Norwegian Investments in the Zambian Mining Industry

Maria Dyveke StyveCaritas Norway (2013)

Who Benefits?

Norwegian Investments in the Zambian Mining Industry

Published by: Caritas NorwayAuthor of report: Maria Dyveke StyveLayout: PoliNor ASPrint: PoliNor ASCover photo of the Mopani mine: Maria Dyveke Styve.Photos: Maria Dyveke Styve

The report is financed by the Norwegian Agency for Development Cooperation (NORAD)

November 2013.

Many thanks to the Caritas Zambia office for the extensive support provided. Thank you to Khazike Sakala and Edmond Kangamungazi at Caritas Zambia, Edward Goma from Centre for Trade Policy and Development, Felix Ngosa from Catholic Relief Services, and Richard Banda from the Diocese of Solwezi. Without you, this report would not have been possible. Also a warm thank you to all the people who took time to be interviewed for the report.

Contents

Executive summary .....................................................................................................................................................5Introduction ..................................................................................................................................................................7Zambia at a glance .......................................................................................................................................................9The Norwegian Government Pension Fund Global ..............................................................................................11Part One: Taxation and development ......................................................................................................................12 Norwegian – Zambian cooperation: Tax for Development program ..................................................13 A brief historical overview of the Zambian mining industry ...............................................................14 Zambian taxation policies .........................................................................................................................15Part Two: Case studies ...............................................................................................................................................18 Mopani .........................................................................................................................................................19 Kansanshi mine ...........................................................................................................................................25 Kalumbila/Trident Project .........................................................................................................................29Conclusion and recommendations ..........................................................................................................................34Notes .......................................................................................................................................................................36List of interviews conducted .....................................................................................................................................40Bibliography ................................................................................................................................................................40

Boxes

Box 1 Zambia: Key indicators ................................................................................................................................9Box 2 Investments by the Norwegian Government Pension Fund Global (GPFG) .....................................11Box 3 Taxes paid by the four major mines 2008-2010 ......................................................................................16Box 4 ZEITI ............................................................................................................................................................17Box 5 Acid leaching technique .............................................................................................................................18Box 6 Mopani Copper Mines ...............................................................................................................................19Box 7 Mopani Copper Mines CSR projects .......................................................................................................20Box 8 Makumbi versus Mutundu farms .............................................................................................................20Box 9 Transfer pricing ...........................................................................................................................................21Box 10 OECD Guidelines for Multinational Enterprises ...................................................................................22Box 11 The European Investment Bank and Mopani .........................................................................................22Box 12 Glencore .......................................................................................................................................................23Box 13 First Quantum Minerals and Mopani ......................................................................................................23Box 14 Kansanshi mine ...........................................................................................................................................24Box 15 First Quantum Minerals ............................................................................................................................28Box 16 A view from Kalumbila Minerals Ltd ......................................................................................................32Box 17 Zambia Extractive Industries Project (ZEIP) .........................................................................................33

3

Who Benefits? Norwegian Investments in the Zambian Mining Industry.

4

Popularly known as the “Oil Fund”, the Norwegian Government Pension Fund Global has investments spread all over the world, including in large multina-tional companies within the extractive industry. The industry has earned a bad reputation in developing countries for pollution, environmental damages, displacement of local populations, cor-ruption and tax evasion. This report looks to Zambia to study the impacts of Norwegian investments in the extract-ive industry on local development, and to see whether there are any contradic-tions between Norwegian official devel-opment assistance on the one hand, and Norwegian investments in the extract-ive industry on the other.

Zambia has a long history of copper mining. After Zambia gained inde-pendence, the mines were nationalised, and took on a strong role in developing the nearby mining communities. The industry suffered from a long depres-sion of copper prices, and the mines were eventually privatised in the late 1990s. The new multinational compan-ies that bought the mines were given very attractive incentives to invest, while the Zambian state was left with next to nothing in tax revenues from the industry. As copper prices boomed, increasing public pressure led the Zam-bian government to change the tax re-

gime to improve the revenues that the state was receiving. The Zambian and Norwegian tax authorities have had a successful collaboration to improve tax audits of the mining industry to in-crease tax collection. However, could there be cases where there are contra-dictions between official development cooperation on the one hand, and Nor-wegian investments in the Zambian mining industry on the other?

This report looks at two of the com-panies that the Norwegian Government Pension Fund Global has investments in, namely Glencore and First Quantum Minerals, and their investments in the Mopani and Kansanshi mines, as well as in the new Sentinel mine that is still under development.

In the case of Glencore, which owns the majority of the Mopani mine, this report found a contradiction between Norwegian investments in the company on the one hand, and the official devel-opment cooperation with Zambia on the other. A pilot tax audit, supported by the Norwegian government, showed that Mopani had used transfer pricing in a way that was aimed at avoiding taxes in Zambia. The mine declared for over ten years that it had not been making any profits. We also visited the Kankoyo community that is located very close to the mine. The Kankoyo community has

Executive summary

Children playing by Mopani mine.

5

Executive summary

Recommendations

The Council on Ethics should:• Evaluate whether tax evasion by Mopani and the negative impacts on the

Kankoyo community warrants exclusion of Glencore.• Investigate the impacts on local communities as a result of the new Trident

project to see whether they are in contradiction with the ethical guidelines of the Fund.

been suffering over time from the pol-lution from Mopani, and were severely affected when their drinking water was contaminated in 2008. Mopani is now implementing important measures to drastically reduce emissions of sulphur dioxide (aiming to capture 97% of SO2). However, the acid leaching technique that Mopani is using to extract copper still poses a threat to the drinking water supply in Kankoyo. Given Glencore´s poor global reputation, both for tax evasion and environmental damages, the Norwegian Government Pension Fund Global should exclude Glencore from its investment universe.

Close to the Kansanshi mine, owned by First Quantum Minerals, we visited the Kabwela community and Mushitala primary school. In Kabwela, the com-munity has seen their houses crack,

they lack good access to water, and their road connection is so poor that access to medical services is hampered. Some of the farmers who have had to give up their land, are still waiting for compensation from Kansanshi and alternative fields to farm. A jatropha out-grower scheme was introduced by the mine, but failed and caused much frustration for the farmers involved. At Mushitala primary school, Kansanshi has improved the consultation process for new projects, and is now supporting the school with a range of new build-ings.

The Sentinel mine is being de-veloped as a part of the Trident Project of First Quantum Minerals, through its subsidiary Kalumbila Minerals Ltd. The project has been controversial due to the massive area of land that the project

requires and the way in which the land was obtained. While some argue that the relocation plans of First Quantum are good, and that the main problem was a long delay in approval by Zam-bian authorities, others argue that the process has had severe negative impacts on the communities affected.

Norwegian investments in the Zam-bian extractive industry through the Norwegian Government Pension Fund Global´s investments in Glencore and First Quantum Minerals have adverse impacts on local development in the communities that we visited. Based on the findings of this report, the Norwe-gian Council on Ethics should investig-ate the operations of Glencore and First Quantum in Zambia.


6

Mineral resources are a great source of wealth and hold the potential to provide a country with large reven-ues. Despite this, the global extractive industry has earned a bad reputation in many developing countries. Some of the adverse impacts include severe environmental degradation, displace-ment of local populations, corruption and tax evasion, and the failure to con-tribute towards local development. In 2013, Caritas Norway decided to carry out a study on Norwegian investments in the extractive industries in develop-ing countries. The aim was to look at how Norwegian investments impact on local development, and whether there are any contradictions between official Norwegian development assistance and the Norwegian investments in develop-ing countries.

Zambia was selected for a case study, as the country has a long history of copper mining and a large presence of multi-national mining companies. The Norwegian Government Pension Fund Global has investments in sev-eral of the companies that operate in Zambia, and this report focuses on the operations of Glencore and First Quantum Minerals in the Mopani and Kansanshi and Sentinel mines. In terms

of official development cooperation, the Norwegian and Zambian govern-ments collaborate through the “Tax for Development” program that aims to increase the collection of taxes from the mining industry. While the Norwe-gian government is working to ensure that taxes are being collected from the mining industry in Zambia, Norway is also reaping the benefits of the invest-ments of the Norwegian Government Pension Fund Global. As the report will show, not all the companies are will-ingly paying their fair share of taxes, and surrounding communities are ex-periencing the negative impacts of their operations.

This report looks at three case stud-ies, from the Mopani and Kansanshi mines, and the Sentinel mine that is currently under development. For the Mopani mine, we visited the Kankoyo community that is located very close to the mine, and with regards to Kansan-shi, we visited the Kabwela community and Mushitala primary school. The Sen-tinel mine is being developed as a part of the Trident Project of First Quantum Minerals. Unfortunately we did not gain access to the Sentinel mine, but did conduct an interview with one of the community organisers, as well as with

the Resettlement and Community En-gagement Manager from the mine. In addition to visiting surrounding com-munities, a number of interviews were conducted with different civil society organisations, as well as the Zambian taxation authorities, the Norwegian embassy, the ZEITI Secretariat and the Chamber of Mines. A full list of the in-terviews conducted can be found at the end of the report.

This report is meant as a limited case study, and cannot be generalised to draw conclusions for the entire Zam-bian mining industry. However, the study shows that there are a number of negative impacts on local communities surrounding the mines, and the gen-eral feeling is that they are not seeing the desired developmental benefits from the extraction of Zambia´s min-erals. While the tax collaboration with the Zambian authorities has been very successful, the Norwegian government should consider whether the Govern-ment Pension Fund Global should not rather be invested in industries that do more to contribute towards local devel-opment with less adverse impacts on local communities.

Introduction

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Introduction


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Kapiri Mposhi

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Chama

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Mavua Namwala

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Katima Mulilo

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Mbeya

Mzuzu

Mutanda

Caianda

Pweto

Luwingu

Mpulungu

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Lubumbashi

Likasi

Kolwezi

Kasenga

Chingola

Luanshya

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Mufulira

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Chipili

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Chilanga

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NAMIBIA

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The boundaries and names shown and the designations usedon this map do not imply official endorsement or acceptanceby the United Nations.

Map No. 3731 Rev. 4 UNITED NATIONSJanuary 2004

Department of Peacekeeping OperationsCartographic Section

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ZAMBIA

ZAMBIA

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Box 1 Zambia: Key indicators 2

Population14 million (2012)Economic indicatorsGDP growth rate in 2012 ..............................................................................................................7%3

FDI inflows 2012 .....................................................................................................$ 1,981,700,0004

GNI/capita .................................................................................................................................... $1,350Gini-coefficient ................................................................................................................................ 0.58Social indicatorsPoverty level (% of population under national poverty line) ........................60.5% (2010)Proportion of population living in extreme poverty ...................................... 42.3% (2010)5

Life expectancy ....................................................................................................................... 56 yearsEducation – enrolment in primary education ............................................. 93.7% (in 2010) 6

Health expenditure % of GDP ................................................................................................ 6.1% 7

HIV prevalence ...........................................................................................................................12.5%8

Kankoyo township with Mopani mine in the background.

