Transparency and development in the mining sector

By Sokol Mati

Transparency and information are two very important elements in the formulation of development policies for a sustainable economic growth in every sector of the economy.

I will dwell in importance, that these two elements have in mining policy making especially in this period of global crisis extended to the sector, with a fluctuation price mining products much more than normal fluctuation over the years, with price abuse phenomena of their determinants, with new elements observed in global competition, with a geographical redistribution of flows movement of mining products and a lot of wild competition in the global mining market.

When we are talking about the information it has three components: 1. gathering information; 2. analize; and of course 3. public transparency of this information together with open public debate, for determining the optimal options and a decision-making for sustainable development. Transparency should include two aspects, the information on sector developments to ensure ideas from as many stakeholders and transparency of decisions taken.

These three elements are inextricably linked to each other and become effective for sustainable development policies when three used simultaneously and in full. Gaps in the implementation, of even one of them, make applicable policies for the development of the sector to be wrong, not in the right direction, balances of these elements not in the same parameters, thus removing the possibility of the return of all effects in the same measurable terms, usually in those financial, which set a real balance between developed policies and how they are actually implemented.

Sustainable development strategies, more and more are turning in balance evaluators, where special factors are tempted through different coefficients to be measurable and comparable. The fact that during the preparation the number of elements to consider is very large, and the goals to be achieved by them in terms of sustainable development are also numerous, it is making necessity such a thing in order to reflect all the information gathered and its analysis.

Policies that are developed for the implementation of these strategies, mathematical and statistical formulations help but nevertheless there are elements that can’t be measurable, and require decisions in many cases fast pragmatic, which most of the time without any financial or direct economic gain but indirectly.

It is a fact that currently the state benefit from mining taxes has been in rebate (annual reports of Extractive Industries Transparency Initiative determine that the value of income from the mining sector to the GDP over the last four years have been decreasing), global pressure on business has grown, investments do not have positive indicators, in this case policies should be directed not only at the economic impact, but should include all three sides benefiting from an activity. These three sides have elements of goals for sustainable development as: 1. Economy, its resistivity through restoring business confidence, inextricably linked with the improvement of the business climate, enhancing its competitiveness in the region, increased foreign investment, 2. Residents of the region, with the possibility of a guaranteed job, sequential revenue, decrease of the level of poverty in mining regions as currently mining business in these regions is the main promoter and in many cases their only development, 3. Mining business which currently is facing alone with great difficulty, don’t have help from the state to guarantee the investments made, there are difficulties in lending not only just for the fact that banks have increased the requirements and credit care but because business does not seem safe, projects that previously resulted effective now are out of their parameters affected mostly from the mining global crisis and partly from the policies followed in this period of crisis.

The information in the mining sector before 90 was a nominal information, that was collected by each mining enterprise, the information was processed by professionals and the technical analysis were realistic, but the conclusions or recommendations that were done on these analyses for decision-making or policy development not rarely were conditionally due to politic, and so many technical elements were lost because also the professional courage was measured, the latter an element that should have a primary role in these 25 years, but that has always remained in place.

As such, this information was not transparent for the public there was no public debate, because debate between professionals of the central structures and enterprises although existed did not provide opportunities for brainstorming by all parties, but was a debate conditioned by central policy. This fact dim the element of the discussion of ideas, remove the opportunity of selecting the optimal idea, and made that the professionals were not involved in policy making but simply in the rigorous implementation, not rarely failure of implementation for subjective reasons or from the professional courage, caused incalculable damage in their lives but at the same time in the domestic economy.

Information on the mining sector after 90 years up to 1995 continued to be realized by the central institutions but still was never transparent to the public, and the information that was given to the public, perhaps more for the business that was being re-emerge, directed mainly in promotional terms, it was more related to the necessity of the participation of business in mining activities because in this period the mining sector almost collapsed. Then this information almost was not prepared at all, it was just in special reports, distributed in a few hands, coming in 2010 when with the new legal obligations the information was required, its collection and presentation on a readable product was returned as a procedure, and is currently formalized as merit of mining institutions, but up to here.

I say up here, because this information is simply a collection of data, no actual analysis of the causes, effects that give the annual results of sector development, there are vague conclusions and very few recommendations to be able to give ideas for decision makers and policy mining. The information was never done transparent nor for mining institutions with each other, there is never debated on sector data even between professionals or between stakeholders in the mining sector. Not to go beyond that this information is not given to the public even in a summary form and distributed so simply today, with current information tools.

Extractive Industries Transparency Initiative with the annual reports is providing a valuable help in this regard but its impact remains on the day of publication of the annual report that become more a media news of the day that a report on which it is spent not few, analysis of this report should be subject to discussion and also alarm for decision-making when it is noted that the impact of the mining sector in the GDP has fallen a lot in the last five years, when important parts of the sector have been closed and the negative impact of mining products to be processed is in a very high percentage.

It is worth mentioning that these reports with mainly financial problems and despite the opportunities to provide conclusions can’t replace the summaries of technical information that are legally binding for the mining institutions and that take into account many elements influencing sector development as technical and social.

