93695 Ethiopia Extractive Industries Forum: Ethiopia’s Growth and Transformation and Its Extractive Industries Sector October 7 and 8, 2014, Hilton Hotel, Addis Ababa Forum Report Disclaimer: This report presents the main points and conclusions of the presentations, speeches and discussions from the Ethiopia Extractive Industries Forum held in Addis Ababa October 7–8, 2014.The report does not contain verbatim all that was said during the two days of the forum. The findings, interpretations, and conclusions expressed in this report do not necessarily reflect the views of the International Bank for Reconstruction and Development / The World Bank Group and its affiliated organizations or the Executive Directors of The World Bank Group or the governments they represent; Foreign Affairs, Trade and Development Canada (DFATD); the Government of Australia; the U.K. Department for International Development (DFID); the United Nations Development Programme (UNDP); and the African Minerals Development Center (AMDC). They do not guarantee the accuracy of the data included in this work. 2 TABLE OF CONTENTS I. Abbreviations ......................................................................................................................................4 II. Introduction .......................................................................................................................................4 III. Highlights ..........................................................................................................................................5 IV. Speech Highlights .............................................................................................................................6 V. Summary of Panel discussions ....................................................................................................8 1. Ethiopia Extractive Industries Sector: State of Affairs .................................................................... 8 2. Ethiopia’s Artisanal Mining Sector ........................................................................................................10 3. Private Sector Views: Investing in the Extractive Industries in Ethiopia................................12 4. Transparency and Good Governance in the Extractive Industries in Ethiopia: The Extractive Industries Transparency Initiative (EITI) ..........................................................................13 5. Balancing Stakeholders’ Interests and Managing Expectations .................................................14 6. The Africa Mining Vision: Vision, Mission, and Implementation ................................................16 7. Sharing and Management of Extractive Industries Revenue .......................................................16 8. International Good Practices in Geodata Management ..................................................................18 9. Sharing Good Practices for Landscape-Level Planning of National Resource Management ....................................................................................................................................................................................20 10. Looking Ahead: How Can Ethiopia’s Oil and Mineral Extraction Contribute to Sustainable Development ................................................................................................................................23 V. Closing Note: A Motivational Ethiopian Story ...................................................................... 24 VI. Annexes ............................................................................................................................................ 26 1. Annex 1: Forum Agenda ..............................................................................................................................26 2. Annex 2: List of participants ......................................................................................................................29 3. Annex 3: Media Monitoring Report .........................................................................................................35 3 I. ABBREVIATIONS AMDC African Minerals Development Center AMV Africa Mining Vision ASM Artisanal and Small-scale Mining CSO Civil Society Organization CSR Corporate Social Responsibility DFATD Department of Foreign Affairs, Trade and Development (Canada) DFID Department for International Development (UK) EITI Extractive Industries Transparency Initiative FV Financial Valuation GDP Gross Domestic Product GMIS Geological Management Information System HIV/AIDS Human Immunodeficiency Virus / Acquired Immune Deficiency Syndrome IFC International Finance Corporation kWh Kilowatt-Hour LSM Large Scale Mining NRM Natural Resource Management UN United Nations UNDP United Nations Development Programme WWF World Wide Fund for Nature II. INTRODUCTION The 2014 Ethiopia Extractive Industries Forum was a joint effort between the major development partners supporting or interested in supporting Ethiopia’s extractive industries sector: the World Bank Group; the Australian government; the Department of Foreign Affairs, Trade and Development Canada (DFATD); the UK Department for International Development (DFID); the United Nations Development Programme (UNDP); and the African Minerals Development Center (AMDC). The objective of the Ethiopia Extractive Industries Forum was twofold: first, to raise awareness about Ethiopia’s extractive industries sector’s opportunities and challenges, as well as to share good practices for the sustainable management of the oil and mining sector; and second, to launch the study “Strategic Assessment of the Ethiopian Mineral Sector,”1 which was jointly published by the Ministry of Mines, the 1 The multidonor funded study “Strategic Assessment of the Ethiopian Mineral Sector” represents the first comprehensive assessment of the Ethiopian mineral sector and also helps identify potential areas of support by development partners. It was finalized in mid-2014 and was prepared by Swedish Geological AB, IntierraRMG, and IRIS Consulting, under the direction of the World Bank Group. The study was supported by the Australian government; the Department of Foreign Affairs, Trade and Development Canada (DFATD); the UK Department for International Development (DFID); and the International Finance 4 World Bank Group, the Australian government, DFATD, and DFID. In addition, the forum also provided an opportunity for stakeholder dialogue and interaction. A broad-based representation of sector stakeholders attended the forum, comprising about 120 participants from industry (both large and small scale), government (the Ministry of Mines and a selection of other relevant ministries), development partners, and civil society. The forum was also widely covered by the media (see annex 3 for an overview of media coverage). The detailed agenda of the forum can be found in annex 1. III. HIGHLIGHTS Ethiopia’s geology shows potential for long-term mineral Aerial view of Mount Dallol development. Several large projects are under development, and the country already has an extensive and unique artisanal mining sector; however, Ethiopia’s potential as a mineral-producing country still remains largely unexplored. The forum’s panel discussions addressed critical issues for the development of the sector. The many lively © Yara Dallol BV discussions and presentations at the forum highlighted once more that, if well managed and well supported, Ethiopia’s oil and mineral sector (both large and small scale) has the potential to make a difference in the country’s economic development and to contribute to its growth and transformation plans. Some of the major points arising from the forum’s discussions follow: - This promising sector can leverage the lessons from other resource-rich economies. The Ethiopian extractive industries sector is a promising one, and Ethiopia has clear comparative advantages that need to be the focus of the strategy for its development. Most of the opportunities remain largely untapped and unexplored; the sector is still in its infancy. Ethiopia is in a privileged position because it can learn from the past failures and other lessons garnered from resource-rich countries. - The short- and long-term perspectives need to be balanced. The extractive industries sector requires a long-term perspective and requires time to be developed. Short-term and long-term development objectives need to be adequately managed, including resulting environmental and social impacts. Especially for the mining sector, 15 to 20 years may be needed to generate a critical mass. - The institutional and legal framework must be strengthened. The government of Ethiopia is clearly committed to development of the sector and to increasing its contribution to the national economy. Strengthening the institutional and legal framework will be critical to achievement of this goal. The institutional and legal framework for the development and management of the Corporation. The study is a joint effort by the Ministry of Mines and the supporting development partners and has been fully endorsed by the ministry. The study is available online in the World Bank Group Open Knowledge Repository https://openknowledge.worldbank.org/handle/10986/20585. 