Zambia is very rich in natural re-sources, but still face large challenges in terms of poverty levels. The extractive industry, in particular copper, contrib-utes to the country´s export earnings and foreign direct investments. How-ever, the country has a high poverty level, and Zambia was ranked as num-

ber 163 out of 187 countries in the UN Human Development Index from 2013.1 The consequences of the mining industries for local communities have been detrimental, in particular along the Copper Belt and in the North West-ern Province.

Zambia at a glance

9

Zambia at a glance


10

Box 2 Investments by the Norwegian Government Pension Fund Global (GPFG)

Norwegian investments through the GPFG (as of 2012)14 Amount OwnershipFirst Quantum Minerals Ltd NOK 283 270 170 0.49%Glencore International Plc NOK 1 021 978 923 0.45%African Barrick Gold NOK 136 391 129 0.83%European Investment Bank NOK 17 931 634 070

MOPANI

The current ownership structure means that Glencore owns 73.1%, First Quantum owns 16.9%, while the state-owned holding company ZCCM-IH owns the remaining 10% of Mopani Copper Mines.15

KANSANSHI

Through its subsidiary Kansanshi Mining Plc, First Quantum Min-erals owns 80% of the Kansanshi mine. The remaining 20% is owned by a subsidiary of the state-owned ZCCM.16

KALUMBILA

Kalumbila Minerals Limited is a whole-owned subsidiary of First Quantum Minerals, through which it is now carrying out the Trident Project.17

The Norwegian Government Pension Fund Global was established in 1990, and is owned by the Ministry of Fin-ance on behalf of the Norwegian public. The Fund was established to manage Norway´s oil revenues, which are reg-ularly transferred to the Fund from the Ministry of Finance. The Fund invests in international equity and fixed-in-come markets and real estate, and is managed by Norges Bank Investment Management.9

The value of the Norwegian Govern-ment Pension Fund Global now totals

about 4,700 billion kroners, roughly equal to 789 billion USD.10 The Fund is invested in over 8000 companies worldwide.11 The Fund has a set of eth-ical guidelines that stipulates when the Fund should exclude a company or put it under observation. Behaviour that can lead to exclusion include serious human rights violations, severe envir-onmental damage, gross corruption, serious violations of the rights of indi-viduals in situations of war or conflict, or other particularly serious violations of fundamental ethical norms.12 The

Council on Ethics is responsible for considering whether an investment violates the ethical guidelines of the Fund. If the Council on Ethics finds this to be the case, it can recommend exclu-sion or for the company to be put under observation to the Ministry of Finance, where the final decision is made.13

The Norwegian Government Pension Fund Global

Statfjord B.Photo: JanChr – flickr

11

The Norwegian Government Pension Fund Global

Part One: Taxation and development


12

The Zambian and Norwegian govern-ments have an institutional collabora-tion regarding tax collection from the mining industry. The collaboration falls under the “Tax-for-Development” pro-gram, and the Norwegian Tax Admin-istration works closely with the Zam-bian Revenue Authority (ZRA).

The main goal of the collaboration is to “(…) increase the total mining tax collected relative to the gross domestic product (GDP), while maintaining in-vestment, job creation and value addi-tion.”18

The collaboration focuses on capa-city building within the Zambian Rev-enue Authority, in particular for the Mining Tax Unit in the Large Taxpay-ers Office. The activities include train-ing and capacity building, and joint tax audits with Norwegian and Zambian officers.19 Part of the program also aims to sensitize large mining companies in terms of what their tax obligations are and to improve the relationship with the mining sector.20

Mr Gilbert Kalyandu, who works on the tax for development program at the Norwegian embassy in Lusaka, says that the taxpayer education is an important part of trying to break down some of the barriers that have been en-countered and build trust between the Zambian Revenue Authority and the mining companies. One of the chal-lenges for the program is that some of the mining companies do not seem to cooperate fully, and the work to try to educate the companies aims to break down some of those barriers and mis-trust. Information is not accessed eas-ily, in particular for the public. Without knowing the true levels of what the companies are paying in taxes, it is dif-ficult to have a meaningful debate on how fair the tax payments are.21 The EITI provides an opportunity for better access to information on what the min-ing companies are paying and what the government is receiving.

The capacity building program also includes work to deal with issues of transfer pricing, thin capitalisation and

revenue efficiency. Transfer pricing for instance, is dealt with on a case-by-case basis. The tax audits have previously shown transfer pricing practices, and the subsequent tax audits that are being done are trying to follow up on those issues. Due to the global nature of the extractive industry, it is challenging to get a full picture of how the mining business is operating.22

The collaboration between the Nor-wegian and Zambian tax authorities appears to have been successful thus far in building capacity at the ZRA, and on improving tax audits of the mining industry.23 There have been eight joint mining tax audits with both ZRA and Norwegian Tax Authority staff. For 2012, the overall mining tax collected as a share of GDP reached 3.9% compared to an expected 1.4%, and tax compli-ance rates have improved compared to 2011.24 The current phase of the project will be completed in 2015, but due to the long-term nature of the work, it is likely to continue beyond that.

Norwegian – Zambian cooperation: Tax for Development program

Trucks passing the Kansanshi mine.

13


When Zambia gained independence in 1964, revenues that had previously been expatriated were now kept in the country, and the contribution of the mining industry to both the Zambian economy and government revenues increased. The contribution to gov-ernment revenue reached 58%, and the mining sector represented 36% of GDP. In the early 1970s the Zambian government nationalised the copper industry, eventually under the state-owned company Zambia Consolidated Copper Mines (ZCCM). At this time, Zambia was one of the leading copper producers in the world, with a pro-duction level of 700 000 tons per year. However, the 1970s saw a sharp drop in global copper prices, which adversely affected the industry. The low prices, combined with under-investment in the mines meant that the contribution of the mining sector to both GDP and government revenue decreased. By the late 1990s, the government was losing money from ZCCM.25

Zambia had begun borrowing from the IMF in in the 1970s to make up for the loss of income due to the slump in copper prices. By the early 1980s, the World Bank instituted a Structural Adjustment Programme in Zambia.

Throughout the 1980s, the IMF and World Bank advocated for Zambia to privatise the mining industry and lib-eralise the economy. Increasingly in-debted and reliant on donor aid, Zam-bia eventually adopted liberalisation policies, and by the year 2000 the mines had been privatized.26

During the privatisation process, ZCCM was broken up and sold off, while the state retained a minority share through ZCCM-Investment Holdings. The companies that bought the differ-ent copper mines signed “Development Agreements” with the Zambian gov-ernment. These agreements gave the new owners a number of concessions, and were not disclosed to the public. Eventually it became known that the agreements generally exempted the new owners from many of ZCCM´s liabilities. This included debt and pen-sion obligations and exemptions from a number of laws, including on envir-onmental pollution. The agreements further gave very favourable tax exemp-tions. Generally the royalty rate was of no more than 0.6% and corporate in-come taxes were low as a result of the mines being allowed to carry forward losses. The Development Agreements also contained a “stability clause,”

meaning that they would stay in place for the coming 15-20 years, irrespective of future legislation.27

After privatization, the investment levels in the Zambian copper industry grew, as did world copper prices.28 However, privatization led to a number of social problems. The casualization of the workforce resulted from large initial retrenchments, and subsequent rehiring on worse terms through con-tractors, with lower wages and insecure employment.29 Through the ZCCM, the state had provided an extensive social infrastructure to the mining communities, including housing, free hospitals and schools, HIV/AIDS and malaria awareness and prevention pro-grammes. The new owners of the mines were exempted from taking over any of these responsibilities, and the services subsequently collapsed. The Zambian state structures were not able to take over and provide these services at the time, both due to budget constraints and the weak structures in the min-ing areas, where ZCCM had been the service provider.30 In later years, the private mining companies have begun to see the value of contributing to the local communities.

A brief historical overview of the Zambian mining industry


14

After public pressure and the realisation that Zambia was not reaping much of the benefits as copper prices increased through the 2000s, policy changes were implemented. In 2008 the government made the Development Agreements in-valid, through a new Mines and Miner-als Act. The royalty rate was increased to 3% and a windfall tax was introduced that would kick in when copper prices reached a certain level.31 The windfall tax caused a lot of public debate. The President of the Chamber of Mines, Mr Mutati, argues that the major problem that the mines had with the windfall tax was that it was not calculated based on profits but rather on gross revenue, that is, without deducting costs. It kicked in on revenues when the copper prices reached certain thresholds des-pite costs.32 When the global financial crisis led to a drop in copper prices in 2009, the windfall tax was scrapped. Mr Edward Goma, acting director at the Centre for Trade Policy and De-velopment (CTPD), explains that most civil society groups are now advocating for the government to reintroduce the windfall tax. The copper prices are now slightly over 7000 dollars per pound, and the feeling is that the mining companies are making profits without paying enough revenue back to the country. The windfall tax was meant to

capture the excess profits that the min-ing companies were making.33 A recent study shows that if the windfall tax had been properly designed in terms of de-ductibility, it has potential to secure an increased share towards government revenue.34

In 2012, the mineral royalty rate was increased to 6%. Currently, mining companies pay a corporate income tax of 30% (while the rate for other sectors is 35%). Further, there is a variable in-come tax in place, which is subject to the profit that the mine is making.40 However, this excess profit tax has not generated much revenue for the gov-ernment.41

Before, the mines could deduct for capital expenditure with a capital al-lowance of 100%, meaning that they could deduct in the current year. The capital allowance has now been re-duced to 25%, meaning that the mine can only claim the deduction over four years, and only once the asset has been put to use.42

Overall, Mr Goma from CTPD says that there have been important changes made to the tax regime, although there is still room for improvement.43 In par-ticular, local communities are still not getting the maximum benefits from the extraction of resources in their area. In the 2008 Mines and Minerals Act there

is a provision (Article 136) for revenue sharing with the local community. The Mineral Royalty Sharing Mechanism is meant to plough back a certain per-centage to the communities surround-ing the mines, but this mechanism has not yet been implemented and the government is still working on how the mechanism will function in practice.44

“What you expect is a flexible tax sys-tem, in a time of boom, both parties, the country, will benefit from that boom. In a time of recession, the country´s tax regime should be flexible enough to keep the mining companies afloat. But that´s not the case, you find that in times of the boom, when the country wants to get benefits from that, there´s a lot of resistance that is coming from the mining sector.” –Kryticous Patrick Nshindano, ActionAid Zambia.45

The government is now trying to counter the problem of tax evasion and resources leaving the country through transfer pricing by requiring that com-panies repatriate foreign currency earned from exports. The deputy min-ister of Finance, Mr Miles Sampa, has been quoted as saying that this will only have a negative impact on companies that have something to hide. The aim is to ensure that companies are paying the taxes that they should. 46

Zambian taxation policies

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Box 3 Taxes paid by the four major mines 2008-2010

From the published figures between 2008 and 2010, Mopani Copper Mines, Lumwana Mining Company and Konkola Copper Mines paid either very low or no company in-come tax. This was because they had costs for large capital expenditure programs deducted from the profits they were making, and could carry forward losses.35

