Barrick Gold case.pdf

Accounting Forum 38 (2014) 91108

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Accounting Forum

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Corporate accountability and human rights disclosures:A case study of Barrick Gold Mine in Tanzania

Sarah Laa Essex Businesb Department o

a r t i c l

Article history:Received 9 AuReceived in reAccepted 11 JuAvailable onlin

Keywords:AccountingAccountabilitySocial accountHuman rightsGlobalisationDeveloping coTanzania

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Analysis and debate on the roles of accounting in human rights issues is an emerging topicof research. This study draws attention to certain human rights dilemmas arising frominvestment initiatives of transnational corporations within the Tanzanian socio-politicaland economic context. Evidence is provided on how accounting operates in resolving suchdilemmas through an examination of foreign direct investment episodes where the statehas agreed contracts with transnational corporations in the mining sector of Tanzania.The study nally considers the possibility of corporate governance reforms informed byaccounting ideas in order to promote realisation of human rights alongside other interests.

2013 Elsevier Ltd. All rights reserved.

ction

ntemporary global economy, the liberalisation of markets, increasing ow of information technology and thement of capital around the globe have increased the size, reach, power and inuence1 of corporations (Klein, 2001;001). Corporations, particularly transnational corporations (TNCs), have arguably become the most powerful

entity in the global economy, with the largest ones reaching into virtually every country of the world (Bakan,n, 2001). Global corporations have nancial resources and political reach that rivals or exceeds many nationTimes, 2012). However, there are tensions between the corporate pursuit of business objectives of protability,d in a corporate governance structure, and the human rights of populations within the host states where suchs seek to invest (for example see Cooper, Coulson, & Taylor, 2011; Sikka, 2011; Whelan, Moon, & Orlitzky, 2009).tional theories such as agency theory frequently celebrate the pursuit of private prots or shareholder wealthon while offering little help in exploring the tensions between corporate power and society.2 At the same time, thems of nancial and economic transaction (such as structured investment instruments), designed by corporations

global markets to increase capital and prot, can be seen, from other economic or social justice perspectives,

ding author at: Essex Business School, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ, United Kingdom. Tel.: +44 1206874463.resses: [email protected], [email protected] (S. Lauwo).

activity affects practically every aspect of our lives (e.g. the right to food, shelter, safety at work, non-discrimination, clean environment,lthcare) (Mitchell & Sikka, 2005).h theories, the corporate commitment is to increase prots and to maximise shareholder wealth (see Friedman, 1970; Jensen, 1989). Thist complement social objectives such as human rights issues, but is still the predominant strategic route for a rm, including a TNC, to follow.

see front matter 2013 Elsevier Ltd. All rights reserved.rg/10.1016/j.accfor.2013.06.002

92 S. Lauwo, O.J. Otusanya / Accounting Forum 38 (2014) 91108

to pose signicant challenges as to how to make a corporation accountable and responsible for human rights issues (Cernic,2010; Unerman & ODwyer, 2010; Whelan et al., 2009).

As TNCs invest in developing countries through foreign investment contracts, the terms entered upon in the investmentagreements may constrain the host states ability to govern or restrict the activities of large corporations on the ground, andto promotethat the abifor human increasinglycorporate gMcSweeney

In this cand the ensuch researthe contracet al., 2011;rights issuepolitical stu2012; Rabe

In recenin particulabeen to poshumanitari2011; Sikkawhere the private inteagreement

Althougsomewhat dideas and dto TNC initia context bthat operatentities. By governancestate activipotentially investmentaccountabilrights obligwhile thesecorporate gthe contracaspects of trelations rereforms inf

One distAs McSweeanswering changes in,a developina number oforeign invecontracts, inits capacity(see Bitala,human righ

A case sTanzanian cat work, andthe bounda the realisation of basic human rights for local populations (Sikka, 2011). In the context of globalisation, it appearslity of a developing countrys government to set and enforce regulations that promote corporate accountabilityrights obligations remains problematic. So even if in contemporary globalised settings, human rights issues are

highlighted as factors that need to be taken into consideration within the corporate governance system, existingovernance policies continue to be dominated by the notion of maximising shareholder value (for example, see, 2009).

ontext, there is an increasing need for research focusing on the tension between private pursuit of protabilityjoyment of human rights by local populations in host states. There is also arguably a more specic need forch within accounting, given the roles that accounting and accountability ideas and practices play in constructingts through which TNCs enact their investment initiatives in host countries. Yet it has been noted (e.g. Cooper

Sikka, 2011) that little such research has as yet been generated within the accounting literature. Instead humans in host countries where TNCs have contracts have been mostly discussed in disciplines such as law, sociology,dies, economics, international relations, management and public administration (see Cernic, 2010; Muchlinski,t, 2009; Sheldon, 2010; Whelan et al., 2009).t years, however, there have been calls for the accounting scholars to engage with the discourse of human rights,r the human rights obligations of TNCs (see Gallhofer, Haslam, & Walt, 2011; Sikka, 2011). One response hasition human rights within broader debates about corporate accountability and responsibility and its impact onan, ecological, workplace and social issues affecting society at large (see Cooper et al., 2011; Gallhofer et al.,, 2011). For example, a case study Cooper et al. (2011) has examined the right to a safe working environmentpursuit of private prot resulted in preventable death and injuries. Sikka (2011) has examined the pursuit ofrests through foreign direct investment agreements and showed that the stabilisation clauses contained in theconstrained the ability of comparatively poor host countries to protect and promote basic human rights.h the present study is in broad agreement with the ndings of the recent literature, its objective is to make aifferent contribution to this emerging literature on accounting and human rights by considering how accountingiscourses may be used to open up the opportunity for local populations to pursue human rights issues relatingatives. In this way it may become easier to see accounting as a practice that is not only simply located withinounded by corporate or state-level entities, and their internal activities and documents, but also as somethinges across a certain context that includes local populations, and not least those who work locally within corporateextending our implicit sense of context in this way, we may begin to perceive ways in which host state corporate

regimes may be able to shape (as well as be shaped by) what accounting does and says within corporate and/orties and documents. The study seeks to suggest how this may be possible through underlining some of thesignicant implications of documents typically incorporated as part of the contracts signed by TNCs in launching

initiatives in developing countries, particularly those concerned with social accounting disclosures and so withity aspects of human rights issues. The main argument put forward is that corporate accountability to humanations continues to be developed within the shadow of the existing systems of corporate governance, even

continue to be centred upon a shareholder prot maximisation model. This shareholder primacy model ofovernance may in practice repeatedly neglect or downplay social issues, including human rights obligations, butts signed by modern business corporations commit them to forms of social accounting which are now embeddedheir documentary self-presentation in a range of locations, such as annual reports, CSR reports and other publicleases (see Muchlinski, 2012). In this connection the study considers the possibility of corporate governanceormed by accounting ideas in order to promote realisation of human rights alongside other interests.inctive feature of this study is that it offers some insights from a different socio-political and economic context.ney (2000) has stressed, context informs understandings built into the questions; the evidence available forthe questions; the actual multi-layered operation of the processes within contexts; and the constitution of, and

those contexts (p. 845). The study examines corporate accountability and human rights obligations in Tanzania,g country in East Africa. As one of the poorest countries in the world Tanzania has in recent years implementedf reforms advocated by the World Bank (WB) and the International Monetary Fund (IMF), in order to attractstment particularly by transnational corporation operations. However, it has been shown that the investment

particular the stabilisation clauses agreed therein, have created dilemmas for the Tanzanian government in that to promote corporate accountability and responsibility to human rights issues is being signicantly constrained

2008; Kitula, 2006; Lauwo, 2011). In particular, the study focuses on the Tanzanian mining sector where thets practices of large TNCs have been a subject of debate (see Bitala, 2008; Kitula, 2006; The Guardian, 2009b).tudy was designed to draw attention to the dynamics of human rights practices and the dilemmas faced by theitizens in realising the rights to have a safe and clean working environment, to non-discrimination and equal pay

to freedom of association. A case study allows for investigating a contemporary phenomenon in a context whereries between the phenomenon and the context are blurred and multiple sources of evidence are employed (Yin,

S. Lauwo, O.J. Otusanya / Accounting Forum 38 (2014) 91108 93

2003). The data for the case study was obtained from archival documents, social responsibility reports information fromcorporate websites, newspaper clips and any other publicly available social information. The analysis of Barrick BuzwagiGold Mines mineral development agreement provides a good case of how the terms contractually agreed for an investmentinitiative may constrain the ability of a developing countrys government to develop regulations that protect and promotethe realisation of human rights. The analysis of annual reports and CSR reports demonstrate how mining companies haveresponded to the constraints seemingly imposed by the terms agreed in their investment contracts in ways that fail tosafeguard such rights in the manner originally envisaged. Yet the establishment of CSR reports as an integral feature ofcorporate self-presentation indicates that past approaches do change, even if not as yet in ways that decisively transformthe human rights prospects of local populations.

