THE PRESIDENT OF THE UNITED
REPUBLIC OF TANZANIA.

The President of the United
Republic has been given a key role through the new section 5 (a) of the Mining
Act which vests the entire property and control of minerals to the President
who holds this in trust of the citizens of the United Republic. The same is
reiterated under section 4 (2) and 5 (2) of the Sovereignty Act. Previously,
the minerals were vested in what I consider to be a lose term of the “United
Republic”. Section 5 (b) of the Mining Act gives the Government lien over the
minerals and this was briefly discussed in “Shikana Mining Series No.1”).

This provision of empowerment has
really given the President the force and legal right to protect the minerals in
its control and property, this is perhaps explaining the actions so far by the
president who has commissioned investigations as well as summoned individuals
in the mining industry to the State House for queries and discussions.
Considering the current President’s efforts to fight corruption and the
numerous corruption scandals associated to the energy and natural resource
sector, it would make sense to concentrate such a responsibility as holding the
resources in trust by the President.

The President also has the power
to declare any area which is subject to mining operations a “controlled area”.
The
procedure is that the President consults with the Minister responsible for
Local Government Authorities and that the controlled area is also gazette.
Special conditions will be prescribed to the “controlled area” and
contravention of these conditions will constitute an offence.

THE MINISTER OF MINERALS

Part III of the Mining Act which
was entitled “Administration” was repealed and replaced by new provisions which
specifically define the role of the Minister of Minerals, unlike the previous
Act. Section 19 of the Mining Act provides that the Minister is responsible for
preparing policies, strategies and legislative framework for the exploration
and exploitation of mineral resources and monitoring the implementation of the
same. The Minister further has the responsibility of monitoring all
establishments with responsibility of the Ministers for minerals and report to
the Cabinet.

The Minister also has the duty to
promote mineral resources in Tanzania for research and exploitation. The
Minister’s powers are removed with regards to Special Mining Licenses, whereby
the new Mining Commission is the entity that compiles the application and
submits the same to the Minister who is responsible to present this to the
Cabinet of Ministers for approval. Furthermore, the old section 10 of the
Mining Act empowered the Minister to enter into Mining development agreements
(MDAs) Development Agreements however, this has now been repealed.

THE NATIONAL ASSEMBLY.

The National Assembly, also
known as The Parliament of the United Republic of Tanzania, in accordance with
section 12 of the Sovereignty Act and section 4 of the Contract Review Act, has
the authority to review all mineral agreements and can also renegotiate any
existing or future agreements.

Section 5 of the Contract
Review Act provides that all mineral agreements have to be submitted to the
National Assembly. This provision, particularly giving the power to the
National Assembly to approve future agreements was heavily debated by
parliament again under certificate of urgency back in September 5, 2017. It was
suggested that the powers of the National Assembly to approve future contracts
that dealt with natural resources generally
should be removed since power of the National Assembly will be
extended ultra vires. It therefore followed that the Written Laws
(Miscellaneous Amendments) Act No. 3 of 2017 amended section 47 (5) of the
Petroleum Act which removed the power of the National Assembly to approve
future Production Sharing Agreements as well as other similar agreements under
the Petroleum Act, however the same was not made for the mineral agreements
although it is understood that the intention was strongly present.

Previously, agreements entered
into by the Minister were shrouded under secrecy therefore these provisions
that empower the National Assembly to ensure checks and balances are met as
well as the added procedure of the approval of licenses by the Cabinet of
Ministers for strategic
investments, such as those under Special Mining Licenses, are is a real
positive step towards transparency and reducing certain irregularities on the
whole.

Section 6 of the Sovereignty
Act states that it is unlawful to make any arrangement or agreement over
natural resources except where the interests of Tanzanian citizens are approved
by the National Assembly and fully secure.

MINING COMMISSION

This is a new institutional body
that is created by the amended Mining Act. In reading the Mining Act and in
particular the interpretation clause (section 4 of the Mining Act), it would
seem that the Mining Commission has taken over the functions that were
previously the responsibility of the Mining Advisory Board, the Commissioner of
Minerals, the Zonal Mines Offices and the Tanzania Minerals Audit Agency. The
Mining Commission is composed of the Chairman, Treasury, Ministry of Lands,
Ministry of Defense, Ministry responsible for Local Governments, Attorney
General, Federation of Miners Association in Tanzania and two individuals who
possess knowledge on the mining industry.

There is exclusion of the small –
scale miners and mineral dealers, the ministry of environmental protection and
institution for higher education. The Ministries are represented by Permanent
Secretaries and equally the Federation of Miners is also represented by its
Secretary.