Out of the four biggest mines, Kansanshi mine has been the one to pay the most corporate taxes as well

as windfall taxes (in the short period that windfall tax applied for).36

Mopani mines paid no corporate tax from 2008-2010.37

Lumwana mine started production in 2008. It did not pay corporate tax in 2009 and 2010, arguing that this was in accordance with its Development Agreement and that this was still in place, despite the fact that the gov-ernment had made all development agreements invalid with the 2008 Mines and Minerals Act. Despite de-

claring USD36 million in profits for 2009, Lumwana did not pay any cor-porate income tax, or variable income tax.38

In the latest published EITI report for Zambia, Kansanshi reported the highest payments to government. The figures for 2010 are shown below, and include all payments excluding Pay As You Earn (which is income tax for employees).39

K M

illio

n 1600

1400

1200

1000

800

600

400

200

0

Payments as reported by the fourmajor mining companies in 2010

(excluding PAYE)

Kanshansi MiningPlc

Lumwana MiningCompany Limited

Konkola KopperMines Plc

Mopani CopperMines Plc


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Box 4 ZEITI

Zambia Extractive Industry Transparency Initiative (ZEITI)In 2012 Zambia became fully com-pliant with the requirements of the Extractive Industries Transparency Initiative. The initiative aims to im-prove transparency in the extractive industry by publishing reports that compare what the companies declare that they are paying to government and what the government says it re-ceives.47 The initiative also provides a platform for companies, govern-ment and CSOs to meet and discuss the challenges faced. According to Mr Banda, Head of the Zambia EITI Secretariat (ZEITI), transparency in the sector is essential. It functions as a deterrent of the abuse of resources, as misuse of funds would be detected in the EITI report.48 Mr Banda also states that another main objective for the initiative is to ensure that the country maximises benefits from its extractive industries. By publishing what is be-ing paid, the public can see whether the mining sector is contributing the right taxes.

One of the main challenges faced for ZEITI, is getting the correct pro-duction figures for copper in Zambia. Without the correct production fig-ures, it is difficult to know whether the taxes that are being paid are at the

proper level. Another important chal-lenge is the presence of bi-products in the unprocessed copper that is expor-ted, including uranium, gold and sil-ver.49 When the raw material is expor-ted simply as copper, the value of the bi-product is not registered, meaning that Zambia does not reap the benefits of the value of those bi-products.

The ZEITI Secretariat is providing a platform for government, compan-ies and civil society to discuss issues such as how revenues from the mining industry should be used to promote development and poverty reduction, how to avoid tax evasion, and how to achieve greater transparency re-garding contracts with the mining in-dustry. The ZEITI is now also looking at expanding the initiative into other sectors, such as forestry.

The EITI has been criticised for being limited in that it only shows what the company is paying and what the government is receiving, and compares the figures to look for dis-crepancies. But this does not tell you whether the company is paying what it should be paying according to the governing tax regime. Further, parti-cipation in the initiative by compan-ies and governments is voluntary. In

Zambia, work is now being done to change this, by proposing a ZEITI Act that would make it obligatory for both companies and government to disclose the figures, and that would safeguard the initiative.50

The EITI further needs to include a stronger focus on accountability, according to Edmond Kangamun-gazi who coordinates the Economic and Environmental Justice Program at Caritas Zambia. The EITI has in-troduced a new set of rules this year, which opens up opportunities for a greater focus on accountability. Des-pite the fact that Zambia has completed three EITI reports to date, there have been few follow-ups on the findings. Although transparency is provided through the reports, accountability is lacking. Mr Kangamungazi emphas-ises that parliament must become act-ively involved in the process, to ensure that companies are held accountable.51

From 2008 to 2010 the payments to government from the mining com-panies have increased, as can be seen in the graph below.52 The increase was largest from 2009 to 2010, as copper prices recovered from the 2009 dip, with an increase of revenue received by government of 50%.

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Payments from mining companies asrecorded by government 2008-2010

(excluding PAYE)

2008 2009 2010

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Box 5 Acid leaching technique

The Mopani Copper Mines employ what is called an acid leaching tech-nique to extract copper from the ground. This involves pouring sul-phuric acid underground where the copper ore is, for it to dissolve. The solution is then pumped up, and cop-per is extracted. The major environ-mental danger with this technique

is the threat of polluting the under-ground water with the acid.

In Mufulira, underground water is a major supply of drinking water. This makes the acid leaching tech-nique a constant threat as an accident can cause severe pollution of the wa-ter, as was the case in 2008.63

Mopani

Pollution: Living in the shadow of the mineWhen approaching the Mopani mine in Mufulira, the proximity of the Kankoyo township is striking. Over-looking the residential area is a ma-jor tailings dam with waste from the copper mine, a short walking dis-tance from the nearest houses. After spending less than a few hours vis-iting Kankoyo, you leave with sore and running eyes from the polluted air, and a sense of perplexity that the richness of the copper extracted does not reflect in the development of the community living only meters away.

Mr Pepino Musakalu lives in Kankoyo and is a member of the Green and Justice Organisation. The organisation was formed to document the harm in-flicted on Kankoyo´s inhabitants when

there was a spill of acid from the mine into the drinking water in 2008. Mr Musakalu explains that this was a seri-ous incident resulting in a high number of people being admitted to medical institutions. According to a report by the Centre for Trade Policy and Devel-opment (CTPD) and Counterbalance, the number of people affected was as high as 756.59 The CTPD has supported the Kankoyo community in suing the Mopani mine, and its majority owner Glencore for damages.60 However, due to the nature of the way copper is ex-tracted by the Mopani mine, the risk of future accidents like this one is still present. In addition to the risk of Kankoyo´s drinking water becoming polluted, the mine emits sulphur diox-ide into the air, which can cause seri-

ous respiratory diseases.61 Inhabitants in Kankoyo have long been criticising Mopani for the high emissions and the severe impacts it has on the quality of living.62

In response to the problem of sul-phur dioxide emissions, Mopani en-sured that a new smelter installed in 2007 captures 50% of the emissions. By early 2014 the final phase of this project will be completed, ensuring that 97% of sulphur dioxide emissions are cap-tured.64 This should lead to an improve-ment of the air quality in Kankoyo. However, this does not amount to any form of compensation for the local community who has suffered from the impacts of these emissions thus far.

Part Two: Case studies


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Box 6 Mopani Copper Mines

The copper mine in Mufulira dates back to the 1930s, and came under state ownership in the early 1970s after Zambia gained independence in 1964. The mine later became part of the Zambia Consolidated Copper Mines (ZCCM) owned by the Zam-bian state.

As the mines were privatized in the late 1990s and early 2000s the Mufulira assets were sold. The Mo-pani Copper Mines (MCM) was es-

tablished to buy the assets on behalf of Glencore International and First Quantum Minerals in 2000.53 The as-sets were bought for $43 million, with commitments to invest $159 million over the first three years.54

The current ownership structure means that Glencore owns 73.1%, First Quantum Minerals owns 16.9%, while the state-owned holding com-pany ZCCM-IH owns the remaining 10% of Mopani Copper Mines.55

The Norwegian Government Pen-sion Fund Global has NOK 1 021 978 923 invested in Glencore Inter-national, with an ownership share of 0,45%. This corresponds to about 170 million US dollars.56 The Fund also has NOK 283 270 170 invested in First Quantum Minerals Ltd, with an ownership share of 0,49%.57 This is roughly equivalent of 47 million US dollars.58

Local impacts: Corporate social responsibility and local developmentMopani has a range of on-going cor-porate social responsibility projects, which in themselves are commendable. However, such projects seem to have changed little in terms of the conditions of the Kankoyo community. Employ-ment opportunities are scarce, and few in Kankoyo now work for Mopani. Mr Musakalu explains that many miners have moved out of Kankoyo due to the pollution from the mine. Those without the means to move are left behind. Fur-ther, he explains that it is very difficult to grow anything on the land due to the acid rain that results from the emis-sions of sulphur dioxide.65 Living con-ditions are not made easier by the fact that several sections of the Kankoyo township do not have access to water. Mopani provides 50% of the water for the community, but still parts of the community does not have such access. The sewage system is also very poor, resulting in sewage running openly outside people´s houses. This is the re-sponsibility of local government, but the Mopani mine also has an important role to play. The piped water system is very old, and the water is pumped up by the Mopani mine, before the Mulonga water provision company purifies and distributes it. Even the sewage system

is shared with the mine, so it is hard to imagine a lasting solution to both these challenges without involvement by Mo-pani mines.

There is an on-going debate on what role corporate social responsibility policies of large corporations should play for local development, in relation to the role of national and local govern-ment. In Zambia, the situation under the state-owned ZCCM and the current private-owned Mopani mines makes for an interesting comparison. Under state-ownership the Mufulira mine actively developed the surrounding areas. This included providing housing for its employees, with water and elec-tricity covered, developing roads and infrastructure, and running schools and hospitals.66 When the mines were privatized, the water plant was handed over to the local municipality, the power transmission unit was sold into private hands, the mine townships that had previously been under the owner-ship of ZCCM were separated out and individuals could purchase their houses so that Mopani mine did not take over the ownership or responsibility of the townships.67 According to Mr Mutati, Chairperson of Mopani Copper Mines Plc, this earned the new mine owners

a bad name, because the communities still expected the mine to provide the same services to the townships as did ZCCM, even though it no longer owned the resources to carry out some of these services.68 Since privatization, the living conditions of the Kankoyo community appear to have deteriorated.

“Now people are coming from shanty houses going to work for a multi-million facility, so it doesn´t really make sense.” – Zebbies Mumba, resident and human rights activist in Mufulira.69

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Box 7 Mopani Copper Mines CSR projects

The Mopani Copper Mines spends on average 15 mil-lion dollars every year on corporate social responsibility (CSR) projects and has so far spent close to US$200 mil-lion since inception.70

These CSR projects include:

• Hospitals and clinics that are free for miners, but where non-miners pay commercial rates. ■ The Wusakile Mine hospital with a bed capacity

of 300, with 150 in use ■ Malcom Watson hospital with a bed capacity of

120 capacity with 80 in use. ■ 4 township clinics at Mufulira, and 3 at Nkana. ■ A free treatment program for children with club-

foot and a free cervical cancer screening centre.

• Schools that are subsidised for miners, and non-miners pay higher fees. ■ Primary and secondary school in Mufulira and

Nkana. All together these schools take about 1,945 pupils, with 50% being children of miners and 50% being children of non-miners.0

• An extensive malaria prevention program

• HIV/AIDS counselling and testing

• Kankoyo domestic water supply where Mopani pays 50% of the bill for the water.

