Government’s insouciance on unlawful mining contracts

Sayed Ikram Afzali, Executive Director, Integrity Watch Afghanistan  @SIAfzali 
On October 5, the government awarded two major copper and gold exploration contracts to joint ventures owned by Centar Ltd, a company founded by Ian Hannam, a former chairman at JP Morgan, and Afghan Gold and Mineral Company (AGMC) which belongs to former minister of urban development Sadat Mansour Naderi. The firms will dig for gold in Badakhshan and copper in Sar-i-Pul — both provinces located in the north. The contracts were awarded in blatant violation of the mining law that requires a five years cooling-off period for high-ranking officials, ministers included. Naderi resigned his ministerial slot only a few months ago.

The government and the international community have repeatedly acknowledged the rule of law is critical to state building in Afghanistan. However, the award of these mining contracts disquietingly spotlights the pressure the global fraternity is ready to mount on the National Unity Government (NUG) to breach its own laws. Regrettably enough, the NUG also does not shy away from choosing political interests over the rule of law. Article 16 (2) of the mining law bars ministers from obtaining extractive contracts during their office tenure. By the same token, Article 16 (5) clearly explains that senior officials, including ministers, will be entitled to obtain a contract five years after leaving office.

Over the last six weeks, Integrity Watch Afghanistan  has interacted with a large number of stakeholders within and without the government. We have learnt authoritatively that legal and technical experts within government agencies, including some ministers, opine these pacts are illicit. However, for obvious reasons, they cannot make public statements on the issue. Renowned global law firms tend to caution the Afghan government against concluding such contracts in the prevailing circumstances. One of these firms, DLA Piper opines that awarding such contracts is a political decision and the government should consult Afghanistan’s legal community. Hogan Lovells, too, has told the government up front that such contracts are violative of the current Afghan laws.

Afghan civil society has come out with one voice against what it views as unlawful deals. Civil society representatives objected to the award of the contracts at the National Procurement Commission and at a subsequent meeting with Vice President Sarwar Danish. Civil society activists pushing for transparency and accountability have held a string of consultative meetings, press conferences and media interviews to denounce the contracts unanimously. Although dozens of national and international media outlets, including The New York Times and Associated Press, have reported civil society concerns, the government in Kabul has been inscrutably insouciant, neither showing any reaction nor dropping any hint at righting the wrong.

We believe the government has lost its credibility and legitimacy with regard to these accords, something that will impinge on their implementation. The companies may not initiate work right away on the projects for dearth of financial resources — another breach of their obligations. Civil society, while continuing to follow up on this, will likely mobilize the public against such shady deals.