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ASM FORMALIZATION GUIDE
IN THE ICGLR MEMBER STATES
July 2017
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Contents
Acknowledgement ................................................................................................................................................ 3
About the Author .................................................................................................................................................. 3
List of Abbreviations and Acronyms ..................................................................................................................... 5
Executive Summary.............................................................................................................................................. 6
Introduction to the Guide ..................................................................................................................................... 7
ASM Definitions and context ........................................................................................................................... 8
ASM Formalization ............................................................................................................................................... 8
What drives ASM Formalization in the ICGLR ..................................................................................................... 9
Recommended Steps to ASM formalization in the ICGLR ................................................................................ 10
References .......................................................................................................................................................... 15
Annexes............................................................................................................................................................... 16
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Acknowledgement The author would like to acknowledge the Member States of the ICGLR for making available the information used for production of the present report, specially the focal points for the formalization of ASM. To the organizations and individuals that provided information, for their time and valuable information on ASM in ICGLR, are all specially thanked. Special thanks are extended to the participants of the Khartoum validation Workshop who provided valuable inputs to the guide.
About the Author Dr Salvador Mondlane Junior is a Mozambican professor of Economic Geology and Economic Evaluation of ore deposits at the Eduardo Mondlane University. He is the director of Master Course in Mineral Resources Management at UEM since 2012. He is Director of GMSC, Ltd (one stop boutique consulting company in Geosciences, energy and environment). During his 25 years of research he has focussed on: Mineral resources evaluation; ASM in Africa and in Mozambique, its social and environmental impacts, and their maximisation or mitigation, and, the geological mapping and characterization of Mozambique’s mineral resources. Recently he was lead consultant for the development of the training material and supporting the delivery of Training workshop on environment, health and safety in LVMM artisanal and small-scale mining in Addis Ababa (for East Africa Region), Accra (for West Africa Region), and Maputo (for Southern Africa Region). He has successfully completed consultancy services with AMDC where he was involved in the implementation of the ASM Pillar on the African Mining Vision at the AMDC/ UN ECA with focus on profiles of ASM in Africa and review of the mining codes in order to understand how they support the development of sustainable ASM in Africa. Further, numerous assignments as a consultant for international organizations and private companies have cemented Salvador’s expertise in Mineral Resources Management and course delivery at University. Furthermore, as consultant he has conducted successfully assignments on Strategic Environmental and Social Assessments, sustainable ASM management and promotion, mineral and hydrocarbons’ good governance, and institutional capacity building; having participated in the drafting of the New Environment, Health and Safety Regulations for mining and geological activities in Mozambique (2005). More recently Salvador was involved in the Rapid Baseline Study of ASM Sector in Mozambique (2012); he also was involved in the Functional Management Review of the Ministry of Mineral Resources of Mozambique, the INP and ENH (2013); finally he was involved as Deputy Team Leader on the Functional Management Review of the Geological and Mining Institute (2014). Salvador and his team developed the Training Needs Assessment at the Ministry of Mineral Resources (2013). He also led the team that produced the 10 years report of the Ministry of Mineral Resources in Mozambique (2014). Salvador holds a Licenciatura in Geology from the Eduardo Mondlane University, an MSc. In Mineral Exploration and Mining Geology from Leicester University, and a PhD in Economic
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Geology from the University of Zimbabwe and Utrecht University; he speaks fluent English and Portuguese and can work in French and Mozambique’s southern dialects.