5 sector has improved greatly in the past few years, but there is still room for improvement, especially related to the implementation and monitoring of policies and sectoral strategies. - Effective dialogue must be used to balance stakeholder interests. A critical and challenging balancing act must occur between the public and private sectors, communities, civil society at large, and federal, regional, and local government entities. It requires a strong facilitating role from the government and the building of trust and collaboration among all stakeholders. It will also require cross-ministerial collaboration and dialogue between different government entities to address cross-sectoral issues, including the management of environmental and social impacts, revenue management, infrastructure development, fiscal policies, trade logistics, and so on. Effective coordination with the Ministry of Finance and Economic Development, the Ethiopian Revenues and Customs Authority, the Ethiopian Roads Authority, the Ministry of Environmental Protection and Forestry, the Ethiopian Investment Agency, and others is critical. IV. SPEECH HIGHLIGHTS In his opening speech, His Excellency Ato Tolosa Shagi, Minister, Ministry of Mines, highlighted that the “Strategic Assessment of the Ethiopian Mineral Sector” is the first comprehensive assessment of the Ethiopian mineral sector to date. He laid down four major priority areas for the ministry: 1. Acquisition and management of geoscience data 2. Issuance of licenses and contract management 3. Management of the artisanal and small-scale mining (ASM) sector 4. Capacity building to ensure the development of local skills and knowledge. Despite the limited geoscience data available, there are good signs of the country’s geo-energy potential. The exploration activities carried out so far show good presence of gold, platinum, tantalum, phosphorus, iron, salt, potash, soda ash, gemstones, coal, geothermal energy, and natural gas. Industrial and construction minerals and rocks, some of which are very important as substitutes for imported products and for the development of mineral-based local industries, are also present. During the last four years of the Growth and Transformation Plan period (2010–14), more than US$2.3 billion in foreign currency was secured from the export of gold, tantalum, opal, marble, and other minerals produced by companies and artisanal miners. On behalf of the World Bank Group Country Director for Ethiopia, Lars Christian Moller, Lead Economist, World Bank Group, stressed the need to have a strong and effective governance system, legal and regulatory frameworks, good geoscientific information, and capable domestic human resources to develop the sector’s potential. He also stressed the importance of having realistic expectations and the long-term nature of the sector. Ethiopia, despite being in the early stages of development, especially in the large-scale mining sector, is in a privileged position in that it can learn from past failures in other mining and mineral-rich countries and work to build a robust governance and institutional framework that will create a strong basis for future development. 6 In her closing speech for the first day of the forum, Amy Baker, Counsellor to Ethiopia, Department of Foreign Affairs, Trade and Development, Canada, highlighted Canada’s partnership with Ethiopia’s mining sector, and with the Africa region at large. “Canada’s mining industry has been evolving Canada’s cooperation in the extractive sector is centered for over 100 years. In the course of this history, we have learned many lessons. on three areas: Canada’s governance of the mining sector has 1. Improving the governance of natural resources developed through trial and error and by in national, regional, and local governments pioneering new innovations. Canadian 2. Promoting local economic diversification by companies have developed state-of-the-art technologies, many of which are applicable to supporting small businesses operating in and mining enterprises in other parts of the world. around the extractive sector This kind of experience can be useful in Africa. 3. Enabling communities to maximize benefits By learning from the evolution of the mining industry around the world, African countries from the extractive sector. can avoid the kinds of mistakes that have been made elsewhere in the past.” She concluded by recalling the importance of taking into account the gender perspective in the sector’s Closing speech; Amy Baker, Counsellor to Ethiopia, DFATD development, and emphasized that even as the formal benefits of the extractive industry have been captured primarily by men, women often bear a disproportionate share of the social, economic, and environmental risks. During the second day’s opening speech, Eugene Owusu, UN Resident and Humanitarian Coordinator and UNDP Representative, stressed the importance of good governance and long-term planning as two critical elements that can help prevent the realization of the resource curse. More specifically, he highlighted the importance of the following: 1. Transparency throughout the contracting process. Efforts at transparency should not be limited to the revenue flow between companies and government, but should include public expenditure and allocation decisions at all government levels. 2. Inclusiveness of the natural resource management system throughout the whole value chain. Inclusiveness will ensure that the benefits of extraction are distributed as widely as possible. To ensure this outcome, effective anticorruption laws and strong community and civil society engagement from the outset will be critical. 3. Economic diversification. In line with Ethiopia’s Growth and Transformation Plan, strong and competitive agriculture and industrial sectors will help address extractive industries–related shocks and volatility, especially as related to prices. 4. A balanced mix of short-term and long-term strategies. It will be critical to balance short-term priorities with long-term development goals, especially those related to the management of environmental impacts and investment in high-quality health, education, and water and sanitation services. On behalf of the Australian government, Sue Moore, First Secretary of the Australian Embassy, highlighted the importance of ensuring good governance and filling the skills gaps to be able to leverage 7 the potential development benefits of the mineral sector to the fullest. She also highlighted the Australian government’s continued engagement and commitment to support Ethiopia’s mineral sector. IV. SUMMARY OF PANEL DISCUSSIONS 1. ETHIOPIA’S EXTRACTIVE INDUSTRIES SECTOR: STATE OF AFFAIRS Highlights from the presentations and discussion Investment climate - The government of Ethiopia has ambitious plans for the development of the extractive industries sector. The vision of the Ministry of Mines is “To foresee the well-developed mineral resources contribution to the foreign currency earnings increase by tenfold, and be the backbone of the industry in 2020–2023.” Currently, gold makes up close to 100 percent of the mining sector’s exports. The artisanal gold mining sector (placer gold) has been present in Ethiopia for more than 2,000 years, but the large-scale mining sector is still in its very early stages. Gemstones are also being mined artisanally, with 90 percent of value coming from opals. Industrial minerals such as cement raw materials and dimension stone are mined at the small industrial scale. - The Ministry of Mines highlighted some of the characteristics that make Ethiopia an attractive country for investors in the mining sector: o Fast-growth economy and political stability o Favorable geology for diversified mineral resources o Existence of good basic geological data already collected by the Geological Survey of Ethiopia o Possibility for investors to prospect before application for license o Attractive fiscal regime (no duties on exploration- and mining-related equipment, tax holiday, and income tax reduced to 25 percent) o Projected power supply of 10,000 MW around 2017 as the result of major mega energy projects, including the Renaissance Dam; cost of power is US$0.3/kWh, one of the cheapest in the world o Ambitious railway network in the pipeline. However, there is still room to improve the investment climate, as the Swedish Geological AB team highlighted, especially the following: o High-quality geodata with a finer scale (existing data available only at 1:250,000) and tighter line spacing using modern procedures and methodologies are necessary. o A strong and competitive local private sector will allow for local content and broader economic linkages and will prevent enclave sector development. o Distribution of the different federal, regional, and local government mandates for management of the sector must be streamlined. o Future railway network and other transport planning must take into account potential minerals commodity traffic. 8 Licensing and exploration - According to the Ministry of Mines, there are 152 potential investors registered and 250 licenses granted; 180 of these are active exploration licenses. Some 51 percent of the licenses have been granted to foreign investors, 28 percent to local firms, and 21 percent are joint ventures. - The ministry highlighted the need to diversify exploration activity. Although most exploration licenses are focused on precious and base metals, promotion of less-capital-intensive and less- risky industrial- and construction-related minerals will be important to facilitate participation of the local private sector. “The study ‘Strategic Assessment of the Economic contribution of the sector Ethiopian Mineral Sector’ being launched - As of 2012, the mining sector was responsible for at this forum lays an excellent foundation 1.5 percent of GDP and 19 percent (US$1,618 for a deeper understanding of the million) of the country’s export revenues, with opportunities and challenges provided by gold close to 100 percent of the mining sector’s Ethiopia’s mineral resources.” exports and with most of the gold coming from Opening speech; Sue Moore, First artisanal mining.2 The sector’s contribution to Secretary, Australian Embassy employment is small because the sector is small and large-scale mining is not a labor-intensive industry. Artisanal mining possibly involves up to 1 million people. The Swedish Geological AB team highlighted the need to give the sector time to develop and to set realistic expectations. Given the 15–20 years that will be needed for the mineral sector in Ethiopia to generate critical mass, the economic potential of the sector is difficult to predict in the shorter term. However, a scenario-based model that relies on mining sector data and associated forecasts for 20 years can be analyzed. The scenarios relate mainly to production of gold, potash, tantalum, and copper, the main commodities explored currently. In a probable scenario,3 the sector could generate revenue of up to US$1.5 billion and direct employment of up to 4,300 jobs by 2024. - During the discussion, the need to pay attention to industrial and construction minerals and their critical role for import substitution was stressed. The economic potential of industrial and construction materials will need to be assessed further. Challenges and ways forward - Major capacity-building challenges remain at the Licensing and Administration Directorate related not only to training, but also to the internal incentives system and high staff turnover. - The need to make sure solid and responsible investors are attracted was also highlighted by the ministry. It is important to have a strong and well-functioning Ministry of Mines with a good level of intragovernmental coordination, as well as clear and comprehensive regulations, especially related to the Model Mining Agreement, and environmental and social safeguards. 