INTRODUCTION
Few countries are confronted with a mining skills deficit comparable to that of Rwanda. A 2012 skills survey showed that the Rwandan mining sector alone had a total skills deficit of 2,721 labour units in the short term, of which 89.9 per cent were skilled mining artisans, 4.1 per cent managers, 2.8 per cent technicians, 1.4 per cent liberals and 1.8 per cent scientists.Footnote 1 The survey reported the absence of training institutions in Rwanda offering training programmes for mining professionals and technicians, such as mine engineers, geologists, metallurgists, geophysicists and geochemists: professionals who are in high demand in mining labour markets.Footnote 2 A major culprit in this debacle was the 1994 genocide in which Rwanda's professional class was virtually annihilated.Footnote 3 As Teeffelen observed, after the genocide “not much was left of Rwanda's mining sector”.Footnote 4 Teeffelen's research finds that during the genocide “laboratories were looted, equipment destroyed and geologists murdered”.Footnote 5 To survive, Rwanda has relied on foreign mining professionals and technicians, but the low wages offered in Rwanda have hampered the country's ability to attract highly skilled workers.Footnote 6 A 2009 document put the number of locally available mining scientists in Rwanda at just 40, of whom four were below the age of 40.Footnote 7 The most important skills needed are those of geologists, mining engineers, mining technicians, business managers, laboratory technicians / sample analysts, environmental compliance officers and geophysicists.Footnote 8 With foreign professionals and technicians forming the majority of the high earning workforce in Rwanda however, the prosperity of the mining sector cannot trickle down adequately to ordinary Rwandans, since the expatriate workers eventually repatriate their funds to their home countries. This has implications for poverty perpetuation in RwandaFootnote 9 and even, by extension, for human rights, since poverty inhibits an individual's right to enjoy even basic human rights, such as the right to life. As the UN Development Programme (UNDP) pointedly puts it, “[p]overty is a denial of human rights”.Footnote 10 Given the importance of mining to economic development in Rwanda, the need for a comprehensive strategy on the part of Rwanda to enhance local capacity to harness the country's mining resources is readily apparent and compelling.
To be sure, the Rwandan government recognizes that “[o]ne of the key means of ensuring that the mining industry has a positive impact on rural communities and the country as a whole is through the development of local skills”.Footnote 11 This recognition has been demonstrated through a series of policy and legislative reforms that culminated in the enactment of Law No 13/2014 of 20 May 2014 on Mining and Quarry Operations,Footnote 12 which came into force on 30 June 2014. The question for this article is: to what extent does this law address the country's vast capacity building challenge in the mining sector?
The article begins with an overview of mining development in Rwanda in order to underline the importance of the mining sector to Rwanda's economic development. This overview includes a review of the policy and legislative initiatives the Rwandan government took to enhance its mining capacity, before enacting Law No 13/2014. This paves the way for consideration of how Law No 13/2014 has advanced the capacity building struggle. Two issues deemed critical to capacity building in the context of mining development in Rwanda are considered: the formalization of artisanal and small-scale mining (ASM) and the promotion of local content / procurement. The main thesis of the article is that, despite the Rwandan government's recognition of its dire need for capacity building in the mining sector, aside from the formalization of ASM, Law No 13/2014 provides very limited opportunities for rebuilding Rwanda's capacity in the sector. Its local content provisions are rather nervously worded and provide limited opportunities for Rwandans to integrate themselves into the mainstream of mining development in Rwanda. This is worsened by the fact that Rwanda does not currently have local content legislation. The article calls for the adoption of separate local content legislation in Rwanda, with detailed rules on training locals, local procurement, local hiring and value addition generally, as well as mechanisms for monitoring implementation.
