Partnerships for managing social issues in the extractive industries. Case Study 8. Development in Kahama District, Tanzania

Transcription

1 Partnerships for managing social issues in the extractive industries Case Study 8 Development in Kahama District, Tanzania Location Tanzania Operator Kahama Mining Corporation Limited Investment Unknown Partnership Infrastructure Overview This case-study examines the partnership approach underpinning the social development programme of Kahama Mining Corporation Limited (KMCL), the developers of the Bulyanhulu gold-copper mine in the Shinyanga Region of Tanzania. The mine started production in April The Tanzanian government recently opened its mining industry to the private sector. This process has been accompanied by public expectations that the granting of mining concessions will lead to local community benefits beyond employment. Another important element of government policy is also for political and administrative decentralisation, although this process has been impeded by the limited financial resources available to local government. For example, Providing safe, reliable and affordable water supply to the Kahama District although Kahama District Council has committed 25% of its locally derived income to implement a District Development Plan, this represents just 2% of the overall anticipated expenditure. With central government likely to contribute only a further 12%, the District Council is looking to NGOs, donors and, in particular, KMCL, to fill the void. To generate community benefits in this complex working environment, KMCL instigated a social development programme (SDP), centred around the provision of infrastructure for water supply, health care and primary. The primary business drivers were the broader need to ensure the acceptability of the mining industry and the specific KMCL objective of reducing its expatriate workforce by 70% over five years (which requires that KMCL needs to construct housing and related infrastructure of a quality sufficient to attract Tanzanian managers to the region). This infrastructure will be extended to the local community, thereby improving local infrastructure and the level of delivery of basic services, as well as enabling the development of other businesses in the area. The SDP has been underpinned by a partnership approach. A series of multi-party steering committees have been formed to co-ordinate the programme design and resource inputs from KMCL, communities, the district council, NGOs and donors. The SDP has been closely aligned with the Kahama District Development Plan, thereby meeting local infrastructure priorities and the government s policy for a bottom-up approach to community planning. KMCL has provided most of the investment capital, and has used its competencies in contract and project to oversee contractors. The steering committees have now shifted their emphasis towards building the capacity of local government, communities and NGOs to take over the long-term and maintenance of the infrastructure facilities. With many of the facilities to be managed on a user-fee basis, and with the anticipated improvements in the capacity of the district government to manage public services, there is every prospect that KMCL will be able to stand back from the leadership role it has taken to now, and contribute to local society on a more equal and sustainable footing with its government and civil society partners. i

2 Social Context Approximately 21,000 people live in the vicinity of the Bulyanhulu mine. The quality of life of local communities is low, as a consequence of poverty, low levels of (see Box 1), and chronic ill health. The majority of households in the area are involved in subsistence crop farming. The common sources of water for domestic use are open wells, some fitted with hand pumps. Most wells are considered unsafe and have low and unreliable yields, especially during the dry season. The key medical concerns in the region are the high incidence of diseases such as diarrhoea, pneumonia, anaemia, malaria and HIV/AIDS. Health infrastructure is poor, with shortages of medical staff and equipment. Business Context Box 1 Local Education Profile Of the 2,693 school age children (7-13 years old) in Bugarama Ward, 71 per cent are in school. 21 per cent of children in the ward do not complete primary. In 1999, 5 children (3.6 per cent) were selected to join secondary schools. The teacher/pupil ratio is below the national average. Severe shortage of school facilities (eg classrooms, books). Adult illiteracy rates in some local villages are close to 90 per cent. The Tanzanian government has recently amended its legislation to promote Tanzania as an attractive investment location to the global mining industry. Barrick Gold hopes to establish a regional mining zone in Tanzania, and the Bulyanhulu mine is viewed as the first in a series of such operations. The increasing involvement of the private sector in the mining sector, has led to public demands for communities in the vicinity of mining operations to gain from the granting of mining concessions. As a consequence, the Tanzanian mining industry is increasingly expected to make a positive contribution to local community development. A further issue for KMCL is that KMCL wishes to reduce the number of expatriates at the mine by 70% within five years. KMCL s experience has been that Tanzanian managers will be unwilling to move their families to such a region unless infrastructure such as schools, health and housing matches that available elsewhere in Tanzania. Mining companies have traditionally assumed that providing jobs alone would be enough but it is increasingly clear that the industry needs to do much more on community development. Mr Roy Meade (Senior Vice President & General Manager, KMCL) KMCL could have elected to implement a development programme alone, or through establishing a local company-managed foundation. Instead, KMCL chose to adopt a multisector partnership approach, involving not just different parties, but the pooling of their resources and competencies. The partnership approach was adopted for a number of reasons, as follows: To enable KMCL to focus its efforts on those areas where social needs were greatest and where KMCL could provide maximum value to community development; To enable KMCL to work with potential partners, and through this to develop trust and understanding and a more secure social license to operate; To manage community expectations of KMCL for local development, through clearly defined and agreed goals and workplans that engage all sectors of local society in taking actions and assuming responsibilities; and To enable KMCL to hand over the long-term and maintenance of infrastructure and other projects to communities and government. Governance Context The aim of the Tanzanian Local Government Reform Agenda is to enable local government authorities to be more autonomous. Kahama District Council issued its first District Development Plan in The aim of the plan is to improve the welfare of the population, by enhancing food security, rural income and improving social services in the district. The ii

