Property Rights Conundrums in Artisanal and Small-Scale Mining: Experiences from USAID Projects in Côte d’Ivoire, Guinea, and the

Democratic Republic of Congo

Mark Freudenbergerwith

Bocar Thiam, Catherine Picard, Sabine Jiekak and

Terah DeJong

Annual World Bank Conference on Land and Poverty 2015March 26, 2015

Active diamond mining in Forécariah District, Guinea.

Expanding diamond mining in and around Séguéla, Côte d’Ivoire

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• Turbulent Histories of Artisanal Mining in Guinea, Côte d’Ivoire and the Democratic Republic of the Congo

• Contradictions between Statutory and Customary Tenure

• Conflicts between Surface and Sub-Surface Rights

• Innovations in Policy, Law, and Practice

The Common Narrative of Artisanal and Small-Scale Mining

Active gold mining in South Kivu, DRC.

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Resource Tenure and Artisanal Diamond Mining in Guinea

Resource Tenure and Artisanal Diamond Mining in Guinea

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Artisanal Diamond Mining Sector in Guinea

History

• Discovery: Diamonds discovered in 1932 near Macenta and exports began in 1935 by the Société Guinéenne d’exploitation minière.

• Colonial Period: Clandestine artisanal diamond mining widespread despite interdictions during colonial period.

• Independence Period: Alternating bans and acceptance of artisanal diamond mining intertwined with state concessions to exporting companies.

Current Status of Artisanal Diamond Mining

• Diamond Production: Expanding throughout the country to new areas, but dynamics much dependent on international market incentives and access to capital. Diamond potential as much as 40 million carats.

• Certification: Kimberley Process Certification Scheme (KPCS) in force, but reforms recommended to strengthen internal traceability within value chain.

• USAID PRADD II Project: Provide technical assistance to Ministry of Mines to implement mining best practices in Côte d’Ivoire and Guinea, and promotes good governance of the mining sector through the KPCS.

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Diamond Pits in Forécariah

Artisanal Diamond Mining in Forécariah

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Interface between Surface and Sub-Surface Tenurial Regimes in Guinea

Statutory Tenure Regime• Mining Code: Recognizes rights of indigenous landowners, but no regulations drafted to create

process of recognition and pay compensation for mining activities. Principle of benefit sharing recognized, but no regulatory framework. Ministry of Mines attempts to parcel out claims to generate revenue and monitor production. Lack of geological evidence to justify allocations of parcels and permits.

• Land Code of 1992: Customary tenure recognized, but no regulatory process in place to formalize customary land ownership.

Customary Tenure Regime• Customary Rights: Historical rights derived from first settlers. Descendants of first arrivals

control access and use of all farming and grazing lands as well as swamps and streams where diamonds are mined. Traditional authorities extract “rents” from all non-resident miners as well as a share of the diamond profits.

• Ignoring the State: In new mining areas like Forécariah, ministry officials fail to monitor diamond mining. Traditional authorities tend to ignore the State.

Contradictions and Conflicts• Rights remain unclear: Despite 1992 Land Policy based on respect for rights of land users and

traditional landowners, tenure remains insecure and uncertain.

• Overlapping Institutional Mandates within the State: Difficult to launch inter-ministerial dialogue over contradictions in policy and law.

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Innovations in Policy and Practice Toward the Artisanal Mining in Guinea

Innovation # 3: Establishment of Exclusive Reserved Zone for Artisanal Diamond Mining. In highly speculative land situation in Forécariah, delineate area of 983 km2 to clarify surface and sub-surface rights for benefit of diamond mining communities. With US Geological Survey assistance, model probability of finding alluvial diamonds and establish more rational parcellization and claims. Institute SMARTER mining techniques as part of environmental rehabilitation strategy.

Innovation # 1: Technical Assistance to Ministry of Mines to Define Revenue Benefit Sharing to include Customary Land Owners. Carry out studies to define how to assure equitable distribution of a share of diamond mining revenues.

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Innovation # 2: Technical Assistance to Ministry of Agriculture to review policy, legal, and institutional constraints to implementation of Land Code. Engage other ministries and donors to design a road map for formalizing customary rights.

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Resource Tenure and Artisanal Diamond Mining in Côte d’Ivoire

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Resource Tenure and Artisanal Diamond Mining in Côte d’Ivoire

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The Artisanal Diamond Mining Sector in Côte d’Ivoire

History

• Discovery: Initial discovery of diamonds in 1928. Semi-industrial production from 1940’s – 1975 by French company SAREMCI. Company town of Tortiya built. Séguéla exploitation commenced in 1952 by SANDRAMINE and SODIAMCI.

