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01.07.2004 Business & Finance

Extractive Industries Transparency Initiative launched in Tarkwa

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Tarkwa (W/R), July 1, GNA - Extractive Industries Transparency initiative (EITI), an initiative to ensure transparency in the operations of mining companies in the country, was Wednesday launched at Tarkwa.

Mr. S.B. Nyantekyi, Director of Budget, Ministry of Finance and Economic Planning, on behalf of Dr. Samuel Nii Noi Ashong, Minister of State at the Ministry at a day's seminar on EITI organised by the Ghana Chamber of Mines, performed the launch. The seminar was under the theme: "Ensuring Transparency In The Payment And Utilisation Of Returns On Mining Activities For National Development."

In an address read for him by Mr. Nyantekyi, Dr. Ashong said the mining industry generates 40 percent of the country's foreign exchange earnings and contributes six percent of the Gross Domestic Product (GDP).

He said as a result of its significant role in the economy, government is determined to ensure that the fruits of mining industry benefits the communities in which they operate as well as the entire country.

Dr. Ashong said it is against this background that Ghana has taken advantage of EITI to deepen and consolidate efforts made so far in this direction by strengthening institutions like the district assemblies and the office of the Administrator of Stool Lands to live up to their expected role.

He said the EITI was launched in Johannesburg, South Africa in 2003 at the World's Summit on Sustainable Development and is been spearheaded by the Department For International Development (DFID) of the United Kingdom.

Dr. Ashong hoped that the initiative would broaden the scope and deepen the concepts of transparency and accountability in the extractive industry in the country.

He said through this, investors would make appropriate payments in the right way and at the right time and government would utilise such receipts for intended purposes to achieve sustainable development, particularly in communities where mining companies operate.

Dr. Ashong, however, expressed regret that some mining communities lack basic amenities like potable drinking water, schools and health facilities despite the payment of royalties for the development of those areas.

He hoped that through the initiative, the mining companies, government, the communities and the independent aggregator would device a system whereby beneficiaries would actually know what is due them. Dr. Ashong said in order to ensure the effective operation of the initiative, a number of reporting guidelines have been designed for companies and investors in the extractive industry and the complete templates for submission to an independent third party for analysis, presentation and publication.

He said this would take place at the community level to enable the people at the periphery the opportunity to ask relevant questions. Dr. Ashong hoped the EITI Secretariat at the Ministry of Mines would be adequately resourced to ensure that reporting templates are completed on schedule and submitted to an Aggregating Body, which would be appointed soon.

Miss Joyce Aryee, Chief Executive Officer of the Ghana Chamber of Mines, said members of the Chamber voluntarily contributed well over 29 million US dollars to their host communities last year.

She said mineral royalties totalled approximately 192 billion cedis in 2003, adding that mineral royalties represent a large proportion of mining's contributions to the economy and it should benefit all interested parties, particularly the host communities.

Miss Aryee said the royalties if judiciously used and well accounted for would complement voluntary contributions of the mining companies to spur sustainable development and growth in the mining communities.

She said it would augur well for the nation to see visible development in mining areas and the Chamber therefore advocate that all recipients of mineral royalties utilise them for capital expenditure or channel them into durable investments instead of using them to supplement recurrent expenditure.

Miss Aryee said in this way the host communities would benefit from the huge resource and with the EITI, it should be possible to account for all payments made to all recipients including the traditional and local authorities.

She said the people of the host communities would then make inputs into development issues as well as informed about how their monies are utilised.

Miss Aryee said the Chamber view the EITI as a confirmation of its own policy on good governance, the kind of governance predicated on transparency and respect for the communities in which they operate. Madam Sophia Horner-Sam, Deputy Western Regional Minister, said natural justice demands that communities that bear the brunt of mining activities should also drive some benefits from the mining companies. She said that the EITI is designed to achieve this objective and therefore the initiative is a step in the right direction. Madam Horner-Sam said the initiative would consolidate and expand the gains so far made in the socio-economic development of mining companies.

She hoped a solid partnership would be developed among all stakeholders so that the initiative can be properly monitored to ensure its sustenance.