OVERVIEW OF THE MINING SECTOR IN RWANDA
The advent of mining in Rwanda can be traced to the early period of the Iron Age.Footnote 13 However, the first official “geological observations” in Rwanda were made in 1909 during the visit of the German Duke Mecklenburg.Footnote 14 The Belgians carried out further exploration in the 1920s and 30s.Footnote 15 Minerals exploration and production were largely undertaken through a “subcontracting” arrangement, under which the right of access to the minerals was vested in local entrepreneurs and landowners who organized artisanal miners into teams and paid them for their labour based on the quantity of minerals produced.Footnote 16 While this arrangement had the advantage of enabling mining permit holders to make the best use of the abundant local labour available without assuming any direct responsibility towards the labourers, it promoted informality in the sector and sowed the seed for the predation and smuggling (which thrive in an atmosphere lacking, or with limited, governance) that remain prevalent to this day.Footnote 17
After Rwanda's independence, the government grouped together all existing mining companies into a public company known as Société Minière du Rwanda (SOMIRWA) in which it held a minority share of 49 per cent, while two mining companies held the remaining shares.Footnote 18 However SOMIRWA was beset by a myriad of problems, including poor financing, which culminated in its bankruptcy in July 1985.Footnote 19 The government then initiated the formation of an artisanal mining cooperative in 1988, Coopérative de Promotion de l‘Industrie Minière Artisanale au Rwanda (COPIMAR), to revitalize the sub-sector that had by then become moribund. A year later it formed another public company, Régie d'Exploitation et de Développement des Mines (REDEMI), to continue SOMIRWA's work.Footnote 20 According to Perks, this was against the advice of international financial institutions, which had recommended privatizing SOMIRWA rather than nationalizing it through the formation of REDEMI.Footnote 21
The economic exigencies of the time forced the government to shift its policy focus from a state-based to a market-based economy, beginning from the early 1990s. This entailed the privatization of government-owned mines and culminated in the privatization of REDEMI, which was completed in 2006.Footnote 22 However privatization did not affect state-owned enterprises that were performing well.Footnote 23 There are conflicting accounts about the impact of the privatization efforts. According to MINIRENA, the government has seen increased productivity since the privatizations, due not only to high prices in international commodity markets, but also to better management practices adopted by the companies.Footnote 24 Field research carried out by Perks shows, however, that many Rwandans, in both government and industry circles, are dissatisfied with the performance of the Rwandan mineral economy following the privatizations, many questioning the nature of the companies that were granted minerals permits and their adherence to labour standards.Footnote 25 “The result of such a mediocre privatisation”, writes Perks, is that “[a]rtisanal practices still dominate the landscape despite distinctions made between the ‘large companies’ and ‘small cooperatives’ or ‘independent operators’”.Footnote 26 The government's simultaneous pursuit of a mineral trade liberalization policy may have contributed to the failure of privatization to deliver its promises.Footnote 27
During the early period of mining exploration in Rwanda, mining's contribution to economic development was immense, particularly between 1930 and 1968 (six years after independence), when mining accounted for 42.5 per cent of Rwanda's foreign exchange earnings.Footnote 28 However, due to lack of investment in the sector after independence, foreign exchange earnings from mining began to drop and by 1984 they were only just 10 per cent.Footnote 29 The 1994 genocide worsened the situation because, as noted above, mining facilities were decimated and the country lost virtually all of its professional workforce.
Reconstruction after the 1994 genocide was long in coming. Not until 2004 was a mining policy formulatedFootnote 30 and not until 2008 was a mining law enacted: Law No 37/2008 of 11 August 2008 on Mining and Quarry Exploitation. At about the same time, the Rwanda Geology and Mines Authority (RGMA) was created with various responsibilities, including to: conduct geological and mining surveys based on “major national priorities”, “facilitate” the creation of mining standards in Rwanda, “supervise and monitor” mining activities, and contribute to law, policy and strategy formulation in relation to geology and mining in Rwanda.Footnote 31 In 2009 the government established the Public Sector Capacity Building Secretariat as one of its strategies to rebuild the capacity of its public institutions.Footnote 32 In 2010, the RGMA published a four-year strategic plan covering 2010 to 2013, with the objective of reviving and sustaining the geology and mining subsector. The plan's implementation programmes included programmes targeted at: “improv[ing] geological and mining knowledge in Rwanda”, “improv[ing] operating and investment conditions in Rwanda” and “add[ing] value to mineral and quarry resources in Rwanda”.Footnote 33
In 2011, Rwanda adopted a Strategic Capacity Building Initiative to address the capacity building challenge in a more focused manner, with national priority areas clearly delineated, including increasing government revenue from mining.Footnote 34 The critical step towards that was to provide a legal framework that integrated local capacity building into mining development and that would result in increased government revenue. Recognizing and promoting ASM was seen as an important way to integrate local capacity building into mining development. The Rwanda Natural Resources Authority (RNRA) was established in the same year.Footnote 35 The RNRA absorbed the responsibilities of the RGMA as well as those of the National Land Centre and the National Forestry Authority. Article 3 of the law establishing RNRA entrusts the RNRA with responsibility to manage, supervise, monitor and ensure the implementation of policies and programmes relating to the promotion and protection of Rwanda's natural resources. The next section addresses the extent to which the Rwandan government advanced these initiatives through Law No 13/2014.
