Makinikia Live-Part 1

Kim

Member
Sep 24, 2006
18
45
Early this year, when president Magufuli declared a ban on mineral concentrates export, very few people took this cautiously. Only Acacia reacted to the order. No one ever expected a matter to escalate to this level today because this was just the beginning. The order was followed by the surprise visit to the port where the export was still on-going, costing a port in charge and mineral department secretary. Ever since, a drive begun including commissioning of two presidential committees to probe the export of mineral sand aka makinikia. Prominent opposition lawyers with other legal members cautioned the government decision that it may turn upside down in favour of Acacia...

Despite the preempted legal consequences that we may face as the country, the government remained tough. This compelled the Barrick Executive Chairman Professor John L. Thornton to board a plane all the way to Tanzania to seek concession with the government. He further confirmed his readiness to make concessions on many of the issues raised. The Barrick Executive Chairman Professor John L. Thornton trip from Toronto to Dar es Salaam has proved our so-called jurists wrong. On the other hand, this has confirmed that not all lawyers are scrupulous as expected. These are the same people who had been crying foul for same government to take action against unfair mining deals.

Barrick has a very good number of legal counselors who could have advised their executive team to keep their seat in Toronto and be ready for legal action, as has been anticipated by some of our legal experts who are not on an equal footing with the government treatment of the matter. Such preemption not only undermines our government’s efforts to fight corruption. We have to remember that the president and his cabinet are not the only ones who feel the “Makinikia” impact. The brunt of those consequences is borne disproportionately by the majority citizens with exception of few ‘pro-corruption individuals’ and ‘corruption beneficiaries’.

Amongst the prominent figures in the Acacia board of directors is Mr. Juma Mwapachu, an experienced Tanzanian who was appointed a non-executive director in 2011 under African Barrick Gold (ABG). His appointment was hailed by the majority as a step towards having an executive in the investor’s team of management, with expectancy that he could help to advise them for the best interests of the country. It is about 6 years now serving in the same role; there is no positive impact at all. I recall the remarks made by the investors’ top executive team when Mr. Mwapachu was appointed:

"During the course of our discussions over recent months I have been impressed by Ambassador Mwapachu's knowledge of our operating environment and the issues facing us, together with his passion to see Tanzania and the rest of the African continent succeed. His energy and expertise will bring additional depth to the board and I greatly look forward to working with him." ABG's Senior Independent Director, Derek Pannell

"The Board is delighted to welcome as a new member someone of the calibre of Ambassador Mwapachu. His experience in Tanzania and more broadly in Africa will add a new dimension to the Board and will be of significant value in meeting the challenges of delivering on the strategic objectives of the business." - ABG's Chairman, Aaron Regent

Here are unanswered questions:
  • What interests does Ambassador Mwapachu serving?
  • Can we credit the on-going partially to him for failure to advise the investors meticulously?
  • Again and again, what is the essence of having such a respected legal scholar, practitioner and jurist who has spent his life in serving and aligning this country’s legal system with international experience but remained silent after the appointment to African Barrick Gold board of directors?
  • Was it an investors’ move to have someone influential onboard to deal with the government top brasses when needed to?
  • Can he have acted differently at the good paycheck with several fringe benefits enjoyed at his appointment status?
  • Will he be part of the negotiating team?
Despite the fact that he is the strong silent type, like other senior Acacia officials in the country, he has kept silent. However, to these gold mining tycoons in such circumstances, he may be an eye-opener in the discussion round table with the government. On the same note, it is too early to conclude that he is influential behind the preempted legal politics by the anti-government jurors like Tundu Lissu from the day when government decided to take up arms against this blatantly unfair gold mining export business. It is not surprising to find out that the same or part of them will form part of the investor’s counsel team in future.

I am not a politician, but Mr. Mwapachu's recent political move from CCM to the opposition wing and his attempted success to rejoin CCM is doubtful. He left CCM when Mr. JPM was appointed to fly the flag. He is not expected to cooperate with the current government efforts on this matter. Further, he couldn’t be in a position to play his influence in defending the investors’ interests under the opposition cap. To achieve this, a political reverse was unavoidable. On the same move this doesn’t wash away his political links with opposition jurors to come up with legal threats to the government efforts in banning the mining concentrate exports. It is like he was putting the investors’ interests at risk by playing politics from opposition angle; no way could they feel comfortable while doing the business in the country with their director leading the opposition.

At his position,Tanzanians didn’t expect him to keep silent since this Makinikia thing started. That he is an employee of Acacia; he is still a Tanzanian, expert and learned lawyer educated under the Tanzanians expenses, who could have devoted his patriotism largely to his motherland, Tanzania. People feel he has betrayed their trust and that money has taken all this attention away. That he needs to apologize to the marginalized countrymen for not acting responsibly for the country. Even the “few” applauded opposition leaders have lost their direction in this matter, which as well can be linked to his political ties to them.

Tanzanians have a vested interest in what government is trying to achieve. However, to achieve this, wisdom is necessary. People are against the win-win approach, but in such circumstances, the mutual agreement is necessary. It is not a matter of give and take, the defendant needs time to go through allegations, respond to allegations. We should remember as well that not everything valid to the government is valid to Acacia; that is where we need a mutual consent between the parties.

Yes, because government is a complainant in the matter, surely, it is obliged to dictate the terms of discussions. Discussion group participants should be carefully selected based on their profession, knowledge and expertise in all mining, contracts and finance related fields. We can still hire negotiators to assist if we are not comfortable in some areas. Who knows? May be we can eventually arrive at a figure that is mutually acceptable for compensation while laying the base to review similar current and future agreements.

It goes without saying that due to the weakening gold prices, plunging shares and laden binding debt, Barrick is in a precarious financial position by itself. Prof. Thornton is one trusted to rescue this gold miner from economic sinking. We should, therefore, not expect the easy talk, we need to be prepared and play smart, or else...
 

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