• Roads ■ Part of the Mufulira/Sabina road ■ Part of Kitwe ring road

• Sport facilities

• Farms for ex-workers (see box on the Makumbi farm project)

Box 8 Makumbi versus Mutundu farms

Makumbi farmsOne of Mopani´s CSR projects supports retired miners in Mufulira in farming activities. Mopani acquired 1300 hectares of land for a group of 130 retired miners with their families. It also provided training and support to grow various food crops like maize, bananas, vegetables and keep chickens, cattle, goats, pigs and produce honey, among other things. The project is now running inde-pendently, with the farmers selling various farm produce to shops in Mufulira.71

However, according to Charles Mulila, coordinator of Development Education Community Project (DECOP), the Makumbi farm project has not been as successful as Mopani claims. According to Mr Mulila, the number of farmers was high at the start, but has now dwindled after the support from Mopani was concluded. The farmers who were able to continue were those who already had some capital, or had access to loans. The farmers who did not have capital found it difficult to carry on, as the farming area was located far from where they live, mak-ing transport costs a challenge. Further, Mr Mulila ex-plains that Zambian farming is rain-fed, as irrigation is expensive. His organisation attempted to set up an irrig-ation project for the Makumbi farms, so that agricultural activities could be carried out throughout the year, and had approached Mopani to partner in the project along with another funder. However, as Mopani had already concluded their support for the Makumbi farms, the ir-rigation project was not carried out.

Mutundu farmsMr Mulila also described the situation for farmers in a different area called Mutundu. The state-owned ZCCM had originally settled ex-miners to the farming areas in Mutundu. During the privatization process, the Mopani mine did not initially take over ownership of this land, but acquired it in a second round of negotiations. Mo-pani now holds the land rights, and claims that there might be copper there. There are about 200 farmers af-fected in the Mutundu area, and the Mopani mine is not allowing any new permanent structures to be built on the land. Now the farmers can only grow crops that can be harvested within a short time frame, and not crops such as cassava that take longer. The farmers cannot make any long-term investments due to the uncertain-ties of whether they will be able to stay on the land or not, and there is now an on-going court case against Mo-pani/Glencore for the farmers to obtain the land rights.72


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Box 9 Transfer pricing

When a subsidiary of a company trades with the company that owns it or another subsidiary, this is re-ferred to as transfer pricing. Ac-cording to good business practice and the OECD Guidelines, such trade should be conducted at an arm´s length. This means that if a company for example sells a good or a service to the mother company, the price and conditions should be in line with what would have been the case if it conducted the sale to a third party on the open mar-ket. However, transfer pricing can be manipulated to ensure that the company pays the lowest possible tax rates. One way of doing this is for a subsidiary to sell a good at a low price from country A (thereby making low profits in country A, and paying low taxes), to another subsidiary located in a tax haven with much lower tax rates. When the good is then sold on from the tax haven at a higher price, the company pays minimal or no tax in the tax haven. The African Union estimates that Africa loses about US$148 billion every year in illicit financial flows moving out of the continent. Tax evasion makes up the largest part of these flows.80

Taxation: Taxing for developmentThe Mufulira mine was privatized and sold to Glencore and First Quantum in 2000, and became part of the Mopani Copper Mines. As with the other com-panies that bought mines in the privat-ization process, Glencore and First Quantum negotiated a “Development Agreement” with the Zambian state, which specified tax rates, concessions and incentives for the Mopani Copper Mines. The Development Agreements were generally kept secret, and most had stabilisation clauses that meant that the provisions in them could not be changed over the coming 15-20 years. The mineral royalty rate in most of the Development Agreements was set at 0.6% of revenues, instead of the 2% stipulated by law. From 2002 the cor-porate tax rate for the mining industry was set at 25%. However, in addition to low tax rates, the mining companies could carry forward losses, and so pay less corporate tax.73

According to Edward Goma at the Centre for Trade Policy and Devel-opment (CTPD), Mopani claimed for over ten years that the company was not making any profits. This allowed Mopani to pay less tax, on top of the other tax concessions in the Devel-opment Agreement.74 In 2009 a pilot audit was conducted on several com-panies with the support of the Nor-wegian government.75 The operations of Mopani were included in this pilot audit, and the outcome of the audit was not made public until the report was leaked to one of CTPD´s partners, and

CTPD decided to publicise it widely. The findings of the audit showed how Mopani was avoiding taxation in Zam-bia, by overestimating operating costs, underestimating production values, and using transfer pricing, breaching the arms-length-principle.76 For ex-ample, the operating costs of Mopani in 2007 were almost double of what the auditing team had estimated that they should be. It was difficult to find any feasible explanation for why the operat-ing costs had increased massively since 2005, while production had only in-creased moderately. Further, Glencore is Mopani´s main buyer, and the sales of copper to Glencore appear to violate the arms-length-principle. The audit found that Mopani seemed to sell the copper to Glencore whenever prices are at their lowest.77 This means that taxes that have to be paid in Zambia are kept at a minimum. The audit team stated clearly “we believe that the Mopani cost structure cannot be trusted to represent the true nature of the costs of the Mo-pani mining operation”.78 Jan Isaksen recently worked as a Country Econom-ist at the Norwegian embassy in Lusaka. During our interview he expressed sur-prise over the fact that the Norwegian Government Pension Fund Global still had investments in Glencore, and stated that the Norwegian Council on Ethics should investigate Glencore both for the tax evasion that was revealed in the pilot audit, and perhaps even more so for its poor environmental record.79

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Box 10 OECD Guidelines for Multinational Enterprises

The OECD guidelines are a set of re-commendations for multinational enterprises either operating in or from the countries that adhere to the guidelines. The guidelines are a code of responsible business conduct re-garding a wide range of issues, includ-ing human rights, employment, en-vironment, corruption, competition and taxation amongst others. In order

for the guidelines to be implemented, there are “National Contact Points” in each country that deals with instances where there are disputes over whether a company has violated any of the principles.

However, the OECD guidelines are non-binding. This means that companies that operate in a way that contradicts the guidelines, and are ex-

posed for doing so, mainly risk their international reputation. The main sanction against non-compliance is therefore naming-and-shaming.

For more information, see:http://www.oecd.org/daf/inv/mne/oecdguidelinesformultinationalenter-prises.htmhttp://www.oecd.org/daf/inv/mne/48004323.pdf

Box 11 The European Investment Bank and Mopani

“It is shameful to dedicate 48 million euros to the Mopani mine because we have no guarantee that this investment will benefit Zambians, or the poorest Zambians. Moreover, Glencore is a company with a dark past, based in tax havens, we know that they never pay taxes anywhere. So to give develop-ment funds to the Mopani mine, which is run by Glencore, is to be blind.” Eva Joly, interviewed in the documentary “Good Copper, Bad Copper.”

In 2005, the European Investment Bank (EIB) granted a loan to Glen-core for 48 million Euros to renov-ate the smelter at the Mopani mine. The European Investment Bank is the bank of the European Union, and in Sub-Saharan Africa the bank is meant to promote sustainable eco-nomic growth and reduce poverty.83 According to the EIB, the aim of the loan was mainly environmental, to invest in a new smelter that would reduce emissions of sulphur diox-

ide.84 However, despite its own reg-ulations demanding a proper Envir-onmental Impact Assessment of such projects, the only one conducted was done by Mopani itself.85 According to Counter Balance, the EIB funding did not contribute any environmental value to the project, as the smelter would have been built in any case. Further, given the dubious reputation of Glencore internationally, Counter Balance argues that it should not have been granted public funding through the EIB.86 The European Investment Bank stated in 2011 that due to “serious concerns about Glen-core´s governance (…) and which go far beyond the Mopani investment”, any future financing requests from Glencore would be denied.87

The Norwegian Government Pen-sion Fund Global has over NOK17,-9billion invested in the European In-vestment Bank.88 This corresponds to about 3 billion US dollars.

Taking Glencore to the OECDBased on the evidence in the leaked audit, a coalition of organisations sub-mitted a complaint to the OECD for breach of the OECD Guidelines for Multinational Enterprises.81 The OECD guidelines require that companies com-ply with tax laws and regulations in the countries they operate in, and that they follow the principle of operating on arm´s length regarding transfer pricing. The leaked audit report had showed that Mopani was breaking the arm´s length principle when selling copper to Glencore, to avoid paying taxes. The complaint to the OECD in-cluded a demand for Mopani to pay Zambian authorities the taxes that it would have had to pay, if the company had not manipulated the transfer pri-cing when selling copper to Glencore. The case was taken up by the OECD in Switzerland and Canada (where Glen-core and First Quantum have their headquarters), and a dialogue was fa-cilitated between the companies and the NGOs. Glencore claimed that the leaked audit had factual errors, and that it had neither violated the arm´s length principle, nor inflated its prices. The fi-nal statement from the OECD simply states that it recommends the parties continue the dialogue, and that it con-siders the case to be closed.82

Kankoyo sewage running past residential houses.


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Box 12 Glencore

Glencore merged with Xstrata in 2013, and the com-pany “GlencoreXstrata” is now one of the world´s largest natural resource companies. GlencoreXstrata produces and markets metals and minerals, energy products and agricultural products. The company operates in over 50 countries worldwide.89

Glencore has earned itself a bad reputation for hu-man rights violations, environmental degradation, an-ti-unionism and tax evasion in a range of countries, in-cluding Columbia, Peru, Bolivia, the DRC and Zambia. The company was also involved in a number of scan-dals, including dealing with illegitimate regimes under sanctions such as the apartheid regime and Iraq under Saddam Hussein. In 2008, Glencore won the Public Eye Swiss Award for worst company of the year.90

The Norwegian Government Pension Fund Global has NOK 1 021 978 923 invested in Glencore Interna-tional, with an ownership share of 0,45%.91 This corres-ponds to about 170 million US dollars.92 The Fund´s in-vestment in Glencore first appears in 2011.93

Box 13 First Quantum Minerals and Mopani

FQM also received strong criticism in 2001, when a com-plaint was sent to the OECD contact point in Canada for FQM´s involvement in forced displacement of local communities close to the Mopani mine, in breach of chapter II and V of the OECD guidelines. The Canadian national contact point brought the parties together, and a resolution was achieved where FQM would stop all evictions and support the resettlement of the affected groups to areas that they would get the land rights for. However, in 2006 the evictions were resumed, and were estimated to affect about 600 people. A Canadian study showed that First Quantum had breached all the points in the agreement made in 2001, and stated that the evic-tions represented a clear violation of the human rights of the evicted communities.94

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Box 14 Kansanshi mine

The Kansanshi mine claims to be the largest copper mine in Africa. Kansanshi is an open pit mine, loc-ated just north of Solwezi, and it extracts both copper and gold.

Through its subsidiary Kansan-shi Mining PLC, First Quantum Minerals owns 80% of the Kansan-shi mine. The remaining 20% is owned by a subsidiary of the state-owned ZCCM.95

The Norwegian Government Pension Fund Global has NOK 283 270 170 invested in First Quantum Minerals Ltd, with an ownership share of 0,49%.96 This is roughly equivalent of 47 million US dol-lars.97


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Local impacts: the Kabwela communityWhen coming to Kabwela from Sol-wezi, you hold on a little extra as the car turns into the last stretch of bumpy road. We were lucky to visit outside the rain season, when the road becomes nearly impossible to travel on. At the community school in Kabwela, I met with the school´s headtecher, Mr Lubelenga Wisamba. The school caters for 418 pupils from grades 1-7, with only four teachers for the whole school.