2 “Strategic Assessment of the Ethiopian Mineral Sector” (World Bank Group, Washington, DC, 2014). 3 The three potential scenarios are described as follows: In the conservative scenario, due to the many possible risks facing mineral sector investment, exploration in Ethiopia is not intensified; in the probable scenario, only a small increase in mining is realized, primarily because of the currently low number of advanced projects and rather low intensity of exploration; and in the possible scenario, strong intensification of exploration activities would be required. 9 2. ETHIOPIA’S ARTISANAL MINING SECTOR Highlights from the presentations and discussion Main features of the artisanal and small-scale mining (ASM) sector in Ethiopia Opal trader - ASM is a priority sector for the Ethiopian government. According to Ministry of Mines’ estimates, more than 1 million people are engaged in ASM activities in Ethiopia. Indirect beneficiaries are estimated to be between 5 million and 7 million people, or about 5 percent to 7 percent of the country’s total population. ASM activities are present in all regions of Ethiopia. - Ethiopia has a unique artisanal gold supply chain and buying scheme. It is a centralized system in which the ASM gold gets sold to regional branches of the National Bank of Ethiopia at a 5 percent premium on top of the daily world gold price. The artisanal gold is later sent to be refined at Argor Refinery in Switzerland and finally exported to Germany. The © PACT Ethiopia amount of gold purchased by the National Bank of Ethiopia increased from 735 kilograms in 2009 to 8,386 kilograms in 2013. - Ethiopia’s gemstone and jewelry industry has important untapped potential. Unique Ethiopian gemstones include four types of opal and green amber. - Most of the exports are rough gemstones, so the loss of potential income for the country is substantial, and there is potential to add value in-country and by local means. The economic and job creation potential of the Ethiopian gemstone and jewelry sectors could be realized if adequate support were provided. - Suggested interventions in the gemstone sector include the following: o Consider including the cutting and polishing of gemstones as part of the manufacturing sector and give it an adequate level of priority and administer it under the Ministry of Industry o Facilitate access to capital and land for the gemstone sector o Create a gemstones quality certification system and facilitate its promotion and marketing o Support professional education and recognize gemology as a professional degree o Create a gemstones stakeholder association o Make Ethiopia a regional trading center for gemstones. Institutionalization and policies - ASM is recognized as an important contributor to foreign exchange earnings in major national strategic and policy documents. Within the Ministry of Mines there is an ASM Directorate and a Gold Trade and Value Chain Directorate that are mandated to regulate and facilitate the development of the sector. The regions issue licenses for ASM activities. The government 10 facilitates the formalization of the ASM sector through the provision of extension services, including microfinance services; training to increase productivity; and environmental and safety standards, among others. Today more than 100,000 miners are organized in cooperatives, and more than 50,000 miners are organized as micro and small-scale miners. The Ethiopian government also organizes an annual ASM conference to encourage experience sharing among different regions and stakeholders. Challenges and ways forward - Accomplishments of the government of Ethiopia in the development of the ASM sector. The uniqueness of Ethiopian ASM was highlighted as well as the government’s commitment and willingness to support the development of a more productive and responsible ASM sector. The Ministry of Mines is working on improving the existing centralized buying scheme, as well as on the introduction of improved ASM technology Artisanal miner and development of ASM training manuals that will support and guide ASM communities. - Social and environmental impacts of ASM. Some of the ASM-related challenges highlighted included high mobility of miners, HIV/AIDS, land degradation, water contamination and other environmental impacts, health and safety issues with regard to the occupational health risks of working in the mines without proper training and equipment, and the alteration of the social fabric of the community. (Save the Children Ethiopia shared its experience working with communities through “Environmental Clubs,” in which ASM communities themselves take responsibility for © World Bank Group Archive preserving and taking care of the land and other natural resources of the mining sites in which they work. They emphasized the important role that regional and local governments can play and are playing in ensuring the success of this type of initiative.) - Dialogue between ASM and large-scale mining (LSM). The need to strengthen the ASM-LSM dialogue and collaboration was highlighted during the discussions, along with the need to capture the lessons learned and experiences from existing LSM projects such as Lega Dembi. - Civil society organization (CSO) coordination in the ASM sector. Nongovernmental organizations have a broader and more holistic approach to community development and do not focus only on sectoral approaches. There is a need to raise the awareness and strengthen the capacity of local CSOs to understand how the extractive sector affects the overall development of the communities. There is also a need to ensure that the more development-focused CSOs are included in the debate about natural resources management in the country. - Education. The training and organization of artisanal miners will greatly benefit both production and the social and environmental impacts of mineral extraction. 11 3. PRIVATE SECTOR VIEWS: INVESTING IN THE EXTRACTIVE INDUSTRIES IN ETHIOPIA Highlights from the presentations and discussion Investment climate - The extractive industries sector is a globally Allana Potash Afar Plc. Mining Site competitive one. Ethiopia is competing against the rest of the world for solid and responsible investors in the oil and mining sectors. All companies agreed that the investment climate and the general legal framework for the development of extractive industries in Ethiopia has improved greatly in the past few years, but there is still room for improvement. - Ethiopia’s comparative and competitive advantages. The companies highlighted the fact that even though the Ethiopian extractive sector is still in its infancy, the country has a clear comparative advantage and most of the opportunities in Ethiopia remain unexplored. In addition, Ethiopia provides some incentives that make it attractive for investment: a low corporate tax rate, accelerated depreciation, loss © Allana Potash Afar Plc. carry forward, tax-free import of equipment and material, royalty is ad valorem, re-claim of value added taxes, and no value added taxes on exports. Also, Ethiopia possesses some important enabling characteristics for investment, such as government stability since 1991, being a signatory to Multilateral Investment Guarantee Agency, and the high GDP growth rate, among others. - Promotion and facilitation of foreign investment. However, there is still the need to attract foreign capital and promote Ethiopia’s extractive sector, especially in the areas of laboratory analysis, refining, and exploration. Most of the laboratory and refinery-related activities are currently being outsourced abroad. - Government of Ethiopia’s commitment and political will. The companies highlighted the political will of the government of Ethiopia to ensure the success of mining and oil ventures, as well as its commitment to providing needed infrastructure. They also emphasized the need to support the Ministry of Mines in capacity building and resources so it can effectively accomplish its mandates and responsibilities. - Public-private collaboration for sectoral data and information exchange. The need to improve data exchange between the public and private sectors was also highlighted by some of the companies. - Government´s facilitating role. Most companies highlighted the importance of the government’s facilitating role in addressing investors’ expectations related to, among others, o Infrastructure to remote locations (roads, water, power, telecom, and the like) o Cross-ministerial coordination within the government 12 o Support for the development of a capable domestic private sector and training and certification of local skilled manpower, including in the ASM sector o Quality and safety standards o Trade logistics and streamlining of customs and import/export procedures, especially in a sector such as the extractive industries in which the operational costs per day can reach US$450,000. 