MINING SECTOR DIAGNOSTIC - BURUNDI REPORT MARCH 2025 ACKNOWLEDGEMENTS AND VALIDITY This report is the result of the Burundi Mining Sector Diagnostic Assessment carried out between Q4 2023 and Q1 2025 by a technical team led by Martin Lokanc (TTL) and Adaeze Wigwe-Chizindu (co-TTL) and comprised of the following members: Charles Douglas- Hamilton (Lead Consultant and main author), Lois Margaret Hooge (Legal Consultant for De Jure Assessment), Aristide Igiraneza (Consultant for carrying out interviews and aggregating survey data), and Helga Treichel (Consultant). In the preparation of this report, the team interviewed a wide range of mining sector stakeholders. The World Bank wishes to thank all the interviewees for their time and valuable contributions. This report is based on mining investment and governance data and indicators effective as of March 2025. MINING SECTOR DIAGNOSTIC - BURUNDI REPORT MARCH 2025 © 2025 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank, EGPS or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. The boundaries, colors, denominations, links/footnotes and other information shown in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Burundi Mining Sector Diagnostic. © World Bank.” Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e mail: pubrights@worldbank.org. Design: Claudia Rospigliosi Photo: Photo taken of a small-scale tin and columbite-tantalite mine located in Burundi. THE WORLD BANK CONTENTS List of Figures................................................................................................................................ 6 List of tables.................................................................................................................................. 6 Acronyms and Abbreviations......................................................................................................7 Executive Summary......................................................................................................................9 I. Introduction........................................................................................................................13 II. Country’s Mining Sector....................................................................................................16 II.1 Mining Sector Importance............................................................................................. 16 II.2 Mining Sector Management.......................................................................................... 23 II.3 Legal Framework............................................................................................................ 28 III. MSD Results Dashboard..................................................................................................30 IV. Assessment of the Sector Management Framework...................................................33 V. Performance along the Extractive Industries Value Chain..........................................42 V.1 Contracts, Licenses and Exploration............................................................................ 42 V.2 Mining Operations.......................................................................................................... 54 V.3 Taxation........................................................................................................................... 67 V.4 Revenue Distribution and Management...................................................................... 79 V.5 Local Impact.................................................................................................................... 82 VI. Stakeholder Priorities.....................................................................................................91 VII. Strengths, Challenges, and Reform Agenda................................................................93 VII.1 Strengths...................................................................................................................... 93 VII.2 Challenges.................................................................................................................... 94 VII. 3 Reform Agenda........................................................................................................... 96 Annexe I : MSD Methodology - Brief Description................................................................ 103 Annex II: Question Scores...................................................................................................... 105 Annexe III: Voting Template................................................................................................... 128 REPORT 5 MINING SECTOR DIAGNOSTIC - BURUNDI Liste des figures Figure 1 : Burundi Mining Sector Diagnostic Dashboard..................................................... 11 Figure 2 : Mineral occurrence map of Burundi (sourced from the OBM).......................... 20 Figure 3 : Organogram of the Ministry of Mines, Hydraulics, Energy and Mines.............. 24 Figure 4 : Burundi Mining Sector Diagnostic results Dashboard........................................ 31 Figure 5 : Implementation Gap Analysis................................................................................. 32 Figure 6 : Mining Sector Management Framework............................................................... 33 Figure 7 : Value Chain Stage 1- Indicators.............................................................................. 42 Figure 8 : Value Chain Stage 2 - Indicators............................................................................. 54 Figure 9 : Value Chain Stage 3 - Indicators............................................................................. 67 Figure 10 : Value Chain Stage 4 – Indicators.......................................................................... 79 Figure 11 : Value Chain Stage 5 - Indicators........................................................................... 82 Figure 12 : Shared Stakeholder Priorities............................................................................... 91 Figure 13 : Top Ten Stakeholder Priorities............................................................................. 92 List of tables Table 1: Mineral production and export statistics for Burundi for the year 2022 (source: OBM)............................................................................................................................. 16 Table 2: Mineral production and export statistics for Burundi for the year 2023 (source: OBM)............................................................................................................................. 16 Table 3: Key mineral deposits in Burundi............................................................................... 22 Table 4: Definitions of groups of minerals which may be the subject of a permit according to article 4 of the 2023 mining code......................................................... 44 Table 5: Different types of agreements cited in the 2023 mining code.............................. 46 Table 6: Requirements for state participations according to articles 66 and 93 of the 2023 mining code........................................................................................................... 47 Table 7: Some royalties selected from the Joint Ministerial Order on the tax regime applicable to the mining and quarrying sector of Burundi (2019)......................... 69 Table 8: Variation in fixed royalty rates for industrial mining and artisanal mining......... 70 Table 9: Laws and regulations on Child Labor....................................................................... 87 6 REPORT THE WORLD BANK ACRONYMS AND ABBREVIATIONS 3Ts Tin, Tungsten, Tantalum AfDB African Development Bank AMB Africa Mining Burundi ASM Artisanal and Small-Scale Mining AU African Union BEPS Base Erosion and Profit Shifting BESD Office of Strategic Studies and Development BMM Burundi Mining and Metallurgy International BRB Bank of the Republic of Burundi (Central Bank) CDA Community Development Agreement CFCIB Federal Chamber of Commerce and Industry of Burundi CIT Corporate Income Tax Co Cobalt co-TTL Co-Task Team Leader CSMC Sectoral Chamber of Mines and Quarries of Burundi CSO Civil Society Organization CSR Corporate Social Responsibility Cu Copper DRC Democratic Republic of Congo EAC East African Community EANB East African Nickel Belt EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization EI Extractive Industries EIA Environmental Impact Assessment EITI Extractive Industries Transparency Initiative EMP Environmental Management Plan EMMP Environmental Mitigation and Monitoring Plans EPRP Emergency Preparedness and Response Plans ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plans ETM Energy Transition Minerals FCV Fragility, Conflict and Violence IBRD International Bank for Reconstruction and Development ICGLR International Conference on the Great Lakes Region ICMM International Council on Mining and Metals IDA International Development Association IFC International Finance Corporation IFR Institutional Functional Review ILO International Labour Organization REPORT 7 MINING SECTOR DIAGNOSTIC - BURUNDI IRRN Regional Initiative on Natural Resources ITRI International Tin research Institute ITSCi ITRI Tin Supply-Chain Initiative GDP Gross Domestic Product GIS Geographic Information System LSM Large-Scale Mining MCRP Mine Closure and Rehabilitation Plans MDA Mining Development Agreements MINHEM Ministry of Hydraulics, Energy and Mines MOU Memorandum of Understanding MSD Mining Sector Diagnostic Mt Million tons NAP National Action Plan NCM National Coordination Mechanism NDP Burundi National Development Plan 2018-2027 Ni Nickel NMB Ntega Mining Burundi, OBM Burundian Office of Mines and Quarries OBPE Burundian Office for the Protection of the Environment OBR Burundian Revenue Authority OECD Organization for Economic Cooperation and Development OHS Occupational Health and Safety ONATOUR National Peat Office PGE Platinum Group Elements RAP Resettlement Action Plans RCM Regional Coordination Mechanism RINR Regional Initiative Against the Illegal Exploitation of Natural Resources RMB Rainbow Mining Burundi RSP Responsible Sourcing Programmes SDG Sustainable Development Goals SIA Social Impact Assessment SGR Standard Gauge Railway SME Small and Medium-Sized Enterprises SMP Social Management Plan TMB Tanganyika Mining Burundi TTL Task Team Leader UN United Nations UNDP United Nations Development Programme USD US Dollar VAT Value-Added Tax WGS World Geodetic System 8 REPORT THE WORLD BANK EXECUTIVE SUMMARY Burundi is a small landlocked country bordered Projects of strategic national importance such by the Democratic Republic of the Congo (DRC) as the Musongati nickel deposit have not to the west, Rwanda to the north and Tanzania been developed. This is primarily due to the to the east and south. Burundi is endowed with landlocked nature of Burundi and the distance to deposits of gold, tin, tungsten and tantalum (3Ts), a deep-water port, and the lack of infrastructure lithium, rare earth minerals (the lanthanides), (power and transport links) within both Burundi vanadium, titanium, nickel, cobalt, copper, and Tanzania. New mines require dependable platinum group elements (PGEs), phosphates, and timely logistics for importing capital goods and various industrial minerals and mineral and mine consumerables to mines and for fuels such as peat and hydrocarbons. The exporting mineral products to global markets. development of these resources could generate With a huge transport and energy infrastructure important revenues, export earnings and deficit, the costs of operating in Burundi are employment opportunities and could catalyze very high. Burundi also has limited resources infrastructure development and economic with knowledge, experience and expertise in linkages (water, rail, roads and power) in to the large-scale mining projects. broader economy. The mining sector represents an important opportunity for economic growth In 2021 the Government took the decision to and shared prosperity for the people of Burundi. suspend four mining contracts, pending the However, if poorly managed, the extraction of promulgation of a new Mining Code (August these resources (as has been shown globally) 2023). The license suspensions were made can contribute to income disparities, poor because of the Government’s perception human development outcomes, macro- that the mining sector was not generating economic distortion, irreversible environmental sufficient benefits for the country due to damage and (at times) conflict. poorly negotiated mining agreements. Since the suspensions there has been a breakdown The mining sector’s contribution to government in trust between Government, Industry and revenues, export earnings, employment and Civil Society. This has been exacerbated by a Gross Domestic Product (GDP) remains very lack of dialogue and consultation between the low. No large-scale mine has ever been built different stakeholder groups. The suspension in the country and the sector is dominated by of mining licenses has called into question the artisanal mining for gold and the 3Ts. While security of tenure of all mining titles in Burundi an important source of income for miners and which has undermined investor confidence. communities near mines, the mining sector Security of tenure is an important criterion in Burundi generates negligible tax revenues for international investors when making or royalties for the Government. All three investment decisions. Since 2021 the mining stakeholder groups—Government, Industry sector has fallen into a state of stagnation and and Civil Society—are dissatisfied with the state has received virtually no foreign investment. of the mining sector in Burundi. REPORT 9 MINING SECTOR DIAGNOSTIC - BURUNDI Attracting international investment and its natural resource wealth for positive and operational expertise to Burundi’s mining sustained development outcomes. projects requires both predictable governance and reliable infrastructure. Other resource- endowed countries that have managed to MINING SECTOR DIAGNOSTIC attract investments have done so by providing (MSD) RESULTS DASHBOARD clarity, consistency and predictability on the policy, legal, regulatory, and institutional A key component in the World Bank’s support framework, and the roles and responsibilities to the Burundi government is the Mining Sector of government agencies and investors alike, Diagnostic (“MSD”) presented in this report. The backed by transparent non-discretionary rules MSD is a data-driven tool that the World Bank and decision-making processes. Geological has developed to comprehensively assess a prospectivity1 has not been sufficient by itself to country’s mining sector. Specifically, the tool attract significant investment to many of these assesses the overall policy environment for the emerging economies in the absence of strong sector and clearly identifies the mining sector’s institutional, legal and regulatory frameworks. strengths and weaknesses along the Extractive Industries (EI) Value Chain. The MSD takes a The Government of Burundi recognizes the detailed look at both the legal and regulatory largely untapped productive potential of the framework of the sector (the “rules”) as well as mining sector in Burundi and its critical role for the implementation of these rules, including the providing fiscal revenues and export earnings. capacity of the ministries and agencies involved. In November 2023 the Government adopted In doing so, the MSD considers the views of an Action Plan for the Development of the three different stakeholders—Government, Mining sector, following the promulgation Industry, and Civil Society and explores these of the Mining Code in August 2023. Many of stakeholders’ views on key areas for sector the activities outlined in the Action Plan, if reforms. Due to its comprehensive and objective implemented, would help the Government assessment methodology, the MSD is different towards realizing the potential of its natural from other assessment tools. Importantly, it is resources for the benefit of the country. not a ranking tool or perception-based survey, It will be the quality of institutions; sector but rather aims to provide policymakers with governance and policy that will be instrumental the detailed information necessary for them to in determining Burundi’s path to harnessing make informed policy choices. 1 ‘’Geological prospectivity’’ refers to the probability or chance that mineral deposits of a certain class can be discovered in an area because the geology of that area is permissive or favourable to the formation of such class of mineral deposits. 10 REPORT THE WORLD BANK Figure 1: Burundi Mining Sector Diagnostic Dashboard Mining Sector Diagnostic Mining Sector Management Intra-Governmental Sector Policy Sector Dialogue Roles and Responsabilities Coordination II. Extractive Industries Value Chain Contracts, Revenue Mining Licenses and Mining Operations Management and Local Impact Taxation Exploration Distribution Mining Legislation/ Processes, Land/ Local Content, Compensation/ Employment, Rules for License Resettle Tax Policy and Revenue Sharing De Jure Community Allocation, ment, Tax and Fiscal Performan- Engagement, Oversight, and Environmental and Administration Stabilization-- ce CSR Transfer Social Impact Rules Rules and Social Management, Issues ASM, OHSA, Mine Closure-- Rules Land/ Collection/ Compensation/ Revenue Sharing, Local Supplier Maintenance of Resettle Fiscal Development, Geological ment, De Facto Mining Tax Ad- Stabilization and Employment, Information and Environmental and Performan- ministration Resource Community Effective License Social Impact, ce and Auditing Revenue Engagement, Allocation Support for Transparency-- CSR and Social and ASM, OHSA, Mine Practice Issues--Practice Management Closure-- Practice Scoring Key Very Low (1 - 1.75) Low (>1.75 - 2.5) High (>2.5 - 3.25) Very High (>3.25 - 4) The MSD dashboard for Burundi (see above) This report analyses each dimension in depth presents an overview of the mining sector’s and examines the main underlying causes of the performance along the extractive industries observed results and highlights opportunities value chain and with respect to the sector for improvement. The objective of this MSD management framework (See section III. MSD is to assess strengths and weaknesses of Results Dashboard and Annexes I and II for the the legislative, institutional and regulatory details on how the dashboard was constructed). framework for the mining sector in Burundi and The Dashboard shows that out of the 14 to identify opportunities for sector development dimensions assessed (each of the cells with and priorities for reforms. scores of 1.00 to 4.00), eight (7) obtained a high score, five (6) obtained a low score, and one (1) POLICY RECOMMENDATIONS & obtained a very low score (<1.75). There were no areas with very high scores showing that there PRIORITIES FOR REFORMS is significant room for improvement in all areas. Policy recommendations and priorities for reforms have been grouped under three key pillars: REPORT 11 MINING SECTOR DIAGNOSTIC - BURUNDI 1. Mining Sector Growth – The development of poor human development outcomes and new mines to increase mineral production. macro-economic distortion. Strengthening environmental, social, and governance (ESG) Environmental and Social Governance 2. policies in Burundi's mining sector is crucial to – Strengthening governance systems to mitigating its negative impacts and ensuring mitigate the negative environmental and sustainable development. By implementing social impacts of mining. stronger ESG policies, Burundi can reduce 3. Benefit Capture and Management – deforestation, protect water sources, and Ensuring that the benefits of mining are improve labor conditions while fostering effectively captured, managed, and shared. transparency and responsible resource management. This approach should ensure that The mining sector in Burundi needs to be well mining benefits local communities and supports managed to avoid creating income disparities, long-term national development. Environmental and Social Benefit Capture and Mining Sector Growth Governance Management Immediate term actions (next 12 months) • Re-negotiate the Mining Agreements • Adopt Environmental • Conduct an Institutional that were suspended in 2021 with Regulations. Functional Review of the the support of Transaction Advisors. • Publish all documents relevant OBM for obtaining laboratory • Conduct an inventory of OBM's to mine developments including accreditation. geological data and digitize high- RAPs, ESIAs, ESMPs, and mining • Establish a functional, priority data for strategic projects. agreements. credible and effective • Develop a modernized GIS-linked • Build capacities of the OBM platform for multi- online Cadaster system. regional offices to monitor sites stakeholder engagement to ensure the Mining Code and and consultation to improve • Complete the ETM Roadmap to dialogue between different assess opportunities for Burundi's Regulations are enforced. stakeholders. mining sector in Infrastructure and • Strengthen monitoring capacities industrial diversification. of the OBPE for environmental • Conduct cost-benefit analyses inspections and audits and for on the Government's equity assessing ESIAs and ESMPs. participation in mining projects. Short-medium term actions (1-6 years+) • Build cross-sectoral & multi- • Ongoing capacity strengthening • Become a Member of disciplinary capacities for contract for the OBM regional offices the Extractive Industries negotiations using transaction to monitor sites to ensure the Transparency Initiative (EITI). advisors and tailored programs. Mining Code and Regulations are • Implement the findings • Establish a geological data and enforced. and recommendations of information repository and create • Ensure sufficient resources and the Institutional Functional an online geodata portal. staff are available to implement Review of the OBM. • Develop an investment promotion the Government's National • Conduct an Institutional strategy for the mining sector. Action Plan to reduce and/or Functional Review of the eliminate the use of Mercury in OBPE. • Update the Mining Policy outlining ASGM. the Government's vision for • Define a Local Content Policy. leveraging mineral resources for • Ongoing strengthening of monitoring capacities at OBPE for • Increase resources for tax development. collection and audits. environmental inspections and • Conduct high resolution nationwide audits and for assessing ESIAs • Strengthen capacities at OBM geological campaign. & OBR to accurately value and ESMPs. mineral exports. 12 REPORT THE WORLD BANK I. INTRODUCTION The Mining Sector Diagnostic (MSD) is a tool a more dynamic mining sector, contributing not that the World Bank has developed, firstly to only to economic growth but also the wellbeing comprehensively assess a country’s mining of the population, especially in mining regions. sector laws, rules and regulations, and secondly to identify the strengths and weaknesses of In the fourth quarter of 2023 the Ministry the institutions that implement those laws, of Hydraulics, Energy and Mines in Burundi rules and regulations and administer and drafted an Action Plan for the development oversee the sector. The MSD considers the of the Burundi Mining Sector. The Action views of the three main stakeholder groups – Plan included a Mining Sector Diagnostic for government, mining companies and civil society completion in 2024. In March 2024 the Ministry - in a structured manner. It is a systematic and of Finance, Budget and Economic Planning practical diagnostic tool that reports its main requested Technical Assistance from the World conclusions objectively. Bank in the mining sector. The request focused on the need for capacity strengthening at all The assessment is based on information levels in the ministries involved in governing compiled from legislation, interviews, the mining sector. Specific requirements secondary sources, and surveys, the results of included: (i) training on negotiation of contracts, which are assessed and summarized around (ii) ensuring the timely development of new the extractive industries (EI) value chain links2 mines and mining projects and, (iii) capacity and key issues for mining investment and strengthening programs. governance3. The MSD addresses the “rules” in place (“de jure” situation) as well as the extent In March 2024 a World Bank Group team to which these “rules” are implemented in undertook a mission to Bujumbura to initiate the practice (“de facto” performance). Mining Sector Diagnostic (MSD). The objectives of the Mission were: (i) to meet with the three The Burundi MSD compiles and disseminates stakeholder groups including government, information on the management and industry and civil society to explain the MSD and governance of the mining sector at the central its methodology and to identify priorities for and regional government levels. It not only mining sector development and reforms; and (ii) assesses the performance of the sector from to share detailed MSD questionnaires with the the perspective of the three main stakeholder different stakeholder groups. groups, but also provides their respective priorities for improving the performance of the Following these meetings, questionnaires were mining sector. The results of an MSD can form supplied to the government, industry and civil the basis of a reform agenda that can lead to society stakeholders. A total of 65 respondents 2 The Extractive Industries Value Chain is a methodology adopted by the World Bank to systematize the different mining sector management dimensions from the mining regulator’s viewpoint, which differs from the industry’s global value chain viewpoint. See Alba (2009). The term “extractive industries” refers to mining and hydrocarbons, since this same methodology is used to assess both sectors. In this report, every time we speak of extractive industries we are referring solely to mining. 3 “Governance is the process of interaction among government and non-government stakeholders to formulate and implement policies within the framework of a specific set of formal and informal rules that shape and are shaped by power relationships.” See “La Gobernanza y las Leyes”, World Bank, 2017, https://openknowledge.worldbank.org/bitstream/ handle/10986/25880/210950ovSP.pdf REPORT 13 MINING SECTOR DIAGNOSTIC - BURUNDI filled out questionnaires and returned them to provided important context and explanations the World Bank. The number of responses was for the answers given. All MSD responses were high and reflects a strong willingness among inputted into a data aggregation tool to display different stakeholders to drive positive change the results through dashboard graphics. and improvement in the mining sector. In many cases, follow-up interviews were conducted to A total of 28 Questionnaires were received clarify survey answers and explore several topics from Government officials from the following in greater depth. More than 2000 comments Ministries and departments: were given by different respondents which • The Office of Strategic and Development Studies (BESD) at the President; • The Office of the Prime Minister; • The Ministry of the Interior, Community Development and Public Safety; • The Burundian Office of Mines and Quarries (OBM); • The Ministry of Hydraulics, Energy and Mines; • The Burundian Revenue Authority (OBR); • The Ministry of Finance, Budget and Economic Planning; • The Ministry of Transport, Commerce, Industry and Tourism; • The Ministry of Justice; • Regional branches of the Burundian Office of Mines and Quarries; • Regional (provincial) and local (communal) Authorities. A total of 21 Questionnaires were received and a variety of advocacy groups and Non- from industry representatives from a variety of Government Organisations (NGOs) focusing on different companies and organisations, including specific areas in health, human rights, conflict both local and international companies. These resolution, education, youth employment, included: the Sectoral Chamber of Mines and gender, the environment and governance and Quarries (CSMC), artisanal and small-scale transparency. mining cooperatives in gold and the 3Ts (tin, tungsten, tantalum), exploration companies, In July 2024, a World Bank Group team mining companies, quarrying companies undertook a mission to Bujumbura to convene and service sector firms supporting private a workshop to share the findings of the MSD. sector companies in the mining sector (legal The workshop was attended by approximately and advisory firms as well as geological and 90 stakeholders from government, industry engineering consulting firms). and civil society. Feedback from the workshop has been incorporated into the MSD report. A total of 16 Questionnaires were received from Following the July workshop a field trip was taken civil society organisations. These included: the by the World Bank mining team with the OBM’s University of Burundi, journalists and the media, Director of the Direction of Geological Research 14 REPORT THE WORLD BANK and the Mining Cadastre to a number of different licenses, and exploration; (ii) mining operations; deposits around the country including (but not (iii) taxation; (iv) revenue management and limited to): Musongati, Mukanda, Nyabikere, distribution; and (v) local impact. For each of Kivivu and Gakara. these stages, the MSD evaluates the de jure situation (legislation, rules and regulations) and This report summarizes the analysis and de facto performance (institutional capacity and findings of the MSD and is organized as follows: effectiveness), describing the observed areas for improvement. Chapter VI analyses the sectoral Chapter I provides the general introduction stakeholder priorities defined as the key priority to the Burundi MSD. Chapter II contextualizes areas identified by respondents—reforms that the diagnostic, describing the mining sector’s would have a significant impact on improving management framework in Burundi, its the mining sector’s contribution to sustainable importance in the overall economy, the main economic development and wellbeing for the institutional roles and responsibilities, and entire population. Chapter VII concludes with provides an overview of the legal and regulatory a summary of sector strengths and challenges framework governing the sector. Chapter III and presents a reform agenda. presents a comprehensive summary of the results, discussing the data as aggregated This report has three annexes. Annex I contains into the MSD dashboard and analyses the an overview of the MSD methodology. Annex implementation gaps between de jure situation II contains the MSD questionnaire and the and de facto performance. Chapter IV analyses scores for all individual questions that form the the de jure situation and de facto performance basis for this report. Annex III shows the voting of the Burundi mining sector management template that was used to elicit stakeholder framework and identifies its weaknesses. preferences. This report and the underlying Chapter V analyses the de jure situation and data will be made publicly available on the de facto performance of the five stages of the World Bank’s MSD website. Extractives Industry (EI) value chain: (i) contracts, REPORT 15 MINING SECTOR DIAGNOSTIC - BURUNDI II. COUNTRY’S MINING SECTOR II.1 MINING SECTOR IMPORTANCE Macroeconomic Performance The mining sector in Burundi is largely With no large-scale mining projects in undeveloped and its contribution to production, the mining sector in Burundi government revenues, export earnings, is dominated by artisanal and small-scale employment and GDP remain very low. mining for gold and the 3Ts4. An estimated Progress to date has not matched the 40,000 people are employed directly in the expectations that different stakeholders have artisanal and small-scale mining (ASM) sector had for the mining sector to be an engine for primarily involved in the mining of gold and socio-economic development for the country. In the 3Ts in the north of the country. Despite the 2022 the total value of mineral exports was only prominent role played by artisanal mining in US$60 million, or less than 3% of total exports several locales of the country, its contribution from the country. Gold accounted for 9% of all to national revenues is marginal, although it mineral exports. generates important export earnings for the Central Bank and is an important source of income for communities in mining areas5. Table 1: Mineral production and export statistics for Burundi for the year 2022 (source: OBM) PRODUCTION ET EXPORTATION MINIERE EN 2022 PRODUCTION EXPORTATION Substan- CASSITE- WOLFRA- Mixed CASSITE- WOLFRA- COLTAN GOLD COLOTAN GOLD ce RITE MITE (3Ts) RITE MITE / kg / kg / kg / kg Or /g / kg / kg /g Or / g Total 13 191,50 100 082,20 170 250,20 235 025,93 149.386.14 144 398,20 98 261,63 190 868,20 939 400,00 Table 2: Mineral production and export statistics for Burundi for the year 2022 (source: OBM) PRODUCTION ET EXPORTATION MINIERE EN 2023 PRODUCTION EXPORTATIONS Subs- COL- CASSITE- WOL- Mixed Li- GOLD CASSITE- COLO- WOL- Li- GOLD/ tance TAN/ RITE/kg FRAMI- (3Ts)/kg thium/ in g RITE/kg TAN/ FRAMI- thium/ kg kg TE/kg kg kg TE/kg kg Total 5 704,5 107 059,3 123 499,4 248 319,1 299 000 67 914,71 129 520,5 18 214 66 777,1 299 000 1 108,95 4 Taken from the Government’s Action Plan for the development of the mining sector, 202 5 Since mid-February 2024 the international gold price (LBMA) has been higher than USD 2000 per troy ounce and in July 2024 the gold price reached an all-time high of USD 2482.97 per troy ounce. A high gold price acts as a poverty alleviator for artisanal and small-scale miners, and their communities, in gold mining areas. 16 REPORT THE WORLD BANK In 2022 and 2023 there were significant The Government of Burundi recognizes the discrepancies between official production and largely untapped productive potential of the export statistics for gold and the 3Ts from mining sector in Burundi and its critical role Burundi. It is likely that some of the exported for providing fiscal revenues, export earnings gold and 3Ts originated in other countries in and other socio-economic benefits8. If its the region, such as DRC, and that production of mineral resources are developed sustainably gold and the 3Ts in Burundi is being exported within a robust strategy for realizing wider from Rwanda and Tanzania6. In the fourth benefits and industrial diversification, quarter of 2019, the Government suspended Burundi could leverage its resource wealth the licenses of gold trading firms in Burundi. to support durable economic growth and The central bank of Burundi became a de- transformative development for the broader facto monopoly in the gold trade in the country region. The quality of institutions, sector by being the sole official buyer of gold from governance and policy will be instrumental cooperatives and mining companies. Feedback in determining Burundi’s path to harnessing from the MSD suggests that the central bank natural resource wealth for positive and purchasing of gold, at the official exchange rate, sustained development outcomes. pushed much of the gold trade into the informal economy7. Gold production in 2022 and 2023 With a huge transport and energy 9 was lower than pre-2019 levels even though the infrastructure deficit, the costs of operating international spot price for gold has recently in Burundi are very high. Any bulk mineral or risen above USD 3000 per ounce. In July 2024, base metal deposit would need to be large the Central Bank offered to buy gold produced and high grade to be commercially viable10 for by cooperatives in Burundi in US Dollars. development in Burundi. Projects of strategic national importance such as Musongati Mining Sector Performance nickel deposit have remained undeveloped. This is primarily due to the land-locked nature Results from the MSD questionnaires show of Burundi and its distance from a suitable that government is mildly satisfied (2.6) with deep-water port, and the lack of infrastructure mining sector development taking place (power and transport links) within both Burundi in Burundi. This is at odds with industry and Tanzania. New mines require dependable representatives and Civil Society Organizations and timely logistics for both importing capital (CSOs) who are dissatisfied (1.9) and very goods and mine consumerables to mines and dissatisfied (1.7), respectively, with the state for exporting mine and value-added products to of mining sector development taking place global markets. In its Action Plan for developing in Burundi. Government, industry and CSO the mining sector the Government acknowledges stakeholders are all aligned in their support that ‘’with regard to the processing and refining for the development of the sector to generate of mining products, the State recognizes the positive socio-economic outcomes. constraints in terms of energy and transport 6 Between 2022 and 2024 Rwanda become the largest exporter of 3T minerals in the world. 7 Many of the gold mining sites in Burundi are within 20 kilometres of the border with Tanzania and Rwanda, making it easy to smuggle gold across the border at relatively low cost. 8 Burundi has a shortage of foreign exchange reserves held at the Central Bank and the mining sector represents the biggest potential source for generating export earnings over the short, medium and long-term. 9 An example of such a deposit is the Simandou iron ore deposit in Guinea which was discovered in the 1990s and is being developed for first production in 2025, nearly 30 years after its initial discovery. The development of Simandou will cost US$ 20 billion for mine, rail and port infrastructure the projects development is only possible with the construction of the 650 kilometres Trans-Guinean Rail corridor from the mine to a port on the Atlantic Ocean coast. 10 An example of such a deposit is the Simandou iron ore deposit in Guinea which was discovered in the 1990s and is being developed for first production in 2025, nearly 30 years after its initial discovery. The development of Simandou will cost US$ 20 billion for mine, rail and port infrastructure the projects development is only possible with the construction of the 650 kilometres Trans-Guinean Rail corridor from the mine to a port on the Atlantic Ocean coast. REPORT 17 MINING SECTOR DIAGNOSTIC - BURUNDI infrastructure that arise in the development of Action Plan went on to say ‘‘in the immediate added value for most mining substances, and future, the state must renegotiate the mining agrees that Burundi will not be able to compete contracts that were suspended in 2021 pending with other countries without the necessary the new mining code. This process will include infrastructure being developed’’. technical assistance for contract negotiation’’. Resolving the issues with the suspended In 2021 the Government took the decision to mining licenses will send a positive message to suspend four mining contracts11, pending the potential investors. Becoming a Member of the promulgation of a new Mining Code (August Extractive Industries Transparency Initiative 2023). The license suspensions were made would also be seen as a positive development because of the Government’s perception by foreign investors. that the mining sector was not generating sufficient benefits for the country due to poorly Attracting international investment and negotiated mining agreements. Since the operational expertise to Burundi’s mining suspensions there has been a breakdown in projects requires both predictable governance trust between government, industry and civil and reliable infrastructure. A recent World society. This has been exacerbated by a lack of Bank report titled ‘’Review of Burundi’s dialogue and consultation between the different Industrial Metallic Mineral Fiscal Regime’’ found stakeholder groups. The suspension of mining that the main criteria used by mining investors licenses has called into question the security include: geological prospectivity, political of tenure of all mining titles in Burundi which stability, safety and physical security, security of has undermined investor confidence in the tenure, permitting delays, clarity of procedures, country. Security of tenure is an important administrative consistency, commodity prices criterion for international investors when and access to infrastructure (energy, water and making investment decisions. Since 2021 transport). The report found that Burundi’s the mining sector has fallen into a state of infrastructure deficit, recurrent balance of stagnation and has received virtually no foreign payments crises, restrictions on remittances, investment as investors consider the country to banking inefficiencies and corruption pose be a high-risk jurisdiction. disincentives for mining investment.12 The Government’s Action Plan for the Other resource-endowed countries that development of the Mining Sector in Burundi have managed to attract investments have has acknowledged the stagnant state of the done so by providing clarity, consistency and sector. It states ‘’due to the perception of predictability on the policy, legal, regulatory, some legal instability, few foreign mining and institutional framework, and the roles companies are currently investing in the and responsibilities of government agencies sector, as they consider Burundi a high- and investors alike, backed by transparent risk country. In this context, the State is non-discretionary rules and decision- committed to regaining the confidence making processes. Geological prospectivity of operators to revive investments and has not been sufficient by itself to attract declares the promotion of large mines and significant investment to many of these the professionalization of small mining emerging economies in the absence of operators to be the two main axes of the strong institutional, legal and regulatory mining sector's development strategy’’. The frameworks.13 11 Companies having their licences suspended included: Rainbow Minerals, Ntega Mining Burundi, Tanganyika Mining Burundi and African Mining Burundi. 12 Taken from’’Review of Burundi’s Industrial Metallic Mineral Fiscal Regime’’ by Andrew Bauer (2024). 13 There is a lack of modern and up to date geological information in Burundi and the country remains underexplored. The geological maps were compiled back in the 1990s and were done on a regional mapping scale of 1:250,000. 18 REPORT THE WORLD BANK Mineral Potential of Burundi Burundi) and nickel laterite deposits (Musongati, Nyabikere, Waga15).16 17 Burundi contains deposits of gold, tin, tungsten and tantalum (3Ts), lithium, rare earth minerals The EANB also hosts numerous occurrences (the lanthanides), vanadium, titanium, nickel, and deposits of vanadiferous titanomagnetite cobalt, copper, platinum group elements (PGEs), hosted in layered intrusions. Deposits of titano- phosphates, and various industrial minerals and magnetite have been observed in Nyabikere18, mineral fuels such as peat and hydrocarbons14. Itaba, Bukirasazi, Musongati, Rotovu and further south in Gitanga, Makamba19 and Mabanda. Burundi contains the south-western portion The EANB is underexplored, and it is likely that of the East African Nickel Belt (EANB) which additional nickel and titanium-iron-vanadium passes from the north-east of Burundi to the deposits could be discovered in the EANB with south of the country in a NE-SW orientation. The more exploration and geological research. EANB is best known for hosting nickel sulphide deposits (Kabanga in Tanzania and Muremera in 14 A diverse mineral resource endowment, if developed responsibly, can lead diversification of revenues across commodities to smooth out over-reliance on the revenues from a single commodity being exported. 15 The Waga deposit located in the province of Gitega and has a historical Mineral Resource Estimate of 35 million tonnes at 1.38% Ni. 16 The Kabanga deposit in Tanzania is one of the largest and highest-grade undeveloped nickel sulphide deposits. 