This paper is structured as follows. Section 2 provides a theoretical perspective on human rights, with a focus on devel-oping countries. This section considers how the intensication of globalisation and the adoption of neo-liberal policies haveincreased thaffected thevides an anaSection 4 loBarrick Buzto protect tbasic humaattention to(in the pare

2. Globalis

The pastthe nature a2006; Muchproduction1995; Tomlincluding hhave been (Reed, 2011and structuas human rglobal econsocial servi3). Howevebusiness onpromotion globalising

In the coholder valu2008; McSwcorporationsurpluses foresponsibilthat is to mshareholdethe existingwhich comhas remainrespect hum2012; Rugga responsib

3 Capitalism4 The power

national-state5 The corpo

UK Companies182(1) of the Tin good faith ae power of corporations, especially TNCs, but have thereby created a governance dilemma which has adversely promotion and enforcement of fundamental human rights particularly in developing countries. Section 3 pro-lysis of the socio-economic development of Tanzania as a background for understanding human rights dilemmas.oks at the mining sector in Tanzania. Section 5 examines a Mineral Development Agreement (MDA) relating towagi in order to show how the terms agreed on the contract have constrained the Tanzanian governments abilityhe environment, and promote health and safety and labour standards, and thus to promote the realisation ofn rights. Section 6 examines the CSR statements of the selected mining company for 20032010 in order to draw

the claims made on the commitment to human rights issues both locally (local reports) as well as internationallynt company reports). Section 7 provides a concluding discussion.

ation, corporate accountability and human rights: some theoretical issues

few decades have witnessed signicant changes in socio-political and economic forces, which have changednd size of corporations and led to the business-related human rights debate (see Amnesty International, 2003,linski, 2009; Ruggie, 2010). The rapidly growing signicance of information and communication technology in

, marketisation and nancialisation has acted as a major driving force for economic globalisation (Cox, 1996; Sklair,inson, 1999). Capitalism has become a key feature of the contemporary world that shapes the social relationsuman rights agendas (Held and McGrew, 2002).3 In the contemporary capitalism economy, large corporationsable to undertake fundamental transformation in order to increase their market reach, share and protability; Sklair, 1995). This has entailed using a variety of nancial and economic transactions, such as nancialisationred investment contracts, which may have serious implications for corporate accountability to social issues suchights (Unerman & ODwyer, 2010). As a result, corporations, particularly TNCs, have become active players in theomy (Bakan, 2004; Harvey, 2005; Korten, 2001).4 According to Monbiot (2001), companies now help to provideces and offer funding to political parties and our universities as well as shaping economic and social policy (p.r, the burgeoning growth of TNCs in the global economy have been paralleled by concerns over the impacts of

social and human rights (see Kinley, Nolan, & Zerial, 2007; Murphy, 2011). Public anxieties about protection andof human rights are fuelled by the increasing governance gap created by neoliberal policies implemented in theera.ntemporary globalisation era, the idea that corporations should be run with the primary goal of maximising share-e has come to dominate the corporate governance regimes of many countries (Ezzamel, Willmott, & Worthington,eeney, 2009; OSullivan, 2007). Within the corporate governance framework the fundamental obligation of a

is towards their shareholders, and company directors enjoy considerable autonomy to appropriate economicr shareholders (see Millstein & MacAvoy, 1998).5 Relying on the contestable notion that a corporations sole

ity is to its shareholders, Friedman (1970) argued, there is one and only one social responsibility of business andake as much money for the shareholders as possible. As the agency and other economic theories declared thers interest to be the general interest, other stakeholders interests, such as human rights, rarely featured within

corporate governance structures (Aglietta & Rebrioux, 2005; Aras & Crowther, 2008). Indeed, the extent topanies can be held accountable for human rights obligations within the existing corporate governance systemed questionable (Muchlinski, 2012, p. 163). Corporations are creatures of laws, but corporate responsibility toan rights has not been framed as a binding obligation under the existing legal framework (see Muchlinski,

ie, 2010). Within the existing corporate laws, the obligation of a corporation to respect human rights is seen asility rather than a duty (see Muchlinski, 2012, p. 147).

is considered as the only viable alternative for the survival of the global markets. of TNCs has been linked inter alia to: the size of their economic wealth (Currah, 2000, p. 2); their capacity to shape the policy agendas ofs and international bodies (Korten, 2001, p. 60); and their momentous impact (Marsden and Andriof, 1998).rate accountability to the shareholders is even legitimised within the existing corporate governance system, for example, Section 172 of the

Act 2006 requires directors to promote the long-term success of the company for the good of the shareholders as a whole. Similarly, sectionanzanian Companies Act 2002 provides that a director of a company when exercising powers or performing duties must act honestly andnd in what the director believes to be the best interests of the owners.


Concurrently, as an essential component of corporate governance system, corporate reporting continues to be grounded inthe logic of capitalism facilitating wealth accumulation and private property rights (see Dillard, Rigsby, & Goodman, 2004).This however has further implications on the corporate ability for disclosure on other signicant social issues includinghuman righsocial respothe ability rationality business cavalue (ibid)rights and csocial welfacorporationAras & Crowother stake2012). Horn

Rathmodeefci(p. 84

In this cof the existInevitably tHassmann,internationRuggie, 201player has aas recognisand encourprotect andgovernanceneeded to nis arguably 359). Thus, constitutivefurther weaAs the UN Htoday can breport, theadequate sagap. For exaservices at and humanincome anduid and in

It has becan be consto labour la(2000) statetheir envirooperations and serviceenvironmen2005, p. 1).

Many dcorporationneo-liberalrole to playbeen vieweand stimulahuman rights obligations. Although in recent years companies have expanded their scope of reporting by producing voluntarynsibility reports as a way of responding to the increasing public pressure, such a response could be linked toto make prots (see Gallhofer & Haslam, 1997, 2003; Unerman & ODwyer, 2007). Arguably, often corporatedictates the nature and scope of acceptable CSR disclosure (Banerjee, 2008, p. 61). Inevitably this has led to these for CSR, which is based on the assumption that it makes good business sense as long as it enhances shareholder. In practice, the evidence shows that there is a huge gap between professed corporate commitment to humanorporate action (for example see Amnesty International, 2003, 2006; Sikka, 2011). Corporate commitment tore, such as human rights, is arguably constrained by the existing corporate legal frameworks, which precludes from voluntarily embracing social responsibility policies that might conict with shareholder interests (seether, 2008; Lobel, 2006). As corporate governance legislation focuses on the rights of the shareholders, arguablyholder rights including human rights have remained relegated to the areas of voluntary social policies (Horn,

states that:

er than merely intervening in the governance of corporations, laws and regulations are actually constitutive to thern corporation . . . corporate governance regulation is not a regulatory mechanism to coordinate and increase theency of economic organisation, but rather a fundamentally political expression of underlying capitalist principles).

ontext, within the contemporary global economy, shareholder wealth maximisation remains the central teneting corporate governance system (Andersson, Haslam, Lee, Katechos, & Tsitsianis, 2010; Aras & Crowther, 2008).here is a tension between the shareholder wealth maximisation motive and human rights agendas (see Howard-

