ODD MAN OUT South Africa is not a member of the Extractive Industries Transparency Initiative, unlike other major mining destinations, such as the US
The Extractive Industries Transparency Initiative (EITI), a global standard to promote open and accountable management by countries of the revenue generated during the extraction of natural resources, has 49 active member countries.
Banking group Nedbank Capital mining and metals head Paul Miller points out that South Africa is not a member of the EITI, unlike other major mining countries, such as the US.
“What is it going to take for the South African government authorities to realise that the country needs to get up to speed with these international obligations? “We comply with these obligations from a banking perspective, but not from a mining industry perspective. I believe that we are already one of the less transparent jurisdictions in Africa and [therefore] perhaps it is time for us to join the EITI,” he commented.
Law firm Herbert Smith Freehills partner and Africa chair Peter Leon explains that, despite repeated requests from the EITI to the South African government for the country to sign up to the initiative, these have been declined, as the State has argued that it has one the most transparent budgeting and accounting systems worldwide.
“This may or may not be the case. However, it is still deeply concerning that we have still not signed up to the EITI. “Many other African countries are in fact full members, such as Mozambique and the Democratic Republic of Congo,” he notes.
Further, Leon says that, while South Africa has incorporated intergovernmental economic association the Organisation for Economic Cooperation and Development’s Anti-Bribery Convention and the United Nations’ principles into its domestic law through the Prevention and Combatting of Corrupt Activities Act, it is not being implemented. “Hence, we have best practice in terms of our legislation, but very little prosecution of corruption.”
Advisory firm Deloitte & Touche emerging markets and Africa MD Dr Martyn Davies adds that, with regard to Africa broadly, there are many countries on the continent that are “run like family businesses” and, therefore, it is virtually impossible to have transparent and accountable systems in place under such circumstances.
“Therefore, without meaningful political change throughout Africa and the establishment of genuine democracies, there will be no improvement in tackling corruption and ensuring transparency in many African mining jurisdictions,” he concludes.
Miller, Leon and Davies were participating in a webcast, earlier this month, as a preview to the 2017 edition of the Investing in African Mining Indaba, which will take place between February 6 and in Cape Town.