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Werema: Contracts flawed |
Monday, 01 October 2012 21:35 |
By Zephania Ubwani The Citizen Bureau Chief Arusha. The Attorney General, Mr Frederick Werema, yesterday admitted that some contracts the government had entered with some foreign mining firms were flawed. He said some of them were either outdated or lacked the new practices in investment agreements. However, he noted that the deficiencies were not because Tanzanian lawyers were not familiar with legislation on contracts. We have now to train our people on the emerging trends on the costs and benefits of gas, oil and mining sectors, he said when opening a workshop on Best Practices for Tendering, Negotiating and Drafting Petroleum Projects. Justice Werema said the growing public outcry that the countrys resources were plundered by foreign investors as a result of lopsided contracts should not be ignored. He said most of the criticism has been directed to the mining sector where critics have time and again complained that they benefited the foreigners more than Tanzanians through capital flight. These complaints or opinions cannot be ignored or wished away. We have to address the growing concern, he said. The plundering is, according to critics, the result of very lopsided agreements that the government signed with investors. It is alleged that the investors rights are grandfathered and safeguarded than public rights, he noted. The AG challenged engineers, lawyers and economists to act and ensure that contracts entered between the country and foreign investors, notably in the extractive industries do not favour foreigners at the expense of the locals. However, when he addressed journalists on the sidelines of the workshop, the AG defended the government for the bad contracts, saying it was compelled to enact laws that were attractive to investors. (Talking with both sides of his mouth!!!) During those years (the 1990s), we struggled hard to attract investors who were scared of Tanzania because of our past records. There was little understanding of the contract law then, he said, adding that by then there were only six types of mining contracts. There was also the issue of incentives whereby foreign mining firms were given some incentives such as tax holidays, although this was later found to have been abused by some companies. Judge Werema cautioned that with the growing mining, gas and petroleum sector in Tanzania, lawyers, engineers and economists must come up with contracts that would protect the interests of the country and investors. He admitted, though, that there were tricky situations such as the costs of investment, compensations and the actual extractions, which, he insisted, called for a close monitoring. He stated that although some of the criticisms levelled against the extractive industries may have been overblown by politicians and activists, relevant authorities must act on them. It is a challenge. You cant stop listening to what people say whether the contracts entered benefited the country or not. We must also address the options, he explained. The workshop has been organised by the AGs Chambers with the support of the United Nations Development Programme (UNDP) and International Senior Lawyers Project. It is among a series of training workshops aimed at acquainting experts in the extractive industry with investment contracts. |