2005). Increasingly, there are calls for reinforcement of host government regulations and development ofal binding legal norms that hold corporations accountable to human rights issues (see Global Witness, 2006;0; United Nations Human Rights Council, 2008, 2009). Such calls are based on the views that the state as a key

signicant role to play to promote, secure the fullment of, respect, ensure respect of, and protect human rightsed in international as well as national laws (see Baxi, 2005). The host state in this context has a role in creatingaging the development of a particular form of corporate governance (through laws and regulations) in order to

enhance human rights. However, the state appears to be systematically excluded through voluntary corporate codes (see Strange, 1996). As Suzuki, Ghayur, and Khan (2002) argued that set of regulations and governanceormalise corporate accountability to social and human rights issues and for an efcient interplay of market forcesabsent in the contemporary capitalist economy more so in the developing countries (see Suzuki et al., 2002, p.rather than merely intervening in the governance of corporations, government laws and regulations seem to be

to the contemporary capitalism. This has created a governance gap, which has been considered responsible forkening mechanisms for promoting human rights especially in developing countries (Bakan, 2004; Korten, 2001).uman Rights Council Report (2008) has reported, the root cause of the business and human rights predicamente linked to the rise in corporate power and the governance gap created by globalisation (p. 3). According to these governance gaps may provide a permissive environment for wrongful acts by companies of all kinds withoutnctioning, especially in developing countries (p. 3). In fact, TNCs have become adept at exploiting the governancemple, Bakan (2004) argues, corporations are no longer tethered to their home jurisdiction, but produce goods andsubstantially lower costs by buying cheap labour from poor developing countries where social, environmental

rights regulations are weak, and by selling their products in wealthy countries where people have disposable are willing and able to pay for them. According to Kobrin (1997), TNC production processes have become global,creasingly divorced from the regulatory control of any individual nation-state.en argued that the social and environmental impact of corporate activities on the enjoyment of human rightsiderable due to the pressure exerted by corporations on states to lower national standards, such as those relatingw and environmental law (Gibney, 2002; Jrgers, 2002; Korten, 2001). The UNDP Human Development Reportd that global corporations may have a signicant impact on human rights in their employment practices, innmental impact, in their support for corrupt regimes or their advocacy for policy changes (p. 79). Although TNChave the potential to bring real benets and to enhance the lives of people around the world by providing productss that provide for human needs, arguably they can as well cause serious harm to the workers, communities and thet particularly in developing countries (see the International Institute of Environment and Development Report,

eveloping countries, such as Tanzania, are desperate to attract foreign investment, often from transnationals, in order to stimulate their economy, create employment and reduce poverty (Hoogvelt, 2001). Proponents ofism are of the view that transnational corporations, as drivers of foreign direct investment (FDI), have a signicant

in promoting social and economic development in developing countries (see OECD, 2003). Indeed, FDI hasd (e.g. by Asiedu, 2004) as a mechanism for increasing productivity, exports, employment, government revenueting growth. However, foreign investment contracts may have serious implications for the realisation of basicts (see Cotula, 2008; Global Witness, 2006). As foreign investment is driven by the search for prot, the contracts


of transnational corporations often adopt certain investment protection strategies in order to minimise the risks of theirinvestment (see Sikka, 2011, p. 4). As a consequence, developing countries governments are struggling to t in the globaleconomy, as FDIs are often coming with attached conditions. As Mann (1997) argues, stable government, social orderand education and health systems still seem the minimum of what substantial foreign investment contact requires (p.487).

Thus, betions that pbe seriouslyment contrthe governait difcult tof losing fofor foreign such strateDevelopmeand commerights (see Pagainst futu

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In sum, the investmof Tanzaniathe country

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Tanzaniaeconomic caddress thegovernmenthe InternaVarious mescal incent2005). This 1998 to US$in respect ogold, which

It has beand TNC op1995; Chriswhich haveservices andhave been lhave allowegiven to cor2008/0920million in rthe corporato live in ex

As a conTanzania reing captured by corporate interests, the ability of developing countries to develop and enforce laws and regula-rotect employees, communities and the environment, and which promote the realisation of human rights, may

constrained (Bakan, 2004; Korten, 2001; Ratner, 2001). In essence, the strings attached to the foreign invest-acts pose serious questions about the boundary between the state and corporations, particularly in respect ofnce of business operations (see Ratner, 2001, p. 458). In practice the governments of developing countries ndo strengthen domestic, social and environmental laws, including those relating to human rights, due to fearsreign investment (Frankental, 2011; Sikka, 2011). Moreover, the pressure for developing countries to competeinvestment may require the lowering of taxes and the imposition of less rigorous laws and regulations; andgies may constrain the realisation and enjoyment of human rights (International Institute of Environment andnt Report, 2005). For instance, stabilisation clauses, which are used by corporate entities to manage politicalrcial risk, can constrain a governments ability to implement regulatory changes to protect and promote humanlatform, 2010). Thus, as Platform (ibid) points out, stabilisation clauses have the effect of immunising investorsre changes in both scal terms and legislation:

ilisation clauses reduce legislative sovereignty removing the ability of the country to improve its environmentalations, laws governing workers rights or health standards. They allow companies to prot from undevelopedation and legislation . . . [S]tabilisation clauses are thus detrimental to the protection of democracy, environment,n rights and workers rights, and are an obstacle to development (p. 28).

interventions to protect and promote basic human rights tend to be constrained by the conditions attached inent agreements in developing countries. The following section considers the social and economic environment

and its impact on human rights in order to draw attention to the business-related human rights dilemmas in.

conomic development and human rights in Tanzania

ious section highlighted how the protection and promotion of human rights have become caught up in the processg globalisation and implicated in the existing corporate governance structures. The section drew attention to theaced by governments, especially those of developing countries, in endeavouring to protect and promote basicts while at the same time attempting to attract foreign investment. This section considers the socio-economicth regard to Tanzania in order to provide the background for a discussion of business-related human rights issues.

is one of the poorest countries in Africa (UNDP, 2010). It has continued to experience considerable socio-hallenges over the past decades and these have acted as a thrust for major policy and institutional changes. To

pressing socio-economic needs, which severely undermine basic human rights, the Tanzanian government, likets in many other developing countries, has had to turn to TNCs and global agencies (such as the World Bank andtional Monetary Fund) and to enter into bilateral and multilateral treaties and other investment agreements.asures and strategies have been implemented to secure foreign investment, such as privatisation, deregulation,ives, investment concessions, low taxes, subsidies, stabilisation clauses and investment guarantees (see Mkenda,has inevitably increased TNC operations in Tanzania, and, as a result, the inow of FDI rose from US$172 million in744 million in 2008 (World Bank, 2010). Since the 1990s, TNC operations have become predominant in Tanzaniaf the extraction of minerals (which has been responsible for the receipt of two-thirds of total FDI), particularly

accounts for more than 90% of mineral exports (UNCTAD, 2007, p. 36).en argued that various measures and strategies (such as incentives and stabilisation clauses) adopted to attract FDIerations in Tanzania have had adverse implications for the human rights of many Tanzanian citizens (Chachage,tian Aid, 2008). In fact, various scal incentives have created opportunities for tax avoidance and tax planning,

eroded the tax-base and thereby reduced the government revenues desperately needed for providing social other infrastructure to improve the standard of living of Tanzanian citizens. It has been reported that revenuesost through a combination of tax exemptions, trade mispricing, stabilisation clauses and other strategies thatd companies to avoid or evade paying corporation tax in Tanzania (Policy Forum, 2009). For example, exemptionsporations have deprived Tanzania of an average of US$288 million (Tshs 458.6 billion) a year in the three years10/11 (Curtis, NGowi, & Warris, 2012). According to Curtis and Lissu (2008), Tanzania has lost at least US$265.5

ecent years due to an excessively low royalty rate and government concessions in the mining sector. In essence,te tax lost could have been used to improve the basic human rights of Tanzanian citizens, most of whom continuetreme poverty.sequence, inadequate social infrastructures, poor quality of life of local citizens and widespread poverty inmains signicant. Accordingly, Tanzania is extremely poor, with its 45 million people living on average incomes


of just US$530 a year.6 With a human development index (HDI), of 0.398, Tanzania was ranked 148 in the list of 169 poorestcountries in the world in 2010 (UNDP, 2010). It has been reported that at least 140 of the approximately 4400 babies borndaily in the country die (The Citizen, 2009b). Furthermore, in 2010, more than 22 million Tanzanians (54%) did not haveaccess to safe drinking water; and, in 2006, only 31% of the urban population had proper sanitation facilities (UNDP, 2010).As the share of national expenditure allocated to public services has remained low, the provision of healthcare, educationand other infrastructure has been poor. For example, in 2007, 47.3% of GDP was allocated to public services, but educationand health received only 1.8% and 1.4% of GDP respectively (United Republic of Tanzania, 2007). It has also been argued thatprivatisation of the health sector and the introduction of user fees in the 1990s was responsible for reducing access to thehealth service for most of the poor living in the rural regions of Tanzania (World Bank, 2006). In fact, healthcare services inTanzania have become more inaccessible, leading to a high mortality rate of 116 in 100,000 for every child of the populationaged under 5 in 2007 (UNDP, 2007), and a maternal mortality rate of 950 deaths for every 100,000 live births in 2005 (WHO,2005).7

In addition to lost tax revenues, which could have been used to promote and protect human rights in Tanzania, foreigncorporations investing in the country have also been accused of perpetuating violations of basic human rights (see Curtis &Lissu, 2008tion and en(Almas, Kwhealth, safeThe Citizen