These summaries should give generalizing data for programming basic geological research activities and implementation; annual product forecast in mining sector and its implementation; employment and the need to develop human resources, professionals in mining activities and also employment opportunities in sector; programming for implementation of the rules for safety, employee safety, environmental protection, landscaping, realizations of the safety elements and environmental rehabilitation, realization of mining operations and disposal of mining waste; including the movement of mineral reserves, definitions for hazardous areas, etc.

All this information should be part of the discussions between mining institutions, with all development agencies, business groups and other stakeholders for investment, professionals, civil society organizations, communities, local authorities and relevant ministries related to mining development, such as finance, environment, infrastructure and others so that the analysis of this information should be complete, connected with current and long-term development. This debate may serve as a catalyst to connect the mining policies with national development.

Currently are observed very large deficiencies in at least two of the basic elements, analysis of information and lack of transparency of the debate-dialogue.

The analysis of annual information on the issues I mentioned above, debate and open dialogue with many stakeholders at country level are a foundation for the integrated role of mining in the activities of the national plans and in a broader discussion of sustainable development. Existing forums and others that may be formed in the future should engage in a more systematic way as a stimulus for the growth of inclusive dialogue and cooperation.

It is noticed a European wind of more environmental than mining sector development. We can and must develop mines while protecting the environment. In addition to this natural potential that Albania has we must use it in a rational way for sustainable development of the country. A collapse of the mining sector will remove an important element in the development of domestic resources, further geographical balance in terms of economic developments in country.

Our job is to get final products from mineral resources by advocating strongly processing, guaranteeing the continuity of mineral resources through encouraging exploration and state participation in general studies because a total dependence on import for final products which partly now days are balanced with raw value products would be a very strong blow to the Albanian economy, and furthermore unprepared in such confrontation, different from the European economy, for which also these years crisis is passing much softer than for us.

No activity for the discussion of these reports is noticed, civil society which really has expressed a commitment to be commended is not involved enough. Currently, her voice is little or nothing heard. Media is increasingly silent and relatively closed in sharing of thoughts. Professionals even those in old age of mining institutions, universities are in lethargy, at a time when for more than three years the mining industry is going through many difficulties that is not able to cope alone.

The dialogue must necessarily include elements of development indicators deterioration, his unsustainability, environmental degradation, displacement of population, economic and social inequality by geographic areas, the values of the sector income, distribution and their reinvestment, fiscal evasion and subjectivity in decision making, negative and positive impacts of minerals activities combined with industry ability to mobilize human element, technological and financial resources.

Geographic extent and nature of mining activities create opportunities to contribute positively and directly to the reduction of poverty; the development and diversification of direct and indirect economic benefits; in economic and social development; development of new technologies and promoting the construction of new infrastructure for transport, communication, water and energy; for the environment and landscape protection, when accurate access policies and management in a responsible manner lead to decent work and economic growth; to provide opportunities for training and contributes to the reduction of social inequality and social conflict mitigation.

Information not discussed or missed directly affects the impossibility of understanding of the benefits and damages stemming from the development of the sector. Unreserved information and open dialogue serve in understanding correctly the effects of mining activities on sustainable development and how these effects relate to each other. It helps raise awareness for its stakeholders and how they can address the opportunities, challenges in the mining industry. Transparency makes governments accountable. Governments as responsible for legislation, economic policies (in their mining policy), and set standards of environmental performance, social services, public health, education, public infrastructure, etc., they are also responsible for putting in working position mining institutions which are able to ensure harmonization of policy coherence, cooperation among agencies and levels of government involved in the management of the mining industry.

The information and transparency will guarantee maximizing of positive effects and contributions to society in terms of sustainable development. These two important elements in the design of immediate and long-term policies make that the determination of priorities between policies takes a special importance role. In this approach, currently for me priority is: Creating of business favourable climate with emergent legal and institutional interventions.

This not simply for fiscal legislation that is indispensable for temporary periods with realistic estimates, but comprehensive institutional support in mining business to preserve the investments, maintaining employment, creating a positive atmosphere for attracting domestic and foreign mining sector; Promoting exploration activity for the addition of new mineral reserves; Deep processing of mining products (physical, metallurgical, chemical, biological, etc.) for getting all the elements in an ore, as elements to increase mineral value in country and employment growth; rational and safe mineral resources for maximum benefit of Albanian citizens with the view that these mineral resources belong not only to our generation but also future generations; Promote and support of businesses applying new technology, automation, optimization of processes to cope with detection, the use of mining troops going on in depth and which have a low content of useful mineral, ever-growing requirements in terms of land use and obtaining mineral rights, dealing with rising costs, price volatility or competition in global markets; Mining activities with minimal impact on the environment on the basis of new environmental concepts;

The realization of mineral planning based on concepts of territorial planning those in comparative of effectiveness realized from the exploitation of that territory for the development of mining activity or any other activity; Encouraging the participation of young experts in the sector and training of existing ones; Increasing sector transparency in terms of performed activity and incomes created and how they are distributed; Real partnership public-private activities with the concept of bilateral benefit.