Address major sand mining issues

Tuesday April 06 2021
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Innocent Nkwasiibwe

By Innocent Nkwasiibwe

Ugandans, even those casually interested in mining and related commercial activities may have occasionally read articles in the media about poor sand mining activities in Kalungu, Masaka, Mpigi (commonly known as Lwera) and Wakiso districts, mostly close to or on the shores of Lake Victoria. By commission and or omission, responsible government agencies have aided and or abetted actions that over time, may lead to great ecological disaster of our times.

The most held narrative is that the biggest environmental destruction is caused by dredgers from the swamps and water bodies by ‘Chinese’. While this is partly true, it diverts focus to power politics away from regulatory failures, greed, and the poor man’s curse of living in short term bubbles that, taken together, constitute time bombs for posterity.

Sand mining has not been recognized as critical, economically. But urbanisation in the recent decades may in fact have made it central, as a significant percentage of brick and mortar is sand-based.

 With Uganda joining the Extractive Industries Transparency Initiative (EITI) in 2020, open discussion of extractives, methods, implications, revenues and impact on economy should be at the table.

Beneficial ownership is fast becoming an important tool in untangling the question of persistence mining methods that are known to destroy the ecosystem, particularly around Lake Victoria   that supports livelihoods for many.

The gap in information on licence status of Chinese players, records on destination of grain sand, low sand revenues to the State, unclear position on sand royalties as stipulated in the law should be a cause for concern to Ugandans and partners of good will. Are these ‘investors’ infact Chinese? How much does the population know about them? Can Ugandans deliver on what foreigners do? , and what would that mean for reviewing the challenges of regulating the sector? Are technologies like dredgers, wheel loaders, excavators so advanced that Ugandans cannot afford them? And are we adding value through exportation of grain sand? What measures are in place to restore the areas mined?  What is the cost of foreigners crowding out Ugandan businessmen? There are no simple answers.

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Beneficial Ownership perspective compels disclosure of actual ownership information of companies in mining and extractives. Through regular publication by the state, individuals, who ultimately own or have controlling stakes (25 per cent or more in shares) or have significant business interests in such entities ( voting rights on company boards for instance) are subjected to scrutiny. Uganda needs to do this in sand mining, and not just in the Gazette, but   in leading media too for a number of reasons. First, is the dominance of politically exposed Persons in mining and related business, invariably  affecting the effectiveness with which responsible Government departments for Instance the Department of Geological Survey and Mines / Ministry of Energy and Mineral Development , Inspectorate General of Government, Parliament, and National Environment Management Authority can exercise their oversight and regulatory roles.

Further, civil society and media are only as good as the information they can access, so disclosure in this area would lead to greater tools to hold leaders accountable. Thirdly, such declarations and public disclosures would level the business playing field and provide Ugandans of means who are not politically ‘well connected’ an opportunity to invest while at the same time meeting their environmental protection obligations.

Ugandans must demand that government lives up to her commitments in the EITI, enacts laws that will mandatorily require Company holdings of shares above 25 per cent (controlling stakes), voting rights of 25 per cent and above and those having a right to appoint or dismiss majorities on boards of directors to disclose.

It is also incumbent on the Ministry of Energy and Mineral Development to publish sand exports and, together with the tax entity, indicate the revenues and royalties applicable and whether or not these are handled per regulations.

Mr Nkwasiibwe is the CEO of Tripartite Initiative for Resource Governance in Africa.

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