The Titanium-Mining Scandal.

[wanyee]

My fellow Kenyans,

I have taken the liberty of starting a new thread, because I believe that we are just getting warmed up on this issue. Besides, "Tiomin secures Kwale land" just sounds too depressing, if not downright revolting. That's not the title that this thread should be headed by.

I trust that you shall all concur.

Nawe pia, 'Mzee Msa'.

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Prior to the 2002 General Elections, then presidential candidate Mwai Kibaki stated as follows, specifically in reference to this controversial project :

“NARC will…take measures to improve and sustain economic fundamentals…and an investment climate that will translate into rapid economic growth and employment opportunities for Kenyans. For every investment proposal, NARC will ask one fundamental question: How many jobs will it create?” [How Kenyans can get back on track (27th November 2002)].


Nobel Laureate Professor Wangari Maathai once said that:

"Kenyans are getting so little from the mining that it is going to be a rip-off…the slave labour will be provided by Kenyans…the Kenyan government should have been the one to invest in the production and processing of the minerals" [Troubles Mount for Canadian Titanium Mine in Kenya – Environment News Service (www.ens-newswire.com), 11th April 2001].

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Where 'this' process got derailed:

[MiningWatch Canada issued the following optimistic report, soon after the last elections].

New Kenyan Government Holds Tiomin to Account
Tuesday June 3, 2003 10:02 AM

The new government in Kenya is treating the Kwale titanium project with healthy suspicion.

In early March, the Kenyan High Court restrained the National Environment Management Authority (NEMA) from issuing an Environmental Impact Assessment (EIA) licence to Tiomin Resources Inc. of Canada for its titanium mining project, pursuant to section 63 of the Environmental Management and Co-ordination Act. The order remains in force until NEMA complies with section 59 of the Act which provides for public review of the Environmental Management Plan (EMP).

Mr Justice Andrew Hayanga issued the order based on a civil case filled by the Centre for Environmental Legal Research and Education (CREEL).

On April 10, 2003, Assistant Minister for Environment and Natural Resources Hon. Prof. Wangari Maathai – former chairperson of the Greenbelt Movement in Kenya – met with mine opponents, including the Coast Mining Rights Forum. This was the first meeting of its kind, indeed of any kind, between members of civil society and the Government over the issue of titanium mining in Kwale. According to Kenyan sources, “the mood during the meeting was upbeat and for the first time, we were able to explore the issues surrounding the titanium mining, highlighting what went wrong and what needs to be done.”

All the issues that the Coast Mining Rights Forum have been raising about the mine – groundwater exploitation, the development of a shipping facility at Shimoni, economic benefits, compensation and resettlement, and rehabilitation and radiation control – were addressed. The Coast Mining Rights Forum also learned that Tiomin intends to dredge the Wasini channel, which it had previously denied. This would be necessitated by the weight of the ore to be exported.

Tiomin has not received an Environmental Impact Assessment licence. What it has received is an approval letter of its EIA, issued by the former Director General of NEMA. This situation is a result of the failure of the former Moi government to promulgate the guidelines and regulations for EIA. The Commissioner of Mines and Geology cannot therefore issue a special mining lease until Tiomin presents an EIA License issued under the not-yet existent Guidelines. The Guidelines are supposed to be gazetted and possibly debated.

As well, the Environmental Management Plan (EMP) presented by Tiomin and approved by NEMA late last year was incomplete. The EMP is part of an EIA process; what was presented was merely an EMP Report. It did not include a comprehensive action plan specifying costs, time and responsible persons for the mitigation of identified impacts. A complete EMP must be submitted prior to approval of the mining lease. The EMP would then be subjected to public scrutiny.

The government early this year sent a fact finding team headed by Prof. Wangari to visit a titanium mine in South Africa to study the activity's effect on the environment. The team was to visit the Richard’s Bay mining area, and arrangements were made to meet NGOs in South Africa who have been challenging the titanium issue there. Environment Minister Kulundu said the government wanted the ore processed in Kenya and not exported raw as had been envisaged by Tiomin. The government has also indicated that the compensation offered to relocate farmers was completely inadequate.

Two public forums will be organised to develop consensus on the issues after the team reports.

www.miningwatch.ca/index.php?/Newsletter_12/New_Kenyan_Governmen

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THESE FORUMS WERE NEVER ORGANIZED.

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One month later…

Just before the July 2003 parliamentary recess (in preparation for the Bomas II conference), a ministerial delegation led by then National Security Minister Chris Murungaru, visited Kwale. This followed the Canadian ambassador’s remarks, that our country risked losing his country’s investment, if we did not accept the present terms and conditions [No end in sight yet to row over titanium mining / MP’s divided over titanium mining – Daily Nation, 9th October 2003]. It is also interesting to note that the then Minister for Environment and Natural Resources, Dr. Newton Kulundu, had already stated that the project would continue, before the aforementioned delegation had even left for Kwale [Disputed Titanium mining to go on – Daily Nation, 8th October 2003]. Such a stance only serves to confirm previous reports that “senior government officials will not allow anything to stand in the project’s way” [Titanium – G21; The World’s Magazine, . This may be largely owing to the fact that “substantial progress has been made in marketing the expected production from Kwale, with letters of intent being executed for a significant portion of the future production of zircon and rutile” [Management’s Discussion and Analysis of Financial Condition and Results of Operations (for third quarter and nine months, ending September 30, 2004). See also Chinese Company Eyes Mineral Deal – Daily Nation, 18th October 2005].

Many months later…

In a revealing interview featuring the 2004 Nobel Peace Prize winner, Professor Wangari Maathai, the East African Standard reported that “according to the plan, the delegation was to compile and present…findings to the government, and these were to form the basis for a decision on whether to license the company or not. The findings were to be discussed before a national consultative forum. But…just days after the trip, the government announced…that it had issued Tiomin with a mining permit. Curiously, the announcement came the same day a national forum had been organized to discuss the delegation’s findings. Everyone was taken aback, with most questioning the logic behind sending a high powered delegation to South Africa in the first place” [East Africa hails Wangari Maathai’s Peace Prize – East African Standard, 11th October 2004].

Professor Maathai has also alleged that “Tiomin presented a doctored Environmental Impact Assessment when applying for its license” [Troubles Mount for Canadian Titanium Mine in Kenya – Environment News Service (www.ens-newswire.com), 11th April 2001]. The World Conservation Union (IUCN) preceded Professor Maathai’s claim, calling Tiomin’s EIA “incomplete and unbiased” [Kenyan Farmers Battle Mining – San Francisco Chronicle, 11th April 2000].


Finally, in today's news:

Police break workshop by lawyers on mining deal - Daily Nation, 3rd May 2006.

Police in Kwale at the weekend dispersed a workshop organised by Federation of Women Lawyers and Muslim Lawyers Trust to educate farmers to be relocated next month to pave way for the Sh9 billion titanium projects on their legal rights.

The lawyers led by Muslims for Human Rights coordinator Hussein Khalid, arrived at Maumba primary school on Saturday morning ready to educate the local people, but were confronted by police from Msambweni station, who declared the meeting illegal.

Kwale police chief Patrick Mbarire said NGOs were not welcome in the area without the permission of the local police commanding officer. "We shall not allow NGOs to visit farmers without the knowledge of the police," he said.

He accused NGOs of inciting the people against the project at the implementation stage.

"If NGOs have any issue with the farmers, let them give sufficient notice and invite us so that we can go there and listen to what they have to tell the peasants and not just sneak in and incite them against the project," he said.

Mr Khalid said his group pleaded with the police to allow them to talk to the farmers, but the officers were adamant and advised them to leave or be arrested. He claimed the police have banned NGOs from the area and wondered what the Government was hiding about the project.

Mr Khalid, who spoke to the Nation on the telephone said banning NGOs from meeting with the farmers was creating more confusion. Kwale district commissioner Moffat Kangi claimed the lobby groups were creating confusion about the project that has been delayed for the last 10 years.

The coordinator said the lawyers were determined to offer free legal aid to the affected farmers in Maumba and would never be cowed by threats of arrest.

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“Any serious effort to redistribute the world’s wealth, carries within it the seeds of revolution” [Julius W. Hobson, in Black Power And Capitalism].

[kamalet]

Wanyee,

Big question, are there any Kenyans capable of investing in Titanium mining? I do not think so. Can the locals actually mine it so that they can dispense with the 'foreigners' NO! So really what is at issue?

Negotiations have taken place over several years under 2 governments on how the locals would be compensated, and agreements keep being repudiated at one time or other. What intrigues me is that at every repudiation, a different set of NGO's are represented. Ever wondered why?

Please do refer to the Del Monte saga when it transpired that NGO's were inciting locals so that they can be bribed by Delmonte to shut up. It was only after Del Monte said enough that the NGOs were finally exposed for the crooks they were -bribing locals to allege all sorts of abuse. It is not any different for Tiomin - the live off such blackmail and this might explain why the government is 'banning' the NGOs from the area.

The locals have been paid for land they barely used, why not let the project go ahead. It may just provide employment for the youth of the area since the project is labour intensive. Something needs to be done about these thieves who masquerade as NGOs fighting for the rights of Kenyans whilst their intention all along is to scam their way into some cash!

[emmo]

Oh but yes Kamale, there must be Kenyan Corporations that can invest in Titanium mining. For sure we may need to employ some expatriates but yes we can.

There's a lot of money floating idly about in this country, it could be put to good use. We have this bad habit of thinking that progress will only come through FDI.

