Tanzania Briefing: New Guidelines for Local Content Submission and Integrity Crash Regulation

In this presentation, we summarize the main provisions of the Integrity Commitment Regulations and the Guidelines for the Presentation of Local Content

Introduction

On July 13, 2018, the new regulations and The following guidelines were issued in Tanzania: Integrity Commitments (19659005) Regulations (19659005) Section 106 (3) of the Mining Act, 2010. This section states that the Minister Minerals "must make regulations to guide the respect of the commitment of integrity". The following are some of the main provisions of the Integrity Pact Regulations:

• Motion – The Integrity Purity Regulations apply to persons undertaking activities prospecting and mining. Although the "Enforcement Provision" limits the Integrity Commitments Regulations only to the holders of mining rights, some of the provisions of the Integrity Enforcement Regulation appear to apply subcontractors and any other person engaged in mining activities. Signature of Integrity Commitments – A holder of mining rights must submit a promise of integrity executed to the Mines Commission. The Integrity Commitment Regulations provide a prescribed format for the promise of integrity. In addition, the holder of mining rights must ensure that his subcontractors and any other person engaged in mining activities of the holder of mining rights comply with the promise of integrity executed.
• Integrity Objectives Promises Integrity Commitments aim to strengthen corporate governance, integrity, transparency and accountability in day-to-day business processes and procedures companies and companies involved in the mining industry.
• Code of Conduct Mining stakeholders are now required to establish and maintain a compliance program for the duration of the license, including: a written code of conduct, policies and procedures, awareness campaigns, education and notification. It is still unclear whether the italicized terms imply that the holder of mining rights and the mining sector are now required to publish / publish investigations against them regarding their breach of the promise of integrity.

Also, Mineral Rights Holders and the Mining Sector Stakeholders are required to develop, implement and distribute a written code of conduct to the person to whom it applies. We understand that the Code of Conduct will contain guidelines on how employees, agents, contractors, subcontractors, and so on. working with the mining rights holders must behave and deal with the business in a manner that does not violate the commitment of integrity. 19659013] There are other obligations stipulated in section 9 of the Integrity Commitments Regulations, including:

• conducting operations and mining activities with the greatest integrity [19659009] by renouncing any arrangement that jeopardizes or harms Tanzania's financial, monetary and fiscal systems, as well as Tanzania's economic policies and national security;
• ensuring satisfactory and effective insurance coverage against loss and damage to the environment, persons and property; and
• Ensuring Full Compliance with Tanzanian Laws, Regulations, Rules and Policies

• Specific Penalties for Malpractice – If a holder of mining rights commits professional misconduct, he may be liable to a fine minimum of TZS 100 million (approximately $ 44,000) or serving a minimum term of imprisonment of 10 years. "Malpractice" includes tax evasion, double taxation, undervaluation or overvaluation, transfer pricing and corruption. Other penalties may be imposed on the holder of the mining right for non-compliance with the Regulation respecting the pledge of integrity, in particular the suspension or cancellation of his mining rights, the payment of Penalties and Other Penalties Under Other Tanzanian Laws
• Compliance Deadline – Mineral rights holders must ensure that necessary arrangements are made to the satisfaction of the Mining Commission in order to to comply with the Integrity Safeguards Regulations within three months after July 13, 2018.

Guidelines for the Presentation of Local Content

The guidelines for the presentation of local content are pursuant to paragraph 6 (2) (b) of the Mining Regulations (local content) 2018. This regulation stipulates that guidelines, to include targets and formats for local content plans and reports. Here are some of the main provisions of the Guidelines for the Presentation of Local Content:

• Application – The Guidelines for the Presentation of Local Content apply to all applicants for mining rights and prospecting, mining, special mining, processing, smelting and refining licenses, including their contractors, subcontractors or other related entities engaged in mining activities (stakeholders).
• Statement – When a local content plan is submitted to the Mining Commission, stakeholders state that the goods and services purchased and manufactured in Tanzania and those that meet the specifications of the industry must be considered and prioritized as a matter of priority. The required reporting format is stipulated in the Local Content Guidelines
• Required Information – Interested parties are required to provide a lot of information when submitting local content plans to the Commission but not limited to:
  • Tanzania Revenue Authority tax authorization certificates,
  • passport copies of foreign administrators as well as copies of their residence and work permits (where applicable) ;
  • audited financial reports of the last 3 years
  • company profile;
  • website of the company; and
  • the name, professional address and identity documents of the primary contact person.
• Subplans – Stakeholders are required to include sub-plans in local content plans to be submitted to the Mines Commission. Among other issues, sub-plans are supposed to cover issues relating to the provision of banking and financial services, legal services and research and development. The prescribed formats of the sub-plans are stipulated in the local content presentation guidelines.