Tanzania

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Tanzania: President sacks mining minister for alleged collusion with firms to evade tax; Acacia denies allegations

25 May 2017 — Tanzania President fired his mining minister following an investigation into possible undeclared exports by mining companies to evade tax. Acacia Mining has denied the allegations saying it "that it fully declares everything of commercial value".  

Tanzania: Govt. regulatory agency shuts down FBME bank over claims of complicity in terrorism

9 May 2017 — "Tanzanian bank FBME shut down over US terror funding charges" Tanzania has shut down one of the country's largest banking institutions, FBME, following charges of aiding the finance of terrorism by US authorities. A statement from the central bank said it had revoked its licence. It was accused in the US of, among other things, money laundering and facilitating the payment of thousands of dollars from a financier of the Lebanese Hezbollah Islamist militants. In its defence, the bank said it had boosted anti-money laundering measures. FBME was set up in Cyprus before moving its headquarters to Tanzania in 2003. The US Treasury's Financial Crimes Enforcement Network (FinCEN) had made the original accusations of the links with Hezbollah. FBME was placed under the management of Tanzania's central bank in 2014 following the FinCEN allegations, Reuters news agency reports. The bank then mounted a legal challenge against the allegations saying that it had complied with regulations. A US court however ruled in favour of FinCEN in April, allowing it to shut the bank out of accessing the US financial system.  

Tanzania: Govt. regulatory agency shuts down FBME bank over complicity in terror claims

9 May 2017 — "Tanzanian bank FBME shut down over US terror funding charges" Tanzania has shut down one of the country's largest banking institutions, FBME, following charges of aiding the finance of terrorism by US authorities. A statement from the central bank said it had revoked its licence. It was accused in the US of, among other things, money laundering and facilitating the payment of thousands of dollars from a financier of the Lebanese Hezbollah Islamist militants. In its defence, the bank said it had boosted anti-money laundering measures. FBME was set up in Cyprus before moving its headquarters to Tanzania in 2003. The US Treasury's Financial Crimes Enforcement Network (FinCEN) had made the original accusations of the links with Hezbollah. FBME was placed under the management of Tanzania's central bank in 2014 following the FinCEN allegations, Reuters news agency reports. The bank then mounted a legal challenge against the allegations saying that it had complied with regulations. A US court however ruled in favour of FinCEN in April, allowing it to shut the bank out of accessing the US financial system.  

Africa: Columnist says political will necessary for successful implementation of proposed policy on business & human rights

9 May 2017 — "Why the African Union must press ahead with a business and human rights policy" The African Union (AU) is developing a policy designed to hold companies to account by setting down guidelines on how they should conduct business on the continent. The aim of the policy is to implement a set of guiding principles drawn up by the United Nations. It will provide a roadmap for states, regional economic communities and regional institutions to regulate the impact of business activities on people. The policy also seeks to advance guidance for firms conducting activities in Africa... The AU’s policy is a right step towards ensuring business upholds human rights. But it’s only the start of a long journey towards deepening a culture of respect for human rights among businesses in Africa...A number of key steps need to be taken if the policy is to become a reality. First, sufficient resources must be made available to make sure its implemented by both states and regional bodies. Secondly, states must drive policy implementation with the political will to regulate businesses within their territories. And finally institutions must be strengthened at all levels of implementation including national, regional and continental levels. [refers to Coca-Cola, Shell, ENI & Agro EcoEnergy. Agro EcoEnergy has in the past responded to concerns against its operations in Tanzania. The response in available here]

South African banks fund mining projects in southern Africa that raise issues over social, environmental, human rights impacts, says new report

