Tanzania Extractive Industries (Transparency and Accountability) Act of 2015

Natural resources belong to the country’s current and future generation. To ensure that these resources benefit the current generation and posterity, there is an urgent need for all major stakeholders—the Government and companies—to embrace and foster transparency and accountability. Indeed, the Extractive Industries (Transparency and Accountability) Act was passed by the government in August 2015 to make transparency and accountability a mainstay in the extractive industry. The Act which applies only to Tanzania Mainland stipulates various transparency and accountability measures including, among others, the establishment of transparency and accountability committee; nomination committee; obligations of extractive companies and statutory recipients; obligation to publish information; appointment and the role of reconciler; discrepancies and role of controller and auditor-general; and false information, etc.

=Extractive Industries (Transparency and Accountability) Committee= The Act establishes a multi-stakeholder entity composing government, companies and civil societies to serve as an oversight body for promoting and enhancing transparency and accountability in the extractive industry. This committee shall be constituted by a Chairperson and not more than 15 members. The chairperson shall be appointed by the President whereas the members shall be appointed by the Minister for Energy and Minerals. The committee’s composition is made up of five persons from Government entities, one of whom shall be the Attorney General or his representative; five persons from extractive companies; and the remaining five persons from civil society organisations.

=Nomination Committee= The Act establishes the Nomination Committee which is made up of the Permanent Secretary for the Ministry of Energy and Minerals (Chairperson); the Permanent Secretary for the Ministry of Finance; the Permanent Secretary of the Ministry responsible for public service; the Permanent Secretary of the Ministry responsible for labour; and two experts in the extractive industry. The nomination committee shall be responsible for nominating the Chairperson of the Tanzania Extractive Industries (Transparency and Accountability) Committee; or the Executive Secretary of the Committee who will be approved by appointing authorities—the President or the Minister.

=Obligations of extractive companies and statutory recipients= To ensure maximum obligation for payment and revenue disclosure, the Extractive Industries (Transparency and Accountability) Committee shall in each fiscal year set out a threshold for the purpose of discovering companies that are eligible for reconciliation on payments made and revenues received by the Tanzania Government. The qualified companies shall, therefore, submit to the committee information and data including all forms of taxes and charges made to the Government as per the prescribed regulations. On the other hand, statutory recipients (government entities) that receive payments from companies shall also submit to the committee information and data on revenue receipts.

=Information on local content, corporate social responsibility and capital expenditures= Extractive companies operating in Tanzania are mandated to submit to the committee annual reports with information on local content and corporate social responsibility. Additionally, extractive companies are obliged to also submit capital expenditures at every investment stage. Failure to furnish the authorities with this information—local content, corporate social responsibility and capital expenditure—amounts to committing an offence.

=Obligation to publish information= To ensure effective disclosure and thereby enhancing transparency and accountability in extractive industries, the Minister shall publish:


 * “In the website or through a media which is widely accessible all concessions, contracts and licenses relating to extractive industry companies;


 * Individual names and shareholders who own interests in the extractive industry companies;


 * Implementation of Environmental Management Plans of the extractive industry companies; and


 * Implementation reports referred to under section 17(5) – [a report from an Independent Reconciler].”

=Independent Reconciler= Payment made by extractive companies and revenues received by statutory entities shall be reconciled by an independent entity known as an “independent reconciler.” The reconciler, who is engaged by the committee, is charged with the responsibility of reconciling and verifying payments made by extractive industry companies and revenues received by the Tanzania Government. The reconciliation and verification include data on investment expenditure, production figures, export and any other matters related to the activities of the extractive industry in a particular reporting year.

=Role of the Controller and Auditor General (CAG)= There are times when a reconciliation report identifies material discrepancy between payments made by companies and revenues received by the government. In such circumstances, the Act stipulates that the committee shall within 14 days upon receipt submit such report to the office of the Controller and Auditor General (CAG) for further investigation, who will then prepare the audit report and submit it to the Committee for the Tanzania Extractive Industries (Transparency and Accountability). The Committee would then forward the same to the Minister for further action. According to the Act, the “Minister shall, as soon as may be practicable and not later than twelve months after the close of the financial year, lay before the National Assembly a report on the implementation of activities under this Act.”

=Submission of false information= Article 24 of the Act states that whoever provides false information or report concerning data on investment expenditure, production figures, exports, etc, or fails to produce a statement of account as mandated by this Act, and obstruct the committee or any authorised entity/person from executing its rightful duties, commits an offence and the penalty is a fine of not less than one hundred million Tanzanian shillings upon conviction.

=Disclosure requirements on previous MDAs and PSAs= Article 27 (1) subjects all the existing Mineral Development Agreements (MDAs) and Production Sharing Agreements (PSAs) or any other agreements signed to disclosure requirement under this Act, with the exception of the information regarded as confidential by the Committee for the Tanzania Extractive Industries (Transparency and Accountability).

=Stakeholders’ comments= According to mtega.com, the requirement to disclose the content of the existing MDAs and PSAs is clearly a good step as this has not been done before. Additionally, it states that the disclosure requirements to be clearly stipulated in Act is “a big step forward, particularly as it goes beyond the requirements of the Extractive Industries Transparency Initiative (EITI) and Tanzania’s OGP commitment to contract transparency in extractives.” However, stakeholders were of the view that prior to formulating and laying of the Bill for debate, the Tanzania Government should have established first a special management committee on natural resources (oil, gas and mining) made up of different experts from all relevant ministries, civil societies/NGOs and collected public views and integrated them in drafting policies relating to management of each resources. To them, this would have ensured maximum participation of the citizens.

=References=