4. TRANSPARENCY AND GOOD GOVERNANCE IN THE EXTRACTIVE INDUSTRIES IN ETHIOPIA: THE EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE (EITI) Highlights from the presentations and discussion Ethiopia EITI - EITI is a global, voluntary initiative that aims to strengthen governance by promoting transparency and accountability in the extractive sector. It focuses on ensuring disclosure of data and information about the country’s extractive sector, including detailed revenue figures as reported by both the companies and government agencies. Stakeholder dialogue and engagement between the government, the private sector, and civil society are critical parts of the EITI process, and EITI data will help to hold governments accountable for resource revenue management. - Ethiopia’s commitment to join EITI was officially announced in 2009. In March 2014, Ethiopia was admitted as an EITI Candidate country. EITI Ethiopia is managed by a tripartite decision- making body, the National Steering Committee, which comprises representatives from government, companies, and CSOs. The “I was pleased to learn that in March this Ethiopia EITI Implementation Secretariat year the Board approved Ethiopia to be an facilitates the work of the steering committee Extractive Industries Transparency Initiative and is responsible for the day-to-day activity of Candidate. EITI and for turning all steering committee This provides an excellent opportunity for Ethiopia to learn from and contribute to decisions into action. global best practice in ensuring the sustainable management of extractive Challenges and ways forward industries and their resources to promote - EITI law. Apart from general challenges in human development.” implementation of the EITI related to data Opening speech; Eugene Owusu, UN management and availability, the EITI Resident and Humanitarian Coordinator and Implementation Secretariat highlighted the lack UNDP Representative of a legal framework or national EITI law as a main challenge. Although not all EITI member states have such laws, having an EITI law will help provide the initiative with legal status. In other countries, such as Liberia, the parliament has played an important role in passing the EITI law and providing parliamentary policy and budget oversight in the extractive sector. - Revenue management legal framework. A clear legal framework for the management of extractive sector revenue is needed. In Ethiopia, for instance, companies’ contribution to the community development fund is mandatory, but no legal provision states the minimum amount companies should contribute. 13 - Broad involvement of government entities in EITI. Strengthening the involvement of other government entities, apart from the Ministry of Mines, in the EITI process is critical, especially the Ministry of Finance and Economic Development, the Ethiopian Revenues and Customs Authority, the National Bank of Ethiopia, the Auditor General, and the Ministry of Environmental Protection and Forestry, among others. - EITI and stakeholder dialogue. Building trust among stakeholders will be critical. Also, the need for civil society and the private sector to be actively involved in all stages of the EITI process was highlighted during the discussions. - EITI and ASM. Thinking through and clarifying how best to integrate the ASM sector into the EITI will be necessary. 5. BALANCING STAKEHOLDERS’ INTERESTS AND MANAGING EXPECTATIONS Highlights from the presentations and discussion Community development - The Ministry of Mines’ Environment Community members and Community Development Directorate was established in 2007. The directorate’s mandates include three critical areas: (1) environmental and social impact assessments, as delegated to the Ministry of Mines by the national environmental authorities; (2) occupational, health, and safety standards; and (3) community development. - With regard to its community © World Bank Group Archive development–related mandates, the directorate is responsible for coordination of company payments to the community development fund, evaluation and monitoring of community development projects, and the facilitation of conflict resolution between communities and companies, including land-use conflicts. Allocations to the community development fund are mandatory for all companies, but the amount is negotiable. The local authorities are responsible for preparing community development projects with support from the ministry. Artisanal mining - Pact Ethiopia presented some relevant figures on the ASM sector globally and in Ethiopia: o Globally: ASM’s contribution to the mining sector is substantial and rarely acknowledged: 10 percent of world output and 90 percent of mining workforce (30 million to 50 million miners in 70 countries). ASM produces 15–25 percent of all gold, 15 percent of all diamonds, and 80 percent of all colored gemstones. 14 o Ethiopia: Artisanal miners are estimated to be in the range of 500,000–1 million. Of these miners, 62.5 percent are men and 37.5 percent are women. Some 63.4 percent of miners reported doing mining throughout the year, and 43.2 percent of miners are also engaged in farming activities. Challenges and ways forward - Lack of a social management policy Worker at Allana Potash Afar Plc Mining Site for the extractive sector. - Limited capacity and resources versus an extensive mandate for the Environment and Community Development Directorate. The directorate and the resources available to fulfill its mandate will benefit from a structural revision and strengthening of its capacities. - Expectations management within © Allana Potash Afar Plc. communities. Most communities living adjacent to oil and mineral extraction sites do not know what to expect, nor do they have the capacity to assess potential impacts and benefits. A stakeholder engagement strategy that focuses on informing oil and mining communities about the sector will be important and is partially integrated into the government’s EITI work plan. - Importance of capacity building and awareness raising in mining communities on health, safety, social, and environmental impacts. Artisanal miners have minimal knowledge of health and safety issues. Diseases such as malaria, tuberculosis, and asthma strike miners, and 61.8 percent of accidents at ASM sites relate to poor mining practices. Artisanal mines also attract children as workers. Poor extraction techniques inflict huge environmental degradation such as deforestation, topsoil removal, disruption of chemicals in the soil, changed hydrology of rivers, and so forth. - Critical facilitating role of the central administration. The central administration can play a critical and leading role in addressing some of the challenges related to the impact at the local (woreda, kebele) and community levels. The extractive sector could consider learning from the experiences of other, more established sectors such as the health sector and its health extension program, which has a strong presence at all government levels. - Economic linkages and ASM ethical value chain. In addition to awareness raising and capacity building, Pact Ethiopia suggested additional interventions such as (1) building skills and professionalization of ASM workers and facilitating linkages to industrial mining projects and (2) providing incentives for responsible production in the ASM sector and considering the possibility of developing an “ethical value chain” and “ethical market” for Ethiopian gemstone sectors as has been done in other countries. 15 6. THE AFRICA MINING VISION: VISION, MISSION, AND IMPLEMENTATION Highlights from the presentation and discussion The Africa Mining Vision and the African Mineral Development Center - The Africa Mining Vision (AMV) was adopted by the African Union Heads of State and Government in 2009, and its action plan was approved in 2011. It is the continental framework for promoting mineral resource–based development and structural transformation, and it is an African conceived, owned, and operationalized framework. The African Mineral Development Center (AMDC) was launched in 2013, and its main role is to support African Union member states in implementing the AMV. Its implementing partners are the United Nations Economic Commission for Africa, the African Union Commission, the African Development Bank, and the United Nations Development Programme. Some of the focus areas include policy research and continuous advocacy and an information campaign to engage stakeholders on AMV implementation at the “In today’s global village the Ethiopian country level. The AMDC has seven major work government by itself cannot overcome the challenges facing the mining sector. areas: policy and licensing; geological and Therefore, we would like to underpin our information systems; governance and participation; co-operation with development partners ASM; linkages and diversification; human capacity and best performing countries in the and institutional capacities; and communication and areas of building up the indigenous advocacy. expertise with more emphasis in regulating the mineral and oil and gas Implementation of the AMV to date resources to properly administer - The AMDC has so far supported the development of contracts as we are dealing with non- Country Mining Visions in Ghana, Lesotho, renewable natural resources.” Mozambique, and Tanzania. The AMDC has also Opening speech; His Excellency Ato developed a guidebook for the development of Tolosa Shagi, Minister, Ministry of Country Mining Visions. The guidebook is a step-by- Mines step guide for strategic assessment, identification of instruments for policy dialogue and sector analysis, and mechanisms for conducting stakeholder consultations, along with steps for policy design and for the formulation of Country Mining Vision implementation, monitoring, and evaluation. 7. SHARING AND MANAGEMENT OF EXTRACTIVE INDUSTRIES REVENUE Highlights from the presentations and discussion Revenue management fund and fair distribution of revenues - Adam Smith International presented its EI Governance Framework in which fair management of revenues is just one piece of a holistic approach to achieve a sound governance and effective institutional framework. A fair management framework needs to be built on three pillars: fiscal and policy legislation, revenue administration, and long-term revenue management and planning. Two critical decisions should be considered along the way: o Establishing a revenue management fund. The decision will need to be made in line with broader macroeconomic considerations and the existence of alternative transfer mechanisms. 