Civil society calls on President Ghani to ensure transparency in large contracts to American companies

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Kabul, March 18, 2018.

Afghan and international civil society organizations today called on President Ashraf Ghani to guarantee he will implement transparency reforms and other protections before granting new mining contracts – amid pressure from the US government to give deals to American companies.

A coalition of 20 CSOs wrote to President Ghani asking for the public commitment because of growing concerns over corruption and conflict around mining, the slow pace of reforms and fears the Trump administration is looking to Afghanistan’s natural resources to help fund the conflict.

Sayed Ikram Afzali, Executive Director of Integrity Watch Afghanistan, said: “We fully support the development of the mining sector, but we are deeply alarmed at the possibility that American companies will be given preferential access to Afghan resources at the expense of the Afghan people, in a way that ignores obvious risks of conflict and corruption – and ultimately does more harm than good to both countries.”

The CSOs also expressed fears that contacts may be given out in areas which are deeply insecure – either saddling governments with massive security costs or leading to the failure of the project.

Trump has argued for taking the oil in Iraq, and there has been alarming talk from people with links to him like Eric Prince of Blackwater about taking Afghan resources too. That may just be talk, but the Afghan people deserve clear reassurances. We are asking for a guarantee that any new concessions will be allocated transparently, through competitive bidding rather than as political favors – and strictly on the basis of the transparency reforms and other protections the President has already promised. Given the repeated commitments both governments have made to support better governance, that is surely not too much to ask.

The Afghan government has made very welcome commitments to reforms, including the publication of contracts as a condition of their validity, publication of the real ‘beneficial’ owners of mining companies, requiring that a transparent account be used for all payments and that production data be published alongside it, and a proper system to ensure locals benefit from the resources in their own backyard. Afzali Shirzad from WADAN stated that “So far, none of these measures has been effectively implemented.” A key test will be whether they are incorporated into amendments to the Afghan Mining Law, currently under discussion.

Despite this, the US and Afghan governments have agreed on benchmarks calling for a new round of mining contracts in 2018. An immediate concern is two major contracts the Afghan government is currently considering, for copper and gold deposits in Sar-e-Pul and Badakhshan provinces. In addition, Rare Earth Elements in Nangarhar and Helmand as well as copper and gold in Herat requires similar immediate attention.

Nick Donovan, Campaign Director of the corruption watchdog Global Witness, said: “The Badakhshan concession is largely under insurgent groups’ control, and CENTAR, the key international partner in the project, has declined to publicly respond to basic questions like who will pay security costs and what benefits local communities will see. A government minister is also listed as a partner in the projects, something which would be against Afghan law if it is not addressed before they are signed.” The Afghan government is reported to have agreed to sign some of these contracts with the USA companies under the US-Afghan Compact. “The document has been kept secret from the Afghan people and has not been made available to civil society organizations,” Said Naser Timory, Head of Advocacy & Communications at Integrity Watch.

“We welcome companies from any country that want to invest in a responsible, sustainable and transparent way,” Baryalai Omerzai of Afghan NGOs Coordination Bureau said. “If America wants to be a partner in that way, we will support them. But if they use their strength to take Afghanistan’s resources unfairly, it will face serious backlash from the Afghan people. Janan Abdulrahimzai of Mining Watch Afghanistan stated that “We should move forward with mining, but slowly, carefully and having built the solid foundation that has been missing until now. That is in the interests of America and of Afghanistan alike.”

Contacts:

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Notes for Editors:

Mining Watch Afghanistan is a consortium of Afghan civil society organisations. The members are:

AABRAR                                                               Abdul Hai Gardezi Council

Afghan Anti-Corruption Network              Afghan NGOs Coordination Bureau

Afghanistan Civil Society Forum                 Aghanistan Research and Evaluation Unit

AMAL Foundation                                            Aynak Council

Frogh e Mili Jawanan                                      FETWO

Ghazni Zarkashan Shura                                Hajigak Council

Hajigak People’s Shura                                   HMC

Hold                                                                       L.C.S.O

Logar Civil Society                                            L.Y.S.A

Mis-e-Aynak Council                                       NMA

Pajhwok Afghan News                                   PEWO

Quba                                                                     Rangeen Kaman Network

TEO                                                                        WADAN

Global Witness                                                  Integrity Watch Afghanistan