Mining & Trade News

The Malawi Extractive Industries Transparency Initiative (MWEITI) says the absence of a dedicated legal framework continues to limit its effectiveness in promoting transparency and accountability in the country’s extractive sector.

MWEITI Secretariat Desk Officer Leonard Mushane said the initiative currently operates under the Mines and Minerals Act and existing public finance laws, which encourage disclosure and transparency but are not specific to the Extractive Industries Transparency Initiative (EITI) standards.

“We do not yet have an independent legal authority, but we have a draft bill for MWEITI. At the moment, we use the provisions in the Mines and Minerals Act and the public finance management framework to promote transparency. These legal provisions complement and support EITI’s objectives, even though they are not specific to it”, Mushane said.

He explained that once the MWEITI Bill is approved by Parliament, it will grant the institution full legal authority to enforce international transparency standards and strengthen oversight in the extractive sector.

“It has taken long but we believe the process will soon be expedited so that MWEITI can fully operate as a legally established entity,” he said.

MWEITI has three main functions that define its work which are to promote transparency in the extractive sector by implementing international EITI standards, grow the revenue base of the extractive sector to contribute meaningfully to Malawi’s economic development and to foster collaboration and trust among key stakeholders, government, companies, and civil society.

MWEITI has also been instrumental in ensuring that mining revenues translate into tangible development, especially at the community level. Mushane cited that through MWEITI’s efforts, Malawi has adopted provisions for Community Development Agreements (CDAs) under the Mines and Minerals Act of 2023.

He said through the provision every large-scale mining company is now required to allocate 0.045 percent of its gross revenue to communities within a 20-kilometre radius of the mine. This ensures that local people directly benefit from mining activities rather than waiting for government redistribution.

Mushane said MWEITI is also promoting local content regulations to ensure communities benefit through jobs, supply contracts, and business opportunities around mining operations. In addition, the initiative is working on establishing a Revenue Management Fund, a mechanism that will allow transparent tracking and allocation of mining revenues.

“Currently, all mining revenues go into government account number one, making it difficult to track their use. We are promoting a system that ensures clear, traceable, and equitable distribution of mining revenues. A consultant from Canada is helping us conduct a feasibility study and once it is completed, stakeholders will be consulted to finalize it,” Mushani said.

Despite progress, Mushani acknowledged several challenges hindering MWEITI’s full implementation of EITI standards, among them is the lack of a legal framework, which makes enforcement difficult and leads to cases of noncompliance from companies and some government agencies.

“Sometimes companies delay or refuse to provide information because there are no penalties for noncompliance. In other countries, where there are laws, things move faster because everyone understands the consequences of withholding information,” he said. He also cited limited funding and the absence of a fully-fledged MWEITI institution as obstacles to effective dissemination of reports and stakeholder engagement.

“We are doing what we can as a small team, but without adequate resources and legal powers, we cannot fully achieve our mandate,” Mushane said.

Looking ahead, MWEITI has outlined key priorities to strengthen transparency and accountability in Malawi’s extractive sector. These include pushing for the enactment of the MWEITI Bill, establishing the Revenue Management Fund, and developing a Local Content Policy and Regulation in collaboration with the Ministry of Mining.

“With new mineral discoveries and increased investment, we must ensure Malawi benefits fully from its natural resources. The local content policy will guarantee greater benefits for Malawians through employment and business participation,” Mushane emphasized.

He said that to ensure transparency, MWEITI publishes its reports on its official website, www.mweiti.gov.mw and also works with civil society organizations and the media to disseminate information. “We summarize and translate our reports into local languages such as Chichewa and Tumbuka for easy understanding at the community level. Although funding limitations affect consistency, our goal is to make information accessible to every stakeholder,” Mushane said.

MWEITI is also promoting beneficial ownership disclosure, which allows the public to know who truly owns companies operating in the extractive sector. However, Mushani noted that because the institution lacks legal power, only companies that voluntarily submit ownership information are currently listed.

As Malawi moves towards strengthening its mining governance structures, MWEITI’s push for a legal mandate and improved transparency mechanisms could mark a turning point in ensuring that the nation’s mineral wealth benefits all its citizens.

Leave a Comment

Comments