3 May 2017 — Southern Africa Resource Watch, in announcing its report, South African Banks Footprint in SADC Mining Projects, said: "South African Banks are often key funders of a number of mining companies. Questions abound on the nature of these deals and the lack of transparency that surrounds them. There are concerns about whether banks do due diligence before they fund any mining activities to guide against corruption, social, environmental and human rights abuses that are linked to mining. This report interrogates the funding commitments of South African banks in mining in SADC and considers whether they can do things differently." The report reviews environmental, social and governance principles used by South African banks; common funding methods for mining projects and banks' decision-making processes; banks' policies on environmental, social and governance issues in their investments - and those policies' effectiveness.  It analyses six cases: Ghagoo Diamonds (Botswana); Geita Gold (Tanzania); Konkola Copper (Zambia); Marikana Platinum (South Africa); Vele Coal (South Africa); Kolwezi Copper (Dem. Rep. of Congo) and makes recommendations on the environmental, social, and governance frameworks for mining investments by South African banks. Business & Human Rights Resource Centre invited the banks named to respond: ABSA, First National Bank (part of FirstRand), Investec, Nedbank, and Standard Bank.  Responses by Investec, Nedbank, and Standard Bank are below.

Leader says tax avoidance by multinationals depriving Tanzania 5% of national income

2 May 2017 — “Zitto wants foreign firms taken to task via tax review” ACT-Wazelendo leader Zitto Kabwe yesterday recommended that a major review be carried out on tax laws that involve multinational corporations to ensure the country’s tax base is maintained…[He] appealed to the government to carry out an amendment on its tax laws to ensure the country gets what is required… According to him, various studies had found that Tanzania lost 5% of the national income due to tax evasion by multinational companies through tax planning measures…

Controller and Auditor General allege mining companies involved in tax avoidance

2 May 2017 — "CAG slams mining deals, urges rethink of tax code” Prof Mussa Assad, the Controller and Auditor General (CAG)...[has said] that Tanzania must review contracts and rethink its tax code if it wants to benefit from the extractive industry. Assad said a partial review of existing mineral development agreements (MDAs) signed between the government and large-scale gold mines conducted by his office established that foreign investor companies use several loopholes in the contracts to dodge taxes. "The MDAs were found to have unreasonable terms which undermine public interests such as unreasonable conditions for renewal of licenses, protection against future amendments of laws, unreasonable agreements in foreign currency policies, custom arrangements and unreasonable incentives in tax and accounting treatment of capital expenditures...The government is advised to use sanctity of fundamental clauses which exist in most MDAs to renegotiate the unfavourable contractual terms." The CAG said he came to that conclusion after personally studying mining contracts between the country's four biggest gold-producing mines - Geita Gold Mine (owned by Anglogold Ashantia) and three mines owned by Acacia Mining Plc - Buzwagi, Bulyanhulu and North Mara. "Significant weaknesses were noted in procedures to enter MDAs, such as government relying on prospecting and feasibility reports conducted by the license applicants without having an adequate mechanism to monitor and verify the submitted reports, therefore impairing the government bargaining position," he said.

AngloGold Ashanti response

2 May 2017 — [As its response, AngloGold Ashanti referred to a statement by the Tanzanian Chamber of Minerals & Energy: “The Mining Industry and Taxes”.]  

Tanzania: Govt' official alleges foreign mining companies using loopholes to avoid tax, Acacia & AngloGold Ashanti respond

2 May 2017 — Tanzania's Controller and Auditor General has called for a review of the tax code for the country to benefit from the extractive sector. He claimed that foreign mining companies use loopholes in mineral development agreements to dodge tax. The Business & Human Rights Resources Centre invited both Acacia and AngloGold Ashanti to respond to the allegations. Acacia provided a response which is available here. Both Acacia and AngloGold Ashanti referred us to the official statement by the Tanzania Chamber of Minerals and Energy which is also provided here.

Acacia's response

2 May 2017 —  "Acacia Mining's Response" Acacia, like many other mining companies, has agreed to voluntarily comply with a number of the regulations of the 2010 Mining Code despite the terms of legal agreements that the Tanzanian Government signed when the companies originally decided to invest significant amounts of money into Tanzania. [Acacia also referred to a statement by the Tanzanian Chamber of Minerals & Energy: “The Mining Industry and Taxes”.]