Moreovesiderable cAlthough intion and incompanies and equal pmost valuato freedom

Furthermand forced Wanzala (2bitter and vand anger oThe Citizen

The aborights in thea sector do(MDAs), sucthe effect o

4. The Tan

Tanzanidevelopmethe 1990s, aDevelopme(World Gol1992, playeBank, 1992million in o

6 World Ban7 In compar8 These incl

(MEM, 2009).9 The World

government sthe enactmenclauses (ibid). caused by lowarrangements; The Citizen, 2009c; This Day, 2009b). Specically, transnational companies have been blamed for causing pollu-vironmental degradation in Tanzania, which have threatened the rights of many citizens to a safe environmenteyunga, & Manoko, 2009; Bitala, 2008; Kitula, 2006). For example, mining companies have been accused of laxty and environmental protection standards, which have posed serious threats to the lives of innocent people (see, 2009a, 2009c; This Day, 2009b).r, increasing evidence of abuse of workers rights involving foreign companies in Tanzania has attracted con-

riticism from NGOs, trade unions and the media (Tanzania Daily News, 2011; The Citizen, 2010; URT, 2008).ternational human rights treaties (such as the ILO, which has been ratied by Tanzania) prohibit discrimina-

equality in the workplace, the reality in practice has left much to be desired in Tanzania. For example, mininghave been accused of infringing workers rights to freedom of association and speech and to non-discriminationay (see Lauwo, 2011; The Guardian, 2011). Lauwo (2011) has stated that, although employees are one of the

ble assets for companies, income inequality, employee discrimination and evidence of abuse of workers rights of expression have remained pervasive in the Tanzanian mining sector (p. 208).ore, many local people have been aggrieved by the fact that the foreign companies have taken over their lands

them to leave their homes, often with little or no compensation being paid. For example, in the mining sector,007) argues, the majority of those displaced and who have not been able to regain meaningful livelihoods areiew the discovery of gold and the coming of large-scale investors as a curse rather than a blessing. The bitternessf those displaced is reected in the ongoing conicts between local communities and the mining companies (see, 2009a).ve evidence provides a glimpse of the challenges faced by Tanzanian citizens with regard to enjoying human

country, particularly in the context of the mining sector. The following section also examines the mining sector,minated by TNC investment. It considers, in particular, the terms agreed in mineral development agreementsh as stabilisation clauses, which not only add to the complexities of the governance system, but which also havef restricting and restraining the enjoyment of human rights in Tanzania.

zanian mining sector

a is endowed with abundant valuable mineral resources,8 which have the potential to provide for socio-economicnt, improve the standard of living and reduce poverty in the country. Following the liberalisation of the economy in

number of multilateral and bilateral agreements were entered into in the mining sector (Society for Internationalnt (SID), 2009). This led to an increase in the inux of foreign investors, particularly transnational corporationsd Council, 2009). The Africa Strategy for Mining Technical Paper, which was developed by the WB and the IMF ind a signicant role in transforming the mining sector and in facilitating the expansion of capital in Tanzania (World).9 The WB established a ve-year Mineral Sector Technical Assistance Project in Tanzania amounting to US$14.5rder to create an attractive investment environment for foreign investors. The project included assistance in

k country page for Tanzania, www.worldbank.org.ison, the USA had 11 maternal deaths for every 100,000 live births in 2005.ude gold, coal, copper, silver, tin, mica, gypsum, sand, lime, nickel and gemstones such as diamonds, tanzanite, rubies, sapphires and emeralds

Banks African Mining Strategy document recommended that Tanzanias mining companies should be privatised, and that the Tanzanianhould no longer be involved in mineral extraction and marketing functions (World Bank, 1992, pp. 5256). In addition, it also recommendedt of new mining codes in order to remove bureaucracy and to provide investment incentives, protections and guarantees and stabilisationThe view of the World Bank was that mining in Africa, and in Tanzania in particular, suffered from inefciency, stagnation and loss of markets

levels of private investment, state ownership, restrictions and controls on mining, cumbersome regulatory procedures, unattractive taxation and unstable macro-economic policies.


enacting new national legislation (e.g. the Investment Act 1997 and the Mining Act 1998) to harmonise Tanzanias legislationwith the requirements of the new global political economy (Butler, 2004, p. 68). The WB emphasised that:

. . . there was a lack of an attractive enabling environment in developing countries (and Tanzania in particular) forprivate sector mining investment, a paucity of accurate up-to-date geological information and the system to managethe information, inadequate or non-existent environment regulation and standards, and insufcient human skills andcapacity to effectively administer the sector.10

As a result of the reforms, the Tanzanian mining sector has attracted a signicant proportion of FDI in the last decadeor so. For example, in the period 1998-2009, the mining sector attracted over US$2.5 billion (two-thirds of total FDI inTanzania) ((Barrick Goeconomy amining for 2008, 2009try to empl2007, accougovernmeneducation, 2008). For (9% of expocontributioeral Policy (InternationTanzanian eunrest in lomunities inKorten:

The dumpfacto

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in other sectorSID, 2009). Yet, mining activities in Tanzania continue to be dominated by the giant three global companiesld, AngloGold and Resolute Mining Ltd.). Critics have argued, however, that, despite the liberalisation of thend the increasing role of transnational corporations in the mining sector, the socio-economic contribution ofthe development of Tanzania and for the promotion of human rights is yet to be realised (Christian Aid Report,; Curtis & Lissu, 2008). For example, as mining is highly capital-intensive, the contribution of the mining indus-oyment in Tanzania has remained relatively low.11 Thus, only 29,000 people were employed in the sector innting for only 0.2% of the working population (UNCTAD, 2007). It has also been argued that the Tanzaniant has not been able to realise the substantial revenues from mining activities, which could be used to invest inhealthcare, infrastructures, and also to address the endemic poverty levels (Christian Aid, 2008; Curtis & Lissu,instance, out of the US$2.8 billion generated from mineral exports from 1999 to 2005, only US$252 millionrt revenues) was raised by the government in the form of tax payments and royalties (UNCTAD, 2007). Then of mining to GDP has therefore remained relatively low, despite the 10% target laid down in Tanzanias Min-of 1997 and its Development Vision 2025, accounting (in 2006) for only 3.8% of GDP and 3.6% of tax revenuesal Council on Mineral and Metal (ICMM), 2009). Although mining activities have the potential to stimulate theconomy and help eradicate the poverty, they nevertheless have the potential to cause social dislocation andcal communities, as well as pollution and environmental degradation. Korten (2001) argues that poor com-

developing countries are becoming the favoured area for waste dumps and polluting chimneys. According to

wealthy governments have economic power and political power to make sure that pollutants and wastes areed somewhere other than in their locality and ensure that their neighbourhoods remain pleasant, polluting

ries and waste disposal sites are consistently located in poor and minority communities (p. 39).

tional companies have also been alleged to be undermining fundamental human rights issues through termsineral development agreements (MDAs) (Christian Aid, 2008, 2009; Curtis & Lissu, 2008; Lange, 2006). It has

that the investment terms and conditions given to foreign mining companies in the 1990s, in order to encourageest in Tanzania, were too generous (Chachage, 1995; Christian Aid, 2008, 2009). For example, MDAs made underf the Mining Act 1998 offered scal stabilisation regimes and tax concessions. These MDAs allowed 100% foreign

and provided guarantees against nationalisation and expropriation. They also offered unrestricted repatriationd capital. Stabilisation clauses in MDAs required the Tanzanian government to guarantee the scal stability ofining projects and to prevent the government from conducting future reviews of the terms agreed upon (SID,

tabilisation clauses also served to ensure that the wishes of the mining companies embodied in MDAs continuedUNCTAD, 2007). In particular, freezing clauses were permitted, which required the Tanzanian governmenthat the legal-scal regime existing at the time of signing the contract would remain unchanged in the future. The government also permitted the use of economic equilibrium clauses, which required the government to

the investor should the government enact any legislation that increased the costs of the project (SID, 2009). Thus,prevented new legal and scal regimes applying to a mining project, and also forced the Tanzanian governmentate mining companies should they be adversely affected by any changes to the law, for instance when any legaled the returns promised to investors (see Cotula, 2008).s agreed in the mining investment contracts have been criticised for widening the governance gap and forg the states role in protecting and promoting human rights in the mining sector (Chachage, 1995; Curtis & Lissu,ison, 1999). Although MDAs tend to be condential, in recent years some have attracted the attention of theemics and NGOs in Tanzania. The next section examines a MDA in order to provide an example of the sorts ofions, incentives and stabilisation clauses, which can form part of the terms of such agreements.

k Group and International Finance Corporation (IFC), Mining Regional Strategies: Africa, 2003, http://www.worldbank.org/ogmc/mining africa.

um wage in the mining sector has, however, remained higher than in other sectors (e.g. in 2008, it was Tshs.350,000 compared to Tshs.65,000s (ILO, 2010).