17 An overview of nickel mineralisation in Africa with emphasis on the Mesoproterozoic East African Nickel Belt (EANB). https:// www.researchgate.net/publication/305619289_An_Overview_of_Nickel_Mineralisation_in_Africa_with_Emphasis_on_the_ Mesoproterozoic_East_African_Nickel_Belt_EANB. 18 The Nyabikere deposit has a historical nickel Mineral Resource Estimate of 46 million tonnes at 1.45% Ni. 19 The Mukanda vanadium deposit is the most significant of these deposits and in 2006 had a Mineral Resource Estimate of 9.7 million tonnes at 0.63% vanadium. Refer to: International Gold Exploration AB, 2007. Annual report 2006: Stockholm, Sweden, International Gold Exploration Ab, Press Release no 21, p.50. REPORT 19 MINING SECTOR DIAGNOSTIC - BURUNDI Figure 2 : Mineral occurrence map of Burundi (sourced from the OBM) The north-western and north-eastern parts of north and north-west of the country. Deposits Burundi are located within the Kibaran Belt which include Muyinga on the border with Tanzania, passes from DRC into Burundi and Rwanda and Ntega, Marangara, Busiga, Kabuye, Kabarore contains mineral occurrences and deposits of 21 in the north and Muramvya, located east of tin, lithium20, columbite-tantalite (niobium and Bujumbura. Cassiterite (tin) mineralization in tantalum), tungsten and beryllium. A number of hard rock is reported in Kabuye (Kayanza) and pegmatites and greisen veins have been mapped Murehe (Kirundo). and are being mined on an artisanal basis in the 20 Pegmatites containing the lithium-bearing mineral ‘spodumene’ have been observed in Ndora in the north-western part of Burundi. 21 Situated near the border with Rwanda in Kabarore commune in the Kayanza province, the Kivivu Mine is one of the major deposits of cassiterite and tantalum-rich columbite-tantalite in the northern Kibaran Belt. 20 REPORT THE WORLD BANK Musongati is considered to be a project of strategic national importance Musongati is the largest known nickel laterite deposit in Africa. Mineral Resources and Reserves for Musongati Limonite (ferralite) – (low MgO zone suitable for processing using acid leaching) • Indicated resource of 26.66 Mt at a grade of 1.13% Ni, 0.17% Co and 0.35% Cu, and 1.27 g/t PGEs • Inferred resource of 27.32 Mt at a grade of 0.99% Ni, 0.14% Co, 0.24 % Cu. • Combined Limonite resource (0.8% Ni cut-off grade) of 53.98 Mt. Saprolite (high MgO zone suitable for processing with smelting) • Indicated resource of 20.18 Mt at 2.19% Ni, 0.06% Co and 0.21% Cu. • Inferred resource of 76.02 Mt at 1.26% Ni, 0.05% Co, 0.21% Cu. • Combined Saprolite resource (0.8% Ni cut-off) of 96.2 Mt. The limonite contains high levels of iron and low levels of magnesium making it amenable to acid leaching. High magnesium saprolites need to undergo smelting to produce ferronickel, nickel matte and other nickel products. Smelting is very energy intensive. Building a smelter for processing the saprolite ore would require a large capital investment in equipment and plant and energy infrastructure. The complexities of having different processing facilities for different ore types on the Musongati project cannot be underestimated, particularly for a project located more than 1200 kilometers from a deep-sea port by road. This is compounded by a lack of sufficient and reliable power in the region, poor quality transport links to ports on the Indian Ocean coast, and a lack of human resources with experience in developing and operating large polymetallic projects in Burundi. More work is required to define the commercial viability and the optimal pathway for project development for the Musongati, Nyabikere and Waga deposits and other undiscovered deposits. Pegmatites in the vicinity of Kabarore contain not known and more geological research is higher grades of tantalum compared to needed to assess the mineral potential of pegmatites elsewhere. It is in the Ndora lithium in Burundi. pegmatites that that lithium mineralization has been discovered and has been mined on an Rare earth mineralization has been found and artisanal basis. The size and characteristics of mined at Gakara. The bastnasite mineralization these lithium-bearing pegmatites is currently is located in numerous thin veins. Although high REPORT 21 MINING SECTOR DIAGNOSTIC - BURUNDI grade, the discrete nature of the veins makes At a gold price in excess of USD 2300 per it difficult to scale up production volumes. To ounce, even small gold projects in Burundi maximize grades and to minimize dilution from may have the potential to generate significant non-mineralized rock, ore sorting has been done returns for investors. by hand by miners in the open pits at Gakara. Other potential sources of rare earth mineralization are The Vyerwa kaolin deposit, located near the town related to the carbonatite deposits at Matongo of Ngozi, covers an area of approximately 15 which are rich in phosphates. km2. A feasibility study carried out on the project concluded that it would be viable to develop with Gold is mined in several localities in Burundi. a nearby ceramic factory. There is also potential However, most gold deposits in Burundi are that the kaolin could be used in the manufacture generally small and are mined on an artisanal of insecticides, pozzolanic cement, and in the and small-scale mining basis by cooperatives. paper, rubber and paint industries. Table 3: Key mineral deposits in Burundi (source: Burundi Mining Policy) Tonage of Ore Location Grade Reference Resources Musongati- Feasibility study of BMM company, 150 MT 1.62% Ni Rutana 2011 Lateritic nickel Pre-feasibility Study of Samancor Ni and associated Nyabikere-Karuzi 46 MT 1.45% Ni (HK) company, 2009 ores Pre-feasibility Study of Samancor Ni Waga-Gitega 35MT 1.38% Ni (HK) company, 2009 9.7 MT primary m. Pre-feasibility Study of the company 0.63%V Iron-Titanium- 2.1MT secondary m. ELKEMAS Mukanda-Gitega Vanadium 0.8% V Engineering Division,1984 13629 kg Gold ; Cimba/ Tanganyika Gold Company 15591Kg of Ag; 36000 5g/t Gold And Mabayi Feasibility Study, 2016 T of Cooper associated minerals Masaka in Feasibility study of the company 1564.31 kg of gold 2g/t Butihinda African Mining Limited, 2018 Feasibility study of the company Gakara/ 58.36% Rare Earths 256 000 T Rainbow International Resources, Bujumbura TREO 2013 Colombo- Buvyukana/ 339 ppm Feasibility study of the company 2 464 293 T tantalite Kirundo Ta2Os Ntega Holding, 2019 Matongo/ Feasibility study of the company Phosphates 270 000 T 14.9% P2OS Kayanza British Sulfur Corporation, 1993 Matongo/ Feasibility study of the company Carbonatites 9.44 MT 45.19%CaO Kayanza British Sulfur Corporation, 1993 22 REPORT THE WORLD BANK Tonage of Ore Location Grade Reference Resources Mvumvu/ Kaolin 2.7 MT Kayanza Project to establish a ceramic - factory in Burundi, 1990 Vyerwa/Ngozi 16.32 MT 5.13MT, reserves on Project of implantation of a Quartzites Mukinya/Ngozi - less than 2km2 ceramic factory in Burundi,1990 Kanyaru- high/ 0.73MT, on a little Project of implantation of a factory Felthpaths - kayanza vein ceramic in Burundi,1990 Nyamuswaga, Ndurumu, 11% Peat 56.3 MT Peat Study in Burundi, 1978 Nyavyamo, humidity Buyongwe 45% of CaO; Kagisa/Busiga 100,000T 40.32% of Limestone Feasibility study available Cibitoke 2.2 MT CaO with 2.2%MgO Although mineral occurrences have been the mineral potential of the country is still observed for a number of minerals in different largely unknown. Burundi remains highly metallogenic belts in Burundi, very little underexplored. exploration work has been done to date and II.2 MINING SECTOR MANAGEMENT The Government lacks capacities at all levels capacities within government departments in the mining sector. Effectively mitigating the through a learning-by-doing approach as negative impacts of mining on communities mines are progressively developed. Burundi and the environment by addressing does not have experience of developing large- Environmental, Social, and Governance (ESG) scale mining projects. Global experience has factors begins with building robust institutional shown that building institutional capacities is frameworks and strengthening capacities. very difficult in the absence of a mining sector Other resource-rich countries have developed with operating mines. REPORT 23 MINING SECTOR DIAGNOSTIC - BURUNDI Key regulatory institutions Ministry of Mines and Hydraulics Energy and Mines Figure 3: Organogram of the Ministry of Mines, Hydraulics, Energy and Mines MINISTRE Coordination of the Ministerial Office: • Assistant to the Minister • Political Advisors Water and Electricity • Secretariat Production and Permanent Secretariat Distribution Authority • Permanent Secretary (REGIDESO-SP) • Technical Advisory Units • Secretariat National Peat Office (ONATOUR-SP) General Inspectorate of the Ministry of Hydraulics, Energy and Mines Petroleum Company of Burundi (SOPEBU) Regulatory Authority for the Drinking Water and Energy Sector (AREEN) Main Inspection Inspection Main Inspection of the Drinking Principale du of the Energy Burundian Rural Water Sector secteur de Sector Electrification Agency l’Energie (ABER) Burundian Agency for Hydraulics and Sanitation in Rural Areas (AHAMR) Burundian Office of Mines and Quarries (OBM) Directorate General for Drinking Water and Basic Sanitation Directorate General of Energy (DGEPA) (DGE) Directorate of Basic Sanitation Department of Department of Directorate of Drinking Water Department Planning and Renewable Energies Petroleum and Monitoring of and Energy Efficiency Gas Products Electrical Projects Management The Ministry of Hydraulics Energy and Mines working in close collaboration with other (MINHEM) is the governmental agency Ministries such as the Ministry of Environment, responsible for managing and administering Agriculture and Livestock on sector water, the mining sector in Burundi. The MINHEM is energy and mining sector issues; (iv) provision responsible for the following: (i) the design and of sustainable energy access to the population; implementation of the National Energy and (v) the promotion of renewable energy Mining Policies; (ii) the promotion of geological technologies; (vi) participation and coordination research activities in the mining sector; (iii) of energy exchange and partnership programs 24 REPORT THE WORLD BANK with regional and international institutions carry out its mandated functions. There is a of which Burundi is a member; (vii) planning, need for additional IT hardware and software construction and management of basic water, and new vehicles. There is also a shortage of energy and sanitation infrastructure; (viii) work offices within the OBM compound. It is developing and monitoring the Ministry’s recommended that the Laboratory be housed investment projects. in a separate building to free up space for the other Directions in the OBM. There are four main divisions under the MINHEM which include: (i) General Directorate, An Institutional Functional Review is going to be (ii) General Inspection; (iii) Minster’s Office and performed of the OBM. Amongst other things (iv) The Permanent Secretariat. The OBM is a the Institutional Functional Review should specialized technical under the Supervision focus on the ‘‘suitability’’ and ‘’appropriateness’’ of the MINHEM and is the Agency responsible of the mandates of Directions and services. for overseeing and regulating the day-to- An important component of the Institutional day of the mining sector in Burundi. Housed Functional Review will be to assess the optimal within the General Inspection is a department structure of a new regulatory entity for the for Technical Inspection of mining, quarries mining sector and how decentralization to and the hydrocarbon sector. The Mining regional offices should be structured. The and hydrocarbons policy and legislation Institutional Functional Review should also department are located in the Office of the assess how best communication, collaboration Permanent Secretariat. and coordination can be improved between the MINHEM and the Ministry of Finance on tax The Office of Mines and Quarries in Burundi collection and between MINHEM and the Ministry (OBM) of Environment, Agriculture and Livestock on environmental protection in the mining sector. The OBM was established in 2016 and its The Institutional Functional Review will be able day-to-day management is ensured by the to determine which information system and General Director assisted by four directors: database system would aid staff in managing the Director of Operations, the Director of and regulating the mining sector. Geological Research and Mining Cadastre, the Director of the Laboratory and the Director Direction of Operations for Administration and Finance. In July 2024, a Decree was adopted replacing the Director The Direction of Operations has three services General and all of the Directors for the main which include: (i) Mineral Traceability Service Directions in the OBM. Frequent changes and monitoring of counter activities; (ii) to the staffing at senior levels in the OBM Formalization, Monitoring and Supervision; (iii) has negatively impacted the sustainability of Licensing, Authorizations and Collections. The capacity strengthening programs and the ability Direction of Operations overseas five regional to retain institutional memory. OBM offices in southern, eastern, western, northern and central Burundi. Each regional The institutional, human22 and financial capacity office is tasked with formalization of artisanal of the OBM remains weak and needs to be and small-scale mining operators, technical strengthened. The OBM lacks updated and assistance to miners, monitoring all mining sites detailed geological data and modern equipment, and enforcement of regulations. The staffing and its workforce is insufficient in number to levels are inadequate for the regional offices 22 The MINHEM currently has no experienced mining lawyer. The OBM does not have real financial autonomy nor sufficient highly qualified human resources. OBM regional branches do not have sufficient human resources nor the means of travel to effectively control and supervise all mining activities in their regions. REPORT 25 MINING SECTOR DIAGNOSTIC - BURUNDI to fulfill their mandates23. It is recommended Direction of Geological Research and Mining that additional staff be recruited and trained for Cadastre the regional offices to be able to carry out their mandated functions. The Direction of Geological Research and Mining Cadastre has three services which include: The Direction of Operations is also responsible (i) Geological Research and Mining Sector for ensuring the ITRI Tin Supply Chain Initiative Promotion Service, (ii) File Analysis and Processing (ITSCi) that 3Ts mined in Burundi are sourced Service and (iii) Mining Cadastre, Geomatics and and traded through responsible supply chains. Geological Documentation Service. In 2023 ITSCI held eleven capacity building and coaching sessions for the OBM staff, There is a lack of up-to-date geological member companies and miners on traceability information on the mining sector in Burundi. procedures and risk mitigation measures24. Most of the geological maps date back to the 1990s and were done on a scale of 1:250,000. Direction for Laboratory Management There is also no countrywide geophysics data for use in promoting the sector to investors. The Direction of the Laboratory has three Old reports, maps and data are all in hard copy services which include: (i) Equipment format. Very few of these records are digitized. Maintenance and Sample Preparation Service The document library has extensive old paper (ii) Geochemical and physical-chemical analysis reports and records for deposits such as Department and (iii) Quality Management Unit. Musongati, Nyabikere, Waga and Mukanda25. The Laboratory is housed across several offices The hard copy data could be a valuable resource in different buildings at the OBM compound in for the OBM. The OBM would benefit from the Bujumbura. The compound itself has enough digitization of this data and information. A full space for a new Laboratory to be constructed Gap Analysis done on all digital data and hard as a standalone building. By having a dedicated copy data held at the OBM would help establish standalone laboratory in a single building, what is available and what is missing. This will it would free up space in the existing offices help determine priority programs for digitization housing the laboratory for the other Directions and data validation from hard copy records. and departments in the OBM. There is no up-to-date modernized Cadastre In 2019 a consultant drafted a roadmap for system in Burundi. The Cadastre Service has laboratory accreditation. To date the laboratory one member of staff and a technician. The is not accredited and lacks adequate funding, Cadastre is kept on a laptop computer which equipment and trained staff to carry out its uses ARC GIS with all license information kept mandated functions. The Institutional Functional in an Excel spreadsheet. The Cadastre system Review of the OBM should assess the business needs to be modernized and made accessible model for the laboratory and include a Finance online and supported by a secure server26. and Sustainability Plan for the laboratory so that it can become self-sufficient. The Direction of Geological Research and Mining Cadastre faces serious capacity constraints including a lack of trained staff for the Cadastre and a lack of knowledge and resources to be 23 The northern regional OBM office only has 4 staff members to monitor and supervise all mining activities in the north of the country where there are hundreds of mining sites (gold and the 3Ts). 24 https://mailchi.mp/internationaltin.org/itsci-newsletter-june-4395720-9577754 25 Most of these records include drill logs and assay data. 26 An assessment will need to be made on where the server will be located and what power source to use to ensure a stable source of power. 26 REPORT THE WORLD BANK able to promote Burundi’s mining sector. There The Burundian Revenue Authority (OBR) is a lack of funding for geological research in Burundi and the Government has no investment The Burundian Revenue Authority (OBR) has strategy for the mining sector. Training will be legal status and is under the supervision of the needed on sector promotion and on raising Ministry of finance. This institution was created awareness in the Government on the criteria to increase government revenues to reduce the investors use for making investment decisions. level of poverty in Burundi. The OBR is meant Geological research is required to generate to accomplish this objective through improved the geodata needed to effectively show case public revenue collection as well as through Burundi’s deposits and mineral occurrences an enabling business climate. As stated by and to promote the sector. government, the OBR is an institution created to inaugurate an era of modern and professional Ministry of Environment, Agriculture and tax and customs administration in Burundi. Livestock The law governing the OBR has been revised to adapt and harmonize it to the evolving socio- International good practice calls for economic context of the country.27 independence of an environmental regulatory authority from other line ministries. In Burundi, Membership of the International Conference there is potential for conflicts of interests to arise on the Great Lakes Region (ICGLR) by having the Ministry of Environment combined with the Ministry of Agriculture of Agriculture Burundi is a member of The International and Livestock. An Institutional Functional Conference on the Great Lakes Region (ICGLR) Review should be performed of the Ministry which is an inter-governmental organization of Environment, Agriculture and Livestock to with member countries in the African Great define the optimal structure for establishing Lakes Region. Its establishment was based on an Independent Ministry of Environment or the recognition that political instability and Environmental Protection Agency. conflicts in these countries have a considerable regional dimension and require a concerted The OBPE which is responsible for implementing effort in order to promote sustainable peace and Environmental Code and Regulations lacks development. Conflicts in the region constitute a major threat to international peace and security. the budget, equipment and vehicles needed High value mineral resources such as gold and to access, monitor and audit operating sites. the 3Ts, have funded armed groups in these There is no central digitized record database conflicts. The main divisions of the ICGLR are: or digital filing system in the OBPE making (i) Peace and Security; (ii) Democracy and Good it hard to retrieve records for different Governance; (iii) Economic Development and companies and projects. There is also a lack Regional Integration; (iv) Humanitarian social of intragovernmental coordination between and environment issues; (v) Cross Cutting Issues; the OBPE and the OBM in the MINHEM and and (vi) Gender, Women and Children. The between the OBPE and the Ministry of National organization is composed of twelve member Solidarity, Social Affairs, Human Rights and states, namely: Angola, Burundi, Central African Gender with regard to Environmental and Social Republic, Republic of Congo, Democratic Republic Impact Studies (ESIAs) and Environmental and of Congo, Kenya, Uganda, Rwanda, Republic of Social Management Plans (ESMPs). South Sudan, Sudan, Tanzania and Zambia. On the national level, each of the Member States has put in place a National Coordination Mechanism (NCM) which includes representatives of civil society and women and youth organizations. 27 https://www.obr.bi/index.php/en/ REPORT 27 MINING SECTOR DIAGNOSTIC - BURUNDI II.3 LEGAL FRAMEWORK Burundi’s mining sector is governed by the made in the 2023 revision of the Mining Code 2023 Minerals Code (Law No. 1/19 of August 4, according to the Government of Burundi’s 2023). Below are some of the main changes Action Plan: • A logical path allowing the professionalization of artisanal mining and quarrying and its easy transition to industrial exploitation, while promoting the adoption of the best technical, environmental and social standards. The legal framework has been modified with the creation of new permits for mines and quarries with wider perimeters and longer validity periods, where light mechanization is allowed, accompanied by stricter environmental protection measures and a financial mechanism for the rehabilitation of sites at the end of exploitation. • The option for the State to conclude production sharing contracts based on the principle of "win-win" equity in the distribution of revenues from the exploitation or, alternatively, to take a stake in the capital of mining companies at the level of a minimum of 16% (up from 10%), increased by 5% each time the agreement is renewed. This right is optional, that is to say, the State has the choice to exercise this prerogative or not to do so28. • The possibility of Burundian economic operators taking a stake in the share capital of mining companies by negotiation by mutual agreement between the parties under market conditions. • Mining agreements that specify obligations in terms of infrastructure, socio-economic contributions and recruitment, with a standard format to be specified by decree. • Subnational revenue sharing to be further defined in the mining regulations. • Measures to ensure the training and employment of Burundian workers and the increase of added value for the country. The Mining Code contains measures relating to the preferential supply of goods and services to mining companies by local SMEs, accompanied by national staff obligations at all levels. • Prohibition of government officials having involvement in the mining sector. The Action Plan for the sector states that According to the MSD, government officials ‘’Some of these innovations will be introduced are generally satisfied (2.9) with the country’s on an experimental basis in the next two mining legislation whereas both industry (2.3) years to test their effectiveness. They may and CSOs (2.4) are dissatisfied. Both industry be improved based on the results obtained and CSOs say that they were not consulted and lessons learned in its implementation, in the revision of the 2023 Mining Code, or in if necessary, during an update of the Mining the process of revising the Artisanal and small- Code from 2025’’. scale mining (ASM) regulations in 2023 and 28 There is a lack of information available on the modalities of production sharing in terms of how the minerals would be stored and where and by whom and practical issues about where they would be sold and for what price. The cost of carry can be significant. 28 REPORT THE WORLD BANK larger scale mining (LSM) Regulations in 2024. Comments from industry said that the revised Government officials indicate that the Mining 2023 Mining Code is less investor friendly Code is consistent with Land Legislation compared to the previous Code and that it (2.8), Environmental Protection (3.2), Social introduces uncertainty regarding production Protection (2.9) and Fiscal Legislation sharing and the fiscal regime including a (2.8). However, government officials also minimum of 16% government equity in noted inconsistencies with Environmental operating companies. The sections below will Legislation because research and exploitation outline in more detail an assessment of the permits have been issued in protected areas, Mining Code and 2015 Regulations and the namely in the Kibira National Park and Ruvubu views of the different stakeholder groups. National Park. REPORT 29 MINING SECTOR DIAGNOSTIC - BURUNDI III. MSD RESULTS DASHBOARD This section presents a summary of the Burundi shows that of the 14 dimensions assessed MSD key findings. The results are aggregated (each of the cells in the dashboard), 7 obtained into the dashboard (Figure 4), which presents an a high score, six obtained a low score, and one overview of the performance of the mining sector received a very low score. There were no very along the extractive industries value chain as high scores showing that there is significant well as with respect to the sector management room for improvement. The following sections framework, as defined earlier. Each cell in the will take a detailed look at each dimension and dashboard consists of one or more indicators present an updated analysis of the issues each and each indicator is scored based on a set of dimension is facing, discussing the main reasons questions included on the questionnaires29. The behind the results. The dashboard can be seen details behind each indicator (i.e., the underlying from two different perspectives: horizontally questions and their scoring) can be found and vertically. From the vertical perspective the separately in Annexes I and II. The overview assessment has three thematic blocks: 1. Mining sector management framework, which evaluates sector policy, sector dialogue, roles and responsibilities, and intragovernmental coordination; 2. De jure performance, which includes legislation, rules and regulations along the five stages of the extractive industries value chain; and 3. De facto performance, which includes institutional capacity and effectiveness along the five stages of the extractive industries value chain. 29 The scores for each element in the sector management framework derive from a set of relevant questions. Annex II provides a complete list of the underlying questions for each element, as well as the disaggregated scoring for each question. 30 REPORT THE WORLD BANK Figure 4: Burundi Mining Sector Diagnostic results Dashboard Mining Sector Diagnostic Mining Sector Management Roles and Intra-Governmental Sector Policy Sector Dialogue Responsabilities Coordination II. Extractive Industries Value Chain Revenue Contracts, Mining Management Licenses and Mining Operations Local Impact Taxation and Exploration Distribution Mining Legislation/ Processes, Land/ Compensation/ Local Content, Rules for License Resettle Tax Policy Revenue Sharing Employment, De Jure Allocation, ment, and Tax and Fiscal Community Performance Oversight, and Environmental and Administra- Stabilization-- Engagement, CSR Transfer Social Impact tion Rules Rules and Social Issues Management, ASM, OHSA, Mine Closure-- Rules Land/ Collection/ Compensation/ Revenue Sharing, Local Supplier Maintenance of Resettle Fiscal Development, Geological ment, Mining Tax Stabilization and Employment, De Facto Information and Environmental and Administra- Resource Community Performance Effective License Social Impact, tion Revenue Engagement, CSR Allocation Support for and Auditing Transparency-- and Social and ASM, OHSA, Mine Practice Issues--Practice Management Closure-- Practice Scoring Key Very Low (1 - 1.75) Low (>1.75 - 2.5) High (>2.5 - 3.25) Very High (>3.25 - 4) The dashboard shows the following: 1. Regarding Mining Sector Management, there is room for improvement in all four areas of Sector Policy, Sector Dialogue, Roles and Responsibilities and Intra- Governmental Coordination. The biggest weaknesses are in Sector Dialogue and Intra-Governmental Coordination. 2. In terms of De Jure performance Burundi scored highly in Contracts, Licenses and Exploration and in Tax Policy and Tax Administration Rules but scored low in Mining Operations and Local Impact and very low in Revenue Management and Fiscal Stabilization Rules. 3. In terms of De Facto performance, the scoring for none of the components received a very high score, indicating the need for improvement in “Contracts, Licenses and Exploration”, “Mining Operations”, “Taxation”, “Revenue Distribution and Management” and “Local Impact”. REPORT 31 MINING SECTOR DIAGNOSTIC - BURUNDI Another reading of the assessment summarized and Distribution’’ and ‘’Local Impact’’. The most in the above dashboard provides an aggregated significant aspects of these gaps are discussed horizontal overview of each of the five stages throughout the following section of this report. of the extractive industries value chain. The policy implementation gap (e.g., the difference Given there are no large-scale mines in Burundi, between de-jure and de-facto performance) the links further down the EI value chain, including provides another high-level analysis of Revenue Management and Distribution and the Burundi data (see Figure 5). The most Local Impact have not been effectively tested. significant implementation gaps where De Jure As a result, the Implementation Gap for these performance exceeded De Facto performance two links in the EI chain, whereby the De Facto were for ‘’Contracts Licenses and Exploration’’. scores were higher than the De Jure scores, The most significant gaps where De Facto needs to be put into context. performance scored higher than De Jure performance were for ‘’Revenue Management Figure 5: Implementation Gap Analysis Policy Implementation Gaps 4,00 3,25 2,50 1,75 1,00 Contracts, Mining Mining Revenue Local Licenses and Operatons Taxation Management Impact Exploration and Distribution Policy Implementation Performance de jure Performance de facto 32 REPORT THE WORLD BANK IV. ASSESSMENT OF THE SECTOR MANAGEMENT FRAMEWORK The review of the dashboard and the gap which is considered to be unsatisfactory. This analysis in the preceding section provide a considers the quality of sector policy, sector birds-eye view of the sector’s De jure and De dialogue, roles and responsibilities and intra- facto performance but does not give specific governmental coordination. information on the strengths and weaknesses identified through the MSD. This section and More generally, though, the MSD results the following sections provide a more detailed regarding Burundi’s mining sector need to be look at the sector management framework and treated with some caution. The management performance along the EI value chain – including framework is largely untested because no large- identifying potential areas for improvement, scale mines have been developed in Burundi. whether to policy and regulations or their In the absence of large-scale mechanized implementation. The following discussion mines being developed the legislative and starts with the sector management framework regulatory governing the mining sector in (Figure 6). The perceived performance of mining Burundi remains untested. sector management at an overall level is 2.49 Figure 6: Mining Sector Management Framework Mining Sector Management (2.49) Intra-Governmental Sector Policy Sector Dialogue Roles and Responsibilities Coordination (2.62) (2.03) (3.23) (2.10) Scoring Key Very Low (1 - 1.75) Low (>1.75 - 2.5) High (>2.5 - 3.25) Very High (>3.25 - 4) Based on the MSD responses, Burundi’s mining of objectivity by asking respondents very sector management framework is assessed as specific and detailed questions. However, there being slightly unsatisfactory (2.49). are instances where the views of different stakeholder groups on various issues differ and The scores for each element of the sector this report does note these differences. management framework are derived from a set of relevant questions. Annex II provides Sector Policy (2.62) a full list of the underlying questions for each element as well as the scoring for each Burundi currently faces a serious shortage question. The remainder of this chapter and the of foreign exchange reserves, making the following chapter summarize the main findings. development of the mining sector a key priority The report is based on the data collected and for the Government due to its export earning summarized in Annex II. The MSD questionnaire potential. The mining sector is an integral to the used to collect the data aims for a high degree Government of Burundi’s 2040-2060 Vision for REPORT 33 MINING SECTOR DIAGNOSTIC - BURUNDI economic development. This is also reflected in transparency, and formalize artisanal mining the Burundi National Development Plan 2018- activities. It also calls for incentives to increase 2027 (NDP) in which the mining sector is one of mineral exploration and geological information three priority growth sectors. A Mining Policy and protection of the environment.31 was promulgated in March 2022, which had been developed since 2015. In November 2023 In April 2023, the government released “Projet the Government adopted an Action Plan for the de ‘Vision Burundi pays emergent en 2040 et pays development of the mining sector in Burundi. développé en 2060’”, a longer-term national development plan. The mining sector does The Government of Burundi considers not feature heavily, with greater emphasis on regional economic integration as a strategic institutional development, agriculture, the service priority and is closely collaborating with the sectors (e.g., financial services), infrastructure Government of Tanzania on proposed road and (e.g., energy, transport, internet, clean water), rail infrastructure linkages. A Memorandum of value-added industrialization, healthcare and understanding (MOU) has been signed between education. Mines are only mentioned in reference both Governments to build out and extend a to value-added manufacturing. Standard-gauge railway (SGR) into Burundi30. Mining Policy National Development Plan In 2015 the Government started drafting a The National Development Plan of Burundi Mining Policy which was completed in March (2018-2027) sets the development of the mining 2022. The Mining Policy conforms with the sector as one of the three priorities to boost priorities and objectives of the NDP for the economic growth, along with agriculture and mining sector and is aligned with the African infrastructure. The plan is vague, but it does Mining Vision. The Mining Policy is publicly call for the government to promote the sector available and on the website of the Ministry of and add value to raw minerals, review mining Hydraulics Energy and Mines. The mining policy legislation, promote good governance and has a number of guiding principles: • Ensure the contribution of the mining sector to socio-economic development for the well-being of the nation; • Establish effective administration and management of the mining sector in accordance with the principles of good governance, transparency and accountability; • Strengthen the contribution of the artisanal mining sector to the creation of economic opportunities and jobs for rural communities; • Encourage mining exploration and exploitation and attract private investment, taking into account the specific risks of the mining sector; • Ensure the participation and inclusion of all stakeholders; • Mitigate the negative impact of mining activities on the environment and communities; 30 A US$2.15 billion contract was signed on January 29, 2025, between representatives of the Governments of Tanzania and Burundi and the China Railway Engineering Group and the China Railway Engineering Design and Consulting Group for the construction of an electrified standard gauge railway line between Uvinza and Musongati. This followed on from an Economic and Financial Study of the proposed new railway from Uvinza to Musongati which was conducted by Gauff Ingenieure GmbH & Co in March 2020. 31 https://www.presidence.gov.bi/wp-content/uploads/2018/08/PND-Burundi-2018-2027-Version-Finale.pdf. 34 REPORT THE WORLD BANK • Ensure respect for human rights and take into account the presence of vulnerable groups; • Ensure training and capacity building of human resources; • Develop support infrastructure for the mining sector. Comments received by Industry and Civil Society to several small amendments recommended representatives as part of the MSD showed that by the Council of Ministers). The Action Plan several of them did not know that a Mining Policy has been the official roadmap the Government from 2022 existed and did not know about the has used to implement mining sector reforms. 2023 Action Plan for the Development of the It was mentioned in the media (National TV/ Mining Sector. Radio) and on the Government website in the Council of Ministers’ minutes. The MINHEM Action Plan for the development of the and OBM have regularly mention the existence mining sector of the Action Plan during workshops and meetings. However, the Action Plan was not In the last quarter of 2023 the Ministry of widely disseminated to the public and it cannot Hydraulics, Energy and Mines drafted an Action be found online. Plan for the Development of the mining sector. Inputs and comments were submitted from The November 2023 Action Plan is aligned the OBM and the document was presented with the "Vision Burundi Emerging Country in to the Council of Ministers. The Council of 2040 and Developed Country in 2060" and the Ministers officially approved and adopted the "National Development Plan 2018-2027". The Action Plan on the 4th November 2023 (subject objectives of the National Plan are the following: 1. Establishment of a clear, stable and predictable legal and regulatory framework, while ensuring high levels of transparency and good governance; 2. Institutional capacity building and institutional reform of the administration of the mining and geological sector; 3. Development of institutional cooperation with tax and environmental authorities to improve tax revenue collection and strengthen environmental protection in the mining industry; 4. Promotion of good governance and transparency in the mining sector, with the announcement of Burundi's application to the Extractive Industries Transparency Initiative (EITI); 5. Establishment of a transparent, predictable, fair and competitive tax regime for mining investments; 6. Strengthening the traceability and certification of minerals and the formalization and supervision of artisanal mining activities; 7. Intensification of geological and mining research activities aimed at promoting investment in the sector; 8. Improved management and protection of the mining environment; REPORT 35 MINING SECTOR DIAGNOSTIC - BURUNDI 9. Promotion of skills, employment and procurement from domestic companies; 10. Optimization of mining economic benefits. The Action Plan has a number of core and challenges as well as prospects for interventions. These include: (i) Institutional supporting the collaborative development of capacity building and institutional reform regional value chains through coordinated of the administration of the mining and investments with Burundi’s neighbors. To geological sector; (ii) Promotion of good develop the roadmap, the government will need governance and transparency, with application to assess the following priorities: (i) improved to the EITI; (iii) Establishment of a transparent, geological data; (ii) improved sector governance; predictable, fair and competitive tax regime (iii) reducing obstacles to private sector for mining investments; (iv) Strengthening ETM investment; (iv) creating a competitive the traceability and certification of minerals fiscal regime for mining and value addition; and the formalization and supervision of assessing options for affordable, reliable and artisanal mining activities; (v) Intensification of low-carbon electricity; (v) assessing options geological and mining research activities aimed for dependable and secure transportation and at promoting investment in the sector; (vi) logistics infrastructure; (vi) local employment Improving the management and protection of and human capital development32 across the mining environment; (vii) Promotion of skills ETM value chains; (vii) durable social benefits and procurement from national companies and community partnerships; (viii) enhanced (local content); and (viii) Optimization of mining environmental management; (ix) attraction of economic benefits. private-sector investment into value-added ETM processing and manufacturing value The Action Plan is ambitious and attempts to chains. The roadmap will be aligned with the resolve a number of the challenges facing the African Mining Vision, the Africa Union (AU) mining sector in Burundi and to be effective, Agenda 2063’s Continental Commodities it will require extensive dialogue with Strategy33 and will complement Burundi’s 2022 stakeholders. The Action Plan has a number Mining Policy and 2023 Action Plan for Mining of activities which have been scheduled but Sector Development by offering studies and these have not been costed up and there is a analytics that would inform policymakers on lack of funds to pay for the different activities. options for strategic investments and reforms. The Action Plan also lacks the development of Further detail on the role of transport, energy, an investment promotion strategy and does not and other critical sectors will be addressed in outline a coordinated vision for how Burundi the cross-sectoral ETM Roadmap, designed to can benefit from the global energy transition support integrated development. and leverage its energy transition mineral (ETM) resources for economic development. Sector Dialogue (2.03) The Government will benefit from the holistic Of the four categories under Mining Sector Energy Transition Minerals roadmap which Management, Sector Dialogue (2.3) scores is currently underway. The ETM Roadmap the lowest overall and is considered to be will assess Burundi’s own infrastructure unsatisfactory. Government is satisfied with and industrial diversification opportunities the level of dialogue it has with industry and 32 An assessment of the opportunities for human capital development will need to focus on the skill sets needed for the future for Burundi to develop its ETM resources while ensuring sustainable, equitable and inclusive development. 33 The continental Commodities Strategy is a flagship project of the AU’s Agenda 2063 and envisions a commodity-led industrialization: developing Africa’s commodities as a driver for achieving the structural, social and economic transformation of the continent. 