16 o Agreeing on a fair distribution of revenues. This is not an easy step and will greatly depend on the political economy of the country and the level of regional identities. There are different views: one view argues that regions hosting the extractive industries need to be compensated, while the other view argues that wealth from extractive industries should be spread among the regions, especially to the most vulnerable, developing ones. - It was obvious from the discussions that there is no clear recipe for addressing these crucial issues, and the political economy of the country will be critical; apart from technical considerations, decisions will largely be of a political nature. Taxation of mining income in Ethiopia - The International Finance Corporation presented the framework for taxing mining Ethiopian EITI delegation participating in a South- income in Ethiopia. There are three South exchange learning with Liberia different laws for income taxation in Ethiopia: a general income tax (Proc. 286/2002 as amended), a petroleum income tax (Proc. No 296/1986 as amended), and a mining income tax (Proc. No. 53/ 1993 as amended). - All income-tax-related laws need to be harmonized. There is a need for more coherence and streamlining of taxation laws. © World Bank Group Archive - Inconsistencies in the legal framework related to transfer pricing4 between the general and mining income tax laws need to be resolved: For instance, the definition of affiliated persons in the general income tax differs from that in the mining income tax laws; also, there is no clear definition of market prices for arm’s length transactions,5 and there are no documentation requirements and penalties for transfer pricing in the laws. - Capacity building and closer coordination between mining licensing authorities and national tax authorities will also be critical. Reviewing the mining income tax revenue allocation scheme in the context of international practices was also recommended. Benefit sharing and corporate social responsibility - The different dimensions of value from the extractive industries (fiscal, infrastructure, employment, social, and environmental) can be maximized through both mandatory and voluntary corporate social responsibility (CSR) frameworks. Ultimately, the decision to impose mandatory regulations rather than a voluntary framework should take into account local realities and a company’s capacity and 4 Transfer pricing occurs when two related companies trade with each other. Monitoring transfer pricing practices is important because transfer pricing manipulation can lead to significant tax revenue losses in countries hosting extractive industries companies. 5 An arm’s length transaction is a transaction in which the buyers and sellers of a product act independently and have no relationship to each other. The concept of an arm's length transaction is to ensure that both parties in the deal are acting in their own self-interest and are not subject to any pressure from the other party. 17 willingness to engage in CSR activities. There are many CSR approaches. DFATD presented four useful categories to help define a company’s approach to CSR: o Community Builder; CSR as a form of marketing. Companies contribute to charities and support employee efforts to volunteer. o Reputation Builder; CSR to build reputation capital. Companies are proactive in addressing issues and may have their own charitable foundation. o Social Enterprise; CSR as a business model. Financially sustainable initiatives are created to address social and environmental issues. o Corporate Citizen; CSR for economic and social sustainability. The company leverages corporate resources for societal benefit. - Ezana Mining Development PLC is an indigenous Ethiopian company and a subsidiary of the state- owned Endowment Fund for the Rehabilitation of Tigray (EFFORT conglomerate). As an indigenous company, it is well placed to understand local realities and directly engage with communities. The company is working closely with and supporting local artisanal miners. It has prepared a plan in collaboration with the Tigrai Regional Mining Bureau to assist local gold artisanal miners; artisanal miners are allowed to work in prospect license areas, and the support is focused on helping them delineate placer gold deposits and providing skills and technical training. 8. INTERNATIONAL GOOD PRACTICES IN GEODATA MANAGEMENT Highlights from the presentations and discussion - Ethiopia, like many other African countries, faces challenges related to data quality, limited map coverage, and human capacity. Currently, 74 percent of Ethiopia is mapped at a scale of 1:250,000, only 600 of 800 positions at the Geological Survey of Ethiopia have been filled, the number of technical staff is limited, and staff turnover is very high. - A summary of Ethiopia’s rich mineral resources was presented highlighting (1) Precambrian metamorphic-intrusive complexes: gold, platinum, niobium, tantalum, nickel, copper, iron, chrome, manganese, molybdenum, lead, zinc, kaolin, Yara Dallol Site-Magnetic Telluric Survey Crew feldspar, clay, asbestos, talc, marble, granite, and so on; (2) Mesozoic sedimentary rocks: limestone, sandstone, gypsum, clay, oil, gas, and others; (3) Cenozoic volcanic or volcanic- sedimentary rocks: lignite, opal, oil shale, laterite iron ore, bentonite, clay, perlite, diatomite, potash, halite, oil, gas, and so on; (4) rift valley minerals: geothermal resources, alkali, epithermal gold, diatomite, © Yara Dallol BV bentonite, halite, sulfur, pumice, 18 and so on; (5) oil and gas resources mainly in the Ogaden Basin. - The availability of a comprehensive geological and mineral database will allow both the public and private sectors to make informed decisions; it will provide the government with better capacity to negotiate sustainable mineral development projects; and will also lower the risks associated with investment in exploration and mine development for the private sector. - An efficient institutional structure for geodata management is critical. The AMDC is undertaking research into good practices for institutional arrangements for an efficient geological management information system (GMIS) including semi-autonomous institutional structures, independent pay scale, earmarked funding for GMIS through mining levies, and so on. - Sweden has a database of geodata from about 160 years of data collection and spends an annual budget of US$25 million on the collection of geodata (www.sgu.se). One of the critical issues to consider when building a geodata management system is to find the right balance between cost recovery and data accessibility. The cost of accessing refined and managed geodata rather than raw geodata is rather cheap, and geodata are available for free to institutes and universities to be used for research purposes. Also, there is an increasing shift in Sweden to focus on geodata collection to support sustainable spatial planning development. Geodata can be critical to inform overall land-use planning, including infrastructure development, in a holistic manner, also helping identify alternative strategic land and natural resource uses. - The Chongqing Geology, Mineral Exploration, and Development Bureau of the China cooperation program6 has a timeframe of five years (2012–17) and is located in the southern and western parts of Ethiopia (148,000 square kilometers). - Establishing a mineral resources database addresses critical objectives: Prediction of mineral resources and prospecting trends Provision of a scientific basis for researching and developing a national mineral resource strategy and social economy medium-to-long-term growth plan. Identification of the reasonable development and utilization of mineral resources to achieve the optimal exhaustion of resources Prevention of loss, waste, or destruction of mineral resources and reduction of environmental destruction and protection of the eco-environment. - During the discussion, concern was raised about potential conflicts of interest and possible preferences or advantages to partners supporting the collection of geodata who also have economic interests in mineral development projects. The Ministry of Mines and the Geological Survey of Ethiopia emphasized and clarified that cooperation projects on geodata collection and management are of a purely technical nature and do not give any preferences to specific countries or partners. 6 The memorandum of understanding is focused on the following cooperation areas: basic geological survey, mineral exploration and development, technical research, geochemical survey, geophysical exploration, remote sensing, laboratory construction, geoscientific database establishment, and personnel training. So far the China-Ethiopia cooperation project has finished a 9,000 square kilometer geological survey and geochemical survey in Negele, Moyale, and Sidamo through field geology, remote sensing, geochemistry, geophysics, and laboratory and personnel training; also, gold and copper potential blocks have been discovered. 19 9. SHARING GOOD PRACTICES FOR LANDSCAPE-LEVEL PLANNING OF NATURAL RESOURCE MANAGEMENT Opal Site © PACT Ethiopia Highlights from the presentations and discussion Oil and mining companies no longer operate in isolation; their development needs to be integrated into an overall development strategy. Challenges and framework for landscape-level planning of natural resource management (NRM) in Ethiopia IRIS Consulting presented the challenges related to landscape-level planning of NRM in Ethiopia. - Landscape planning is a complex and multidimensional issue because it is being shaped by a combination of the national legal framework, social conventions and negotiations, institutional arrangements, spiritual values, and more. - WWF added to this the issue of resource corridor development: resource corridors, although much needed, are often badly planned and coordinated, with environmental considerations only taken into account as an afterthought. - Serious environmental degradation has been happening in Ethiopia during the past decades, even without substantial development of the extractive industries, including reduction of closed high forest from 2.64 percent of the country’s area to 0.2 percent between 1973 and 1990 and continuous encroachment into national protected areas. With the development of the extractive industries, additional environmental impacts can be expected, such as land-use competition, habitat destruction, pollution, tailings and mine waste management, acid mine drainage, water- use conflicts, gas flaring, accidental oil spills, escape of certain chemical, and so on. Importance of a sustainable private sector and the assessment of cumulative impacts - Being a responsible private sector investor should be a nonnegotiable issue. A distinction needs to be made between purely responsible private sector investors and a sustainable private sector that also cares about transformational change and creates value for society through multisectoral partnerships. 