5. Barrick Buzwagis mineral development agreement: tax incentives and concessions and stabilisation clauses

Barrick Gold Corporation is a global gold mining company with headquarters in Toronto, Canada, and a portfolio of miningand exploration projects in the United States, Canada, Australia, Peru, Chile, Argentina and Tanzania. The company is listedon the Toronto, New York and London Stock Exchanges12 with a market capitalisation of about US$37 billion (about Tsh.48.1trillion). In February 2010, Barrick Gold Corporation sold out its shares in Africa to African Barrick Gold (ABG), a new companylisted on the London Stock Exchange with headquarters in London. ABG, the new company and a subsidiary of Barrick GoldCorporation, took over control of the four gold mines in Tanzania: Bulyanhulu Gold Mine; North Mara Gold Mine; TulawakaGold Mine and Buzwagi Gold Mine (Policy Forum, 2008). This section focuses on Buzwagi Gold Mine (BGM), the second largestmining operation and the largest single open pit mine in the country, opened in May 2009 in the Kahama district of Shinyangaregion of Tanzania. The BGMs gold reserves are estimated at 2.4 million ounces, and annual production is expected to yield225,000 ounces of gold (SID, 2009). As at 31 December 2010, a total of 1992 individuals were employed at Buzwagi, consistingof 802 ABG Group employees and 1190 contracted local employees.13 BGM provides a good case study to problematise thechallenges posed by terms contractually agreed for an investment initiative on the governance of large corporate entities.

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of the lower rstabilisation cing in Tanzania is shrouded in secrecy. The contents of BGM mineral development agreements (MDAs) made withian government and signed in 2007, like other mining agreements, have never been made public or discussed inian Parliament. In August 2007, an opposition MP attempted to get parliament to investigate the motive behindn by the Minister of Energy and Minerals, Nazir Karamagi, to sign the Buzwagi [MDA with Barrick] at a timeovernment had declared it would not sign any new agreements while a government review was underway.ressure, BGM MDA was made available to the NGOs for scrutiny (see Curtis & Lissu, 2008; The Guardian, 2011).tion of the terms of the MDA by the researcher reveals that Barrick regarded stabilisation of the tax and scalzania as a fundamental requirement for its investment in Tanzania (preamble 5). The agreement committed thet to maintaining, throughout the life of the mining project, the regulations and tax levels in force at the time of

agreement. Thus, the agreement stated that:

duration of the Special Mining Licence shall be for a period of twenty ve (25) years with an option for theany to renew the same upon the same terms and conditions for a further period of twenty ve (25) years (article).

ination of the MDA also reveals that the Tanzanian government had guaranteed that the company would be pay a reduced rate of tax. With regard to local government taxes, the MDA stated that:

tax] shall not be based on prots, sales, output from mining operation or value of the land used for the mine..ded that the aggregate of such local government rates and taxes shall not exceed US$200,00014 in any calendar

(articles 4.3.2 and 4.3.2).

ernment of Tanzania also exempted the company from paying VAT and allowed it to repatriate all prots madeg activities in the country (article 5.1). The tax concessions and incentives offered under the terms of the MDAteed that the company would be required to pay a low royalty rate. Thus, it was stated that:

company shall pay to the government a low royalty at the rate of 3% on the Net Back15 Value of all mineraluced from the Contract Area, other than Diamond, in respect of which the royalty shall equal 5% of the Net Back (article 4.1.1).

tax concessions, article 4.7 of the agreement stated that:

company shall be allowed to deduct 80% of capital expenditure incurred in the year, thereafter 50% per annumclining balance method, provided that the government shall have made legislative changes to ensure that thission is applicable under the laws of Tanzania.16

ernment of Tanzania also guarantee that it shall not undertake any nationalisation or expropriation of assets;f the agreement stated:

government shall not nationalise or compulsorily acquire the whole or any part of the companys interest inpecial Mining License nor compulsorily acquire or nationalise any right, title or interest of the company or its

w.miningwatch.ca/sites/miningwatch.ca/les/Canadian Cos in Africa 2001.pdf.anbarrickgold.com/page.html?pageID=26&pageChosen=Operations&categoryChosen=Buzwagi.overnment Finances Act (1982) requires all mining companies to pay to the local council tax of 0.3% of the turnover. However, Buzwagi MDAs

ing of US$200,000 per annum. This amount is relatively small compared to the mining turnover, yet remains the only direct contribution thats required to make to the local communities where it operates.ned as the market value of the minerals minus the cost of transport and the cost of smelting or rening in-country.s lower than the current 100% capital deduction allowed to mining companies under the Income Tax Act, 2004. However, the applicationate is based upon the government of Tanzania changing the current law, which cannot be changed due to scal stability guaranteed by thelauses. Thus, Barrick will continue to enjoy the 100% capital expenditure write-off (see Curtis and Lissu, 2008).


contractors or subcontractors in any property used for the purpose of mining operations on or in relation to the SpecialMining License, provided that, if it does take any such action to acquire those assets, it will pay a compensation in USdollars to an account outside Tanzania specied by the Company in an amount and manner that is prompt, adequateand effective.

The MDA also gave the company power in relation to exploration, extraction, transportation and occupation of land. Itcommitted the Tanzanian government to allow the company to acquire land, and also to be able to relocate members of thelocal community who had previously owned the mining rights:

If the company nds it necessary, for the purpose of building the project and relevant infrastructures, to make useof the land which is lawfully owned, occupied or under care and charge of other person, the government shall, uponthe request of the company, assist the company in its effort to agree with such persons in obtaining the permissionor renting or purchasing such land, and if the company is unable to come to an agreement with such persons, thegoverin ord

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17 This includlocated beyonmachinery, eqor the conduccapital, protsforeign currento the economnment shall assist the company subject to the provision of the Act or any amendments or re-enactment thereofer to enable the company to make use of such land (article 9.2).

ever has raised serious questions about the local communities right to land and right for compensation.tion of the MDA also shows that no limits were placed on the number of expatriate staff that could be employed

in Tanzania; and that expatriate staff were given particular and special treatment compared to local employees. 8.2 of the agreement stated that the government will expeditiously grant applications of the company and its

and sub-contractors for work permits. Article 8.4 provided that the company, its contractors and subcontractorsled to import their personal and household effects, including one automobile, free of import duty and other taxes.lso entitled to export freely from Tanzania all of their salary (article 8.5).1.1 provided that the government shall ensure that during the term of the agreement, legal provisions governingy or its shareholders benets, rights and duties in the following matters shall not be changed.17 Furthermore,

stated that:

e event of fundamental changes concerning the Company or its shareholders benets, rights and duties underrticle 11.1, which would place the company in a worse off situation than it was on the effective date, the Gov-ent shall in consultation with the Company take necessary steps to ensure that the Companys right or interestot eroded or otherwise materially diminished.

3 prescribed the dispute settlement procedure with arbitration being administered in the UK by the Londonernational Arbitration (LCIA) in accordance with the United Nations Commission on International Trade Law) arbitration rules in force of the scal stabilisation date (article 13.2).e, Buzwagis MDA provides an example of the nature of MDAs and other investment agreements in Tanzania.tions of stabilisation clauses and other incentives for the realisation of human rights in Tanzania are discussed

plication of tax concessions, incentives and stabilisation clauses for human rights

ious section showed that the Tanzanian government has chosen to adopt various strategies and policies (suchssions and stabilisation clauses in MDAs) in order to attract foreign investment in the mining sector. The above

Buzwagis MDA provides an example of the sorts of tax concessions, incentives and stabilisation clauses, which in mining investment agreements. The use of such strategies and the adoption of such policies raise fundamentalbout the ability of the Tanzanian government to enact and enforce laws and regulations that promote and protectts. This section considers the constraints created by the terms agreed in MDAs on the promotion and enforcementan rights.