36 REPORT THE WORLD BANK civil society stakeholders34 (scores of 2.5 and revisions of the 2023 ASM Regulations and 2024 2.6 respectively). However, this is at odds with LSM Regulations. Industry (1.5) and civil society (1.8) who are both dissatisfied with the extent of dialogue with Global experience has shown that regular the Government.35 Industry is very dissatisfied sector dialogue is important for ensuring (1.7) with dialogue with civil society and civil strong governance37 and securing investment society are also ‘’dissatisfied’’ (1.9) with the level in the mining sector. Indeed, the Government of dialogue with industry. Both industry and of Burundi has outlined its intention to CSOs consider that meaningful consultations join the EITI, a multi-stakeholder platform on sector strategy have been largely absent for revenue accountability. To successfully from the policy formulation process regarding manage the mining sector, the Government the mining sector in Burundi. Industry (1.4) of Burundi needs to enforce its legal, political and CSOs (1.7) are very dissatisfied with the and administrative authority for managing and extent of informed dialogue and consultation regulating the sector and interact consistently that took place during the preparation of the with different stakeholders to understand their Mining Policy 2022 and, until July 202436, were needs as the sector develops. Civil society and largely unaware that an Action Plan for the industry need to be provided with the platform development of the mining sector existed. required to influence policy decisions, exercise Since being approved by the Council of Ministers their rights, comply with their obligations, and in November 2023, the Action Plan has not been resolve their differences. CSO representatives in publicly disseminated to stakeholders and is not Burundi indicate that Government and industry accessible online. participants are simply not aware of the role that civil society can play for good governance In the Government’s Action Plan for the mining of the mining sector. sector, it says that the new mining code has introduced new measures that ‘’represent a The Government needs to set up a functional, fundamental reform of the sector and their credible and effective platform for multi- introduction requires an in-depth dialogue with stakeholder engagement and consultation. all stakeholders’’. The Action Plan also says ‘’the However, there are challenges doing so. The State is committed to conducting information, Burundi Federal Chamber of Commerce and education and communication campaigns to Industry (CFCIB) is not heavily involved in the help all government institutions and agencies, mining sector. The Sectoral Chamber of Mines mining operators and the population to and quarries (SCMC) in Burundi is insufficiently understand the new legislative and regulatory resourced to be able to represent the views provisions and to listen to their opinions’’. The of all industry stakeholders and although Government clearly outlines and promotes it helps convene meetings, the majority of transparency and multi-stakeholder dialogue industry members are dissatisfied (2.0) with and engagement in the 2022 Mining Policy the Sectoral Chamber of Mines and quarries and the 2023 Action Plan. However, comments as it lacks the skills, financial resources and the received from both Industry and CSO stated that technical capacities to successfully accomplish they had not been properly consulted during its mission38. Very few international exploration the revision of the 2023 Mining Code or with the and/or mining companies are active in Burundi 34 Comments from Government said that meetings with civil society are rare which conforms to views held by CSOs. 35 More than half of industry interviewees responded saying that sector dialogue with the Government was very unsatisfactory. 36 A workshop was held in July 2024 where government, industry and civil society stakeholders were invited to discuss the preliminary findings of the MSD wit the World Bank. At the workshop the Director General of the OBM presented to all stakeholders the Government’s Action Plan for the Development of the Mining Sector in Burundi. 37 An important aspect of sector dialogue is to ensure that different stakeholder expectations are realistic. 38 The Chamber of Mines in Burundi has a limited membership, has limited capacities and has no website. REPORT 37 MINING SECTOR DIAGNOSTIC - BURUNDI and as a result, the MINHEM do not have for additional IT hardware and software and for open and frequent dialogue with international data files within both the OBM and the OBPE to companies and international investors to be digitized. CSOs have also highlighted their understand what their requirements and needs concerns of disagreements between mining are and how they allocate capital to investment authorities and environmental protection opportunities. There is a small range of civil authorities over roles and responsibilities society organizations in Burundi and only a few regarding the mining sector, particularly in of them are involved with the mining sector. regard to the rehabilitation of mining sites. Roles and Responsibilities (3.23) An Institutional Functional Review should be performed of the OBM. A separate Institutional Of the four categories under Mining Sector Functional Review should be conducted for Management, Roles and Responsibilities (3.23) the Ministry of Environment, Agriculture and has the highest score. Findings from the MSD Livestock in order to define the optimal structure show that Government officials and Industry and mandate for an independent Environmental are very satisfied (3.1) that the MINHEM has Regulatory Authority40. The independence clearly defined roles and responsibilities39. of an Environmental Regulatory Authority is Industry representatives are also very satisfied important to avoid conflicts of interest and for (3.4) that in practice there are very few promoting good governance. disagreements between government agencies and departments over roles and responsibilities Good governance of the mining industry requires although both government and industry think a decision-making system that is: (i) horizontally that roles and responsibilities in the Ministry multi-sectoral (involving several ministries to of Environment could be improved to ensure a establish checks and balances); (ii) vertically timely processing and issuance of environmental multi-level (incorporating the management certificates. Government officials are satisfied and participation of regional and municipal (3.1) that mining and other legislation assigns authorities); and (iii) multi-stakeholder (with the clear authorities and non-overlapping participation of civil society, mining companies, responsibilities between government ministries universities and local communities). This for the mining sector. However, there appears system must be supported by interoperable to be overlapping mandates between the OBPE and integrated information systems, as well as and the Ministry of National Solidarity, Social adequate resources and institutional capacities Affairs, Human Rights and Gender. to ensure its effectiveness. Although roles and responsibilities have been Intragovernmental Coordination (2.10) clearly defined for both the OBM and OBPE, in practice they are not implemented as defined Government officials are dissatisfied (2.38) while in the legislation due to capacity constraints. Industry (1.92) and CSOs (1.86) are dissatisfied Institutional, human and financial capacity of with intra-governmental coordination relating both the OBM (within the MINHEM) and the to the mining sector. Government respondents OBPE (within the Ministry of Environment, report little disagreement between mining and Agriculture and Livestock) is weak and needs to other authorities, with some minor tension in the be strengthened. The OBM and the OBPE lack relationship with land use authorities and sub- vehicles and modern equipment and their staff national authorities. Industry representatives are insufficient in number to carry out both are very satisfied (3.4) and Government official agencies’ mandated functions. There is a need are satisfied (2.7) that there are no major 39 The 2023 Mining Code makes reference to the Mining Cadastre but it fails to make it a legal requirement to have a computerized mining Cadastre based on a GIS-system. 40 The independence of an Environmental Regulatory Authority is important for good governance and to avoid conflicts of interest. 38 REPORT THE WORLD BANK disagreements between government authorities to mine site development or pit expansions. A for mining, land access and use, environmental lot of the documentation handled by the OBM protection and social protection. However, and the OBPE is in hard copy. The establishment according to a government official, there has of digital mechanisms for information sharing been disagreement between the Government would make intra-governmental coordination and ITRI on the traceability system and on the between Ministries more efficient. This would share of revenue taken by ITRI through fees it be aligned with the Governments’ Action Plan levies on mining production. for the mining sector which states it would ‘’ promote intersectoral governance and the The Government is dissatisfied (2.3) with distribution of tasks and responsibilities at all the formal mechanisms to share resources levels of government to operationalize this and information between Ministries and approach, through information sharing and departments in Government. In the MSD, capacity building of stakeholders. The objective some government officials stated that there is to increase the visibility of spending in the is no central information storage system nor municipalities affected by mining projects and to database that has been set up to support the promote productive diversification in territories maintenance, verification and sharing of data for using the mining sector as a lever’’. the mining sector. This is at odds with how other government officials responded in the MSD who There are reportedly different working groups said that mining-related information is shared and task forces that have been established by the among relevant agencies and is easily accessible Government. The Office of the Prime Minister with formal mechanisms for information sharing. has reportedly brought together practitioners in There appears to be no formal information the sector to increase production and curb fraud sharing mechanisms in place between the OBPE in minerals, especially in gold and the 3Ts. The in the Ministry of Environment, Agriculture and National Coordination Mechanism of the ICGLR Livestock and the Ministry of National Solidarity, Regional Initiative against the Illegal Exploitation Social Affairs, Human Rights and Gender. More of Natural Resources (RINR) and The National than 70% of industry respondents did not know and Provincial Traceability Committees, are about any formal mechanisms in Government bodies that have been set up in this framework. for sharing information or resources between ministries and regulatory authorities. Given that no large-scale mines have been put into production, intragovernmental As mentioned in the Roles and Responsibilities coordination remains largely un-tested. section above, Government officials and Any industrial-scale mine developed in the Industry representatives have concerns about country will stress-test the legislative and the timeframe it takes for environmental regulatory framework of the mining sector certificates to be approved and information in Burundi. Cross-ministerial and cross- exchanged with the OBM. A more stream-lined sectoral collaboration will be critical for the approach to inter-ministerial coordination may Government of Burundi to mitigate negative result in the quicker timeframes for delivery socio-environmental impacts of mining while of the Environmental certificates, assuming maximizing socio-economic benefits from the they full comply with the Mining Code, the development of new mines in the country41. Environment Code and relevant regulations. The Institutional Functional Review of the OBM should assess how best communication, Timing of data sharing data between ministries collaboration and coordination can be improved and agencies was also raised as a concern for land between the MINHEM and the Ministry access and compensation particularly in relation of Finance on tax collection and between 41 This will be particularly important for the Government when assessing how best to leverage Burundi’s Energy Transition Mineral resources for the development of regional value chains for regional economic integration and development. REPORT 39 MINING SECTOR DIAGNOSTIC - BURUNDI MINHEM and the Ministry of Agriculture and mining sector in Burundi can be leveraged for Environment on environmental protection in positive development outcomes. Establishing the mining sector42. An important component an independent Environmental Regulatory of the Institutional Functional Review will Authority is a key priority for ensuring effective be to assess the optimal structure of a new and independent regulatory oversight of regulatory entity for the mining sector. the mining sector. The government should also address immediate needs, such as Room for Improvement in “Mining renegotiating suspended mining licenses with Sector Management Framework” the use of transaction advisory support and conducting an institutional functional review To improve the mining sector management in of the OBM. In the medium term, priorities Burundi, the Government will need to implement include modernizing the GIS-linked Cadaster a comprehensive set of recommendations system, developing an investment promotion focused on legal, institutional, and governance strategy, becoming a member of the EITI, reforms. Improving stakeholder engagement enhancing capacities in contract negotiations through a functional multi-stakeholder and strengthening institutional capacities at platform is crucial to building trust and the OBM, the OBPE and the OBR. These efforts improving dialogue between industry, civil are necessary to improve sector governance, society, and the government. Strengthening attract investment, and ensure the sustainable intra-governmental coordination is vital development of Burundi’s mining industry. for ensuring the timely processing of authorisations and approvals. An effective This MSD has helped identify a number of policy whole-of-government approach to the Energy recommendations and priorities for reforms Transition Minerals Roadmap will be required which are outlined below43. to enable the Government to articulate how the Immediate Term Priorities (next 12 months) ‚ Strengthening the Legal, Institutional and Regulatory Framework ◊ Adopt the revised Environmental Regulations which have not yet been promulgated. ◊ Conduct an Institutional Functional Review of the OBM to define the optimal structure of a mining sector regulatory entity44. ‚ License Allocation and Management ◊ Re-negotiate mining agreements. ‚ Sector Policy and Sector Dialogue ◊ Complete the Energy Transition Minerals (ETM) Roadmap to assess infrastructure and industrial diversification opportunities and challenges as well as prospects 42 Cross-ministerial and cross-sectoral collaboration will be critical for the Government of Burundi to mitigate negative socio- environmental impacts of mining while maximising socio-economic benefits from the development of mines. 43 The highest priority recommendations are outlined in bold font. 44 The Institutional Functional Review of the OBM should assess how intragovernmental coordination can be improved with other Ministries and regulatory entities, how the mining sector regulator should be resourced to carry out its prescribed mandates, and should assess the business model for the laboratory so that a finance and sustainability plan can be produced. 40 REPORT THE WORLD BANK for supporting the collaborative development of regional value chains through coordinated investments with Burundi’s neighboring countries ◊ Improve dialogue between stakeholder groups in Burundi’s mining sector by establishing a functional, credible and effective platform for multi-stakeholder engagement and consultation. Short to medium-term Priorities (1 year – 7 years) ‚ Strengthening the Legal, Institutional and Regulatory Framework ◊ Carry out an Institutional Functional Review of the Ministry of Environment, Agriculture and Livestock with the objective of establishing an independent Environmental Regulatory Authority to replace the OBPE. ◊ Strengthen capacities in contract negotiations through the use of independent transaction advisors. ◊ Develop an information and database management system for mining sector administration. ◊ Following the Institutional Functional Reviews of the OBM and the OBPE (and the formation of an Independent Environmental Regulatory Authority), ensure recommendations and findings are implemented in full and ensure sufficient human, financial and technological resources for the respective entities to carry out their roles, responsibilities and mandates. ‚ License Allocation and Management ◊ Develop a modernized GIS-linked Cadaster system. ‚ Sector Policy and Sector Dialogue ◊ Update the Mining Policy, following the completion of the ETM Roadmap with the Government’s vision for leveraging Burundi’s mineral resources for development and economic transformation. ◊ Develop an investment promotion strategy for the mining sector. ◊ Strengthen capacity of the Chamber of Mines to represent the interests of the private sector. ◊ Support the establishment and functioning of a civil society umbrella organization to represent civil society and local communities in mining areas on mining related topics and issues. REPORT 41 MINING SECTOR DIAGNOSTIC - BURUNDI V. PERFORMANCE ALONG THE EXTRACTIVE INDUSTRIES VALUE CHAIN The Extractive Industries Value Chain This chapter takes a more detailed look at the emphasizes five distinct but related features in performance of the mining sector in Burundi the sector management process. Every resource- at each stage of the Extractive Industries dependent state has to move through each of Value Chain and lists potential areas where these if resource-led development is to take there is room for improvement. Given the place. They cover (1) the establishment of a legal largely undeveloped nature of the mining framework that will convey and enforce rights to sector in Burundi, several of the links of the EI investors within a broad policy for development value chain have not been fully tested. This is of publicly owned resources, (2) the institutional particularly important for the latter links which organizations of the sector and particularly the include Taxation, Revenue Management and regulation and monitoring or operations in the Distribution, and Local Impact. public interest, (3) the design and collection of taxes and royalties, (4) revenue management and distribution, and (5) the implementation of sustainable development policies45. V.1 CONTRATS, PERMIS ET EXPLORATION Figure 7: Value Chain Stage 1--Indicators46 Indicators De Jure License Allocation Rules (2.64) Performance (3.13) License Management and Transfer Rules (3.63) Collection and Maintenance of Geological Information (2.18) De Facto Performance Effective License Allocation (2.89) (2.52) Effective License Management (2.50) Scoring Key Very Low (1 - 1.75) Low (>1.75 - 2.5) High (>2.5 - 3.25) Very High (>3.25 - 4) 45 Refer to ‘‘Oil, Gas and Mining: A Sourcebook for Understanding the Extractive Industries’’ by Peter D. Cameron and Michael Stanley, World Bank. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/222451496911224999/oil- gas-and-mining-a-sourcebook-for-understanding-the-extractive-industries 46 The scores in this table were obtained in accordance with the DSM Methodology described in Appendix I and Question Scores presented in Appendix I. 42 REPORT THE WORLD BANK Within the 2023 Mining Code, there are clear The requirement for a mining Agreement does institutional arrangements and defined not reflect good international practice as in regulatory responsibilities pertaining to most developed mining jurisdictions the terms licensing of various types in the mining sector. and conditions of mine licensing are published Therefore, the De Jure assessment for License in law and not negotiated on a case-by-case Allocation Rules and License Management and basis through mining Agreements (the results Transfer Rukes scores highly (3.13). However, of which are announced by decree). The 2021 there are weaknesses in the Code that prevent mining license suspensions were made because it from being ranked in the highest category. of the widespread perception in Government These include: (i) insufficient definition of that the mining agreements had been poorly terms, (ii) considerable discretion in the award negotiated in an opaque process. Instead of of licenses, (iii) incomplete requirements for adopting mining Agreements, the Government the content of mining Agreements, and (iv) could have clearly specified the conditions and excessively broad groupings of some categories obligations for companies through the Mining of minerals. Code and supporting Regulations. This would have avoided the suspension of mining licenses License Allocation Rules (2.64) which has deterred much needed investment. Allocation of Licenses Processes for Mineral License Applications The OBM makes decisions around licensing Regarding the Mining Code, there appears to of ASM and quarries. Decisions around be significant discretion in the awarding of exploration and large-scale mining licenses are exploration and mining rights. The term “in the made at higher political levels within MINHEM. public interest” does not define criteria for the These decisions are announced by decree. decision-making involved in which applicant Exploration licenses and mining licenses are will be awarded permits/licenses. Article 41 issued following approval from the Council of states that exploration permits shall be granted Ministers. Best practice would provide licensing by decree after deliberation by the Council of terms and conditions in the legislation and all Ministers. Where several applications have been companies would be required to demonstrate made for an exploration permit for a same area they are following these to receive a license and or for overlapping areas and the applicants' to maintain it. capacities are equivalent within the meaning of Article 43, the Minister in charge of mines and quarries shall grant priority: 1. To the holder of the prospecting permit, where the perimeter is derived from a prospecting permit. 2. In the public interest. However, Article 25 in the 2015 Mining Due to lack of clear legal guidance set out Regulations states in the event of multiple in the Mining Code, significant discretion in applications for the same area or for overlapping decision making is required of various officials. areas, the Minister will give priority according to For example, Ministerial discretion is legally the priority of the applications. There does not authorized to rule on applications of renewal seem to be a separation between exploration of large-scale mining – this can be alarming for permits and mining/ exploitation licenses in that investors at a time by which much investment Article 42 specifies that a mining agreement must will have been made - the renewal process be attached to an exploration permit application. should rely on technical, financial, and overall REPORT 43 MINING SECTOR DIAGNOSTIC - BURUNDI performance standards that are clearly stated for registration and conservation. There is to safeguard the investment. The lack of no mention of the applicant being informed transparency in license processes combined individually or of any rights to appeal. For with vague legal guidance can be detrimental exploration rights, there is no mention of a to sourcing mining investment and creates process of informing the applicant or giving opportunity for corrupt practices.47 them rights to appeal the decision. In terms of government’s requirement to decide Types of Licenses and Groups of Minerals on an application, this is referred to in Article 35 of the 2015 Mining Regulations. It states The Mining Code sets out a range of permits that for a mining license, without prejudice to for the mining sector. For ASM, only a mining the provisions of the Mining Code, the granting cooperative set up in accordance with the Code or refusal of a mining title must be made no des Sociétés Privées et a Participation Publique, later than ninety working days from the date and whose sole purpose is artisanal mining, can of receipt of the application by the Minister apply for an artisanal mining permit. Mining from the date of receipt of the application by permits are issued by the Ministry of Hydraulivs, the Minister. The decision to grant or refuse a Energy and Mines. The following table (table 3) mining title is published in the Bulletin officiel lists the definitions for groups of minerals that du Burundi and on the Ministry's website. The can be subject to permitting. mining title is sent to the Mining Cadastre Table 4: Definitions of groups of minerals which may be the subject of a permit according to article 4 of the 2023 mining code Article 4 Observations/Issues • Very broad coverage, e.g., brick, natural stone, concrete and more – it is 1. Building materials, paving important to limit mining materials. stones, lime and cement stones • If the Code seeks to also cover semi-or fully processed materials, this is not “quarry” but under downstream governance. • “Ceramic industries” is a very broad term and may include ‚ o structural (bricks, pipes, floor and roof tiles), 2. Materials for the ceramic ‚ o refractories (kiln linings, gas fire radiant, steel and glass making), industries ‚ o whitewares (tableware, cookware, wall tiles, pottery), • (4) technical/special ceramics (gas burner nozzles, ballistic protection, vehicle armor, and more. 3. Soil improvement materials for land cultivation and other similar substances, with the exception of • This definition requires clarification. phosphates, nitrates, alkaline salts and other associated salts in the same deposits 47 World Bank Detailed Review of the Draft 2023 Mining Code, Burundi. Mary-Louise Vitelli 44 REPORT THE WORLD BANK Article 4 Observations/Issues • Under the 2023 Mining Code, peat is categorized as “quarries”, but revision/additional consideration is required. • Peat is partially decayed or wetland vegetation; in some jurisdictions, peat bogs are drained for mining. 4. Peat • Use of peat is common throughout the world; legal governance should be specific and environmental impacts more carefully governed. • Many jurisdictions have removed peat as a topic from mining legislation. The legislation could be enhanced to better define the characteristics and requirements of each license category. Each category should be charted out to clarify the following: • Actual size/description of license (area, investment, holder) • Exclusivity • Rights/requirements of land acquisition • Specific relinquishment requirements • Institutional authority for submission and review of applications • Grant, rejection, modification and appeal of applications • Applicant eligibility requirements • Ineligibility for applicants • License rights • License obligation License Auctions, Contracts or Agreements evaluation criteria attached to the bidding process are included in the Act except for a In general, the auction system is not used as a general reference under Article 71. These are the first step in allocation of mineral rights. However, same as the criteria used for application for the Article 78 specifies that an auction procedure original mining license. for a large-scale mining permit shall be initiated when the former mining title has been revoked The granting of large-scale mining permits for any of the grounds provided for in Article shall be subject to the technical and financial 36. However, it does not appear that specific capabilities of applicants and submission of: 1. A definitive feasibility study approved by the competent authority; 2. An environmental and socio-economic assessment approved by the competent authority; 3. A work program; 4. A mining plan in accordance with this Code and the terms of the mining agreements. REPORT 45 MINING SECTOR DIAGNOSTIC - BURUNDI International good practice for large-scale mining licenses would typically involve the submission of a number of documents with the application. These include, but are not limited to: • A Definitive Feasibility Study; • Work Plan; • Occupational Health and Safety Plan; • Environmental and Social Impact Assessment; • Environmental and Social Management Plans; • Waste Management Plans; • Compensation Agreements; • Resettlement Action Plans; • Rehabilitation Plans; • Community Development Agreements; • Mine Closure Plans. The Mining Code gives broad reference to negotiation does not negatively impact the “negotiation” which typically is not supported mining operations, financial investment, under a license regime where rights, obligations etc.48 The table below (table 4) illustrates the and enforcement should be legally certain. different types of agreements cited in the 2023 Where some topics require negotiation, those Mining code. topics should be clearly legislated to ensure Table 5: Different types of agreements cited in the 2023 mining code Illustrative Article Agreement cited in Draft Mining Code 74 • Mining Agreement 68 • Production Sharing Agreement 69 • Mining Exploitation Agreement 94 • Quarrying Agreement Contracts that arise out of the granting of an State Ownership/Participation exploration or mining right must be made public. Article 41 of the Code states that In terms of the extent to which government exploration permits shall be granted by decree can share equity ownership with mining after deliberation by the Council of Ministers companies, there are several Articles that refer and made public. to this requirement. Articles 66 and 93 require 48 World Bank Detailed Review of the Draft 2023 Mining Code, Burundi. Mary-Louise Vitelli 46 REPORT THE WORLD BANK State shareholdings but the language must be pre-emption for the acquisition of shares in the clarified – e.g., “in the mining company’s share capital of the operating company…” As a matter capital” – rather than in the investment/license of policy, government should consider whether (see table 5 below). In both cases, “The State and this is the best approach to ensuring revenue Burundian economic operators have a right of generation and benefits sharing49. Table 6: Requirements for State participation under Articles 66 and 93 of the 2023 Mining Code Article Category Provision • The granting of a large-scale mining permit shall entitle the State, as owner of the subsoil, to a share of at least sixteen percent (16%) of the mining company’s share capital for the entire life of the mine. Such Large-scale Mining shareholding, free of all charges, shall not suffer from dilution in the 66 event of an increase in share capital. Permit • The State and Burundian economic operators shall have a right of pre-emption for the acquisition of shares in the capital of mining companies, according to the usual procedures in force in this area. • The granting of a small-scale mining permit shall entitle the State to an interest of at least sixteen percent (16%) in the mining company's share capital, for the entire lifespan of the mine, as the owner of the Small-scale Mining subsoil. This shareholding, free of any encumbrance, shall in no case 93 suffer from dilution in case of share capital increases. Permit • The State and economic operators of Burundi shall have a pre-emptive right to acquire shares in the mining company's share capital, as per the regular procedures in force, applicable to such matters. • The granting of an industrial quarrying permit shall entitle the State to an interest of at least twenty percent (20%) in the quarrying company's share capital, for the entire lifespan of the quarry, as the owner of the Industrial Quarrying subsoil. This shareholding, free of all charges, shall in no case suffer 163 from dilution in the event of an increase in share capital. Permit • The State and economic operators of Burundi shall have a pre-emptive right to acquire shares in the quarrying companies share capital, as per the regular procedures in force, applicable to such matters. It is unclear what a minimum of sixteen percent employment and other socio-economic (16%) of a mining company’s share capital actually benefits. Industry respondents attribute the means in practice and how the Government lack of sector development to the suspension could increase its stake beyond 16%. of licenses, a lack of geological data and a lack of policy continuity. Collection and Maintenance of Geological Information - De Facto Government is very dissatisfied (1.18) that the (2.18) Direction of Geological Research and Mining Cadastre in the OBM has the capacity to fulfill The Government is dissatisfied (2.0) with the its mandate in a satisfactory manner. This limited amount of exploration taking place in view is shared by Industry who are dissatisfied Burundi and the limited role the sector plays (1.87) with the geological information available for generating revenues, export earnings, across the country. In particular, Industry is very dissatisfied (1.53) with the geological maps 49 World Bank Detailed Review of the Draft 2023 Mining Code, Burundi. Mary-Louise Vitelli REPORT 47 MINING SECTOR DIAGNOSTIC - BURUNDI available which were completed in the 1990s the compilation, digitization, and acquisition and are on a scale of 1:250,000. There is a lack of of geological data and should focus do modern and up to date geological information an inventory of all relevant geoscientific in Burundi and the country remains information for Burundi, particularly for underexplored. As one Government official known deposits which the Government plans stated in their questionnaire ‘’ As geological data to tender51. are essential to the development of the mining sector, the service responsible for collecting The website for the OBM includes a Cadastre them must be reinforced with sufficient human and Geomatic documentation section but it and material resources’’. does not include any geological maps for the country. Government has indicated it is satisfied The Government’s November 2023 Action (2.77) with the extent that exploration license Plan involves intensifying geological and holders deliver the data and information on their mining research activities aimed at promoting projects through quarterly reporting. However, investment in the sector. The Action Plan some Government officials are concerned that states "Efforts will be made to strengthen the companies have not fully shared data on their technical capacities of geological and mining projects in both hard copy and soft copy formats. research services aimed at the development The Government should ensure that the LSM of the geological map of Burundi at a scale of regulations require all companies to submit 1:50,000 and the realization of an inventory of all data in both hard copy and soft-copy to the the country's mining potential’’. OBM and should state that licenses renewals will not be approved until this data is shared Government is very satisfied (3.33) that it with the OBM. Government is also very satisfied makes use of the geological data collected (4.0) that data and reports transmitted from from companies to improve government’s companies to the OBM are kept confidentially. knowledge of the geological prospectivity of the However, one Industry respondent stated on country. This is at odds with comments from their questionnaire that ‘‘technical reports several Government officials who have said that submitted often seem to disappear, as new companies have not shared all of their data with copies are requested’’. the Government50. The collection of geological data from companies to monitor compliance The Government is very dissatisfied (1.39) with authorizations is carried out by the OBM. with the capacity of the mining Cadastre to Government officials are satisfied (3.10) that fulfill its mandate. A number of Government the geological data collected from companies officials suggest that the Cadastre needs to be is effectively used to monitor compliance with strengthened and needs to be given sufficient license conditions. The OBM has a library where human and material resources. Industry is also geological information is collected and made dissatisfied (2.2) with the capacity of the Mining accessible to the public. Although Government Cadastre to fulfill its mandate. The Cadastre is satisfied (2.80) with the collection of geological currently uses ARC GIS with license information information in the publicly accessible library, contained within an Excel spreadsheet. There very little of this data is in digital format. The is an urgent need to modernize the Cadaster Government should assess all the geodata system in Burundi. available in different formats and prioritize 50 The Government does not seem to have any digital data for the exploration programmes done on different projects since the 1980s. 51 The Government has abundant hard copy records from the UNDP exploration programs funded in the 190s for projects of strategic national importance. 48 REPORT THE WORLD BANK OBM Library mining licenses and is dissatisfied (1.82) with the timeframes for approving exploration Projects of strategic importance in Burundi programs, which has caused delays in have extensive historical data which could be developing projects. In general, Industry is a valuable resource for the Government52. Not satisfied (2.60) that exploration and mining only does the Government have historical data licenses are awarded to applicants who have in hard copy format but it also has diamond drill the technical and financial capacity to comply core from previous drilling campaigns on the with license requirements and associated work Musongati, Nyabikere and Waga nickel deposits programs. and the Mukanda vanadiferous titanomagnetite deposit53. Accurate and reliable information Government is very satisfied (3.77) that on the location of prospective metallogenic the correct procedures are followed when belts, active mines, undeveloped mineral licenses are denied or cancelled. Government deposits, and old abandoned mine sites could is very satisfied that conflicts that arise be integrated with spatial planning to help due to overlapping perimeters of licenses the government reach informed decisions on are effectively addressed through the making investments in infrastructure. Geodata Mining Cadastre. Comments from Industry could also be used to generate sector promotional representatives indicate that they think the maps and brochures for to illustrate prospective license suspensions in 2021 were unlawful and mineral belts, significant mineral deposits, in contravention of mining agreements and opportunities for potential investors and should mining conventions. The license suspensions outline why Burundi is an attractive investor- have caused stagnation of the mining friendly mining jurisdiction. The importance of sector and has undermined trust between geodata for strategic planning and mining sector government and industry stakeholders. promotion should not be underestimated. Other Security of tenure is a core consideration countries that have invested in geological data for investors and companies when making acquisition and surveys have managed to attract investment decisions. It is recommended significant amounts of investment. that the Government re-negotiate the mining agreements to enable mines to be developed. Effective License Allocation (2.89) All stakeholder groups, (government, industry and CSO), are in agreement that mines need to In practice, information required for license be developed for the mining sector to deliver applications is publicly available. The positive socio-economic outcomes for Burundi. Mining Code and the Regulations stipulate what information is required for license License Management and Transfer applications. Copies of license application Rules (3.63) forms are available at the OBM and can be downloaded from the OBM website. Industry is Regarding “License Management and Transfer satisfied (2.78) that the procedures in the legal Rules,” this area received a score in the “very framework for the award of exploration and high’’ category (3.63). Following international mining licenses is followed by the Government. best practice, the Code provides for an efficient However, industry is dissatisfied (2.21) at the transition for an exploration rights holder to timeframes for the award of exploration and obtain a mining license, provided the necessary 52 Historical drill core can be re-logged, re-sampled and re-assayed to confirm hard copy logging data and assay results. This data can then be used for conducting a Mineral Resource Estimate which can feed into Front-End Loading Studies (FEL-1 to FEL-3). A FEL-1 Study is referred to as a Scoping Study (otherwise known as a Preliminary Economic Assessment (PEA)), a FEL-2 study is a Pre-Feasibility Study and a FEL-3 Study is a Definitive Feasibility Study. 53 Historical drilling data in hard copy format at the OBM could be digitised and used to build databases for 3D geological and block modelling. Drill core can be sampled to confirm historical assays. Twinning of old drillholes can confirm geology and assay data for conducting mineral resource estimations. REPORT 49 MINING SECTOR DIAGNOSTIC - BURUNDI terms and conditions are met. The Mining Code that a decree renewing the mining title is issued also provides a detailed process, timeframe and within a period not exceeding three months in criteria for the revoking or termination of a large- response to the application. scale mining license. Details of each license are required to be entered into a manual mining According to a research article on land cadaster. Had Burundi had a modernized public cadastres54, the following is provided: For the online GIS-backed Cadaster system, the score purpose of mining cadastral unit, Burundi would have been higher. national territory is divided into squares whose sides are oriented North-South and East-West License Management according to a cadastral grid. The squares are identified by their geographic coordinates, in As per best practice, the Mining Code contains WGS 84, on the surface of the earth or by the provision for an automatic right to mine following codes assigned to them by the Mining Cadastre the completion of exploration activities, provided Service55. certain terms and conditions are met. Article 60 states that holders of an exploration permit The area granted for artisanal mining must who have submitted a definitive feasibility study be mapped by the Mining Cadastre Service. to the Minister in charge of mines and quarries The Service is responsible for the following: may be granted a mining permit upon providing (i) preserving and managing cartographic, evidence of having the required technical and photographic and geological documents; (ii) financial capacities in accordance with the drawing up geological and metallogenic maps; (iii) regulatory requirements if they apply for such issuing cadastral technical opinions and reports mining permit within six months, failing which when required; (iv) demarcating perimeters and the applicants shall no longer have priority. ensuring regular control of license areas held; However, the State shall reserve the right to (v) maintaining the Cadastre of exploration, proceed with an international call for tender mining and hydrocarbon licenses and their to recruit a mining company if holders of an perimeters; (vi) keeping records of mining, oil exploration permit do not meet the conditions and quarrying titles; (vii) submitting opinions to required in the previous paragraphs. management in the event of the classification, downgrading or reclassification of a prohibited Article 35 of the 2015 Mining Regulations zone; (viii) ensuring that documentary data is specifies the process of communication with kept up to date; (ix) promoting the museum and the license applicant. Without prejudice to the Geomatics activities; and (x) issuing technical provisions of the Mining Code (at that time, this opinions on Geomatics56. referred to the 2013 Mining Code) the granting or refusal of a mining title (the application for Suspension and Termination of Licenses which includes a mining works program) must be made no later than ninety working days The Mining Code provides clear guidance from the date of receipt of the application by regarding potential reasons for the revoking the Minister from the date of receipt of the or termination of a large-scale mining license. application by the Minister. The decision to The main reason for suspension or termination grant or refuse a mining title is published in the is the non-compliance of the terms of the Bulletin officiel du Burundi and on the Ministry's license. Guidance on such terms is outlined website. The mining title is sent to the Mining in the Code and in the Regulations. Article 36 Cadastre for registration and conservation. For states that Mining titles shall be revoked in the renewals of mining licenses, Article 72 states event of an unjustified delay in the start-up or 54 https://revues.imist.ma/index.php/AJLP-GS/article/view/32600/18430 55 https://revues.imist.ma/index.php/AJLP-GS/article/view/32600/18430 56 https://www.obm.bi/wp-content/uploads/2020/05/CAHIER-DE-CHARGE-CADASTRE-MINIER.pdf 50 REPORT THE WORLD BANK progress of mining operations. Other reasons safety regulations; (iii) non-payment of area for suspension or termination include: (i) failure fees and mining royalties due; (iv) diversion of to provide technical information required under mineral production. this Code or the mining Agreement; (ii) serious breaches of hygiene, health, environmental and Revocation may be decided: 1. At any time and upon simple notification in the event of an assignment, farming out or change in the share capital or control of the company that is not in compliance with Article 28; 2. After a period of three months from the date of formal notice to the holder of the licen- se to comply with its obligations referred to in Article 36, if the said formal notice has remained unheeded. Revocation of a mining permit shall automatically with exploration and mining license conditions. entail revocation of the mining Agreement. Although industry is very satisfied (3.5) that a company that holds an exploration license and, Article 103 allows cancellation of small-scale which is fully compliant with the obligations of permit rights where a holder fails to report its license, has an automatic first priority right discovery of a mineral not included in its rights to obtain a mining permit, it is dissatisfied (2.23) within 15 working days. However, there is no with the authorities’ practices regarding the legal guidance on what constitutes a “discovery”. extension of exploration and mining licenses. Some industry representatives have stated License Transfer Rules that over the last twenty years, a number of licenses have been cancelled without any Article 42 of the Code states that the application explanation from the Government. Industry to transfer a license is examined by the Agency, representatives have called in to question the which submits a report to the Minister within legality of the suspensions which they argue ten working days. In addition to the elements are in contravention of the signed mining of the file, the Agency verifies the conformity conventions. Mining license were suspended of the perimeter transferred and retained, the by the Government in 2021 for four companies eligibility of the assignee to hold a mining title, because there was a widespread perception perimeter assigned and retained, the eligibility in Government that the mining sector was not of the assignee to hold a mining title and the generating sufficient benefits for the country payment of the assignment fee by the assignor due to poorly negotiated mining agreements5758. to the OBM. The Minister has fifty working days The revision of the Mining Code and the mining in which to make his decision, failing this, the regulations has delayed the Government re- transfer assignment is deemed to have been negotiating mining contracts. accepted. The Government’s 2023 Action Plan states ‘‘in the Effective License Management (2.50) immediate future, the state must renegotiate the mining contracts that were suspended According to the MSD, Government is satisfied in 2021 pending the new mining code. This (2.88) that it is effectively managing compliance process will include technical assistance for 57 Feasibility studies submitted to the Burundi Government in the past have fallen short of international good practice and would not constitute JORC or NI-43-101 Definitive Feasibility Studies. The Government of Burundi needs to have the staff with the requisite skill-sets to assess the package of documents submitted as part of a Definitive Feasibility Study, before approving / rejecting a mining license application prior to negotiating a mining agreement. 