• Colonial Period: ASM mining not allowed; only licensed concessionaires.

• Independence Period: In 1960, ASM mining allowed by new government. Spread rapidly in Séguéla. By 1961, 30,000 miners in area, but spiraled out of control. Violent military suppression in 1962. SODEMI state concessionaire takes over control, but ASM mining continues in disorderly fashion. By 1984, government legalizes again ASM, but SODEMI charged with organizing cooperatives (GVC).

• National Partition: Rebellion starts 2002. Forces Nouvelles capture diamond areas in Tortiya and Séguéla and use revenues to finance arms purchase. Kimberley Process Embargo in 2005.

• Reconciliation : KP Embargo lifted in April, 2014. Buying Houses re-established in February, 2015. KP Review mission in March 2015 reportedly concerned.

Current Status of Artisanal Diamond Mining

• Production: Small producer of diamonds compared to neighboring countries. Statistics uncertain. Perhaps 11 million carats remain, but primary deposits off limits to ASM miners. SODEMI prospecting.

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Interface between Surface and Sub-Surface Tenurial Regimes in Côte d’Ivoire

Statutory Tenure Regime • Distinct surface and sub-surface regimes to land and minerals. Mining Code stipulates all minerals

resources belong to the State. Holders of surface rights cannot own sub-surface rights. Permits required from State for right to extract sub-surface resources.

• Compensation: Payments must go to the “legitimate land occupants” who engage in mise en valeur of the land. Case-by-case negotiation required.

• Land Law Frameworks: National Land Law (Loi no. 98-750 Relative au Domaine Foncier Rural) creates framework for recognition of customary land rights with a Certificat Foncier converted to a title within 3 years from date of acquisition. Regulatory system complex and costly to majority of the rural population.

Customary Tenure Regime• Similarities in Séguéla and Tortiya: Rights of first occupants structure customary tenure institutions and

rules. Land chiefs (chefs de terre) continue to occupy key role by managing land on behalf of male members of the community. Supervises land allocation for agriculture, tree crop cultivation, and artisanal mining to both community and newcomers. In principle, land cannot be bought or sold.

• Artisanal Mining: Chef de terre allocates mining and negotiates compensation. Outsiders must pay share of diamond profits to acquire temporary rights under tutoriat system.

Contradictions and Conflicts• National Land Law: Limited application with only 306 land certificates issued by 2014 out of estimated

demand for 500,000.

• Parallels between Customary and Statutory Regimes: Considerable similarities, but conflict over authority of the State vis à vis traditional authorities.

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Innovations in Policy and Practice Toward the Artisanal Mining in Côte d’Ivoire

Innovation # 1: Expanding the SODEMI Model. Cooperatives coordinate all diamond sales and are dominated by customary authorities. GCV able to retain 20% of all diamond sales while guards monitor all mining at site. 12% share used for community development; 8 % to SODEMI. Cooperatives monitored by community and funds used for development projects, usually infrastructure (schools, health clinics, mosques). Innovative amalgamation of customary and statutory principles and practices.

Innovation # 2: Pilot implementation of 1998 Land Law (Loi no. 98-750 Relative au Domaine Foncier Rural) in 15 mining communities in Séguéla. First time land law piloted in diamond mining areas. Key element consists of territorial boundary demarcation and conflict resolution between villages. Clarification of territorial rights should strengthen community negotiations with SODEMI in advent of industrial diamond mining development and subsequent negotiation of compensation and distribution of royalties.

Innovation # 3: Pilot land and resource use planning in Tortiya around competing uses of land for artisanal diamond mining, cashew production, and urban expansion. First time land law applied. Process should clarify territorial boundaries and ambiguous customary tenure arrangements. Opportunity opening up for land use planning between competing land uses.

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Communication and Outreach Meetings Tortiya

Conflict Diagnostics Séguéla

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Capacity Building for a Responsible Minerals Trade in the Democratic Republic of the Congo (DRC)

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South and North Kivu

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The Artisanal Mining Sector in the Democratic Republic of Congo

History• Legendary Mineral Reserves: 10% of planet’s known copper, 30% of cobalt,

80% of coltan plus largely unknown reserves of bauxite, uranium, gold, diamonds.

• Industrial Sector Decline and Growth of ASM: Industrial production falls dramatically after nationalization by Mobutu regime in late 1960s. Set in motion expansion of ASM sector with massive entry of men, women, and youth – as well as armed groups.

• Dodd-Frank Wall Street Reform Act 2010: Companies listed on SEC using conflict minerals (tin, tantalum, tungsten [3Ts] and gold) must disclose if sourcing directly or indirectly supported illegal armed groups. Incentive to reform ASM sector, but also led to de-facto embargo. Significant drop in ASM exports after Dodd Frank, however tracing and certification schemes for 3Ts starting to scale-up and investor confidence is growing. ASM gold remains a significant problem.