[museveni]

The solution to these Foreign investment problems is simple, pass a bill in parliament that stipulates that all companies and coorporations based or operated on Kenyan soil must be 51 % and above owned by indiginous kenyans.

This will ensure that the interests of the local communities are taken into consideration.

[pharlap]

NIce move M7, can you suggest that to our parliament? I am sure they will all want a piece of the cookie. They have proved that no matter what, they will always have their hand in the jar, hata kama they have no business there. Its a nice move, lakini since when did beggars become choosers? How long have we been sitting on the titanium and growing minazi instead of mining? What money are you talking about- flowing around? How come none of the so called rich Kenyans has actually come out to offer a realistic offer for prospecting and drilling oil, which has been confirmed is there already? The amounts needed for this kind of projects are more than the few millions those thugs looted from our coffers.

You have a good proposal but where are the kenyans to own the 51%? May the real slim rich kenyans please stand up!

[wanyee]

pharlap (and kamalet),

Have you assimilated all the facts presented in this thread so far, including the comments from Professor Maathai?


Meanwhile, please consider the following excerpt:

“We need a strategy to address the real problems faced by ordinary Canadians…This strategy must constitute a clear break with past and present economic policies. It must confront the serious structural economic problems we face in an honest and creative way. It must state what needs to be done, even if the remedies outlined are not popular…And it must challenge, directly, the prevailing arguments propounded by business interests that the only way to resolve the crisis is to give private investors a completely free hand to restructure the economy according to their priorities. The purpose of an alternate strategy must be to satisfy the basic social and economic needs of ordinary Canadians, rather than to maximize the profits of wealthy investors. It must create jobs, rather than use employment as a means of undermining the wages and job security of workers. It must promote socially useful arguments, rather than speculation in finance, banking, real estate and foreign currency, no matter how profitable the latter activities are. It must focus on raising real wages and living standards, rather than sacrificing these to provide a more favorable investment climate for private capital…Fundamental to the implementation of an alternate economic strategy is the recognition that it is a mistake to give more say over economic decision making to private investors. What we need is to establish genuine public control over economic policy. This will entail new forms of involvement by – and accountability to – ordinary citizens…The corporate sector has waged a remarkably successful campaign to discredit all forms of public ownership and control. This campaign has been immeasurably assisted by the actions of business-oriented governments, who have made no attempt to explore the very real possibilities which public ownership provides for democratic control by citizens” [Daniel Drache and Duncan Cameron (eds), 1985; The Other Macdonald Report: The Consensus On Canada’s Future That The Macdonald Commission Left Out, James Lorimar & Company, Publishers (Toronto)].

“Because the U.S will continue to do whatever it can to obfuscate the terms of NAFTA, Canada must pursue two avenues simultaneously. One is to develop other markets for the country’s natural resources in order to lessen dependence on one customer…The other is the creation of secondary industries…so that what is being exported is a value-added product and not merely raw material” [Canada must take steps to combat double standards of U.S on trade – The Globe and Mail, 16th August 2005].

The latter, regards the recent softwood lumber dispute between the U.S and Canada.

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emmo,

your suggestion is very much feasible. This is exactly the kind of progessive thinking we need in Africa today. (After all, didn't every one of us learn how to walk at some point?).


A friend recently sent me this:

During the last KENGEN placement, Kenyans / Kenya Companies paid Kshs. 17 billion to subscribe – an oversubscription of Kshs. 12 billion! Tiomin has been trying to raise Ksh 11 billion from financial houses or sale of shares. This essentially means that if Kenyans are sufficiently guided, they can own their own resources and oxploit them to their benefit. We can import the technology to mine / process titanium.

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museveni,

What about the people having complete control of the entire production process, and we only pay for the necessary expertise and equipment?

There are several ores, with hundreds, if not thousands of applications between them. Imagine the potential industries that can be created.

Ultimately, it's all about sustainable development, and I know that we are thinking along these lines.

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Last, but certainly not least, WE SHOULD NOT PROCEED ANY FURTHER WITH THIS PROJECT, UNTIL ALL ENVIRONMENTAL CONCERNS ARE ADDRESSED.

[kamalet]

wanyee said:

pharlap (and kamalet),




A friend recently sent me this:

During the last KENGEN placement, Kenyans / Kenya Companies paid Kshs. 17 billion to subscribe – an oversubscription of Kshs. 12 billion! Tiomin has been trying to raise Ksh 11 billion from financial houses or sale of shares. This essentially means that if Kenyans are sufficiently guided, they can own their own resources and oxploit them to their benefit. We can import the technology to mine / process titanium.

------

museveni,

What about the people having complete control of the entire production process, and we only pay for the necessary expertise and equipment?

There are several ores, with hundreds, if not thousands of applications between them. Imagine the potential industries that can be created.

Ultimately, it's all about sustainable development, and I know that we are thinking along these lines.

---

Last, but certainly not least, WE SHOULD NOT PROCEED ANY FURTHER WITH THIS PROJECT, UNTIL ALL ENVIRONMENTAL CONCERNS ARE ADDRESSED.

Obviously you have not considered the motivation of Kenyans to invest in Kengen and perhaps not in Tiomin. When you invest, profit is usually the motive, so if Tiomin cannot raise 11b from the financial market, then their fundamentals must be wrong!!

But you deviate! Are Kwale people being ripped off? Maybe, but who has a better solution? They can take the little money and run or in the alternative have their land and not utilise it!!!

[pharlap]

kamalet and M7, Kenyans rushed to grab Kengen shares because they have faith in Kengen. They have seen the company perform well over the years, the transformation and the potential to generate income and increase thei amounts worth. If you ask me, less than a thousandth of those guys pouring in money there know what titanium is and what it can do. You cannot compare the two and use it as a basis to eliminate one. Thats outright wrong!

Kengen is safe ground, it is home, familiar territory so its safe to invest there. Tiomin is a whole new paradigm, it will take time before its finally started, its like a log fire. People opposed to everything regarding the titanium mining project ought to really stop whining and just accept things as they are. Has there been another company that offered a better deal? SI it is the same kenyans who haven't bought those shares to raise the 11 billion like the kengen madness? So do you expect these misers to actually own 50% of the overall deal? Nobody wants to risk their money except Tiomin. I say get the mine going and create jobs for idle coast youth. Selling minazis and kahawa tungu for a lifetime is just not maendeleo. Let those youth go and get jobs in the construction. Let their daughters be secretaries and receptionists and the old folks can get security jobs. No thief would want to go rob there anyway, so it will be more of "opening the gate" for them.

Twende mbele. We have beaten this horse to death.

[wanyee]

pharlap and kamalet,

I did not come to Jukwaa, simply to fuss and fight with you. I am sure that we all have more important things to do than simply bash each other. I came here specifically to share information, based on which, we can have constructive and progressive dialogue. As you both know, we can accomplish much more through this. Otherwise, we are wasting time and energy arguing for the sake of differing.
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pharlap,

It's good to know that you are not a such a brute after all. I do understand your frustration. This has dragged on, and that's entirely the fault of our "leaders". It's quite simple - is the agreement good for Kenya's best interests or not? Sign or not sign.

The truth is, THIS IS ISSUE WAS NEVER DEALT WITH AS IT SHOULD HAVE BEEN - SUFFICIENTLY. Remember those forums that were supposed to be held right after the Kibaki government took over? The ones that even Professor Maathai was part off? What happened then, and why is the government preventing them from being held now?


On the subject of compensation:

Umegusia kitu muhimu sana. Do you know what these wazungus had the audacity to offer, when they first came to Kenya? ~9,000 Ksh per acre! What does this in itself, tell you? Madharau?!
Tiomin justified this claim by saying that it was based on "lands office record sales" [Mineral Obsession: Inside the Canadian push to make a killing on Kenya’s titanium – Toward Freedom (online magazine), June / July 2001]. In order to appreciate the insolence of this offer, one need only note that it costs as much, for two to dine in a fancy hotel, a few blocks from the corporation’s headquarters, in downtown Toronto. Even the lowest-paid, part-time dishwasher in Canada, would earn more, if he / she worked for less than a week! Pursuant to this, a company report boasts that Tiomin’s exploitation costs could be recovered in less than four years of operation [Annual Information Form (April 30, 2003). See also Titanium: Will Govt Yield To Tiomin or its People? – The East African, 1st January 2005].

The 80,000 Ksh that was hurriedly offered after the aborted forums, was meant to hush things up, and scuttle the process. You know "how it works" with these guys.

Those lawyers from FIDA, including wananchi like us, are just insisting that the Kibaki administration fulfill its pre-election pledge, to sufficiently address this issue. Why is that so difficult? Kind of like insisting on the new constitution that was promised to Kenyans, 100 days after the elections. I shall hereby quote the President again, specifically regarding this project:

“NARC will…take measures to improve and sustain economic fundamentals…and an investment climate that will translate into rapid economic growth and employment opportunities for Kenyans. For every investment proposal, NARC will ask one fundamental question: How many jobs will it create?” [How Kenyans can get back on track - www.nationaudio.com, 27th November 2002].


You said that Kenyans are not motivated about Tiomin, as they are about KENGEN. I agree with you, ABSOLUTELY! As a matter of fact, you have hit the nail squarely on the head!

Motivation is precisely what is lacking. Kenyans are still very much in the dark, regarding "the titanium-mining scandal", as it can be aptly called.