The Mining Commission’s
responsibilities are enumerated under section 22 (a) to (v) of the Mining Act.
The functions are extensive and wide-ranging. The Mining Commission’s functions
include the review of special mining license applications before submission to
the Cabinet; granting of prospecting and primary mining licenses; suspension
and revocation of licenses; the monitoring of the mining operations (including
then assessment of the quantity and quality of minerals produced); the audit of
expenditures for tax purposes; the assessment of local content performance and
investment in the local economy and the monitoring of environmental management.
In the next week’s article, we will elaborate more on this as we will examine
the environmental impact assessment in relation to Mining industry. Other
duties include to make regulations for the industry.

THE ATTORNEY GENERAL’S OFFICE.

The Written Laws (Miscellaneous
Amendments Act (No.3) 2017 that was passed on September 15, 2017 provides that
the Attorney General shall have the right to intervene in any suit or matter
instituted by or against the Mining Commission. This provision was added after
and provides protection to the Mining Commission where it is suing or being
sued. In this event, the Government Proceedings Act provisions shall apply to
the proceedings of the suit or matter that is instituted against the
Government.

MINISTER OF
CONSTITUTIONAL AFFAIRS.
The gatekeeper of the Natural Wealth and Resources Permanent Sovereignty Act of
2017 is the Minister of Constitutional Affairs. It is important to point out
that the Written Laws Miscellaneous Amendments Act No. 3 of 2017 amends section
3 of the Sovereignty Act to include under the definition of “natural
resources”, mineral resources.

As such, the Minister of
Constitutional Affairs has the duty to of making regulations that will
prescribe the code of conduct for investors in natural wealth and resources.
The Minister also has to develop the minimum guidelines for inspection,
monitoring and evaluation of investments in natural wealth and resources; and
create regulations that are incidental or conducive to the effective
implementation of this Act.

The Minister of Constitutional
Affairs also has the power to make regulations for the implementation of the
Natural Wealth and Resources Contracts (Review and Renegotiation of
Unconscionable Terms) Act, 2017.

THE JUDICIARY OF TANZANIA.

Typically, the jurisdiction
clause in contracts governing minerals and natural resources generally provided
for foreign international arbitration in the event of dispute resolution.

Section 11 (2) of the Sovereignty
Act formally provides that for disputes arising from extraction, exploitation
or acquisition and use of natural wealth and resources will be adjudicated by
judicial bodies or other organs established in the United Republic and in
accordance with laws of Tanzania. Section 11 (3) of the Sovereignty Act goes
further in providing that all contractual arrangements should include such
provision regarding dispute resolution.

COMMISSIONER FOR MINERALS.

Previously, the Commissioner for
Minerals had extensive powers to administer the Mining Act, however the new
Mining Act, section 20 reduces the functions of them Commissioner for Minerals
to advising the Minister of Minerals on matters related to the mining sectors.
In practice though, the Minister delegates the duty of foreseeing policy
implementation to the Commissioner for Minerals as well as the role for
promotion.

MINES RESIDENT OFFICERS.

The Mines Resident Officers are
responsible for the day to day monitoring and reporting of mining activities at
mining sites and they are to be stationed at every mining site. The Mines
Resident Officers have the task of also verifying records, information and
production reports kept by the holder of mineral rights and they also have an
oversight over the mineral storage facility at the mine as well as the mineral
transportation to the Government Minerals Warehouse (section 27 of the Mining
Act).

GEOLOGICAL SURVEY OF TANZANIA.

Section 27A establishes the Geological Survey of Tanzania
(the “GST”), which is responsible for all matters related to geological
activities other than prospecting, exploration and mining activities. In
particular, the GST shall;

a)      advise
the Minister on geological matters;

b)      undertake
the geological mapping of Tanzania, and may for that purpose, engage contractors;

c)       provide
data concerning the geology and mineral resources of Tanzania, and generally
assist members of the public seeking information concerning geological matters.

It has other extensive
responsibilities such as promoting investment in the mining sector through the
use of data, acquiring Geo-scientific data and information that will assist the
Minister of Minerals in making its decisions, etc. The GST has the
responsibility to establish the National Mineral Resources Data Bank.

Mining data is extensively
regulated whereby the Mining Act explicitly states that the mineral data
generated by the Mining Act, whether it is from the GST or the mining
operators, is owned by the government (section 27F (2) of the Mining Act). Furthermore,
the data which is submitted by the mineral rights holder is given free of
charge to the GST (section 27F (4) of the Mining Act). The Mining Act provides
however that the GST can allow the mineral right holders to market the use of
data “on terms to be agreed” (section 27F (5) of the Mining Act).

Seeing as mining data makes up
the value of the project, it is difficult to see how mineral right holders can
be comfortable with such an arrangement.

A major change in the new
mining act is the question of Indemnity. Previously all officers discharging
duties under the mining act were exempt of liability. The new law provides that
all officers are liable. This is encouraging and in line with the Government’s
fight against corruption.

 

 

 

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