_ this is the first day of my life.: Costs & Benefits: Trying to Update a Blog in Salone

It is past time for a blog update! I generally find myself with little time to give updates here, but when I do actually sit down to write one the internet connection doesn't allow me to post it!

So this one has been hanging out for a while to get posted, but delayed as it is, it's a small attempt to get somewhat back on track by sticking something from work up here. I have many more pictures and things to update on, but as the internet is so unreliable here and what with me leaving on Monday (wow! already?) to return to the States, I may have to wait and post those things there in the land of speedy internet connections.

But until then, I am posting below a press release I wrote for the release of two reports analyzing some flaws in mining agreements between the Government of Sierra Leone and foreign companies. The basic idea is that the government has violated its own laws in granting too many financial concessions to the companies, which means they lose out on substantial tax revenues that could/should be put toward development projects here.

We launched the report in two provincial towns out in the central part of the country where these two companies are operating, then had a national launch here in Freetown. This week I got to go to the State House (Sierra Leone's version of the White House) for the launch of a work plan on the Extractives Industry Transparency Initiative, and the Government Chief of Staff actually mentioned the reports and said they were committing to take up the recommendations made in them! It remains to be seen if they will actually make good on that promise, but it was neat to hear them brought out in a pretty high-level forum and to get some form of commitment from the government.

The press release is below, and to spice things up I'm also including a couple photos from the launches at the bottom of the page:

Reports Uncover Flaws in Mining Agreements with London Mining and African Minerals Limited

Freetown, Sierra Leone, 12 July 2011 - The Network Movement for Justice and Development (NMJD) today released two cost-benefit analysis reports that reveal flaws in recent mining agreements made by the Government of Sierra Leone (GoSL) with the London Mining Company (London Mining) and African Minerals Limited (African Minerals).

“These two contracts, if allowed to go on as ratified, will amount to holding Sierra Leone economically hostage and will reinforce the notion of the natural resource curse,” says Mr. Abu Brima, Executive Director of NMJD. “This obviously spells doom and undermines everything that has been done in the country to secure peace and work for change.”

The reports indicate that according to information accessed regarding iron ore mining agreements made with these companies in the past year, Sierra Leone will be deprived of large amounts of tax revenue by implementing these agreements. They also state that the GoSL is violating its own laws through the heavy fiscal concessions it has granted to both African Minerals and London Mining. This sets a bad precedent for future mining agreements, they note, as it will now be difficult for the GoSL to fully implement laws such as the Mines and Minerals Act in the future.

“The government’s priority that the country needs as much foreign investment as it can secure is much appreciated, but at what cost?” states one report.

Mrs. Aminata Kelly-Lamin, Program Director of Mining and Extractives at NMJD, says the reviews were undertaken as a conscious effort to examine what Sierra Leone as a nation gives away in light of what it receives in return. Based on the findings, she concludes that the costs of these agreements far outweigh the benefits.

“These minerals cannot be replaced,” says Mrs. Kelly-Lamin. “If we are to give our natural wealth away to these companies, the fiscal incentives should make it a win-win situation. According to these agreements, however, it’s not worth it.”

Mrs. Kelly-Lamin points to the low royalty rates and the numerous, heavy concessions the GoSL has made to the mining companies as examples of ways in which the mining agreements have put Sierra Leone at a disadvantage. One concession in the London Mining Agreement, for example, will result in an 84 percent loss of income tax revenue over the first 10 years of the contract.

This concession directly contradicts the Income Tax Act of 2000 and is just one of several provisions in both agreements that contravene Sierra Leone’s own laws, including the Mines and Minerals Act of 2009.

The reports make recommendations for rectifying such flaws found in these existing agreements, including amending the agreements to comply with existing laws and renegotiating royalty rates based on the Fe content of the iron ore. But Mrs. Kelly-Lamin hopes the reports will also serve as a guide for monitoring future investments that come to Sierra Leone and ensure that national laws are not flouted in the future.

“We are doing these reports so the Government can see it as a basis for going forward with any new agreements,” she says. “We hope that the relevant Government Ministries will look at these reports in the best interests of the nation and will respect Sierra Leone’s laws in forming these types of agreements.”

The GoSL signed a mining lease agreement with London Mining for an iron ore mine in Marampa on 9^th December 2009, and with African Minerals for an iron ore mine in Tonkolili on 20^th August 2010. NMJD, with support from the German Agency for International Cooperation (GIZ), contracted Sierra Business Solutions to complete the review of both agreements.