The Kansanshi mine constructed the school block that we are having the interview in, as well as two houses to accommodate teachers in, and a clinic just down the road. Kansanshi also gives support for adult literacy classes for the entire community, providing educators and the materials needed.98 Although Mr Wisamba highlights these contributions as positive, there are cer-tain challenges even with the structures that have been built. One of the staff houses for the school has not yet been handed over to the government, des-pite having been completed for quite some time. The clinic was completed by the end of 2012, but has also not yet been handed over to government, and is therefore not yet in use. When asked

why it is taking so long to make the clinic operational, Kansanshi explained to the Kabwela community they are still procuring equipment for the clinic, and that this has caused delays. In the meantime, the community is suffering hardship in terms of getting access to medical services. The nearest hospital is 8km away, which is far when you con-sider the poor state of the roads. As an-other community member explained, pregnant women find themselves hav-ing to deliver their babies on the road on the way to the hospital. Mr Wisamba further explains that getting to the hos-pital if you get sick at night is even more difficult due to the state of the roads.

In terms of the negative impacts on Kabwela community from the Kansan-shi mine, Mr Wisamba highlights the issue of reduced food security. In 2011 farmers had to give up their land for Kansanshi, but the compensation pro-cess has taken very long, and some of the farmers have not been giving al-ternative fields as of yet. According to Mr Wisamba, “they are just surviving by the grace of God”. While not having land to cultivate, people resort to burn-ing charcoal that they then sell to sur-vive. Very few people in Kabwela work for the mine. Those with fields are able to grow maize, while those that do not have fields make their livelihoods from

charcoal burning and keeping vegetable gardens.

Abandoned jatropha out-grower schemeOne of the community members ex-plains that the Kansanshi mine ini-tiated a project in 2007 to support the Kabwela community in growing jatropha. Jatropha is a plant that is used for biofuel production. Kansanshi had encouraged the farmers to plant jatropha in their fields, and had prom-ised that they would buy the jatropha from them. The farmers were told that they would benefit from this scheme, and since Kansanshi would buy the produce, they went ahead to plant the jatropha. The farmers got fertilizers through the scheme, and put a lot of effort into planting the jatropha. Ac-cording to Mr Wisamba, the jatropha takes up a lot of space in the fields, and thus crowded out maize production. From 2007 to 2010, the farmers cultiv-ated jatropha, until the project came to a sudden halt. Kansanshi then claimed that the company had never promised to buy the jatropha from the farmers. According to schoolteacher Mr Collins Kaumba, this created a lot of frustration in the community.99 People felt cheated, as Kansanshi had convinced them that

Kansanshi mine

Mr Wisamba explains where the Kabwela community school collects water to the team from Caritas, Catholic Relief Services and Centre for Trade Policy and Development.


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jatropha cultivation was a good in-vestment, and would be a good source of income. When Kansanshi then ter-minated the project without buying the produce, the farmers were very frus-trated, and many believe that Kansan-shi should compensate them for the labour, time and money that they had spent planting jatropha. Mr Wisamba has written to Kansanshi several times without a response.

Cracked houses and poor access to waterThe community school building also has a number of cracks in the walls and the floor. Schoolteacher Mr Kaumba explains that the mine blasts every day, and that the tremors have caused the cracks in the school building, as well as in people´s houses. When Kansanshi received complaints that the building was being damaged from the blasting, they came to do tests to see whether the mine was the cause. The machine they brought could not detect the test blast, but according to Mr Kaumba, the test they conducted was only a small explo-sion, and not comparable to the blast-ing that goes on in the mine. However, Kansanshi claims that it is the structure

of the building that is weak, and that it is not the blasting that is causing the cracks. Mr Wisamba points out that it was in fact the mine that built the school block, and if a strong building like the school can crack, then what about the houses in the community built from timber and bricks?100 For the weaker structures in the community, the situation is worse in terms of cracks and damages.

Another issue that was raised was the lack of proper access to water near the school. The school had asked Kansanshi to drill a water borehole for the school and community to have proper access to water. Kansanshi sent people to assess where they could drill the borehole, but that was over three years ago, and the borehole has still not been made. Currently the children at the school and the people living nearby are using water from a shallow well down the hill from the school. After the interview, Mr Wisamba took us down to see where the water is collected. The water source is simply a small pipe in-serted not far below the ground, with water coming out in a thin stream that runs into a puddle where it mixes with mud. In the rain season the situation becomes worse.

“We have been asking them to at least drill a borehole here, but to no avail”. – Mr Wisamba, head teacher Kabwela community school.

Mr Wisamba explains that it is difficult to engage with the mine, and that when Kansanshi comes up with projects to support the community they do not consult with the community first. When asked what he thinks the mine should do for the community, he has clear list. Firstly, Kansanshi should work on the road, so that it will be easier to access the nearby hospital. Further, Kansanshi should work with the community to try to create employment opportunit-ies for people in Kabwela, in particular for those who have lost their land and who have not yet been given alternative land to farm on. At the moment they are struggling to sustain their liveli-hoods based on burning charcoal, and Kansanshi should speed up the com-pensation process.

“We need them to consult the people be-fore bringing any projects, instead of just imposing projects, which are fruitless.” Mr Wisamba, head teacher of Kabwela community school.101

Kabwela school class.


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Local impacts: Mushitala primary school and corporate social responsibilityIn Mushitala we also visited Mushitala primary school, with 1200 pupils and 51 teachers. This school also receives sup-port from Kansanshi, and the interac-tion with the Mushitala school appears to be better. According to deputy head, Mrs Pamela Munkinyi, Kansanshi used to initiate projects without consulta-tion, but this has changed. Now the process has become more consultative through all stages, and the school man-agement is involved in new projects from the start.102 Kansanshi built one of the school blocks, and have provided text books. The mine is now planning to built a sports hall and a football court, a kindergarten and another classroom block. This time around, the school has been involved in the planning, and has requested that Kansanshi use local un-skilled labour and train them to work on these projects. Mrs Munkinyi ex-

plains that she has been advocating for local women to get employed in these new projects. One of the major chal-lenges for the community is the lack of economic empowerment, and Mrs Munkinyi highlights the need for wo-men to become part of projects that can give them a sustainable income and economic independence. The area has been adversly affected, as it used to be a village where people made their livelihoods from farming, and the dis-placements have led to the loss of land. In some cases, people find it difficult to send their children to school as there is not sufficient food at home.

In 2010, an extensive research was carried out to assess the operations of Kansanshi, both from the viewpoint of local communities and the mine itself.103 The assessment showed a wide range of both benefits and concerns in the com-munities surrounding the Kansanshi mine, of which Kabwela and Mushitala are only two. The report confirms that lack of compensation has been a serious

concern in Kabwela, as well as lack of employment opportunities. The mine has provided support for education, as well as a number of other initiatives, including drilling four boreholes. How-ever, in an interview Mr Richard Banda from the Catholic Diocese of Solwezi explains that these boreholes were put up along the road that separates the mine and the community, and not where most people live.104 Further, the main problem with the boreholes is that they dry up quickly. At least 300 people use these boreholes to draw water, but in the dry season muddy water starts coming out after not too long. When the community complained about this issue to the Diocese, it was brought up with the mine, but Kansanshi argued that the Diocese could not represent the community. The Diocese suggested that the boreholes should be made deeper to reach levels where there is more water, but up to now nothing has been done with this issue.

Cracks in the floor at the Kabwela community school.

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Box 15 First Quantum Minerals

First Quantum Minerals is a mining and metals company operating in Zambia, Mauritania, Spain, Finland, Australia and Turkey, with new ex-pansions on the way in Peru, Panama and Zambia. FQM produces copper, nickel, gold, zinc and platinum group metals.105

In Zambia, FQM operates the Kansanshi mines outside Solwezi,

and is now developing the new Sen-tinel mine as a part of a larger “Tri-dent” project. FQM also has a minor-ity share in the Mopani mine.

The Norwegian Government Pen-sion Fund Global has NOK 283 270 170 invested in First Quantum Min-erals Ltd, with an ownership share of 0,49%.106 This is roughly equivalent of 47 million US dollars.107

Kalumbila/Trident Project

Kalumbila Minerals – entrance to Sentinel


Where to go? Relocations and the Trident projectFirst Quantum Minerals is in the pro-cess of expanding its mining opera-tions in Zambia through its subsidi-ary Kalumbila Minerals Limited, and its new Trident project, which will in-clude three new open pit mines.108 The first of these is the Sentinel mine, loc-ated in the North Western province.

The process to obtain the land for the Trident project has been marred by con-troversy. In 2011 Kalumbila Minerals Limited (KML) had already obtained 50 000 hectares from chief Musele in Sol-wezi, and had received approval from the Zambia Environmental Manage-ment Agency (ZEMA) for the environ-mental impact assessment that they had submitted. However, when KML applied for the approval for additions to the project, including the construction of the Chisola Dam, questions were raised about the authorization of such a vast area of land.109 Chiefs are only allowed


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to allocate up to a maximum of 250 hec-tares of land before presidential approval is required.110 ZEMA subsequently hal-ted the approval process, and an inter- ministerial task force was set up to assess how the land had been obtained. The task force concluded that no presiden-tial consent had been given as required by Zambian law, and that the land thus been obtained in an irregular manner. It recommended that no further approvals for additions to the Sentinel project should be given until the land acquisi-tion issue was resolved. In line with this decision, ZEMA could not issue any approvals of the additional projects by KML, and eventually issued an Environ-mental Protection Order in May 2013.111 The work on the Chisola Dam therefore had to be halted until ZEMA approval could be obtained. FQM announced that 500 workers who were employed to work on the dam would be laid off, but the government intervened to prevent the lay-offs from taking place.112 In Oc-tober 2013, ZEMA gave its approval for

the resettlement and compensation plan submitted by KML.

Compensation and resettlementThe Trident project is estimated to displace 570 families, of which 1400 people are farmers, 105 are livestock farmers and 100 beekeepers, while yet others are job seekers.113

However, disagreements and ten-sion have arisen in relation to the com-munities that are being resettled. Mr James Mashimango from the Musele community is secretary to the Musele Task Force, which was set up by the local chief.114 The task force sent a submission to the government with inputs from the community on resettlement and com-pensation. This was part of the process that the inter-ministerial task force had initiated when realising that there were problems with the way the land had been obtained. Mr Mashimango ex-plains that the land that FQM/KML has

obtained is far too vast, and that almost everyone living there will now have to be resettled. He argues that those people who have already been resettled do not have good access to water, and have not been compensated sufficiently. Although FQM has offered them jobs, this is as construction workers on the project, which are only short-term and unsustainable. Further, he states that the task force is concerned over the fact that FQM has proposed to move people to another part of the land that FQM has obtained, meaning that they will be living on FQM land, and thus risk being resettled again in the future. Accord-ing to Mr Mashimango, the task force is not against the investment by FQM, but want to ensure that both the local community and the nation benefit. At the moment, he says they cannot see how the local community will see bene-fits from the investments in the Sentinel project.