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List of Abbreviations and Acronyms
3Ts Cassiterite, Wolframite and Coltan
AMV Africa Mining Vision
AMDC African Mining Development Centre
AMZs Artisanal Mining Zones
ASM Artisanal and Small-Scale Mining
CAMI Mining Cadastre
CEEC Centre d’Expertise, d’Evaluation et de Certification des Substances Minérales précieuses et semi-précieuses
CSO Civil Society Organization
CSR Corporate and Social Responsibility
DRC Democratic Republic of Congo
EIA Environnemental Impact Assessment
GDP Gross Domestic Product
ICGLR International Conference on the Great Lakes Region
ICGLR MS International Conference on the Great Lakes Region Member States
KPCS Kimberly Process Certification Scheme
LSM Large Scale Mining
MEM Ministry of Energy and Mines (Tanzania)
NGO Non-Governmental Organisation
OECD Organization for Economic Cooperation and Development
PPLs Primary Prospecting Licences
RCM Regional Certification Mechanism
RIF Rural Investment Facility
RINR Regional Initiative on Natural Resources
ROM Run of Mine
SAESCAM Service d’Assistance et Encadrement du Small-Scale Mining
SSM Small Scale Mining
ToR Terms of References
VAT Value Added Tax
ZEAs Artisanal Exploitation Zones
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Executive Summary bout the ASM Formalization Guide in the ICGLR Members States: the Formalization guide describes fast track processes and recommendations for legalization of the ASM taking into consideration the best practices being implemented in the Region and is
anchored on the field observations on the 50% of the ICGLR Member States. The best practices are harvested in a separate publication and this guide is mainly a set of recommendations of what Member States can adopt to formalize and manage sustainably the ASM.
Figure 1: ASM site for alluvial Gold, Manica, Mozambique.
It is recognised that all ICGLR Member States have processes and procedures for licensing ASM. In most countries, the legislation distinguishes clearly the processes and requirements for Artisanal Miner from Small Scale Miner while two countries consider a generalised legislation that include Artisanal and Small-Scale Miners. The rate of informality in the ICGLR MS is very high in all minerals and reaches more than 90%. Thus, the sector does not fully contribute to the National economies, which constitute one of the reasons for the Governments to lose interest in assisting this sector. The region through ICGLR has approved and established important instruments related to mechanisms and systems to prevent illegal exploitation of natural resources, however, the Member States are rather slow in harmonizing and making their legislations complaint to the Protocols. The only countries that have made significant progress in enacting specific regulations aligned with Regional Protocols are DRC and Rwanda. The Guide aims at assisting Governments that are committed in harvesting benefits from the ASM sector while controlling the negative impacts and the illegal trafficking of minerals and consequently eliminating its contribution to political and military instability in the Great Lakes Region.
A
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Introduction to the Guide
This guide is a compilation of practices on the basis of ToR commissioned by ICGLR and the
active collaboration of main stakeholders in the ICGLR Member States and provides an
informative overview of ASM sector mainly on 3Ts and Gold and attempt to guide the
Governments on appropriate approaches to formalization of the lower-end of the sector
segment, the Artisanal Miners, by drawing from lessons learned from past experiences in the
region and elsewhere.
The guide is mainly intended to the Governments, especially entities responsible for the design
and enforcement of laws or regulations. Other stakeholders and practitioners from NGO’s,
development partners and civil society organizations (CSO) could use the guide to drive their
contributions in the formalization efforts to ASM.
This guide has to be used in conjunction with other two sister publications “BEST PRACTICES
ON THE STRATEGIES TO FORMALIZE THE ASM SECTOR IN THE ICGLR MEMBER STATES
(AND ETHIOPIA AND GHANA AS BENCHMARK COUNTRIES)” and the “GENERAL OVERVIEW
OF THE LEGISLATION ON THE ICGLR MEMBER STATES (AND ETHIOPIA AND GHANA AS
BENCHMARK COUNTRIES)”, also produced under the same ToR.
The Formalization Guide principles assumes that Governments accept, and to some extent
decided to take steps towards sustainable development of the ASM sector in their countries.
The Guide also takes cognisance of the fact that the Member States are in different levels of
socio-economic capacity and political commitment and stability.
Formalize or legalize or authorize ASM: there is a general tendency to believe that the magic
solution for the sustainable development of ASM is eliminating the illegality by formalizing the
sector. In this context formalization is considered as licensing or attribution of legal rights to
operate to the miners or groups of miners. It is already reported that the context in which
mining rights are awarded vary from country to country in the ICGLR MS1, however, regardless
of the Governments’ efforts in pursuing formalization for the last twenty years, the result has
not yet been satisfactory.