Now please don't take this the wrong way, but some of your statements have provided me with a very good idea about the highly unfortunate lack of citizen-awareness, particularly with respect to this project. For you are probably among the more informed, possessing a fair amount of education, and having relatively good access to information. (In fact, compared to the average citizen, you and I are likely to be much more informed about "issues" like these). And if wananchi like you are unaware of what has been going on in Kwale for the last decade, imagine how oblivious the average Kenyan is! This is precisely how the poor masses get robbed every day, in broad daylight, under the direct supervision of their "leaders".

Let us consider Magadi Soda, for example. Are you aware about this almost-century-old rip-off?!

Prior to the recent acquisition by Tata Chemicals Ltd. of India, Magadi Soda Kenya was the largest subsidiary of Brunner Mond, Europe’s second largest manufacturer, and the U.K’s sole manufacturer of soda ash. Brunner Mond's mission statement, “to be the world’s soda ash supplier of choice”, may not have been too far-fetched, considering that Lake Magadi is Africa’s largest soda-ash resource! [NGO Challenges Magadi Soda’s U.K Monopoly - The East African on the Web, 9th February 2004]. The same source further states that, “the Magadi Soda Company is in the country illegally, that its lease is unsustainable and that the local people do not benefit from its operations” [Ibid]. Over the years, the multinational has supplied about 1,500 customers worldwide, including glass makers, bath additive producers, sugar extractors, and suppliers of haemodialysis treatments. It is interesting to note that the British multinational sought to renew its mining license just before the 2002 General Elections, which was (interestingly), twenty years ahead of the expiry date. The Commissioner for Mines and Geology, who happens to be a cousin to the infamous Mr. Nicholas Biwott, “okayed the extension” of the contract [Ibid. See also Soda firm and council sign agreement - Daily Nation on the Web, 20th February 2004].

What do we have to show for having Africa's largest soda ash resource? How have Kenyans benefitted from this resource, vis a vis the shareholders in Europe and elsewhere?

Note that whatever infrastructure Brunner Mond laid over the years, was ultimately geared towards facilitating the multinational's objectives: roads, railway lines, buildings etc. Kenyans must now also recognize this project for what it truly is. THE MAGADI SODA COMPANY IS NOT A CASE-STUDY OF SUSTAINABLE DEVELOPMENT!!!

It is simply another illustration of how wealth is transferred from one country to another - from one population to another, via multinational corporations.

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When I first heard about Tiomin's controversial project, I too did not realize its full potential. I was a little familiar with some of the high-profile uses of titanium metal, particularly with respect to military applications. Over the next five years, I learnt a whole lot more...

The potential of these resources is incredible! I have already pointed out the fact that these wazungus would not have been persistent for a decade, spending millions of dollars, if it were otherwise. (Si tumesikia ya kwamba "mwenye haja huenda choo"?). If Kenyans were educated about the ores present, and subsequently, the potential industries, they would cease to regard this project lightly. (I have also stated that this is the Kenya's largest foreign inverstment to date. We should ask ourselves why this is so. We should take the time to do our homework / research, and find out exactly what we are "peddling" to these desperate "investors". Those ores will not simply substitute madafu's and korosho's. Rather, they have the potential of turning our economy around. Trust me when I say that it is not just about a few farmers in Kwale. I urge you again, to consider the facts presented.

You must also ask yourself, as the lawyers were recently asking, what the Government is hiding. Why is there resistance towards organizing the public forums that were supposed to have been organized years ago, when Professor Maathai was among those challenging the project? Why is the government not answering simple questions, that have been repeatedly posed over the last few years?

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Are the villagers of Maumba and Nguluku being ripped off? I assure you kamalet, it's more like "Kenyans are being ripped off". BIG TIME!

Take time my brother. Be objective. Assess the information presented, and you are bound to agree.

(Speaking of the information presented, have you both read

You ask if anybody has a better solution? I ask you how others have done it [e.g - Brazil Takes Flight: Embraer pulls off mission impossible - The National Post (Canada), 28th March 2005. Embraer has now defeated its competitor, Canada's Bombardier].


kamalet na pharlap,

Tuungane mikono sasa, maana adui ni mmoja - ukoloni mamboleo.

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“The real ‘domino effect’ that terrified Western planners during the Cold War, was not the threat of Communist expansion, but the threat of nationalism. Were the poor to throw off the dictatorship of the West and better themselves in one part of the world, then people might be inspired to follow this ‘threat of a good example’” [David Cromwell, 2002; Private Planet: Corporate Plunder and the Fight Back, Jon Carpenter Publishing (Charlbury)].

[pharlap]

wanyee----I get your drift here. I personally visited magadi soda when i was i standard 5, the heat!!! My friend...and much later on, i learnt about the 100 year lease, which was supposed to have expired at the turn of the century? I think we are looking at a totally different set of agreements between TIomin and the kenyan government. Anyone who agrees to the Magadi soda kind of deal is not fit to be anywhere near parliament. Anyway, what we are saying is that if the deal is not too bad after all, why cant we be cooperative and see how far it goes? My only problem is that this thing has taken a whole flippin' 10 years! thats a whole lot of time!

Your expertise and knowledge clearly comes out, and i do admit i am not so informed of this things lakini from what i have read, we are not going to have another 100 year rip-off. On the other hand, nobody is willing to invest their expertise and get nothing out of it. So lets be fair. The 50-50 thing will not just work for now. Too much skepticism and ignorance.

[wanyee]

pharlap,

I am glad we agree on the Magadi issue. That was one of those field-trips in primo that I missed - including the visit to the Mt. Long'onot crater. (Meanwhile, I am having a visual of you with a handkerchief pinned to your stained shirt, fighting for precious window-space, with four other eager little faces. Nimekurudisha mbali sana?).

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Wazee, I am just the average mwananchi who read something in an online newspaper in 2001, smelled a rat, and followed the stench. And that is exactly why this whole thing is stupefying, let alone infuriating. If a regular Joe like me can dig up stuff like this, what if the government employed the comparatively numerous resources at its disposal, to do the same? Is it just me, or have our "leaders" laliaad their maskios?

Whatever the deal is so far, particularly regarding the long-term benefits (SPECIFICALLY value-adding secondary processing), it is evidently something that the government does not want Kenyans to know about. I know that the time issue has rendered this as being very "drawn out". Yet, it is this very fact that should cause us all, to pay much more attention to this controversy.

I do acknowledge that there are opportunistic NGO's and lawyers who play a double-sided role in these issues, for selfish reasons. We must all be on the lookout for such elements. For often, this is more detrimental than helpful.

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I wish to share the following information with you all:

"It is argued that even if the mine remains an enclave, cut off from the rest of the economy, the country still benefits financially from the mine. In return for a licence to develop the mineral deposit, the company will indoubtedly have to pay taxes. The government can use this income to develop the educational, technical and industrial infrasctructure. Alternatively the income can be channelled through the central and commercial banks to provide risk capital and encourage new enterprises and local entrepreneurs.

"The revenue accruing to the government from taxes will depend on the value of the mineral, the profitability of the mine, and the division of profits between the mining company and the government. In the colonial era, the funds diverted to Africa were negligible in relation to the developmental needs of the continent. Since independence, nationalist governments have sought to increase their share of mine profits. But although they have made some progress, they have not succeeded in diverting enough of the surplus created by the mining industry to generate economic development. Liberia, for example, is as far from industrialization as ever; and despite more than twenty years of iron-ore production, the country still imports all its steel.

"The government's income from mining in Africa is often very small, and despite the heavy capital expenditure it is not enough to lay the basis for further economic development. The income is used to meet the government's rising recurrent administrative costs, and may well be offset by a consequent reduction in aid, as in Botswana. There is a small gain in economic independence, but little or of no help for balanced economic development. Even where the government has taken a large stake in a mining company, this does not necessarily mean that the government's income will increase. The compensation agreements involve the payment of large sums of capital, which have to be paid out of the country's foreign exchange earnings for many years [Lanning G. and Mueller M, 1979; Africa Undermined: A History Of The Mining Companies And The Underdevelopment Of Africa, Penguin Books Ltd (Harmondsworth, England)].

"While it is true that many industrial skills are badly needed in Africa, it seems unlikely that the mining companies will provide them. The local labourers that the mine employs are almost exclusively unskilled or semi-skilled. The more skilled workers often come from outside the country and return there at the end of their contracts (e.g Zambia and Liberia). This is very imporatnt, because, while even a small group of skilled workers might have a beneficial effect on the rest of the economy, a large group of unskilled labourers cannot. In fact, the influence of the unskilled miners may be very damaging to the economy, because they are likely, as in Zambia, to copy the consumption patterns of the highly-paid expatriate staff. This 'imitation effect'' is partly responsible for the high-import, high-wage and high-cost structure of the Zambian economy. Zambia has acquired the consumption pattern of an advanced industrial society without the skills and structure to support it.

"Nor are the incomes generated by the labour force likely to provide a source of new investment funds, for two reasons. A high proportion of the managerial staff will be foreign, and their salaries and savings will be remitted overseas. Moreover, local miners are likely to spend their wages in an attempt to raise the low living standards of themselves, their families and their relatives in the cities and rural areas, before saving a high proportion of their income. In any case, savings in a capitalist economy more often come from company profits than from the incomes of manual workers. But as the mines are invariably established with foreign capital, the bulk of the profits are also paid overseas, except of course for the taxes levied by the government. Skilful use of transfer accounting can further reduce the amount of tax paid by the companies. Even if more savings and profits were channelled through the commercial banking sector, there is not, in most African states, an indigenous entrepreneurial class waiting to utilize the capital. If funds are available locally, the mining company with its superior credit rating will take advantage of them to finance mine renewal or expansion. Then, as in Zambia, the companies will use bank funds, while exporting their own incomes to their metropolitan base [Ibid].

