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SESA of Mineral Sector, SESA of Mineral Sector, Sierra LeoneSierra Leone

STRATEGIC ENVIRONMENTAL ASSESSMENT IN AFRICA: STRATEGIC ENVIRONMENTAL ASSESSMENT IN AFRICA: CHALLENGES AND OPPORTUNITIES – REGIONAL WORKSHOPCHALLENGES AND OPPORTUNITIES – REGIONAL WORKSHOP

Fernando Loayza, Senior SEA Specialist, World BankFernando Loayza, Senior SEA Specialist, World Bank

Addis Ababa, Ethiopia June 16-19,Addis Ababa, Ethiopia June 16-19, 2008 2008

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Sierra Leone, Mining SESASierra Leone, Mining SESA

October 2006 – July 2007

Key Partners:• National Commission for Environment and Forestry (NaCEF), • Ministry of Mineral Resources (MMR)

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ContextContext• Significant mineral endowment and booming metal Significant mineral endowment and booming metal

pricesprices– High contribution to national economy: 20% GDP, 90% High contribution to national economy: 20% GDP, 90%

Exports, 8% Fiscal revenues, 14% Employment (in the Exports, 8% Fiscal revenues, 14% Employment (in the 90s) 90s)

• Outdated laws and regulations and weak capacityOutdated laws and regulations and weak capacity• Informal activities (i.e. smuggling, water pollution, Informal activities (i.e. smuggling, water pollution,

land deg.) plague the sectorland deg.) plague the sector• Huge expectations for employment and community Huge expectations for employment and community

development at the local leveldevelopment at the local level

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MotivationMotivation

• Bank’s budgetary support (DPL) to GoSL Bank’s budgetary support (DPL) to GoSL

identifies need for an SEA of the mining sectoridentifies need for an SEA of the mining sector

• GoSL requested for assistance to develop its GoSL requested for assistance to develop its

minerals policyminerals policy

• Bank initiated negotiation with GoSL about a Bank initiated negotiation with GoSL about a

loan for restructuring the mining sector (the loan for restructuring the mining sector (the

Mining Technical Assistance Project)Mining Technical Assistance Project)

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SESA’s ObjectivesSESA’s Objectives

• Provide strategic framework for Provide strategic framework for strengthening minerals sector’s strengthening minerals sector’s contribution to sustainable developmentcontribution to sustainable development

• Provide a mechanism for policy dialogue Provide a mechanism for policy dialogue on the mining sector reform on the mining sector reform

• Inform the preparation of the Mining Inform the preparation of the Mining Technical Assistance ProjectTechnical Assistance Project

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SESA process and stages SESA process and stages

Situation Analysis

Analysis of Transmission Mechanism

Policy and Institutional Adjustments

Pu

blic

Partic

ipatio

n

Environmental and Social Priorities

Inte

rsecto

ral S

EA

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erin

g

Com

mitte

e

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Key features of SESA Key features of SESA

• Identification of key environmental and Identification of key environmental and social priorities social priorities by stakeholdersby stakeholders

• Analysis of Analysis of transmission mechanismstransmission mechanisms from mining policy to priority issuesfrom mining policy to priority issues

• Political economy analysis Political economy analysis

• Action Matrix with outcomes and Action Matrix with outcomes and monitoring indicatorsmonitoring indicators

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Public ParticipationPublic Participation

• Active involvement of stakeholders Active involvement of stakeholders through the entire SESA processthrough the entire SESA process– Two rounds of regional and one national Two rounds of regional and one national

workshops, focus groups, case studiesworkshops, focus groups, case studies

• Identification of priorities and validation of Identification of priorities and validation of SESA findings in regional workshopsSESA findings in regional workshops

• Stakeholders contributed to the SESA’s Stakeholders contributed to the SESA’s policy recommendations at the national policy recommendations at the national workshop workshop

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Public ParticipationPublic Participation

Regional PrioritiesRegional Priorities• Employment Employment • InfrastructureInfrastructure• Community dev. and Community dev. and

participationparticipation• Regulations for Regulations for

blastingblasting

Cross cutting PrioritiesCross cutting Priorities• Resettlement and land Resettlement and land

compensationcompensation• Post-closure reclamationPost-closure reclamation• Sanitation and water Sanitation and water

pollutionpollution• DeforestationDeforestation• Child LabourChild Labour

Regional and cross-cutting priorities Regional and cross-cutting priorities resulted from the consultation processresulted from the consultation process

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Public ParticipationPublic Participation

