MINING & SOCIAL ISSUES with Ignatius Kamwanje

Resettlement and Compensation for displaced communities due to Mining Activities in Malawi

Malawi has considerable deposits of minerals such as iron ore, niobium, tancol (tantalum and columbium) and zirconium, graphite, limestones, gemstones, rare earths, mineral/energy fuels like hydrocarbons, coal, uranium and also dimension stones. Malawi’s mining industry is very small as compared to surrounding countries in the region and most licences that have been awarded are for prospecting and not mining. Malawi is a resource rich country. Below is a brief quote from the (World Nuclear Association, 2014).

Malawi was a producer of brick clay, cement, coal, crushed stone, lime, limestone, and sulfuric acid fordomestic consumption in 2013; Malawi’s consumption of minerals and mineral fuels, however, was not globally or regionally significant. The country also mined and exported uranium; gemstones such as amethyst, garnet, ruby, sapphire, and tourmaline; and such ornamental stones as agate and rose quartz. Malawi accounted for nearly 2% of world uranium production in 2013.

Although mining is done in Malawi, most of the minerals are mined at Small Scale level. However, the country does not have a national resettlement policy although resettlement and compensations are reflected in the Mines and Minerals Policy (2013) and the National Land Policy (2002) and also projects in energy and roads have resulted in land acquisition, resettlement and compensation although little data is available to indicate the numbers of displaced communities or households. Many of these have been guided by resettlement policy frameworks and action plans that are specific to the project in question and usually required as part of the conditions for projects that are financed by international lending institutions, such as the World Bank or IFC.

Much of the resettlement literature in Malawi is based on relocating people due to infrastructure development and land reform. There is no concrete and binding literature on mining-induced displacement in Malawi but there are a number of reports produced by civil society organisations (CSOs) and non-governmental organisations (NGOs) on the impact of mining operations on communities. In particular, the contested impacts of Kayelekera are documented; this operation saw the resettlement of some households in line with government legislation. In the same vein the Kanyika Niobium Project also saw proposed relocation of the communities to a new area although still up to now there is a conflict due to the delay in its implementation.

Villagers in Malawi have been forcibly evicted from their homes to make way for coal and uranium mines and consequently face serious problems accessing safe water. This is according to a “Human Rights Watch Report,’’ which claims that the government lacks adequate safeguards to protect those affected.

Villagers narrated stories that they were given little to no notice that mining would begin in their area, and unsatisfactory or zero compensation for resettlement, the report said. It also claimed the villagers had suffered problems with their crops and water sources and were worried about the effect the mining was having on their health.

Although the villagers claim that they had been forcibly evicted, there is need to applaud one mining company that invested heavily in social improvement projects, the Kayelekera Uranium Project. They solely funded the water purification plant at Karonga Boma. They built a clinic in Kayelekera, roads, some houses and rehabilitated schools. They provided direct support to the community in the form of donations of food, non-mining vocational training and school supplies. They also paid compensation to the displaced families although there is still an outcry from some CSOs that not much in terms of financial requirement was compensated and paid for.

Displacement poses a risk to socio-economic sustainability. Negative effects include, joblessness, loss of land and homes, marginalisation, increased morbidity and mortality, food security issues, loss of access to property, psycho-social issues, social and community breakdowns etc.

In order to assess the compensation of people as a result of mining activities, the following principle elements may be important to consider: Note that these are but only a few

• the disruption of the socio-economic activities
• change or conversion of use of the land after mine closure
• duration of the mining lease
• loss of expected income which depends on the nature of crops and their life expectancy
• any other disturbance suffered as a result of the grant of the mineral right
• diminution of the value of the land as a result of the diminution of the use made of or which may be made of the land
• severance of any part of the land from other parts
• any surface rights or access
• the cost of re-establishing commercial activities elsewhere in a similar locality
• loss of net income during the period of transition

However, in the mining sector, the World Bank Operational Policy (OP) and Bank Procedures (BP) 4.12 on ‘’Involuntary Resettlement ‘’and the International Finance Corporation’s (IFC’s) Performance Standard 5 on ‘’Land Acquisition and Involuntary Resettlement’’, first adopted in 1980 and 2006 respectively are most commonly applied. Most mining giants like Rio Tinto, BHP Billiton, Arcelor Mittal, Barrick, Vale, use one of these standards to govern their resettlement policies and planning. They reliably commit themselves to the application of the IFC Performance Standards in their policies on community engagement, human rights and sustainable development, even if the IFC is not providing project finance. A mining company should therefore treat the resettlement aspect as an integral component of the development process and devote the same level of effort and resources to resettlement preparation and implementation as to the rest of the project. This is because implementing resettlement as a development program not only helps the people who are adversely affected but also promotes easier, less-troubled implementation of development projects.

The major international financial institutions, including the World Bank, International Finance Corporation (part of the World Bank Group), African Development Bank and Asian Development Bank, have their own involuntary resettlement policies for projects for which they provide finance. These policies have most frequently been applied towards more sustainable development and are an integral part of the approach these lending institutions take, manage risk for project financing. They have been developed to    provide substantive and procedural policy protections for people displaced from their livelihoods and/or homes by projects financed by the institutions.

Case Study: A scenario that needs to be avoided at all cost.

In 2011 Globe Metals entered into negotiations and consultations for the resettlement of the Kanyika   Community and the payment of compensation for any loss and damage occasioned to the Community as a result of the implementation of the Project. The following issues were brought forward:

• that Globe Metals would resettle all members of the Kanyika Community adversely affected by their operations by the year 2012 (the ‘resettlement undertaking’) and compensate any loss and damage suffered as a result of the project (the ‘compensation undertaking’);
• the Mzimba District Commissioner gave assurance to the Kanyika Community that he would ensure they were paid compensation and relocated from the Kanyika Area by the year 2012.

What followed thereafter?

The Kanyika Community significantly laid off their use of their land, ceased long term activities including their homes which were marked for demolition by Globe Metals & Mining Ltd. Five years down the line, Globe Metals is not honouring the terms agreed.

Observation

There is one “Resettlement Policy Framework” produced for the proposed Globe Metals & Mining at Kanyika Niobium Project which can be accessed and it committed itself to adhering the IFC guiding principles and ofcourse the Malawian Laws at local level. Similarly, Paladin Africa in its Kayelekera Uranium Mine project also committed to the IFC standards through adherence to the Equator Principles that aligned with the IFC standards. It is anticipated that the Songwe Rare Earth Project and the    Malingunde Graphite have also prepared theirs that conforms to the IFC Standards.

Lessons Learnt

In August 2017, the Kanyika Community commenced an action in the High Court seeking constitutional and common law damages and compensation. In September 2017, the Attorney General, on behalf of the second defendants filed a Defence denying the Kanyika Community’s Claims. The first defendants also filed its Defence denying the allegation. The matter has since been referred for mediation.

Opinion

It recommended that mining companies in Malawi use and follow the International Guidelines for Resettlement and Compensations though they are liable to have one for a specific project. These should also be legally bounded to avoid the Kanyika scenario and also a Memorandum of Understanding (MOU) plays a significant role. It has also been observed that displacement of communities was done hurriedly before significant final processes were followed as a result the communities felt cheated because they were kept waiting for too long without tangible results on resettlement and compensation issues.

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This piece was initially published in Malawi’s Mining & Trade Review Issue Number 63 (July 2018).

The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.