The mineral sector should benefit all, even those who lose their land rights

Professional valuers from far and wide, converged on the capital city of Dodoma to hold the 4th Annual General Meeting of the Valuers Registration Board of Tanzania, which took place on November 9 and 10, 2023 at the Jakaya Kikwete International Convention Centre. The meeting was graced by His Excellency, the Prime Minister, Kassim Majaliwa Majaliwa, MP.

The theme of the AGM was: “Harnessing mineral wealth for National Sustainable Development. Implication for land rights, Values and Compensation”. The valuers grappled with the fact that while most countries are happy to have natural resources in terms of minerals, the latter can turn out to be harmful to the country, or, ending up contributing much less than was expected in terms of national development.

The list of factors that may make a nation not to benefit from its natural resources, such as minerals, is long, and includes the following: Investors exploiting a country’s natural resources may not give the host country, its due share of the exploits; natural resources can trigger internal or external conflicts and strife, pitting a section of the country against another, or of people against investors or against the government; and, resources obtained may be misused where governance deficits prevail.

In many cases, people who lose land and other rights to natural resources may end up all the poorer, if expropriation of their rights, including compensation and resettlement, is not done properly; conflicts may develop between small scale and artisanal miners and large-scale investors; and, exploiting minerals and other natural resources has environmental outfalls, which can harm adjacent communities, and other natural resources such as rivers and water bodies, the air, forests and flora and fauna. Such adverse impacts include deforestation, mercury and cyanide emissions, water pollution, soil contamination, and lack of reclamation and rehabilitation at the exhaustion of mining activities.

There could also be adverse macro-economic consequences resulting from the natural resources (including mining), exploitation scenario. These include: Over-reliance on revenues from natural resources leading to neglecting investments in other, key or more technologically advanced, sectors; revenues from natural resources may be misappropriated to the detriment of the general economy and the larger interests of the population; the local populations may abandon key economic sectors such as agriculture, and focus on benefiting from natural resources; dangers of labour exploitation, including child labour, increase, as pupils have been known to abandon school to engage in mining in one way or the other; the promise of abundance may attract populations from other regions or countries leading to local social tensions, environmental destruction, conflicts; and finally, exports of natural resources may lead to an excess inflow of foreign currency, leading to the appreciation of the country’s own currency, making national exports uncompetitive, the so called “Dutch Disease”.

Fortunately, Tanzania has in place the appropriate policy and legal framework to ensure that the nation benefits from its natural endowments

However, the question of extinguishing property rights and the compulsory acquisition of, and compensation for, land found to have minerals remains contentious.

Since the discovery of gold in the 1920’s, the Tanganyika Order-in-Council made it clear that all minerals were vested in the Governor; a situation that persists to-date. Under Mining Act RE 2019, as amended, and Natural Wealth and Resources (Permanent Sovereignty) Act No. 5 of 2017, the entire property and control of all minerals on the surface or below the surface, including bodies of water, are public property vested in the President in trust for the citizens of Tanzania.

There are many cases where minerals are found on land that is occupied by other interested parties, especially rural communities. Losing their land rights triggers a process of compulsory land acquisition, compensation and resettlement, with its complications, worldwide. The focus is always to put the Project Affected Persons [PAPs] in an equivalent situation; or, in any case avoiding putting them in a worse-off situation.

With regards compensation, the law, in Tanzania, requires that the assessment be undertaken to identify the occupiers of the land, followed by a valuation of the land and any crops or other properties thereon; an exercise which must be carried out by a qualified valuer and before commencing the valuation exercise, it is a requirement to consult the local government regarding the valuation exercise, compensation and, if applicable, resettlement. The basis for assessment of the value of land and any unexhausted improvements for the purposes of compensation is the market value of the land. The compensation package normally includes: the value of the land; the value of unexhausted improvements; disturbance allowance; transport allowance; accommodation allowance; and, loss of profits.

Determining the above has been a matter of contention, with PAPs showing dissatisfaction, and sometimes resorting to openly speculative activities like Tegesha.

The valuers resolved, among others, for the need to review the whole land acquisition and compensation package, and to develop a national resettlement policy that would meet international best practices on involuntary resettlement; and to find ways of ensuring that those who lose valuable land, such as minerals land, end up all the better off, and do not feel left out in the cold, when it comes to benefiting from national natural resources.