Regarding the 50/50 idea:

"Although the mining companies have ceded majority ownership of many of their African mines, they have evolved a whole range of techniques to neutralize the effects of these takeovers. The most important element of their strategy is to cede nominal control to the country in the form of majority ownership while retaining as much effective control over the mines as possible through management, advisory and sales contracts, and by reinforcing the rights of minority shareholders. As long as day-to-day management remains the prerogative of the mining companies, much of the investable surplus needed in Africa for development continues to leave the continent. In the company accounts this surplus sometimes appears as profits, but often it is disguised as inflated ‘head office charges’, ‘management and consultancy fees’, ‘machinery costs’, ‘shipping and handling charges’, and ‘marketing commission’. The paramount concern of the mining companies is to ensure the continuing flow of minerals and profits from Africa. The developmental needs of Africa are likely to be a long way down any company’s list of priorities” [Ibid].

BASICALLY, EVEN 100% LOCAL OWNERSHIP MEANS NOTHING, IF THERE IS NO VALUE-ADDING SECONDARY PROCESSING!!!

[museveni]

Sounds Great Wanyee. Kenyans have always had the desire to own Kenya economically and not just by name.

The only hinderance has been due to lack of implementation of sessional papers and economic blueprints, coupled with greed on the part of our leadership.

I am very hopeful that , now that Mwananchi is more hawk-eyed, The next elections will attract leader that will have little choice but to work towards improving Kenya, not only politically, but also Economically and socially.

Mwananchi has developed an upper hand by becoming more politically awere since the 2002 elections.

[pharlap]

Agree with y'all. Mwananchi has become enlightened kidogo.

[wanyee]

Kenya: Farmers Grow Uneasy As Time to Pave Way for Tiomin Draws Near

allafrica.com/stories/200604110422.html


Meanwhile (and I know I posted this elsewhere):

Police break workshop by lawyers on mining deal - Daily Nation, 3rd May 2006.

Police in Kwale at the weekend dispersed a workshop organised by Federation of Women Lawyers and Muslim Lawyers Trust to educate farmers to be relocated next month to pave way for the Sh9 billion titanium projects on their legal rights.

The lawyers led by Muslims for Human Rights coordinator Hussein Khalid, arrived at Maumba primary school on Saturday morning ready to educate the local people, but were confronted by police from Msambweni station, who declared the meeting illegal.

Kwale police chief Patrick Mbarire said NGOs were not welcome in the area without the permission of the local police commanding officer. "We shall not allow NGOs to visit farmers without the knowledge of the police," he said.

He accused NGOs of inciting the people against the project at the implementation stage.

"If NGOs have any issue with the farmers, let them give sufficient notice and invite us so that we can go there and listen to what they have to tell the peasants and not just sneak in and incite them against the project," he said.

Mr Khalid said his group pleaded with the police to allow them to talk to the farmers, but the officers were adamant and advised them to leave or be arrested. He claimed the police have banned NGOs from the area and wondered what the Government was hiding about the project.

Mr Khalid, who spoke to the Nation on the telephone said banning NGOs from meeting with the farmers was creating more confusion. Kwale district commissioner Moffat Kangi claimed the lobby groups were creating confusion about the project that has been delayed for the last 10 years.

The coordinator said the lawyers were determined to offer free legal aid to the affected farmers in Maumba and would never be cowed by threats of arrest.

---

N.B: The issue of NGO's having ulterior motives is besides the point.

The public forum that was supposed to have been held after the 2002 elections, HAS NOT YET BEEN ORGANIZED!

Ref: New Kenyan Government Holds Tiomin to Account
www.miningwatch.ca/index.php?/Newsletter_12/New_Kenyan_Governmen

[wanyee]

A Noose, Not a Bracelet
by Naomi Klein

Gordon Brown has a new idea about how to "make poverty history" in time
for the G-8 summit in Scotland. With Washington so far refusing to
double its aid to Africa by 2015, the British Chancellor is appealing to
the "richer oil-producing states" of the Middle East to fill the funding
gap. "Oil wealth urged to save Africa," reads the headline in London's
Observer.

Here is a better idea: Instead of Saudi Arabia's oil wealth being used
to "save Africa," how about if Africa's oil wealth was used to save
Africa--along with its gas, diamond, gold, platinum, chromium,
ferroalloy and coal wealth?

With all this noblesse oblige focused on saving Africa from its misery,
it seems like a good time to remember someone else who tried to make
poverty history: Ken Saro-Wiwa, who was killed ten years ago this
November by the Nigerian government, along with eight other Ogoni
activists, sentenced to death by hanging. Their crime was daring to
insist that Nigeria was not poor at all but rich, and that it was
political decisions made in the interests of Western multinational
corporations that kept its people in desperate poverty. Saro-Wiwa gave
his life to the idea that the vast oil wealth of the Niger Delta must
leave behind more than polluted rivers, charred farmland, rancid air and
crumbling schools. He asked not for charity, pity or "relief" but for
justice.

The Movement for the Survival of the Ogoni People demanded that Shell
compensate the people from whose land it had pumped roughly $30 billion
worth of oil since the 1950s. The company turned to the government for
help, and the Nigerian military turned its guns on demonstrators. Before
his state-ordered hanging, Saro-Wiwa told the tribunal, "I and my
colleagues are not the only ones on trial. Shell is here on trial....
The company has, indeed, ducked this particular trial, but its day will
surely come."

Ten years later, 70 percent of Nigerians still live on less than $1 a
day and Shell is still making superprofits. Equatorial Guinea, which has
a major oil deal with ExxonMobil, "got to keep a mere 12 percent of the
oil revenues in the first year of its contract," according to a 60
Minutes report--a share so low it would have been scandalous even at the
height of colonial oil pillage.

This is what keeps Africa poor: not a lack of political will but the
tremendous profitability of the current arrangement. Sub-Saharan Africa,
the poorest place on earth, is also its most profitable investment
destination: It offers, according to the World Bank's 2003 Global
Development Finance report, "the highest returns on foreign direct
investment of any region in the world." Africa is poor because its
investors and its creditors are so unspeakably rich.

The idea for which Saro-Wiwa died fighting--that the resources of the
land should be used to benefit the people of that land--lies at the
heart of every anticolonial struggle in history, from the Boston Tea
Party to Iran's turfing of the Anglo-Iranian Oil Company in Abadan.
This idea has been declared dead by the European Union's Constitution,
by the National Security Strategy of the United States of America (which
describes "free trade" not only as an economic policy but a "moral
principle") and by countless trade agreements. And yet it simply refuses
to die.

You can see it most clearly in the relentless protests that drove
Bolivia's president, Carlos Mesa, to offer his resignation. A decade ago
Bolivia was forced by the IMF to privatize its oil and gas industries on
the promise that it would increase growth and spread prosperity. When
that didn't work, the lenders demanded that Bolivia make up its
budget shortfall by increasing taxes on the working poor. Bolivians
had a better idea--take back the gas and use it for the benefit of the
country. The debate now is over how much to take back. Evo Morales's
Movement Toward Socialism favors taxing foreign profits by 50 percent.
More radical indigenous groups, which have already seen their land
stripped of its mineral wealth, want full nationalization and far more
participation, what they call "nationalizing the government."

You can see it too in Iraq. On June 2 Laith Kubba, spokesman for the
Iraqi prime minister, told journalists that the IMF had forced Iraq to
increase the price of electricity and fuel in exchange for writing off
past debts: "Iraq has $10 billions of debts, and I think we cannot avoid
this." But days before, in Basra, a historic gathering of independent
trade unionists, most of them with the General Union of Oil Employees,
insisted that the government could avoid it. At Iraq's first
antiprivatization conference, the delegates demanded that the government
simply refuse to pay Saddam's "odious" debts and opposed any attempts to
privatize state assets, including oil.

Neoliberalism, an ideology so powerful it tries to pass itself off as
"modernity" while its maniacal true believers masquerade as
disinterested technocrats, can no longer claim to be a consensus. It was
decisively rejected by French voters when they said No to the EU
Constitution, and you can see how hated it has become in Russia, where
large majorities despise the profiteers of the disastrous 1990s
privatizations and few mourned the recent sentencing of oil oligarch
Mikhail Khodorkovsky.

All of this makes for interesting timing for the G-8 summit. Bob Geldof
and the Make Poverty History crew have called for tens of thousands of
people to go to Edinburgh and form a giant white band around the city
center on July 2--a reference to the ubiquitous Make Poverty History
bracelets.

But it seems a shame for a million people to travel all that way to be a
giant bauble, a collective accessory to power. How about if, when all
those people join hands, they declare themselves not a bracelet but a
noose--a noose around the lethal economic policies that have already
taken so many lives, for lack of medicine and clean water, for lack of
justice.

A noose like the one that killed Ken.


This article can be found on the web at:

www.thenation.com/doc.mhtml?i=20050627&s=klein

---

Ms. Klein's father-in-law wrote in his new book:

"What makes me nearly apoplectic - and I very much want to say this - is that the Bank and the Fund were fully told about their mistakes even as the mistakes were being made. It's so enraging that they refused to listen. They were so smug, so all-knowing, so incredibly arrogant, so wrong. They simply didn't respond to arguments which begged them to review the human consequences of their policies. The fact that poverty became increasingly entrenched, or that economies were not responding to the dogma as the dogma predicted, made no difference. It was a form of capitalist Stalinism. The credo was everything; the people were a laboratory" [Stepen Lewis, 2005; Race Against Time, House of Anansi Press (Toronto)].

