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TANZANIA: THE MINING (CORPORATE SOCIAL RESPONSIBILITY) REGULATIONS 2023

By Kelvin Mosha,Allen Lema Tuesday, July 25, 2023
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On 23 June 2023, the Minister for Minerals (Minister) published the Mining (Corporate Social Responsibility) Regulations 2023 (Regulations) via Government Notice No. 409 of 2023. The Regulations provide guidance to mineral right holders on the implementation of section 105 of the Mining Act, Cap 123 of the Laws of Tanzania (Act).

Application

The Regulations apply to individuals or entities holding mineral rights, specifically those falling within the scope of Part IV of the Act. This encompasses various categories such as prospecting, gemstone prospecting, special mining, mining, primary mining, processing, smelting and refining licence holders.

In accordance with the Regulations, mineral right holders are responsible for formulating an effective corporate social responsibility plan (CSR Plan) for the host community. The CSR Plan must be jointly agreed with the pertinent local government authorities (LGAs) responsible for the area where mining activities are being conducted. The Regulations further require projects proposed by LGAs to be deliberated on by the Ward Development Committees in the presence of the mineral right holder. These proposals are to be submitted to the relevant district, town, municipality, or city council for thorough analysis and review by October of each year.

Allocation of resources

The implementation of the CSR Plan must adhere to a resource allocation ratio of 40% dedicated to projects within the village and local community where the mining activities are taking place and 60% dedicated to projects within the district council, town, municipality, or relevant city where mining activities are taking place.

The Corporate Social Responsibility Experts Committee

Regulation 5 imposes a requirement on each district council, town, municipality, or relevant city where mining activities are taking place to establish a Corporate Social Responsibility Experts Committee (Committee). The composition of the Committee includes the executive director who serves as the chairperson, the planning officer who assumes the role of secretary, the mining commission officer of the respective area, two representatives from the mineral right holder, an engineer, a State attorney, an environment officer, a community development officer, and an officer from a specific project to be implemented through the CSR Plan.

The functions entrusted to the Committee, as stipulated by the Regulations, grant the Committee certain powers. These include the authority to review plans, monitor compliance with CSR plans, and provide professional advice with regards to CSR plan implementation and other relevant matters related to CSR. They are required to submit their findings to the district, town, municipality, or relevant city council. The Committee is also tasked with ensuring that the implemented projects deliver value for the resources allocated, maintaining the quality of materials used, and ensuring efficiency in the execution of CSR projects.

Corporate social responsibility plan approval

The CSR Plan is first submitted to the Committee which will review and analyse it within 14 days from the time it was received. The Committee will then submit it to the relevant district, town, municipality or city council (Council) with its advice.

All councils where mining activities are taking place are required to review and either approve or reject the CSR Plan submitted to it by the Committee within seven days of receiving it. If the CSR Plan is rejected, the Council must give reasons for its rejection and require the mineral right holder to make the necessary improvements to the CSR Plan and resubmit it for approval.

Once the CSR Plan is approved by the Council, it will be forwarded to both the Minister responsible for LGAs and the Minister for Finance within 30 days. Upon receiving the CSR Plan, the Ministers will appoint a joint committee to advise on the CSR Plan. The Ministers can either approve or reject the CSR Plan following the recommendations of the joint committee within 14 days. If the Council does not receive any feedback from the Ministers, the CSR Plan is deemed approved after 21 days have lapsed.

Regulation 10 requires that the CSR Plan considers environmental, social, economic and cultural activities in line with the priorities of the respective host community. The Regulations also require the CSR Plan to be measurable by criteria of usefulness and success, and to be enforceable and capable of being implemented within the agreed timeframe.

Financing

According to regulation 11, mineral right holders are obligated to provide funds for the implementation of all CSR projects located within the areas where mining activities are taking place and to cover all the projects in accordance with the CSR Plan. Mineral right holders are also required to submit written information to the relevant Council and the Mining Commission (Commission) detailing all payments made to contractors, subcontractors and other partners involved in the implementation of the CSR projects.

Further filing requirements under the Regulations require mineral right holders to submit quarterly and annual reports to the Commission regarding the amount of money expended and the CSR projects implemented. The quarterly report must be submitted within 14 days, while the annual report must be submitted within 60 days from 31 December each year.

In addition, regulation 12 authorises the Commission to conduct audits of the funds allocated for CSR by the mineral right holders. If any of these funds remain unutilised in a given fiscal year, the mineral right holder is required to allocate such funds in subsequent years. Any money remaining from the implementation of a project, upon all stakeholders’ approval, will be reinvested in other CSR projects.

Corporate social responsibility implementation

A mineral right holder is responsible for the implantation of the CSR Plan in the host community in accordance with the procurement requirements. However, the mineral right holder may also engage a contractor or any other person in the implementation of the CSR projects. The licensee is required to submit a report on the implementation of the CSR Plan to the relevant Council and the Commission every quarter.

During the implementation process, the respective Councils have the authority to supervise the execution of the CSR projects and may conduct inspections of contracts, bills of quantities, or any other pertinent documents. Each relevant Council is required to review the CSR program every fiscal year and submit a report to the Commission.

Dispute resolution procedure

The Regulations also provide a dispute resolution procedure where a conflict arises between the mineral right holder and the relevant Council. Under regulation 17, parties are required to resolve any dispute through negotiation. If negotiations fail to resolve a dispute, either party involved has the option to bring the dispute to the attention of the Commission. The Commission will decide within 14 days of receipt of the complaint. If a decision made by the Commission is contested, an appeal can be made to the Minister who will make a decision within 30 days of receiving the complaint.

General requirement

Mineral right holders and the relevant Council, in collaboration with the Minister, are required to provide educational training at least twice per year to the host community.

Penalty for non-compliance

Non-compliance with the Regulations is an offence punishable in line with the Act. The prescribed penalties under section 63 of the Act include the suspension or cancellation of a licence.