Changes to Sierra Leone’s mining law are a chance to safeguard responsible investment

Sierra Leone mining

22 March 2021

By Edward Bankoloh Koroma Jr, Accountable Mining Project Coordinator, Transparency International Sierra Leone

Sierra Leone, a small West African country with vast mineral resources, might be about to lead the charge on responsible investment by introducing integrity due diligence on mining companies as a core part of the licensing process.

In April, the government of Sierra Leone is expected to table its much-awaited bill to amend the country’s mining law, the Mines and Minerals Act 2009. As part of the law reform process, Transparency International Sierra Leone has contributed to the government’s working group on integrity due diligence. We’ve been working closely on the technical aspects as well as supporting communities to participate in the public consultation process.

Integrity due diligence promotes responsible investment

Integrity due diligence builds on the country’s commitment under the Extractive Industries Transparency Initiative (EITI) to require mining companies wanting exploration and mining rights as well as those already operating in the country to disclose their beneficial owners. This information will help the National Minerals Agency (NMA) determine if the company is owned by a political figure with a conflict of interest or if the company is backed or controlled by individuals who are the subject of corruption and integrity investigations.

The need to conduct these background checks to keep out dishonest investors has only become clearer with a Swiss Court’s recent corruption finding against businessman Beny Steinmetz for his dealings in neighbouring Guinea through his company BSGR. A subsidiary of BSGR operates in Sierra Leone and faces at least one lawsuit from local communities for environmental damage around the mine. In August 2020 the Sierra Leone High Court froze the subsidiary’s assets to stop it moving funds out of the country.

Leadership on integrity from the National Minerals Agency

Anti-corruption advocates and civil society activists are hoping the new law will give the government body in charge of managing mining licences, the NMA, the legal authority to conduct robust integrity due diligence on companies applying for mining rights in the country.

Since at least 2016, the NMA has been looking for ways to help Sierra Leone attract responsible mining operators and keep out investors with questionable reputations. Working with experts, the NMA developed a detailed roadmap for integrity due diligence on mining companies wanting to do business in the country.

The NMA has also taken steps towards implementing these background checks. The agency has developed all the necessary disclosure forms that licence applicants must complete as part of the process. Through the government’s working group, we’ve reviewed and provided feedback on the forms to ensure they are fit for purpose. We also recommended, and the NMA has recognised, the importance of working with the Corporate Affairs Commission which is responsible for registering businesses and corporate entities. These bodies will need to work closely together to ensure that the NMA can obtain the information on company owners.  But until it is legally empowered to conduct integrity due diligence, the NMA cannot start doing this important work.

Raising awareness to empower community participation

As an organisation committed to promoting public participation, TI Sierra Leone organised workshops in three mining districts to support communities in mining regions to engage in the government’s consultations on the law. The workshops covered the following topics:

  • The importance of integrity checks and beneficial ownership screening in curbing corruption in the mining sector
  • The review process of the Mines and Minerals Act
  • How citizens can participate in the consultations on the review of the law

To put community members in a strong position to understand and make meaningful inputs on integrity, beneficial ownership and due diligence provisions in the new law, we developed a simplified version of the NMA’s integrity roadmap.

Participants in our workshops came from different stakeholder groups, including local government, traditional authorities, women and youth groups. The reaction from community members was positive and many went on to participate in the regional consultations.

“This [the workshop] has been an eye opener to the importance of integrity, beneficial ownership disclosure, and due diligence in the awards of mining licenses and contracts,” (Workshop participant, Kenema District)

“With this knowledge, we can meaningfully contribute to the review process,” (Workshop participant, Tonkolili District)

“We must continue to work together to ensure that our position is represented in the revised Act to reduce corruption in the award of mining licences and contracts,” (Workshop participant, Tongo Fields)

The road from here

The revision of the Mines and Minerals Act is an opportunity to ensure Sierra Leone’s mining sector is governed by rules that meet the standards of the twenty-first century. To help make sure that the mining sector benefits the people of Sierra Leone, we need government officials to conduct integrity due diligence on licence applicants.

We look forward to seeing the government of Sierra Leone demonstrate bold leadership with the amendment Bill. We are committed to supporting the NMA develop effective implementing regulations and will continue to work towards achieving proper integrity due diligence on mining companies wanting to do business in Sierra Leone.

Photo credit: Red Morley-Hewitt/Unsplash