20 - Assessing the cumulative impacts7 of the sector, including ASM, and having an integrated and holistic approach to spatial planning were highlighted as critical elements by both WWF and IRIS Consulting. Such planning will also include the definition of no-go areas and of certain boundaries for the development of the extractive sector, taking into account the concept of “no net loss of biodiversity.” Experience with integrated NRM in Ethiopia - Ethiopia’s Tana Sub-basin has piloted integrated water resource management (IWRM) to effectively manage the economic sector’s water needs. IWRM is a systematic process for the sustainable development, allocation, and monitoring of water resource use in the context of increasing demand and competition for water resources, and dynamic and competing social, economic, and environmental objectives. The implementation of IWRM can be summarized in four critical steps: (1) identify water-using sectors and their water demands; (2) scenario definition taking into account different possible or potential development interventions; (3) use of multicriteria analysis to identify optimal scenarios to balance economic, social, and environmental needs; and (4) draft sub-basin plans to allocate water use according to different planning scenarios. NRM legal framework in Ethiopia Drill Site - The country has a set of legal tools such as the Environmental Impact Assessment Proclamation (No. 299/2002) and related directives and manuals to guide implementation of the law. Under the current Ethiopian legal framework, all areas are open for development by extractive industries and any land could be reserved for extractive industries if it is considered the best option for the country’s development by the © Allana Potash Afar Plc. government. Ethiopia could benefit from a more robust legal framework and approach to NRM and improve, among others: The Environmental Impact Assessment Proclamation (No. 299/2002). Development of sector-specific directives to enforce the implementation and monitoring of environmental performance 7 Cumulative impacts are those that result from the successive, incremental, or combined effects of an action, project, or activity when added to other existing, planned, or reasonably anticipated future ones. For practical reasons, the identification and management of cumulative impacts are limited to those effects generally recognized as important on the basis of scientific concerns or concerns of affected communities. Multiple and successive environmental and social impacts from existing developments, combined with the potential incremental impacts resulting from proposed or anticipated future developments, may result in significant cumulative impacts that would not be expected in the case of a stand-alone development (IFC, Good Practice Handbook—Cumulative Impact Assessment and Management: Guidance for the Private Sector in Emerging Markets [Washington, DC: International Finance Corporation, 2013]). 21 The Climate Resilient Green Economy Strategy, 2011. Integration of considerations and abatement strategies related to the development of the extractive sector, including petroleum and cumulative impacts of ASM activities. Challenges to managing the extractive industry’s environmental impacts in Ethiopia - The Environment and Community Development Directorate from the Ministry of Mines highlighted critical challenges in the area of management of environmental impacts. - The extensive responsibilities and mandates of the directorate in relation to the management of environmental impacts include, among others, Reviewing environmental and social impact assessment reports of mining and petroleum exploration projects, approving the project, and issuing authorization or Potash samples from core drilling refusing implementation of the project Monitoring implementation of environmental and social impact management plans of the sector's development projects Evaluating environmental and social impact management implementation reports Evaluating resettlement action © Yara Dallol BV plans and monitoring their implementation. - Major challenges to fulfill the directorate’s mandates and responsibilities included the following: Very limited human resource capacity in the directorate, and lack of multidisciplinary professionals to ensure adequate and regular follow-up of the more than 271 mining and exploration projects Lack of any directive or guidelines that can guide the implementation of Environmental Impact Assessment Proclamation 299/2002 Lack of provisions to ensure effective management and allocation of the environmental rehabilitation fund. 22 10. LOOKING AHEAD: HOW CAN ETHIOPIA’S OIL AND MINERAL EXTRACTION CONTRIBUTE TO SUSTAINABLE DEVELOPMENT? Highlights from the presentations and discussion The role of the private sector - DFID’s presentation focused on the role of the “As highlighted in the study, if well extractive industries private sector in contributing managed and well supported, the Ethiopian mineral sector has the potential to sustainable development. One of the challenges to make a difference in the economic related to social investment activities is how to development of Ethiopia and to contribute effectively measure and quantify the impact of and to the poverty reduction agenda. This will returns on social investment. The Financial require a strong public sector, including Valuation Tool for Sustainability Investments in the regions, a responsible international the Extractives Industry8 (FV tool) tries to address and domestic private sector, and a this challenge. Quantifying the impact of social supporting role from the development investing can help better integrate sustainability partners. As the World Bank Group, we issues and spending into core financial modelling are committed to contribute to this and strengthen the business case for community process.” investment, and convey signals to investors and Opening speech; Lars Christian Moller, insurers about good environmental and social risk Lead Economist, World Bank Group management. Learning from successful approaches in other African countries - Pact Ethiopia’s presentation focused on the importance of avoiding the bad experiences of other African countries related to conflict and corruption, and leveraging the lessons and experiences of good practices in other African countries. Tackling the “resource curse” - The World Bank Group presented findings from recent research that presents new evidence that goes against the accepted wisdom of the “resource curse”:9 o Some of the world’s fastest-growing countries since 2000 have been resource-rich countries, particularly in Sub-Saharan Africa. Many low- and middle-income mineral- rich countries have experienced strong growth for a decade or longer, propelled by rapid expansion of their mineral exports and a rise in commodity prices. o Countries with long mining histories that started reform processes relatively early have benefited from substantial and positive impacts on employment. World Bank Group research shows that between 2001 and 2011, mining-dependent low- and middle-income countries posted higher average GDP growth rates and higher rates of improvement on the Human Development Index than did comparable nonmining countries. With respect 8 The FV tool is the result of a partnership that includes the International Finance Corporation’s Oil, Gas and Mining Sustainable Community Development Fund (IFC CommDev), Rio Tinto, Deloitte, and the Multilateral Investment Guarantee Agency, with support from the government of Norway. 9 Gary McMahon and Susana Moreira, “The Contribution of the Mining Sector to Socioeconomic and Human Development” (World Bank Group, Washington, DC, 2014). 23 to governance, mineral-dependent countries do not perform significantly differently from nonmining countries. o The mining sector’s total impact on socioeconomic and human development in a country is determined partially by the size and composition of the sector, partially by the amount of fiscal revenue generated and how it is used, and partially by how it contributes to overall industrialization of the country, that is, the sector’s ability to serve as an engine for growth. Local sourcing policies, well-planned infrastructure, and overall enabling business conditions are critical. - Speakers from the private sector and the Ethiopian government emphasized the need to structurally grow and improve the sector, given that it has the potential to help Ethiopia become a middle-income country, making reference to Growth and Transformation Plans 1 and 2. For this, a long-term vision will be required. One aspect emphasized by the Director General of the Geological Survey of Ethiopia, Ato Masresha G/Selassie, was the need for additional geodata, in particular airborne geophysics. He also emphasized the need to support the industrial mineral sector (limestone, marble) because it has strong potential. The private sector and the government will need to work together to accomplish this. - The AMV recognized the strong presence of domestic investors in the oil and mineral sector in Ethiopia, and wondered to what extent these domestic companies partnering with international mining companies could be a model for mining on the continent. - All participants agreed that for the sector to move forward sustainably, a clear road map for the sector will be required, which will require strong direction by the government, and commitment and alignment of all stakeholders, including the various development partners supporting the sector. 