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Controversies over land and environmental impactsAnother pressing issue is that farm-ers stopped cultivating their crops on the land that FQM obtained.115 In an-ticipation of being relocated, it made little sense to invest in another harvest. However, as the process was dragging out, also due to the delay in the ap-proval from ZEMA, the situation be-came increasingly difficult, in particu-lar for cassava growers. Cassava takes a long time to grow, and is not cultivated in the same way that for example maize is. Mr Banda from the Catholic Diocese in Solwezi explains that they have been advocating for the farmers to be able to start planting cassava on alternative fields now, to ensure that they do not suffer food shortages when they are re-located.116

Mr Mashimango explains that FQM was supposed to work in collaboration

with the local authority to find altern-ative land for the displaced people, but that the local authority has failed to do so. At the moment, the task force is considering taking the case to court, as Mr Mashimango believes that the land has been obtained illegally.

Pamela Chisanga, director of Ac-tionAid in Zambia, also maintains that there have been a number of illegalities in the way that FQM/KML have con-ducted the project. She points out that work continued on the Chisola Dam, even with the protection order from the Zambia Environmental Management Agency in place, which ordered the halt to all developments.117 The way FQM obtained the land was also not done according to the law, as presidential ap-proval is required for land of that size. Even though the chief had signed the agreement for the 518 sq. km of land (which he was not authorized to do),

Chisanga says that is was clear that the chief had been arm-twisted. She says that certain ministers in the previous government had put pressure on the chief to sign. Although FQM had ini-tially asked for 700 sq. km, the chief had negotiated this down to 518 sq. km.118 Further, Chisanga explains that bey-ond the original agreement with chief Musele, FQM/KML had suggested a number of additions to the project. This included a new location for the tailings storage facility119, new pipelines for tail-ings and for water, new alignments for water being diverted from nearby river, and a new dam on the Chisola river. These changes also meant that a new host resettlement site had to be found for the villages that were to be relo-cated. According to Chisanga, these ad-ditions would impact negatively on the community.120


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In terms of the environmental im-pacts of the Sentinel project, Mr Mashi-mango raises concerns regarding the proposed location of a tailings dam (containing waste from the mine), close to a river. If this river is polluted, it will contaminate the water in other streams and affect the lives of the people are re-liant on this water. Further, Mr Mashi-mango says that the communities will now be left without any river to use, as FQM is building dams on the two rivers that people are surviving on. Although FQM is promising to build boreholes, he says that this is insufficient, as people have been accustomed to using the river as a source of water for all usages.121

Mr Mashimango also states that they feel betrayed by their government of-ficials, as they have not yet gotten any feedback on their submission to the government, and that there has not been proper engagement. Mr Banda

from the Catholic Diocese of Solwezi, also states that the government should have gotten involved at a much earlier stage to avoid tension between the company and the communities.122

A more positive takeDespite the criticism that the Sentinel project has received in the Zambian media, others hold the view that FQM/KLM have prepared quite extensive relocation and compensation plans that compare well with those of other companies that have been approved by ZEMA in the past. It is clear that the communities that are living on the land have suffered in the process, but this can also be attributed to the long delay in approval by ZEMA. The delays caused much uncertainty and posed challenges for farmers in terms of whether to con-tinue cultivating the land.

Mr Felix Ngosa from Catholic Relief Services explains that FQM has learnt from previous experiences with reloca-tions, and has improved their conduct. For the Sentinel project, FQM/KML now says it is following World Bank guidelines on relocations. Mr Ngosa says that should KML follow the relo-cation plans that they have to the letter, the outlook is good. He says that the company has tried to be as consultative as possible, and that they have already started building houses that are twice the size of the previous houses and of better quality for the relocated com-munities. Mr Ngosa further explains that the major problem is the lack of Zambian guidelines on relocations that all companies would be obliged to abide by, and that the legal framework needs to be improved to address this challenge.123

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Box 16 A view from Kalumbila Minerals Ltd

According to Garth Lappeman, Resettlement and Community Engagement Manager at Kalumbila Minerals Ltd, the media coverage of the Sentinel project has been unfair.124 He says that the company has done its best to follow in-structions from the Zambian government for how to obtain land rights and to get approval for its resettlement plan.

Government approvalsWhile other mining companies have obtained government approval within a short period of time for resettlement plans with less favourable compens-ation levels, KML only obtained ap-proval from ZEMA in October 2013, over two years after the resettlement plan had been submitted in Septem-

ber 2011. While the resettlement plan has been approved, KML is still waiting for presidential approval for its land title application. After negoti-ations with the government, the land area in question has now been re-duced to about 400 sq. km, although this has not yet been confirmed,

awaiting the approval by government. When ZEMA recently approved the resettlement plan, a number of condi-tions were attached, including adding an extra room to all houses, giving all displaced families 4 hectares of land and for those who are displaced to get title deeds for the land.

Relocations and compensationOver 100 families have already been relocated, leaving another 470 famil-ies yet to move. The total number of families who will be displaced num-ber 570, which corresponds to about 4000 individuals. Mr. Lappeman highlights food security as a major concern in the relocation process, and says that efforts were made to ensure that farmers did not lose out on any

seasons. The delays in approval from ZEMA made this a greater challenge, but according to Mr. Lappeman, KML offered employment in the construc-tion phase to about 90% of the house-holds, which secured an income in the meantime. For those families who have not already moved, those loc-ated in the next zone can still farm until construction begins in that area.

According to the relocation plan, the displaced communities would get compensation for moving, larger and improved houses, new schools and a rural health centre, as well as access to employment and training. A griev-ance mechanism has also been estab-lished, to allow for displaced people to complain if they have not been com-pensated correctly.125

New townKML is also building a new town that is likely to accommodate over 10 000 households. Part of the intention for constructing a new city is to avoid the

overcrowding and lack of planning that has often characterized the areas surrounding mines. KML plans to de-velop the infrastructure for the town,

and hand this over to the government at a later stage.

Controversy and the need for stronger regulationIn any large-scale mining project that involves relocation of a large num-ber of people in the process is likely to create debate. For the Sentinel pro-ject, both the land acquisition process and the relocation process would have benefited greatly from stronger and clearer government regulations and a

legislative framework that clearly stip-ulates what the company is expected to provide for the community. In KML´s own environmental impact statement, beyond the 4000 people who will be re-located, about 21 000 people are likely to be affected by the Trident project.126 Given both the controversies in Zambia

surrounding the project and the high number of people both affected and to be relocated, it is important that the Council on Ethics investigates whether the Trident project is in line with the ethical guidelines of the Norwegian Government Pension Fund Global.


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Box 17 Zambia Extractive Industries Project (ZEIP)

Caritas Zambia working with local mining communitiesThe Zambia Extractive Industries Project (ZEIP) is coordinated by Caritas Zambia, and is supported by Catholic Relief Services, Caritas Nor-way and Canadian Development and Peace. Mr Felix Ngosa, who works with the ZEIP project at Catholic Re-lief Services, explains that the overall goal of the project is for the extractive

industries in Zambia to contribute to-wards sustainable development.127 On the one hand, the focus is on building the capacity of local communities to engage on issues that affect them as a result of being located close to mining companies. On the other hand, the project also interrogates government policies and the legal framework, ad-

vocating for policies that to ensure that the Zambian people benefits from their natural resources. Caritas works on a national level with policy and legal framework issues, while the Diocese works at the local level with the affected communities.

From the Alternative Mining Indaba held in Ndola, July 2013. Photo: Edmond Kangamungazi, Caritas Zambia.

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Mrs Loveness Kamwendo, community member in Kabwela

This report has shown that the mining industry in Zambia has a number of adverse impacts on local communities and local development. Although the mines are slowly improving in terms of their corporate social responsibility policies, the general feeling is that local communities are not getting their fair share of the wealth that is being extrac-ted, while they are the ones who are suffering the negative impacts of the mining operations.

The Kankoyo community has suffered over time from the emissions of sulphur dioxide from Mopani mine and the constant danger of contamin-ation of their drinking water. Mopani is promising that the pollution caused by sulphur dioxide will end in 2014 as they will be able to capture 97% of emissions. However, due to the acid leaching technique that Mopani em-ploys, the Kankoyo community cannot be guaranteed that another spill of acid into their drinking water, as occurred in 2008, will not happen again. A tax audit from 2009 revealed how Mopani was avoiding taxation in Zambia, by overestimating operating costs, un-derestimating production values, and using transfer pricing, breaching the arms-length-principle. This pilot audit was supported by Norwegian authorit-ies and it is surprising that the Govern-

ment Pension Fund Global would then choose to invest in Glencore in 2011, despite evidence of tax evasion by the company. Glencore owns a majority in the Mopani mine, while First Quantum Minerals, that the Fund also has invest-ments in, owns a minority share.

In Kabwela, next to the Kansanshi mine owned by First Quantum, the community has seen their houses crack, they lack good access to water, and their road connection is so poor that access to medical services is hampered. Some of the farmers who have lost land are still waiting for compensation from Kansanshi and alternative fields to farm. A jatropha out-grower scheme was introduced by the mine, but failed and caused much frustration for the farmers involved. At Mushitala primary school, Kansanshi has improved the consultation process for new projects, and is now supporting the school with a range of new buildings.

There has been a lot of controversy surrounding the Sentinel mine that is being developed by First Quantum Minerals as part of its Trident project. A Zambian government task force estab-lished that First Quantum had not fol-lowed the proper legal procedure when obtaining the vast amount of over 500 sq. km of land needed for the project. There are also major issues relating to

the relocation of the communities that are now living on the land. One of the community groups in Musele argues that in addition to the irregularities in the land acquisition process, they fear negative environmental impacts of the new mine and that the community will not see any benefits from the invest-ments. However, this case is disputed, and others argue that the relocation plans of FQM/KLM are good, that it is the government that has not handled the matter well, and that Zambia lacks good and clear regulations regarding relocations.

Based on the findings of this report, there are adverse impacts on local com-munities surrounding the mines of Glencore and First Quantum, where the Norwegian Government Pension Fund is invested. In terms of official de-velopment assistance, the collaboration between the Norwegian and Zambian tax authorities has yielded positive res-ults. However, there is a clear contra-diction between Norwegian official de-velopment assistance on the one hand and the investments of the Fund on the other, in particular when the Fund is invested in Glencore, where its Mopani mine has been shown to use a range of techniques to avoid paying taxes to Zambia.

Conclusion and recommendations“Why would the Norwegian government invest in companies like Mopani with its poor record of environmental impacts and low tax compliance, while at the same time they are helping our government collect taxes?” – Pamela Chisanga, Country Director, ActionAid Zambia.


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Recommendations

The Council on Ethics should:

• Evaluate whether tax evasion by Mopani and the negative impacts on the Kankoyo com-munity warrants exclusion of Glencore.