The rights to operate are complex in the region, varying from different structures, from
traditional and customary ownership of land to the central or decentralized legal framework.
This Guide will not try to solve such complexity of issues, but, to propose a path in which
interested Governments may follow to formalize the sector.
1General overview of the legislation on the ICGLR member states (and Ethiopia and Ghana as benchmark countries)
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ASM Definitions and context
Artisanal and Small-Scale Mining (ASM) are formal or informal operations with
predominantly simplified forms of exploration, extraction, processing and transportation. ASM
is normally low capital intensive and uses high labour intensive technology. ASM can include
men and women working on an individual basis as well as those working in family groups, in
partnership or as members of cooperatives or other types of legal associations and enterprises
involving hundreds or thousands of miners2.
The discussion on the definition of the ASM is presented on the “General overview of the
legislation on the ICGLR Member States (and Ethiopia and Ghana as benchmark countries)”, as
part of this study, similarly is presented the significance of the ASM sector in the ICGLR MS.
ASM Formalization
The legal review of the mining laws in the ICGLR MS is also extensively discussed in the
“General overview of the legislation on the ICGLR Member States (and Ethiopia and Ghana as
benchmark countries)”. In the present section of the study, it is important to focus on the
formalization of the ASM sector and proposed steps for formalizing ASM in the ICGLR MS.
All ICGLR Member States have processes and procedures for licensing ASM. In most countries,
the legislation distinguishes clearly the processes and requirements for Artisanal Miner from
Small Scale Miner while two countries consider a generalised legislation that include Artisanal
and Small Scale Miners.
The rate of informality in the ICGLR MS is very high in all minerals and reaches more than 90%
(ASM Study on ASM in Africa, 2016). Thus, the sector does not fully contribute to the National
economies, which constitute one of the reasons for the Governments to lose interest in
assisting this sector.
The region through ICGLR has approved and established important instruments related to
mechanisms and systems to prevent illegal exploitation of natural resources, however, the
Member States are rather slow in harmonizing and making their legislations complaint to the
Protocols. The only country that has made significant progress in enacting specific regulations
aligned with Regional Protocols is Rwanda and to some extent DRC.
2OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk
Areas – Supplement on Gold, Second Edition (2012) www.oecd.org/fr/daf/inv/mne/mining.htm
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What drives ASM Formalization in the ICGLR
There is extensive literature discussing what drives informality of ASM in the world and in the
ICGLR Member States and these include poverty, complex legislation, centralised processes
for legalizations, high licence fees, etc. The discussion here is about finding positive reasons for
formalizing ASM beyond the obvious reason such as revenue collection from Governments,
rational, political, economic, social and environmental management of the sector. The main
drivers to formalization of ASM in the ICGLR include (i) attempt to control the illicit trade of
minerals; (ii) need to comply with international covenants and guidelines, e.g. OECD
guidelines, Dodd Frank Act etc.; (iii) military instability in the region; (iv) six tools of the RINR
(ICGLR); (v) need for traceability of the 3Ts and Gold.
Figure 2. Key drivers for formalization in ICGLR Member States
All the above drivers are valid in the perspective of the regulators or the Governments
(demand side). Probably it is high time that reasons for and from the miners areused to explain
the need for formalization. In the above drivers forformalization, the processes are imposed to
the miners and they are expected to comply.
What could be the tangible direct benefits that miners could accrue from formalization? From
lessons in the world the following benefits to the miners are considered: secure and fairmarket,
fairprice, Government protection, access to technology, access to finance, etc. These might
work for 3Ts and other bulk products, but it does not apply for precious metals and stones
where there is always competitive market, sometimes higher than the world market price.
With exception of Ethiopia which managed to implement a subsidy scheme that support the
1.Military instability in the region
1.Illicit trade of minerals
1.International covenants and
guidelines
1.Traceability of minerals
1.Six tools of the RINR
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buyers by paying 5% above the international market3, very limited experiences can be cited on
this regard.
