Secret deals and confidential contracts have long characterized Africa’s mining industry. Its history is one of quiet hand shakes and signatures attached to the end of a series of legal provisions that only high-powered political and corporate leaders ever get to see.
This is starting to change, thanks to the efforts of the Extractive Industries Transparency Initiative (EITI), international finance institutions, and coalitions of civil society organizations working long and hard to break down barriers to public disclosure of contracts in the extractives sector.
Progress is also the result of the growing will of government leaders to improve and make transparent the terms for their countries’ mineral extraction and the management of their mining revenues. Acknowledging that mineral resources are the property of the nation and that citizens have a right to know how their governments are selling their resources, responsible leaders are making state-investor contracts available for public scrutiny.
These leaders are realizing that public disclosure results in more stable and durable contracts, both because they are less subject to citizens’ suspicions and because the incentives for governments and companies to negotiate better contracts are increased. They’re also showing commitment to deterring high-level corruption by providing an incentive for government officials and company representatives to operate within the bounds of the law and to avoid deviating from general contract forms and terms.
One such leader is Guinean President Alpha Condé. Having taken action to put his 2010 electoral promise of mining reform and better resource governance into practice by passing a new mining code in 2011 and announcing a review of all existing contracts, he has scaled up his commitment to the next level. On February 15th, the Guinean government launched a new online database containing all its existing mining contracts – 60 contract documents covering 18 mining projects.
The website was developed with the assistance of experts from the Revenue Watch Institute, the World Bank Institute and Columbia University, who have been supporting the Guinean government in its contract review. The online materials include a searchable summary of contract terms, allowing non-expert readers to find key sections and to understand the obligations for companies and the government.
This is a major step forward for Guinea. One of the first countries to join the EITI, its membership status was suspended in 2009 by the EITI Board when the political and security situation provoked by the military junta made EITI implementation impossible. Less than two years later the suspension was lifted and candidate status reinstated. But the country has continued to face huge challenges, not least a ranking of 154 out of 182 countries on the Transparency International Corruption Perceptions Index and a ranking of 178 out of 185 economies on the World Bank’s Doing Business Index.
However, the Guinean government is now showing genuine commitment to improving its governance record and to assuring investors that it’s taking action to build a stable environment for international business. Its new mining law has set a fiscal regime in place that will allow the state to generate substantial revenues from its mining sector. Through the launch of its online contract database, the government has signaled to the public that it has nothing to hide, that it honors citizens’ rights of access to contracts that may affect them for extensive periods, and that it respects citizens’ rights to influence how resources are used. As envisaged by the Africa Mining Vision, this is a precondition for the successful harnessing of mineral resources for the nation’s economic growth and human development.
In short, if all mineral-rich African countries were to follow Guinea’s example by routinely publishing their mining contracts, and if they were to commit to channeling revenues transparently through the public purse into quality public services, we might see the continent’s realization of the Africa Mining Vision far sooner than we thought possible.