shown above, in order to guarantee secrecy, the terms laid down in MDAs are often decided upon by only a of government ofcials and are rarely discussed in Parliament or disclosed to the general public (The Citizen,xample, Buzwagis MDA between the Tanzanian government and Barrick Company was signed by the formerEnergy and Minerals (MEM), Nazir Karamagi, in a hotel in London, a fact that has been criticised by the media,members of the public (Curtis & Lissu, 2008; The Guardian, 2011). The secrecy surrounding such MDAs andee of strict condentiality has kept the public in the dark. In other words, public scrutiny and discussion off MDAs is virtually impossible, which makes it difcult to hold the government to account for the fact that

es agreements such as: the duration of the Special Mining License or the use of land over the Contract Area including the use of any landd the Contract Area for its infrastructure or storage or transport of its products (s. 11.1.1); bringing into Tanzania expatriate personnel,uipments, tools, structures, transport vehicles, accessories, spare parts and other materials which are necessary for the building of the minet of the mining operations (s. 11.1.2); exemption from taxes, duties, levies and imports of any nature (s. 11.1.3); guarantees of transfer of

and dividends and guarantee against expropriation (s. 11.1.4); pricing or export of gold (s. 11.1.5); retaining and remitting abroad money incy (s. 11.1.6); liability to royalty, income tax and the method of computation thereof (s. 11.1.7); and any other matter which is fundamentalic position of the company (s. 11.1.8).


such agreements fail to make any provision with regard to the promotion and protection of human rights in the miningindustry. Although MDAs offer investment concessions, guarantees and protections, they make no specic requirements forcompanies to address fundamental human rights issues (such as right to a clean environment, to health and safety, and tonon-discrimination and freedom of association in the work place). The use of MDAs, in particular the use of stabilisationclauses, guarantees the stability of favourable terms and conditions over the long-term life of the investment project, butthis has adverse implications for the realisation of human rights. In particular, freezing clauses, which guarantee the long-term scal stability of a mining project, have been criticised for their potential to override any subsequent changes in the lawand the need to uphold responsible business practices (Cotula, 2008; Shivji, 2007). For example, in the Buzwagi MDA, thestabilisation clauses are binding for a period of 2550 years. As a result, any future changes in the law (e.g. those containedin the new This is becathe ability onew laws aplace) and a

Althougthe humanLocal resideeviction of their displabeing unlawthat 400,00Lissu, 2008human righwords, if thhuman righhave a consOrganisatiofree consengovernmenstability guobligationsapplicable tgovernmenorder to pro

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18 Stabilisatiobligation on 19 E.g. sampl

drastically aboMining Act 2010) only affect new mining companies, not the Buzwagi project and existing mining companies.use such clauses are stated to last for the duration of the project. In this context, stabilisation clauses constrainf the Tanzanian government to pursue human rights goals, as such clauses prevent the government from makingnd regulations to improve labour standards (e.g. with regard to equal pay, and non-discrimination in the worklso environmental standards.18

h MDAs give concessions to mining companies to possess and acquire land in the mining areas, this has threatened rights of local residents, leading to serious conicts between local communities and the mining companies.nts have been concerned about the ongoing social unrest and unresolved conicts resulting from the forcefullocal people from the mining area and about the unfair or non-existent amounts of compensation awarded forcement (see Lauwo, 2011; The Guardian, 2011). According to Lauwo (ibid), local residents have complained offully and forcefully displaced, of not being compensated and of being mistreated (p. 225). It has been reported

0 artisanal miners were evicted from their land in 1996 to make room for foreign mining companies (Curtis &; Kitula, 2006). Although the UN Commission on Human Rights recognises forced eviction as a gross violation ofts, the government of Tanzania is on the horns of dilemma (see Curtis & Lissu, 2008; Lauwo, 2011). In othere government imposes too many restrictions on companies to ensure that they respect, protect and enforcets, this may have a negative effect in that companies may decide not to invest in Tanzania, which will in turniderable detrimental impact on its socio-economic development. Although article 6 of the International Labourns Indigenous and Tribal Peoples Convention of 1989 requires states to consult local residents and obtain theirt before they take over their land, the stabilisation clauses in MDAs constrain the capacity of the Tanzaniant to enforce such rules. Thus, while the state is expected to protect the human rights of its citizens, the scalaranteed by the stabilisation clauses has constrained the Tanzanian governments ability to meet its human rights. This is because the stabilisation clauses legally bind the government to maintain the same taxes and scal lawso the mining companies for the entire duration of the mine (see This Day, 2009a). In other words, the Tanzaniant therefore lacks the capacity to apply its existing laws or to create new social and environmental standards inmote the full realisation of human rights in Tanzania.ard to environmental issues, local communities residing near the mining sites in Tanzania have raised concernsollution and environmental degradation which have occurred in local neighbourhoods, and the fact that theythe right to a safe and clean environment (see The Citizen, 2009c; The Guardian, 2009a, 2011). As the mines aree to local neighbourhoods, there is a high risk of environmental degradation and the impact of this is felt most ofbers of the local communities. According to the 1972 UN Conference on the Human Environment in Stockholm2 UN Conference on Environment and Development in Rio, each individual has the fundamental right to freedom,d adequate conditions of life, in an environment of a quality that permits a life of dignity and well-being, and hemn responsibility to protect and improve the environment for present and future generations. This however

questionable in the mining areas in Tanzania. Mining companies have been blamed for causing pollution in regions, in particular by spillages of cyanide and other heavy metals. The amount of cyanide and heavy metals

waste rock piles and the tailing dams of the big mining companies is much higher than that recommended asWorld Health Organisation (WHO) and by the USA and Tanzanian regulatory bodies (see Almas et al., 2009).19

evidence to show that the high levels of poisonous heavy metals and cyanide in the environment around the caused serious health problems in the local communities residing nearby (see Almas et al., 2009). Local peoplening areas face a serious risk of suffering and dying from health-related problems caused by the effects of pollution

metals and cyanide (Almas et al., 2009; The Citizen, 2009c; This Day, 2009c; The Guardian, 2009b). A study byyunga, and Manoko (2009) found that the consumption of food and water polluted by heavy metals had causedlems, which had endangered the lives of persons residing near the mining areas (p. 12). In fact it was reportedt 43 villagers had died as a result of drinking the poisoned water which leaked from the mining tailing damrby Tigithe River (The Guardian, 2009b). Thus the concentrations of heavy metals and hazardous chemicals in

on clauses provide immunity to the existing mining companies from any new laws which might affect their mining activities, including anytheir part to promote and guarantee human rights.e water taken from one river in North Mara Gold Mine (a mining site with alleged spills in 2009), contained an arsenic level of 1142 g/l,ve the WHO recommended level of 10 g/l for drinking water (Almas et al., 2009). High levels of arsenic can cause serious skin problems.


neighbourhoods close to the mines have deprived residents not only of their right to a safe and clean environment but alsoof their right to a clean and safe water supply (see The Guardian, 2009b).

Local residents have indicated concern about the role played by government regulations in mitigating the environmentalconsequences of mining activities in the local communities, and the consequent failure to promote and protect their basichuman rights. Yet, despite these concerns on social and environmental consequences and the associated health issues, theTanzanian government has done very little to investigate local citizens concerns (The Citizen, 2009c). This is due in part tothe fact that the government of Tanzanias capacity to change existing social and environmental standards in the miningsector in order to promote the social welfare of its citizens and to meet its UDHR obligations is constrained by the terms ofthe MDAs, wtaken prior

TanzaniaassociationHowever, thrights, is hiunfair treatabout the rfrom joininLabour Relaof labour riprivate sectair trafc coregard to thdismissed fforeigners alabour rightquestions aattract forelabour righ

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20 http://ww21 http://wwhich the government has entered into with the mining companies. In other words, investment incentives haveity over the promotion of human rights in the mining sector in Tanzania.

has ratied the ILO convention aimed at ensuring workers human rights, such as the right to freedom of, the right to organise and bargain collectively and the right not to suffer discrimination in the work place.e governments ability to enforce laws which protect such labour rights in the mining sector, as with other humanghly problematic. In fact, the evidence of increasing employee grievances relating to poor working conditions,ment and discriminatory practices in the workplace (see Curtis & Lissu, 2008; Lauwo, 2011) raises questionsealisation of workers rights in Tanzania. Mining companies have been alleged to have discouraged employeesg a union, for instance, by threatening to re them if they do so.20 Despite the enactment of the Employment andtions Act 2004, which aimed to democratise workers rights and enhance collective bargaining, the enjoymentghts in Tanzania remains a ction (see Lauwo, 2011; Shivji, 2004). While it remains difcult for workers in theor to strike, workers in some occupations in the public sector (such as those working in the water, electricity,ntrol, telecommunication and civil aviation industries) are completely barred from exercising this right. Withe mining industry, in 2007, more than 1000 workers, including trade union leaders, were reported to have beenrom a mining company after participating in a workers strike in order to dispute the disparity in wages betweennd local staff (Daily News, 2007). Although the mining companies have claimed that they respect and promotes (see Section 6 below), including the right to freedom of association, the evidence of employee grievances raisesbout the realisation of such rights in Tanzania. In fact, the investment protections offered by the government toign investors have constrained the governments ability to call giant TNCs to account for the alleged breaches ofts and to promote the progressive realisation of human rights in the area of labour law.e, the realisation of basic human rights (as stipulated in Article 25 of UDHR) in Tanzania has remained a dream.on of abuse of human rights involving foreign companies in the mining sector of Tanzania has attracted trenchantm NGOs, academics and the media. As with other TNCs, the mining companies in Tanzania have responded to thisd public pressure by expanding the scope of their corporate social responsibility reports. However, whether such

improve corporate accountability and promote the enjoyment of human rights in Tanzania remains questionableing section shows.