Today, Rwanda's mining sector is one of the country's key exports and the country is best known for the “3 T” minerals: tin (cassiterite), tungsten (wolframite) and tantalum (coltan). The European Union has designated these minerals, particularly tungsten and tantalum, as “critical” because they “display a particularly high risk of supply shortage” (because of the concentration of their production in a few countries) and are “particularly important for the value chain”.Footnote 36 This puts Rwanda in a strategic position in global mining. In 2010, the mining sector accounted for over 40 per cent of Rwanda's foreign exchange earnings, mostly coming from tin, which is mined in 26 of Rwanda's 30 districts. In 2011, the mining sector was rated the “most prosperous” in Rwanda, as it earned the country approximately $150 million, behind only the tourism industry, which earned approximately $200 million.Footnote 37
CAPACITY BUILDING AND LAW NO 13/2014
Formalization of artisanal and small-scale mining
Meaning and importance of formalization
Formalization has been viewed from a number of perspectives. As summarized by Siegel and Veiga, to some it is about creating a legislative framework for ASM; to others, it is about “the process of registering, organizing, and tracking mining activity in the field”; and to yet others, it is about recognition of rights: “the right to mine, the right to land title, and the right to minerals”.Footnote 38 Property rights are at the heart of this last view. In the absence of land tenure rights, access to credit is hampered and there is little incentive for miners to comply with environmental regulations.Footnote 39 Siegel and Veiga explain that “formalization is the means of absorbing existing customary practices - developed informally by miners - into the mainstream of a country's legal and economic affairs”.Footnote 40 Reflecting on the problems associated with ASM, a 1999 document published by the International Labour Organization (ILO) strikes at the heart of formalization:
“If small-scale mining is to be encouraged to operate legally, legislation must be (at least) even-handed in allowing small-scale miners access to suitable land for prospecting and mining activities. It must be “user friendly” as far as the issuing of permits and the granting of licences are concerned - permits that provide clear security of tenure for a reasonable period so that small-scale mining can become established.”Footnote 41
Recognizing the importance of ASM to economic development, a UN Economic and Social Council (ECOSOC) report calls for:
“Building the legal and regulatory framework for artisanal and small-scale mining in a way that both recognizes its contributions to livelihood and tries to maximize its social benefits through legal recognition of small-scale mining activities; adequate zoning of land suited for artisanal and small-scale mining activities; facilitation of registration for miners; and provision of technical support to small mining communities.”Footnote 42
Due to the high labour-absorbing capacity of ASM, its high market value and its potential to generate socio-environmental problems, many scholars believe that the first step towards ensuring sustainable ASM development is formalization. Formalization enables ASM to be subjected to “oversight and regulation”Footnote 43 and has been described as “the inevitable policy route” towards ensuring that ASM benefits local people.Footnote 44 Veiga and Beinhoff, for instance, regard formalization as “a pre-requisite to change behaviour and transform underprivileged people into citizens”.Footnote 45 Formalization will ensure “order” and “human security” in ASM, because titleholders will respect each other's title and human security will improve.Footnote 46 The ILO highlights “the extent of economic loss” developing countries suffer as a result of the non-legalization of ASM, stressing that “legalization … is an important step towards transforming [ASM] into a sustainable activity”.Footnote 47 A 2005 report to the Ugandan government states that “[i]mprovements in the technical, environmental and socio-economic performance of the ASM sector hinge on the organization, formalization, and legalization of ASM activities”.Footnote 48 However formalization comes not only with recognition of rights, but also with the imposition of corresponding duties on miners to comply with certain standards of conduct, such as environmental, labour and human rights standards.Footnote 49 Formalization also facilitates the accessibility of legal redress when miners’ rights are violated by the government or their fellow miners. In a study of the benefits of small and large-scale mining in a political district in Indonesia, Langston et al found that formalization enhanced the “political purchasing power” of artisanal and small scale miners with district governments.Footnote 50