58 Mining contract negotiations are complex and require a multi-disciplinary team within the Ministry to have expertise in geology, mineral processing, mining engineering, financial modelling, law, finance, tax, the international metal markets etc. REPORT 51 MINING SECTOR DIAGNOSTIC - BURUNDI contract negotiation’’. It is recommended that contracts and agreements remain confidential. contracts be renegotiated in a timely manner Government respondents explained that to ensure that companies can move forward information on contracts is made public by with developing projects for the benefit of the Presidential Decree but are not published in sector. The MSD found that both Government the media. Others from Government have and CSOs support capacity strengthening stated in the MSD that ‘’the content is subject programs on contract negotiations for the to confidentiality between the Government successful renegotiation of mining agreements. and the Mining Company’’. International good Going forward, rebuilding trust between practice calls for all mining agreements to be stakeholders, through enhanced sector made public. dialogue, is going to be critically important for the sector’s development. Resolving the Room for Improvement in “Contracts, issues with the suspended mining licenses Licenses and Exploration” will also send a positive message to potential investors given that security of tenure is a core This MSD has helped identify a number of policy criterion for investment decisions. Burundi recommendations and priorities for reforms becoming a Member of the Extractive Industries related to ‘‘Contracts, Licenses and Exploration’’, Transparency Initiative would also be seen as a which are outlined below59. positive development by foreign investors. The Government needs to prioritize the Government is very dissatisfied (1.73) with the collection, digitization, and acquisition of capacity of the OBM’s Direction of Geological modern geoscientific information, particularly Research and Mining Cadastre to effectively for known mineral deposits and across the control and monitor the licenses of companies. East African Nickel Belt, the south-western According to Government officials there part of which is located in Burundi. The OBM is a need for capacity building in the unit should conduct an inventory of existing responsible for controlling and monitoring geological data, perform a GAP analysis for all operating authorizations. One Government geoscientific information and data for strategic official stated: ‘’The budget allocated to the Unit projects, digitize high-priority information is insufficient to be able to adequately carry out and data, and create a digital and hard-copy its missions. It needs more qualified personnel geodata repository. The Mining regulations including mining engineers, geophysicists, should be revised to ensure that all companies technicians, lawyers and mining economists’’. submit both hard and soft copies of geological Industry, however, seems to be satisfied data. For transparency and accountability, (2.53) with the way in which the Direction of the Government should join the Extractive Geological Research and Mining Cadastre Industries Transparency Initiative (EITI), is managing the monitoring of licenses and publish all mining contracts, and ensure early fulfilling its mandate. consultation with stakeholders, making key documents publicly available. Furthermore, The Government is satisfied (2.78) that in renegotiating suspended mining agreements practice exploration and mining licenses, and modernizing the GIS-linked Cadastre contracts and agreements are made publicly system should help restore investor confidence available. However, this is at odds with and will help with license management. CSOs who have stated that certain mining 59 The highest priority recommendations are outlined in bold font. 52 REPORT THE WORLD BANK Immediate Term Priorities (next 12 months) ‚ License Allocation and Management ◊ Re-negotiate mining agreements that had been suspended in 2021. ‚ Collection and Maintenance of Geological Information ◊ Conduct a full inventory of all the data the OBM holds in digital and hard copy formats. ◊ Complete a GAP analysis on data available for projects of strategic national importance. ◊ Digitize all high-priority data for projects of strategic importance. ‚ Transparency and Accountability ◊ Publish all contracts negotiated with mining companies and ensure that all documents relevant to mine developments are published including: Resettlement Action Plans (RAP), Environment and Social impacts assessments (ESIAs), Mining Closure and Rehabilitation Plans (MCRPs), Environmental and Social Management Plans (ESMPs), and mining agreements themselves. Short to medium-term Priorities (1 year – 7 years) ‚ License Allocation and Management ◊ Develop a modernized GIS-linked online Cadastre system. ◊ Use transaction advisors to support the government with important contract negotiations. ◊ Build cross-sectoral and multi-disciplinary capacities for contract negotiations: increase knowledge of international metal markets, develop sufficient capabilities for assessing feasibility studies and have dedicated training in financial modelling. ◊ Improve definitions and better clarify all characteristics and requirements for each license type in the Mining Code and the LSM Regulations. ◊ Ensure that all relevant agencies (GIS, Mining cadaster, licensing and monitoring environmental / social impacts) are adequately staffed and have sufficient budget to fulfill their mandate. ‚ Collection and Maintenance of Geological Information ◊ Create a hard copy library and a digital geodata repository. ◊ Make geological information available through an online geological database (geoportal). REPORT 53 MINING SECTOR DIAGNOSTIC - BURUNDI ◊ Build capacities for establishing, managing and maintaining a geological data repository. ◊ Build capacities for using geodata to promote specific mining opportunities to investors. ◊ Revise the LSM Regulations to make it mandatory for all companies to submit hard- copy data and digital data with their statutory reports. ‚ Transparency and Accountability ◊ Pursue membership of the Extractive Industries Transparency Initiative (EITI). V.2 MINING OPERATIONS For the purpose of this report, the “Mining occupational health and safety, environmental Operations” component of the extractive impact, social impact, and mine closure and industries value chain includes a look at such financial sureties for decommissioning. aspects as artisanal and small-scale mining, Figure 8: Value Chain Stage 2 - Indicators Indicateurs Mining Legislation and Processes (2.90) Land, Compensation and Resettlement Rules (2.13) De Jure Environmental and Social Impact Management (2.45) Performance (2.41) Artisanal and Small-Scale Mining (2.65) Occupational Health and Safety (1.75) Mine Closure and Financial Sureties for Decommissioning (2.60) Land, Compensation and Resettlement--Practice (2.94) Environmental Impact (2.24) De Facto Social Impact (2.27) Performance (2.49) Support for Artisanal and Small-Scale Mining (2.34) Occupational Health and Safety (2.87) Mine Closure and Financial Sureties for Decommissioning (2.27) Scoring Key Very Low (1 - 1.75) Low (>1.75 - 2.5) High (>2.5 - 3.25) Very High (>3.25 - 4) The De Jure performance Assessment score satisfactory (2.87). None of the areas covered was for Mining Operations was lower than De in Mining Operations ranked in the ‘‘very high’’ Facto performance. This is partially caused by or ‘‘very satisfactory’’ category showing that an unsatisfactory score (1.75) in the De Jure there is room for improvement across all areas assessment for Occupational Health and Safety within Mining Operations. where the De Facto performance score was 54 REPORT THE WORLD BANK Mining Legislation and Processes – development, community protection, worker (2.90) health safety and environmental management (these would comprise part of the licensing award The review of Mining Operations uses the 2023 process as well as post-licensing monitoring). Mining Code and the 2015 Mining Regulations. There are legally binding laws and regulations The award of the highest-ranking category for which cover exploration and mining activities “Mining Legislation and processes” section of the in Burundi. These are readily available. The value chain is primarily due to the holistic legal Government has recently been revising the LSM approach to mining investments in Burundi that Regulations for promulgation. The Mining Code aligns with good industry practice. This means presents a holistic legal approach to mining that in addition to addressing core mining investments which generally aligns with good governance, mining-related governance aspects industry practice. However, the Mining Code are included such as environment, labor, social in places is legally vague. General references protection, and the fiscal regime. While these to “regulations”, other legislation, conventions latter aspects are included, more comprehensive and treaties does not provide legal certainty to requirements are needed for associated ensure sound sector operations. Legal clarity relevant plans. These would include the mining is sufficiently lacking to jeopardize investment. company’s plans to provide for socio-economic Examples include the following: 1. Vague definitions and terminology; 2. Institutional authority to monitor, regulate, enforce, appeal is not defined; 3. Reference to “conventions and treaties” without limit or parameters for application; 4. General guidance on “start” and “closure” with less emphasis on activities conducted throughout license term; 5. Acquisition of land, compensation and mining-related rights, and 6. Uneven reference to reporting requirements for various license actions. Four mining licenses were suspended in 2021 these are only generally prescribed. There pending the promulgation of a new Mining is no requirement for the application of an Code (August 2023). The 2023 mining code international protocol, such as the World Bank includes at least 16% free state equity (and Guidelines for Resettlement. The inclusion of this an additional 5% at the 15-year renewal of the requirement would raise the score of this part mining permit) in addition to 4% royalty on of the assessment. Also, the law does not seem base metals. to provide for compensation for individuals negatively affected by the license holder’s access Land, Compensation and Resettlement to their land, but not relocated or resettled. It Rules (2.13) should be noted that this type of compensation can be negotiated through a Mining Agreement. “Land, compensation and resettlement rules,” When productive land is withdrawn from refer to the license holder’s responsibilities communities for mining activity, even if the regarding the involuntary displacement of community remains, there should be a legally communities or economic activities, however, mandated process and value for compensation, REPORT 55 MINING SECTOR DIAGNOSTIC - BURUNDI especially for food crops. For these reasons, the properly compensated, which has elevated ranking of this sub-component is “high” but not tensions between land owners and companies. “very high.” Environmental and Social Impact Specificity around the requirements for land Management - De Jure (2.45) access, compensation and resettlement are set out in the 2015 Mining Regulations. Article For the management of environmental and 188 states that the Mining Administration's social impacts from a mining operation, Burundi requirements are adjusted according to the is on the borderline between “low” and “high.” scale of the planned work, ranging from a simple There is a requirement for an EIA (that includes environmental impact notice for an exploration social impacts) for a mining project where permit to an environmental and social impact significant environmental impacts are likely to assessment study (ESIA) for a mining permit. occur. However, the specific components of an EIA such as attention to aspects of biodiversity The various requirements are: an Environmental and climate change are not included, but general Impact statement for a research permit; a full requirements for attention to these appear and detailed Environmental and Social Impact elsewhere in the Environment Code, 2021. For study, accompanied by an environmental and example, the Environment Code, 2021 includes social management plan (ESMP), a hazard study, a chapter on Climate Change but there is no a health and safety plan and a resettlement specific reference to adaptation or mitigation plan for displaced populations for a large-scale measures that should be undertaken by operating permit. mining companies. Against best international practice, the Environment Code 2021 states Article 189 states that the resettlement plan that the specific terms and conditions of the for populations displaced by mining operations environmental management plan attached must include compensation for loss of income to an industrial project (including mining) are and means of subsistence due to such relocation. to be issued by decree. This means that the Resettlement and related compensation are environmental management requirements and to be provided at the mining company's cost, the extent to which public participates in the according to a procedure determined by the evaluation of social and environmental impacts Government that incorporates international are determined in an ad hoc manner. However, principles of participation and consultation of the petitioner and the public concerned may the affected populations. lodge an administrative or judicial appeal against decisions taken by the Minister for Land, Compensation and Resettlement the Environment if the EMP is accepted by the Practice (2.94) Ministry against the public’s wishes. Regarding ‘’Land, Compensation and Another omission is the requirement for a Resettlement Practice’’, which had a ‘’high’ social baseline study by the license holder in score (2.94), CSO are satisfied (2.75) that the the preparation of the EIA and EMP. Without Government enforces the legal requirements the company being required to undertake a to resettle communities affected by mining baseline review of pre-mining socio-economic activities. Government respondents are very conditions, it is not easy to determine satisfied (4.0) that the Government enforces mitigating measures to reduce social impacts legally binding payments of compensation or to measure the effectiveness of these, when exploration and mining activities interfere particularly at mine closure. with land ownership and land use. However, several CSOs have stated that compensation There is a requirement for the Ministry of is inadequate and land owners are often not Environment to undertake regular environmental 56 REPORT THE WORLD BANK audits that measure compliance of the mining arrangements for public participation and operation with the environmental conditions determines the different levels of public set out in the decree. It is important to assess participation, i.e. information, consultation whether this requirement is implemented. and active participation. Article 49 provides for an appeal process against relevant decisions. The Mining Code provides only general The petitioner and the public concerned may guidance on environmental and social lodge an administrative or judicial appeal impact management from mining activities against decisions taken by the Minister for the (particularly large-scale) and references the Environment or the competent authority. mining rights holder’s adherence to the 2021 Environment Code. In its Section VIII entitled The 2015 Mining Regulations specify Environment, Health and Safety and Social requirements that protect communities and Responsibility, the articles that follow on citizens from negative impacts of mining. mainly refer to Burundi’s international signed Article 191 states that to ensure the rational protocols. Article 191 says that health, safety, exploitation of mining resources in harmony environmental and community standards are with the protection of the environment to be governed by conventions and treaties and the preservation of health, holders of ratified by Burundi. Article 192 states that authorizations, mining titles and quarrying in addition to the specific environmental permits must do the following: (i) ensure the provisions set out in this Code, mining and prevention or minimize any negative effects of quarrying activities are subject to the relevant their activities on health and the environment, laws and regulations in force, especially in particular, the use of harmful and dangerous the Environmental Code and legislative and chemicals; (ii) minimize noise emissions harmful regulatory provisions relating to industrial to human health; (iii) minimize release of toxic water, protection of air, water, soil, fauna chemicals and gas which could be harmful and flora quality, establishments classified as to human health; (iv) minimize the pollution hazardous, and waste management. of water, air and soil. However, there is no specific reference in any legislation reviewed There is reference to an approved EIA being to a company’s requirement to undertake a required as a condition for mining licensing in baseline social impact assessment prior to the 2023 Mining Code. The Environment Code submission of an EIA/EMP. 2021 in Article 35/36 notes that an approved environmental impact assessment must be The 2023 Action Plan for the development undertaken should impacts of activities be of the mining sector prioritizes improving harmful to the environment. Article 35 of the management and protection of the the Environmental Code calls for identifying, mining environment. It states that ‘‘measures measuring, analyzing and mitigating negative relating to the monitoring of environmental impacts. Article 36 also states that a decree management and the prevention of implementing this Code lays down the categories environmental risks specific to the activities of projects which are subject to an environmental of the mining and quarrying sector require and social impact assessment. Regulatory the strengthening of national capacities, the provisions relate to the protection of air, water, coordination of synergies of interventions soil, fauna and flora quality, materials classified between the responsible administrations as hazardous, and waste management. and actions for the mitigation of the impacts of climate change and the preservation of The Environment Code, 2021 states in Article biodiversity. The related provisions will be the 48 that for all stages of the environmental subject of a joint implementing decree of the and social impact assessment procedure, administrations in charge of Mines and the an implementing decree lays down the Environment respectively, in full compliance REPORT 57 MINING SECTOR DIAGNOSTIC - BURUNDI with the new Environmental Code and its Environmental certificates and authorizations. Implementing Decree’’. The Institutional Functional Review envisaged as part of the Government’s Action Plan for Environmental Impact Management - the development of the mining sector needs to De Facto (2.28) assess how intragovernmental coordination can be improved between the OBPE and the OBM. ‘’Environmental Impact Management’’ had a ‘’low’’ score (2.28). Government is very Government is satisfied (2.64) that there is satisfied (3.93) that exploration and mining systematic implementation of EMMPs and activities are initiated only after the approval other environmental impact management of environmental compliance certificates. and mitigation plans. However other An environmental compliance certificate is a Government officials question the monitoring prerequisite for obtaining an exploration and and enforcement capacity of the OBPE. One mining permit. Government respondents are Government official said ‘‘the Environmental dissatisfied (2.04) with the time it takes for the Agency does not have the financial means to Ministry of Environment to authorize and issue monitor the implementation of Environmental approvals and certificates. One Government and Social Management Plans’’. The OBM, representative has stated that the Burundian which is the authority in charge of monitoring Office for Environmental Protection (OBPE), mining activity and supporting the collection the institution responsible for monitoring and and recovery of revenues from the mining and applying environmental laws and regulations, quarrying sector, also does not have sufficient has insufficient staff and resources to effectively means to monitor the socio-environmental carry out its mandate in a timely manner. CSOs impacts of mining activities. Government is also are also dissatisfied (2.0) by the way the OBPE very dissatisfied (1.17) that EIAs and EMMPs is carrying out its mandated tasks and identify are not made public. CSOs are also dissatisfied a number of capacity constraints and a lack of (1.91) and have stated that they are not informed trained staff. Industry is likewise dissatisfied about the public availability and accessibility of (2.07) with the OBPE and they note a lack of EIAs and EMMPs. monitoring capacities. The OBPE has practical constraint, including a lack of vehicles, to access Government is very dissatisfied (1.67) with how sites for monitoring and to sensitize local surface and ground water is being protected. communities on environmental protection. One Government official said: ‘‘In practice, the quality of surface and groundwater is poorly Although Government is very satisfied (3.31) monitored’’. Industry is satisfied (2.58) that that EIAs and Environmental Monitoring and biodiversity is an important part of the ESIA. Mitigation Plans (EMMPs) are approved by the Industry is also satisfied (2.66) that natural mining authorities before mining rights are habitats being identified, managed and granted, respondents have noted that delays in protected. At present mining companies do not getting approvals and certificates is common. submit Emergency Preparedness and Response In practice, questions relating to environmental Plans (EPRPs). It should be a legal requirement impacts are handled by environmental that all LSM companies submit an Emergency agencies who communicate the results to Preparedness and Response Plan. mining agencies for approval. An ESIA report is annexed to a permit application addressed to Although Government is dissatisfied (2.33) the mining authority which makes the decision with mining companies' design, operation and on the basis of this report and after the opinion maintenance tailings dams and impoundments of the environmental authority. Coordination that hold mine waste, it is worth bearing in mind mechanisms need to be improved between the that tailings dams and mining waste retention OBPE and the OBM to ensure timely approvals of basins are very rare in Burundi because the 58 REPORT THE WORLD BANK large-scale mining has not been developed. environmental compliance. At present mining companies do not submit Government is also satisfied (3.00) that SMMPs Emergency Preparedness and Response Plans are systematically monitored and enforced. (EPRPs) that are approved by Government. However, Government respondents were It should be a legal requirement that all dissatisfied (1.63) with the fact that SIAs and LSM companies submit an Emergency SMMPs are not made public. This view was Preparedness and Response Plan. shared by CSOs who were dissatisfied (2.09). All three stakeholder groups, government, The Government is satisfied (2.85) with how industry and CSOs are dissatisfied with the way it monitors and enforces compliance with the OBM is monitoring and enforcing social environmental requirements for artisanal mitigation measures. and small-scale miners. In practice, OBM and its regional offices carry out field visits and Best international practice to manage social supervision and inspection missions to mining impacts caused by a mining operation involve and quarrying sites. In practice, the OBM and doing a baseline study to establish the pre-mining its regional branches carries out technical conditions in which mining-affected communities supervision and inspection missions on mining are living. Extensive additional social pressure and quarrying sites as part of their approach to may occur from the mine operations on potable assist artisanal operators carry out exploitation water resources, marine life quality, availability using responsible mining practices. However, of agricultural land, mixing of tribal norms and very few artisanal mining sites are in compliance customs from inward migration, or increased with environmental requirements. New gold rates of violence and other forms of social lack of mining sites are being developed in protected cohesion. It is difficult to measure and mitigate areas such as in Kibira National Park. these potential impacts without a baseline knowledge of the pre-existing standard of living. There are concerns have been raised that staff at the OBM and OBPE are connected with Artisanal and Small-Scale Mining consulting businesses in the private sector that (ASM) - De Jure (2.65) carry out and submit ESIAs to the OBPE. This is a conflict of interest and should not be allowed. For ‘’Artisanal and Small-Scale mining, the One industry representative said stated ‘‘It is ranking is “high.” This mostly is a result inconceivable that the evaluator of the study of the new Regulations for ASM that were is at the same time the executive editor of the passed in 2023. They specify clear licensing study. It is high time to change this situation’’. requirements, including membership in an ASM mining cooperative, size of area of Social Impact Management - De Facto permitting, and other mine methodology (2.27) requirements specific to ASM. They provide detailed guidance for social, workforce and Government is satisfied (2.95) that SIAs and environmental obligations. ASM is the size SMMPs are approved by the authorities within and level of mining currently dominating the OBPE and the Ministry of Environment, the Burundi mining industry and the Agriculture and Livestock before a mining development of these regulations is an right is granted. The mining authority sets up a important step forward in increasing the rate commission which is responsible for analyzing of formalization of this sector. However, the Social Impact Assessment (SIA) reports and general environmental provisions do not Social Management Plans (SMP) (or other break down ASM environmental obligations key documents related to social impact). specifically related to negative impacts on These are accompanied by the certificate of water, such as excessive siltation or pollution, REPORT 59 MINING SECTOR DIAGNOSTIC - BURUNDI on deforestation, slope instability or other Privées et a Participation Publique, and whose aspects of environmental degradation that sole purpose is artisanal mining, can apply for could be caused by ASM. Adding this level of an artisanal mining permit. Mining permits are specificity would increase the score. issued at the OBM. Licensing Requirements Article 25 of the new ASM Regulations specifies the conditions needed for the award of an ASM There are legally binding procedures for permit. Subject to the provisions of the Burundi registering or granting licenses to artisanal Mining Code and the ASM Regulations decree, and small-scale mining operators. A new set a natural or legal person can hold one or more of Regulations for ASM was passed in 2023, permits/authorizations simultaneously. The providing a specific legal framework for this permit or authorization is in the form prescribed category of mining. Only a mining cooperative by the ministry in charge of mines and quarries set up in accordance with the Code des Sociétés and specifies the following: 1. The type of permit or authorization; 2. The mineral, including associated minerals, for which the permit or authorization is granted; 3. The name and contact details of the permit or authorization holder; 4. The address of the registered office of the holder in Burundi; 5. The date the permit or authorization was granted and the period for which it is granted; 6. Where applicable, a description of the area for which the permit or authorization is granted; 7. The conditions for granting the permit or authorization; 8. The duration of the permit or authorization; 9. The date on which the permit or authorization was entered in the register of permits 10. Where applicable, the agreed ad valorem tax; 11. A schedule of mining activities to be implemented, including the start of mining activities; 12. For artisanal or semi-mechanized mining and artisanal or mechanized quarrying: a. the name and contact details of the representative of the company or cooperative; b. statutes; c. certificate of environmental conformity; d. land rights which include: 60 REPORT THE WORLD BANK ‚ the signed land lease; ‚ when the land belongs to the State , the written agreement of the competent public; ‚ authority in the form of a certificate of vacancy of land; ‚ an authenticated written agreement between the owner of the land and the applicant when the land belongs to a third party; e. the work program and budget; f. a copy of the certified simplified environmental and social assessment and the management plan; g. Health and safety provisions, including personal protective equipment to be provided to each worker, signed and certified by the holder; 13. The location of the mineral processing unit, the description of the processing activity, equipment and machines, as well as any other information required under the order of the Minister responsible for mines and quarries. ASM Environmental and Workforce Safety authorization holders are also required to pay a Obligations fixed contribution intended for the rehabilitation of orphan sites as defined under this mining The permitting conditions outlined above Code. The amounts and terms of payment of include provisions for environmental and social the fixed contribution are to be specified by impacts management as well as for worker regulation. Article 199 states that mining or health and safety. However, there are additional quarrying permit holders must provide the requirements covering these areas in the Mining competent authority with an annual activity Code and in the new ASM Regulations. report detailing the environmental impacts of operations undertaken and measures taken to In addition to the environmental and labor remedy to them. requirements listed above, Article 134 of the Mining Code 2023 states that artisanal mining Article 24 of the new ASM Regulations states permit holders are required to conduct the that the ASM application must include a map development of the mineral substances in showing the area of application defined by the a rational manner, ensuring compliance prescribed coordinates. A simplified assessment with public health, occupational safety, of the environmental and social impacts, and environmental protection, and production an environmental and social management marketing standards. plan including all potential adverse effects and proposed mitigation measures with The Mining Code Article 198 states that holders respect to the environment, social aspects and of artisanal or semi-mechanized mining permits, archaeological or cultural remains is required. as well as artisanal or mechanized quarrying permits are required to progressively rehabilitate Holders of other permits and prospection the mining/quarrying sites. Mining or quarrying authorizations need to complete and submit right holders and mineral substance transport an annual environmental impact statement REPORT 61 MINING SECTOR DIAGNOSTIC - BURUNDI to the Minister in charge of the environment. ASM entities. CSOs themselves could play The template of the statement is to be set by an important role in educating and raising an order (decree) of the Minister in charge of awareness among miners regarding the the environment. environment, responsible mining, health and safety, human rights and legal rights etc.). Signatory to the Minamata Convention Due to a lack of dialogue in the sector, CSOs are dissatisfied that ASMs can have effective On the 14th February 2014 the Government of participation in the monitoring, advocacy and Burundi signed up to become a Member of the protection of ASM and property rights. Minamata Convention60. Burundi’s membership was ratified on the 26th March 2021 following Government could also support formalization the completion of a National Action Plan to initiatives. Given there are no large-scale reduce and/or eliminate the use of Mercury mines, co-existence of ASM with companies in Artisanal and Small-Scale Mining of Gold in holding LSM licenses is very limited in Burundi61. Mercury use on artisanal and small- practice. In the November 2023 Action Plan scale gold mining sites in the north-western for the Mining Sector, the Government has part of Burundi poses a significant risk to both prioritized strengthening the traceability and human health and the environment as mercury certification of minerals and the formalization accumulates in the soils and ecosystems and supervision of artisanal mining activities. surrounding mining areas. Drainages from the The Action plan outlines several initiatives north-western part of Burundi also drain into to support the ASM sector. These include, Lake Tanganyika which is a source of water but are not limited: (i) support formalization and fish for millions of people in East and efforts and promote the development of a central Africa per year. Lake Tanganyika also semi-mechanized mining sector to improve represents the world’s second largest volume of environmental performance; (ii) strengthen fresh water worldwide and contamination from the fight against fraud through strict mercury needs to be avoided. monitoring and purchases of gold; and (iii) strengthen the gold purchase programs by the Support for Artisanal and Small-Scale Central Bank (BRB)62. Mining (ASM) - De Facto (2.34) Government is satisfied (2.8) that ASM is being ‘’Support for Artisanal and small-scale Mining done through formal channels. However, it is (ASM)’’ has a ‘’low’’ score (2.34). There does likely that gold is being smuggled into Tanzania not appear to be a dedicated unit for artisanal from a number of the northern gold mining and small-scale mining in Burundi which has sites near the borders with Tanzania and the capacity to fulfill its mandate. The OBM Rwanda. With the recent price of gold breaching regional offices are meant to supervise and USD 2400, and formal production showing no monitor mining activities across the country. significant increase since 2019 levels, it is likely These regional offices have limited budgetary that gold mined in areas near the borders resources, are understaffed and have a lack of Tanzania and Rwanda are being traded of equipment. CSOs are dissatisfied (2.2) through informal channels across the borders. with the level of technical support provided A sustained high gold price well in excess of by Government for technical training of USD 2000 per ounce is also likely to attract new 60 The Minamata Convention on Mercury is an international treaty designed to protect human health and the environment from anthropogenic emissions and releases of mercury and mercury compounds. The convention was a result of three years of meeting and negotiating, after which the text of the convention was approved by delegates representing close to 140 countries on 19 January 2013 in Geneva and adopted and signed later that year on 10 October 2013 at a diplomatic conference held in Kumamoto, Japan. 61 https://minamataconvention.org/sites/default/files/documents/national_action_plan/Burundi-ASGM-NAP-2019.pdf 62 In July 2024 the Central Bank has offered to buy gold from cooperatives in US Dollars. 62 REPORT THE WORLD BANK entrants into ASGM and ensuring the gold trade Emergency Preparedness Plans to be made is in the formal economy will be important. With public or to be available in different languages such a high gold price, artisanal mining for gold if different from the official national languages. may become the ‘‘alternative livelihood’’ for many people in the gold rich areas in the north Health and Safety and north east of the country. While there is no specific reference to an Mercury is being used to process gold bearing Emergency Preparedness Plan, Article 203 of ores in a number of mining sites in north- the 2023 mining code states that the holders western Burundi. Drainages in these mining of a mining or quarrying right must draw up areas ultimately drain into Lake Tanginika. regulations on safety, hygiene and occupational Mercury presents a chronic risk to health in risks before starting exploration or mining areas around mining sites and to those who work. Article 204 further requires that before are connected with marine ecosystems for their undertaking any prospecting, exploration or livelihoods. The Government lacks the capacity mining work, holders of a mining or quarrying to effectively implement the National Action right operating in land containing radioactive Plan (NAP) for Minimata. Raising awareness and substances or using equipment containing sensitization of mining communities on the risks such substances, need to provide evidence of mercury is important to reduce and eliminate that they have an operational radiological its usage in gold mining areas in Burundi. The emergency plan and can demonstrate providing Government will need to ensure sufficient regular domestic monitoring to all exposed resources are available to implement the workers in accordance with the regulations National Action Plan to reduce and/or eliminate in force. Article 205 states that in the event the use of Mercury in Artisanal and Small-Scale of an accident or identified danger, holders Mining of Gold in Burundi. of a mining or quarrying right are to take all necessary measures to contain or prevent such Occupational Health and Safety (OHS) disasters. These license holders are required to - De Jure (1.75) immediately bring the facts to the attention of the competent authority. The “occupational health and safety” element received a ranking on the border of “very The Mining Code 2023, Article 201 states that low” and “low.” This is mostly due to the without prejudice to the provisions of the Labor absence of the requirement for an emergency Code, holders of mining or quarrying rights preparedness plan before a mining operation must comply with health and safety standards commences, as well as a lack of specificity for workers. Article 202 states that any natural around occupational health and safety (OHS) or legal person carrying out prospecting, requirements throughout the mining lifecycle exploration or mining works under this Code are (such as development of a Health and Safety to carry out such works in accordance with good Plan; published risk management strategies, practices, to guarantee public health and the measures and results; development of a joint safety of people and property. The same rules committee on health and safety, etc.) apply to transport, storage, use and marketing of explosive materials and radioactive sources. Emergency Preparedness These will be set out by joint (regulators of mining and safety) ordinance. Article 203 states The 2015 Mining Regulations are not specific in that holders of a mining or quarrying right must terms of requiring an emergency preparedness draw up regulations on safety, hygiene and plan prior to the commencement of operations. occupational risks before starting exploration There are no legally binding requirements for or mining work. REPORT 63 MINING SECTOR DIAGNOSTIC - BURUNDI Occupational Health and Safety - De mine closure planning and financial Facto (2.87) requirements for these. ‘’Occupational Health and safety – De Facto’’ have The Mining Code, Article 197 states that large- a ‘’high’’ score (2.87). Industry is satisfied (2.67) scale or small-scale mining permit holders that the implementation of Occupational Health must progressively rehabilitate sites mined and Safety (OHS) standards and procedures is and a trust account designated as "Site enforced. Industry representatives also indicate Rehabilitation Fund" is to be opened for this that OBM and OBPE managers like to ensure purpose. The holder must open and maintain a OHS is enforced on mine sites. However, on trust account in a commercial bank in Burundi. many ASM sites, OHS standards and procedures This account is intended for the constitution are not respected by miners. of a fund to cover the costs of implementing the site rehabilitation program as defined in Given the nascent state of the mining sector the environmental and social management in Burundi and the fact there are no large- plan appended to the approved environmental scale mines and the sector is composed impact study. These rehabilitation costs must entirely of ASM, a grievance and complaints be specified in the Mining Agreement attached mechanisms remain largely untested. Even so, to the operating license. The scoring of this Government respondents are satisfied (3.10) element would be higher if more specific that the grievance and complaints mechanism content were included in the EIA requirement. for OHS works well in practice. This is at odds International best practice would include with CSOs (2.27) who are dissatisfied that the more explicit requirements for the detailed grievance and complaints mechanism for OHS assessment of the mining project’s impact on works well in practice and have stated that such climate change, biodiversity, deforestation, mechanisms are not well known to the public. waste disposal and water quality. Government is also very satisfied (3.45) that it successfully keeps track of the number of Progressive Rehabilitation and Financial injuries and fatalities related to mining activities. Sureties The number of injuries and deaths linked to mining activities is listed in the records of the The 2015 Mining Regulations state in Article mining authority. 