Current Status of Artisanal Mining• Importance of ASM: 3-10 million people benefit directly or indirectly from

artisanal and small-scale mining; 75-80% of DRC’s mineral exports derived from ASM. Significant numbers of women and youth directly or indirectly involved.

• Controversies around ASM: Source of income for millions of Congolese, but also revenue and support for illegal armed groups.

• Regulatory Challenge: Informal economy, unregulated sector, many artisanal mines in legal limbo/mining code reform doesn’t address ASM, and insecurity.

Cassiterite mining Rwanda

Washing artisanal goldSouth Kivu

Gold encased in rock South Kivu

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Interface between Surface and Sub-Surface Tenurial Regimes

Statutory Tenure Regime • Policy: Lack of policy and legislation that recognizes protects rights of artisanal miners;

• Administration: Extremely limited capacity of the state to govern and regulate the ASM sector;

• Conflicts and Disputes: Grievances and contradictions between surface and sub-surface rights leading to conflict

• Arbitrary Evictions: Forced evictions of artisanal mining communities without compensation

• Social Impacts: Vulnerable groups suffer- minorities, indigenous peoples, poor, and women.

Customary Tenure Regime • Replacement of Customary Regime: Customary tenure system replaced by administrative

procedures (General Property Law) in 1960s.

• Lack of State Authority: State not able to abolish customary tenure systems; de facto dual system emerges. Legal requirements for registration, licenses, and cooperatives complex and open to abuse.

• .Harsh Reality: Opaque, informal, and negotiated set of customary rules and official regulations. Customary systems “captured” by rebel forces to pay for arms and rebellions.

Contradictions and Conflicts• Certification Schemes: Debate on conflict minerals focuses on traceability, certification, and due

diligence.

• Disputes Tenure Related: Lack of clear and enforceable tenure over surface and sub-surface rights overlooked. Competition over surface and sub-surface rights overlooked, yet plays critical role in disputes.

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Innovations in Artisanal Mining Sector by CBMRT Project

Innovation # 2: Study tour to ASM mining sites with 15 tenure policy reform “champions” from Parliament, Senate sub-committees, and Provincial Ministry of Mines to build foundation for policy and legal reform.

Innovation # 3: Certification and traceability pilots may be unexpectedly contributing to formalization and exercising of land rights at local level (South Kivu, Nyabibwe). Landowners obtained formal title and claiming compensation for subsurface access by miners.

Innovation # 4: Exploration of associating ASM mining in and around large-scale mining operations (ie: Bando in South Kivu and Maniema Provinces).

Innovation # 5: Delivery of training at mine sites to explain and help clarify statutory and customary tenure interfaces with respect to surface and sub-surface rights.

Innovation # 1: CBMRT significantly different from other donor conflict mineral projects because it focuses on issues of overlapping and competing tenurial regimesD

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Scoping mission challenges, South Kivu, January 2015

Scoping mission realities, South Kivu, January 2015

Scoping mission team, South Kivu, February 2015

Innovation # 5:. CBMRT is introducing the first alternative traceability and due diligence system for artisanal tin and tantalum, and piloting traceability for legal, artisanal gold from the DRC.

General Conclusions

• USAID Programs of PRADD II Guinea and Côte d’Ivoire and CBMRT Show Competition and Conflict between Statutory and Customary Tenure over Surface and Sub-Surface Rights in the Artisanal Mining Sector: Prevalent but overlooked type of conflicts over natural resources in many parts of Africa. The debate is shifting from “resource curses,” post conflict or ethnicity as a source of resource conflict. New conversations are beginning over the interplay between different tenurial regimes in the artisanal mining sector.

• The State and Statutory Claims: The State owns sub-surface mining rights and grants concessions or licences to public and private interests.

• “Customary” Institutions and Claims: Customary authorities often negotiate access to both surface and subsurface rights irrespective of the State. The State lacks enforcement authority for the corpus of land and mining laws.

• Fundamental Re-Thinking about Interplay between Surface and Sub-Surface Rights Occurring: Rural protest and resistance is forcing State recognition of the primacy of historically derived customary claims to sub-surface mineral resources.

• Leveling of the Playing Field: The balance of power between local communities with historically derived and territorial rights to sub-surface and surface resources may be levelling out vis à vis the State. The struggle for a greater share of benefit streams from artisanal mining is unfolding as mining communities try to gain greater control over natural resources on the surface and below. This is the source of protest, resistance, and sabotage!

Check in next time to review lessons learned!