3 participation of local communities in both planning and implementation of the plan is seen as essential to strengthen the responsibility and capacity of communities to solve their own development problems. This approach reflects the bottom-up focus of the Local Government Reform Agenda, where there is an emphasis on the delegation of authority and responsibility to the lowest practicable level of governance. At the time of preparing this report, the processes of planning and implementing the District Development Plan were still relatively new, and there were significant limitations in the resources available to communities and government to effectively implement the Plan. The approach adopted by KMCL aims to bridge the gap by addressing areas where there is a real need and where KMCL can make a real difference. The ultimate aim is for government, communities and NGOs to take over. However, to get things started, KMCL has had to adopt a role that is closer to that of an NGO. Ms Aida Kiangi (Community Development Manager, KMCL) The Partnering Process In 2000, KMCL commissioned Planning Alliance, a Canadian consulting company, to assist in the development of KMCL s housing scheme as part of the Social Development Programme (SDP). The SDP focused on: The development of a housing scheme for mine employees; and Assisting the communities surrounding the mine in the areas of health,, water supply and micro-enterprise development The preparation of the SDP involved extensive consultation and negotiation with KMCL, existing residents, government agencies and mineworkers. A specific aim of the consultation process was to ensure that the SDP reflected the priorities in the District Development Plan. Partnership Activities Box 2 Scope of the KMCL SDP Housing Scheme Develop a housing scheme (total of 600 houses) for mine employees and their families Enable local communities to benefit from the infrastructure (roads, community services) associated with the housing scheme Community Education Programme Improve the quality of the al infrastructure (buildings and facilities) Improve the quality of primary in the area (covering approximately 3,000 children) Provide access to basic adult Community Health Programme Ensure that there is a basic health system available to all communities in the vicinity of the mine operations Educate communities and workers on diseases such as HIV/AIDS and malaria Water Programme Provide safe, reliable and affordable water supply to local communities Other Programmes Local enterprise development and local housing. At the time of the SDP development, community and government capacity and resources were extremely limited, not least in the techniques of community participatory planning, and there was a general lack of understanding of the role that could be played by the private sector in community development. While KMCL s original intention was that the SDP implementation would be based on principles of equal contributions and responsibilities, the practical limitations meant that, while the direction of each of the projects was defined by all partners KMCL was compelled to take a leadership role by providing the bulk of the funding as well as contributing contract and project skills. Despite this, the partnership principles of joint design and decision-making, shared risks and responsibilities, and a pooling of resources and competencies, were adhered to, through the establishment of a series of multi-party committees for each of the main programme components. Each steering committee comprised representatives from local and district government, NGOs, KMCL and the affected local communities. The committees provided a means for ensuring that KMCL focussed its resources on those areas where there was a need to bridge resource gaps (ie specific activities or projects that could not be implemented by others due to a lack of resources or capacity). Where these resources already existed, KMCL encouraged the relevant communities, NGOs or government agencies to mobilise. In practice this meant that KMCL assisted principally with technical know-how, financial support and capacity building in infrastructure and maintenance. iii

4 Division of Roles The resources and competencies committed by the partners are summarised in Figure 1. Figure 1 Division of Roles and Competencies in the SDP Partners Partnership Education Health Housing Water KMCL Project Financial resources Construction of classrooms Project Financial resources Rehabilitation of dispensary Project Financial resources Facilitate employment of local community Project Financial resources for construction and community NGOs CARE Tanzania Project Produce training manuals Train and mentor teachers Community mobilisation AMREF Train health workers Supervise dispensary Produce health promotion materials Liase with government and local communities WEDECO System operation and maintenance Community mobilisation Community Kahama District Council (Government) Recruit teachers Supervise schools Supply learning materials Provide construction materials for school buildings Logistical support to programme Recruit and train dispensary staff Dispensary supervision Procure drugs and other materials Logistical support to programme Prepare land use plans Assist KMCL in land acquisition and negotiations Contribute to design of water system Village Government & Local Communities Contribute labour and land for construction work Explore community s potential financial contribution to Mobilise community to participate in adult Provide feedback on the programme Facilitate the identification of peer educators Assist peer educators with awareness campaigns Provide feedback on the health programme Assist KMCL in the payment of compensation Prepare land use plans Provide advice on the required social facilities Mobilise communities to assist in building facilities Contribute to the identification of water points Build water points Participate in water user groups Take long-term responsibility for the operation and of the system Outcomes For all parties, the pooling of competencies and sharing of responsibilities provided measurable benefits. Table 1 summarises the added value of the partnership from the perspectives of business, community development impact and public sector governance. iv