204 that costs incurred in the progressive restoration of sites can appear in the accounts Mine Closure and Financial Sureties of the holder of the mining license as for Decommissioning - De Jure (2.60) deductible expenses. Regarding “mine closure and sureties for In this context, the license holder must take all decommissioning,” the high ranking reflects necessary measures to make the sites viable to the requirements in the Mining Code that set make them compatible with all forms of life and out requirements for progressive rehabilitation, activity in the area, namely: 1. the elimination of risks harmful to people's health and safety; 2. restoring the site to a condition acceptable to the community; and 3. the re-establishment of vegetation with characteristics identical to those of the with those of the surrounding vegetation. 64 REPORT THE WORLD BANK The 2023 Mining Code Article 89 states that upon the expiry of large-scale mining permits, permit holders are to carry out, at their own expense and in accordance with the terms of the mining Agreement: 1. Works to ensure public safety; 2. Environmental protection works; and 3. Works for the conservation of the mine and the isolation of various permeable levels. The terms and conditions for the operation and Government is satisfied (2.91) that Mine Closure replenishment of this site rehabilitation fund and Rehabilitation Plans (MCRPs) are prepared are laid down by joint order of the ministers and approved prior to the commencement of responsible for mines, the environment and production. An Environmental and Social Impact finance. Study (ESIA) is a prerequisite for obtaining an operating authorization. The ESIA must include Mine Closure Planning an MCRP and must be approved before an Environmental Compliance Certificate can be According to the 2015 Mining Regulations, Article issued. Government is satisfied (2.50) that the 207 states that the holder of an exploitation legislation ensures that MCRPs are prepared permit is required to proceed with the closure and approved before mine closure activities of its exploitation in a progressive and orderly begin. Government is also satisfied (2.50) that manner to prepare the Community for the independent experts would be used in practice cessation of its activities. to approve and audit an MCRP. The holder is required to notify the Mining A Government respondent stated ‘‘Mine closure Administration at least twelve months before and rehabilitation plans are not made public in the planned closure date and must prepare, in practice and are not widely available from our collaboration with the territorial administration mining companies because the institutions in and the local Community, a plan for the closure charge of mines do not have copies on file’’. of its mining operations six months before the Another Government official stated ‘‘despite closure date. the existence of mine closure and rehabilitation plans in the Bankable Feasibility Study, very few Mine Closure and Financial Sureties members of the public are interested in this for Decommissioning - De Facto (2.27) data’’. ‘’Mine Closure and Financial Sureties for CSOs are dissatisfied (1.90) with how Industry Decommissioning - De Facto’’ has a ‘’low’’ score engages with local communities when (2.27). In practice, Burundi has not developed developing MCRPs, even though very few have large scale mines and there has been a been prepared to date. Government is also lack of experience in Burundi with MCRPs. dissatisfied (1.89) with how mining companies Although companies are supposed to engage consult with communities when developing with communities when designing their Mine and updating the MCRPs. In the future, sector Closure and Rehabilitation Plans (MCRP), very dialogue between stakeholders needs to ensure few companies have reached that state of that ESIAs, ESMPs and MCRPs are circulated development. Therefore, questions in the MSD and disseminated to all those who will be relating to MCRPs are largely untested given the impacted by mining development. Engagement nascent state of the mining sector in Burundi. during the process of designing these plans is REPORT 65 MINING SECTOR DIAGNOSTIC - BURUNDI essential. Although Government has said these requirements from companies for emergency documents are available, this is at odds with preparedness plans. The Environmental and CSO who say they have not been consulted in Social Impact Assessment (ESIA) process should the process of designing MCRPs be improved by mandating baseline studies, making key documents publicly available, and The Government is satisfied (2.94) with its plan ensuring explicit environmental evaluations be to do an inventory of abandoned mine sites and made, such as the impacts on climate change to assess needs for rehabilitation and closure. and biodiversity. Additionally, there should be The creation of a fund for the rehabilitation of a focus on strengthening institutional capacity, abandoned sites is already provided for by law particularly for independent environmental but its application is not effective. monitoring by OBPE and general regulatory oversight by the OBM. For the artisanal mining Room for Improvement in “Mining sector, the government is urged to allocate Operations” more resources to implementing its National Action Plan to eliminate mercury use and This MSD has helped identify a number of should enhance traceability mechanisms. policy recommendations and priorities for These measures aim to improve governance, reforms related to ‘‘Contracts, Licenses and accountability, and environmental protection Exploration’’, which are outlined below63. within the mining sector, ensuring a more sustainable and responsible approach to The government should adopt international mining activities in Burundi. standards relating to resettlement and compensation, particularly for displaced Regarding “Mining Operations” there is room communities and ensure stronger legal for improvement as follows: Immediate Term Priorities (next 12 months) ‚ Strengthening the Legal, Institutional and Regulatory Framework ◊ Adopt the revised Environmental Regulations which have not yet been promulgated. ◊ Requirements for resettlement should be clearly incorporated in the Regulations based on international standards such as the World Bank Guidance on Resettlement (Resettlement Action Plan). ◊ Define timelines in the LSM Regulations and the Environmental Regulations for the approval and issuance of mine development plans and environmental certificates. ◊ LSM Regulations need to have explicit requirements for the detailed assessment of a mining project’s impact on climate change, biodiversity, deforestation, waste disposal and water quality. ‚ Transparency and Accountability ◊ Publish all contracts negotiated with mining companies and ensure that all documents relevant to mine developments are published including: Resettlement 63 The highest priority recommendations are outlined in bold font. 66 REPORT THE WORLD BANK Action Plans (RAP), Environment and Social impacts assessments (ESIAs), Mining Closure and Rehabilitation Plans (MCRPs), Environmental and Social Management Plans (ESMPs), and mining agreements themselves. Short to medium-term Priorities (1 year – 7 years) ‚ Strengthening the Legal, Institutional and Regulatory Framework ◊ Ensure an Independent Environmental Regulatory Authority has the budget, resources and trained staff to carry out its mandate relating to site-based monitoring and auditing. ◊ Build monitoring capacities of the OBM regional offices to monitor sites to ensure The Mining Code and Regulations are enforced. ◊ Ensure sufficient resources and staff are available to implement the Minamata National Action Plan to reduce and/or eliminate the use of Mercury in Artisanal and Small-Scale Mining of Gold in Burundi. ◊ Support the formalization of Artisanal and Small-Scale Mining operators. ◊ Support regional traceability and certification mechanisms for minerals mined in Burundi. V.3 TAXATION The performance of the third extractive paying tax to the tax administration and auditing industries value chain component, “Taxation”, capabilities of the Government remain largely shows that the De Facto performance for Mining untested in the mining sector. The report titled Tax Administration and Mining Tax Auditing ‘’Review of Burundi’s Industrial Metallic Mineral being lower than the De Jure assessment. Very Fiscal Regime’’ completed in 2024 by the World few companies are currently in production in Bank has supported this section segment of Burundi. Therefore, very few companies are the Value Chain on Taxation. Figure 9: Value Chain Stage 3 - Indicators Indicators De Jure Tax Policy and Instruments (2.86) Performance (2.87) Mining Tax Administration Rules (2.89) De Facto Mining Tax Administration (2.51) Performance (2.63) Mining Tax Auditing (2.75) Scoring Key Very Low (1 - 1.75) Low (>1.75 - 2.5) High (>2.5 - 3.25) Very High (>3.25 - 4) REPORT 67 MINING SECTOR DIAGNOSTIC - BURUNDI Tax Policy and Instruments (2.86) cover detailed arrangements. The 2023 Draft Mining Code states that the payments method The two aspects of “Legislation, Policy and will be provided in regulatory texts. The most Regulation” scored “high” in the MSD ranking recent said regulation from 2019 (Ordonnance system. Under “tax policy and instruments,” ministerielle conjointe 760/540/670/2019 du specific tax requirements are set out for the 05/04/2019 portant révision de l’ordonnance mining sector. ministérielle conjointe 760/540/898/2015 du 13 juillet 2015 portant régime fiscal) states However, the legally binding provisions for that royalties are paid at time of sale or export, mining sector tax payment processes that will which allows for serious transfer pricing cover detailed arrangements will be provided manipulation. The Public Finance law (Article in the LSM Regulations accompanying the new 104) states when corporate income tax (CIT) Mining Code. The inclusion of the overarching must be paid on an annual basis, as is the case tax regime framework requirements in the in every country globally. Mining Code include royalty, income tax, corporate tax and other payments, consistent The 2023 Mining Code and 2020 Income Tax with international norms and standards. The Law and related laws and decrees contain law provides exemptions in special economic financial provisions that comprise various fees, zones and free trade zones. There is also royalties and taxes that mineral right holders no withholding tax on dividends, tax-free are required to pay. The payments will be repatriation of profits, and exemption from a made to an account designated by the State transfer tax on the purchase or sale of buildings. for collection of payments, royalties and fees. The major categories of fees and payments are If Burundi decided to reform its taxation as follows: regime, the ranking of this element of the value chain stage could be higher. Several reforms Fees could help optimize the fiscal regime. First, the government could increase the regime’s Mineral right holders are required to pay progressivity, generating an incentive to invest application fees, report filing fees, fees for at the margins. Two non-exclusive options access to geological data and public registers. would be to replace the existing royalty with Mineral right holders, dealers, and other license a sliding-scale or variable-rate royalty and to or permit holders are also subject to annual introduce a resource rent tax. Other suggestions licensing or permit fees. These are delineated for improving government revenue from the in the Ordonnance ministerielle conjointe mining sector include reducing tax incentives 760/540/670/2019 du 05/04/2019 portant and goods eligible for tax exemption. régime fiscal applicable au secteur des mines et carrières du Burundi (2019). A partial list of fees However, the legally binding provisions for is provided in Table 6 below. mining sector tax payment processes and they 68 REPORT THE WORLD BANK Table 7: Some royalties selected from the Joint Ministerial Order on the tax regime applicable to the mining and quarrying sector of Burundi (2019) Droit minier Montant (équivalent en BIF) Granting or renewal of prospecting authorization USD 3,000 Grant: USD 10,000 Granting or renewal of research permit First renewal: USD 12,000 Second renewal: USD 15,000 Granting or renewal of mineral exploitation permit USD 50,000 Granting or renewal of the gold counter approval USD 35,000 Granting or renewal of the coltan, wolframite, USD 10,000 cassiterite and rare earths counter approval The Mining Code makes provisions for mineral organizations, and international travel. The OBR right holders to pay an area-based annual requires that companies pay their VAT and that charge that is equal to a price times a share they apply for a VAT refund. VAT is tax deductible of the number of cadastral units that comprise with a few exceptions, such as in the hospitality the mineral right, called a “surface fee”. The industry. calculation for the surface fee can be found in the same regulation. Industrial mines are charged The 2021 Investment Code (Articles 16 and USD 5 per hectare with a minimum payment of 17) provides VAT exemptions for imports for USD 20,000 per year. In the exploration phase, companies that meet a minimum investment companies with research permits must pay threshold, which would be met by all medium- USD 20-60 per square kilometer. Other rates to-large scale mining projects. VAT must be are mentioned for artisanal miners, quarries, charged on imports. However, the OBR provides peat miners and cement manufacturers.64 a refund. The exemption lasts 5 or 10 years, depending on the government’s will. Value added tax Royalties Any company earning more than BIF 100 000 000 per year (approximately USD 35,000) must Royalties are designed as compensation to the pay value added tax (VAT) (“taxe sur la valeur owner of an asset for use or depletion of that ajoutee” / TVA). The VAT Law sets the VAT at asset. In this case, the subsoil minerals belong 18 percent with a 10 percent rate on imported to the Burundian state and mining companies foods, agricultural products transformed are being charged for the depletion of these in Burundi, good and services imported by finite assets. Royalties can also compensate the hotels, and agricultural inputs. There is no state for permanent environmental damage. VAT on exports, international transport, and Gross royalties have interesting features. For intermediate transactions for products destined instance: they ensure a minimum revenue to for export. VAT standard exemptions include: governments; they are easier to administer than most agricultural and livestock products, other tax instruments (although often more insurance, real estate construction, healthcare, complex than people think); and they are less pharmaceuticals, education services, water, subject to base erosion. But, as royalties are not electricity, household heating, banking related to profitability, they are regressive and services, military services rendered by social 64 De Jure Questionnaire (World Bank, 2019). Andrew Bauer REPORT 69 MINING SECTOR DIAGNOSTIC - BURUNDI are paid even if a mine is not profitable. As such, of minerals from a mine or once the minerals they are treated as a fixed cost by investors and leave the mine site. This differs somewhat from should be kept at a reasonable level. the older regulations that state that royalties are due in US dollars at moment of export or Mining royalty rates can be fixed, variable or domestic consumption, not at the mine site or progressive. Fixed rates are the most common. central depository. They are paid to the Office It is estimated that three quarters of African Burundais des Recettes (OBR), the National countries, including Burundi, have fixed ad Revenue Authority, which holds an account at valorem royalties for base and precious metals the central bank. as well as precious stones. There is a trend to move towards variable rate royalties based The Joint Ministerial Ordinance on mineral prices: Burkina Faso (minerals), 760/540/670/2019 of 04/05/2019 revising Joint Cote d’Ivoire (minerals), Queensland and Ministerial Ordinance 760/540/898/2015 of July Australia (oil and gas) being recent examples. 13, 2015 relating to the tax regime applicable A few countries such as Chile, Peru, Niger and to the mining and quarrying sector of Burundi South Africa are using revenue or profit-based requires that mining companies pay an ad royalties. These are sophisticated instruments, valorem royalty as soon as any production and their enforcement requires a similar agreement or permit is granted. degree of administrative expertise as that used to collect corporate income tax. We do not Rates recommend revenue or profit-based royalties, The Mining Code (2023) (Article 213) sets as they suffer from similar weaknesses to different rates for industrial mining and artisanal corporate income taxes. mining, which differ somewhat from the older The 2023 Mining Code states that royalties regulation (Table 7). are due following the first commercial sale Table 8: Variation in fixed royalty rates for industrial mining and artisanal mining Product Industrial mining rate Artisanal mining rate Base metals 4% 3% Precious metals 5% 1% Precious stones 7% 2% Semi-precious stones 4% 3% Other mineral substances 2% 1,5 % Quarried substances 3% 1,5 % Except for some precious stones, these Recettes (OBR), the national revenue authority, categories are undefined in the Mining Code; which holds an account at the central bank. the code states that they will be specified in regulation, so far incomplete. The Ordonnance ministerielle conjointe 760/540/670/2019 du 05/04/2019 portant Contrary to international best practice that révision de l’ordonnance ministérielle conjointe suggests using a mineral reference price where 760/540/898/2015 du 13 juillet 2015 portant possible, Article 217 of the Mining Code (2023) régime fiscal applicable au secteur des mines states that the price used to calculate the royalty et carrières du Burundi requires that mining shall be the sales price or “residual value or initial companies pay an ad valorem royalty as soon as value”. They are paid to the Office Burundais des any production agreement or permit is granted. 70 REPORT THE WORLD BANK Burundi’s royalty rates for metallic minerals is percent–the effective rate depends more on compared to 18 other African countries. Many Investment Code provisions and deductions countries do not set specific royalty rates for than on the base rate. A 15-year project with commodities that are rare or that they do not a 5-year cost recovery period would apply an produce. Thus, few countries set specific royalty average rate of 15 percent over the lifespan of rates for jade or platinum, for example.65 the mine. However, profits would not be taxed at an average rate of 15 percent for many reasons. Corporate Income Tax First, profits could be timed to benefit from the Investment Code’s lower rates in the first few Resident and non-resident corporations in years of post-cost recovery production. Second, Burundi are liable to pay corporate income tax costs could be artificially inflated and revenue (CIT) on all income generated within Burundi. artificially shrunk through base erosion and The CIT rate is currently 30 percent as per the profit shifting (BEPS). Third, mining companies Income Tax Law (2020), Article 103, payable in can reinvest the profits in other projects, thereby Burundian francs. The Income Tax Law (2020) reducing the tax base. sets a minimum income tax rate of 1 percent of turnover (Article 22). Many organizations The 2020 Income Tax Law notes that Interest are not obligated to pay income tax, such expenses are deductible. However, interest as humanitarian organizations, scientific deductions on inter-company loans are capped organizations, religious groups, cooperatives, by a thin capitalization rule in Article 56. Where and state entities. the debt-to-equity ratio is less than 2:1, all interest paid to related parties is tax deductible. The law provides exemptions in special If the debt-to-equity ratio is greater than 2:1, economic zones and free trade zones. For interest paid to related parties is deductible up instance, companies in a free trade zone are to a maximum of 30 percent of the profits for provided with a 10-year exemption on corporate the tax year, calculated before the deduction of income tax followed by a 15 percent rate, which the interest amounts. is further reduced to 10 percent if the company employs at least 100 Burundi nationals. There Custom Duties and Taxes is also no withholding tax on dividends, tax-free repatriation of profits, and exemption from a The 2021 Investment Code (Articles 16 and transfer tax on the purchase or sale of buildings. 17) provides VAT exemptions for imports for companies that meet a minimum investment The 2021 Investment Code provides a number threshold, which would be met by all medium- of tax incentives that apply to corporate to-large scale mining projects. VAT must be income tax. Mining projects investing at least charged on imports, however the OBR provides USD 500,000 in Bujumbura or USD 250,000 a refund. The exemption lasts 5 or 10 years, elsewhere in Burundi are eligible for a CIT rate depending on the government’s will. After this of 5, 10, 15, 20 and 25 percent in the first five date, any company earning more than BIF years of positive net cash flow, respectively, 100 000 000 per year (approximately USD 35,000) starting once the company starts earning a must pay value added tax (VAT) (“taxe sur la profit. Artisanal miners do not pay any CIT for valeur ajoutee” / TVA). The TVA Law sets the VAT the first five years of production (Article 98, at 18 percent with a 10 percent rate on imported Income Tax Law). foods, agricultural products transformed in Burundi, goods and services imported by While Burundi’s 30 percent rate is moderate hotels, and agricultural inputs. There is no by African standards–the African average is 28 VAT on exports, international transport, and 65 Ibid. REPORT 71 MINING SECTOR DIAGNOSTIC - BURUNDI intermediate transactions for products destined it appears the Cour des Comptes verifies for export. VAT standard exemptions include: whether the OBR is collecting the projected most agricultural and livestock products, revenue and requires the ministry of finance insurance, real estate construction, healthcare, to reconcile revenue collection against the pharmaceuticals, education services, water, amount anticipated. There is no requirement electricity, household heating, banking to assess the performance of the fiscal regime services, military services rendered by social nor has any assessment been carried out by the organizations, and international travel. Cour des Comptes or an independent agency. The score under this stage of the value chain Mining Tax Administration Rules (2.89) would be higher if Burundi joined the EITI as a candidate country. This would provide a system “Mining Tax and Administration Rules” includes for greater transparency and accountability clear responsibilities and institutions governing around collection of mineral revenue at this tax law in the country. stage of the value chain. EITI would also require third-party auditing of payment of mineral Regulatory Authority revenues by companies as well as of receipts of these by government. According to the Office of the Burundi Tax Collection Authority (OBR) website, all tax and The National Assembly does not have a special customs administrations have two essential committee that covers the mining sector. objectives: to better serve taxpayers and to However, the Public Accounts Committee improve the collection of tax and customs should touch on these topics tangentially.67 revenue for the public treasury. It is within this framework that the OBR was created. The Mining Agreements creation of the OBR is also a reform that fits with Burundi’s economic integration policy within The Mining Code (Article 64) requires a mining the East African Community (ECA). agreement be signed between the state and the mining company once a large-scale The Burundian Revenue Office (OBR) has legal exploitation permit is granted. The Agreement, status and is under the supervision of the when signed is published by decree. There are Ministry of Finance. It is governed by Law No. no constraints in mining code on what can and 1/22 of November 5, 2021 revising Law No. cannot be included in the contract. However, 1/11 of July 14, 2009 relating to the creation, Article 68 specifically mentions the contents of the mining agreement for large-scale organization and operation of the Burundian mines, a list that slightly contradicts Article 64 Revenue Office. The general goal of creating this which lists only infrastructure creation, socio- institution is the reduction of poverty through economic contributions and recruitment, with improved public revenue collection as well as equal qualifications, of Burundian nationals or an improved business environment in Burundi. Burundian subcontractors. Article 68 names, The OBR is therefore an institution created to among other elements: establishing a joint inaugurate an era of modern and professional venture; the fiscal regime; financial guarantees; tax and customs administration in Burundi. and the elements listed in Article 64. It is not The law governing the OBR has been revised to considered best practice not to negotiate the adapt and harmonize it to the evolving socio- fiscal regime and financial guarantees outside a economic context of the country.66 legislative or regulatory framework, particularly if capacities in contract negotiations are weak. In terms of government audit internal processes, 66 https://www.obr.bi/index.php/en/ 67 Correspondence with the OBM 72 REPORT THE WORLD BANK There is an option to sign a production sharing The only publicly available mining agreements agreement instead of a concession. There is are the Musongati nickel mine between the no requirement for the mining agreement to state and BMM International, and the Gakara be approved by Parliament. Only the ministers Rare Earths contract. The Musongati contract in charge of mines and finance must sign the was signed in 2014 and is no longer considered agreements. to be valid. Among the contract’s more salient points are the following: • A stabilization clause (Article 45) that locks in all fiscal terms from 2014, except in cases where the fiscal regime and customs duties are more favorable to the company; • A 15% free carried state equity participation with an option to purchase shares to raise the state equity position to 34%; no restriction on cash calls; • Surface fees only paid once the project is profitable; • Sales figures determined based on market value as reported by the company, not on a reference price; • A maximum debt-to-equity ratio of 75:25 • Guaranteed 30% of the seats on the board to be held by Government and 40% of managers must be Burundian; • A requirement for the Kermas Group to finance three hydroelectric projects, using fiscal revenues on the Musongati mine as a guarantee; • Local content provisions, including: ‚ A vague preference for using Burundian services and supplies; ‚ Replacing at least 80% of expatriate workers with Burundians within 8 years; ‚ Training at universities; ‚ Capacity building for the ministry in charge of mines; ‚ No restrictions on suppliers, imports, exports, transport and sales; ‚ A requirement to build housing, medical center, restaurant, school for workers and families; ‚ Vague requirements to support local communities with infrastructure and revenue generation activities and a requirement to pay USD 50,000 per year to the local community; • Unlimited rights to natural resources, including wood and water, in the concession area; and REPORT 73 MINING SECTOR DIAGNOSTIC - BURUNDI • A requirement to progressively rehabilitate the mine site, paid out of a fund representing 1% of annual profits, controlled jointly by the government and the company, an amount that is tax deductible Transfer Pricing shares. Article 68 also states that the state may negotiate a production sharing agreement with The Income Tax Law (2020) has vague rules on mining companies. transfer pricing in Article 57. The 2020 Income Tax Law refers to the tax authorities’ right to Article 93 provides for a 16 percent state information on prices of intragroup transactions. participation for small mines over the lifespan It states that a ministerial ordinance will be of the mine, which can be in the form of issued on transfer pricing. It is unclear whether production sharing. The 16 percent cannot any such ordinance has been issued to date. be diluted. Article 92 gives “priority access” to Burundians in receiving exploitation permits There are transfer pricing rules in a 2013 for small mines. (Article 99 contradicts this by ordinance. However, they are vague and repeating the provision of Article 68, except that allow for any of several methods to be used small mining permits are renewed after 10 years to determine prices. Also, it is unclear whether then every subsequent 5 years under Article 98, these provisions are enforced. so the 5 percent increase in state participation increases faster than for large mines.) These State Participation provisions do not substantially alter the status quo, given that the Burundian state already The Burundian state is both a minority and owns 10-15 percent of all operating industrial majority shareholder in the domestic mining metallic mines and that most of these mines sector. Currently, the government owns 10 may be short-lived. However, they do shift the percent of the Gakara Rare Earths Project, 15 perception of investors by suggesting that the percent of the Cimba-Mabayi gold mine, 15 state wishes to become a more active participant percent of the Masaka-Butihinda gold mine, in the mining sector. In theory, they offer the and 15 percent of the Buvyukana-Kirundo state with a greater share of profits, which coltan mine. Previously, the government also could become an important source of revenue owned 15 percent of the Musongati nickel should commodity prices rise substantially. mine. The MINHEM holds the government’s However, they generate a significant degree equity share. State-owned Office Nationale de of financial risk due to the obligations to cover la Tourbe (ONATOUR) has a monopoly on peat cash calls and other costs (e.g., social costs, production; as of 2024, there was no majority rehabilitation). Many investors quietly welcome state ownership of any operating metallic state participation since they are unlikely to pay industrial mines. dividends except near the end of the project’s life and state equity encourages the state to fast- Article 68 of the new 2023 Mining Code requires track permitting and environmental and social a 16 percent state participation or production approvals. Overall, minority state participation sharing, with an increase by 5 percent each generally benefits private investors at the time the mining permit is renewed. (Article 74 expense of the state. states that mining permits for large mines last 15 years and are renewed for 10-year periods.) The Government needs to increase the Thus, a joint venture with the state must be revenues and export earnings generated created. Fiscal terms are negotiated in the from mining without jeopardizing the convention /contract. Clause 13 of Article 68 also inflow of foreign investment into the sector. requires that Burundian investors can purchase The government should be cautious with 74 REPORT THE WORLD BANK respect to additional equity participation as extremely dissatisfied (1.00) with the extent a minority shareholder in mining projects. of consultation undertaken when mining tax State equity creates financial obligations, legislation changes. Industry is dissatisfied and any returns depend on the private (1.89) with stability over time of the fiscal terms majority shareholder’s willingness to pay a for mining. Industry is also very dissatisfied dividend. Dividends are unlikely to be paid (1.25) with the lack of guidance notes for mining without government control of the board of sector taxpayers. Industry representatives would directors or special provisions in the mining welcome meetings to discuss tax issues and agreement. International experience suggests would like guidance notes to better understand that government equity, even if free, may end tax policies and procedures. The Government up costing the government more than the is satisfied (2.59) that the Burundian Revenue dividends earn, especially in net present value Office (OBR) has the mandate to collect taxes. terms and in cases where the government Government is very satisfied (3.89) that income must borrow at high interest rates to finance and withholding tax payments and royalties its share of cash calls. The government may from mining companies are paid to government. wish to consider “trading” its equity in mines Payments of income taxes, withholding taxes for higher royalties, fewer deductions, or and royalties from mining companies to the other concessions. government are placed in the national treasury through an account opened in the name of the Financial Audits Office Burundais des Revenues du Burundi. There are legally binding provisions that At the OBR, there is a unit responsible for require regular tax, cost and physical audits collecting mining revenues at the Small and to be conducted of mining operations and Micro Taxpayers Directorate of the Internal Tax the provisions apply to all mining taxpayers and Non-Fiscal Revenue Commission while large (excluding ASM) and the audits are a combination mining companies are managed at the Large of scheduled and risk-based. Taxpayers Office (at the Department of Large Taxpayers). The Government is very satisfied Article 58 of the Mining Code requires audits (3.25) that in practice, that the fiscal terms of exploration expenses. Article 87 requires including provisions for tax incentives in the law audits to be carried out annually, though by the are followed and is very satisfied (3.25) that taxes company so they are not independent. Audits and payments by mining sector tax payers are can be risked-based according to Law 01/12 collected by the OBR. Industry is less satisfied of 25 November 2020 but there is no evidence (2.18) with the capacity of the OBR to fulfill its one way or the other to suggest what is actually mandate. Burundi’s limited administrative happening inside the OBR.68 capacity poses challenges for implementing complex fiscal policies, underscoring the Mining Tax Administration - De Facto need for targeted capacity-building efforts in (2.51) tax administration, financial modelling, and international market dynamics. Comments ‘’Mining Tax Administration – De Facto’’ by Government officials also indicated that scores ‘’high’’ (2.51). Industry representatives data sharing between the OBM and the OBR is are dissatisfied (2.41) with the availability unsatisfactory and that collaboration needs to and accessibility of policies and procedures be improved. This is particularly important in related to mining taxation. Industry is also terms of production figures and the value of exported mined products69. To ensure effective 68 Except where specified, information on financial issues has been provided by Andrew Bauer either on the WB De Jure Questionnaire or in the report noted below. 69 For quarries, production volumes are checked quarterly. For the 3Ts production is checked by the ITSCi traceability system. For REPORT 75 MINING SECTOR DIAGNOSTIC - BURUNDI tax collection the Government needs to have learn whilst working on the job which is accurate production records and a good sense considered an effective way to strengthen of the value of minerals and products exported capacities in contract negotiations within from Burundi70. a multi-disciplinary team. To successfully negotiate a mining agreement, the Government One Government official stated ‘‘The needs to have knowledge and understanding international community can help provide in several areas which include (but are not logistical support to the OBR and contribute limited to): geology, resource definition, mineral to the establishment of a coordination unit processing, metallurgy, mining engineering, between the Ministry of Mines, the Ministry of international metal markets and market pricing, Finance and the OBR which will be responsible financial modelling, law, finance, tax, etc. for the analysis and forecasting of revenues from extractive industries’’. An Institutional Functional One of the challenges faced by Governments is Review of the OBM, which is being planned in ascertaining the value and price of exported by the Government, needs to assess ways to mineral products, particularly if intermediate improve intragovernmental coordination. products or concentrates where there is limited market information on pricing. For example, the The OBR has a Commissariat responsible for pricing of rare earth concentrates is often not the collection of tax and non-tax revenue and a straightforward and the market can be opaque Commissariat responsible for the collection of for metals traded on long-term contracts Customs Revenue and the two commissions, as without a spot market with liquidity allowing for well as other services of the OBR, share the data price discovery. collected. This is meant to ensure that customs authorities share export figures with the OBR. The Government in its Action Plan for the A verification team in the OBR is meant to be development of the mining sector has able to compare export figures with production prioritized the ‘’establishment of a transparent, statistics from companies, although given predictable, fair and competitive tax regime for limited mine development in Burundi over mining investments’’. One it the Government’s recent years, this remains largely untested. With priorities is to re-negotiate the mining contracts a lack of staff and resources, both the OBR and that were suspended in 2021. The Government OBM have limited capacity to accurately record has also stated that it wants to be competitive the production volumes from different mines. so that it can attract foreign investment. The government is very dissatisfied (1.70) Mining Tax Auditing - De Facto (2.75) with its capacity to negotiate fiscal terms with mining companies in negotiations. ‘’Mining Tax Auditing – De Facto’’ scores ‘’high’’ Negotiating agreements which deviate from (2.75). Government is between dissatisfied the mining legislation has the potential for and satisfied (2.50) that tax, cost and physical sub-optimal deal terms, especially if capacities audits of mining companies are conducted for contract negotiations are limited. It is systematically. The Government is very satisfied critical that governments have the requisite (3.25) that in practice, there are legally binding experience, knowledge and support for provisions on penalties and sanctions for successfully negotiating mining contracts. The non-compliance with tax legislation being use of Transaction advisors helps officials implemented. The Government has weak audit gold, production is checked daily. Additional staff will be needed to effectively monitor production from new mines in Burundi. 70 Certain markets for complex intermediate products in the battery metal markets and energy transition metal markets are hard to value by Governments and knowledge of metal market pricing is very important. Likewise, having sufficient capacities to accurately monitor production volumes is important for the government to ensure it receives the correct amount of tax and royalties’ payments owed to it from mining operations and mining companies. 