11. CLOSING NOTE: A MOTIVATIONAL ETHIOPIAN STORY "In the rural area of Welo there were these two boys, Habtamu and Ashenafi. They were troublemakers. In fact, they were creating such a stir in the local village that the Priest decided the best thing they could do was send them to the North, to Gondar, to be disciplined by the church—they were going to study the priesthood and be trained as priests. Even on the bus trip to Gondar they were causing havoc—they nearly convinced the bus driver that he had taken a wrong turn and needed to turn the bus around! When they arrived in Gondar they were assigned to a wise old priest for studies and discipline. Habtamu was determined to prove that the old priest was actually a fool! Habtamu caught a butterfly and showed it to his buddy, ‘Ashenafi…I have a great plan!’ he said. ‘I will take this butterfly to the old priest in my hands like this (cupping his hands) and I will ask the priest if the butterfly in my hands is alive or dead!? If the priest says the butterfly is dead, I will just open my hands and let it fly away… if he says the butterfly is alive – well, I will squeeze my hands together like this and show him that the butterfly is dead! Either way, the priest will be wrong and everyone will know he is a fool!’ “That afternoon they had their meeting with the priest and Habtamu was quick to make his way to the front of the group to confront the priest who was sitting on the steps of the church monastery. ‘Oh priest!’ he shouted, ‘I have a question for you.’ ‘What is it Habtamu?’ ‘Well, you see, I have in my hands a 24 butterfly… can you tell us if it is alive or dead?’ The priest paused shaking his head, ‘Habtamu,’ he said in a low voice, ‘the answer to your question is completely in your hands… If you wish the butterfly to be alive, simply let it go… if you wish it to be dead simply close your hands together and show your friends what you have done.’ “Our lives, our development, the outcome of each day, and the development of the Ethiopian extractive industries are like the butterfly… it is completely in our hands and the hands of the sector stakeholders. If we wish to produce life and freedom, we can make it happen… if we wish to stifle growth and demonstrate the failures and defeats of any day, we have that power… it is completely in your hands… what will you do with what you have?” Courtesy of the Center for Creative Leadership Midroc Gold Legadembi Mine © Ministry of Mines Archive 25 Annex 1: Forum Agenda Ethiopia Extractive Industries Forum: Ethiopia’s growth and transformation and its extractive industries sector October 7 and 8 2014, Hilton Hotel, Addis Ababa DAY 1: TUESDAY, OCTOBER 7, 2014 Ethiopia Extractive Industries Sector: State of Affairs 8.30 9.00 Arrival and Registration 9.00 9.10 Welcome and Introduction by H.E Ato Tolesa Shagi, Minister, Ministry of Mines 9.10 9.15 Opening Speech by the World Bank Group 9.15 9.35 Ethiopia Extractive Industries Sector: State of Affairs: Overview of the extractive sector in Ethiopia, and its investment opportunities. Ministry of Mines, Ato Sisay Ayalew, Director 9:35 09.55 Development potential of oil and gas in Ethiopia Ministry of Mines, Dr. Ketsela, Director 09.55 10.25 Coffee Break 10.25 11.05 Strategic Assessment of Ethiopia Mining Sector: Opportunities and Challenges Presentation of the main opportunities, risks and and recommendations of the MoM-WB-Canada-Australia-DFID joint study of the state of affairs and potential scenario’s for Ethiopia’s Mineral sector to contribute to sustainable development of the Country over the next 30 years. • Mr. HåkanTarras-Wahlberg, Managing Director, Swedish Geological AB • Mr. Sileshi Nemomissa, IRIS Consult 11.05 11.55 Panel discussion: The Artisanal Mining sector and sustainable development in Ethiopia (focus on gold and gemstones) Facilitator: Ms. Kirsten Hund, Sr Mining Specialist, World Bank Group • Ministry of Mines; Ato Tamrat Mojo, Director Artisanal Mining Directorate • Save the Children Ethiopia ; Mr Paul Kasanga, Project Director, BSG FSEG Project • Orbit Ethiopia Plc.; Ato Tewodros Sintayehu, Managing Director 11.55 12.30 Q&A 26 12.30 13.30 Lunch 13.30 14.00 Investing in the Mining Sector in Ethiopia: A Private Sector Perspective • Midroc Mining • Yara Dallol BV; Mr. Sanjay Rathore, Executive Director 14.00 14.30 Investing in Oil and Gas in Ethiopia: A Private Sector Perspective • Tullow Oil; Mr. Nick Woodall-Mason, Operations Manager • Southwest Energy (HK) Ltd, Ms. Shani Senbetta, General Manager, Government and External Relations 14.30 14.45 Q&A 14.45 15.30 Panel Discussion: Transparency and Good Governance in the Extractive Industries in Ethiopia: The EITI Initiative Facilitator: Amy Baker, Head of Development Cooperation, DFATD Panelists: • Ethiopian EITI Secretariat, Ato Merga Kenea , Head • Transparency Ethiopia; Ato. Eyasu Yimer , Vice Chair, Transparency Ethiopia Board and Member of the EEITI MSG • Kefi Minerals Ethiopia Ltd 15.30 16.00 Coffee Break 16.00 16.45 Panel Discussion: Balancing Stakeholder’s Interests and managing expectations of large scale oil and mineral development in Ethiopia (including Q&A) Facilitator: Mr. James Wakiaga, UNDP Panelists: • Ministry of Mines, Ms. Enatfenta Melaku (MoM); Director, Environment and Community Development Directorate • Allana Potash Corp, Mr. Nejib Abba Biya, Senior Vice President, Business Development • Pact Ethiopia • Agathon Consulting, Mr. Graham Lee, Director 16.45 17.00 Closing (Canadian Department of Foreign Affairs, Trade and Development) 17.00 19.00 Cocktail, hosted by the Canadian department of Foreign Affairs, Trade and development Day 2 October 8, 2014 Good Practices and Standards in Extractive Industries Governance 8.30 9.00 Arrival and Registration 9.00 9.05 Welcoming and Introduction by the United Nations 27 Mr. Eugene Owusu- UN Resident Coordinator 9.05 9.10 Speech by the Government of Australia, Ms. Sue Moore, First Secretary Australian Embassy 9.10 9.40 The Africa Mining Vision: Vision, Mission and implementation African Minerals Development Center; Mr. Valerio Bosco, Ph.D., Economic Affairs Officer, Mineral Sector Governance, (AMDC/UNECA) 09.40 10.10 Q&A 10.10 11.00 Panel Discussion: Sharing and Managing of Extractive Industries Revenue Facilitation: Mr. Lars Christian Moller, Program Leader, WB Panelists: • Adam Smith International; Ms. Catherine Ogden, Senior Manager, Extractive Industries Governance • IFC; Ms. Wollela Yesegat, Tax expert • Government of Canada; Ms. Corry van Gaal, Team Leader - Sustainable Economic Growth, Embassy of Canada • Ezana mining development PLC 11.00 11.30 Coffee Break 11.30 12.20 Panel Discussion: International Good Practices in Geo Data Management: Facilitation: Ato Hundie Melka, Geological Survey of Ethiopia Panelists: • Swedish Geological AB; Mr. HåkanTarras-Wahlberg, Managing Director • African Minerals Development Center (AMDC); Mr. Jeremy Webb, Geology and Minerals Information Systems Specialist • Nankai Mining P.L.C; Mr. Chen Dabing, Xie (Alice) Qingzhen 12.20 13.20 Panel Discussion: Oil, Mining (ASM+LSM), and the Environment: Standards and Good Practices for Landscape Level Planning of Natural Resources Management Facilitation: Mr. Stephen Danyo, Natural Resource Management Specialist, WBG Panelists: • WWF International; Mr. Jon Hobbs, Coordinator Extractive Industries • IRIS Consult; Ato. Sileshi Nemomissa • Tana Sub-Basin Organization; Ato Birlew Abebe, Head, Managing economic sector’s water needs • Ministry of Mines; Ms. Enatfenta Melaku (MoM); Director, Environment and Community Development Directorate 13.20 14.20 Lunch 14.20 15.30 Looking Ahead: How can Ethiopia’s Oil and Mineral Extraction contribute to Sustainable Development? Facilitator: Mr. Kojo Busia, Ph. D.Snr. Mineral Sector Governance Advisor African Mineral Development Centre/AMDC United Nations Economic Commission for Africa/UNECA 28 Panelists • DFID, Ms. Diana Klein, Africa Regional Conflict Advisor-Extractive Industry • PACT Ethiopia, Ms. Cassandra Chapman, Deputy Country Director • Midroc • Ministry of Mines: H.E Ato Tolesa Shagi, Minister, Ministry of Mines • Ministry of Mines; Director of Geological Services of Ethiopia • World Bank Group 15.30 15.45 Wrap up of key conference findings 15.45 16.00 Closing by H.E Ato Tolesa Shagi, Minister, Ministry of Mines, Annex 2: List of participants Ethiopia's Extractive Industries Forum October 7th and 8th, 2014 List of participants No. Full name Organization Government 1 Abebe Bedassa MoM-Ministry of Mines 2 Almaz Belayneh MoM-Ministry of Mines 3 Bacha Faji MoM-Ministry of Mines 4 Betru Haile MoM-Ministry of Mines 5 Dereje Wondyfraw MoM-Ministry of Mines 6 Dr. Ketsela Tadesse MoM-Ministry of Mines 7 Enatfenta Melaku MoM-Ministry of Mines 8 Ermias Mulugeta MoM-Ministry of Mines 9 Ethiopia Bederha MoM-Ministry of Mines 10 Girma Woldetinsae MoM-Ministry of Mines 11 Matewose Abate MoM-Ministry of Mines 12 Merga Kenea MoM-Ministry of Mines 13 Roman Abera MoM-Ministry of Mines 14 Sisay Ayalew MoM-Ministry of Mines 29 15 Sofia Mohammed MoM-Ministry of Mines 16 Tadesse Alemu MoM-Ministry of Mines 17 Tamrat Mojo MoM-Ministry of Mines 18 Tsehay Mulugeta MoM-Ministry of Mines 19 Tweledbrhan Abay MoM-Ministry of Mines 20 Akalwoled Seifu GSE-Geological Survey of Ethiopia 21 Assefa Zerihun GSE-Geological Survey of Ethiopia 22 Befekadu Oluma GSE-Geological Survey of Ethiopia 23 Dawit Mamo GSE-Geological Survey of Ethiopia 24 Hundie Melka GSE-Geological Survey of Ethiopia 25 Masresha G/Selassie GSE-Geological Survey of Ethiopia 26 Muhuadin Abdella GSE-Geological Survey of Ethiopia 27 Salahadin Ali GSE-Geological Survey of Ethiopia 28 Solomon Kebede GSE-Geological Survey of Ethiopia 29 Abraham Muluneh GSE-Geological Survey of Ethiopia 30 Fistsum Abraham MoFA-Ministry of Foreign Affairs and Economic Development 31 Fitsum Abreham MoFA-Ministry of Foreign Affairs and Economic Development 32 Mulay Weldu MoFA-Ministry of Foreign Affairs and Economic Development 33 Samson G/Mariam MoFA-Ministry of Foreign Affairs and Economic Development 34 Serkalem Eniyew MoFA-Ministry of Foreign Affairs and Economic Development 35 Fisseha Meresa Tigray Region 36 Abdulmalik Mohammed Harrari Region Mineral & Energy Office 37 