• Investigate the impacts on local communities as a result of the new Trident project to see whether they are in con-tradiction with the ethical guidelines of the Fund.

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Conclusion and recommendations

1. UNDP, “Human Development Report 2013: The Rise of the South,” (New York: United Nations Devel-opment Programme, 2013).

2. World Bank, “Zambia,” http://data.worldbank.org/country/zambia. Accessed on 01.11.2013.

3. World Bank, “World Develop-ment Indicators,” http://databank.worldbank.org/data/views/re-ports/tableview.aspx. Accessed on 01.11.2013.

4. World Bank, “Foreign Direct In-vestment, Net Inflows (BoP, Current US$),” http://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD/countries/1W-ZM?display=default. Accessed on 01.11.2013.

5. UNDP, “Millennium Development Goals: Progress Report Zambia 2013,” (Lusaka: United Nations De-velopment Programme, 2013), 16.

6. Ibid., 22.

7. World Bank, “Health Expenditure, Total (% of GDP),” http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS/countries/1W-ZM?dis-play=graph. Accessed on 01.11.2013.

8. World Bank, “Prevalence of HIV, Total (% of population ages 15-49),” http://data.worldbank.org/indicator/SH.DYN.AIDS.ZS/countries/1W-ZM?display=graph. Accessed on 01.11.2013.

9. Norges Bank Investment Manage-ment, “Government Pension Fund Global,” http://www.nbim.no/en/About-us/Government-Pen-sion-Fund-Global/. Accessed on 19.11.2013.

10. Norges Bank Investment Man-agement, “Market Value,” http://www.nbim.no/en/Investments/Market-Value/. Accessed on 03.11.2013. The conversion was made on the 3rd of November 2013 using www.xe.com with a rate of 1 NOK = 0.167453 USD.

11. Aftenposten, “Her er Oljefondets plasseringer,” http://www.aftenpos-ten.no/okonomi/innland/Her-er-Oljefondets-plasseringer-5113580.html. Accessed on 03.11.2013.

12. Coucil on Ethics, “Guidelines for the Observation and Exclusion of Companies from the Government Pension Fund Global s Investment Universe,” http://www.regjerin-gen.no/en/sub/styrer-rad-utvalg/ethics_council/ethical-guidelines.html?id=425277. Accessed on 03.11.2013.

13. Norwegian Ministry of Finance, “Etikkrådet for Statens pensjonsfond utland,” http://www.regjeringen.no/nb/sub/styrer-rad-utvalg/etikkradet.html?id=434879. Ac-cessed on 19.11.2013.

14. Norges Bank Investment Manage-ment, “Holdings and Voting,” http://www.nbim.no/en/Investments/holdings-/holdings-and-voting/. Accessed on 29.10.2013.

15. Emmanuel Mutati, President of the Chamber of Mines and Chairman of Mopani Copper Mines. Inter-view, 17/9/2013.

16. First Quantum Minerals, “Kansan-shi,” http://www.first-quantum.com/Our-Business/operat-ing-mines/Kansanshi/default.aspx. Accessed on 29.10.2013.

17. First Quantum Minerals, “Press Re-lease: First Quantum Holds Ground-breaking Ceremony for Trident Project,” http://www.first-quantum.com/default.aspx?SectionId=5cc5ecae-6c48-4521-a1ad-480e593e4835&LanguageId=1&PressRelea-seId=c6f901b1 -68ee-47d6-81bd-595ed2ba6c9b. Accessed on 03.11.2013.

18. The Norwegian Ministry of Foreign Affairs and the Government of the Republic of Zambia, “Agreement Regarding Development Coopera-tion Concerning Specialized Large Taxpayer Administration in Zam-bia,” (2011), 2.

19. Torfinn Arntsen, Minister Councel-lor, Norwegian Embassy. Interview, 18/9/2013.

20. Gilbert Chinyama Kalyandu, Fin-ancial Quality Controller, Norwe-gian Embassy in Lusaka. Interview, 18/9/2013, The Norwegian Min-istry of Foreign Affairs and the Government of the Republic of Zambia, “Agreement Regarding De-velopment Cooperation Concerning Specialized Large Taxpayer Admin-istration in Zambia.”

21. Kalyandu.

22. Ibid.

23. Joseph Nonde, Assistant Director, Mining Audit, Zambia Revenue Authority. Interview, 18/9/2013.

24. Royal Norwegian Embassy in Zambia, “Increased Tax Revenues from Norway-Zambia Cooper-ation in Tax Administration,” http://www.norway.org.zm/News_and_events/News-and-Events/Increased-tax-reven-ues-from-Norway-Zambia-co-operation-in-tax-administration/#.UnZIVJglZjE. Accessed on 26/10/2013.

NotesWho Benefits? Norwegian Investments in the Zambian Mining Industry.

36

25. Olav Lundstøl, Gaël Raballand, and Fuvya Nyirongo, ICTD Working Paper 9: Low Government Revenue from the Mining Sector in Zambia and Tanzania: Fiscal Design, Tech-nical Capacity or Political Will? (Brighton: Institute of Development Studies, April 2013), 12-13.

26. Alastair Fraser and John Lungu, For Whom the Windfalls? Winners and losers in the Privatisation of Zambia´s Copper Mines (Lusaka: Civil Society Trade Network of Zambia and Catholic Centre for Justice, Development and Peace 2007), 9.

27. Ibid., 2, Savior Mwambwa, Aaron Griffiths, and Andreas Kahler, A Fool´s Paradise? Zambia´s Mining Tax Regime (Lusaka: Centre for Trade Policy and Development (CTPD), 2010), 5.

28. , A Fool´s Paradise? Zambia´s Min-ing Tax Regime, 5.

29. Fraser and Lungu, For Whom the Windfalls? Winners and losers in the Privatisation of Zambia´s Cop-per Mines, 3.

30. Ibid., 4.

31. Mwambwa, Griffiths, and Kahler, A Fool´s Paradise? Zambia´s Mining Tax Regime, 7.

32. Mutati.

33. Edward Goma, Acting Director, Centre for Trade Policy and Devel-opment. Interview, 30.09.2013.

34. Lundstøl, Raballand, and Nyirongo, ICTD Working Paper 9: Low Gov-ernment Revenue from the Mining Sector in Zambia and Tanzania: Fiscal Design, Technical Capacity or Political Will? , 28, 32.

35. ZEITI, “A Brief on Setting Imple-mentation Objectives for ZEITI for the Period 2014-2016,” (Lusaka: ZEITI Secretariat, 2013), 11.

36. Lundstøl, Raballand, and Nyirongo, ICTD Working Paper 9: Low Gov-ernment Revenue from the Mining Sector in Zambia and Tanzania: Fiscal Design, Technical Capacity or Political Will? , 28.

37. ZEITI, “A Brief on Setting Imple-mentation Objectives for ZEITI for the Period 2014-2016,” 12.

38. Ibid.

39. Hart Nurse Ltd and Baker Tilly Meralis, “Zambia Extractive Industry Transparency Initiative (ZEITI) Final Reconciliation Re-port,” (Lusaka: Hart Group, 2013), 55.

40. Nonde.

41. Lundstøl, Raballand, and Nyirongo, ICTD Working Paper 9: Low Gov-ernment Revenue from the Mining Sector in Zambia and Tanzania: Fiscal Design, Technical Capacity or Political Will? , 31.

42. Nonde.

43. Goma.

44. Ibid.

45. Kryticous Patrick Nshindano, Economic Justice Program Officer, ActionAid Zambia. Interview, 17/9/2013.

46. Financial Times, “Zambia cracks down on miners over tax,” http://www.ft.com/intl/cms/s/0/5bf-bd716-afe0-11e2-acf9-00144fe-abdc0.html#axzz2hgAXVyBd. Accessed on 01.11.2013.

47. EITI, “Zambia,” www.eiti.org/Zam-bia. Accessed on 03.11.2013.

48. Siforiano S. Banda, Head of ZEITI Secretariat. Interview, 17/9/2013.

49. Ian Mwiinga, Project Communic-ations Officer, ZEITI Secretariat. Interview, 17/9/2013, Banda.

50. Mwiinga.

51. Edmond Kangamungazi, Coordin-ator of the Economic and Environ-mental Justice Program at Caritas Zambia. Discussion, 18.11.2013.

52. ZEITI, “A Brief on Setting Imple-mentation Objectives for ZEITI for the Period 2014-2016,” 7.

53. Francis Kaunda, Selling the Family Silver: The Zambian Copper Mines Story (Durban, KwaZulu-Natal: Interpak Books, 2002), 111,116, First Quantum, “Nkana and Mu-fulira Assets Transferred to Mopani Copper Mines Plc.,” http://www.infomine.com/index/pr/Pa039315.PDF. Accessed on 25.10.2013.

54. Francis Kaunda, Selling the Family Silver: The Zambian Copper Mines Story (Durban, KwaZulu-Natal: Interpak Books, 2002), 111,116, First Quantum, “Nkana and Mu-fulira Assets Transferred to Mopani Copper Mines Plc.,” http://www.infomine.com/index/pr/Pa039315.PDF. Accessed on 25.10.2013.

55. Mutati.

56. Using an exchange rate of 1NOK-=0.167USD.

57. Norges Bank Investment Manage-ment, “Holdings and Voting.”


59. Pollution in the Copperbelt Province of Zambia: Case Study of Kankoyo, (CTPD and Counter Balance, 2012), 10.

60. See the documentary by Alice Odiot and Audrey Gallet, “Zambia: Good Copper, Bad Copper,” (France: 2011).

61. Pollution in the Copperbelt Province of Zambia: Case Study of Kankoyo, 8.

62. Ibid.

63. Ibid.

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Notes

64. Mutati.

65. Pepino Musakalu, Member of Green and Justice Organisation. Interview, 21.09.2013.

66. Charles K. Mulila, Development Education Community Project (DECOP) Coordinator. Interview, 19/9/2013.

67. Mutati.

68. Ibid.

69. Zebbies Mumba, Human Rights Activist in Mufulira. Interview, 19/9/2013.

70. Mutati.

71. Ibid.

72. Development Education Com-munity Project (DECOP) Coordin-ator Charles K. Mulila, Interview, 19/9/2013.

73. Mwambwa, Griffiths, and Kahler, A Fool´s Paradise? Zambia´s Mining Tax Regime, 5.

74. Goma.

75. Jan Isaksen, Former Country Economist at the Norwegian Em-bassy in Lusaka, currently Senior Researcher at Christian Michelsen Institute. Interview, 29/10/2013.

76. Grant Thornton and Econ, Pilot Audit Report- Mopani Copper Mines Plc (Lusaka: Zambia Rev-enue Authorities, 2010), CTPD, “Press Folder: Specific Instance regarding Glencore International AG and First Quantum Minerals Ltd. and their alleged violations of the OCED guidelines for multinational enterprises via the activities of Mo-pani Copper Mines Plc. in Zambia,” (Lusaka: SHERPA, Déclaration de Berne, CTPD, Mining Watch, LÉntraide Missionaire, 2011), 5.