76 REPORT THE WORLD BANK capacities for companies in the mining sector Room for Improvement in “Taxation” in the OBM (Mines), OBR (Tax and Finance) and OBPE (Environment). Given the nascent state The government should carefully assess its equity of the mining sector in Burundi and the lack of participation in mining projects and consider large-scale mines that pay tax or royalties to the trading its equity for higher royalties or other government, Taxation and Mining Tax Auditing concessions to avoid the financial burden of are largely un-tested. being a minority shareholder. The Government should consider reforms to mining taxation Government respondents are very satisfied such as implementing a sliding-scale royalty, a (3.40) with legally-binding provisions regarding resource rent tax, and address Base Erosion and transfer pricing being implemented. In practice, Profit-Shifting (BEPS) through legal changes like however, there are no regular audits for domestic revising thin capitalization rules and tax treaties. and international related party transfer pricing Strengthening tax administration and auditing transactions and government is very dissatisfied capabilities is also crucial by improving data (1.75) with these audit capabilities. and information sharing between the OBM and OBR, enhancing audit capacities and ensuring Advanced pricing rules are not used in accurate records are kept of production Burundi for regularly occurring domestic volumes and the value of mineral exports. and international related party transactions Becoming a Member of the Extractive Industries although the government seems to be satisfied Transparency Initiative (EITI) is seen as a vital (2.80) with them. step for increasing transparency and ensuring the efficient collection and management of Although Government is satisfied (2.80) that tax revenues. These measures aim to optimize in practice there are regular audits of mining fiscal returns from the mining sector while companies for compliance with thin capitalization ensuring a competitive and transparent rules, several officials say that there are no business environment that attracts investment regular audits of mining companies to check and minimizes the risk of fiscal leakage. compliance with thin capitalization rules. This MSD has helped identify a number of policy recommendations and priorities for reforms for ‘’Taxation’ ’which are outlined below71. Immediate Term Priorities (next 12 months) ‚ Tax Policy and Instruments ◊ The government should conduct cost-benefit analysis on “trading” its equity in mines for higher royalties, fewer deductions, or other concessions. Short to medium-term Priorities (1 year – 7 years) ‚ Tax Policy and Instruments ◊ The government may wish to address BEPS directly through legal reforms. These could include: 71 The highest priority recommendations are outlined in bold font. REPORT 77 MINING SECTOR DIAGNOSTIC - BURUNDI ‚ Introducing a new thin capitalization rule that caps interest deductions as a percentage of Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) and covers foreign exchange losses; ‚ Eliminating tax deductibility of royalties; ‚ Revising the Investment Code to apply the statutory corporate income tax rate to mining companies while maintaining the lower rates for sectors where firms are mobile; ‚ Revising existing double taxation treaties to eliminate preferential withholding tax rates and ensuring that any future tax treaties do not further erode withholding tax payments; ‚ Introducing a reference price for publicly traded minerals and stronger price application rules; ‚ Excluding fuel and some other key operational imported inputs from VAT and customs exemptions in the Investment Code; and ‚ Excluding stabilization clauses that cover the fiscal regime from future mining agreements. ‚ Mining Tax Administration and Tax Auditing ◊ Strengthen capacities of the OBM to accurately record the ore grades and production volumes from different mines. ◊ Strengthen capacities of the OBM and OBR to accurately value mineral exports through real-time information on commodity market pricing for bulk mineral and feedstock prices, intermediate mineral product prices and refined mineral product prices. ◊ Following the Institutional Functional Review of the OBM, implement recommendations to Improve intragovernmental coordination between the OBR and OBM. ◊ Mining and tax authorities should coordinate to identify areas of highest risk of fiscal leakage. ‚ Transparency and Accountability ◊ Pursue membership of the Extractive Industries Transparency Initiative (EITI). V.4 RÉPARTITION ET GESTION DES REVENUS 78 REPORT THE WORLD BANK V.4 REVENUE DISTRIBUTION AND MANAGEMENT The De Jure performance for Revenue Sharing Rules and Fiscal Stabilization Rules are very unsatisfactory. De Facto performance for Revenue Sharing Arrangements, Fiscal Stabilization and Resource Revenue Transparency is much higher. Figure 10: Value Chain Stage 4 – Indicators Indicators De Jure Revenue Sharing Rules (1.00) Performance (1.75) Fiscal Stabilization Rules (2.50) Revenue Sharing Arrangements (2.23) De Facto Performance Fiscal Stabilization (2.50) (2.57) Resource Revenue Transparency (2.97) Scoring Key Very Low (1 - 1.75) Low (>1.75 - 2.5) High (>2.5 - 3.25) Very High (>3.25 - 4) Revenue Sharing Rules (1.00) to pressure coming from local threats of mine disruption or other forms of civil unrest that The scoring for ‘‘Revenue Sharing Rules’’ may occur if communities believe that “their” falls into the “very low” category of the MSD resources are being stolen by foreign entities. ranking system. This is mainly because In some cases, companies are expected to there does not appear to be any resource become a quasi-government as well as being revenue sharing requirements prescribed in responsible for generating employment and law. While companies are expected to fund providing training and capacity building. community development agreements, there Requirements for a portion of mineral revenue is no requirement for sub-national transfers to be transferred to local governments would of mineral revenue collected by the Ministry increase the scoring of this element of the of Finance (and consolidated into the national value chain. budget) to local governments. This can be problematic for mining companies who are The 2023 Mining Code requires companies paying considerable tax revenue, when such to provide financial support to communities payments are not visible to the citizens of the through the negotiation of a community country living in mining zones. If there are development plan. However, there is no no prescribed transfers of a portion of this reference to sharing of resource revenue from revenue to the local areas for socio-economic the national to sub-national (local) governments. development, community dissatisfaction with the company and the local government can It is important that the government is clear, be the result. When there are no services consistent and predictable regarding the roles or development in rural areas where large- and responsibilities of government agencies scale mining is taking place, mining-affected and investors/companies alike. This would help communities in under-developed countries ensure that expectations of local communities often expect mining companies to take on the in mining areas are reasonable and based role of government in the provision of basic on prescribed obligations to be offered by services. Companies sometimes do this due government and companies REPORT 79 MINING SECTOR DIAGNOSTIC - BURUNDI Revenue Sharing Arrangements (2.23) funds, fiscal rules, or resource buffers, to smooth budget expenditures when mineral revenues In practice there are currently no arrangements decline. As a result, the national budget remains for resource revenue sharing between central vulnerable to external shocks. and sub-national governments and production sharing is in ongoing discussion. Government While the relatively modest contribution of has allocated a low score (1.80) to arrangements mining to overall revenue may not yet warrant for revenue sharing. the establishment of a sovereign wealth fund or other financial vehicles, integrating resource The Action Plan for the Development of the revenue planning into a medium-term fiscal mining sector has made broad commitments framework would be a valuable step. Over time, to addressing revenue sharing arrangements. building fiscal tools to manage volatility will be In an attempt to optimize economic benefits important as the sector grows. from mining the Government has outlined the following in its Action Plan: ‘’The State will make Fiscal Stabilization (2.50) efforts to increase efficiency, transparency and accountability in the use of tax resources The “Fiscal Stabilization” component scores generated by mining activity to optimize the at the midpoint (2.50), reflecting that these economic benefits of the sector. This will mechanisms have not been tested in Burundi. involve expanding the role, skills and place of This is due to the absence of industrial-scale local authorities in the local management of mining generating significant government the national mining heritage, as well as building revenue. To date, there have been no meaningful the capacity and increasing the responsibility fiscal flows from the sector to expose the of local communities in the development of government to the revenue volatility typically concerted development plans’’. The Action associated with commodity cycles. Proactive Plan further states: ‘’the State will promote development of fiscal stabilization frameworks intersectoral governance and the distribution will be essential to enhance resilience as the of tasks and responsibilities at all levels of mining sector develops. government to operationalize this approach, through information sharing and capacity Resource Revenue Transparency (2.97) building of stakeholders. The objective is to increase the visibility of spending in the All mining sector revenues are paid into an municipalities affected by mining projects and to account operated by the OBR. There are promote productive diversification in territories currently no assets and liabilities of mining using the mining sector as a lever’’. It remains sector State Owned Enterprises (SOE) included in unclear how the Government will legislate for the public sector accounts because there are no publicly owned companies in the mining sector. revenue sharing arrangements, even though There are no government managed Natural such commitments are within the Action Plan. Resource Funds. The National Institute of Statistics of Burundi is responsible for collecting Fiscal Stabilization Rules (2.50) and publishing statistics on Burundi’s economy. Data on gold production and exports can also The “fiscal stabilization” component of the value be found through ITSCi and ICGLR reports. chain received a low score. This reflects the The Minister of Mines responds to questions limited capacity of the government to manage addressed to him by the National Assembly revenue volatility from fluctuations in global regarding revenues from the mining sector. The commodity prices, particularly in the absence Government does not readily publish mining of formal stabilization mechanisms. Currently, sector statistics, as this data tends not to be Burundi does not have legally binding provisions disaggregated from Industry data. or operational instruments, such as stabilization 80 REPORT THE WORLD BANK In its Action Plan the Government has outlined for resource revenue sharing, ensuring that its objective of becoming a member of the a portion of mining revenues is transferred Extractive Industries Transparency Initiative to local governments for socio-economic (EITI). The MSD found that becoming a member development, as this will help reduce community of the EITI was strongly supported by all dissatisfaction and improve transparency. It is stakeholder groups: government, industry also recommended that the government avoid and CSOs. The implementation of the EITI blanket fiscal stabilization clauses in mining would enable the country to: (i) improve tax agreements and aim for balanced clauses revenues from the mining sector; (ii) involve that protect both the government's regulatory stakeholders in ongoing mining sector reforms; capacity and investor concerns. Additionally, (iii) master production statistics; (iv) raise Burundi should pursue membership in the awareness among artisanal mining operators Extractive Industries Transparency Initiative (EITI) about the regularization of their activities; and to enhance transparency and accountability (v) increase the Government's reputation and in the mining sector, which will ultimately the attractiveness of the mining sector at the strengthen governance and send a positive national and international levels. At its very message to international investors. Lastly, the core is the establishment of a multistakeholder government must clarify how mining revenues working group, which would be a solid platform will be administered and used, ensuring that the for improving sector dialogue. interests of the state and investors are balanced to promote investment in new mines and future Room for Improvement in “Revenue revenue generation. These recommendations Distribution and Management” are justified to foster local development, improve governance, attract investment, and ensure The Government needs to assess how it should that the benefits from mining are more evenly optimally balance the interests and needs of the distributed across the country. State with those of investors to attract foreign investment into the mining sector in Burundi This MSD has helped identify a policy for developing new mines to generate revenues recommendations and priorities for ‘’Revenue for the future. The government should prioritize Distribution and Management’’ which are the establishment of a clear legal framework outlined below72. Immediate Term Priorities (next 12 months) ‚ Strengthening the Legal, Institutional and Regulatory Framework ◊ Clarify in the legislation how revenues from the mining sector will be administered and used. Short to medium-term Priorities (1 year – 7 years) ‚ Transparency and Accountability ◊ Pursue membership of the Extractive Industries Transparency Initiative (EITI). 72 The highest priority recommendations are outlined in bold font. REPORT 81 MINING SECTOR DIAGNOSTIC - BURUNDI V.5 LOCAL IMPACT This section looks at the rules and policies and their enforcement with regard to the local impact of mining in Burundi. Figure 11: Value Chain Stage 5 - Indicators Indicators Local Content Rules (1.67) De Jure Employment Policies (2.80) Performance (2.03) Rules on Community Engagement (2.67) CSR and Social Issues--Rules (1.00) Local Supplier Development (2.86) De Facto Employment (2.93) Performance (2.69) Community Engagement (2.57) CSR and Social Issues (2.39) Industry has the highest average score for Local there are provisions in the 2015 Regulations Impact of the three stakeholder groups. The to give preferential access to procurement limited development of the mining sector to activities to Burundians, and delivery of capacity date has meant that views from cooperatives building programs to increase opportunities and ASM entities are more pronounced than for for local suppliers, there is insufficient detail exploration and large-scale mining companies around this issue to move the scoring up to a when it comes to Local Impact. This may result higher level. The inclusion of the job creation in biasing up the scores for local supplier and training provisions of a mining project are development, employment, community also negotiated at the Mining Agreement stage, engagement, Corporate Social Responsibility but these appear to be ad hoc. (CSR) and social issues for Industry in the MSD. Fewer respondents from government, industry Article 88 states that a Mining Agreement, drawn and CSO have answered questions in the Local up in accordance with the model in Annex I to Impact link of the EI Value Chain which may the regulations, must be negotiated before the have introduced bias to the aggregated scores. mining license is issued and must specify the socio-economic commitments of the license Local Content Rules (1.67) holder. The Mining Convention is published on the Ministry's website by the Agency and in The “local content rules” scores are “very low” the Burundi Official Bulletin. For example, the in the rankings. This is because there appears Burundi Mining Metallurgy International (BMM to be no local content policy that provides International), Musongati, Concession, 2014 guidance to mining companies regarding the mentions job opportunities and requires the requirements to increase local participation in provision of compensation for destruction of economic activities generated by a mine. While land or property as well as protection of sacred 82 REPORT THE WORLD BANK sites. There is no mention of increasing supplier larger companies, local markets and suppliers opportunities for procurement. will be constrained on the amount of goods and supplies they can supply Article 89 states that the holder of a mining or quarrying right and the companies working Employment Policies (2.80) on their behalf or on its behalf must give preference to Burundian companies of their “Employment Policies” scores more highly than choice for any contract, if they offer comparable rules regarding local content because there is prices, quantities, quality and delivery times. In significant legal attention paid to this issue in all cases, the share of small and medium-sized the labor legislation in the 2023 Mining Code enterprises (SMEs) and other enterprises owned and in the 2015 mining regulations. or controlled by Burundian companies must be progressively increased. Extensive requirements for the license holder to either employ Burundians, build supplier capacity Article 90 notes that in order to promote the or encourage ownership and participation of development of the private sector, holders of local companies appear in Articles 88-98 in the mining or quarrying rights as well as companies 2015 Mining Regulations. Article 88 says that working on their behalf, must implement a a Mining Agreement, drawn up in accordance plan to support the creation and/or capacity with the model in Annex I to the 2015 Mining building of SMEs and other companies owned Regulations, must be negotiated before the or controlled by Burundians for the supply of mining license is issued and must specify the goods and services widely used in their activities. socio-economic commitments of the license holder. The Mining Convention is published Local Supplier Development (2.86) on the Ministry's website by the Agency and in the Burundi Official Bulletin. Article 89 requires ‘‘Local Supplier Development’’ had a ‘’high’’ the holder of a mining or quarrying right and score (2.86). Government is satisfied (3.00) the companies working on his behalf must give that it has sought the views of a wide range of preference to Burundian companies of their stakeholders in preparing a local content policy choice for any contract, if they offer comparable for goods and services in the mining sector. prices, quantities, quality and delivery times. In However, as mentioned by one Government all cases, the share of small and medium-sized respondent: ‘’ The government has not yet enterprises (SMEs) and other enterprises owned prepared the local content policy for goods or controlled by Burundian companies should and services within the mining value chain. be limited. Enterprises owned or controlled by It will consult a wide range of stakeholders Burundians must be progressively increased. when the right time comes to do so’’. Industry gave a very high score (3.61) when responding Article 90 states that to promote the to what percentage of goods and services development of the private sector, holders of their entity was sourcing locally. It is easier mining or quarrying rights and the companies for cooperatives and comptoirs operating in working on their behalf must implement the ASM and trading of ASM mineral products, plan to support the creation and/or capacity to source small quantities of goods from building of SMEs and other companies owned local suppliers than it is for larger companies or controlled by Burundians for the supply of who may find capacity and scale constraints goods and services widely used in their activities. with local suppliers. This can be explained by a significant number of cooperatives and Article 91 says that each holder of a mining or comptoirs (3Ts) and small companies who quarrying right must submit an annual report have no problem sourcing small quantities to the Minister in charge of mines on its use of of goods from local suppliers. However, for SMEs and other enterprises owned or controlled REPORT 83 MINING SECTOR DIAGNOSTIC - BURUNDI by Burundians. The report must provide procedures are announced in the media. The details of the progress made by the holder of holder of a mining or quarrying right and the the mining or quarrying right in achieving the companies working on his behalf are obliged minimum share defined in this article, as well as to employ, as a matter of priority, residents its activities to create or strengthen Burundian of the local community or of neighboring capacities. The report, a copy of which has been communities and in all cases, exclusively deposited with the Ministry in charge of SMEs, is local Burundians people, except in the case to be published in the Burundi Official Bulletin of agreements to the contrary duly ratified by and on the Ministry's website. Burundi, for all jobs not requiring qualifications. The minimum quota of Burundian employees Reference is also made to other legislation in per project development phase and/or per Burundi that deals with employment policies. company operating period is defined. Article 92 requires the holder of the mining or quarrying right and the companies working Article 94 says that each holder of an industrial on his behalf to comply with the requirements exploitation permit must submit annually to the of labor legislation. Subject to the provisions Ministry in charge of Labor and the Ministry in of paragraph 1, the holder of the mining or charge of Mines a report on its recourse to the quarrying right must give priority to employing employment of Burundians, that will detail the Burundian managers with the required skills. progress towards achieving the quotas defined To this end, the holder of a license for the in this article, as well as its activities in favor of industrial exploitation of mining substances job creation or capacity building for Burundians. must, during the development phase, present to The report will be published in the Burundi the Ministry responsible for vocational training Official Bulletin and on the Ministry's website. and to the mining administration a training plan for Burundian managers. The plan should Article 96 requires all holders of mining or enable managers to acquire the skills required quarrying rights and the companies working by the management of the company to occupy on their behalf to draw up and submit to the management positions within the first five years Ministry for approval a training and further from the date of first commercial production. training program that promotes the transfer of technology and skills to Burundian companies Article 93 describes the process of ensuring and personnel in order to achieve the minimum that local Burundians are hired. The selection quotas set out in Article 93. In terms of training, this section of the 2015 Mining Regulations outlines company responsibilities. Article 97 requires the license holder to develop a training plan and this must include in particular: 1. Receiving graduates from vocational schools and universities for six-month work placements and two-month work experience placements for pupils and students undergoing initial training; and 2. The participation of Burundian employees in courses and/or internships organized in Burundi or abroad. The Ministry may ask the investor to supplement companies working on his behalf must draw up the training of Burundian employees by their a career and succession plan for all employees, participation in operations carried out abroad particularly those in management and executive to give them expertise in the various sectors positions, or for any job requiring expertise of mining activity. Article 98 specifies that the within the framework of compliance with the holder of the mining or quarrying right and the minimum quotas set out in Article 93. 84 REPORT THE WORLD BANK It appears that some of Mining Agreements represented. CSOs are somewhat dissatisfied (such as the Musongati Concession referred to with industry’s actions to provide women with above) contain requirements regarding support equal employment opportunities but the focus to local students graduating in the mining of these CSOs is mostly on artisanal and small- sciences and provision of employment on a scale mining. sliding scale that would gradually decrease the number of foreign employees. The mining sector in Burundi suffers from a lack of incentives for the creation of economic links With reference to the Environment Code, upstream and downstream of mining activities, 2021 and the Mining Regulations, 2015, there as well as policies and support mechanisms to is nothing in the Environment Code about maximize local employment. The Government’s development of local capacity for employment Action Plan for the development of the mining and/or procurement within the EIA/EMP sector states that the LSM regulations will framework. Items related to social issues in prescribe requirements for the implementation the ESIA focus on impacts on populations of of local skills training policies, the creation of the mining project. The focus is on mitigating jobs for Burundian citizens and the participation impacts and providing compensation for these. of small and medium-sized enterprises (SMEs) It does not include the aspect of “development”, in the mining industry value chain. including employment policies. These measures appear to be in the specific Mining Agreements Rules on Community Engagement - De negotiated on a case-by-case basis. Jure (2.67) Employment (2.93) The Mining Code requires a community development agreement to be negotiated ‘‘Employment’’ had a ‘‘high’’ score (2.93). Industry with the mining-affected community through representatives are supportive of providing which the mining company’s CSR contribution job training for their employees and many of will largely be delivered. For this reason, the them documented the types of training they ranking for the element, “rules on community have offered. In Burundi a person below the engagement” is “high.” age of 18 is not allowed onto a mining site. However, several industry respondents in the There are requirements in the Mining Code for MSD have said they see children in mine sites, the mining company to engage with communities mostly working as artisanal miners. In practice, to develop a community development plan laws that prohibit child labor are not being and to provide funds for the implementation well enforced by the Government. Monitoring of projects under this plan. The Code says capacities of mine sites needs to be increased. that holders of mining or quarrying titles shall CSOs are dissatisfied with laws not being able to draw up a community development plan in prevent children from working in mining sites. consultation with the neighboring communities and the territorial and local administrative Government respondents are satisfied authorities, with precise objectives and an with progress being made in implementing investment plan. employment equity. CSOs are satisfied (2.62) that government actions to provide women Holders of mining or quarrying titles are with equal employment opportunities has made required to set up a fund to which contributions progress although women are still very under- shall be made every year. Such a fund is to be REPORT 85 MINING SECTOR DIAGNOSTIC - BURUNDI used to carry out socio-economic development and Environmental Performance Standards, projects for the local communities set out in the or the UN’s Principles on Business and Human community development plan. Such amounts rights guidance. These standards reflect best shall be exempt from industrial and commercial international practice and mandated application profits tax. The terms and conditions for the of these would include not only requirements funding and management of this fund are to be for a CDA, but also requirements attached specified by the mining regulations. to the mining license around human rights, gender participation, workforce conditions, Most mature mining regimes require some social protection and family welfare. While form of socio-economic development some of these issues will be covered under agreement between a community (that is a CDA, provided that the new regulations suffering negative social and environmental accompanying the Mining Code are adequately effects from the activities of a mining operation) defined, this is not enough to achieve a higher with the mining company. The regulations score under this element of the value chain. accompanying this Code will need to be specific in terms of representation of parties in the As noted above, in terms of CSR, a community CDA, the types of projects it will support, and development plan will form the basis for a the amount of funding agreed to by the mining company’s social investment into a mining- company (as well as a grievance mechanism affected community. This section will focus and reporting requirement). Most regulations on Social Issues most relevant to the mining include a requirement for local government to sector: human rights, child labor and gender be a participant to ensure cohesion with local discrimination. development planning. Human Rights Community Engagement - De Facto (2.57) In the Mining Code, ‘‘Chapter IV. Social Responsibility’’, several Articles require that ‘‘Community Engagement – De Facto’’ had a ‘‘high’’ mining or quarrying title holders shall comply score (2.57). However, CSOs are dissatisfied with, protect, and promote human rights. with the consultations that take place between Holders of mining or quarrying rights are mining companies and affected communities. required to respect the rights of local populations In practice very few community development and communities. However, apart from the agreements have ever been signed because requirement for a CDA (as noted above), there so few projects in the mining sector in Burundi are no specificities around how human rights have been developed. will be protected. Corporate Social Responsibility (CSR) The Mining Code and Regulations could and Social Aspects - De Jure (1.00) require mining companies to subscribe to an international standard such the UN Guiding For the scoring under “CSR and social issues Principles on Business and Human Rights. rules,” the scoring was “very low.” In addition to Companies could be required through their a Community Development Agreement (CDA) CSR or CDA, to develop a policy commitment (falling under community engagement), the legal to respect human rights, undertaking human requirements regarding social issues should rights due diligence and providing for or require companies to adopt international cooperating in processes to enable the standards such as the International Labor remediation of adverse human rights impacts Organisation (ILO) Labor standards, the that companies have caused. Included in this International Financial Corporate (IFC) Social category would be involuntary resettlement of 86 REPORT THE WORLD BANK people, infrastructure or economic activities. Child labor in ASM is a problem in many The International Council on Mining and Metals developing countries, despite the requirements ICMM principles ask companies to avoid the of legislation. This is a particularly important involuntary physical or economic displacement area where interrogation of this issue “on-the- of families and communities. The guidance ground” will be necessary. Article 191 in the states that where this is not possible companies 2023 Mining Code states that health, safety, should apply the mitigation hierarchy and environmental and community standards shall implement actions or remedies that address be governed by international conventions residual adverse effects to restore or improve and treaties ratified by Burundi. These would livelihoods and standards of living of displaced include international protocols governing the people. Requirements for adoption of World use of child labor. See chart below to determine Bank Resettlement Guidelines or equivalent the national labor laws governing child labor. standard could be referenced in this area. Child Labor Table 9: Laws and regulations on Child Labor Meets Standard International Age Legislation Standards Minimum age for work Yes 16 Articles 2, 10 and 618 of the Labor Code (24) Minimum age for hazardous work Yes 18 Articles 270, 279 and 618 of the Labor Code; Article 13 of the Ministerial Ordinance to Regulate Child Labor (25,24) identification of hazardous Yes Articles 9-15 of the Ministerial Ordinance to occupations or activities prohibited Regulate Child Labor (25) for children Prohibition for forced labor Yes Articles 4-6, 10 and 18-20 of the Trafficking in Persons Law; Articles 7 and 617 of the Labor Code (24, 26) Prohibition of child trafficking Yes Article 12 of the Labor Code; Articles 4-6, 10 and 18-20 of the Trafficking in Persons Law; Article 197, 246 and 255 of the Penal Code (24, 27) Prohibition of commercial sexual Yes Article 12 of the Labor Code; Articles 542- exploitation of children 544 and 546 of the Penal Code; Articles 4, 10 and 18-20 of the Trafficking in Persons Law (24, 27) Prohibition of using children in illicit Yes Article 12 and 618 of the Labor Code (24, 27) activities There is nothing stipulated in the local regulations However, in the 2015 Mining Regulations, Article or Mining Code regarding the minimum age 198 states that though not specific to ASM, no required for application for an ASM license. person under the age of eighteen years shall be Only cooperatives can apply and receive these employed in a mine or quarry, underground, at permits, and the rules governing the associations the face of open-cast work, in the operation of of cooperatives would determine whether there machines used for hoisting or moving objects, is an age limit for members. in the operation of winches used for raising or lowering persons or in blasting. REPORT 87 MINING SECTOR DIAGNOSTIC - BURUNDI It is recommended that Burundi adopts or to employ women for half their positions. follows the Organisation for Economic Co- operation and Development (OECD) Guidance. At the same time, Burundian women’s organizations are attacking cultural barriers While the use of child labor is almost entirely that hold women back. They want to end an issue found in ASM, the MSD includes the practices such as parents not sending their assessment of how the mining legislation daughters to school. The Burundian Association deals with this issue. It is recommended that of Women Engineers encourages girls to pursue the Government make it a requirement for scientific and technical studies. The Burundian companies to adopt the OECD Due Diligence Association of Women Lawyers advocates for Guidance for Responsible Supply Chains of women to have equal rights to land ownership. Minerals from Conflict-Affected and High- Other groups, such as the Association of Risk Areas which identifies the worst forms of Repatriated Women, encourage women to child labor as a serious human rights abuse organize to gain strength in numbers.75 associated with the extraction, transport or trade of minerals that companies should not Globally, some progress on women’s rights has tolerate, profit from, contribute to, assist with been achieved. In Burundi, 19% of women aged or facilitate in the course of doing business. The 20–24 years old who were married or in a union OECD Due Diligence Guidance recommends before age 18. As of February 2021, 38.2% of that companies at all stages of mineral supply seats in parliament were held by women. chains commit to eradicating the worst forms of child labor from their supply chains.73 However, work still needs to be done in Burundi to achieve gender equality. The adolescent birth Gender Issues rate is 58.2 per 1,000 women aged 15-19 as of 2015, down from 84.5 per 1,000 in 2011. In 2018, In the Mining Code, there are no gender-specific 22.1% of women aged 15-49 years reported requirements around gender prescribed that they had been subject to physical and/or human resources (quotas), training objectives sexual violence by a current or former intimate or workplace conditions. There is, however, a partner in the previous 12 months. Moreover, National Gender Policy of Burundi74. women of reproductive age (15-49 years) often face barriers with respect to their sexual and In Burundi, a women’s investment and reproductive health and rights: in 2017, 39.6% development bank was founded in February of women had their need for family planning 2021. The goal is to help women build and satisfied with modern methods. expand agricultural enterprises. In June 2021, the World Bank gave Burundi $80 million to As of December 2020, only 46.7% of indicators promote employment of women and young needed to monitor the SDGs from a gender people. Some 120,000 people have benefited, perspective were available, with gaps in key including 16,000 Burundians returning from areas, in particular: unpaid care and domestic abroad. Moreover, Burundi’s laws promote work and key labor market indicators, such female employment. The Constitution sets as the gender pay gap. In addition, many a minimum of 30 % women in government. areas – such as gender and poverty, physical The National Assembly, the lower chamber of and sexual harassment, women’s access to Parliament, even requires government offices assets (including land), and gender and the 73 https://mneguidelines.oecd.org/Practical-actions-for-worst-forms-of-child-labour-mining-sector.pdf 74 https://bi.chm-cbd.net/sites/bi/files/2021-07/gender_strategy.pdf 75 h t t p s : / / w w w . d a n d c . e u / e n / a r t i c l e / a c c o r d i n g - b u r u n d i a n - s a y i n g - h e - w h o - l a c k s - g o o d - w o m a n - l a c k s - wealth#:~:text=Moreover%2C%20Burundi%27s%20laws%20promote%20female,of%2030%20%25%20women%20in%20 government. 88 REPORT THE WORLD BANK environment – lack comparable methodologies citizens without prejudice. In practice, however, for regular monitoring. Closing these gender indigenous people face a number of challenges data gaps is essential for achieving gender- such as a lack of access to good fertile land. related Sustainable Development Goal (SDGs) commitments in Burundi. Government is dissatisfied (1.60) with how its policy on of free, prior and informed consent Corporate Social Responsibility (CSR) is implemented in practice. CSOs are also and Social Aspects - De Facto (2.39) dissatisfied with its implementation. ‘‘CSR and Social Aspects – De Facto’’ had a Areas of Improvement in “Local ‘‘low’’ score (2.39). According to CSOs mining Impact” community representatives are dissatisfied (2.09) with how industry, government and civil society To improve local impact and sustainable collaborate in the planning and implementation development in Burundi’s mining sector, the of Community Social Responsibility (CSR) government should prioritize the creation of a activities. Industry is more satisfied (2.82) with the local content policy in consultation with industry planning and implementation of CSR activities and civil society that clearly outlines the roles being undertaken in the sector. In practice, CSR and responsibilities of both companies and activities related to mine developments is limited government in fostering local job creation, in Burundi because so few mine projects have skills development and training, and SME been advanced towards production and because participation in the mining value chain. This there are no large-scale mines in Burundi. policy should integrate international standards such as the ILO Labor Standards, the IFC Social Responses in the MSD from industry are more and Environmental Performance Standards, likely to be focused on artisanal and small scale and the UN’s Principles on Business and Human mine operations for gold and the 3Ts. Without Rights to address social issues, including human having data points from large scale mining rights and child labor. Furthermore, the mining for CSR and Social Issues, it is not possible for sector's Corporate Social Responsibility (CSR) stakeholders to answer some of the questions. initiatives should be enhanced by clearly defined categories for socio-economic support, such as Health services and education services in education, health, and job creation, while also artisanal and small-scale mining communities specifying the percentage of company revenue are very limited. In recent years, some children committed to funding these efforts through have dropped out of school to work in mines. Community Development Agreements (CDAs). This may become an issue for the Government CDAs should be subject to annual reporting in the north of the country in the vicinity of and include grievance mechanisms. Lastly, the gold mines and mines being mined for the 3Ts. government should strengthen monitoring With high gold prices of more than USD 2300, capacities to prevent child labor, with a focus on artisanal and small-scale gold mining becomes enforcing compliance through adherence to the a much more attractive livelihood option for OECD Due Diligence Guidance for Responsible poor communities in the vicinity of gold mining Supply Chains. These recommendations, when areas. A high gold price acts as a pull factor for implemented, should help ensure a more children into artisanal gold mining. sustainable and community-focused mining industry in Burundi. The Government recognizes indigenous people and their rights in the country’s constitution This MSD has helped identify a number of policy in Articles 13 and 22 and highlights the recommendations and priorities for reforms for government’s commitment to protect all its ‘‘Local Impact’’ which are outlined below76. 