Seid Ali Amhara Mines and Energy Resources Agency 38 Andargie Bekele Ethiopia Petroleum and National Gas 39 Zewdu Tadesse Oromia Water Mineral and Energy Bureau 40 Wondu A MoT-Ministry of Trade FeMSEDA- Federal Micro and Small Enterprises Development 41 Wubishet Banbil Agency 30 42 Gew Ding Gambella Region Mines Agency 43 Tefferi Waktola EMA-Ethiopian Mapping Agency 44 Getachew Alene Beninshangul Gumuz Water Mine Energy 45 Fikru Gezahegn NBE-National Bank of Ethiopia 46 Seyoum Dagne ERCA-Ethiopian Revenues and Customs Authority 47 Workeneh Kebede Ethiopian Youth Federation 48 Genet Sibany EIC-Ethiopian Investment Commission 49 Teketel Tsige Tigray Resources 50 Seyoum Gezmu ERC-Ethiopia Railway Corporation 51 Eyasu Mamo SNNPR Mines 52 Six Abrar ERA-Ethiopian Roads Authority 53 Merga Tassew EEP 54 Meharic Wonmagegu MEF-Ministry of Environment and Forest 55 Kebede Tesfaye FENAPD Development Partners AMDC / UNECA-African Mineral Development Center / United 1 Kojo Busia Nations Economic Commission for Africa AMDC / UNECA-African Mineral Development Center / United 2 Valerio Bosco Nations Economic Commission for Africa AMDC / UNECA-African Mineral Development Center / United 3 Marti Kitaw Nations Economic Commission for Africa 4 Jeremy Webb UNECA- United Nations Economic Commission for Africa 5 Bettina Wall UNDP-United Nations Development Programme 6 James Wakiaga UNDP-United Nations Development Programme 7 Afework Fekadu UNDP-United Nations Development Programme 8 Wollela Yesegat IFC-International Finance Corporation 9 Abebe Abebayehu WBG-World Bank Group 10 Lydia Mesfin WBG-World Bank Group 11 Cathere T WBG-World Bank Group 31 12 Steve Danyo WBG-World Bank Group 13 Mireia Estrada EU Delegation-European Union 14 Thomas Huyghebaert EU Delegation-European Union 15 Shewit Emmannuel DFID-Department For International Development 16 Julius Court DFID-Department For International Development 17 Diane Klaim DFID-Department For International Development 18 Emma H DFID-Department For International Development 19 Amy Baker Embassy of Canada 20 Chris Gilberth Embassy of Canada 21 Jerusakem Berhanu ECCO-Ethiopia-Canada Cooperation Office 22 Yared Fekade ECCO-Ethiopia-Canada Cooperation Office CIDA / DFATD-Canadian International Development Agency / 23 S. Assefa Department of Foreign Affairs, Trade and Development DFATD- Department of Foreign Affairs, Trade and 24 Corry Vanbarn Development DFATD-ECCO- Department of Foreign Affairs, Trade and 25 Berhanu Assefa Development-Ethiopia-Canada Cooperation Office 26 Zachary P United States Embassy 27 Helena Schradek United States Embassy 28 Yeneneh Teka US Embassy Regional Office for Eastern Africa 29 Edward Demano USAID-United States Agency for International Development 30 Monica Wisnor USAID-United States Agency for International Development 31 Endegena Ashenafi USAID-United States Agency for International Development 32 Uli Plen GIZ-Gesellschaft für Internationale Zusammenarbeit 33 Havard G Norway Embassy 34 Sanjay Verme Indian Embassy 35 Sue Moore Australian Government 36 Shewaye Deribe EWNRA- Ethio Wetlands and Natural Resources Association CSOs 32 1 Yibrah Hagos Relief Society of Tigray 2 Eyasu Yimer Transparency Ethiopia 3 Catherine Ognen Adam Smith International 4 Steve Macey Adam Smith International 5 Paul Kasanga Save the Children 6 Yared Antonio PACT 7 Cassandra Cravens PACT 8 Wondwossen Damte PANE-Poverty Action Network of Civil Society in Ethiopia 9 Abraham Tadesse EITI-Extractive Industries Transparency Initiative 10 Kibreab Abebe TI-E 11 Melaku Sebhat Redeem General 12 Zegeye Asfaw HUNDEE Oromo Grassroots Development Initiative Industry 1 Birlew Abebe Tana Sub Basin Organization 2 Senay Bisrat Richland International 3 Nick Woodall Mason Tullow Ethoipia BV 4 Melaku Beza National Mining Corporation (MIDROC) 5 Arega Yirdaw National Mining Corporation (MIDROC) 6 Girmaye Tekle National Mining Corporation (MIDROC) 7 Alemayehu T National Mining Corporation (MIDROC) 8 Graham Lee Agathon Consulting 9 Kiros Negash Ezana Mining Dvt PLC 10 Lazzare P Offspring Group 11 Sanjay Singh Rahore Yara Dallol 12 Oystem Kostol Yara Dallol 13 Sanjay Singh Rahore Yara Dallol 14 Paris Lee Agathon Consulting 33 15 Yared Berhane Ernst & Young 16 Stuart Hutchson Stratex East Africa 17 Hiwot Wolde Stratex East Africa 18 David Hall Stratex East Africa 19 Sileshi Nemomissa IRIS Consult PLC 20 Xie Qingzhen Nankaimznhg PLC 21 Atalkilt Araya Ezana Mining Dvt PLC 22 Yonas Bekele G&B Central African Resources Limited 23 Shani Senbetta Southwest Energy 24 Tewodros Sintayehu Orbit Ethiopia PLC 25 Alganesh Hagos Cowloon Gem PLC 26 Dr. Dandena Tolessa PS Mining & TGB 27 Begasew Abate ORBIT Ethiopia PLC 28 Dr. Deksissa Debele ASCOM Mining Ethiopia 29 Ketema Fufa ADBC 30 H. Tarras-Waglberg Swedish Geological AB 31 Kassaye Derseh Kefi Minerals 32 Chen Dabiny Nankaimznhg PLC 33 Habtu Hagos Afar Salt Production S.C 34 Mastewal Mekonnen Benzu Gold Mining Ethiopia PLC Others 1 Lensa Bekele ORIVO 2 Tewodros Tilahun FIDO 3 Worede Sahilu GSLD 4 Abayneh Tilahun EPDE 34 Annex 3: Media Monitoring Report Media Monitoring Report The Ethiopia Extractive Industries Forum I. Introduction The Ethiopia Extractive Industries Forum was held on October 7 and 8 at the Hilton Hotel in Addis Ababa, Ethiopia. Organized in collaboration with the Ministry of Mines of the Federal Democratic Republic of Ethiopia (FDRE), with the support of United Nations Development Programme (UNDP); the Department of Foreign Affairs, Trade and Development Canada (DFATD); the Australian government; the UK Department for International Development (DFID); and the African Minerals Development Centre (AMDC), the forum brought together more than 115 participants. II. Summary of content coverage The media in its coverage of the Ethiopia Extractive Industries Forum indicated that the forum convened experts to maximize the contribution of extractive industries to Ethiopia’s sustainable development. The need to raise awareness of the contribution of the mining sector was noted because Ethiopia is not much known in the mining world, except the small-scale gold, tantalum, and gemstone exports. The study unveiled at the opening of the forum, “Strategic Assessment of the Ethiopian Mineral Sector,” was also given attention, stressing the US$5 billion potential of Ethiopia’s mining sector. Media coverage also included an interview with Kirsten Hund, Senior Mining Specialist at the World Bank Group, which highlighted the need to ensure that local communities and civil society’s interests are well articulated in the development of the sector’s policies and strategies, as well as in mining and exploration projects. III. Media presence About 20 media representatives attended the Ethiopia Extractive Industries Forum, representing the following 14 media members. 69 percent of media attendees were local media members (4 national media members out of 11 local ones), while the remaining 31 percent were regional or subregional media members represented in Ethiopia. The majority of represented media members belonged the press (75 percent) while the remainder was television and radio agents. 35 # Press name Category 1 Ethiopian News Agency (ENA) Local (National) 2 Ethiopian Press Agency (EPA) Local (National) 3 ENJU Local (National) 4 Business Times Regional / Sub Regional 5 The Reporter Regional / Sub Regional 6 Fortune Regional / Sub Regional 7 The Daily Monitor Regional / Sub Regional 8 Bisrat FM 101.1 Local 9 Sendek Newspaper Local 10 Anadolu Agency Regional / Sub Regional 11 Oromia TV Local 12 Ethio Chanel Local 13 Yegna Press Local 14 Afro 105.3 FM Local 15 Addis Admas Local 16 PFMA Local IV. Media coverage The World Bank Group Press Release presented the forum was as follows: http://www.worldbank.org/en/news/press-release/2014/10/07/ethiopia-extractive-industries-forum- convenes-experts-to-maximize-the-contribution-of-extractive-industries-to-ethiopias-sustainable- development 36 ONLINE COVERAGE The forum was covered by various local, regional, and international news websites (13 links below). It was also mentioned on Twitter and LinkedIn. Source: www.thereporterethiopia.com. Link to coverage: http://www.thereporterethiopia.com/index.php/in-depth/indepth-business-and- economy/item/2604-enhancing-the-contribution-of-the-mining-sector. 37 Source: www.haberler.com. Source: www.allafrica.com. Link to coverage: http://allafrica.com/stories/201410291688.html 38 Source: http://www.out-law.com/. Link to coverage: http://www.out-law.com/en/articles/2014/october/report-highlights-5bn-dollar- potential-of-ethiopias-mining-and-geothermal-sector/. 39 Source: http://www.ventures-africa.com/. Link to coverage: http://www.ventures-africa.com/2014/10/ethiopias-mining-industry-worth-5bn/. Source: http://www.busiweek.com/. Link to coverage: http://www.busiweek.com/index1.php?Ctp=2&pI=2037&pLv=3&srI=%2054&spI=&cI=11. 40 Source: http://newbusinessethiopia.com/. Link to coverage: http://newbusinessethiopia.com/index.php/component/k2/item/115-world-bank- highlights-need-for-mining-focused-civil-societies-in-ethiopia/115-world-bank-highlights-need-for- mining-focused-civil-societies-in-ethiopia. 41 Tweets on www.Twitter.com. Link to coverage: https://twitter.com/IM4DC/with_replies Link to coverage: https://twitter.com/search?f=realtime&q=World%20Bank%20highlights%20need%20for%20mining- focused%20civil%20societies%20in%20Ethiopia%20&src=typd. 42 Source: www.linkedin.com. Link to coverage: https://www.linkedin.com/groups/World-Bank-highlights-need-miningfocused- 2679386.S.5925599688349745152. Source: www.amharicnews.com. Link to coverage: http://amharicnews.com/newsite/2014/10/21/ethiopia-ponders-u-s5-billion-gold.html. Source: www.news.ashamaddis.com. 43 Link to source: http://news.ashamaddis.com/post/ethiopia-ponders-5b-gold. Source: www.diretube.com. 44 Link to coverage: http://www.diretube.com/article_read.php?a=6987&mode=preview#.VJJeU2SUfrt. 45 Newspapers Two local newspapers, Ethiopian Press Agency and Addis Admas, also covered the forum and its key messages during the week of the forum. Radio and Television Coverage Out of the four media members in radio and television who attended the event, Afro 105.3 FM covered the news on the first day of the forum (October 7, 2014). 46 47