Formalization is also critical to a country's ability to implement the transparency principles promoted under the auspices of the Extractive Industries Transparency Initiative, because payment and revenue tracking is impossible without the proper documentation of transactions. In the case of Rwanda this is especially critical, as several reports have implicated Rwanda as a transit route for conflict minerals in central Africa, a factor found to be fuelling the crisis in the Democratic Republic of Congo (DRC).Footnote 51 Rwanda is considered a preferred route not only because of its geographical proximity to the DRC, but also because exports of tantalum concentrates are not taxed in Rwanda but are taxed in the DRC, making it profitable to export them to Rwanda.Footnote 52 Placing due diligence obligations on mineral trading companies in Rwanda with regard to the source of the minerals they trade would therefore go a long away towards stopping illegal mineral trading in Rwanda and in central Africa generally.Footnote 53 It would be extremely difficult (if not impossible) to regulate trading in the absence of formalization of the process by which what is being traded is produced. Such formalization would include making provisions regarding who can engage in mineral trading, where and how.Footnote 54
However, while formalization would give legal authority to local miners, it could also produce negative outcomes, such as upsetting power relations within communities. “Improper use of power”, favouritism and marginalization of vulnerable groups in the formalization process can lead to increased income inequality within communities.Footnote 55 In a study of the regulatory complexities in the informal mining sector in Indonesia, Spiegel found that the formalization process mostly favours “more powerful stakeholders” and others who are willing to pay bribes to government authorities and that it has not led to “meaningful redistribution of opportunities” across the board, especially for vulnerable groups.Footnote 56 Part of the problem are the complex and lengthy bureaucratic processes for processing permit applications. Fiscal barriers, such as difficulties obtaining financing and the inability to pay the permit fees, also prevent many local miners from participating in the formalization process.Footnote 57 Based on field research carried out within the diamond industry in Liberia, Bockstael adds that most of the formalization laws are “inflexible” and out of tune with local reality, forcing local miners to adopt “coping strategies”, which involve making informal arrangements with underpaid local government officials who seize the opportunity to supplement their income.Footnote 58
However, Verbrugge argues that, while these entry barriers and political bottlenecks explain the persistence of informality despite efforts to regulate ASM, they do not explain the persistence of informality in labour arrangements in cases where miners have obtained permits.Footnote 59 Based on a study of ASM regulation in Ghana and Tanzania (two countries with a long history of ASM regulation), he proposes an “integrative approach” to the understanding of persistent informality: informality persists due to a combination of two causes: fiscal, administrative and political barriers; and “exploitation” of the workforce by financiers and miners who have the financial strength to join the formal sector.Footnote 60 The exploitation, which the state condones and sometimes even facilitates,Footnote 61 induces people to opt for self-financing and they continue to operate in the informal sphere until they have saved enough to be able to join the formal sector. Verbrugge's perspective is important because it demonstrates that democratization of the permit granting process alone is not the panacea to persistent informality. Attention should also be paid to the protection of labour rights. Above all, it is necessary to consider the local context in which formalization occurs.
ASM formalization in Rwanda and Law No 13/2014
The slow growth rate of ASM formalization in Rwanda (and in other parts of Africa) and the poverty associated with it are substantially attributed to a lack of interest, particularly on the part of international donor agencies, such as the World Bank. The bank demonstrated “a large-scale ‘bias’” against ASM in the early days of mining legal and policy reforms in Africa and downplayed the growth potential of ASM in Africa.Footnote 62 ASM remained at the fringes of international development policy for a long time. Its potential to contribute to poverty reduction in rural communities escaped the notice of development policy makers who focused their attention on promoting small scale agriculture as their main poverty reduction strategy.Footnote 63 ASM's poverty reduction potential was first brought to the international scene in May 1995 at the International Roundtable on Informal Mining.Footnote 64 The purpose of the roundtable was to consider: how ASM could be carried out “safely and in an environmentally acceptable manner”; how the sector could “contribute to economic progress”; and what “technical, financial and regulatory measures” were required to achieve these.Footnote 65 The roundtable concluded that “no real solutions are possible unless artisanal miners are given full legal and transferable mining titles to their claims”.Footnote 66 This belated recognition of ASM as a viable venture led to frantic efforts that produced interventions that were largely freestanding and not properly integrated into the overall economic development agenda of the individual countries.Footnote 67 The eventual rise of ASM in Rwanda also reflects its rise in other parts of Africa, the compelling need for rural communities to seek alternative means of livelihood and the recognition by African policy makers of ASM's employment-generating potential.
