Lawmakers urge EU to halt funding Mopani
Lawmakers urge EU to halt funding MopaniBy Chiwoyu Sinyangwe
Fri 27 May 2011, 07:00 CAT
FIFTY members of the European Parliament have called for a halt on EU public financing for mining projects like Mopani Copper Mines until adequate standards and regulations are in place. They said there was need for strong standards on mining firms to ensure communities where they operated benefitted from their resources.
The lawmakers were drawn from four different political parties including Progressive Alliance of Socialists and Democrats, European United Left–Nordic Green Left, Alliance of Liberals and Democrats for Europe and the Greens–European Free Alliance.
“The added value of mining projects for development is highly debatable,” said Thijs Berman (S&D) who presented the letter in the European Parliament last Tuesday. “Due to favourable tax regimes, low labour standards and a significant environmental impact, it is rarely the hosting country or its population benefiting from these mining projects.
It is rather the international mining companies that make the profit and I don’t see why they would need public financial support for that. At least not until standards and regulations are in place, that can guarantee a positive outcome for those who need it: poor countries and their population.”
The letter refers to previous successful processes in other sectors such as the World Commission on Dams or the World Bank’s Extractive Industries Review as worth following.
Recently, a consortium of Zambian and European-based NGOs petitioned EU to halt funding to Mopani Copper Mines (MCM) after a pilot audit revealed glaring irregularities and inconsistency in production and revenue figures that it submitted to Zambia Revenue Authority for tax administration, most of which hinge on its links to Glencore AG.
MCM had also been accused of polluting Mufulira by releasing sulphur emissions from its heavy emission copper smelter beyond international standards.
According to the European Parliamentarians, their initiative came as a result of gross pollution by Mopani, a consortium that is mining copper and cobalt in Kitwe and Mufulira.
And Centre for Trade Policy and Development (CTPD) director Savior Mwamba said by financially supporting companies like MCM, the European Investment Bank was doing more harm than good.
“These companies bring little social or economic benefits to our country. To the contrary, they are depriving the people of Zambia of their right to social and economic benefit,” said Mwamba.
Labels: EU, MOPANI, TAX EVASION, WINDFALL TAX
posted by MrK @ 4:48 PM
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From a December 2010 interview with Savior Mwamba:
Mining baleful for development
December 15, 2010
In the beginning of December 2010 Counter Balance members – Bankwatch Network, urgewald and les Amis de la Terre – organised a speakers tour with Saviour Mwambwa from the Centre for Trade Policy and Development (CTPD), a Zambian NGO. The Tour visited Germany, Czech Republic, Poland and France to convince policy makers, students and civil society organisations of the baleful impact of the mining sector on development. For those who missed the Tour Savior explains what it is all about in this interview with Counter Balance.
“The EIB plays a negative role for development in Zambia”
Savior Mwambwa knows all about the Zambian mining sector and the problems they come with. For years he has been trying to improve the policies of the mining companies but a lot of problems remain: tax evasion, huge environmental impact, lack of transperency, … “All problems which the European Investment Bank (EIB) closes an eye on”, Mwambwa says. In december he is in Europe on a speakers tour organised by Counter Balance members to raise awareness among ngo’s, the public and decision-makers about these problems. Those who missed the speakers tour can check out some written and audio interviews in which Savior Mwambwa elaborates on the main problems of the mining sector in Zambia and the role of the EIB.
Savior Mwambwa works for the Centre for Trade Policy and Development (CTPD) in Zambia. This is a network of civil society organisations working on themes such as debt, mining, and agriculture, all tackling different issues of economic justice. “We want to raise awareness among the general public in Zambia. Local people need to speak out for themselves and defend themselves against problems caused by multinational corporations or trade policies”, he says. “But also the people in the North and their policy makers need to know, as they can hold their companies – which cause the problems – to account”, he adds. And that’s why he’s here: to make us aware of the baleful impact of northern mining companies in his country. After all these years they remain huge.
What are the main problems that these mining companies cause?
There is the whole issue of the lack of contribution of the mining companies to the Zambian economy. They are not committed to meet their tax obligations, as can be seen especially with Mopani: until today they claim that they are not making any profit and therefore can’t pay taxes. But in the mean time there is this high secrecy around their mining operations. Nobody knows what exactly they mine and how much they mine. They profit from the fact that the government hasn’t got the capacity to monitor their activities and check what they exploit and export. The government is completely depending on what the company reports on this. While it is hard to prove, there are strong indications that Mopani uses tax evasion practices.
Beside the non-payment of taxes, the jobs at Mopani have been dramatically reduced, especially during the crisis. Many workers are today employed through subcontractors, getting paid worse and getting fewer social services.
(Continued...)
Besides these problems there is the disregard of the company for the environment: agricultural land has been damaged severely and there are heavy sulphur emissions into the air from the copper smelter. Despite promises from EIB that their loan would help to reduce sulphur emissions, this still hasn’t been the case.
The Lumwana mine has the additional problem that the copper deposit also contains uranium. The company plans to exploit this as well, but there are severe dangers that come with the mining of uranium and the radioactivity of it. There is very few information available and Zambia lacks the regulations to oversee these activities. The local communities have not been well informed about this, which is unacceptable.
Have you raised these problems with the EIB?
We had several discussions with the EIB, especially on Mopani. They are of the opinion that Mopani does a good job and that things improved compared to the time when Mopani started. However, they admitted that Mopani wouldn’t be allowed to operate in the EU the way they operate in Zambia. We therefore think that they should do more to force Mopani to adopt higher standards. On the question of tax evasion they say that there is no evidence and that mining is expensive and takes a lot of investment, which explains why they are not making profits yet.
From your experience, does the EIB play a positive role for development in Zambia?
Honestly, the answer is no. The EIB has a quite traditional view on development. They believe that giving money to a company will automatically lead to economic growth, which will trickle down and eventually help to abolish poverty. But if they give money to multinational corporations which main interest is to make money instead of fostering the development of the country they operate in, no real development will take place. The problem is that the EIB is not really interested in what happens after they give the money. Therefore we want them to either stop giving money to these corporations or strictly monitor them in order to make them behave better and contribute more to the economies they operate in.
You are visiting now four European countries: Germany, Czech Republic, Poland and France. What do you expect of it?
I’m here to meet with European partners, the public and decision-makers to share our concerns on mining companies. Some of the companies working in Zambia are European or have ties with Europe. The Mopani Copper Mine for example got an EIB loan of over €48 million in 2005 and his owned by Swiss Glencore and Canadian First Quantum. The same goes for the Lumwana Mining Company which is owned by the Australian/Canadian Equinox Minerals. They got three EIB loans of €85 million altogether. I hope that the people we meet can help us with tackling the negative impact that these companies cause to local environment and communities.
Listen to other interviews of Savior Mwambwa
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