The Ministry of Mines will create a new law to force mining companies to become more transparent.
The ministry recently became a candidate for Extractive Industries Transparency Initiative (EITI), a global coalition of governments, companies and civil society organizations working together to improve openness and accountable management of revenues from natural resources. Its goal is to mandatorily boost the transparency initiative for the companies.
Tolosa Shagi, Minister of Mines, said that the ministry is now working to table the new law for the parliament to ratification. For mining companies to join the sector they will have to abide by the new law.
“We have a plan to amend the mining proclamation as soon as possible, if a company does not wish to follow the transparency initiative it means they have different values than us and we don’t want to deal with a company like that,” the minister said.
“Definitely the law will be ratified in the coming year,” he said.
He said that his ministry is also implementing the transparency initiative scheme on mining companies. “Currently, 35 international and local companies are included in this scheme,” he explained.
“We are now working to be a full member on the initiative that includes 44 countries. The inclusion under the initiative will benefit the country and the sector development, we are working hard to minimize the time before we become a full member at EITI and we hope to finish the process within a year,” he said.
Reputable companies that are free from corruption and illegal activities will be interested in investing in the mining sector and the scheme will create trust between the developers, the public and as well the government. He said that the initiative will facilitate finance to enhance transparence, sustainable development and good governance in the sector.
Countries that joined the initiative have registered good change since they became a member of the EITI. According to the minister, at the current level Ethiopia has not suffered from the mining sector. “There are not that many companies involved in mining and most are in the exploration process but we have to prepare during the early stages to prevent illegal activity because the sector is now growing significantly,” Tolosa said.
EITI is an international organisation that has developed a standard assessing the levels of transparency around countries’ oil, gas and mineral resources. This standard is developed and overseen by a multi-stakeholder board, consisting of representatives from governments, extractive companies, civil society organisations, institutional investors and international organisations. The EITI Standard is implemented in 44 countries. It consists of a set of requirements that governments and companies have to adhere to in order to become recognized as ‘EITI Compliant’
EITI also assists in strengthening accountability and good governance, as well as promoting greater economic and political stability. This, in turn, can contribute to the prevention of conflict based around the oil, mining and gas sectors.
Experts said that Ethiopia’s membership in the EITI would help the country ensure transparency in the extractive industry.