Tough new law for mines

MASERU – The government is set to introduce a tough law what will compel mining companies to do more to help communities in which they operate. Mining Minister Keketso Sello unveiled the Minerals and Mining Bill 2017 at a workshop last week.
Cabinet will soon discuss the Bill before it is brought to parliament, according to Sello. The Bill seeks to impose penalties on mining companies that neglect their corporate social responsibility programmes.

“Every holder of mineral rights shall set aside one percent of the gross income for corporate social responsibility purposes,” the Bill reads.
The Bill proposes that companies that fail “to implement corporate social responsibility obligations” shall be fined an equivalent of 50 percent of the amount which was to be remitted as part of its corporate social responsibility obligations plus the principal sum.
If a company repeats the offence “the Mining Authority shall forfeit the licence”.

If the company does not pay the fine, the Authority shall confiscate its assets to pay for the unpaid fines and outstanding fees.
Under the Bill the Mining Authority “shall be the chief regulator of the mining industry”.

The Authority shall oversee the implementation of the provisions of the Act and all regulations and guidelines.
It will also consider applications for mineral rights and grant mineral rights by issuing licences.

The Bill says a mining company that fails to hire locals will be fined the equivalent of 30 percent of the value of money that was to be paid to the local employees. If it repeats the offence twice its licence will be forfeited and its assets confiscated in the case of its failure to pay the fines.
The Bill proposes that a mining company shall “prepare an employment plan indicating the managerial, technical, and support positions which shall be filled in by expatriates and those which shall be filled in by the people of Lesotho”.

It proposes that a mining company must “give preference to the people of Lesotho who possess the required managerial and technical qualifications for all managerial and technical functions”.
Such company must “give employment only to the people of Lesotho for all support functions”.
The Bill also says companies must “draw and implement a systematic plan of on-job training and exposure to managerial skills for Basotho as part of a succession plan”.
Companies are forced to organise on-job technical training programmes for Basotho relating to the running and operating of machineries, tools and other equipment used in mining activities.
They are also required to organise training opportunities, seminars, or study tours for Basotho within or outside the country on all skills relevant to mining with the purpose to build skills.

The bill says a holder of mineral rights shall “procure products and equipment manufactured or produced in Lesotho from companies in Lesotho, and preference shall be given to companies in which people of Lesotho hold at least 20 percent of shares”.
Speaking at the legal framework workshop, Sello bemoaned the reliance of the ministry on outdated pieces of legislation such as the Precious Stones Order 1970, Precious Stones Order Regulations 1970, Diamond Dealers Licence 2004, Kimberly Process Regulations 2003, Mine Safety Act 1981 and Minerals Act 2005.

“There is need to review the mining legislation as the mentioned pieces of legislation are outdated and do not contain provisions relating to the responsibilities and obligations of government, mine investors and other key actors,” Sello said.
“The lack of statutes in vital areas such as safety and occupational health, anti-hoarding measures, corporate social responsibility, legality of artisanal and small scale mining activities and illegal trade compounded by inadequate regulations for implementing the Mines and Minerals Act lead to uncertainty and unpredictability in the sector,” he said.

“Consents and the associated prolonged procedures for securing them in investment transactions requiring mining title transfers are a hindrance to the flow of mining investment into the sector.” Sello said as a result “the existing legal regulatory framework is fragmented and does not meet today’s societal and industrial needs”. “There is need to overhaul all the above legislation in order to improve our monitoring of the mining operations with a view to providing lasting and equitable socio-economic benefits to the country,” he said.

Staff Reporter