27 Nov 2013

Natural resources are always a God given endowment to a country, but their prudent management remains the domain of human beings.

Success or lack thereof, in managing natural resources have overtime led to chaos that often result in governments being overthrown, or at the extreme end, people killing each other over control of such.

Botswana sits on the world’s most sought after stone, the diamond, and so far remains one of the enviable stories of managing such a potentially conflict-brewing commodity. Efforts to prevent conflict within the then infant nation started just a year after independence with the passing of the Mineral Rights in Tribal Territories Act, a move that saw seven Tribes [Bakwena, Bangwato, Bangwaketse, Batawana, Barolong, Bakgatla and Balete] surrendering their mineral rights to the new republic.

“This was an absolutely fantastic starting point for a new country where all eggs had to be put in one national basket for the benefit of all,” Attorney General Dr Athalia Molokomme noted in an interview.

The uniform agreement with each of the dikgosi of the seven tribes was such that all the rights, titles and interests of the merafe in minerals were now transferred to the state without compensation. In this context “mineral rights” was confined to mean rights to prospect, search for, win or appropriate minerals, while the term “mineral” meant any constituent of the crust of the earth including diamonds, oil and oil shale but did not include soil or subsoil, sand, sandstone, gravel.

Mineral also excluded salt or clay reasonably required by tribe members for their pastoral, agricultural or domestic purposes. Following the foundation laid by ceding mineral rights to the state, legislators then enacted the Mines and Minerals Act which among others dealt with ownership of minerals and acquiring their rights, prospecting licences, mining leases, mineral concessions and surface rights, special rights plus penalties and offences.

The act bars non-citizens and individuals who have stayed in the country for less than four years from holding mineral concessions while it also prohibits companies that do not fully operate from Botswana (domicilium citandi executandi) to hold such. When purchasing, constructing and installing facilities, reads part of the act, the holder of every mineral concession shall give preference to the maximum extent possible to materials and products made in Botswana.

This also applies to service agencies located in Botswana and owned by citizens while he or she shall in all phases of his operations give preference in employment to Batswana. A mineral concession holder is also bound by the act to conduct training programmes in consultation with government for the benefit of employees so that such employees may qualify for advancement.

This is the act that empowers the President of Botswana, through Section 65 (1) to compulsorily acquire land that is required to secure the development or utilisation of mineral resources. Because now a legal case had been made to regulate mining in Botswana, government then had a duty to ensure that every thebe accrued from its minerals was accounted for, hence the Mineral Rights Tax Act which detailed the charge of mineral rights tax and rates, administration and the regulations thereof.

Since its inception, every person who held rights to any minerals was expected to pay tax each year to government.

As the world’s biggest diamond producer by value, Botswana also put in place the Diamond Cutting Act that details issues of control of diamond cutting, acquisition of rough or uncut diamonds, export, sale, delivery or disposal of unpolished diamonds, records of diamonds handled by employees and powers of certain persons to enter upon licensed premises. The act specifies licences that may be issued among them a diamond cutter’s licence which entitles the holder to carry on diamond cutting for purposes of business or trade.

There is also a diamond research licence which entitles the holder to conduct research into the physical properties of diamonds, the uses to which diamonds can be put and cognate matters, but shall not entitle the licensee to carry on diamond cutting for purposes of business.

Another license can be given to a diamond toolmaker who shall be entitled to set rough or uncut diamonds, not suitable for polishing, in tools or implements, or to crush or alter such diamonds for that purpose or for purposes of trade. Every licensee, as per Section 24 (1) of the act shall keep a true and correct daily record, in the form and manner as may be prescribed, of all diamonds handed to and returned by each of his employees.

While the various acts operate as yardsticks in mineral exploration in Botswana, there are other existing side legal documents that also give teeth to the overarching principles. Between government and De Beers there is the Master Agreement which deals with ownership and shareholding issues of Debswana Mining Company while the latest Sales Agreement deals with the manner in which the diamond mining produce is sold.

“The foundation had long been laid by our leaders post-independence, that is why we do not have conflicts around our natural resources,” summed Dr Molokomme in an exclusive interview. ENDS