Lilongwe – Malawi has fallen into the resource-curse trap by failing to protect the rights and livelihoods of people living in budding mining communities, Human Rights Watch (HRW) has said.
The global human rights body in its latest report observed that families living near coal and uranium mining operations in northern Malawi faced serious problems with water, food, and housing.
“They are left in the dark about health and other risks from mining,” said HRW in its 96-page report titled, ‘They Destroyed Everything': Mining and Human Rights in Malawi.’
The report examined the impact of extraction industries on communities in northern Malawi’s border district of Karonga, which was located on the shores of Lake Malawi.
“Malawi shouldn’t repeat the mistakes made in resource extraction in other countries in southern Africa,” said HRW researcher Katharina Rall.
She added: “It is not enough to create a fertile investment climate for mining companies. The government urgently needs to protect the rights of affected communities."
Human Rights Watch documented rights violations by mining operations of Eland Coal Mining Company, Malcoal, and Paladin Africa Limited.
It said that Malawi lacked adequate safeguards to ensure the necessary balance between development efforts and protecting the rights of local communities.
"Weak government oversight and a lack of information leave local communities unprotected," reads the report in part.
Malawi's institutional framework for the mining sector was rutted, as there was no single legal or policy framework that articulated where the roles of the different institutions interact and detach.
Malawi’s mining minister Bright Msaka admitted the challenge in an interview with News24.
He was quick to explain that the government had reviewed its mining legislation in order to bring sanity in the industry.
"It is indeed true that it is so difficult to police mining activities because of the current legislation. But the good news is that we have reviewed the laws and we believe the new law will ensure a properly regulated mining sector," he said.
According to Msaka, government was meeting stakeholders in the mining sector to sensitise them about the reviewed act.
"We want the new law to balance issues of benefits to Malawians and those of investor-friendliness," he said.
According to the country's current laws, every mineral found in Malawi belongs to the president. Any mining activity is deemed illegal if not sanctioned by the president through the Ministry of Natural Resources, Energy and Mining.
Paradoxically, despite having that law there were no legal penalties for those found mining gold, garnet or other precious metals in the country illegally.
A local grouping Citizens for Justice believed that many companies were getting away with unscrupulous activities due to an archaic mining law.
Reinford Mwangonde, the group's executive director attributed dishonest activities in the mining sector to the outdated the Mines and Minerals Act of 1981.
"The major weakness is that the act gives considerable power to the president and the minister responsible for mines, without providing any checks or balances to the mining companies," he said.
According to an investigation by ActionAid Malawi, the southern African nation lost a lot of revenue through tax dodging.
It says Malawi lost out on $43m in mining revenue between 2009 and 2014, from a single company, the Australian mining company Paladin.
“The money has been lost through a combination of harmful tax incentives from the Malawian government, and tax planning using treaty shopping by Paladin,” stated Action Aid in its report An Extractive Affair published last year.
The Australian mining company used the Malawi-Netherlands treaty to avoid paying $43m of taxes by simply by routing money from Malawi to Australia via the Netherlands.
"Between the lowered royalty rates and the avoided withholding taxes, Paladin lowered its tax contributions to Malawi by more than $43m," stated Action Aid.
Paladin, which halted its operations in Malawi a year ago, denied the allegations.
- News 24