Press release / April 28, 2020

CSOs warn on need for reforms as government moves forward on new mining contracts

As the Afghan government moves ahead with new mining contracts, Afghan and international civil society organisations (CSOs) expressed serious concern about continued weaknesses in the management and oversight of the mining sector and the lack of a unified strategy for managing conflict risks – and warned that caution was needed to avoid issues like those which saw two major contracts cancelled earlier this year.

The Ministry of Mines announced new contracts for marble and travertine in Nangarhar, Kunar and Parwan provinces on April 21. 

“We understand the pressure on the Afghan government to generate revenue from mining – we all share that goal,” said Ikram Afzali, Executive Director of the Afghan anti-corruption NGO Integrity Watch. “But we have had lesson after lesson over the last 20 years, showing us at great cost just how easily corruption and conflict can mean that mines do far more harm than good. We urge the Afghan government to be very careful as they move forward – and to fix the problems that still exist around contract allocation, transparency, relations with local communities, and the involvement of armed groups in mining.”

The CSOs welcomed the January decision by the Afghan Cabinet to cancel the Badakhshan and Balkhab mining contracts, calling it a welcome step towards the enforcement of mining governance and one which will strengthen confidence in the government’s ability to manage Afghanistan’s natural resources – but again added that reforms were still needed. 

“It is always painful to see hopes for international investment fall through, but we believe this decision was necessary to safeguard the government’s commitment to implement the rule of law,” Afzali said. “However, we call on the government as a matter of urgency to make changes to the contact allocation process and to its wider mining strategy in response both to problems around these contracts, and wider concerns.” 

The specific reforms the CSOs asked for include: 

  • The government should urgently develop a dedicated security and governance strategy to deal with mining in conflict-affected areas. They should not issue large contracts in areas that are substantially contested by armed groups. For medium and smaller contracts they should, at a bare minimum, explicitly evaluate and address all associated costs and risks. 
  • The government should integrate natural resources into wider security planning, and into strategy around the Afghan peace process. Any peace deal should include commitments to good governance and transparency, and not use resources as bargaining chips. 
  • The government should prioritise building up oversight, legal, and contract allocation capacity, which clearly still have weaknesses despite some improvements in recent years. Until those have been demonstrably strengthened it should prioritise small and medium contracts, and artisanal and community-based mining. 
  • The government should strengthen community consultation and dispute resolution mechanisms, and develop models for community ownership of and benefit from mines to help reduce conflict and create incentives for formalising artisanal mining. 
  • The government should give the Mining Ombudsman full independence and the powers needed for effective investigations. 
  • The government should review the contract allocation process and give greater independence to the institutions that award and manage contracts. 
  • Afghanistan’s international partner governments should avoid backing any specific natural resource deals to avoid perceptions of undue influence in the allocations process. 

“We all want to see Afghan mining develop in a responsible way. Outside investment is part of that and companies face genuine challenges here,” said Stephen Carter of international NGO Global Witness. “But these are not the first deals to fall apart amid recriminations and disappointed hopes, and elsewhere in the sector there remain widely acknowledged problems with corruption and abuses. Much of the country’s resources are in insecure districts. We appreciate the progress that has been made in some areas, but the government and its international partners still need to do more to tackle the enormous challenges of corruption, conflict and capacity which remain. If they don’t, then there is a much greater risk that new contracts could do more harm than good.”

/ ENDS

Contacts

Stephen Carter, Afghanistan Campaign Leader

[email protected]

+44 (0)7809342796

Wahidulla Azizi, Communications Officer, Integrity Watch Afghanistan

[email protected]

+93 (0)705666962

Notes to editor:

 The initial decision to cancel the Badakhshan and Balkhab contracts was taken by the High Economic Council at the end of November 2019, but was only confirmed by the Cabinet on January 18, 2020. The government gave official notice of the termination of the Badakhsan and Balkhab contracts on February 12, 2020, on the basis that the companies involved had failed to provide performance bonds as required despite being granted extensions.


Recent press releases