Although discussions about ASM formalization have continued in Rwanda for decades, they have often given way to political discussions regarding security in the Great Lakes Region.Footnote 68 Part of Rwanda's policy justification for formalizing ASM is that, through effective protection of private property rights and organizational representation, miners would be better able to access market opportunities and obtain financing.Footnote 69 Formalization would enshrine a well-defined tax regime that would lead to increased tax revenues and increasingly enable the industry to be in a position to ensure the protection and rehabilitation of mines and quarries.Footnote 70 It is also considered crucial to the containment of mineral theft and smuggling, which are endemic in Rwanda.Footnote 71
Under Law No 13/2014, ownership and control of all minerals resides in the Republic of Rwanda, regardless of any ownership rights a person may possess over the soil beneath which the minerals are found.Footnote 72 A person who wishes to carry out exploration or mining operations must therefore obtain a mineral licence from the Rwandan government. Although the law does not define ASM or large-scale mining (which is left to a future ministerial order), it defines the size and area each may cover. Artisanal mining is treated separately from small-scale mining. The mineral licence area for small-scale mining is defined as 100 hectares, while that for artisanal mining is 49 hectares and for large-scale mining 400 hectares.Footnote 73 The law also makes provisions for the acquisition of both ASM and large-scale mining rights and creates rights and obligations for holders of each of these rights.Footnote 74
Law No 13/2014 does not, however, spell out the modalities for applying for a mineral licence. Instead, it assigns to the responsible minister the power to do so by way of an order.Footnote 75 The minister is under no obligation to subject the licensing process to competitive bidding. However, in the case of areas where minerals are discovered through exploration carried out by the government itself and areas with known mining potential based on past exploration or mining operations, the minister is given the discretion to require that the licensing process be subjected to competitive bidding.Footnote 76 In such cases, the bidders must comply with Rwanda's public procurement laws. These provisions apply as much to ASM as to large-scale mining. While the minister may decide to subject all licensing to competitive bidding, the lack of a legal provision mandating the minister to do so does not augur well for transparency. Too much power seems to have been given to the minister, without adequate guidelines or safeguards on how the minister is to exercise that power.
One remarkable feature of ASM formalization in Rwanda is the organization of ASM cooperatives. While ASM cooperatives have existed in Rwanda since the 1920s, it was not until Rwanda's independence from Belgium that they became very popular.Footnote 77 The principal reason for promoting the cooperative model was to enhance indigenous participation in mining. However, the growth of the cooperative system was hampered by financial constraints.Footnote 78 In 1988 the government initiated the formation of COPIMAR to strengthen the cooperative model and revive the ASM sector, with the aim of improving production, promoting good practices and increasing benefits to the miners.Footnote 79 In 2012, cooperative members produced a combined total of 42 per cent of Rwanda's total 3 T mineral production.Footnote 80 Despite these strides, however, challenges to the effective functioning of mining cooperatives still remain, one of which is the low financing of cooperatives.
Although Law No 13/2014 does not address the formation of mining cooperatives, article 2 defines “person” to include “a cooperative”. The development of the ASM cooperative system is not driven by mining-related laws but by policy and the laws regulating the formation and organization of cooperatives. ASM cooperatives are under no obligation to join COPIMAR, but sensitization programmes are carried out to encourage them to join.Footnote 81
The promotion of ASM cooperatives is important in the ASM formalization process. Given the large number of participants in ASM, regulation would be easier if the miners could group themselves into cooperatives with representatives with whom the government can deal directly. In addition, given the low economic power of artisanal and small-scale miners relative to large-scale miners, the formation of mining associations such as cooperatives offers artisanal and small-scale miners the best hope to build their professional and technical capacity and bolster their bargaining strength in their relations with both the government and large-scale miners. They may thus be able to influence government mining policies in their favour. However, the issue of capitalization of the cooperatives through the provision of credit facilities is one that the government of Rwanda must tackle if the benefits of the cooperative model are to be best realized.
