Transparency in the Mining Industry

Afghanistan is a resource-rich country and could be a leading exporter of natural resources, if it mined its deposits in a sustainable and regulated manner. However, the mining sector is largely disorganised and controlled by anti-government groups. Illegal mining and corruption are depriving the Afghan state of substantial revenues, hampering the economic and social development of the country.

Context

Business dealings in the illegal and unofficial mining sector are exacerbating the fragile security situation in Afghanistan. Within the unofficial mining sector, people are working under degrading and dangerous conditions. Moreover, the environment is being damaged.

At present, the Afghan government has only limited scope to fulfil its role as regulator of mining operations. The Ministry of Mines and Petroleum (MoMP) is lacking the capacity and expertise to formalise the extraction of raw materials and does not have the necessary management and operational structures.

Objective

The employees at the Afghan Ministry of Mines and Petroleum have the capacity and expertise to steer mining operations in line with good governance criteria. Government authorities have introduced digital and transparent data management in compliance with the standards set out by the Extractive Industries Transparency Initiative (EITI). Mining rights are allocated on the basis of official state-defined procedures, giving investors the security they need for planning. In turn, investors fulfil their obligations, pay taxes and comply with global standards in the fields of occupational safety and environmental protection. In order to promote gender equality, women are employed in positions requiring high levels of training in administration and the private sector. State revenues generated by the extraction of resources are channelled back into the producing regions, where they help raise living standards.

Measures and Results

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is working on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) to advise the Afghan Ministry of Mines and Petroleum (MoMP) and support it as it carries out reforms. Current measures include training courses, advice on changes to work processes and the establishment of a sound basis of transparent data for decision- making by the MoMP. Promoting women in the mining sector and helping Afghanistan achieve full membership in EITI are also important aspects of the programme.

Transparent data management

The Ministry of Mines and Petroleum and the public Online Transparency Portal are being equipped with digital database systems, which are replacing unreliable paper archives. In addition to all units of the Ministry of Mines, other ministries, authorities, the private sector and the public will also be given access to standardised, well-founded data. The digital network of government agencies is providing the basis for informed and sustainable decision-making in the mining sector. Publicly available information provides an overview of compliance with mining rights, as well as extraction volumes and taxes. Because of this, corruption is made more difficult, and state revenues can increase.

Developing and enhancing expertise

Employees at the Ministry of Mines are receiving comprehensive training. The focus is on leadership and management skills as well as on supervising mining operations. Work processes are being defined, tested and then permanently introduced. Comprehensive field training is informing experts on new technologies for mining inspection work. This hands-on training is enabling staff working at the authorities to assess whether mines are planned and operated in accordance with international legal and technological standards, and to facilitate compliance.

Women are being actively promoted. Equal opportunities at work is the subject of several training courses. In 2018 for instance, 26 women and 30 men took part in training courses in Kabul, Parwan and Mazar-e Sharif on gender equality in the Afghan mining sector. Of the roughly 180 people who completed the Graduate Management Training II course promoting management and leadership skills, 44 were women.

Monitoring by civil society

The mining communities are being given greater influence. The aim is to make mining sustainable and in keeping with local conditions, traditions and requirements. Community-based monitoring is giving civil society oversight. With support from the programme, representatives of the mining communities are monitoring the impact of resource extraction on their environment and their living conditions.

Compliance with international standards

The EITI Standard introduces internationally recognised, transparent methods and benchmarks for data reconciliation in Afghanistan’s mining sector. The Ministry of Mines is equipped with digital database systems. These systems create a solid, transparent information base on extraction volumes and taxes, among other things. The EITI Standard offers planning certainty and is attracting international investors, who are creating jobs and training opportunities.

Promoting women in the mining sector

The Ministry of Mines is introducing a gender policy in all provinces. It is ensuring the fair participation of women in training courses and is granting them decision-making powers and opportunities for development. Better working conditions for women is mobilising a social potential that has as yet been largely ignored. To ensure that women’s skills are also being used in the private sector, the programme is advising companies on employing and promoting women in their workforce.

At a glance

Programme:
Promoting Good Governance in the Extractive Sector in Afghanistan
Commissioned by:
German Federal Ministry for Economic Cooperation and Development (BMZ)
Partner:
Afghan Ministry of Mines and Petroleum (MoMP)
Implementing organisations:
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Provinces:
Nationwide
Programme objective:
To ensure transparency and monitoring of the extractive industry to help regulate government revenues, promote investment and fight corruption over the long term
Overall term:
May 2013 – November 2022