Figure 3. ASM site in Kivu, DRC
Recommended Steps to ASM formalization in the ICGLR
Governments are fostered to see ASM Formalization in respect to the national structures and,
prioritize the need and importance to develop Formalization by considering, improved
governance structures and improved livelihood alternatives, in consultation with miners and
miners’ associations so that they can identify themselves with policies. There is need for
inclusive approach to formalization.
The present guide or set of recommendations is based on the discussions among the
stakeholders and validated in a regional workshop where 23 recommendations were tabled for
discussion and prioritization (see fig. 4). The recommendations that rated less than 4 out of
five, were disregarded or merged to others for better clarity. Out of 23, the participants to the
Khartoum workshop rated five as below four. Hence, the present set of recommendations has
been consolidated to 14 with the merging of other recommendations.
3The Commercial Bank of Ethiopia buys all gold produced in the country and also offers loans to the buyers. The mechanism secure loan payback by discounting on the gold sold to the Bank.
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Figure 4. Rating of the recommendations by the participants of the Validation Workshop in Khartoum
The following are recommended actions to formalize ASM in the ICGLR Member States:
1. The Region has taken the necessary steps to lead the formalization of ASM by
implementing the RINR and by approving the necessary instruments for it. Countries
need to domesticate the regional instruments as recommended in the ICGLR
Declarations. Such domestication requires that Member States pass legal instruments
for ASM formalization. While doing so, it is key to separate the Artisanal Mining from
the Small-Scale Mining. The other level of separation is by main commodities, i.e.
precious metals, 3Ts, industrial minerals, low value and high volume minerals etc.
There is need to harmonize the concepts in the region in order to prevent cross-
border misapplications.
2. The Legal framework needs to be clear about the sector in terms of definitions of the
sector. Such definition need to be flexible to accommodate the complexity of the sector
– and must incorporate elements related to mechanization, production level, initial
capital investment, depth of the operations, size of the concession (allocated minimum
plot), number of workers, and land tenure, be considered to an extent that all
practitioners and interested parties understand the meaning of Artisanal Mining Sector
(or subsector) in relation to the Small, Medium and Large Scale sectors (or subsectors).
Thus, an initial step is to review and update the legal framework and set the minimum
requirements for legalization in a way that it is accessible and affordable to the miners.
The country legislation need also to take cognisance of the ancillary laws and negotiate
its customization to comply with requirements of the ASM subsectors. For example,
the Environmental requirements4 may need to be simplified for the ASM sector and or
waved for lower level of the ASM, (may need only a checklist or an environmental
4 Understood as the major hinder to formalization of the ASM
0
1
2
3
4
5
6
0 5 10 15 20 25
Rat
e 0
-5
Recommendation
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statement) and still be able to have mechanisms that prevent abuses that may result in
overlooking the negative impacts (environmental, social, cultural and illegality (illicit
trade of minerals, traffic, child labour, slavery, etc)). On the similar path, the land and
forestry laws need to be adapted to accommodate the ASM sector as non-competitive
and guaranty that mined out land can be used for other activities. The fiscal law need to
be adapted to accrue associated revenues and compound to high level of cost benefit,
rather than attempting to prohibitively suction the miners. There is need to minimise
the legal requirements for ASM to acceptable and accessible levels.
3. It seems that some countries have the political determination but do not have the
economic/financial capacity to promote ASM. Very few Member States in the Region
do promote ASM as a way for mining in Africa or a way to pursue the Africa Mining
Vision. This is a decision that each Member State needs to take, by understanding that
ASM is not opposite to LSM. The transition from the lower level of the subsector into
the next level need to be clearly legislated and in a flexible way to accommodate the
socio economic and cultural dynamics of the sector in each country. The legal
framework needs to be clear enough to prevent misuse of the incentives provided to
the lower level by operators of the other levels. The transition to the next level could be
associated to the organizational structure of the miners (e.g. association, cooperative,
small business enterprise, etc.), or timeframe (after a number of renewals of the lower
level permit, miners are obliged to move into next level (e.g. as it is done in Ethiopia)) or
by virtue of non-compliance to any of the lower level prerequisites. Thus, a clear path
from lower level into next level needs to be well defined in the legislation.