Stephen Lewis is the UN Secretary-General's special envoy for HIV/AIDS in Africa.

[wanyee]

State in the dock over human rights - Daily Nation, 11th May 2006.

Story by GAKUU MATHENGE

A high-powered Government delegation is in Banjul, Gambia, to defend the State against charges of alleged human rights abuses on a little known community - the Endorois of Lake Bogoria.

The defence will be before the African Commission on Human and People's Rights and this will be the first time that Kenya is the subject of discussions at the continental level in relation to alleged violations of the African Charter on Human and People's Rights.

The Government's legal team for the hearings, which will run up to May 22, is led by deputy solicitor general Muthoni Kimani of the Ministry of Justice and Constitutional Affairs.

A delegation from the Endorois in the streets of Nairobi.. Photo File

"The advance Government team has already left the country for Banjul but we cannot disclose more details to our opponents. This is a judicial process like any other and our strategy is confidential at this point," the director of the legal department at the Ministry of Justice and Constitutional Affairs, Mr Gichira Kibaara, said.

Through the Centre for Minorities Rights and Development (Cemiride), a Nairobi-based lobby, the Endorois, who number about 60,000, claim they were evicted from their ancestral land to create a wildlife sanctuary – the Lake Bogoria Game Reserve – with no compensation.

Current session

They made their application in 2003.

Not only do they want the game reserve back, they also want the Baringo and and Koibatek county councils to surrender all the revenues they have been collecting from the reserve to the Endorois Welfare Council.

In their historic application, the Endorois are seeking special protection under the law, including special rights to their land and natural resources.

Among past rulings the commission has made was the restoration of the citizenship of former Zambian president, Dr Kenneth Kaunda, who had been stripped of Zambian citizenship by his successor, Mr Frederick Chiluba. It also made a declaration that the government of late Sani Abacha and international corporations had short-changed the Ogoni People of Nigeria in oil revenue sharing.

The Endorois, who live on the fringes of the Lake Bogoria Game Reserve, now want the Kenyan Government compelled to hand over the reserve and what they call "Lake Bogoria Region" which includes Lake Bogoria.

A favourable ruling for the Endorois would have legal implications as it would overturn a 2002 High Court ruling that declined to recognise collective identity of the community.

Communal rights

Article 22 of the African Charter not only defines indigenous communities and recognises group identity, but also provides for enforcement of collective and communal rights.

A ruling in favour of the Endorois would put the Kenya Wildlife Service in the spotlight, as the agency charged with oversight on the creation and management of game parks and reserves.

However, KWS deputy director in charge of community conservation, Mr Joachim Kagiri, said KWS was only in charge of policy direction and game protection. He said the management and stewardship of game reserves was in the hands of respective local authorities.

The admission of the precedent-setting Endorois application by the African Commission of Human and People's Rights is significant not only because it amplifies the community's case against the Government, but also forces the Government to come forward to give its side of the story at an independent forum and and under international spotlight.

The commission admits applications from individuals and groups only after it is satisfied they have merit and after all national processes have been either exhausted or proved unhelpful.

Although the commission's decisions and rulings are not legally binding, they have enormous economic and diplomatic implications, not least because AU's organs like the Nepad and the Peer Review Mechanisms have recently assumed increasing importance in shaping the world's perception of member states.

"If the commission rules in favour of the Endorois, the Government will have little choice but go along, or ignore it on the pain of being viewed as a rogue state that has no regard for protocols it is signatory to," said Catherine Mumma, a commissioner with the state-funded Kenya National Human Rights Commission in charge of international obligations.

A ruling in favour of the Endorois would be a boost to other groups and individuals with a beef against the Government.

In their application, submitted to the commission by Cemiride, the Endorois state that:

- They had always lived around the Lake Bogoria area of the Baringo and Koibatek districts, as well as in the Nakuru and Laikipia districts within Rift Valley Province.

- The lake is the centre of the community’s religious and traditional beliefs: around the lake are the community’s historical prayer sites, places for circumcision rituals, and other cultural ceremonies.

- The Monchongoi forest is considered the birthplace of the Endorois people and the settlement of the first Endorois community.

- As a pastoralist community, the Endorois' conception of land "ownership" has not been one of ownership by paper. Nonetheless, the community has always understood the land in question to be "Endorois" land, belonging to the community as a whole and used by it for habitation, cattle rearing, beekeeping, and religious and cultural practices.

- The Endorois have been accepted by all neighbouring tribes as bona fide owners of their land.

At independence in 1963, the British crown’s claim to the Endorois land was passed onto the respective county councils. However, under section 115 of the Kenyan Constitution, the county councils held this land in trust on behalf of the Endorois community who lived and used the land.

The Endorois’ customary rights over the Lake Bogoria region were not challenged until a 1973 legal notice.

In 1973, by Legal Notice No 239, the Lake Bogoria area was renamed the Lake Hannington Game Reserve and later in 1974 it became the "Lake Bogoria Game Reserve".

Very limited discussions took place after this decision was made, and the Endorois community was not aware that, as well as having to leave its dwellings on the land, it would be prevented from accessing the land for natural resources, culture, or religion.

"The Endorois concept of land did not conceive of the loss of land without conquest," their petition says.

The entire community was eventually evicted from the reserve beginning in the 1970s with the final evictions taking place in 1986.

The Endorois now live in crowded conditions around the borders of the game reserve and 30 years after the evictions began, they remain without compensation.

The African Charter is unique among regional human rights instruments in placing special emphasis on the rights of people.

It defines indigenous peoples as a group that occupies and uses a specific territory. This group has a cultural distinctiveness and identifies itself as a distinct collectivity and is recognised as such by other groups. The African Charter resolves cases of groups that have experienced subjugation, marginalisation, dispossession, exclusion or discrimination. The Kenyan justice system has not provided for communal and collective identity and group rights.

In 2002, High Court judge David Rimita ruled in Nairobi that he could not address the issue of a community’s right to property, stating that "there is no proper identity of the people who were affected by the setting aside of the land ... that has been shown to the court".

Cemiride, on behalf of the Endorois community, seeks a declaration that Kenya is in violation of the African Charter.

And among remedies sought include, restitution of its historic land, with legal title and clear demarcation, and compensation to the community for all the loss they have suffered through the loss of their property, development, natural resources but also freedom to practise their religion and culture.

"Given the importance of this land for the Endorois religion and culture, only the restitution of this particular land would allow them to fully enjoy their rights," they say.

"We went to the commission after all local avenues, including negotiations with retired President Moi, failed to provide relief," said Cemiride's CEO Abbey Sing'oei.

The State-funded Kenya National Human Rights Commission, that watches and advises the Government on human rights matters, will also be represented at the hearings, said Ms Mumma, Kenya human rights commissioner in charge of International Obligations.

[wanyee]

Tiomin exodus starts in weeks - Daily Nation, 31st May 2006.

---

Critics oppose Xstrata's bid for Falconbridge: Swiss takeover of Toronto firm would be 'terrible' for Canada - The Ottawa Citizen, 19th May 2006.


Canadian lawmakers and union leaders are opposing a $16.1-billion Cdn hostile bid for Falconbridge Ltd. by Switzerland's Xstrata PLC because they want to keep natural resources under domestic control.

"We should be looking for a Canadian-made solution in protection of our natural resources and the communities that are affected," NDP industry critic Brian Masse said yesterday in Ottawa. Foreign ownership may be "devastating" in areas dependent on mining, he said.

A takeover of Toronto-based metals producer Falconbridge by an overseas company would be "terrible" and put Canadian jobs at risk, said Leo Gerard, president of the United Steelworkers, which represents about 4,000 Falconbridge workers.

Union and political leaders say they prefer a friendly takeover by Toronto-based rival Inco Ltd. that would create the world's largest nickel producer.

Lawmakers have raised concerns previously about foreign takeovers, which don't require parliamentary approval. Noranda Inc. failed to reach agreement on a deal to be acquired by China Minmetals Corp. after seven weeks of exclusive talks in 2004. Some politicians raised objections, citing China's human rights record. Noranda later merged with Falconbridge.

Some investors, who stopped short of saying they would reject a more valuable offer based on the nationality of the buyer, expressed concern that Canada might lose ownership of natural-resource assets.

"I'd be sad to see Falconbridge disappear from Canada," Benoit Brillon, a fund manager who helps oversee $5.1 billion, including shares of Inco and Falconbridge, for Natcan Investment Management in Montreal. "For capital markets, its a negative".

The minority government of Prime Minister Stephen Harper, which would review any foreign purchase, may be reluctant to approve an Xstrata deal with elections coming as early as next year, said Dany Assaf, a lawyer with Ogilvy Renault in Toronto.

The Conservative cabinet "can make Xstrata walk away by being very tough on the conditions they impose," Mr. Assaf said yesterday in a telephone interview. "It's a very challenging political climate".

Conservative lawmakers such as Trade Minister David Emerson, Colin Carrie and James Rajotte, chairman of Parliament's industry committee, have said they favour "Canadian champions".

Falconbridge chief executive officer Derek Pannell said yesterday that Xstrata's cash offer doesn't reflect fair value. He said he preferes Inco's friendly offer. Inco raised its bid May 13 from an original deal announced in Ocotober.