e of corporate social accounting and human rights reporting in Tanzania

t years, major corporations have been increasingly claiming to be socially responsible, and they have supported by publishing lengthy environmental, economic and social reports (Banerjee, 2007; Cooper, 2004; Cooper &; Deegan & Gordon, 1996; Demirag, 2005; Detomasi, 2008; Vogel, 2005). The increasing pressure from NGOs,trade unions and the media has problematised corporate power and the declining role of the state, and, as aorations have responded by embracing corporate social responsibility (CSR) reporting (see Belal & Owen, 2007;gan, 2010). Corporations also include human rights as one of their acclaimed preoccupations in their CSR reports2009). Similarly, in response to local and global pressures, the mining companies in Tanzania have produced

containing pledges to act in a socially responsible manner and stating their commitment to respecting andhuman rights. This section examines the CSR statements of Barrick Gold Corporation (parent company) as welluzwagi Gold Mine, the subsidiary company in Tanzania for 2003-2010 in order to draw attention to the claimscountability for human rights issues in the country. In 2003, Barrick Gold Corporation (parent company) stated:

ck has a Code of Business Conduct and Ethics that sets out high ethical standards with regard to such issues assure, insider trading and doing business abroad, but which also requires adherence to our environmental, safetyuman rights related policies, such as those prohibiting discrimination and harassment (Barrick Responsibilityt, 2003 pp. 23).21

10 Responsibility Report, Barrick referred to its commitment to human rights. Thus, it stated that, as a miningith many operations in developing countries, we have a signicant responsibility for respecting and upholdingts (p. 65). The Report stated that the company was committed to addressing human rights issues:

w.icftu.org/www/pdf/corelabourstandards2006tanzania.pdf.w.barrick.com/Theme/Barrick/les/docs ehss/EHSS 2003 en.pdf.


Table 1Overview of the categories subcategories of CSR disclosures.

Categories Subcategories

Community Partnership with NGOs, international agencies for resource developmentCommunity development programmesCharitable donations

Environmental Environmental stewardshipEnvironmental management programmesCompliance with environmental policies

Employee Generating rewarding and productive employment

Health and s

Security and

Source: Buzwaaspx.

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22 http://bar23 http://ww24 Buzwagi G

Theme/Barrick25 http://wwNondiscrimination policyRespect employee human rightsReward and fair compensation

afety Provide protective equipment to our employeesProvide a safe working environmentTraining

human rights Compliance to applicable laws and regulationsRespect human rights of all individuals impacted by our operations

gi responsibility Report (2010) and http://www.africanbarrickgold.com/corporate-responsibility/corporate-social-responsibility-charter.

icks corporate human rights compliance structure is also being enhanced, aligned with the Ruggie Framework, tor detect and address potential human rights abuses. It will include formal human rights policies and procedures,ing and other elements (p. 11).22

llowing two extracts from its 2005 and 2010 reports, respectively, Barrick claimed to respect fundamental human

icks Corporate Social Responsibility Charter afrms our commitment to observe the fundamental tenets of humans. This commitment is imbedded in our corporate culture and is aligned with the principles in the Declarationick Responsibility Report 2005, p. 20).23

ake an active and positive contribution to human rights through programs that provide access to education, water and health services for the communities neighbouring our mines (Barrick Responsibility Report (2010,).

lso claimed in its 2010 report that it is committed to protecting workers human rights in the work place:

elieve that all our employees are to be treated with respect and dignity. We are committed to providing equalrtunity for all of our employees and contractors and to preventing human rights infringements upon our work-, including all forms of forced and compulsory labour and child labour and racial and gender discriminationick Responsibility Report, 2010, pp. 2526).

rrick Gold Corporation, the parent company, provides more general statements about overall group commitmentsocial issues including human rights. On the other hand, the social responsibility reports of the Buzwagi Gold Miney of Barrick Gold)24 ought to show local information, but unlike other mining companies in Tanzania which

arate social responsibility reports the company only shows its commitment to social responsibility as a captiona Barrick Gold website. Table 1 below provides an overview of the categories and sub-categories of CSR disclosuresagis social responsibility reports and on Africa Barrick Golds website.hows that the social responsibility disclosures by Africa Barrick Gold were mainly in a narrative form, which cansed under environment, health and safety, community relations and security and human rights. For example, itthat:

ating in some areas of Tanzania requires ABG, as well as the Tanzanian government and the local communities,al with law and order issues . . . These challenges vary depending on the location of the operation and othermstances. ABG has implemented, and continues to identify, alternatives to manage security issues in a mannerlaces at its heart the safety and security of people, property and assets.25

rickresponsibility.com/2010/en/pdf/Barrick CSR 2010.pdf.w.barrick.com/Theme/Barrick/les/docs ehss/EHSS 2005 en rev.pdf.old Mine began extraction of mineral in May 2009 and the rst responsibility report was published in 2010 (http://www.barrick.com//les/responsibility-reports/2010/Buzwagi.pdf).w.africanbarrickgold.com/corporate-responsibility/security-and-human-rights.aspx.


To emphasise its commitment to the environment, the company also stated that:

Voluntary Principles on Security and Human Rights are central to our security management system. These are a set ofguidelines by which companies in the extractive sector can maintain the safety and security of their operations withinan operating framework that ensures respect for human rights and fundamental freedoms. Our majority shareholder,Barrick Gold Corporation, is a signatory participant. Our security management system is aligned to this commitmentand to respecting human rights and the fundamental freedom of individuals overall.26

In essence, Buzwagis disclosures emphasise the companys economic role towards various stakeholders. Thus, althoughBarrick Gold Corporation, the parent company, like other TNCs in the Tanzanian mining sector, has shown a commitment toadvancing the various aspects of human rights by publishing social and environmental reports, as yet there is no informationabout how the terms agreed on the MDAs, such as stabilisation clauses, have constrained the realisation of human rights ofthe local citstructure lehuman righenvironmendespite an apollution, a

As a resdegradationin CSR repocorporate cspecic proand environis consistenequitable an2009). Howseek ways tanalysis maproper homand equity,

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26 http://ww27 Christian A

been producin(2002, 2004, 2They outline wabout other or(see also Chrisizens. Indeed, the systemic pressure to increase prots for shareholders enshrined in the corporate governanceaves open to question the claims made by companies to be acting in a socially responsible way and to be promotingts. In line with the MDAs, there is no information in any of the CSR reports about the amount of pollution,tal degradation, as well as the related health problems and other risks, associated with mining activities. Thus,cclaimed commitment to human rights, the CSR reports remain silent about employee grievances, environmentalnd the mass dislocations and displacements which have occurred in local communities.ult, the poor working conditions, the discrimination in the workplace, and the pollution and environmental

which prevail, and which deprive Tanzanian citizens of their fundamental human rights, have remained invisiblerts. Instead, the social reporting of the mining companies consists merely of vague and general statements aboutommitments to employees, local communities, human rights and the environment. The reports provide noposals about how these commitments may be achieved in practice and no evidence about the negative socialmental consequences of mining activities in Tanzania, which deprive citizens of their human rights. This ndingt with previous studies that have challenged social accounting to demonstrate its potential to bring about a just,d fair society, and promote human rights (Gallhofer & Haslam, 1997; Gray, Owen, & Adams, 1996; Spence, 2007,ever, the analysis just undertaken indicates that one way forward to transform the effect of CSR documents is too have them incorporate data that they currently omit. If the data is being generated, as we have shown, theny need to focus on how to require the insertion of such data into documents, which with a CSR remit, are clearly ae for them. This may require work to redraft contracts before the signing stage under principles of transparency

