Mining mandates companies help communities

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Motuma Mekasa

A new law has been imposed on mining companies to pay a minimum of two percent from their annual revenue for community development projects around the areas they mine. Motuma Mekasa, Minister of Ministry of Mines, Petroleum and Natural Gas (MoMPNG), told Capital that the new law established a legal framework for socially responsibility in the mining business.
Previously companies had to promise to be socially responsibility but the rule had no teeth.
In the near past some disagreement occurred in some mineral development areas, although some did help with community development projects. .
Experts said that the current law forces companies to pay the amount for a specific area where a government body will run developmental programs.
“The two percent commitment is the minimum amount that companies have to pay for a wereda or zone administration at the mining area,” experts said. “They are also expected to undertake additional corporate social responsibility programs under their own plan in addition to the commitment,” a person in the industry said.
“For instance companies have to engage in the environmental and other social development in the area that they activated,” an expert said.
The latest mining or related agreements between companies and the government will include the points of the new law. The new law is also applicable on the projects that commenced before the new community development law, according to experts.
By 2025 the sector is expected to cover 10 percent of the GDP, according to the government plan.