Shares of Falconbridge fell 83 cents, or 1.5 per cent, to $54.77 Cdn on the Toronto Stock Exchane. Inco fell $2.66, or 3.6 per cent, to $70.53. Xstrata shares rose slightly in London.

Canada can review any foreign acquisition valued at more than $250 million Cdn under the Investment Canada Act. Such a transaction must pass a "net benefit" test based on criteria such as employment and research and development. Canada has never rejected an acquisition by a foreign company under the investment rules, Mr. Assaf said.

Industry Minister Maxime Bernier declined to comment on the Xstrata offer.

Xstrata, in its statement yesterday, promised "no layoffs of operational staff across Canadian operations for three years," it the takeover is successfull. That includes Sudbury, where Inco and Falconbridge have adjoining mines.

BLOOMBERG NEWS.

[wanyee]

Tension high as small-scale miners venture into industry - Daily Nation, 23rd May 2006.

"...According to the geologist a value added, polished and cut gem of six grammes can fetch up to Sh270,000, while eight grammes of "raw" gem go for only Sh15,000...Laws put in place during the colonial period, which were aimed at shutting out the indigenous people, are also blamed for the frequent confrontations between local and foreign investors over land and mineral deposits...An example is the feud between independent miners and a company in Mwatate Constituency, which saw the area MP Marsden Madoka call for a reconciliatory meeting...The confrontation erupted after squatters invaded a 28,000-acre piece of land belonging to a private developer and started exploiting minerals...Mr Madoka observed: "Despite the locals having the right to benefit from their natural resources, the law is against them and that is why some wealthy people take advantage to exploit them."

[This is not in Kwale].

[wanyee]

Africa is Still Not Economically Free, Says Correa

The Post <http://www.postzambia.com/>

May 26, 2006
Posted to the web May 26, 2006
Nomusa Michelo
Lusaka

AFRICA is still not economically free, Cuban Ambassador Javier Correa has said.

And Vice-President Lupando Mwape yesterday led defence service deputy chiefs, members of the diplomatic corps and ministers in laying wreaths at the Freedom Statue in Lusaka in remembrance of the gallant fighters for Africa's independence.

In an interview at the Freedom Statue at the commemoration of African Freedom Day, Ambassador Correa said it was important for Africa to continue to fight for economic independence. "Even though Africa is politically free, economically the situation is not the same," he said.

"So we encourage the African countries to continue their fight for the control of their resources. Their wealth should be shared by the African people and not by foreign international corporations which are exploiting the resources of Africa."

Ambassador Correa pledged Cuban's continue support to Africa in various fields of interest.

"We support Africans very strongly, we are ready to continue co-operating with Africa in all possible fields, especially in education and health which we can offer," he said. "We are happy that they continue fighting."

And American Ambassador to Zambia, Carmen Martinez, described Zambia as a leader in the African region in terms of co-existence. "You have a lot to teach the countries about getting along and find resolution to problems," she said.

"The people of African need to treat each other in a better manner, treat the continent and its natural resources better. I think the African people and the African continent has a great future."

And World Bank country representative, Dr Ohene Nyanin, said Africa was making steady progress in reducing conflicts and increasing economic growth.

"We're making steady progress. If we look across the continent, the number of conflicts has come down. If you look across the continent, you see a lot of growth," he said.

Dr Nyanin said several of the continental projects that had taken off were an indication that Africa is heading the right way in the area of economic emancipation even though there was a long way to go. And delivering a sermon at the Freedom Statue, Zambia Army chaplain Major Moses Chirwa said it was time for Africa to awaken and take control of her natural resources.

"Africa must no longer be the zone of battle, suffering, injustice and oppression," he said. "It is time for Africa to show rulership over her abundant resources."

Solemn mood characterised the African Freedom Day commemoration as the army brass band played sombre tunes while the Vice-President laid a wreath followed by deputy service chiefs, members of the diplomatic corps and other delegates.

On Africa Freedom Day, Africans from all walks of life observe the creation of the Organisation of African Unity (now African Union) that was driven by aspirations of liberation, equality and justice. They also pay tribute to the fallen heroes.

[wanyee]

African Countries Make Strong Development Proposal.

On the Right Path to Development: African Countries Pave the Way.

The June 7 proposal by the African Group (an alliance of 41 African countries) to the WTO on managing trade in agricultural commodities is a refreshing way forward for addressing poverty and improving living standards in rural areas in the context of the Doha Agenda. The proposal emphasizes the need to ensure stable, equitable and remunerative prices for commodity producers and to deal with structural oversupplies in commodity markets. The proposal lays down a challenge to WTO members: are they serious about doing something for development with the Doha Agenda or not?

Since the Doha Ministerial Conference in November 2001, a group of African countries including Côte d'Ivoire, Kenya, Rwanda, Tanzania, Uganda and Zimbabwe, has called for WTO Members to address the rural crisis in developing countries that arises from the decline in prices of commodities. This group of African countries has emphasized the negative effects of the "colossal power asymmetry" in commodity markets, which allows a small number of multinational companies to gain an ever-increasing share of the profits from commodities trade, leaving producers in developing countries unable to get a fair price for what they produce.

To date, the majority of WTO members have not given serious consideration to these concerns although the declining price of agricultural commodities remains a serious obstacle to reducing poverty levels and to securing benefits from expanding global trade for many developing countries.

On June 7, the African Group took a stand on these vital issues. The proposal by the African Group identifies four areas for inclusion in the Doha negotiations:

(1) The elimination of tariff escalation where it discourages development. Tariff escalation describes a tariff structure in which tariffs increase as products are transformed from their raw state into a processed good. For example, tariffs on raw cotton are typically lower than tariffs on clothing. Tariff escalation al- lows developed countries to import raw materials at low cost from developing countries for their own industries but protects developed country industry from value-added imports, which discourages industrial development in developing countries...

www.tradeobservatory.org/library.cfm?refid=88129

---

What is the WTO?

www.actionaid.org/index.asp?page_id=685

---

WTO must reform to stop rich countries’ underhand tactics.
Thursday, June 29, 2006

"Threats, deception and manipulation are among the negotiating tactics used by rich countries in the current round of trade talks reveals a new report, The Doha Deception Round: How the US and EU cheated developing countries at the WTO Hong Kong Ministerial, launched today by ActionAid..."

www.actionaid.org/index.asp?page_id=1110

---

WTO talks threaten development disaster.

www.actionaid.org/index.asp?page_id=1108

---

WTO's Hong Kong trade deal leaves poor countries worse off.

www.actionaid.org/index.asp?page_id=1101

---

Time for a new approach to world trade.

www.actionaid.org/index.asp?page_id=1115

---

[wanyee]

Why Kulundu Ignored Pleas on Tiomin
By John Mbaria, The East African, Nairobi, Kenya.

Analysts say the apparent rush to license Tiomin could lead to the loss of hundreds of millions of dollars of investment...

www.minesandcommunities.org/Action/press164.htm

---

Confessions of an Economic Hit Man: How the U.S. Uses Globalization to Cheat Poor Countries Out of Trillions

www.democracynow.org/article.pl?sid=04/11/09/1526251

[wanyee]

N.B: The U.S public debt stands at about $7.4-trillion, which translates to approximately $26,000 per U.S citizen! “Such a hyper-economy cannot sustain itself. Someone, somewhere, has to pay” [Ken Saro Wiwa in 'Money for nothing – and the debt is free' - The Globe & Mail (Canada), 22nd May 2004].

---

(Unable to find the link, so I have posted the entire article).

I am sitting in Michael La Simba's airconditioned office in the heart of Kinshasa. La Simba is telling me about his plans to launch a National Mining Commission composed of leading international mining companies to act as a common front for communications with the government to improve governance and transparency in the mining sector. He's a man who's comfortable with his facts: he had an answer to every question I asked.

How much mineral wealth, back-of-the-envelope calculation, is under the Congo? He says, twenty-four trillion dollars. Now he wants an answer from me: why Canada, indeed? I take a stab using common sense. "Most people don't know it, but over half of all global mining operations raise their capital on the Toronto Stock Exchange. Bay Streetis where you go if you want money to mine-anywhere." He doesn't seem convinced, although he does nod pensively.

I find out later that Canada's involvement in the Congo all started in Newfoundland and Labrador. More than ten years ago, a little company named Diamond Fields International found a motherlode of nickel in Voisey's Bay, sparking off a bidding war which ultimately saw Inco Limited win the opportunity to fork over $4-3 billion to Diamond Fields for the rights. The two big winners in this deal were Diamond Fields' Robert Friedland and JeanRaymond Boulle.

While Mr. Friedland put most of his money to work in Asia, including Mongolia with his Ivanhoe companies, Mr. Boulle's money headed straight to the Congo. He hooked up with Laurent Kabila, a rebel on his way to taking the presidency of the Congo for himself. Mr. Boulle's company, TSX-listed American Mineral Fields,Inc. (AMFI), made a seminal deal: fund revolution in return for lucrative mineral concessions and a business-friendly government.

The world's financiers needed certain assurances. A week before Laurent Kabila was to take over the capital, Mr. Boulle flew in a group of bankers representing outfits like ClBC, Wood Gundy and Goldman Sachs in order to kick the tires of the incoming new regime and convince themselves of the Congo's new openness to foreign investment after a long winter under Mobutu's failed kleptocracy. I guess the bankers were satisfied because a week later an AMFI plane landed Laurent Kabila on his new runway in Kinshasa.

The Congo needs the world.