which TNCs accept in other documentary areas (e.g. in Annual Reports and CSR reports).ve been calls for alternative forms of accounting in order to challenge the dominant forms of economic organi-xpose abuses of human rights (Dey, 2007; Dey, Russell, & Thomson, 2008; Gallhofer, Haslam, Roberts, & Monk,n, Gray, Laing, & Dey, 2001). It has been argued that such alternative reporting should be undertaken by civilnisations in order to expose the narrowness of current CSR reporting (Dey, 2007; Gibson et al., 2001). As Spenceargued, social reporting by civil society organisations represents a much more substantive attempt to exposeictions that permeate current modes of economic organisation (p. 206). In fact, a number of NGOs have been

this practice. For instance, Tax Justice Network, Christian Aid and Friends of the Earth have been at the forefronttising corporate power, particularly in developing countries.27 It has been argued that alternative forms of CSRuch as shadow accounts) have the potential to reveal contradictions between what companies choose to reportey suppress (Dey, 2007; Gibson et al., 2001). Such accounts can be used to highlight and problematise corporated can provide new insights into the social and environmental impact of corporate activities on human rights.t be the case. But at the same time this particular tactic does not mean that, as a parallel way of generating a morecommitment to human rights, efforts should not continue to incorporate well-founded data (perhaps includingted by such external bodies) into corporate documentation itself, including such regularly issued documents asnual reports.

on and conclusion

of this paper has been to contribute to the emerging research on corporate accountability and human rights from a developing country context. In the era of contemporary globalisation, many developing countries, such, have entered into bilateral and multilateral investment agreements with transnational corporations in order toreign investment in their countries. It has been argued that the terms entered in the investment contracts haveg CSR and accountability practices of the large TNCs activity in these countries.

w.africanbarrickgold.com/corporate-responsibility/security-and-human-rights.aspx.id and Friends of the Earth have produced alternative accounts of organisations such as Shell and Exxon. Friends of the Earth has, since 2002,g an annual Other Shell Report, which documents Shells social and environmental impact in various contexts. Friends of the Earth Reports005, 2006) engage the voices of communities affected by Shell around the world, in order to highlight the companys poor CSR practices.here Shell has been failing to comply with guidelines and international human rights laws. Friends of the Earth produces shadow accountsganisations, including Anglo Gold America, Barclays and BP. These reports tell a somewhat different story from that portrayed in CSR reportstian-Aid, 2004).


The paper has examined Barrick Buzwagis mineral development agreement (MDA) in Tanzania (which exemplies atypical investment agreement in Tanzania) to underline some of the ways in which the terms of the agreements have actedas constraints on the realisation of human rights (see also Amnesty International, 2003, 2006; Platform, 2010; Sikka, 2011).It has been shown that even though tax concessions and investment incentives may have increased the inow of FDI andincreased TNC investment particularly in the Tanzanian mining sector, they have also arguably constrained the realisationof basic human rights in the country. In particular, as stabilisation clauses prioritise foreign investment protection overconcerns about social justice, this in turn constrains the Tanzanian governments ability to enact and enforce laws andregulations to protect and promote human rights. Thus, despite Tanzanias international obligations to respect and protecthuman rights (e.g. under the Universal Declaration of Human Rights and other international conventions, such as the ILOconvention),28 business-related human rights abuses have continued to be deeply entrenched in the country and this hasleft much to be desired by Tanzanian citizens.

The papein Tanzaniatheir businTanzania dhow these mgeneralisedConsequenpollution anThus, ratheprofession structures t(see Puxty,

The papof human rties to dateentrenchmthe developpractices (f

Thus, lothere is a nesocial and eincrease acsignicant ests of locawide array the traditioas expressecommitmenexpose the neverthelessocial chanissues can aa specic nsuch issuesUN throughorganisatio

Moreovegovernmenwould alsopublic scruaccountabilAs discussecritical inte

28 The ILO Dforced or comthe freedom o29 Due to the

reduction (Shir has shown that in response to recent and world-wide demands for corporate accountability, mining companies have produced voluntary codes of conduct and social responsibility reports containing promises to conductess activities in a socially responsible way. Yet, corporate social disclosures of the selected mining company ino not provide any information about the presence of stabilisation clauses or other investment incentives, and

ay have impacted the local populations. Generally, any disclosures that are made tend to consist of vague and statements with no specic proposals about how human rights issues might actually be tackled (see Sikka, 2011).tly, in relation to the mining industry in Tanzania, poor working conditions, discrimination in the workplace,d environmental degradation and abuses of human rights prevail, but have remained invisible in CSR reports.r than serving community or public interest as claimed in the corporate governance system and accountingon behalf of the state, CSR reporting has tended to be constrained by the systemic pressures and broader powerhat prioritise shareholder wealth accumulation over the rights and needs of a wide variety of social constituents1991).er has suggested that a prioritisation of private prots appears to have been accompanied by marginalisationights. Although nancial and CSR reports could be used to give visibility to social consequences, the possibili-

remain muted as corporations are under immense pressure from markets to prioritise short-term prots. Theent of private interests in accounting, and in neoliberal systems of corporate governance, continues to constrainment of forms of accounting and accountability that could address broader social concerns arising from corporateor example, Baxi, 2005; Muchlinski, 2012).oking forward to address the challenges of corporate accountability and responsibility to human rights issues,ed for changing the neo-liberal governance mechanisms and other institutions that have repeatedly reproducednvironmental injustices and human rights abuses (for example, Muchlinski, 2012; Scherer & Palazzo, 2011). Tocountability of companies, there is a need to expand the composition of Boards of Directors to include othersocial constituencies, for instance representatives of environmental interests, employees interests, or the inter-l community members. Stakeholder involvement in corporate governance might create a space that include aof stakeholders concerns and needs in strategic business decisions, which in turn could facilitate a shift fromnal focus on short-term prots and shareholder wealth maximisation. At the same time corporate reporting,d in conventional accounting-based documents such as annual reports and CSR reports, should articulate thet to social, environmental and human rights. Although mere disclosure of human rights information may not

ideological interests embedded within the corporate governance system (see Puxty, 1991; Sikka, 2011), it mights open up a space for discussion of human rights agendas and so create awareness, which could be a driver forge. Sen (2004) suggested that in addition to inspiring legislation and NGO activism, disclosure of human rightslso provoke public discussion, appraisal and advocacy (p. 320). However, within a Tanzanian context, there iseed to empower local NGOs, as arguably they do not yet have the power to mobilise pressure with respect to

as enhanced corporate disclosure, public accountability and human rights issues in the country.29 Thus, the its human rights framework can play a role in enabling and empowering local NGOs and other civil societyns within a developing country context, and in Tanzania in particular.r, it should also be made obligatory for MDAs and other investment agreements made with the Tanzaniant to contain terms laying down obligations with respect to the protection and promotion of human rights. It

be in the public interest if investment contracts were discussed in parliament and made available for opentiny as part of the accountability debate. This would enable people to build alternative forms of accounting andity (e.g. shadow accounts), which could create greater visibility of the human rights predicaments in Tanzania.d earlier (on page 27) accounting academics can, through working closely with NGOs, play a pivotal role inrventions, by challenging neoliberal systems of corporate governance and examining the social consequences of

eclaration on Fundamental Principles and Rights at Work (1998) provides the core labour standards that aim to: (1) eliminate all forms ofpulsory labour; (2) effectively abolish child labour; (3) eliminate discrimination in respect of employment and occupation; and (4) ensuref association and the right to collective bargaining (www.ilo.org).

level and scale of poverty in Tanzania, a signicant number of NGOs have chosen to focus more on social service delivery and povertyvji, 2004).


increasing corporate power, while also developing alternative forms of accounting and accountability. Accounting scholars inparticular may engage with the debate of corporate accountability and human rights, which could help to push human rightsagendas forward and also advocate for interventions such as the reform of corporate laws and regulations (see Gallhofer &Haslam, 2003).

There is no reason why human rights obligations cannot be part of the binding legal requirements for corporations ratherthan just a duty of care. In this respect there is a need to toughen up local regulations in Tanzania in order that morepressure is placed on the mining companies and other TNCs to discharge their human rights obligations to local citizens.As part of scompanies and more vaccountableconstrainedenues for seffect. Wheand protecttry such asthe governmthat of devalleviate pocitizens.

Thereforaccountabilwhich seekon the possand advocaonly be imphuman righ

Acknowled

We are anonymousinstrument

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30 The study uch a process, the government of Tanzania would need to review the Company Act 2002 to impose a duty onto be accountable for human rights

Documents

Barrick Gold case.pdf