4. Issues related to human rights, modern slavery, human trafficking, child labour, mineral
traffic, illicit financial flows require a regional approach and harmonization of concepts,
laws and regulations. This may result in adoption and implementation of regional
instruments that may need only subscription and not necessarily domestication in the
national laws. These are the cases of regional certifications, some of them already
under implementation. The movement of miners and minerals in the Member States
need to be regulated and harmonised. Similar harmonization of procedures is called for
all actors (Governments, CSO, Development Partners, etc.) in the region. Thus,
Member States are called to act together in a synchronized manner and share
information and experiences.
5. Development of National Formalization Strategy – each country needs to develop an
ASM formalization strategy which will prioritise the commodities and streamline the
institutions to be established or revitalised to implement Formalization. The Strategy
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needs to be inclusive (e.g. conflict, culture, traditions, and gender sensitive) enough to
take into consideration all stakeholder’s (Governments, land owners, LSM, buyers,
processors, smelters, end-users, etc.) interests including the Artisanal Miners’ needs
and aspirations. The strategy that will bread thoroughly into the “African LSM”
needs to clearly recognise the importance of the ASM beyond revenue tax collection.
The strategy must also incorporate incentives for promotion of sustainable mining
associations and cooperatives that can nurture into mining houses (mining business
enterprises) in short period. The National Formalization strategy must also
incorporate elements of local practices in each country, for example the land allocation
structures and natural resource management traditional structures. The Strategy needs
to consider adequate (knowledgeable, resourced and decentralised)governance
structures.
6. Governments are encouraged to simplify the formalization processes for ASM while
monitoring the free riders in the process. A recommended option is evaluation of
strategic environmental assessments and the licensing of areas (designated areas)
for ASM, rather than each mining licence. Governments are also recommended to
empower the local authorities (decentralize) and available private structures to register
ASM. The Miners Card could be allocated by a non-State entity (e.g. a miners’ business
centre operator) or miners’ associations congregation. Encourage recognition of
traditional ownership of resources (mainly land) and align it with formalization of ASM
process5.
7. Governments are encouraged to make available detailed geological data6 for ASM in a
ready-to-use format that will allow them to take decision for acquiring licences. The
experience of Exploration and Mining Licence already applied in some countries is a
good practice, where the first six month or so are considered exploration phase and no
mining taxes are applicable. Governments will need to make adequate geological
assessment of the ASM areas (assign designated areas for ASM) and provide
environmental licence which will make it mandatory to comply with specific
environmental minimum requirement for the practitioners(challenge for many
Governments).There is need to encourage Geological assessment and
Environmental licensing of the ASM areas.
5A valid example is the establishment of Designated Areas Committees at District or Provincial level as it is done in Ghana. 6It is important to prevent misuse of geological data by non-legible actors.
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8. Governments need to promote fair market for ASM; in such cases, it is important that
the revenue authorities are well engaged in the process.
a. Regional processing and buying centres or business centres for ASM and SMEs
b. Regional mineral fairs that could link producers and buyers (the experience of
the Arusha Gem Fair can be replicated and expanded).
c. Access to international auctions
9. The region needs to promote value addition of ASM production by evaluating the
competitive advantages (for the region) in order to locate processing infrastructures
(e.g. availability of electricity, water, access to port, laboratories, technology, etc.).
Promote Regional Inputs and infrastructure sharing in order to derive more shared
value (regionally).
10. Access to technical assistance to the miners and adopt certification (e.g. Miners,
blasters) that is valid for the region,where possible. The Government may provide
technical assistance and charge on cost recovery (non-profit) fee at sales point.
11. Gradually implement Regional and National
Certification mechanisms considering the level
and evolution of the formalization process, and
promote the participation of ASM actors in the
full value chain.