77. Grant Thornton and Econ, Pilot Audit Report- Mopani Copper Mines Plc (Lusaka: Zambia Rev-enue Authorities, 2010), CTPD, “Press Folder: Specific Instance regarding Glencore International AG and First Quantum Minerals Ltd. and their alleged violations of the OCED guidelines for multina-tional enterprises via the activities of Mopani Copper Mines Plc. in Zambia,” 5.

78. Grant Thornton and Econ, Pilot Audit Report- Mopani Copper Mines Plc, 11.

79. Isaksen.

80. Khadija Sharife, Tax Us if You Can: Why Africa Should Stand Up for Tax Justice (Nairobi: Tax Justice Network - Africa, 2011), 11, 66.

81. The organisations filing the com-plaint included Centre for Trade Policy and Development (CTPD), Sherpa, The Berne Declaration, LÉntraide Missionnaire and Min-ingWatch Canada. The complaint can be found here: http://oecd-watch.org/cases/Case_208/925/at_download/file.

82. OECD National Contact Point of Switzerland, “Final Statement: Specific Instance Regarding Taxation Policy by Mopani Copper Mines Plc. and Glencore International AG and First Quantum Minerals Ltd. in Zambia,” OECD, http://oecdwatch.org/cases/Case_208/1195/at_down-load/file. Accessed on 27.10.2013.

83. European Investement Bank, “What is the EIB?,” http://www.eib.org/about/index.htm. Accessed on 27.10.2013, European Invest-ment Bank, “Sub-Saharan Africa, Caribbean and Pacific,” European Investment Bank, http://www.eib.org/projects/regions/acp/index.htm. Accessed on 27.10.2013.

84. European Investment Bank, “Mo-pani Copper Project,” http://www.eib.org/infocentre/press/news/topical_briefs/2011-may-01/mo-pani-copper-project.htm. Accessed on 27.10.2013.

85. Anne-Sophie Simpere, The Mo-pani Copper Mine, Zambia: How European Development Money Has Fed a Mining Scandal (Brussels: Counter Balance: Challenging the EIB, 2010), 18.

86. Ibid., 12,19.

87. European Investment Bank, “Mo-pani Copper Project.”

88. Norges Bank Investment Man-agement, “Holdings and Voting,” (search under fixed income).

89. GlencoreXstrata, “At a Glance,” http://www.glencorexstrata.com/about-us/at-a-glance/. Accessed on 28.10.2013.

90. CTPD, “Press Folder: Specific Instance regarding Glencore Inter-national AG and First Quantum Minerals Ltd. and their alleged violations of the OCED guidelines for multinational enterprises via the activities of Mopani Copper Mines Plc. in Zambia.”, Public Eye Awards, “Glencore,” http://www.publiceye.ch/en/hall-of-shame/glencore/. Accessed on 28.10.2013.



93. Norges Bank Investment Man-agement, “Holdings List as per 31 December 2011,” http://www.nbim.no/Global/Documents/Hold-ings/2011%20EQ_holdings_SPU.pdf. Accessed on 03.11.2013.


38

94. Cory Wanless et al., Can the OECD Guidelines Protect Human RIghts on the Ground? A Case Study: The Evictions at Mufulira byt First Quantum Minerals/Mo-pani Copper Mines (Toronto: The Umuchinshi Initiative, University of Toronto, 2007), OECD Watch, “Oxfam Canada vs. First Quantum Mining,” http://oecdwatch.org/cases-fr/Case_19/?searchterm-=FIRST%20QUANTUM. Accessed on 28.10.2013.

95. First Quantum Minerals, “Kansan-shi.”



98. Lubelenga Wisamba, Head teacher at Kabwela Community School. Interview, 23/9/2013.

99. Collins Kaumba, Teacher at Kab-wela School. Interview, 23/9/2013.

100. Wisamba.

101. Ibid.

102. Pamela Munkinyi, Deputy Head of Mushitala primary school. Inter-view, 24/9/2013.

103. Felix Ngosa and James Van Alstine, Seeking Benefits and Avoiding Conflicts: A Community-Company Assessment of Copper Mining in Solwezi, Zambia (Lusaka: LSE, BCS, Catholic Relief Services and University of Leeds, 2011).

104. Richard Banda, Project Officer at the Catholic Diocese of Solwezi. Interview, 21/9/2013.

105. First Quantum Minerals, “Over-view,” http://www.first-quantum.com/Our-Company/overview/de-fault.aspx. Accessed on 28.10.2013.



108. First Quantum Minerals, “Sentinel: Introduction,” http://www.first-quantum.com/Careers/our-loca-tions/zambia/Sentinel/Introduc-tion/default.aspx. Accessed on 31.10.2013.

109. Lusaka Times, “Issuance of Envir-onmental Protection Order to First Quantum Minerals,” http://www.lusakatimes.com/2013/06/20/issuance-of-environmental-protec-tion-order-to-first-quantum-min-erals/. Accessed on 31.10.2013.

110. Lusaka Times, “Huge land acquisi-tion must be approved by President Luo,” http://www.lusakatimes.com/2013/02/16/huge-land-acquis-ition-must-be-approved-by-presid-ent-luo/. Accessed on 31.10.2013.

111. The Times of Zambia, “Kalum-bila Mine Land Irregularly Ac-quired,” http://allafrica.com/stor-ies/201306210441.html?viewall=1. Accessed on 31.10.2013.

112. Times of Zambia, “A Glimpse Into KML Resettlement Pack-age,” http://allafrica.com/stor-ies/201310050077.html?viewall=1. Accessed on 01.11.2013.

113. The Times of Zambia, “ZEMA Delays Worry Kalumbila Mine,” http://www.times.co.zm/?p=31848. Accessed on 31.10.2013, Zambia Daily Mail, “105 Farmers to Profit from Kalumbila Mine Project,” http://www.daily-mail.co.zm/business/22186. Accessed on 31.10.2013.

114. James Mashimango, Secretary to the Musele Task Force. Interview, 14.10.2013.

115. Banda, Pamela Chisanga, Country Director of ActionAid Zambia. Interview, 17/9/2013, Mashimango.

116. Banda.

117. Chisanga.

118. Lusaka Times, “You Can t Have My Land -Chief Musele Tells First Quantum Minerals,” http://www.lusakatimes.com/2011/03/17/land-chief-musele-tells-quantum-miner-als/. Accessed on 01.11.2013.

119. A tailings dam contains the waste from the mine.

120. Chisanga.

121. Mashimango.

122. Banda.

123. Felix Ngosa, Senior Project Officer for Peace Building and Governance at Catholic Relief Services. Inter-view, 21/9/2013.

124. Garth Lappeman, Resettlement and Community Engagement Manager at Kalumbila Minerals Limited. Interview, 12/11/2013.

125. Ibid.

126. Coastal & Environmental Services, “Final Environmental Impact State-ment for the Trident Copper, Nickel Project, Zambia,” (Grahamstown: CES, February 2011), 130.

127. Ngosa.

39

Notes

Aftenposten. “Her er Oljefondets plas-seringer.” http://www.aftenposten.no/okonomi/innland/Her-er-Oljefondets-plasseringer-5113580.html. Accessed 03.11.2013.

Arntsen, Torfinn, Minister Councel-lor, Norwegian Embassy. Interview, 18/9/2013.

Banda, Richard, Project Officer at the Catholic Diocese of Solwezi. Interview, 21/9/2013.

Banda, Siforiano S., Head of ZEITI Secretariat. Interview, 17/9/2013.

Charles K. Mulila, Development Edu-cation Community Project (DECOP) Coordinator, Interview, 19/9/2013.

Chisanga, Pamela, Country Director of ActionAid Zambia. Interview, 17/9/2013.

Coastal & Environmental Services. “Final Environmental Impact Statement for the Trident Copper, Nickel Project, Zambia.” Grahamstown: CES, Febru-ary 2011.

Community Member in Kabwela, Interview, 23/9/2913.

Coucil on Ethics. “Guidelines for the Observation and Exclusion of Com-

panies from the Government Pension Fund Global’s Investment Universe.” http://www.regjeringen.no/en/sub/styrer-rad-utvalg/ethics_council/ethical-guidelines.html?id=425277. Accessed 03.11.2013.

CTPD. “Press Folder: Specific Instance regarding Glencore International AG and First Quantum Minerals Ltd. and their alleged violations of the OCED guidelines for multinational enterprises via the activities of Mopani Copper Mines Plc. in Zambia.” Lu-saka: SHERPA, Déclaration de Berne, CTPD, Mining Watch, LÉntraide Missionaire, 2011.

Arntsen, Torfinn, Minister Councel-lor, Norwegian Embassy. Interview, 18/9/2013.

Banda, Richard, Project Officer at the Catholic Diocese of Solwezi. Interview, 21/9/2013.

Banda, Siforiano S., Head of ZEITI Secretariat. Interview, 17/9/2013.

Chisanga, Pamela, Country Director of ActionAid Zambia. Interview, 17/9/2013.

Goma, Edward, Acting Director, Centre for Trade Policy and Develop-ment. Interview, 30.09.2013.

Isaksen, Jan, Former Country Eco-nomist at the Norwegian Embassy in Lusaka, Interview, 29/10/2013.

Kalyandu, Gilbert Chinyama, Financial Quality Controller, Norwegian Em-bassy in Lusaka. Interview, 18/9/2013.

Kaumba, Collins, Teacher at Kabwela School. Interview, 23/9/2013.

Lappeman, Garth, Resettlement and Community Engagement Manager at Kalumbila Minerals Limited. Inter-view, 12/11/2013.

Mashimango, James, Secretary to the Musele Task Force. Interview, 14.10.2013.

Mulila, Charles K., Development Edu-cation Community Project (DECOP) Coordinator. Interview, 19/9/2013.

Mumba, Zebbies, Human Rights Act-ivist in Mufulira. Interview, 19/9/2013.

Munkinyi, Pamela, Deputy Head of Mushitala primary school. Interview, 24/9/2013.

Musakalu, Pepino, Member of Green and Justice Organisation. Interview, 21.09.2013.

Mutati, Emmanuel, President of the Chamber of Mines and Chairman of Mopani Copper Mines. Interview, 17/9/2013.

Mwiinga, Ian, Project Communica-tions Officer, ZEITI Secretariat. Inter-view, 17/9/2013.

Ngosa, Felix, Manager for the Zambia Extractive Industry Project (ZEIP) and Senior Project Officer for Peace Build-ing and Governance at Catholic Relief Services. . Interview, 21/9/2013.

Nonde, Joseph, Assistant Director, Mining Audit, Zambia Revenue Au-thority. Interview, 18/9/2013.

Nshindano, Patrick, Economic Justice Program, ActionAid Zambia, Inter-view, 17/9/2013.

Wisamba, Lubelenga, Headteacher at Kabwela Community School. Inter-view, 23/9/2013.

List of interviews conducted

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40

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42

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