The risks inherent in sourcing and bringing to market a diverse range of mineral commodities has meant that the natural resources industry has always been particularly exposed to environmental, social and governance issues, particularly in Africa.
Africa Connected: ESG and climate implications for the mining sector in Africa
Issue 4
Environmental, Social and Governance (ESG) and climate change considerations in the mining sector is the theme of this edition of Africa Connected. We have articles on how mining companies can prepare for new ESG performance standards in 2020, the impact of World Bank sanctions and mine rehabilitation challenges as well as pieces on the Tanzanian mining reform and resource nationalization trends in Southern Africa, among others.
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Africa is still a frontier market, and this has often presented a unique opportunity for governments in African countries to create legal frameworks that attract sustainable investment. But Africa has always written its own rules. This has never been more apparent than in the governance structures of Africa’s major pulling factor – natural resources.
Every year since their inception, World Bank Group (the Bank) sanctions teams have pursued investigations into alleged sanctionable conduct regarding the Bank’s projects in Africa. There have been both uncontested sanctions imposed by the Bank Suspension and Debarment Officer (SDO) and cases unsuccessfully appealed to the Sanctions Board throughout Africa every year since 2011.1 The proportion of all global allegations and investigations taking place in Africa is typically higher than most other regions.
Africa is rich in natural resources, and several African economies are dependent on supplying or using fossil fuels, including South Africa, the Democratic Republic of Congo, Ghana, Tanzania and Mozambique, to name a few.
In many African countries, mining is the backbone of their economies. Often, however, little consideration is given to environmental, social and governance (ESG) implications when a mining resource has been depleted or becomes uneconomical to mine. An appropriate legal framework that deals with mining rehabilitation is vital as part of sustainable mining.
In 2017, drastic and sudden changes affected the mining sector in mainland Tanzania. The Parliament of Tanzania, in a bid to protect the country’s natural resources and the employment opportunities for its citizens, passed a series of legislations in July 2017 aimed towards achieving these objectives.
Ethiopia has an abundance of natural resources, including gold, potash, gemstones and tantalum. Land and natural resources are owned by the people and state of Ethiopia: according to Article 89(5) of the Constitution of the Federal Democratic Republic of Ethiopia, the government is the custodian of natural resources and has the responsibility of ensuring that they are used for the benefit of the people.