THE MINING (INTEGRITY PLEDGE) REGULATIONS 2018, PUBLISHED ON 13 JULY 2018
On 13th July 2018, the Mining (Integrity Pledge) Regulations 2018 (Regulations) were published under the Government Notice No. 304 of 2018 by the Minister for Minerals, the Regulations are a continuity of the series of establishment of several other regulations since the extensive amendments to the Mining Act [CAP 123 R.E] hence an overhaul of the Mining Sector in Tanzania.
GENERAL OVERVIEW OF THE MINING (INTEGRITY PLEDGE) REGULATIONS 2018
The Integrity Pledge Regulations are made under Section 106 (3) of the Mining Act of 2010, these Regulations may be cited as the Mining (Integrity Pledge) Regulations, whereby “Integrity Pledge” means a formal and concrete expression of commitment by a mineral right holder to abide in ethical business practices and support a national stand against corruption, as defined under Rule 3 of these Regulations. The Regulations shall apply to all holders of Mineral Rights who undertake prospecting and mining activities in Tanzania Mainland.
Furthermore, the Regulations fosters on raising awareness of integrity pledge principles to any Contractor, Sub-Contractor, Licensee, or any other person conducting mining activities to adhere underlying integrity requirements on promoting integrity values, transparency and good governance, strengthening internal systems that support prevention of corruption, complying with laws, policies and procedures relating to anti-corruption and to ensure proper operations in the course of carrying out mining activities to avoid losses, injuries or damage to environmental, communities, individual and properties
GENERAL OBJECTIVES OF THE MINING (INTEGRITY PLEDGE) REGULATIONS 2018
To develop a nation of high integrity, that is resilient and embraces universal good values.
To promote integrity, accountability and proper management of anti-corruption programme, for adoption by the corporate community operating in the mining industry.
To reinforce corporate governance, integrity, transparency and accountability in the daily operational processes and procedures of companies and businesses.
To facilitate, support and provide technical assistance for companies and businesses to implement the business integrity system as an effective preventive measure against corrupt and unethical practices.
To ensure proper insurance cover against losses, injuries or damage to environmental, communities, individual and properties that may be occasioned in the course of carrying mining activities; and
To complement the Prevention and Combating of Corruption Bureau’s efforts to set up the best business practice in Tanzania.
AN OVERVIEW OF THE OBLIGATIONS IMPOSED UNDER THE REGULATIONS
Generally, the Contractor, Subcontractor, Licensee, or any other person is obliged to establish and maintain a compliance programme throughout the term of the Licence that includes written Code of Conduct, Policies and Procedures, Training, awareness campaigns and education together with notification of Government investigation or legal proceedings, despite of the abovementioned obligations the contractor, subcontractor, licensee or any other person shall also be obliged to act as specified hereunder:
A holder of Mineral Right is obliged not to engage in any malpractices including tax evasion, double taxation, under or overpricing, transfer pricing and corruption.
A holder of Mineral Right that carries out prospecting or mining activities is obliged to sign an Integrity Pledge form as prescribed in the First Schedule to the Regulations.
A holder of Mineral Right is obliged to ensure that any person it engages with in undertaking any activity in connection with mining activities complies with the Integrity Pledge requirements.
A holder of Mineral Right who carries out mining activities is obliged not to engage in any arrangement that undermines or is in any manner prejudicial to the Country’s financial and monetary systems, in particular, all earnings, payments or receivables derived from or in respect of mining operations or activities shall be received in and accounted for in Tanzania.
A holder of Mineral Right who carries out mining activities is obliged to maintain satisfactory and effective insurance coverage against losses, injuries or damage to environment, communities, individuals and properties, that may be occasioned in the course of carrying out mining operations and/or activities.
A holder of Mineral Right who carries out mining activities is required to disengage in an arrangement that undermines or is otherwise prejudicial to Tanzania’s national security.
MONITORING AND ENFORCEMENT (THE MINING COMMISSION)
In ensuring compliance with the Regulations, the Mining Commission, is empowered to enforce the Integrity Pledge as set forth in the Act and these Regulations and furthermore to make investigation on determining whether any holder of Mineral Right, Contractor, Sub-contractor or any such other person who has violated the provisions of these Regulations.
Moreover, the commission is vested with the powers to summon any person to submit or provide any information that the Commission deems necessary in the course of discharging its duties or functions or suspension and revocation of any license on grounds of failure to comply with the Regulations.
BREACH OF DEFAULT PROVISIONS AND ITS PENALTIES
Despite of a good number of obligations stated under the Mining (Integrity Pledge) Regulations 2018, also the consequences of failure to adhere the same has been clearly stipulated. It is provided under Part III of Regulation that any person who contravenes the obligations under the provision of Regulation 7 Sub-Regulation (1) commits an offence and shall be liable upon conviction, to a fine of not less than One Hundred Million Shillings or to an imprisonment for a term of not less than ten (10) years or to both fine and imprisonment.
Furthermore, by the virtue of Regulation 14 under Part V of the Regulation, its clearly stated that failure to comply with the requirement of the Integrity Pledge a holder of Mineral Right who carries out mining activities shall be liable to the following penalties;
Suspension of a license or permit to engage in mining operation or activity.
Withdrawal or cancellation of a License.
Payment of fine as prescribed in the Act and any other applicable laws.
Any other penalty as prescribed under the Act and any other Written Laws of United Republic of Tanzania.
CONCLUSION
Another important and notable feature of these Regulations is the requirement for the holders of Mineral Rights who undertake prospecting or mining activities to make arrangements to the satisfaction of the Commission in order to comply with the provisions of these Regulations within three (3) months after the Regulations come into force.
The Regulation is amongst the newly and separate mining Regulations that has come into force since the Government became confident on making profits from its mineral resources by reshuffling the fiscal and regulatory regime in the mining sector.
FURTHER INFORMATION:
This editorial is intended to give you a general over view of the Law. If you would like further information on any issue
raised in this column, please contact.
Patrick Sanga
Partner
E: p.sanga@vemmaattorneys.co.tz
M: +255 686 999 993
Haika-Belinda Macha
Partner
E: hb.macha@vemmaattorneys.co.tz
M: +255 688 305 999