South African government must sign up to global mining initiative
The Democratic Alliance (DA) strongly urges the South African government to support good business practice in the mining industry by joining the global Extractive Industries Transparency Initiative (EITI).
Refusing to do so would signal an unhealthy commitment to secrecy. This undermines investment in an already fragile industry through increasing political risk. Reputable mining houses will increasingly be replaced by those who have no concern for job creation and environmentally sustainable mining.
The EITI aims to strengthen governance in mineral-rich countries by improving transparency and accountability in mineral revenue flows. Too often, deals are engineered by politically protected tenderpreneurs who fleece the poor by securing contracts that benefit a narrow band of elites.
Transparency should serve as a vehicle for redress and job creation in an industry that has historically been exploitative. I will thus be writing to the Chairperson of the Portfolio Committee on Mineral Resources, Mr Fred Gona, to request that he invite Minister Susan Shabangu to appear before the committee to account for government's unwillingness to join the EITI.
The hope of the EITI is to free the 3.5 billion people who live in mineral-wealthy countries from the shackles of poverty through open verification and full publication of company payments and government revenues from mineral extraction.
South Africa must join the initiative for the sake of its global integrity and the millions of people who would benefit from greater transparency in mining across the continent. The move is costless, and the benefits are numerous.
Countries that refuse to sign up to the EITI invariably do so to protect questionable interests and thereby encourage centralisation and repression.
With politically connected South Africans involved in mining north of our borders, it is especially imperative that government step up to the transparency plate and lead the continent out of its so-called ‘resource curse' - the paradoxical relationship between mineral wealth and weak developmental outcomes.
Failure to do so runs the risk of creating the perception that it won't join the EITI because it is trying to protect narrow interests in countries like the Democratic Republic of Congo (DRC). President Jacob Zuma's nephew Khulubuse Zuma, for example, has mining interests in the (DRC). He is also the chairman of Aurora Empowerment Systems, which is accused by liquidators of asset-stripping bankrupt Pamodzi Gold.
In refusing to join the EITI, government argues that we already have strong financial accounting systems in South Africa. This misses the point entirely - joining the EITI is an opportunity to signal our global commitment to a transparent mining industry. It is only through transparency and accountability that mineral wealth can benefit the poor.
Statement issued by James Lorimer MP, DA Shadow Minister of Mineral Resources, March 6 2012
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