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Saturday, 4 August 2007

Learning from mistakes, 2nd Edition

In what is becoming an unusual burst of ‘learning from mistakes’, the Government has now come up with a Draft Mining Policy. The document is proving elusive – but I am sure it’s out there somewhere! According to Mineweb:

Among the changes proposed in the draft policy are that the country shall not offer tax holidays in the mining sector but instead develop a friendly tax regime for mining investment. Further, all development agreements signed with investors would be subjected to public scrutiny and must be ratified by the National Assembly before taking effect.

According to the draft mining policy, which seeks to replace the one of 1995 that was anchored to attracting investors into the mines as the country privatized the industry, any fiscal provisions in any agreement will be subject to public scrutiny and be gazetted before taking effect.
This is good news indeed, especially now that we are hearing that Zambia has the potential to be one of the world’s greatest uranium producers. More on that striking revelation here.

11 comments:

  1. According to the draft mining policy, which seeks to replace the one of 1995 that was anchored to attracting investors into the mines as the country privatized the industry, any fiscal provisions in any agreement will be subject to public scrutiny and be gazetted before taking effect.

    This is good news. I hope this oppennes is extended to all of the detailes of the development agreements, past and present.

    Until the real reason of the timidity on behalf of the negotiators of the old mining agreements is explained, it will throw a pall over all other agreements, and the confidence the people can have that their interests will take first place in the negotiation of future agreements.

    The poor quality of the old agreements still has not been explained by anyone in government, and I certainly would look forward to that happening. A statement to parliament could lay a lot of speculation to rest, I would think.

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  2. it is not learning of mistakes but being responsible. the draft is still going to be based on wrong thinking and i can assure you in ten years we will be coming up with another,if we are serious we will be truthfull with ourselves and say this is a trend that has been going on for half a century.

    we are looking for the proceeds of the minerals to solve our problems but what we should be looking at is using the resources to multiply them and keep a rolling fund that keeps multiplying so as to have funds for whatever project we want.

    how much is the profit per tonne of whatever mineral we get puttting all the overheads?

    can the proceeds from these minerals support every person in zambia?

    if we used to think/reason uncompromisingly then we could be fighting a war now. the only reason that is not happenning is our minerals can be subtituted.

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  3. MrK,

    It does indeed appear that they have heard your call!

    Parliamentary scrutiny though may bring some costs e.g. it may stall reaching a deal. But I guess we rather have that than a deal which no one approves.

    On your other point, I can't see the Government digging into the past.

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  4. Arthur

    "the draft is still going to be based on wrong thinking and i can assure you in ten years we will be coming up with another,if we are serious we will be truthfull with ourselves and say this is a trend that has been going on for half a century."

    Good point! We definitely need something that stands the test of time. This calls for a proper policy debated by ALL Zambians at home and abroad.

    I assume the current draft is "Green Paper" as opposed to a "White Paper". So it should be possible to shape it now.

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  5. Cho,

    Parliamentary scrutiny though may bring some costs e.g. it may stall reaching a deal. But I guess we rather have that than a deal which no one approves.

    George Ross' books go into the concept of 'time invested', which he calls his 'Invested Time Philosophy', during the negotiation process in great detail. He argues that the more time both sides have invested in negotiations, the more likely it is that finalisation goes quickly.

    He repeatedly warns against quick negotiation, unless information is in favour of the side pushing for a speedy conclusion.

    In "Tree Easy Ways To Control The Pace Of Negotiation", he lists the following qualities:

    1) Don't accept any offer right away.
    2) Do be indecisive.
    3) Don't Do Quick Negotiations

    I think the trend is clear. :)

    These mining agreements were huge deals to begin with, and these copper reserves weren't going anywhere. So what was the rush?

    On your other point, I can't see the Government digging into the past.

    Well if they won't, future governments will.

    Whoever signed these agreements cost the country billions of dollars in revenues, with tens of billions yet to follow (if the $47 billion worth of reserves is accurate).

    My bet is that no one in government has the luxury not to look at the past.

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  6. Three Easy Ways To Control The Pace Of Negotiation, page 69/70, of Trump Style Negotiation.

    What do you think of his book, by the way?

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  7. I agree that a future Government may look into it. But that has to be a DIFFERENT Government.

    I have been moving houses - just completed the move. I plan to turn to Mr Ross's book this weekend. Expect a page by page report :)

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  8. Well I know from recent experience how draining moving house can be. :)

    Just another note. Western media often talk about 'corrupt politicians' when they talk about Africa not benefiting from it's massive wealth.

    However, I would say that the way the mining companies are not reporting on all their finds, not properly list their profits, etc., things that could get them in serious legal trouble if they tried that in the EU or even the USA. I would say that these companies too are corrupt. They're not just engaging an 'sharp practice', or 'returning value to their shareholders'. The more I know of the mining companies, the more it is clear that the way they do business is extremely corrupt.

    Just had to say that.

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  9. Construction companies are even worse :)
    All of the world they are known for corruption...

    Yes companies are often the source of corruption since they have the cash to bribe!!

    But the reason the politicans are mostly associated with the term is because they are the best hope for actually stopping it. Politicians are accountable to people, and therefore the best hope for halting the problem, since it is them that get bribed.

    Here is the question: Think of a house with open doors. Do you blame the thief [companies] for stealing or the chap who left the door open [Government] or the landlord [People] who let the chap live there in the first place?

    Society tends to blame the chap who left the door open, because it assumes that the theif is acting rational...and the Landlord, well he just has no choice but to put someone there....

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  10. Here is the question: Think of a house with open doors. Do you blame the thief [companies] for stealing or the chap who left the door open [Government] or the landlord [People] who let the chap live there in the first place?

    I blame all of them. But considering how these companies do business, I wouldn't be surprised if the doors weren't open before they arrived. They may have had help.

    If you look at the vulture fund saga, it seems that Chiluba was the one who provided information on the Rumanian government's loans. However, he was also handsomely paid by them.

    I would love to see an indepth review of the mining agreements, hopefully by the PAC.

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  11. "They may have had help."

    lol!!
    Very likely indeed!!

    Now that I have reflected, my analogy was too simplistic...

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