There have been recent outcries to boycott the Sudan from social investor guru Peter Kinder. The idea is that there are some places where investors should not go. Vince Borg, Vicd President at Barrick Gold, explains: "We were there [Congo] briefly and then got out because it was not the kind of place where we could operate responsibly.”

Many other Canadian companies stuck it out, while new ones joined the fray; mostly junior types or the kinds of companies without multi-billion-dollar reputations to lose.

Inside the Canadian Embassy in Kinshasa, Stephen Randall tells me: "You can see good things that happen with mining operations, and [you can also see] pure evil State-building, for instance.

There are almost no road links, no power lines, no infrastructure. The presence of the miners is insurance to keep the international community involved, particularly World Bank loans and UN troops on the ground.

The Congo also has a new Mining Code since 2003, which is generally well received as a fair deal for all, with a tax on profits of 30 per cent and royalty of 2.5 per cent on precious metals. The catch is, many of the companies under the new Mining Code have holding companies in tax havens, as well as operating control, making it easy to hide profits offshore.

On the evil side, four million people have died in the past decade because the Congo has the largest untapped mineral reserves in the world. Villages are massacred, women are raped, genitalia are hacked off, and children are force-marched into hard labor or given an AK47 and shown how to pull the trigger.

It works like this: rebel groups fight to win rich mineral concessions and then use the temporary spoils-truckloads and crates of ready-to-move coltan, cobalt, gold or diamonds-to finance more war. This is not a recipe for sustainable development, economic or otherwise.

Another unsustainable situation exists today with the $5 billion of State mining assets that were transferred to private companies (including many Canadian) for virtually no benefit to the State treasury. And the government can scarcely afford to do anything about it-it can't afford to scare off investors before they have laid down substantial roots. Paul Fortin, the Canadian chief executive of the Congo State mining company Gecamines, the company that piggy-banked the Mobutu regime for decades, says: "I am not here as Sherlock Holmes." Sitting in the lounge of the Memling Hotel, the place where deals are made in Kinshasa, he explains that it's a loser's game to try to dig up the dirt and uncoil the mysteries of past deals.

The Lutundula Parliamentary Commission, whose report was kept under wraps for several months after it was finished, disagrees with Mr. Fortin. The report comes down hard on war-time deals that in effect gave away the family jewels to firms with scant resources for little pecuniary benefit now, or in the future, for the Congo. The report recommended several measures, including cancellations, rejection of partnerships and renegotiating contracts. If the recommendations are adopted, all current deals will be affected. This risk isn't disclosed in the Management Discussion & Analysis (MD&A) of the affected publicly listed companies.

One investment analyst at Sprott Securities highlighted this issue in a March 28, 2006 research report on Katanga Mining Limited, calling it "a mine for pennies on the dollar."

The Congo (when known as Zaire) used to fund over half its state budget from the mining sector. In today's Congo, as seen in the 2005 State Budget, 57 per cent of State revenue is externally financed with injections mainly from the World Bank. Only one per cent of the budget comes from mining. When you consider that a former rebel, who was enticed to join the National Army, is not getting paid, and rebel militias are able to offer him $60 a month, a budget shortfall starts to look like an Achilles heel.

Insert: We believe the world needs the Congo, which is probably the last major undeveloped source of raw materials in the world. The extent of US and UN involvement in the country is a measure of how important stability in the Congo is to the West in terms of raw materials, regional stability and for eradicating ungoverned regions where terrorists can take refuge." -Sprott Securities. Insert ends.

There is another army that also needs to be fed.

They are known as Les Tresors, bands of treasure hunters who scrape the mud for gold dust and skim off the top. The first problem is that this is subsistence living, if you can even call it that, and it is largely unregulated, offering little benefit to the State. I saw one mine pit crawling with two thousand kids and youth working in gangs of eleven to make their 5° cents or dollar for the day.

The US Embassy in Kinshasa estimates that there are sixty to eighty thousand Tresors in the mineral rich province of Katanga alone. Many of these Tresors make their living by scavenging the property of international mining companies which are not yet in production. Incredibly, most of the companies I speak with have no idea how many Tresors they're dealing with. When the mines hit production, the Tresors will have to leave, and if somebody doesn't come up with another way for them to earn a livelihood, they will most likely turn to banditry or rebellion. In a country where the State cannot even afford to pay the army or police salaries, somebody means the companies.

The world needs the Congo, too. With one-tenth of the world's hydroelectric potential, enough fertile land to feed all of western Africa, and an estimated $24 trillion of minerals underground, this country the size of western Europe in the heart of Africa is the UN's largest experiment ever.

The world needs today's Congo and its upcoming democratic elections to be successful for three reasons. The hungry engines of industry demand the country's massive mineral capacity. Also, in a post9/11 world, there is no room for allowing failed states or wild zones in the heart of Africa, especially ones that have ample supplies of uranium. And it's an opportunity for the UN to show the world that it has the wherewithal to fix the international community's most pressing problems.

Insert: Third World UN Expert panel: "The elite network of Congolese and Zimbabwean political, military and commercial interests seeks to maintain its grip on the main mineral resources-diamonds, cobalt, copper, germanium-of the government-controlled area. This network / has transferred ownership of at least US $5 billion of assets from the State mining sector to private companies under its control in the past three years with no compensation or I' benefit for the State treasury of the Democratic Republic of the Congo." Insert ends

On July 30, the Congo is going to have its first Democratic elections in over 45 years. Thirty-four-year-old President Kabila is the leading candidate to continue in office. Since he took over from his father who was assassinated in 2001, he has mostly delivered on his four main promises: to get the foreign invaders out, bring unity, create peace, and get the elections started.

With a gargantuan effort from the UN, twenty-five million people-most of whom have never had any form of ID-were registered and given voting cards. In February, President Kabila promulgated a modem Constitution that local diplomats generally agree provides a legal cornerstone to build a healthy democratic state. Kabila tells me in a private interview at his home that "if the election doesn't go my way, I will not go back to the jungle." The acid test for a functioning democracy is the peaceful transition of power (for the interview as it appeared in the Financial Times, go to www.corporateknights.ca/ content/page.asp?name=kabila).
XXX
Toby Heaps is editor of Corporate Knights.
______________

Insert: Corporate Knights Report

In February, Corporate Knights investigated six TSX-listed mining companies with operations in the Congo (Anvil Mining Limited, Banro Corporation, First Quantum.Minerals Limited, Katanga Mining Limited, Moto Goldmines Ltd., and Tenke Mining Corp.). The investigation took Toby Heaps to all corners of the country, involving 11 planes, 5 helicopters, and many jeeps. Heaps interviewed over 130 people for this article ranging from the President of the country to the presidents of the mining operations to children working as informal miners on company property and local chiefs living in huts in the vicinity of mining operations. Local and international NGOs, media, professors, members of the clergy, lawyers, economists, union leaders, diplomats, UN, IMF, IFC and World Bank officials also provided invaluable insight for this article.

In the course of this investigation, Corporate Knights compiled a report evaluating the operations of these six companies in respect to the General Policies of the OECD Guidelines for Multinational Enterprises, assessing each company with a green/yellow/red score in nine different areas on the basis of their conformance with OECD guidelines. The full analysis is available online at www.corporateknights. i ca/content/page.asp?name=OECDmatrix. Any errors in this article are the sole responsibility of Toby Heaps.

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See also:

Canadian Companies in the Congo and the OECD Guidelines

www.corporateknights.ca/content/page.asp?name=OECDmatrix

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"Developing countries state their concerns at end of failed WTO meeting" (plus several pertinent articles on the WTO):

www.twnside.org.sg/

AND

WTO rules are mere neocolonial schemes - Daily Nation, 30th July 2006.

[wanyee]

“The secret is this. Our country has iron ore. Our country has workers in metal. The skills needed to smelt iron ore and turn it into pig iron has been with us for generations. Before imperialism these were the very skills that were marshaled to make spears, swords, hoes and different types of ring. But this knowledge did not spread for two reasons. The guild of metal workers tended to keep their knowledge to themselves, for in those days the small class of people who know the delicious taste of the sweat and blood of workers gathered in factories had not yet emerged. When the foreigners came here, they deliberately suppressed this native knowledge of metal working to make us buy things made abroad and thus help the growth of their industries.

“So today I say this. Let us unite, big and small, to develop our own machine tools, because the sweat and the blood of our own people is in cheap and endless supply.

“Don’t be deceived by anybody into thinking that we have no iron ore. There is no natural resource that is not available in this country, oil included. But even if we had no large supply of iron ore, we could still develop what in English has been called maintenance technology, yaani, the knowledge of turning used iron into usable smelted iron. What do you think has permitted Japan to survive as an industrial power?

“The sweat of our workers would enable us to manufacture machine tools to make pins, razor blades, scissors, matchets, hoes, axes, basins, water containers, tins and corrugated iron sheets, motor vehicles, tractors, steam and diesel engines, ships, aeroplanes, spears, swords, guns, bombs, missiles, missile-launching rockets or rockets for launching people into space – in short, to make for ourselves all the goods that are now made by foreigners. Then we would see if we too could not benefit from modern science and technology” [Ngugi wa Thiong’o, 1982; Devil On The Cross, Heinemann Educational Books Ltd. (Nairobi)].

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‘“Hundreds of rains before even my earliest memories, talk reached across the big waters of an African mountain of gold. This is what first brought toubob to Africa!” There was no gold mountain…but gold beyond description had been found in streams and mined from deep shafts first in northern Guinea, then later in the forests of Ghana. “Toubob was never told where gold came from,” said the old man, “for what one toubob knows, soon they all know”’ [Alex Haley, 1974; Roots, Bantam Doubleday Dell Publishing Group, Inc. (New York)].

