Swapo think tank wants ‘hard’ local content policies
Body proposed overhaul of govt regulations
The think tank's recommendations follow widespread criticism over the fact that government ordinarily only gets a nominal 10% share in mining and exploration deals.
The Swapo Party think tank has proposed an overhaul of government policies governing the mining and oil and gas industries in Namibia to create more opportunities for the country and increase value for government.
It also wants multinational mining companies to commit, right at the start of negotiating for various licences, to employing Namibians, increasing the participation of local suppliers in the value chain and to guarantee the transfer of technology, skills and knowledge, the think tank said.
“Therefore, in the event of commercial discoveries, in both the mineral and oil and gas sectors, the ministry responsible should provide sufficient clarity to both investors, government agencies and the nation on the requirements of the promotion of a local content policy, as well as opportunities available in the sector.”
These recommendations follow widespread criticism over the fact that government ordinarily only gets a nominal share of 10% in mining and exploration deals.
A leaf from Zambia
According to think tank members Eliphas Hawala and Carlo McLeod, Namibia should take a leaf from neighbouring Zambia’s book, which could include mandatory local content measures for private ventures as well as developing a local content policy that would open up petroleum benefits to Namibians.
They are particularly concerned with the fact that foreign-owned companies and particularly state-owned Chinese companies dominate the procurement processes in the mining and oil and gas industries.
The duo also highlighted that foreigners are appointed in key jobs at the expense of qualified Namibians, despite the existing Petroleum Act and Model Petroleum Agreement stipulating that qualified locals must be given employment preference in the sector.
It is their view that a “hard” local content policy would provide a clear and stable regulatory framework for locally sourced skills and materials while identifying specific sectors for the development of local capacity and creating more jobs for Namibians.
The aim of this policy should also be to increase opportunities for local suppliers and broaden their participation in existing value chains, they said, because there are currently no targeted policies that would compel multinationals in these two sectors to use local content.
Miniscule local content
“Local content is implemented on a voluntary basis through aspects such as the mining charter which is not yet promulgated, as well as the National Equitable Economic Empowerment Bill, also not yet promulgated. Despite notable voluntary implementation programmes by the extractive industry including southern mines, Namibia’s extractive supply chains contain miniscule local content,” Hawala and McLeod wrote in a paper.
“The bulk of the contractor services at large uranium mines are currently in the hands of foreign-owned firms - including state-owned Chinese corporations,” they said.
The paper highlighted that large mining contracts are often aggregated and expensive to service, yet again putting local producers at the back of the line.
“Rossing Uranium recently sent out a 12-year tender to outsource their entire mining operation, including loading, hauling, drilling and blasting, under a single tender. Had such a tender been broken down into smaller units, it would allow local firms to compete.
“Though this practice of work aggregation is discouraged by the Namibian Competition Commission, there are no clear policy legislations to compel this behaviour to be curtailed.”
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It also wants multinational mining companies to commit, right at the start of negotiating for various licences, to employing Namibians, increasing the participation of local suppliers in the value chain and to guarantee the transfer of technology, skills and knowledge, the think tank said.
“Therefore, in the event of commercial discoveries, in both the mineral and oil and gas sectors, the ministry responsible should provide sufficient clarity to both investors, government agencies and the nation on the requirements of the promotion of a local content policy, as well as opportunities available in the sector.”
These recommendations follow widespread criticism over the fact that government ordinarily only gets a nominal share of 10% in mining and exploration deals.
A leaf from Zambia
According to think tank members Eliphas Hawala and Carlo McLeod, Namibia should take a leaf from neighbouring Zambia’s book, which could include mandatory local content measures for private ventures as well as developing a local content policy that would open up petroleum benefits to Namibians.
They are particularly concerned with the fact that foreign-owned companies and particularly state-owned Chinese companies dominate the procurement processes in the mining and oil and gas industries.
The duo also highlighted that foreigners are appointed in key jobs at the expense of qualified Namibians, despite the existing Petroleum Act and Model Petroleum Agreement stipulating that qualified locals must be given employment preference in the sector.
It is their view that a “hard” local content policy would provide a clear and stable regulatory framework for locally sourced skills and materials while identifying specific sectors for the development of local capacity and creating more jobs for Namibians.
The aim of this policy should also be to increase opportunities for local suppliers and broaden their participation in existing value chains, they said, because there are currently no targeted policies that would compel multinationals in these two sectors to use local content.
Miniscule local content
“Local content is implemented on a voluntary basis through aspects such as the mining charter which is not yet promulgated, as well as the National Equitable Economic Empowerment Bill, also not yet promulgated. Despite notable voluntary implementation programmes by the extractive industry including southern mines, Namibia’s extractive supply chains contain miniscule local content,” Hawala and McLeod wrote in a paper.
“The bulk of the contractor services at large uranium mines are currently in the hands of foreign-owned firms - including state-owned Chinese corporations,” they said.
The paper highlighted that large mining contracts are often aggregated and expensive to service, yet again putting local producers at the back of the line.
“Rossing Uranium recently sent out a 12-year tender to outsource their entire mining operation, including loading, hauling, drilling and blasting, under a single tender. Had such a tender been broken down into smaller units, it would allow local firms to compete.
“Though this practice of work aggregation is discouraged by the Namibian Competition Commission, there are no clear policy legislations to compel this behaviour to be curtailed.”
[email protected]
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