12. Involve the LSM companies in order to
successfully implement the certification
mechanisms and the audit schemes for ASM.
The present Guide will also benefit from
involvement of LSM for its implementation, as it
would result in less conflicts between the two
sectors and promote coexistence between the
two and promote partnership between ASM and LSM. This will encourage the ASM to
follow appropriate mining, health, safety and environmental standards. The LSM can
contribute for formalization of ASM.
13. Ensure transparency, gender equity and fairness
in the formalization of ASM by adopting
internationally accepted principles for licence
attribution (e.g. first come first serve). And
promote the use of local languages and simple
e.g. DRC has passed a Ministerial Decree that
obliges any actor involved in the chain of
custody in the DRC to adopt and respect the
OECD-compliant standards of the ICGLR
RCM, this is in line with contribution to the
respect of the human rights. Article 9 of the
Decree indicate that the third-party audits will
be conducted in accordance with the
standards and procedures of the ICGLR
Certification Manual and annexes I, II and III
and the OECD guidance.
E.g. Associate awareness of ASM
formalization with other national
campaigns that might be related
to other sectors (malaria national
campaigns which could relate
environmental good practices and
clean mining).
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drawings to advocate for ASM formalization among the stakeholders. Communicate
to the right audience.
14. In the medium to long term, Member States to integrate ASM topics in the education
curricula in order to cultivate the minimum standards, good environmental and mining
practices, but also to incubate home grown technologies for miners. Promote
technical education that enables local fabrication of mining tools.
References 1. A. Eftimie et al., Gender Dimensions of Artisanal and Small-Scale Mining: A rapid
Assessment Toolkit
2. Africa Mining Vision adopted by the African Union in 2009
3. AMDC/UNECA Study on ASM in Africa: A Review on the Policies and Profile; 2016
4. AMV Document
5. B. Campbell – Regulation of the Extractive Sector: Issues Raised by the Revision of
Mining Regimes in Africa
6. B. Campbell – Revisiting the Reform Process of African Mining Regimes
7. CASM – Mining Together: Large-scale mining meets Artisanal Mining: A guide for Action
8. Contacts and experiences from the ASGM-PARTNERSHIP, GMP data and AMDC/UNECA
Data
9. Democratic Republic of Congo: Growth with Governance in the Mining Sector
10. ECA – Harmonization of Mining Policies, Standards, Legislative and Regulatory
Frameworks in Southern Africa
11. Ecavarria, C. (2014), Participation as Policy: Time to Formalise Artisanal and Small-Scale
Mining in Colombia. IED, London and Arm, Colombia.
12. H. Besada & P. Martin – Mining Codes in Africa: Emergence of a “Fourth” Generation?
13. ISG Report
14. Kenya: A micro-Finance Scheme for Women
15. Mining Codes of the ICGLR MS (all 12 countries)
16. Mondlane, S. (2015) - ASM Legislation in Africa: A Comparative study from 16 countries;
Presentation to the UNESCO Workshop in Arusha, Tanzania.
17. Recent legal developments in the regulation of the mining sector in some West African
States
18. The CASM resource centre and World Bank
19. The contribution of the Mining Sector to Socioeconomic and Human Development
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20. The Draft Guidance for governments on managing artisanal and small-scale mining,
issued by the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable
Development
21. The OECD Due Diligence Guidance on Responsible Supply Chains of Minerals
22. The World Bank’s Evolutionary Approach to Mining Sector Reform
23. WB – Political Economy of the Mining Sector in Ghana
24. WB – Republic of Congo: Mining Sector Review
25. Villegas, C. et al., 2012: Artisanal and Small-Scale Mining in protected areas and Critical
Ecosystems Programme (ASM-PACE): A Global Solutions Study
Annexes
Annex 1: Terms of reference for the study
Annex 2: General overview of the legislation on the ICGLRMember States (Ethiopia and Ghana as
benchmark countries)
Annex3: Best practices on the strategies to formalize the ASM sector in the ICGLR Member
States (Ethiopia and Ghana as benchmark countries)
Recommended