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Gold was sustainably mined in Ghana for 4,000 years, whereas modern techniques such as open-pit mining would deplete the same reserves in 20 years [Joan Kuyek; National Coordinator, MiningWatch Canada].

[wanyee]

Herein lies the pressure point:

The World Bank MIGA Scheme: Keeping Poor Countries Poor
by Bovard, James
Executive Memorandum #199

May 10, 1988

(Archived document, may contain errors)

5/10/88 199

THE WORLD BANK MIGA SCHEME: KEEPING POOR COUNTRIES POOR

Last month, the World Bank formally launched the Multilateral Investment Guarantee Agency (MIGA). This new body will insure foreign investments in less developed countries (LDCs) against nationalization by host governments and against investment losses due to war. In addition, World Bank President Barber Conable maintains that MIGA will cover investments by LDC citizens in their own countries of funds held in overseas banks. Further, even before the program begins operations, Conable has agreed to consider a Japanese proposal that MIGA be expanded to insure short-term private foreign loans. This new MIGA scheme will impair rather than help the economies of LDCs. The fundamental cause of continuing poverty in many parts of the world is the failure of LDC governments to protect the property rights of their own citizens much less those of foreigners. State restrictions and expropriation of property give little incentive for productive economic investments. Yet rather than opposing government confiscation of property and punishing governments engaged in it, MIGA would subsidize such governments, thug encouraging this behavior. Congress currently is considering the World Bank's request for $75 billion in new lending authority, 18.75 percent to be provided by the United States. MIGA gives American lawmakers a good reason to reject this request. Hostile to Property Rights. Since 1981, direct foreign investment in the Third World has fallen by 50 percent - from $17 billion to roughly $8 billion. What is worse, citizens of LDCs have taken tens of billions of dollars out of their own countries') preferring the safety, of American and other banks in the developed world. The World Bank wants to reverse this trend, to encourage more foreign investment and stem capital flight via MIGA. Yet hostility by LDC governments to property rights in general and foreign investments in particular is the cause of the investment nosedive. Example: in 1982 Mexico nationalized its banks, expropriating the savings accounts of thousands of Americans and millions of Mexicans. Example: India, Peru, and many other governments have expropriated Western oil companies. And the government of Indonesia constantly changes the terms of its "contract" with Western investors, to gobble up an increasing share of their profits. It is no wonder that Western businessmen fear investing in Third World countries. In the short run, MIGA may pull more overseas money into LDCs. Yet MIGA will do so only by shielding governments from the consequences of their economically damaging actions.

In the long run, of course, LDC economies will remain sluggish unless LDC governments end their policies that impede investment. The World Bank's experience with Ethiopia is instruc- tive. After a Marxist military clique seized power in 1974 and nationalized all land and foreign assets, the Bank led the charge to give Ethiopia new credit and urged other lendersto do the same. This gave the regime no reason to change its economic policies. As a result, Ethiopia's economy is now in shambles and collectivized agriculture has brought on famine. Western Taxpayers Bearing the Cost. For prudent investment, MIGA is unnecessary. Several private insurance companies, such as Lloyd's of London, already offer insurance for foreign investments. The cost of this insurance accurately reflects the risk of entrusting capital to Third World politicians. MIGA simply would transfer the cost of risk from businesses to the World Bank, which receives a substantial portion of its funds from the U.S. government. The Japanese suggestion that MIGA could guarantee new foreign loans is particularly ill-conceived. Foreign banks already have poured hundreds of billions of dollars, into Third World countries. Most of these funds were wasted by LDC governments on subsidies for money-losing state-owned industries, high salaries for public sector bureaucrats, and bribes for corrupt politicians. World Bank insurance for commercial loans would remove incentives for economic reforms and force Western taxpayers rather than Western banks to pay the cost of Third World loan defaults. As for MIGA insuring investments by LDC citizens wishing to return their money from overseas accounts to their home countries, this fails to get at the root cause of capital flight. These citizens take their money abroad because they do not trust their own governments and fear expropriation or other violations of their property rights. Reform is needed in LDC governments, not in World Bank programs. Costing American Jobs. The MIGA approach could also harm the U.S economy by diverting investment funds that would otherwise stay in the U.S. into riskier foreign ventures. The federal government already has an agency that provides foreign investment insurance to American companies - the Overseas Private Investment Corporation (OPIC). The General Accounting Office recently concluded that OPIC has cost Americans thousands of jobs and is "having negative impacts on U.S. trade." OPIC also illustrates the danger of government insurance for foreign investment losses due to war. OPIC was involved in the recent effort to insure an Iraqi pipeline, despite the likelihood that the Israelis would, bomb it. MIGA cannot reduce the danger of investing in risky Third World countries without diverting resources from countries with sound investment policies. NUGA cannot reward untrustworthy governments without making irresponsible behavior more likely and discouraging economic reform. The U.S. Congress should recognize that this sort of policy is a primary reason why the World Bank does not deserve $75 billion in new lending authority.

Prepared for The Heritage Foundation by James Bovard a Washington - based consultant.

For further information: James Bovard, "The World Bank vs. the World's Poor", Cato Institute Policy Analysis No. 92, September 28,1987. U.S. General Accounting Office., "Foreign Aid: Impact of Overseas Private Investment Corporation Activities on U.S. Employment," May 1987.

Source: The Heritage Foundation
Policy Research & Analysis
www.heritage.org/Research/Economy/EM199.cfm

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See also:

The World Bank Vs. the World Poor
Cato Policy Analysis No. 92 September 28, 1987
www.cato.org/pubs/pas/pa092.html


Risky Business: How the World Bank's Insurance Arm Fails the Poor and Harms the Environment - www.foe.org/res/pubs/pdf/MIGAReport.pdf


LAWYERS' ENVIRONMENTAL ACTION TEAM, TANZANIA - ROBBING THE POOR TO GIVE TO THE RICH: HUMAN RIGHTS ABUSES AND IMPOVERISHMENT AT THE MIGA-BACKED BULYANHULU GOLD MINE, TANZANIA [SUBMISSION TO THE EXTRACTIVE INDUSTRIES REVIEW OF THE WORLD BANK, MAPUTO, MOZAMBIQUE, JANUARY 13-17, 2003]
www.leat.or.tz/activities/buly/eir.submission/eir.submission.pdf


World Bank Group Support for Extractive Industries in Africa:
Poverty Reduction or Poverty Exacerbation?
www.environmentaldefense.org/documents/2737_2737_PovertyRedux2.pdf#search=%22miga%20and%20poverty%20reduction%22

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[wanyee]

Canadian miners, explorers taken to task by African NGOs
By: Rodrick Mukumbira
Posted: '09-OCT-06 10:00' GMT © Mineweb 1997-2006

WINDHOEK (Mineweb.com) -- A call has been made to the Canadian government by African civil society organisations for it to regulate Canadian mining companies operating internationally.

In a communiqué released Monday, NGOs, members of the African Initiative on Mining, Environment and Society (AIMES) and academics from Cameroon, Congo Republic, Democratic Republic of Congo, Equatorial Guinea, Ghana, Nigeria, Sierra Leone, South Africa, Tanzania, Togo, Zambia and Zimbabwe called on the Canadian government to “develop mechanisms that will influence and regulate companies from the country involved in mining, oil and gas exploration which are reportedly perpetuating gross human rights violations”.

“Africa has become one of the major destinations for Trans-national mining companies, following liberalization of the mining sector about two decades ago. Canada is one of the leading countries that play host to mining companies operating in Africa,” said the communiqué. “While some of these companies may be contributing to national and community development in their areas of operations several of them have been severely implicated in cases of human rights violations and environmental abuses such as destruction of farmlands, water resources, protected forests, injuries and threats to death.”

The communiqué follows an Africa-wide meeting on communities affected by mining organised by Third World Network-Africa and hosted by Environmental Rights Action (ERA) in September in Port Harcourt, Nigeria.

At the meeting, communities from Democratic Republic of Congo, Ghana, Sierra Leone and Tanzania gave harrowing testimonies of human rights violations, environmental abuses and livelihood destructions perpetrated by Canadian mining companies.

“Nearly all of these companies including non-Canadian ones and national governments rely on voluntary mechanisms, especially in Africa where the standards of operations are low, for addressing community interest, livelihood challenges, environmental and human rights abuses. However, the systematic pattern, pervasiveness and persistence of these violations and abuses in the areas of their operations in Africa are pointing to the failure of voluntary mechanisms and national regulating standards,” said the communiqué.

It said the need for the Canadian government to intervene was “compelling and imperative due to three factors as follows: Africa was endowed with relatively large mineral and petroleum potentials and yet the least economically developed continent; it was a continent with weak extractive sector governance, policy and regulatory framework; and Canada’s own image as a beacon of good values, democracy, good governance and champion of peace would be severely undermined by the activities of Trans-national mining companies incorporated in Canada or listed on Canadian Stock Exchanges.”

“We therefore wish to call on the Government of Canada to use the opportunity offered by its own multi-stakeholder processes to develop mechanisms for influencing and regulating mining companies that are listed and or home to Canada but operating internationally in particular Africa,” said the communiqué.

Whether the respective Governments in the African countries cited will agree with this assessment by NGO groupings basically opposed to mining, remains to be seen, but where abuses are substantiated, companies and governments need to take rapid action.