76 The highest priority recommendations are outlined in bold font. REPORT 89 MINING SECTOR DIAGNOSTIC - BURUNDI Immediate Term Priorities (next 12 months) ‚ Strengthening the Legal, Institutional and Regulatory Framework ◊ Following the completion of the Energy Transition Roadmap, the Government should define a local content policy in consultation with industry and civil society with requirements for the implementation of local skills training policies, the creation of jobs for Burundian citizens and the participation of small and medium- sized enterprises (SMEs) in the mining industry value chain. ◊ The Government should clarify, through its Local Content Policy, how local communities living in mining areas will be sensitized on their rights. ◊ The Government should require in the Mining Regulations that all mining companies to adhere to international guidelines on human rights through Corporate Social Responsibility (CSR) and CDAs, such as the Voluntary Principles on Security and Human Rights, UN Guiding Principles on Business and Human Rights and the International Council on Mining and Metals’ (ICMM) Human Rights Due Diligence Guidance. ◊ The Government should require in the Mining Regulations that all mining companies adhere to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. This identifies the worst forms of child labor as a serious human rights abuse associated with the extraction, transport or trade of minerals that companies should not tolerate, profit from, contribute to, assist with or facilitate in the course of doing business. ◊ The Government should require in the Mining Regulations that companies adopt international standards such as the ILO Labor standards and the IFC Social and Environmental Performance Standards, or the UN’s Principles on Business and Human rights guidance in regard to social issues. ◊ The LSM regulations should be updated to specify the percentage of either gross profit or revenue that the mining company commits to paying for implementation of the CDA projects annually and CDAs should be subject to an annual reporting requirement to Government and a mechanism for grievance procedures. ◊ The LSM Regulations should specify categories of socio-economic development support to which mining companies can contribute such as: training/capacity building; education; health; social infrastructure and job creation. Short to medium-term Priorities (1 year – 7 years) ‚ Strengthening the Legal, Institutional and Regulatory Framework ◊ Ensure OBM has sufficient monitoring capacities to prevent children from working in mine sites. ◊ Following the Instititional Functional Review of the Ministry of Environment, Agriculture and Livestock, with the objective of establishing an independent Environmental Regulatory Authority to replace the OBPE, ensure that all recommendations are implemented in full. 90 REPORT THE WORLD BANK VI. STAKEHOLDER PRIORITIES The analysis in Sections IV and V has treated the MSD that they considered most important. every topic and each indicator equally. In For each topic, the respondents assigned a total giving a flat listing of shortcomings, the analysis of 100 votes distributed among the indicators overlooks an important aspect: some problems that in their view were priorities and required are more important than others. They either special attention. Priority areas were defined have a larger impact (positive or negative) on as areas where reforms would be most likely the functioning of the mining sector or they to significantly improve the management of the are perceived as indispensable areas that sector with the aim of increasing its contribution require reforms. The analysis of stakeholder to overall sustainable development. It should be priorities in this section is a first step towards taken into account that by definition each priority identifying the topics that should be considered area is an indicator in the MSD framework. priorities, as seen through the eyes of the three main stakeholder groups in the mining sector: The stakeholders’ votes were standardized government, industry, and civil society. to 100 per respondent, giving equal weight to each respondent. The responses were then During the interview phase of the MSD, all aggregated for each stakeholder group. The respondents were asked to identify their top following table shows the top ten priorities for priorities for the sector. Specifically, they received each sector (Figure 13). The table also gives the the voting template reproduced in Annex V, and score for each priority topic. each respondent picked the topics evaluated in Figure 12: Shared Stakeholder Priorities Government CSO 2 1 4 2 3 0 Industry 3 REPORT 91 MINING SECTOR DIAGNOSTIC - BURUNDI The two areas that were priorities for all three and ‘’Land Compensation and Resettlement’’. stakeholder groups (Government, Industry and Shared priorities between Government and CSO CSO) were ‘‘Mining Legislation and Processes’’ are ‘’Revenue Sharing’’ and ‘’Resource Revenue and ‘‘Roles and Responsibilities’’. Shared Transparency’’. The only two shared priorities priorities between Government and Industry between Industry and CSO are ‘‘Mining Legislation are ‘‘Collection and Maintenance of Geological and Processes’’ and ‘‘Roles and Responsibilities’’ Information’’, ‘’Artisanal and Small-scale mining’’ which are also shared by the Government. Figure 13: Top Ten Stakeholder Priorities Votes (% Topic Votes (%) Scores Cumulative) De Jure De Facto Government Collection and Maintenance of Geological 12% 12% 2.18 Information Artisanal and Small-Scale Mining 8% 20% 2.65 2.34 Environmental Impact Management 7% 27% 2.45 2.24 Revenue Sharing 6% 33% 1.00 2.23 Land, Compensation and Resettlement 5% 38% 2.13 2.94 Mining Legislation and Processes 5% 43% 2.90 Resource Revenue Transparency 5% 47% 2.97 Roles and Responsibilities 5% 52% 3.23 Industry Mining Legislation and Processes 12% 12% 2.90 Artisanal and Small-Scale Mining 9% 21% 2.65 2.34 Sector Dialogue 7% 29% 2.03 Sector Policy 7% 36% 2.62 Tax Policy and Instruments 6% 42% 2.86 Roles and Responsibilities 6% 48% 3.23 Collection and Maintenance of Geological 6% 54% 2.18 Information Land, Compensation and Resettlement 6% 59% 2.13 2.94 Civil Society Resource Revenue Transparency 11% 11% 2,97 Roles and Responsibilities 8% 19% 3.23 Mining Legislation and Processes 8% 27% 2.90 License Allocation 7% 33% 2.64 2,89 Revenue Sharing 7% 40% 1.00 2,23 Employment 6% 46% 2.80 2,93 Occupational Health and Safety 5% 51% 1.75 2,87 Tax Auditing 5% 56% 2,75 92 REPORT THE WORLD BANK VII. STRENGTHS, CHALLENGES, AND REFORM AGENDA This section concludes the report by noting the of necessary improvements that could go onto current strengths - where the rules are in line a mining sector reform agenda that includes, with good international practice and where firstly, policy improvements, and secondly, there are competent and capable institutions. It reinforcement of institutional performance then outlines the main medium- and long-term and management. challenges and concludes by proposing a set VII.1 STRENGTHS Untapped mineral potential of Burundi durable economic growth and transformative development for the broader region. The quality Burundi is endowed with deposits of gold, tin, of institutions, sector governance and policy tungsten and tantalum (3Ts), lithium, rare earth will be instrumental in determining Burundi’s minerals (the lanthanides), vanadium, titanium, path to harnessing natural resource wealth for nickel, cobalt, copper, platinum group elements positive and sustained development outcomes. (PGEs), phosphates, and various industrial minerals and mineral fuels such as peat and Clearly Strategy for sector development hydrocarbons. The development of these through the Action Plan resources could generate important revenues, export earnings and employment opportunities The Government has defined a strategy for the and could catalyze infrastructure development mining sector which is laid out in the November and economic linkages (water, rail, roads and 2023 Action Plan for developing the mining power) in to the broader economy. The mining sector. However, the activities have not been sector represents an important opportunity costed and are not adequately resourced. If the for economic growth and shared prosperity Government of Burundi were to successfully for the people of Burundi. However, if poorly implement the Action Plan, it would position managed, the extraction of these resources the country be on a path towards realizing (as has been shown globally) can contribute to the largely untapped potential of the mining income disparities, poor human development sector. Although regional economic integration outcomes, macro-economic distortion, is a strategic priority of the Government, a irreversible environmental damage and (at holistic strategy for how the Government times) conflict. plans to leverage its natural resource for the development of regional value chains is lacking. If its mineral resources are developed sustainably The Government is closely collaborating with within a robust strategy for realizing wider the Government of Tanzania on proposed benefits and industrial diversification, Burundi infrastructure linkages including road and rail can leverage its resource wealth to support infrastructure. An MOU has been signed between REPORT 93 MINING SECTOR DIAGNOSTIC - BURUNDI both Governments to build out and extend an a valuable resource for the Government. The Standard gauge railway (SGR) into Burundi. Government also has diamond drill core from Regional collaboration is vital for Burundi to previous drilling campaigns on the Musongati, unlock the value in its mineral resources. Nyabikere and Waga nickel deposits and the Mukanda vanadiferous titanomagnetite Historical geodata is available and is valuable deposit which could be re-logged and re- sampled and re-assayed to confirm the Projects of strategic importance in Burundi accuracy or historical data. have extensive historical data which could be VII.2 CHALLENGES The mining sector’s contribution to government infrastructure constraints which act as barriers revenues, export earnings, employment and to mining sector development. GDP remain very low. No large-scale mine has ever been built in the country and the sector is Perception of Burundi as a high-risk dominated by artisanal mining for gold and the jurisdiction 3Ts. All three stakeholder groups: government, industry and civil society are dissatisfied with In recent years the mining sector in Burundi has the state of the mining sector in Burundi. suffered from a lack of investment. In 2021 the Government took the decision to suspend four Infrastructure Deficit mining contracts pending the promulgation of a new Mining Code (August 2023). The With a huge transport and energy license suspensions were made because of infrastructure deficit, the costs of operating the Government’s perception that the mining in Burundi are very high. Any bulk mineral or sector was not generating sufficient benefits base metal deposit would need to be large for the country due to poorly negotiated and high grade to be commercially viable for mining agreements. Since the suspensions development in Burundi. Projects of strategic there has been a breakdown in trust between national importance such as Musongati have government, industry and civil society. The remained undeveloped. This is primarily due suspension of mining licenses has called into to the land-locked nature of Burundi and its question the security of tenure of all mining distance from a suitable deep-water port, and titles in Burundi which has undermined investor the lack of infrastructure (power and transport confidence in the country. Security of tenure links) within both Burundi and Tanzania. New is an important criterion for international mines require dependable and timely logistics investors when making investment decisions. for both importing capital goods and mine Since 2021 the mining sector has fallen into a consumerables to mines and for exporting mine state of stagnation and has received virtually and value-added products to global markets. no foreign investment as investors consider the Burundi also lacks the human resources as the country to be a high-risk jurisdiction. country does not have a history of mining and there re a lack of people with skill-sets in the Resolving the issues with the suspended mining sector. mining licenses will send a positive message to potential investors. Becoming a Member of the Burundi has the opportunity of developing from Extractive Industries Transparency Initiative a land-locked to a land-linked country. However, would also be seen as a positive development to do this it has to overcome challenges from by foreign investors. 94 REPORT THE WORLD BANK The Government’s Action Plan for the constraints at all levels within MINHEM and the development of the Mining Sector in Burundi OBM and within the OBPE under the supervision has acknowledged the stagnant state of the of the Ministry of Environment, Agriculture and sector. Attracting international investment Livestock. There are limitations in budgets, and operational expertise to Burundi’s mining equipment, staffing and resources. Burundi projects requires both predictable governance does not have experience of developing large and reliable infrastructure. Other resource- scale mining projects. Other resource-rich endowed countries that have managed to countries have developed capacities within attract investments have done so by providing government departments through a learning- clarity, consistency and predictability on the by-doing approach as mines are progressively policy, legal, regulatory, and institutional developed. Global experience has shown framework, and the roles and responsibilities that building institutional capacities is very of government agencies and investors alike, difficult in the absence of a mining sector with backed by transparent non-discretionary rules operating mines. and decision-making processes. Geological prospectivity has not been sufficient by itself to There is currently no accredited geological attract significant investment to many of these and mining laboratory in Burundi. emerging economies in the absence of strong institutional, legal and regulatory frameworks. Lack of modern geological information for Burundi High population density and competition for land use There is a lack of modern and up to date geological information in Burundi and the Burundi has a high population density in many country remains highly underexplored. The areas of the country that contain minerals. This geological maps were compiled back in the creates competition for land use. To compound 1990s and were done on a regional mapping this issue, Burundi is relatively mountainous scale of 1:250,000. There is no country-wide with many parts of the country dominated by geophysical dataset and very little information hills, steeply incised V-shaped valleys and steep is available in digital format. slopes. This presents a number of issues for mining in areas with perennial rivers that drain Security water into downstream agricultural areas. The effective management of mine waste from mine Burundi is considered a fragile country due to sites, to avoid siltation of drainages downstream, its institutional and social fragility. Despite some is a key consideration in areas with hills, deep positive socio-political developments, the risk of weathering profiles and with high rainfall and conflict and violence persists, driven by regional a high run-off. The positive socio-economic conflict spillover, rapid urbanization, conflict- benefits from mine developments in these induced traumas, and high youth unemployment. settings has to be balanced with mitigating the These factors impact poverty, livelihoods, and negative environmental impacts from mine run- the investment climate, increasing the risk of off. Deforestation is widespread across Burundi conflict and violence. The challenging economic and also contributes to siltation of river systems situation, characterized by high poverty, inflation, due to run-off from farming areas. and fiscal deficits, could further heighten public dissatisfaction, and exacerbate ethnic and Capacity constraints and weak governance regional tensions, especially during the legislative and local elections. The government lacks capacities at all levels in the mining sector which acts as a constraint for sector development. There are capacity REPORT 95 MINING SECTOR DIAGNOSTIC - BURUNDI VII. 3 POLICY RECOMMENDATIONS & PRIORITIES FOR REFORMS Policy recommendations and priorities for reforms have been grouped under three key pillars: 1. Mining Sector Growth – The development of new mines to increase mineral production. 2. Environmental and Social Governance – Strengthening governance systems to mitigate the negative environmental and social impacts of mining. 3. Benefit Capture and Management – Ensuring that the benefits of mining are effectively captured, managed, and shared. Environmental and Social Benefit Capture and Mining Sector Growth Governance Management Immediate term actions (next 12 months) • Re-negotiate the Mining Agreements • Adopt Environmental • Conduct an Institutional that were suspended in 2021 with Regulations. Functional Review of the the support of Transaction Advisors. • Publish all documents relevant OBM.ment for obtaining • Conduct an inventory of OBM's to mine developments including laboratory accreditation. geological data and digitize high- RAPs, ESIAs, ESMPs, and mining • Establish a functional, priority data for strategic projects. agreements. credible and effective • Develop a modernized GIS-linked • Build capacities of the OBM platform for multi- online Cadaster system. regional offices to monitor sites stakeholder engagement to ensure the Mining Code and and consultation to improve • Complete the ETM Roadmap to dialogue between different assess opportunities for Burundi's Regulations are enforced. stakeholders. mining sector in Infrastructure and • Strengthen monitoring capacities industrial diversification. of the OBPE for environmental • Conduct cost-benefit analyses inspections and audits and for on the Government's equity assessing ESIAs and ESMPs. participation in mining projects. Short-medium term actions (1-6 years+) • Build cross-sectoral & multi- • Ongoing capacity strengthening • Become a Member of disciplinary capacities for contract for the OBM regional offices the Extractive Industries negotiations using transaction to monitor sites to ensure the Transparency Initiative (EITI). advisors and tailored programs. Mining Code and Regulations are • Implement the findings • Establish a geological data and enforced. and recommendations of information repository and create • Ensure sufficient resources and the Institutional Functional an online geodata portal. staff are available to implement Review of the OBM. • Develop an investment promotion the Government's National • Conduct an Institutional strategy for the mining sector. Action Plan to reduce and/or Functional Review of the eliminate the use of Mercury in OBPE. • Update the Mining Policy outlining ASGM. the Government's vision for • Define a Local Content Policy. leveraging mineral resources for • Ongoing strengthening of monitoring capacities at OBPE for • Increase resources for tax development. collection and audits. environmental inspections and • Conduct high resolution nationwide audits and for assessing ESIAs • Strengthen capacities at OBM geological campaign. & OBR to accurately value and ESMPs. mineral exports. A more detailed breakdown of the policy recommendations and priorities for reforms is outlined below77. 77 The highest priority recommendations are outlined in bold font. 96 REPORT THE WORLD BANK PRIORITY 1: MINING SECTOR GROWTH THROUGH THE DEVELOPMENT OF NEW MINES TO INCREASE MINERAL PRODUCTION All three stakeholder groups who participated a clear, consistent, and predictable policy, legal, in the MSD – Government, Industry and Civil and regulatory framework. Society –acknowledge that mines need to be developed if the sector is to become a key Immediate Term Priorities (next 12 driver for growth and economic transformation months) in Burundi. With its varied mineral endowment, Burundi has the potential to develop mines Priorities in the immediate term include to increase government revenues, export renegotiating suspended mining agreements earnings, employment opportunities and with the use of multi-disciplinary transaction infrastructure upgrades. advisory support, conducting an inventory of all geological information held by the OBM Developing the mining sector in Burundi will to prioritize data for digitization, developing require investment in mining, energy and an online GIS-enabled Cadaster system and infrastructure. To attract investment the completing the Energy Transition Mineral Government of Burundi will need to establish (ETM) Roadmap78. Specific priorities in the immediate term include: ◊ Re-negotiate mining agreements that were suspended in 2021. ◊ Complete the Energy Transition Minerals (ETM) Roadmap to assess infrastructure and industrial diversification opportunities and challenges as well as prospects for supporting the collaborative development of regional value chains through coordinated investments with Burundi’s neighboring countries. ◊ Improve dialogue between stakeholder groups in Burundi’s mining sector by establishing a functional, credible and effective platform for multi-stakeholder engagement and consultation. ◊ Develop a modernized GIS-linked Cadaster system. ◊ Conduct a full inventory of all the data the OBM holds in digital and hard copy formats. ◊ Complete a GAP analysis on data available for projects of strategic national importance. ◊ Digitize all high-priority data for projects of strategic importance. 78 The ETM Roadmap will assess Burundi’s infrastructure, industrial diversification, and regional value chain development potential. Key areas for evaluation include improved geological data, sector governance, private sector investment incentives, competitive fiscal policies, reliable energy and transport infrastructure, local employment, social benefits, and environmental management. REPORT 97 MINING SECTOR DIAGNOSTIC - BURUNDI Short to medium-term Priorities (1 programs, establishing a central geological year – 7 years) information and data repository, developing an Investment Promotion strategy, updating the Priorities over the short to medium term include Mining Policy following the completion of the building cross-sectoral and multi-disciplinary ETM roadmap and carrying out a high resolution capacities for contract negotiations using geological campaign to evaluate the portion of transaction advisors and through tailored training the East African nickel belt located in Burundi. Specific priorities over the short to medium term include: ◊ Following the completion of the Energy Transition Roadmap, the Government should define a local content policy in consultation with industry and civil society with requirements for the implementation of local skills training policies, the creation of jobs for Burundian citizens and the participation of small and medium-sized enterprises (SMEs) in the mining industry value chain. The Local Content Policy should specify how local communities living in mining areas will be sensitized to their rights. ◊ Develop an information and database management system for mining sector administration. ◊ Use transaction advisors to support the government with important contract negotiations and build cross-sectoral and multi-disciplinary capacities for contract negotiations: increase knowledge of international metal markets, develop sufficient capabilities for assessing feasibility studies and have dedicated training in financial modelling. ◊ Create a hard copy library and a digital geodata repository. ◊ Make geological information available through an online geological database (geoportal). ◊ Build capacities for establishing, managing and maintaining a geological data repository. ◊ Build capacities for using geodata to promote specific mining opportunities to investors. ◊ Revise the LSM Regulations to make it mandatory for all companies to submit hard-copy data and digital data with their statutory reports. ◊ Update the Mining Policy, following the completion of the ETM Roadmap with the Government’s vision for leveraging Burundi’s mineral resources for development and economic transformation. ◊ Develop an investment promotion strategy for the mining sector. 98 REPORT THE WORLD BANK PRIORITY 2: STRENGHTENING ENVIRONMENTAL AND SOCIAL GOVERNANCE TO MITIGATE NEGATIVE IMPACTS OF MINING Strengthening environmental, social, and that mining benefits local communities and governance (ESG) factors in Burundi's mining supports long-term national development. sector is crucial to mitigating its negative impacts and ensuring sustainable development. Weak Immediate Term Priorities (next 12 regulations and poor enforcement have led months) to environmental degradation, human rights violations, and corruption, which undermine Priorities in the immediate term include adopting economic growth and social stability. By the Environmental Regulations, publishing all implementing stronger ESG policies, Burundi documents relating to mine developments can reduce deforestation, protect water including mining agreements, and building sources, and improve labor conditions while capacities in the OBM and OBPE to ensure that fostering transparency and responsible mining and environmental laws and regulations resource management. This approach will not are properly enforced. only attract ethical investors but also ensure Specific priorities in the immediate term include: ◊ Adopt the revised Environmental Regulations which have not yet been promulgated. ◊ Publish all contracts negotiated with mining companies and ensure that all documents relevant to mine developments are published including Resettlement Action Plans (RAP), Environment and Social impacts assessments (ESIAs), Mining Closure and Rehabilitation Plans (MCRPs), Environmental and Social Management Plans (ESMPs), and mining agreements themselves. Short to medium-term Priorities (1 the formalization of artisanal and small-scale year – 7 years) mining and traceability and certification systems and supporting the implementation of the NAP Priorities over the short to medium term to reduce and/or eliminate the use of mercury include building capacities in the OBM regional in mining. offices to carry out their mandate, supporting Specific priorities over the short to medium term include ◊ Build monitoring capacities of the OBM regional offices to monitor sites to ensure The Mining Code and Regulations are enforced. ◊ Ensure sufficient resources and staff are available to implement the Minamata National Action Plan to reduce and/or eliminate the use of Mercury in Artisanal and Small-Scale Mining of Gold in Burundi. ◊ Support the formalization of Artisanal and Small-Scale Mining operators. ◊ Support regional traceability and certification mechanisms for minerals mined in Burundi REPORT 99 MINING SECTOR DIAGNOSTIC - BURUNDI Requirements for the changes to regulations: ◊ Requirements for resettlement should be clearly incorporated in the Regulations based on international standards such as the World Bank Guidance on Resettlement (Resettlement Action Plan). ◊ The government should define timelines in the LSM Regulations and the Environmental Regulations for the approval and issuance of mine development plans and environmental certificates. ◊ LSM Regulations need to have explicit requirements for the detailed assessment of a mining project’s impact on climate change, biodiversity, deforestation, waste disposal and water quality. ◊ Clarify in the mining legislation how revenues from the mining sector will be administered and used and shared between central Government and local government. ◊ The government should require in the Mining Regulations that all mining companies to adhere to international guidelines on human rights through Corporate Social Responsibility (CSR) and CDAs, such as the Voluntary Principles on Security and Human Rights, UN Guiding Principles on Business and Human Rights and the International Council on Mining and Metals’ (ICMM) Human Rights Due Diligence Guidance. ◊ The government should require in the Mining Regulations that all mining companies adhere to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. This identifies the worst forms of child labor as a serious human rights abuse associated with the extraction, transport or trade of minerals that companies should not tolerate, profit from, contribute to, assist with or facilitate in the course of doing business. ◊ The government should require in the Mining Regulations that companies adopt international standards such as the ILO Labor standards and the IFC Social and Environmental Performance Standards, or the UN’s Principles on Business and Human rights guidance in regard to social issues. ◊ The LSM regulations should be updated to specify the percentage of either gross profit or revenue that the mining company commits to paying for implementation of the CDA projects annually and CDAs should be subject to an annual reporting requirement to Government and a mechanism for grievance procedures. ◊ The LSM Regulations should specify categories of socio-economic development support to which mining companies can contribute such as: training/capacity building; education; health; social infrastructure and job creation. 100 REPORT THE WORLD BANK PRIORITY 3: CAPTURING, MANAGING AND SHARING THE BENEFITS FROM MINING The development of Burundi’s mineral resources mining in Burundi are captured, managed and could generate important revenues, export shared properly. earnings and employment opportunities and could catalyze infrastructure development Immediate Term Priorities (next 12 and economic linkages (water, rail, roads and months) power) into the broader economy. The mining sector represents an important opportunity for Priorities in the immediate term include economic growth and shared prosperity for the conducting an Institutional Functional Review people of Burundi. However, if poorly managed, of the OBM, establishing a functional, credible the extraction of these resources (as has been and effective platform for multi-stakeholder shown globally) can contribute to income engagement and consultation and conducting a disparities, poor human development outcomes, cost-benefit analysis on “trading” government’s macro-economic distortion, and (at times) equity in mines for higher royalties, fewer conflict. It is critically important that benefits of deductions, or other concessions. Specific priorities in the immediate term include: ◊ Conduct an Institutional Functional Review of the OBM to define the optimal structure of a mining sector regulatory entity79. ◊ Improve dialogue between stakeholder groups in Burundi’s mining sector by establishing a functional, credible and effective platform for multi-stakeholder engagement and consultation. ◊ The government should conduct a cost-benefit analysis on “trading” its equity in mines for higher royalties, fewer deductions, or other concessions. Short to medium-term Priorities (1 year – and Livestock, pursuing membership of the 7 years) Extractive Industries Transparency Initiative (EITI), and strengthening capacities of the OBM Priorities over the short to medium term include and OBR to accurately value mineral exports carrying out an Institutional Functional Review and to address BEPS through legal reforms. of the Ministry of Environment, Agriculture Specific priorities over the short to medium term include: ◊ Carry out an Institutional Functional Review of the Ministry of Environment, Agriculture and Livestock with the objective of establishing an independent Environmental Regulatory Authority to replace the OBPE. 79 The Institutional Functional Review of the OBM should assess how intragovernmental coordination can be improved with other Ministries and regulatory entities, how the mining sector regulator should be resourced to carry out its prescribed mandates, and should assess the business model for the laboratory so that a finance and sustainability plan can be produced. REPORT 101 MINING SECTOR DIAGNOSTIC - BURUNDI ◊ Following the Institutional Functional Reviews of the OBM and the OBPE (and the formation of an Independent Environmental Regulatory Authority), ensure recommendations and findings are implemented in full and ensure sufficient human, financial and technological resources for the respective entities to carry out their roles, responsibilities and mandates. ◊ Pursue membership of the Extractive Industries Transparency Initiative (EITI). ◊ Strengthen capacities of the OBM to accurately record the ore grades and production volumes from different mines. ◊ Strengthen capacities of the OBM and OBR to accurately value mineral exports through real-time information on commodity market pricing for bulk mineral and feedstock prices, intermediate mineral product prices and refined mineral product prices. ◊ Following the Institutional Functional Review of the OBM, implement recommendations to Improve intragovernmental coordination between the OBR and OBM. ◊ Mining and tax authorities should coordinate to identify areas of highest risk of fiscal leakage. ◊ The government should address BEPS directly through legal reforms. These could include: ‚ Introducing a new thin capitalization rule that caps interest deductions as a percentage of Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) and covers foreign exchange losses; ‚ Eliminating tax deductibility of royalties; ‚ Revising the Investment Code to apply the statutory corporate income tax rate to mining companies while maintaining the lower rates for sectors where firms are mobile; ‚ Revising existing double taxation treaties to eliminate preferential withholding tax rates and ensuring that any future tax treaties do not further erode withholding tax payments; ‚ Introducing a reference price for publicly traded minerals and stronger price application rules; ‚ Excluding fuel and some other key operational imported inputs from VAT and customs exemptions in the Investment Code; and ‚ Excluding stabilization clauses that cover the fiscal regime from future mining agreements. ◊ Strengthen the capacity of the Chamber of Mines to represent the interests of the private sector. ◊ Support the establishment and functioning of a civil society umbrella organization to represent civil society and local communities in mining areas on mining related topics and issues. 102 REPORT THE WORLD BANK ANNEXES ANNEX I: MSD METHODOLOGY - BRIEF DESCRIPTION MSD is a data-driven diagnostic of the mining sector. Data is compiled using a questionnaire con- taining 369 questions. The questions draw on two different data sources, specifically: • Primary data on the country’s laws, regulations, and procedures; these questions are related to de jure “rules.” This data is generated through a desk review of relevant documents; and • Interview data from in-country interviews of representatives from government, civil society, and industry. These questions refer to de facto performance. The response to each question is scored on a scale of 1 (lowest) to 4 (highest). Specifically: • Primary data questions typically deal with the existence of legally binding requirements. In some cases, primary questions are simple Yes/No questions that are scored as 4 or 1, depending on the response. In many other cases, primary questions explore whether the legally binding requirement is consistent with good practice. This is done through a series of sub-questions. The overall score then averages the sub-question scores. • The interview questions have specific response options. Four, three or two options are given. An example of four options is “very satisfied / satisfied / unsatisfied / very unsatisfied” with the respective scoring of 1 to 4. An example of three options would be “fully / partially / not at all” with scores of 4 / 2.5 / 1. An example of two response options would be “Yes / No” with a score of 4 or 1. Interview questions may contain 2 or more sub- questions, in which case the overall score would be an average of the sub-question scores. Interview responses from civil society and industry the dashboard (indicators are shown in several are averaged into one response for civil society Figures in the report and are clearly identified in and one for industry, respectively. Respondents the headings in Annex II). Aggregation of each also have an opportunity to provide comments step involves simple averaging. The resulting to support or clarify their views. Questions scores are divided into four groups: are grouped into indicators and indicators are grouped into “topics” that represent the cells of REPORT 103 MINING SECTOR DIAGNOSTIC - BURUNDI “Very Low” (scores of 1 - 1.75); “Low” (scores >1.75 to 2.5); “High" (scores >2.5 - 3.25); and “Very High” (scores of >3.25 - 4). The figures in the report translate these scores into color coding as follows: Scoring Key Very Low (1 - 1.75) Low (>1.75 - 2.5) High (>2.5 - 3.25) Very High (>3.25 - 4) 104 REPORT THE WORLD BANK ANNEX II: QUESTION SCORES Number Question Data Source Score A Mining Sector Management A1 Sector Policy Is there an approved mining sector strategy that is publicly 1 Primary 3.00 available? Is there a current multi-year national development plan 2 that has a section on the mining sector and that is publicly Primary 4.00 available? How satisfied is government with the mining sector 3 Interview Government 2.57 development taking place in this country? How satisfied is the mining industry with the mining sector 4 Interview Industry 1.89 development taking place in this country? How satisfied is civil society with the mining sector 5 Interview Civil Society 1.67 development taking place in this country? Is mining sector legislation in accordance with the mining 6 Interview Government 2.80 sector strategy? Is mining sector legislation (including policies and 7 regulations) consistent with other relevant legislation Interview Government 2.95 (including policies and regulations)? How satisfied is the mining industry with the country's 8 mining legislation (e.g., is it reasonably up-to-date and Interview Industry 2.28 addresses all relevant issues)? How satisfied is the government with the country's mining 9 legislation (e.g., is it reasonably up-to-date and addresses Interview Government 2.92 all relevant issues)? How satisfied is civil society with the country's mining 10 legislation (e.g., is it reasonably up-to-date and addresses Interview Civil Society 2.44 all relevant issues)? Is there an investment promotion strategy that adequately 11 Interview Government 2.32 covers the mining sector? A2 Sector Dialogue Is there a Chamber of Mines (or similar organization) that 12 Primary 3,00 represents the mining industry? How satisfied is the mining industry with the way the 13 Chamber of Mines (or similar organization) represents the Interview Industry 2,00 views of the mining industry? Are there civil society organizations that represent the views 14 Primary 3,00 of civil society on a wide range of mining sector issues? How satisfied is civil society with the way existing civil 15 society organizations represent the views of civil society on Interview Civil Society 2,17 mining sector issues? REPORT 105 MINING SECTOR DIAGNOSTIC - BURUNDI Number Question Data Source Score How satisfied is the government with the dialogue 16 between the government and the mining industry on Interview Government 2,64 mining sector issues? How satisfied is the government with the dialogue between 17 Interview Government 2,45 the government and civil society on mining sector issues? How satisfied is the mining industry with the dialogue 18 between the government and the mining industry on Interview Industry 1,53 mining sector issues? How satisfied is the mining industry with the dialogue 19 between civil society and the mining industry on mining Interview Industry 1,67 sector issues? How satisfied is civil society with the dialogue between the 20 Interview Civil Society 1,75 government and civil society on mining sector issues? How satisfied is civil society with the dialogue between the 21 Interview Civil Society 1,92 mining industry and civil society on mining sector issues? Did an informed and meaningful national consultation take 22 Interview Government 1,69 place during the preparation of the mining sector strategy? Did an informed and meaningful national consultation take 23 Interview Industry 1,40 place during the preparation of the mining sector strategy? Did an informed and meaningful national consultation take 24 Interview Civil Society 1,72 place during the preparation of the mining sector strategy? Did an informed and meaningful national consultation 25 take place during the preparation of the national Interview Government 1,96 development plan? Did an informed and meaningful national consultation 26 take place during the preparation of the national Interview Industry 1,36 development plan? Did an informed and meaningful national consultation 27 take place during the preparation of the national Interview Civil Society 2,16 development plan? A3 Roles and Responsibilities Is there a stand-alone Ministry of Mines with clearly defined responsibilities for the mining sector? If not, 28 and mining sector issues are covered by a unit/section Interview Government 3,05 in a different Ministry, is this unit/section sufficiently empowered to deal with mining sector issues? Does mining or other legislation assign clear authorities 29 and non-overlapping responsibilities between government Interview Government 3,06 ministries/agencies in the mining sector? Is there a clear understanding and acceptance of the 30 various roles and responsibilities amongst the agencies Interview Government 3,42 involved in the management of the mining sector? Is there a dedicated unit within the mining authority 31 Primary 4,00 dealing with artisanal and small-scale mining (ASM)? 106 REPORT THE WORLD BANK Number Question Data Source Score Is there a legally binding provision for the establishment 32 and operation of a mining cadastre that specifies its Primary 1,00 authority and responsibilities? Is there a legally binding provision that identifies the 33 authority that issues exploration and mining licenses and Primary 2,50 is this authority separate from the mining ministry? Is there a legally binding provision that provides for the use of mining-related standard contracts and/or development 34 Primary 4,00 agreements, does the law define the signatory and is the signatory the same as the license issuer? Are there legally binding provisions that identify which institution or institutions are responsible for approving 35 EIAs and EMMPs as well as monitoring and enforcing Primary 4,00 compliance with legal requirements related to managing environmental impact? Are there legally binding provisions that identify which institution or institutions are responsible for approving 36 SIAs and SMMPs as well as monitoring and enforcing Primary 4,00 compliance with legal requirements related to managing social impact? A4 Coordination intra-gouvernementale In practice, are there disagreements between government 37 ministries/agencies over the roles and responsibilities Interview Government 2,70 regarding the mining sector? In practice, are there disagreements between government 38 ministries/agencies over the roles and responsibilities Interview Industry 3,37 regarding the mining sector? In practice, are there disagreements between government 39 ministries/agencies over the roles and responsibilities Interview Civil Society 1,99 regarding the mining sector? Has the government set up formal mechanisms to share resources and information between institutions in the 40 Interview Government 2,27 form of committees, task forces or working groups that bring together "mining sector practitioners"? Has the government set up formal mechanisms to share resources and information between institutions in the 41 Interview Industry 1,21 form of committees, task forces or working groups that bring together "mining sector practitioners"? Has the government set up formal mechanisms to share resources and information between institutions in the 42 Interview Civil Society 1,90 form of committees, task forces or working groups that bring together "mining sector practitioners"? Are there formal mechanisms for sharing information 43 between government ministries/agencies working on the Interview Government 3,28 mining sector? How satisfied are you with the effectiveness of the formal 44 Interview Government 2,25 mechanisms for sharing resources and information? REPORT 107 MINING SECTOR DIAGNOSTIC - BURUNDI Number Question Data Source Score How satisfied are you with the effectiveness of the formal mechanisms for sharing resources and information 45 Interview Industry 1,67 between government ministries/agencies working on the mining sector? How satisfied are you with the effectiveness of the formal mechanisms for sharing resources and information 46 Interview Civil Society 2,00 between government ministries/agencies working on the mining sector? Has a central information storage system and database 47 been set up that effectively supports the maintenance, Interview Government 2,10 verification, and sharing of data for the mining sector? How satisfied are you with the central information storage 48 Interview Government 1,67 system and database? How satisfied are you with the central information storage system and database that the government is 49 Interview Industry 1,43 using to maintain, verify and share data relateed to the mining sector? How satisfied are you with the central information storage system and database that the government is 50 Interview Civil Society 1,56 using to maintain, verify and share data relateed to the mining sector? 1 Contracts, Licenses and Exploration B1 Rules for License Allocation, Oversight, and Transfer B1.1 License Allocation Rules Are there legally binding procedures for granting exploration and mining licenses that are consistent 51 Primary 4,00 with good practice and compatible with other relevant legislation? Do the procedures used in granting exploration and mining licenses ensure that licenses are only issued to 52 Primary 1,00 qualified applicants and do rely on either "First Come, First Served procedures" or "Competitive Bidding"? If competitive bidding is used for granting exploration licenses, are standardized bidding documents and 53 Primary … contracts used and, if so, do the evaluation criteria emphasize work commitments? If competitive bidding is used for granting mining licenses, are standardized bidding documents used and, if so, do 54 Primary 1,00 the evaluation criteria emphasize investment commitment and premium payments? Are there legally binding procedures for registering or granting licenses to artisanal and small-scale mining 55 operators and, if so, can the registration/license be Primary 2,50 obtained from field offices, not just the mining authority head office? 108 REPORT THE WORLD BANK Number Question Data Source Score Are there legally binding provisions regarding the 56 timeframes for the issuance of exploration and mining Primary 2,00 licenses and the approval of exploration work programs? Is there a legally binding requirement or guideline that 57 requires that a map component be used to record license Primary 4,00 boundaries in the cadastre? Are there legally binding provisions that an applicant be 58 informed if a license application is denied or a license is Primary 2,50 cancelled and, if so, are they consistent with good practice? Are there legally binding provisions that require exploration license holders to report exploration activities and results to 59 Primary 2,80 the Geological Survey Department or the mining authority and, if so, are they consistent with good practice? Are there legally binding procedures for granting licenses to mineral traders and are they required for trading minerals, 60 Primary 4,00 gemstones, etc. produced by mining license holders as well as artisanal and small-scale mining operators? B1.2 Règles de gestion et de transfert de permis Are there legally binding provisions for penalties and 61 sanctions for non-compliance with exploration and mining Primary 3,25 license conditions? Are there legally binding requirements that exploration 62 and mining licenses, contracts and agreements be made Primary 4,00 publicly available? Are there legally binding provisions, such as state secrecy 63 laws, that contain barriers to the disclosure of mining Primary 4,00 sector information? Are there legally binding provisions that require license holders to provide the government with details of the 64 Primary 2,50 beneficial ownership of the license and is this information made publicly available? Does a company that holds an exploration license and is in compliance with exploration license conditions have a legally binding automatic priority right to apply for a 65 Primary 4,00 mining license in that area—provided it does also meet the conditions and has provided all necessary information required for a mining license? Are there legally binding provisions that permit exploration 66 and mining license holders to transfer their licenses to an Primary 4,00 eligible party that meets the license provisions? C1.1 Collection and Maintenance of Geological Information In practice, are exploration license holders delivering the 67 required operational information to the Geological Survey Interview Government 2,77 Department (GSD) or mining authority on a regular basis? REPORT 109 MINING SECTOR DIAGNOSTIC - BURUNDI Number Question Data Source Score In practice, does the GSD or similar organization maintain geological information from companies in a confidential 68 Interview Government 4,00 manner until such time as it can be made publicly available? In practice, does the GSD or similar organization collect 69 Interview Government 2,80 geological information in a publicly accessible library? Is there a government website that presents what national 70 geological information is available or, if not at the national, Primary 1,00 at the sub-national level? Is there a library with current national or sub-national 71 geological information maintained by the Geological Primary 1,00 Survey Department (GSD) or a similar organization? In practice, does the GSD or similar organization make use of the geological data collected from companies to 72 Interview Government 3.33 improve government and public awareness/understanding of geological prospectivity? In practice, does the GSD or similar organization make 73 use of the geological data collected from companies to Interview Government 3,10 monitor compliance with license conditions? In practice, does the GSD or similar organization have the 74 Interview Government 1.18 capacity to fulfill its mandate in a satisfactory manner? How satisfied is the mining industry with the way in 75 which the Geological Survey Department (GSD) or similar Interview Industry 1,87 organization is fulfilling its mandate? What percentage of the licensed ground is being serviced 76 Interview Government 2,00 by active exploration? How satisfied is the mining industry with the availability of 77 Interview Industry 1,53 geological maps for the most prospective areas? In practice, does the Mining Cadastre have the capacity to 78 Interview Government 1,39 fulfill its mandate in a satisfactory manner? How satisfied is the mining industry with the way in which 79 Interview Industry 2,20 the Mining Cadastre is fulfilling its mandate? In practice, is the topographic map for the cadastre 80 Interview Government 3,57 compatible with GPS systems? 