Zambia Civil rights asking government to suspend
licenses for mining companies
Steel Guru News, October 01, 2010

It is reported that civil rights groups in Zambia are asking government to suspend licenses for mining companies that are not fulfilling their tax and environmental obligations.

Mr Saviour Mwambwa ED of Centre for Trade Policy and Development said that during a presentation on key issues in Lusaka on September 28 that there is need for transparency from the mining companies.

Mr Mwamba said during the workshop organized by International Alliance on Natural Resources in Africa and Caritas Zambia focusing on mining taxation that mining companies were obliged to remit taxes and honour environmental obligations.

He said that government should immediately set up a revenue sharing mechanism where resources are shared by the mines and the surrounding communities. It should further set up an environmental fund for addressing current as well as future damages caused by the mines.

He added that establishing an environmental fund will help deal with environmental problems left behind by the mines. It is important that Government addresses issues of tax avoidance, mis invoicing, transfer pricing and outsourcing of business services.

Mr Mwamba said that it was it was unfortunate that companies like Mopani Copper Mines have allegedly not paid any corporate taxes for the past 5 years. It’s a paradox that copper is the highest national earner but contributions to tax is low the only thing Government earns from copper is dividend being shareholders which is also minimal as it is a minority shareholder. The other income is through taxation which also includes Pay As You Earn.

He said that Zambia needs a radical change considering that minerals are a wasting asset and cannot be replaced once used. The principal tool Government should use is to get maximum revenue from the mines when it can. Mines are not adhering to environmental laws citing emissions and discharges.

Mr Mwambwa said that as civil society groups, they are concerned that the costs of copper mining are not commensurate with the gains citing environmental, economic and social effects.

He said that when you look at environmental damages, risk of long term damage to agriculture land and limited linkages with local economic entities, the cost of mining is not commensurate with the gains.

Mr Love Mtesa chairman of Consumer Unity and Trust Society said that Zambia faces the problem of dealing with rapid privatization process it went through under the pressure of the International Monetary Fund and the World Bank.

Mr Mtesa said that Zambia managed the privatization of the mines very badly and in the process the economy suffered. It is important for Government to consider whether it wants to be a perpetual least developed country or graduate to a middle income status.

He said that government must ensure that it gains enough resources from the mines to help it graduate from an LDC to a middle income through mine taxes.

(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)

This news can also be viewed at: http://www.steelguru.com/