Local content / procurement
Meaning of, and policy justifications for, the local content policy
Defined as the requirement that “a given percentage of domestic value added or domestic components be embodied in a specified final product”,Footnote 82 local content policies (LCP)s are designed to enable a country to maximize its gains from foreign direct investment. As a form of productive development policy, their goal is to “strengthen the productive structure of a particular national economy”.Footnote 83 Typically, LCPs mandate investors to utilize local raw materials in manufacturing and indigenous companies in goods and services procurement, and to give preference to local populations regarding employment.Footnote 84 The requirements are either implanted in contractual agreements between governments and investors or enacted legislatively. They may also be established in bidding requirements as part of the criteria for winning contracts or, more indirectly, in regulations and tax regimes that discriminate in favour of local industries.Footnote 85
The policy justifications for LCPs are legion. It is believed that LCPs would reduce the inequalities faced by domestic companies in relation to foreign companies, increase participation of the national industry in specific sectors of economic activity, improve national technological development, create job opportunities for nationals to improve their personal income, support economic diversification and reduce over-dependence on one sector by enhancing the value-creating capacity of a particular sector, and enable domestic companies to compete regionally and internationally.Footnote 86 It has also been pointed out that LCPs help to correct market failures, which occur “when there is a distortion that keeps the market from allocating resources efficiently and adjusting to a steady state”.Footnote 87 In the context of LCPs, market failure occurs when “domestic industries cannot gain the necessary technology and capacity to compete on the open market without outside intervention and protection”.Footnote 88 The unavailability of local skills to meet the needs of the industry results in inefficient allocation of the resources in the market. LCPs can intervene to correct the market failure because, by requiring firms to participate in the development of local skills, LCPs help to ensure that skills are available to meet the needs of the market.Footnote 89
However LCPs also come with certain challenges and tradeoffs. For instance, their accord with World Trade Organization (WTO) rules, particularly the General Agreement on Tariffs and Trade (GATT), the Trade Related Investment Measures and the Agreement on Subsidies and Countervailing Measures (ASCM), has been questioned.Footnote 90 These agreements maintain the “national treatment” principle, which obliges WTO member countries to grant one another the same treatment as they grant their own nationals. As scholars have pointed out, however, these agreements are rarely enforced.Footnote 91 Moreover, there is some room for manoeuvre for developing countries. For instance, under article 5 of ASCM, to challenge a subsidy, the challenging country must show evidence of “adverse effects” on it. Also, under article III(8) of GATT, if the requirement under challenge relates to government procurement, without a view to commercial resale, the national treatment principle would not apply. Some scholars regard LCPs as a necessary part of the “policy space” that developing countries should be allowed to enable them to pursue their own economic development goals, regardless of whether LCPs violate international trade agreements.Footnote 92 Another scholar believes that “fair trade” in the sense of a “level playing field” does not necessarily mean applying the same set of trade rules to all countries, but includes recognizing that some countries need “reasonable accommodation” under the international trade system in order to pursue their own development path successfully.Footnote 93
Furthermore, it is believed that LCPs put such undue pressure on companies to use local workers that this might discourage investment. As a former general counsel of Chevron Nigeria Limited put it, “whether or not new or existing targets are met, [companies] will remain under pressure to justify every single position that is occupied by a [foreigner]”.Footnote 94 This problem may however be addressed by a clear definition of what constitutes local content and by setting realistic and quantifiable targets for companies.
Local content / procurement and Law No 13/2014
As noted above, the Rwandan government recognizes that one of the key means of ensuring the sustainable development of the mining sector and ensuring the positive impact of mining on local communities and the country as a whole is through the development of local skills.Footnote 95 While there are several ways of developing local skills, including the establishment of educational institutions and skills acquisition centres, an approach increasingly being adopted by many countries is to involve the private sector in skills development. This approach is often coupled with restricting companies from employing foreign workers unless they demonstrate that there is no local who has the requisite skills to perform the task for which the foreigner is to be hired. In more stringent countries, a company hiring a foreign worker is required to provide a plan of succession that would enable a local to take over, within a reasonable time, the job the foreigner is being hired to perform.Footnote 96 That succession plan must include the training plan the company has for its local employees to prepare them to perform the task for which the foreigner is to be hired. The goal of this initiative is not merely to create jobs for the country's nationals, but, more broadly, to increase the company's value addition to the economy.
