A conversation with Nadine Kone, Oxfam’s West Africa regional lead on Extractive Industries.
On June 26, Burkina Faso’s transitional authority adopted a new mining code that requires mining companies to commit 1% of gross revenues to a community development fund. This was a historic step for Burkina, one of Africa’s leading gold exporters and one of the world’s poorest countries. If managed properly, these funds could help reduce poverty in Burkina’s mining areas. The 1% provision was included after an intensive campaign by civil society organizations inside Burkina and internationally that was supported by Oxfam and that made extensive use of social media and other campaigning tools.
Oxfam’s West Africa Extractive Industries Regional Policy Coordinator Nadine Kone is from Burkina Faso and helped come up with the idea for the campaign in collaboration with local partner organizations in Burkina. She also provided strategic advice and support to the partners throughout the campaign. I spoke with her recently to get more insights on the campaign and its implications for development in Burkina.
How did the campaign come about?
In April 2014, during a visit you and I made to Burkina, we met with partners and the discussions revolved around the ongoing mining code revision. One of the major innovations in the draft bill was the creation of a Local Development Fund (LDF), to be funded by the Burkina government with 15 % of the mining revenues collected by the government and by mining companies contributing 1% of their gross revenues. Mining companies were opposed to the idea. They found the 1% too high and wanted to negotiate a reduction.
With our civil society partners, including ORCADE, which is the local representative of the global Publish What You Pay campaign, we decided to watch the situation carefully and make sure the contribution from mining companies was not reduced.
In December 2014, the draft bill went to parliament for voting and was rejected so that there could be more consultations with all stakeholders. The mining companies succeeded in having their contribution changed from 1% to 0.5 percent. We responded by launching the 1% Campaign calling on the government and especially on parliament not to vote for a code with less than a 1% mining company contribution to the Local Development Fund
Why did the campaign choose to focus on 1% and not a higher number?
The 1% contribution was the rate proposed by the government’s technical agencies, and after looking at the practice in the sector, especially in the West African region, we (civil society) found it acceptable. The 1% was a consensus between the government and civil society; mining companies were reluctant to support it.
Can you explain what the 1% number means specifically? Is it an additional tax on mining companies?
It can be presented as an additional tax, but in reality it is a more effective way to organize mining companies’ contribution to sustainable local development, where corporate social responsibility initiatives are not showing many tangible results. The Economic Community of West African States (ECOWAS) has called for more revenues from the extractive sector to go to local development. The creation of local development funds that will hold the funds either from government or mining companies to finance development interventions at the local level is one option for doing this.
How much money are we actually talking about?
The provision covers all companies at the production stage at the time the law was enacted. So far we have eight companies operating in Burkina Faso, seven gold mining companies and one producing manganese. In 2012, according to the Extractive Industries Transparency Initiative, total revenue for the sector was $1.575 billion so 1% of that amount would be about $15.75 million. That’s a lot of money in a country like Burkina.
Is the government required to spend the 1% on specific items like agriculture or infrastructure?
The functioning of the fund and its priority sectors for expenditure are yet to be defined. However, more than 70 percent of the population in Burkina is rural and depends on agriculture. It will make real sense if a good part of the money is dedicated to funding the agriculture sector.
The central government will have to re-allocate the money to local governments for them to spend it according to their local development plans. We will work with our partners and local groups to make sure communities are involved in the definition of priorities sectors to be funded as well as in the monitoring of the spending. There must be effective accountability to prevent this “victory of the people” from leaving a bitter taste or feeling like an unfinished symphony. The toughest stage of the battle is yet to come so that “gold can truly shine for the people of Burkina!”
What are the greatest needs in Burkina’s mining-affected communities?
Communities in mining zones, like most rural communities in Burkina, are mainly famers but hardly make a living out farming. They do not have access to markets to sell their production at a good price due to poor roads. Children walk sometimes more than 10 km to go to school, when they are lucky enough to have one. Women give birth at home and during the rainy season malaria continue to kill thousands of infants because they do not have access to basic health care facilities. In these communities electricity, potable water, and decent toilets are luxuries. One has to visit those places to understand how severe the poverty really is.
How can we ensure that the money is actually spent appropriately?
The work with our partners continues in order to put in place a strong accountability mechanism tied to the management of this fund. We are looking at experience from other countries where these types of funds exist to see what the best practices are. We are especially learning from the Ghanaian case, with the system in place for the management of oil revenues. One thing is certain: civil society has already positioned itself as a watchdog for the LDF to be appropriately managed and to ensure the money goes to the right people.
Burkina has traditionally suffered from high rates of corruption. Are you worried that the 1% could get lost to corruption?
Things are changing in Burkina; we have seen the birth of a true active citizenry that is more conscious of its rights and demanding more transparency and accountability in the management of public affairs. Under pressure from civil society organizations and youth movements, a number of corruption case have come to light and been taken to court since last October. I am quite confident that the system that will be put in place for the management of the funds, with the oversight of citizens themselves, will minimize the risk of mismanagement.
This campaign can and should be a model for countries in West Africa as well as other parts of Africa that are engaged in the same process of mining code revision. We have been galvanized by our win in Burkina, we have understood that when citizens are mobilized and organized they can achieve much, especially when they get support from all over the world like it has been the case for this campaign. This advocacy is a vibrant expression of what Oxfam calls its Worldwide Influencing Network (WIN), which seeks to build local to global advocacy initiatives. In this case we combined our support to the campaign in Burkina with advocacy in Washington, DC directed at members of Congress and the US State Department. Senegal is still in the process of revising its mining code; Mali may undertake a light revision of their mining legislation, too. We are therefore prepared to share experience with these countries and accompany them in the process like we did successfully in Burkina.
What can organizations outside Burkina do to positively influence the use of the 1% revenues?
The mobilization and the support should not stop with the vote on the mining code. The support should continue until we have in place an effective mechanism for the functioning of the fund, with a strong accountability system. We also need to continue to push to strengthen global extractive industries transparency standards, including implementation of Section 1504 of the US’s Dodd-Frank Act. Those who will receive the mandate to manage the fund should always be aware that they are being watched from within and outside Burkina. In a word, vigilance should remain our motto.