81 What percentage of the mining cadastre is up-to-date? Interview Government 1,67 In practice, if there is a decentralized cadastre system 82 in place, is the central office able to obtain updated Interview Government 1,50 information on a timely basis? C1.2 Effective License Allocation In practice, is the information required for license 83 Interview Industry 3,58 applications publicly available? Are the procedures in the legal framework for the award of 84 Interview Industry 2,78 exploration and mining licenses followed in practice? Are the limits to discretionary power in the award of 85 Interview Industry 2,80 exploration and mining licenses followed in practice? 110 REPORT THE WORLD BANK Number Question Data Source Score In practice, is there a preference for local companies or 86 producers in the award process of exploration and mining Interview Industry 2,50 licenses? In practice, are exploration and/or mining licenses awarded to applicants which do not have the technical and 87 Interview Industry 2,60 financial capacity to fulfill license requirements and any associated work program? In practice, are the legislated timeframes for exploration 88 Interview Industry 2,21 and mining license awards and extensions followed? Are the timeframes for the approval of exploration work 89 Interview Industry 1,82 programs followed in practice? Are the timelines for deciding on exploration and/or 90 mining license applications compatible with the timelines Interview Industry 2,20 of other required permits? In practice, when licenses are denied or cancelled, are the 91 Interview Government 3,77 procedures followed? In practice, does the unit issuing exploration and mining 92 licenses have the capacity to fulfill its mandate in a Interview Government 1,86 satisfactory manner? How satisfied is the mining industry with the way in which 93 the unit issuing exploration and mining licenses is fulfilling Interview Industry 2,35 its mandate? What percentage of licenses are subject to boundary 94 disputes between license holders due to the ambiguity of Interview Government 3,67 boundaries? Are mining contracts and agreements signed and approved 95 Interview Government 4,00 by the authority or authorities defined in the law? In practice, how often do license cancellations or denials 96 Interview Government 3,63 result in appeals? If mining-related standard contracts and/or development 97 agreements are used, are they used to modify provisions Interview Government 3,57 in the law? C1.3 Effective License Management Is the government effectively managing compliance with 98 Interview Government 2,88 exploration and mining license conditions? In practice, does the unit managing the monitoring 99 of licenses have the capacity to fulfill its mandate in a Interview Government 1,73 satisfactory manner? How satisfied is the mining industry with the way in which 100 the unit managing the monitoring of licenses is fulfilling its Interview Industry 2,53 mandate? How satisfied is the mining industry with the authorities' 101 practices regarding the extension of exploration and Interview Industry 2,23 mining licenses? REPORT 111 MINING SECTOR DIAGNOSTIC - BURUNDI Number Question Data Source Score In practice, are license holders able to transfer their 102 licenses to companies which meet the qualification Interview Government 3,67 criteria? In practice, does a company that holds an exploration license for a certain areas and is in compliance with exploration license conditions have an automatic first 103 Interview Industry 3,50 priority to obtain a mining license in that area—provided it does also meet the conditions and has provided all necessary information required for a mining license? In practice, are exploration and mining licenses, contracts 104 Interview Government 2,78 and agreements made publicly available? If the answer to the preceding question is "No", are 105 key details of exploration and mining licenses readily Interview Government 2,70 accessible? In practice, does the agency or ministry responsible for awarding licenses for exploration and mining operate 106 Interview Industry 1,27 independently from the mining ministry, and without undue influence from the mining ministry? Do you perceive corruption as having a negative impact on 107 Interview Industry 1,57 mining-sector activities--in particular the licensing process? Is your company aware of the payment of bribes in the 108 Interview Industry 2,60 mining sector? 2 Mining Operations Mining Legislation/Processes, Land/Compensation/Resettlement, Environmental and Social B2 Impact Management, ASM, OHSA, Mine Closure--Rules B2.1 Mining Legislation and Processes Are there legally binding regulations which cover 109 Primary 4,00 exploration and mining activities? Are the laws and regulations governing exploration and 110 mining operations readily available from a dedicated Primary 3,00 government source? Is there a legally binding process to appeal decisions by 111 mining authorities and, if so, is the authority that receives Primary 1,00 the appeal independent of the mining authorities? If it exists, does the legally binding process to appeal 112 decisions by mining authorities have the legal standing to Interview Government 2,50 overturn these decisions? Are timeframes for the approval of mine development 113 plans and the approval of extensions of mining operations Primary 4,00 set out in the regulations? B2.2 Règles en matière de foncier, d’indemnisation et de réinstallation Does the holder of a mineral right have legally guaranteed 114 Primary 4,00 access rights to surface land? 112 REPORT THE WORLD BANK Number Question Data Source Score Is there a legally binding established procedure for the resettlement of communities displaced by mining activities 115 and, if so, does it follow internationally accepted principles Primary 2,50 such as the Equator Principles or the IFC Performance Standards? Is there a legally binding procedure for the payment of 116 compensation when exploration and/or mining activities Primary 1,00 interfere with land ownership or land use? If mining is taking place in areas where armed conflict is taking place, are there legally binding requirements for 117 Primary 1,00 a diagnostic review for appropriate actions regarding existing mineral rights in such areas? B2.3 Environmental and Social Impact Management Is there a legally binding requirement that the clearance of the agency or ministry responsible for environmental protection be obtained before exploration or mining 118 Primary 4,00 activities can commence and is the agency or ministry separate from the mining authorities or in a separate line of authority from the mining licensing agency? Is there a legally binding requirement for companies to prepare and submit EIAs, EMMPs (or combined ESIAs and 119 ESMMPs) and related reports including implementation Primary 4,00 and monitoring reports for review and approval by the concerned government agencies? Is there a legally binding requirement for EIAs and EMMPs (or combined ESIAS and ESMPS) and related 120 implementation and monitoring reports to address Primary 1,00 mining's environmental impacts on women separately from the impacts on men? Is there a legally binding requirement for E(S)IAs and E(S)MMPs (or other key environmental impact related 121 Primary 2,50 documents such as monitoring reports) to be made public and is the requirement consistent with good practice? Are there legally binding requirements for pollution prevention and management of air pollution, hazardous 122 Primary 4,00 and non-hazardous wastes, chemicals and hazardous materials and pesticides? Are there legally binding requirements for the protection of surface and ground water quality and the review and 123 Primary 2,20 balancing of water allocations and are they consistent with good practice? Is there a legally binding requirement for structures such as tailings dams and impoundments that hold mine wastes 124 to be designed, operated and maintained according to Primary 1,00 internationally recognized standards that is consistent with good practice? Is there a legally binding requirement for mining 125 operations to identify, manage and protect biodiversity Primary 2,00 that is consistent with good practice? REPORT 113 MINING SECTOR DIAGNOSTIC - BURUNDI Number Question Data Source Score Is there a legally binding requirement for mining 126 operations to identify, manage and protect natural habitat Primary 2,00 that is consistent with good practice? Is there a legally binding requirement that mine design and operations reflect anticipated trends in weather event 127 Primary 1,00 severity and frequency related to climate change that is consistent with good practice? Is there a legally binding requirement for mining operations to have an Emergency Preparedness and 128 Primary 1,00 Response Program (EPRP) prior to commencement of mining operations that is consistent with good practice? Is there a legally binding requirement for Emergency 129 Preparedness Plans to be made public and is the Primary 1,00 requirement consistent with good practice? Is there a legal provision for a simplified Environmental 130 Primary 4,00 Permit for artisanal and small-scale mining (ASM)? Is there a legally binding requirement for companies to prepare and submit SIAs and SMMPs (and related reports including Implementation and Monitoring 131 Primary 4,00 reports) for review and approval by the concerned government agencies and is the requirement consistent with good practice? Is there a legally binding requirement for SIAs and SMMPs (or other key social impact related documents 132 Primary 4,00 such as monitoring reports) to be made public and is the requirement consistent with good practice? Is there a legally binding provision establishing a grievance and complaints mechanism for environmental and social 133 Primary 1,00 mitigation issues and is the complaints mechanism consistent with good practice? Is there an authority with whom a grievance or complaint 134 can be filed and has the authority put in place procedures Primary 3,00 for hearing as well as corrective procedures? B2.4 Artisanal and Small-Scale Mining Is there an association that represents artisanal and small- 135 Primary … scale miners? Is there a government-run program that ASM workers and 136 their families can access to get basic health and education Primary … services in the area where they work? Are there legally binding provisions that provide for 137 the legal operations of artisanal and small-scale mining Primary 4,00 (ASM) activities? Are there legally binding provisions that permit ASM activities to take place, with the consent of the (non-ASM) 138 Primary 4,00 license holder, on land for which an exploration or mining license has been issued? 114 REPORT THE WORLD BANK Number Question Data Source Score Are there legally binding provisions that provide for the 139 settlement of disputes between ASM and exploration and Primary 1,00 mining license holders? Are there legally binding provisions for ASM that safeguard 140 Primary 1,60 from potential environmental and other harm? B2.5 Occupational Health and Safety Are there legally binding Occupational Health and Safety (OHS) standards and procedures, and, if so, do they 141 Primary 2,50 include related education and training requirements and are they in line with internationally used standards? Is there a grievance mechanism for workers for non- compliance with Occupational Health and Safety (OHS) 142 Primary 1,00 standards and procedures, and, if so, does it include penalties in case of non-compliance? B2.6 Mine Closure and Financial Sureties for Decommissioning Are there legally binding regulations which cover mine 143 Primary 4,00 closure and reclamation activities? Is there a legally binding requirement for a Mine Closure 144 and Reclamation Plan (MCRP) to be prepared and is it Primary 2,20 consistent with good practice? Are there legally binding provisions that outline what the MCRP must cover regarding environmental protection, 145 Primary 1,00 remediation and reclamation as well as managing and mitigating potentially harmful social impacts? Is there a legally binding requirement for the MCRP to be 14 6 prepared in consultation with the affected communities and Primary 2,00 local government and is it consistent with good practice? Is there a legally binding requirement for Mine Closure 147 and Remediation Plans to be made public and is the Primary 1,00 requirement consistent with good practice? Is there a legally binding requirement for mining 148 companies to include progressive rehabilitation in the Primary 4,00 mining plan? Are there legally binding provisions regarding a financial 149 assurance mechanism related to mine closure that are Primary 4,00 consistent with good practice? C2.1 Land, Compensation and Resettlement--Practice C2.1 Land, Compensation and Resettlement--Practice In practice, does the government enforce the legal 150 requirements to resettle communities affected by mining Interview Civil Society 2,75 activities? In practice, does the government enforce the legally binding 151 payments of compensation when exploration and/or Interview Civil Society 4,00 mining activities interfere with land ownership or land use? REPORT 115 MINING SECTOR DIAGNOSTIC - BURUNDI Number Question Data Source Score If mining is taking place in areas where armed conflict is 152 taking place, does the government take appropriate actions Interview Government 3,00 in practice regarding existing mineral rights in such areas? If mining is taking place in areas where armed conflict is taking place, how satisfied is the mining industry with the 153 Interview Industry 2,00 actions taken by government regarding existing mineral rights in such areas? C2.2 Environmental Impact In practice, do exploration or mining activities commence 154 without obtaining a permit from the agency or ministry Interview Government 3,93 responsible for environmental protection? Is the institution tasked with monitoring and enforcing environmental laws and regulations carrying out its task 155 Interview Government 2,04 in a satisfactory manner regarding the mining sector from exploration to post-mine closure? How satisfied is civil society with the way the institution 156 tasked with monitoring and enforcing environmental law is Interview Civil Society 2,00 carrying out its task? How satisfied is the mining industry with the way 157 the institution tasked with monitoring and enforcing Interview Industry 2,07 environmental law and regulations is carrying out its task? In practice are EIAs and EMMPs (or other key environmental impact related documents) approved by 158 the mining authority before a mining right is granted and Interview Government 3,31 are the documents updated and approved on a regular basis with specified timeframes? In practice is the implementation of EMMPs and other 159 environmental impact management and mitigation Interview Government 2,64 requirements monitored and enforced systematically? Are Environemntal Impact Assessments (EIAs) and Environmental Management and Mitigation Plans (EMMPs) 160 (or other key environmental impact related documents Interview Government 1,17 such as monitoring reports) made public in practice and are they widely available? How satisfied is civil society with the public availability and 161 Interview Civil Society 1,91 accessibility of EIAs and EMMPs? In practice is surface and ground water quality being 162 Interview Government 1,67 protected and water allocations reviewed and balanced? In practice are structures such as tailings dams and impoundments that hold mine wastes designed, 163 Interview Industry 1,73 operated and maintained according to internationally recognized standards? In practice is biodiversity being identified, managed and 164 Interview Industry 2,58 protected? How satisfied is the government with the mining companies' design, operation and maintenance of 165 Interview Government 2,33 structure such as tailings dams and impoundments that hold mine wastes? 116 REPORT THE WORLD BANK Number Question Data Source Score In practice is natural habitat being identified, managed and 166 Interview Industry 2,66 protected? In practice do mine design and operations reflect 167 anticipated trends in weather event severity and frequency Interview Industry 2,05 related to climate change? In practice do mining companies have an Emergency Preparedness and Response Plan (EPRP) that is approved by 168 Government, is reviewed, tested, and updated on a regular Interview Industry 1,81 basis with reporting to the Government and is prepared and updated in close collaboration with the local community? Are Emergency Preparedness Plans made public in 169 Interview Government 1,56 practice and are they widely available? How satisfied is civil society with the public availability and 170 Interview Civil Society 1,92 accessibility of Emergency Preparedness Plans? In practice is the government monitoring and enforcing 171 compliance with environmental requirements for artisanal Interview Government 2,85 and small-scale miners? C2.3 Social Impact Are the institutions tasked with monitoring and enforcing 172 social mitigation measures and requirements carrying out Interview Government 2,06 their tasks in a satisfactory manner? How satisfied is civil society with the way the institutions 173 tasked with monitoring and enforcing social mitigation Interview Civil Society 1,80 measures and requirements are carrying out their tasks? How satisfied is the mining industry with the way the institutions tasked with monitoring and enforcing social 174 Interview Industry 2,41 mitigation measures and requirements are carrying out their tasks? In practice are SIAs and SMMPs (or other key social impact related documents) approved by the mining 175 authority before a mining right is granted and are the Interview Government 2,95 documents updated and approved on a regular basis with specified timeframes? In practice is the implementation of SMMPs and other social impact management and mitigation requirements 176 Interview Government 3,00 and compliance with legal requirements monitored and enforced systematically? Are Social Impact Assessments (SIAs) and Social Management and Mitigation Plans (SMMPs) (or other 177 key social impact related documents such as monitoring Interview Government 1,63 reports) made public in practice and are they widely available? How satisfied is civil society with the public availability and 178 Interview Civil Society 2,09 accessibility of SIAs and SMMPs? Is the grievance and complaints mechanism for 179 environmental and social mitigation issues working well Interview Civil Society 2,25 in practice? REPORT 117 MINING SECTOR DIAGNOSTIC - BURUNDI Number Question Data Source Score C2.4 Support for Artisanal and Small-Scale Mining If there is a unit in the mining authority dealing with 180 artisanal and small-scale mining, does it have the capacity Interview Government 1,53 to fulfill its mandate in a satisfactory manner? How satisfied is civil society with the way the unit dealing 181 with artisanal and small-scale mining in the Mining Interview Civil Society 2,08 Ministry of similar organization is fulfilling its mandate? In practice, does the government provide technical training 182 to ASM miners to help improve their mining activities and, Interview Civil Society 2,22 if so, is the training effective and inclusive? In practice, are small scale miners able to coexist with 183 Interview Civil Society 2,38 other mining activities? In practice, are large-scale mining operations able to 184 Interview Industry 2,80 coexist with ASM activities? In practice, are artisanal and small-scale miners operating 185 Interview Government 2,81 in the formal market? In practice, are the mechanisms for the settlement of 186 disputes between ASM and other mining operations Interview Civil Society 2,80 being used? In practice, do artisanal and small-scale miner associations 187 participate in the monitoring, advocacy and protection of Interview Civil Society 1,75 ASM mining and property rights? In practice, are ASM workers and their families able to 188 access basic health and education services in the area Interview Civil Society 2,67 where they work? C2.5 Occupational Health and Safety In practice, is the implementation of Occupational Health 189 and Safety (OHS) standards and procedures including any Interview Industry 2,67 related education and training requirements enforced? Is the grievance and complaints mechanism for 190 Interview Government 3,10 operational health and safety working well in practice? Is the grievance and complaints mechanism for 191 Interview Civil Society 2,27 operational health and safety working well in practice? In practice, does the government track the number of 192 Interview Government 3,45 injuries and fatalities related to mining activities? Mine Closure and Financial Sureties for C2.6 Decommissioning In practice is an initial Mine Closure and Reclamation 193 Plan (MCRP) prepared and approved prior to the Interview Government 2,91 commencement of production? In practice is a final MCRP prepared and approved prior 194 to the commencement of mine closure activities and is it Interview Government 2,50 audited by independent experts? In practice do mining companies consult communities and 195 local government when developing and updating the Mine Interview Industry 2,50 Closure and Reclamation Plan (MCRP)? 118 REPORT THE WORLD BANK Number Question Data Source Score How satisfied is civil society with the way mining companies consult with communities when developing 196 Interview Civil Society 1,90 and updating the Mine Closure and Reclamation Plan (MCRP)? How satisfied is local government with the way mining 197 companies consult with communities when developing Interview Government 1,89 and updating the MCRP? Are Mine Closure and Remediation Plans made public in 198 Interview Government 1,08 practice and are they widely available? How satisfied is civil society with the public availability and 199 Interview Civil Society 2,10 accessibility of MCRPs? How satisfied is the mining industry with the way the institutions tasked with monitoring and enforcing the 200 Interview Industry 2,70 environmental and social obligations associated with mine closure are carrying out their tasks? How satisfied is civil society with the way the institutions tasked with monitoring and enforcing the environmental 201 Interview Civil Society 2,36 and social obligations associated with mine closure are carrying out their tasks? In practice does progressive rehabilitation take place 202 to reduce the scope and cost of work needed for mine Interview Industry 2,25 closure and reclamation once production ceases? In practice are mining companies setting aside funds for mine closure consistent with the estimates in the 203 MCRP and are the funds sufficient to cover the costs of Interview Industry 2,15 premature closure as well as the cost of closure by third party contractors in the event this becomes necessary? Are adequate procedures in place regarding the funds 204 Interview Government 2,00 being set aside for mine closure? How satisfied are mining companies with the procedures 205 in place regarding the funds being set aside for mine Interview Industry 1,75 closure? In practice is government working to inventory abandoned 206 Interview Government 2,94 mine sites, and determine the most effective way forward? In practice, is the approved plan for moving forward with 207 Interview Government 3,00 abandoned mine sites being implemented? 3 Mining Taxation B3 Tax Policy and Tax Administration Rules B3.1 Tax Policy and Instruments Are there legally binding provisions that prescribe which government agencies have the authority to collect taxes, 208 Primary 4,00 royalties, and other payments (if applicable) from mining companies? Are income and withholding tax payments and royalties from mining companies to government required by law 209 Primary 1,00 to be placed in the national treasury or other designated accounts? REPORT 119 MINING SECTOR DIAGNOSTIC - BURUNDI Number Question Data Source Score Are the rates, formulae and bases for the main fiscal instruments (such as income taxes, withholding taxes, 210 Primary 4,00 indirect taxes and royalties) that apply to mining prescribed by law? Are there legally binding provisions for the granting of tax incentives to mining companies and, if so, do they require 211 Primary 2,50 that a cost-benefit analysis be conducted before granting the tax incentives? Can the government negotiate fiscal provisions with mining companies that differ from those provided in 212 Primary 4,00 the law and, if so, are these fiscal provisions being made public? Are there legally binding provisions that ensure that the 213 government has an adequate minimum revenue stream Primary 1,00 (relative to sales revenue) in all production periods? Does the country employ an adequate mix of progressive 214 and regressive fiscal instruments with respect to revenues Primary 3,00 from mining? Are there legally binding provisions that require an annual 215 Primary … disclosure of related party transactions? Are there legally binding provisions regarding transfer 216 Primary 3,25 pricing and, if so, are they consistent with good practice? Are there legally binding provisions that limit the risk from 217 thin capitalization and, if so, do they include interest rate Primary 3,00 caps and debt to equity caps? Are there legally binding provisions that identify profits from 218 the indirect or offshore transfer of exploration and mining Primary 1,00 assets/rights so that they are taxable in the host country? In cases where the government holds equity shares in 219 resource companies, are the actual benefits from equity Interview Government 2,20 holding greater than the costs for acquiring equity? How satisfied is the mining industry with the stability over 220 Interview Industry 1,89 time of the fiscal terms for mining? Are there no or low tariffs on imports of capital 221 Primary 4,00 equipment? Do companies have to pay VAT or sales tax on imports of 222 Primary 4,00 capital equipment? Are there no or low tariffs (or non-tariff barriers) on raw 223 Primary 4,00 material exports? B3.2 Mining Tax Administration Rules Are there legally binding provisions that specify which 224 agencies collect mining sector payments and is the Primary 4,00 number of agencies involved relatively small? Are there legally binding provisions for mining sector 225 tax payment processes and, if so, do they cover detailed Primary 3,40 arrangements? 120 REPORT THE WORLD BANK Number Question Data Source Score Are there legally binding provisions for mining sector 226 royalty payment processes and, if so, do they cover Primary 3,25 detailed arrangements? Does the government have a simplified tax collection 227 Primary 1,00 system for ASM? Are there legally binding provisions that require regular tax, cost and physical audits to be conducted of mining 228 Primary 3,50 operations and, if so, do the provisions apply to all mining taxpayers (excluding ASM) and are the audits risk-based? Are there legally binding provisions for penalties and 229 sanctions for companies for non-compliance with tax Primary 2,00 legislation? Are there legal provisions for independent agencies to 230 exercise oversight of the administration of the fiscal Primary 2,00 regime? Are there legally binding provisions that require government officials with a role in the oversight of the 231 mining sector to disclose information about their financial Primary 4,00 interests in any extractive activity or project (NB: These could be general, e.g. not mining-specific provisions)? If they exist, are national mining companies limited to a 232 commercial role and subject to fiscal regulation in the Primary … same way as other commercial companies? C3 Mining Tax Administration and Auditing C3.1 Mining Tax Administration In practice, are policies and procedures related to 233 mining taxation publicly available, easily accessed, and Interview Industry 2,41 understandable by the taxpayer? In practice, are changes to mining tax legislation 234 undertaken through a consultative process and, if so, how Interview Industry 1,00 satisfied is the mining industry with the process? In practice, does the taxation authority issue guidance 235 notes for mining sector taxpayers and, if so, how satisfied Interview Industry 1,25 is the mining industry with these guidance notes? In practice, are the bases on which taxes are levied subject to disputes between taxpayers and the tax authorities and 236 Interview Government … if there are such disputes are they resolved through active tax tribunals? Does the tax administration have a large taxpayer unit/ 237 Primary 4,00 office or one specialized in natural resources/mining? In practice, does the large taxpayer unit/office or the one 238 specialized in natural resources/mining have the capacity Interview Government 2,59 to fulfill its mandate in a satisfactory manner? In practice, how satisfied is the mining industry with the way 239 in which the large taxpayer unit/office or the one specialized Interview Industry 2.18 in natural resources/mining is fulfilling its mandate? REPORT 121 MINING SECTOR DIAGNOSTIC - BURUNDI Number Question Data Source Score In practice, are taxes and payments by mining sector tax 240 Interview Government 3,25 payers only collected by the mandated agencies? In practice, are income and withholding tax payments and 241 royalties from mining companies to government placed in Interview Government 3,89 the national treasury or other designated accounts? In practice, are the fiscal terms, including provisions for tax 242 Interview Government 3,35 incentives in the law followed? In practice, does the government negotiate fiscal terms and fiscal incentives with mining companies that differ from those in the mining and fiscal laws and regulations 243 and, if so, does the government have well experienced and Interview Government 1,70 qualified representative to negotiate fiscal terms and fiscal incentives with mining companies and are the negotiated terms publicly available? In practice, do government officials with a role in the 244 oversight of the mining sector disclose information about Interview Government 2,00 their financial interest in any extractive activity or project? C3.2 Mining Tax Auditing In practice, are tax, cost and physical audits of mining 245 Interview Government 2,50 companies conducted systematically? In practice, are the legally binding provisions regarding 246 Interview Government 3,40 transfer pricing being implemented? In practice, are there regular audits for domestic and 247 Interview Government 1,75 international related party transfer pricing transactions? In practice, are advanced pricing rules used for regularly 248 occurring domestic and international related party Interview Government 2,80 transactions? In practice, are there regular audits of mining companies 249 Interview Government 2,80 for compliance with thin capitalization rules? In practice, are the legally binding provisions on penalties 250 and sanctions for non-compliance with tax legislation Interview Government 3,25 being implemented? 4 Revenue Management and Distribution B4 Revenue Sharing and Fiscal Stabilization--Rules B4.1 Revenue Sharing Rules Are there legally binding provisions regarding arrangements for resource revenue sharing between central and sub-national governments that clearly 251 Primary 1,00 articulate the objectives of resource revenue sharing and do they specify how much should be transferred to sub- national governments? Does the Ministry of Finance have written guidelines 252 regarding when and how yearly budget allocations to sub- Primary 1,00 national governments should be disbursed? 122 REPORT THE WORLD BANK Number Question Data Source Score B4.2 Fiscal Stabilization Rules Are there legally binding provisions that require a medium- 25 3 Primary 4,00 term fiscal framework? Are there legally binding provisions for a mechanism to 254 Primary 1,00 protect budget expenditures from revenue volatility? Revenue Sharing, Fiscal Stabilization and Resource C4 Revenue Transparency--Practice C4.1 Revenue Sharing Arrangements In practice, are the arrangements for resource revenue 255 sharing between central and sub-national governments Interview Government 1,80 being followed? ln practice, does the Ministry of Finance follow its guidelines regarding when and how it disburses budget allocations 256 Interview Government 2,67 to sub-national governments and do sub-national governments receive their entire yearly budget allocations? C4.2 Fiscal Stabilization In practice, is the mechanism to protect budget 257 Interview Government 3,00 expenditures from revenue volatility being applied? In practice, have changes in commodity prices had a 258 Interview Government 2,00 negative impact on budget performance? C4.3 Resource Revenue Transparency Is all government spending from resource revenues appropriated through the national budget and, if not, are 259 Primary 4,00 off-budget funds that manage resource revenues audited and subject to external oversight? In practice, are the assets and liabilities of mining sector 260 SOEs included in the public sector accounts as reported by Interview Government 2,13 the Ministry of Finance? In practice, are the assets and liabilities of any natural 261 resource funds included in the public sector accounts as Interview Government 2,88 reported by the Ministry of Finance? In practice, does the country disclose details relevant to mining sector revenues, such as data on production, sales, 262 Interview Government 2,88 reported profits and payments by fiscal instruments, through EITI or another disclosure process? 5 Local Impact Local Content, Employment, Community Engagement, B5 CSR and Social Issues B5.1 Local Content Rules Is there a policy for the promotion of opportunities for 263 local, regional and national supply of goods and services to Primary 3,00 the mining industry that is consistent with good practice? Are there site-specific agreements with mining companies 264 that promote opportunities for local, regional and national Primary 1,00 supply of goods and services to the mining industry? REPORT 123 MINING SECTOR DIAGNOSTIC - BURUNDI Number Question Data Source Score Is there an agency in the government whose mandate includes tracking demand and supply of goods and 265 Primary … services needed by the mining sector and does this agency periodically conduct this assessment? Does the legally binding requirement to prepare and submit 266 SIAs and SMMPs support local and national employment, Primary 1,00 supply of goods and services, and business development? B5.2 Employment Policies Is there a legally binding provision for mining companies 267 to give equal employment opportunities to women from Primary 1,00 local communities? Is there a legally binding provision for mining companies 268 Primary 4,00 to provide on-the-job training? Are there legally binding provisions that prohibit child 269 Primary 4,00 labor including ASM child labor? Are there government commitments to provide women 270 Primary 4,00 with equal employment opportunities and conditions? Are there legally binding rules that require employment equity, has an agency been designated to enforce the rules 271 Primary 1,00 and has the agency put in place monitoring procedures and enforcement mechanisms? B5.3 Rules on Community Engagement Is there a legally binding requirement for community stakeholder consultation throughout the mine life with 272 Primary 2,29 affected communities and, if so, is it consistent with good practice? Does this legally binding requirement for community 273 stakeholder consultation conform with good practice in Primary 4,00 terms of record keeping, access, and use of information? Is there a legally binding requirement that the results of 274 community stakeholder consultations be used in preparing Primary 1,00 and updating EIAs, EMMPs, SIAs and SMMPs? Is there a legally binding requirement for Community Development Agreements between mining companies, 275 Primary 3,40 government and affected communities and, if so, is it consistent with good practice? B5.4 CSR and Social Issues--Rules Is there a national policy on Corporate Social Responsibility (CSR) that applies to mining and is publicly 276 available and is there an agency that is responsible for Primary 1,00 oversight of the policy and its application in different sectors including mining? Is there a legally binding requirement for free, prior and informed consent, has an agency been designated to 277 Primary 1,00 enforce the requirement and has the agency put in place monitoring procedures and enforcement mechanisms? 124 REPORT THE WORLD BANK Number Question Data Source Score Are there legally binding requirements for local governments and companies to work together to manage 278 Primary 1,00 the effects of the potentially rapid and disruptive in- migration around mining operations? Is there a legally binding requirement for companies to 279 collect data on, report on, and address the impacts of Primary 1,00 mining on women separately from the impacts on men? Local Supplier Development, Employment, Community C5 Engagement, CSR and Social Issues--Practice C5.1 Local Supplier Development Has the government sought the views of a wide range 280 of stakeholders in preparing the local content policy for Interview Government 3,00 goods and services within the mining value chain? What percentage of goods and services is your company 281 Interview Industry 3,61 sourcing from local suppliers? How satisfied is the mining industry with the support 282 provided for domestic suppliers in attaining local content Interview Industry 2,64 goals? In practice, is there an agency in the government that is tracking demand and supply of goods and services needed 283 Interview Government 2,13 by the mining sector and does this agency periodically track demand and supply? In practice, does the Investment Promotion Agency (IPA) or 284 similar organization have the capacity to fulfill its mandate Interview Government 2,92 in a satisfactory manner? C5.2 Employment In practice, is your company providing on-the-job training 285 Interview Industry 3,81 for your employees? Are the laws prohibiting child labor, including ASM child 286 Interview Civil Society 2,29 labor, enforced? Is significant progress being made in implementing 287 Interview Government 3,25 employment equity? How satisfied is civil society with the government's actions 288 to provide women with equal employment opportunities Interview Civil Society 2,62 and conditions? How satisfied is civil society with industry's actions to 289 provide women with equal employment opportunities and Interview Civil Society 2,15 conditions? In practice are mining companies providing equal 290 Interview Industry 2,72 employment opportunities and conditions for women? In practice do mining companies value and respect their 291 Interview Industry 3,65 female employees? REPORT 125 MINING SECTOR DIAGNOSTIC - BURUNDI Number Question Data Source Score C5.3 Community Engagement In practice, are the consultations that take place between 292 Interview Civil Society 2,30 mining companies and affected communities meaningful? In practice are the consultations that take place 293 between mining companies and affected communities Interview Civil Society 2,25 comprehensive? Are the results of the mining company-community 294 stakeholder consultations used in the preparation of Interview Government 3,25 relevant documents? In practice are community development agreements 295 negotiated between mining companies and affected Interview Civil Society 2,14 communities and local governments? In practice do women consider that mining companies 296 and government are doing a satisfactory job addressing Interview Civil Society 2,91 women's concerns and issues? C5.4 CSR and Social Issues In practice, how satisfied are mining community representatives with how industry, government and civil 297 society collaborate in the planning and implementation of Interview Civil Society 2,09 Community Social Responsibility (CSR) activities and with the participation of women in these activities? In practice, how satisfied is the mining industry with the 298 Interview Industry 2,82 planning and implementation of CSR activities? In practice are the health services in mining communities 299 Interview Civil Society 2,25 similar to or better than nearby non-mining communities? In practice are the education services in mining 300 communities similar to or better than in nearby non- Interview Civil Society 2,50 mining communities? In practice, do mining communities depend on regular 301 support from mining companies for the provision of basic Interview Civil Society 3,65 services? In practice are the effects of the potentially rapid and 302 disruptive in-migration around mining operations Interview Civil Society 2,50 adequately managed? Does the government recognize indigenous people on its 303 territory and, if so, does it safeguard their rights in relation Interview Civil Society 3,23 to mining? In practice do indigenous groups consider that mining 304 companies and government are doing a satisfactory job Interview Civil Society 2,02 addressing their concerns and issues of indigenous groups? If the Government has a policy of free, prior and informed 305 Interview Government 1,60 consent, is it implemented in practice? 126 REPORT THE WORLD BANK Number Question Data Source Score If the government has a policy of free, prior and informed 306 consent (FPIC), how satisfied is civil society with the Interview Civil Society 2,20 implementation of this policy? In practice do women who are land users but not land 307 owners receive adequate compensation for loss of land Interview Civil Society 1,75 taken for mining? In practice does the government provide support to improve the productivity and incomes of female subsistence 308 Interview Civil Society 2,00 farmers who have had to relocate their agricultural activities due to mining development taking place? REPORT 127 MINING SECTOR DIAGNOSTIC - BURUNDI ANNEX III: VOTING TEMPLATE Instructions: Below is a list of 25 topics that are among whichever topics you choose, whether important for the functioning of a country’s many or few. Specifically, if you think that only mining sector. They are organized into six one topic is important, assign all 100 of your broad areas: mining sector management, plus votes to that topic. On the other hand, if you the five stages of the IE value chain. Think of the think four topics are equally important, assign topics your country’s mining sector most needs 25 votes to each of the four. Then again, if you to change and improve. You have 100 votes. think one topic is very important but two others Assign the votes among the 25 topics so that the are still relatively important, you could divide number of votes indicates how important you your votes 60-20-20. consider the topic. You can divide your votes Indicateurs Votes Sector Policy Mining Sector Sector Dialogue Management Roles and Responsibilities Intra-Governmental Coordination Collection and Maintenance of Geological Information Contracts, Licenses and License Allocation Exploration License Management and Transfer Mining Legislation and Processes Land, Compensation and Resettlement Environemental Impact Management Mining Operations Social Impact Management Artisanal and Small-Scale Mining Occupational Health and Safety Mine Closure and Financial Sureties for Decommissioning Tax Policy and Instruments Tax Policy and Tax Administration Administration Tax Auditing Revenue Sharing Revenue Management Fiscal Stabilization & Distribution Resource Revenue Transparency Local Content/Local Supplier Development Employment Local Impact Community Engagement CSR and Social Issues 128 REPORT