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Business & Finance | Apr 30, 2004

Government warned on GATS

GNA

Accra, April 30, GNA - The Third World Network (TWN) - Africa on Friday called on the Government not to commit itself to the General Agreements on Trade in Services (GATS), to save the mining industry from total take-over by multi-national companies.

Mr Tetteh Hormeku, Head of Programmes of TWN, a civil society group, said commitment to the terms of GATS would ultimately erase the already lax regulatory measures that had made multinational mining companies to have a field day with little advantage to local communities in which they operated.

Mr Hormeku was speaking to the Ghana News Agency (GNA) to throw light on the GATS, after the opening of a three-day consultative meeting of the African Initiative on Mining, Environment and Society (AIMES) in Accra.

Thirty participants from different nongovernmental organisations in 15 African countries, with observers from the Canada and the United Kingdom are attending the meeting, to strengthen their bonds and build a network for advocacy on negative effects of mining and other extractive activities.

The meeting is on the theme: "Building a Pan African Platform for Extractive Sector Advocacy."

Mr Hormeku said as Ghana was now negotiating to commit its mining industry to GATS, the United States of America and Australia had sent letters to the country to accept GATS.

He said the acceptance of GATS conditions would virtually place no regulations on the operations of foreign mining companies.

He said under the GATS, no quotas were placed on the level of employment of foreign labour, and the foreign company could decide not to use any local input, pointing out that that could create unemployment or under-utilisation of local human resources.

Mr Hormeku, who is also responsible for the Economic and Political Unit of the Third World Network, compared the acceptance of the GATS, to the African Growth and Opportunity Act (AGOA), under which a committed country had to ensure that its withdrawal was in the interests of all the 146 member countries and if it was not in anyone's interest then the country seeking the withdrawal had to pay a compensation to each of the member states.

He strongly opposed any commitment of the Government to GATS and urged individuals and civil society groups to put pressure on it to reject it.

He blamed the negative over indulgence of the multinational mining companies that engendered adverse environmental, economic and social implications on local communities, to lax investment regulations and over pampering, such as tax breaks, offshore accounts and weak environmental quality standards given to them.

Mr Roger Moody, Mining Expert from London, said contrary to popular opinion, there had recently been an increase in extractive activities, attributing the rise to recent gold prices and the increase in demand for base metals in China.

Mr Moody stated that indigenous communities, directly affected by extractive activities must own mining policies.

Professor Bonnie Campbell of the Department of Political Science; University of Quebec, Canada, who spoke on globalisation and the mining sector emphasized good governance, political engineering and stable coalitions in reducing negative effects of mining.

Dr Yao Graham, Co-ordinator of the Third World Network, in a welcoming the participants said the mining industry was consolidating and expanding its influence in African countries, as governments raced each other to lower standards and reduce national gain to attract Foreign Direct Investment.

He said the issue of mergers, GATS, Extractive Industries Review and the New Partnership for African Development (NEPAD) raised important organisational issues, and that at all levels "we have to face the question of how broad and deep our organised constituencies are".

Dr Graham called for more planning research and knowledge for advocacy and the need to share information and more international forums in addressing concerns in the mining and extractive industry.

Dr Rose Mensah-Kutin, a Development Consultant chaired the function.

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