As noted above, one of the policy reasons behind Rwanda's mining policy reform was to boost the capacity of Rwandans to take charge of their development path after the decimation of the country's already meagre professional class in the 1994 genocide. One would therefore expect that the 2014 mining law would chart a legal course for rebuilding Rwanda's mining capacity and set the framework for effective value addition in the mining sector. Quite to the contrary, the legal provisions regarding value addition to Rwanda's economy are rather timidly adopted. Article 50 of the 2014 mining law provides that “a mineral licence may include provisions requiring the holder” to consider the feasibility of processing and refining the mineral products in Rwanda, the goal being to add value to the Rwandan economy. The use of the permissive word “may” implies that the responsible minister is not under any obligation to require mineral licence holders to consider the feasibility of processing and refining their products in Rwanda before considering doing so outside Rwanda. For a country whose domestic professional and technical capacity is in a shambles and that needs to exploit all value addition opportunities possible, one would expect a bold and more stringent provision permitting outside processing and refining only where these are not feasible in Rwanda, rather than a fainthearted adoption of a very important value addition instrument. The government would then support the gradual realization of the goal of such a provision by providing incentives to the companies to establish processing and refining facilities in Rwanda.
Related to this are provisions relating more directly to local content. Article 48 of Law No 13/2014 requires mineral licence holders and their subcontractors to comply with applicable labour laws in Rwanda and states further that “[a] mineral licence must include conditions requiring its holder to provide training to employees to enable them to perform well their duties”. Furthermore, article 49 requires mineral licence holders to “give priority to Rwandan contractors” in the procurement of services, “provided that the rates, quality and time schedule for delivery are competitive to what is submitted by nonresident contractors”. It also requires that, in the procurement of goods, priority be given to “materials and goods produced in Rwanda, so long as they are comparable in quality, quantity, price and delivery to materials and goods produced outside of Rwanda”.
Thus, in contrast to the procurement of local goods and services, there is no legal requirement to favour the employment of qualified Rwandans. Nor is the training that licence holders are required to provide to their employees to be directed preferentially at employees of Rwandan nationality. The provision fails to take adequate cognizance of Rwanda's dire need for capacity building, which was one of the principal policies that drove the enactment of the law. In fact, that the provision is contained in a part of the law headed “Miscellaneous, transitional and final provisions” shows its relative unimportance to the drafters of the law. Augustin Bida, president of the Federation of Mining Cooperatives in Rwanda, is quoted to have decried the impact of lack of capacity on the adoption of environmental and safety standards in Rwanda's mining sector. He states that the organization has only four staff members with a higher education: the executive secretary, the financial supervisor, the accountant and an electro technical engineer. Because of the lack of adequately trained personnel at mine sites, tunnels are not built with adherence to adequate safety procedures and engineering principles.Footnote 97
The authors of the 2012 skills survey mentioned above identified the type of skills needed in Rwanda's mining sector and made a number of recommendations for how to bridge the skills gap. The recommendations include launching and implementing knowledge and skills development training programmes for artisanal and small-scale miners, and enhancing qualitative skills among mining employees in private establishments.Footnote 98 A provision in the law requiring preferential hiring in favour of qualified Rwandans and specifically directing mining companies to offer skills training to their Rwandan employees to enhance their capacity to perform the very tasks that foreign professionals are hired to perform would boost the positive impact of the mining industry on the country.
CONCLUSION
In terms of advancing Rwanda's capacity building initiatives, Law No 13/2014 is a disappointment. While the law makes ample provisions for the formalization of ASM, it is in the critical area of charting an effective legal course for the development of local skills through technology transfer that further advances are most urgently needed. While the Rwandan government has explicitly recognized the dire need for local capacity building in the mining industry, it missed an opportunity to carve an effective legal course to facilitate the development of Rwanda's capacity to take control, within a reasonable time, of its mining industry. Rwanda needs a clear and comprehensive local content strategy that should form an integral part of the mineral licensing process to guide the maximization of the gains from mining development. Delivering local benefits to the local communities where mining activities take place is not merely desirable but necessary for the sustainable development of the mining sector. In fact this is something that is being mandated increasingly in many countries, both developed and developing. Capacity building cannot come about by happenstance, but requires a deliberate and measured strategy towards its realization. This is crucial even in the context of ASM because, while these miners are likely to be Rwandans, there is no apparent legal barrier to non-Rwandans engaging in ASM in Rwanda.
