Tanzania

The Doctrine of Permanent Sovereignty over Natural Resources in Tanzania: A Panacea for the Plundering of Minerals in Developing Countries?

The group is currently working on the doctrine of permanent sovereignty over natural resources which emanates from the UN General Assembly's resolution 1803 (XVII) that has been adopted in Tanzania and which was incorporated into new legislation. The legislation is titled " The Natural Wealth and Resources (Permanent Sovereignty) Act, 2017. The objective of this research will be to investigate whether the Act/legislation cures the malpractice of plundering natural resources from developing countries by multinational foreign companies under the pretext of Foreign Direct Investment. These multinationals are always blamed in Tanzania and elsewhere for extracting precious minerals, such as gold, without fairly sharing the profits with the host nation. In fact, it is well known that those who suffer most are the indigenous people living close to the mining sites. Although the Mining Development Agreements (MDAs) are confidential, the host nation ends up getting a peanut share in terms of royalties, which in most cases does not exceed 5% of the total revenues. These multinationals also have been accused of avoiding taxes by under-declaring the mines ores that are shipped and exported for sale out of Tanzania. They have also been taking advantages of the loopholes that are in the Tanzanian tax regime. In some cases, they are shielded by the foreign arbitral bodies when a dispute arises between the foreign investor and Tanzanian government. This is a practice which scholars have called to level their blame to these arbitration forums.

 

The Tanzanian legislation, among other things, envisages: the prohibition of proceedings in foreign courts, participation of people and the government in mining activities, retention of earnings, requirement for beneficiation, prohibition of exploitation except for the benefit of the people, inalienability of natural wealth and resources, guarantee of returns from natural resources and proclamation of permanent sovereignty over natural resources.

 

Thus the research aims to explore the legal implications of this legislation and doctrine as far as the quest for local citizens (indigenous Tanzanians) to benefit from their natural resources is concerned. The discussion will mostly address whether the legislation is a cure to the malpractice of the alleged exploitation by foreign companies that has been going on since the inception of liberalization policies in 1990s.

 

This case is investigated by University of Dar Es Salaam, School of Law, Under the supervision of  Baraka Kanyabuhinya.

 

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