5 By providing benefits to the local community, KMCL also benefits as the district government can demonstrate to local communities the benefits that result from mining. Mr Noel Mahyenga (District Executive Director, Kahama District Council) Table 1 Added Value of Partnership Process Business Benefit Access to new mineral resources in Tanzania Recruiting and retaining high quality employees Enabled KMCL to demonstrate its commitment to community development as an integral part of mine operations. Enhanced community and political support (as evidenced by strong public statements of support for KMCL and the active involvement of community and government in the CDP implementation). Expedited land acquisition and minimised delays to the construction of the housing scheme. Increased the likelihood of the successful integration of mineworkers into the local community, as a consequence of the good relationship between KMCL and the local community. The Ward and Village Executive Committees are now motivating communities to build schools and other buildings for themselves. Mr Will Thompson (Community Development Coordinator, KMCL) Management of community expectations and reduced community dependency Cost-effectiveness of community development expenditures The SDP is understood by all parties to define the scope of KMCL s community development activities, thereby enabling KMCL to manage community expectations. Leverage of contributions (labour, materials) from the local government and communities for the construction of school classrooms and other buildings. Transferred the longer-term responsibility for infrastructure and maintenance to communities and local government. Ensured that local government is committed to adequately staffing schools and health facilities (with these costs to be met from the district council s budgets). Corporate Reputation Communities, NGOs and government see KMCL as trustworthy and committed to community development. Community Development Impact Working on our own, without KMCL we would not have achieved things such as a permanent road, assistance with the dispensary, office housing for the Ward Executive, school construction projects or hospital improvements. Mr George Kingi (Ward Executive Officer. Bugarama Ward) Improved Infrastructure Educational Security Health Security Access to a reliable water supply for the 5,000 residents of Bugarama and Ilogi villages and the 30,000 people that live along or in close proximity to the Lake Victoria pipeline. Improved local infrastructure (eg shops, community centre, school buildings), designed in accordance with the community s needs. Development of community capacity (eg skills, implementation of revenue earning systems) to effectively manage the provided infrastructure. Increased rates of enrolment in primary schools (in Standard 1, the enrolment and attendance rates are close to 100 per cent, compared to historic levels of per cent). Increased community knowledge of HIV/AIDS and malaria and the adoption of improved health practices to prevent the spread of these diseases. Local Economic Development Employment opportunities for local people in the construction of the housing scheme. Community Capacity Improved community capacity to manage infrastructure. Improved capacity to make decisions on community development (eg through project steering committees) and to lobby government. v

6 Public Sector Governance Effectiveness of social programmes (health, ) The SDP has enabled Kahama District Council to implement most of its development plans for the Bugarama area, despite the limited budgets available to the council. The development of community capacity to manage infrastructure projects (eg water, school buildings) means that a longer-term liability for the district council is not being created. The SDP is assisting the district council in ways that benefit the entire Kahama District (eg through the rehabilitation of the Kahama District Hospital). Accountability and Transparency Increased accountability of district council to local communities (as a consequence of increased community knowledge of their rights). Key Success Factors Two factors were central to the effectiveness of the partnership arrangements: We are starting to see signs of communities taking charge and having an increasing input to the decisions that affect their lives Mr Noel Mahyenga (Kahama District Council) The partnership process actively sought contributions from a range of stakeholders (different levels of government, local communities, NGOs), thereby creating a collective ownership of the projects and ensuring that different resources and capacities were brought to the implementation of the SDP; and KMCL s core competencies were brought into the SDP, namely: its contract, quality control and project skills. KMCL is now using the SDP to develop these and other competencies in its partner organisations, thereby enabling communities and the district government to take over the longer-term and maintenance of community infrastructure. Conclusions Through the SDP, KMCL has acted as a catalyst for community development in the vicinity of the mine by (a) overcoming a major barrier to providing basic infrastructure (ie a lack of financial capacity), and (b) developing community and government capacity to take over responsibility for infrastructure in the long-term. Pressures to provide additional social benefits, combined with limited financial and capacity in local government, is a common scenario in the global mining industry. KMCL s approach to community development (ie convening multi-sector steering committees and focusing on community infrastructure that draws on the core competencies of the business and contributes to the business-case for staff recruitment), perhaps offers a framework by which others can think through how social issues might best be managed in the vicinity of mining operations. Contributors Published Authors: Rory Sullivan & Michael Warner of the Secretariat of the, BPD. With: Aida Kiangi, KMCL.,, c/o CARE International, Rushworth Street, London SE1 0RB, Tel ; Fax: ; : browne@ciuk.org. Full Case-study available at: vi