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Key Priority AreasKey Priority Areas

Regional and localRegional and localDevelopmentDevelopment

(Infrastructure)(Infrastructure)

Poverty AlleviationPoverty Alleviation(inclusion of (inclusion of vulnerablevulnerable

sectors)sectors)

Mining asMining asa sustainablea sustainable

development driverdevelopment driver

EnvironmentalEnvironmentalGovernanceGovernance

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Action matrix and riskAction matrix and riskanalysis analysis

• Short, medium and long-term actionsShort, medium and long-term actions

• Monitoring indicators for each priority Monitoring indicators for each priority areaarea

• Actions are grouped as policy Actions are grouped as policy interventions and technical assistance interventions and technical assistance

• Potential political economy risks that Potential political economy risks that might hamper the reform process for might hamper the reform process for each priority area are identifiedeach priority area are identified

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Political Economy FindingsPolitical Economy Findings

Mining sector reform would change the Mining sector reform would change the distribution of benefits and costs among distribution of benefits and costs among different stakeholdersdifferent stakeholders– Wide benefits to main losers of current Wide benefits to main losers of current

mining policies (land owners, local mining policies (land owners, local communities, vulnerable groups)communities, vulnerable groups)

– Organization and empowerment of weak Organization and empowerment of weak stakeholders (women, artisanal miners, etc.) stakeholders (women, artisanal miners, etc.) is critical and possibleis critical and possible

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Environmental Governance: Environmental Governance: Political economy analysisPolitical economy analysis

• Vulnerability of NaCEF to pressures from Vulnerability of NaCEF to pressures from the government & outsidersthe government & outsiders

• Some players might prefer direct bilateral Some players might prefer direct bilateral negotiation with companies and oppose negotiation with companies and oppose tripartite negotiations tripartite negotiations

• Judiciary may oppose to the establishment Judiciary may oppose to the establishment of alternative dispute resolution of alternative dispute resolution mechanism mechanism

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Community Benefits:Community Benefits:Political economy analysisPolitical economy analysis

• Lack of capacity at all levels of Lack of capacity at all levels of Government Government

• Inability or unwillingness of companies to Inability or unwillingness of companies to meet their obligationsmeet their obligations

• Pressure to companies to provide Pressure to companies to provide services, infrastructure, etc. may lead to services, infrastructure, etc. may lead to conflictsconflicts

• Elite capture of mine employment and Elite capture of mine employment and service contractsservice contracts

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• Chiefs would resist any attempt to Chiefs would resist any attempt to reduce their power with respect to reduce their power with respect to granting mining licenses and access to granting mining licenses and access to landland

• Supporters/middlemen likely to resist Supporters/middlemen likely to resist any responsibility for the degradation any responsibility for the degradation caused by miners supported by themcaused by miners supported by them

• Supporters likely to oppose to GoSL Supporters likely to oppose to GoSL efforts to register artisanal minersefforts to register artisanal miners

Poverty Alleviation:Poverty Alleviation:Political economy analysisPolitical economy analysis

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Overall, the fact that the sector thrive Overall, the fact that the sector thrive under lack of formality and control from under lack of formality and control from

the government poses significant risks for the government poses significant risks for reformreform

Building Support to Building Support to ReformReform

It is critical to:It is critical to:• Increasing legitimacy of the reform by paying special Increasing legitimacy of the reform by paying special

attention to vulnerable groups attention to vulnerable groups • Achieving society-wide buy-in to the reform Achieving society-wide buy-in to the reform

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SESA’s initial outcomes SESA’s initial outcomes

• Strengthened the voices of environmental Strengthened the voices of environmental stakeholders in the mining reform (NaCEF, stakeholders in the mining reform (NaCEF, landowners and others) landowners and others)

• Analysis informed the preparation of the Analysis informed the preparation of the Bank’s Mining Technical Assistance ProgramBank’s Mining Technical Assistance Program

• Proposed reform acknowledges:Proposed reform acknowledges:– Institutions-based environmental risks for mining Institutions-based environmental risks for mining

reform and commits to mitigate themreform and commits to mitigate them– Need for a system of check and balances: tripartite Need for a system of check and balances: tripartite

negotiation and transparency in accessing land negotiation and transparency in accessing land and mineral rightsand mineral rights

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THANK YOU.THANK YOU.

I. Fernando Loayza, Ph.D.Senior SEA Specialist

Environment Department

The World Bank

1818 H. Street, NW

Washington, DC 20433

Tel. (202) 458-7117

Fax. (202) 477-0565