Holes in mining industry legislation, amendments needed
The Ministry of Energy and Mines has asked the National Assembly (NA) to approve a proposed amendment to the Minerals Law to better regulate the mining sector, which is one of the largest industries and the number one foreign exchange earner in Laos.
NA members debate the amendment of the Minerals Law yesterday.
If passed, the proposed changes would be the second amendment to the law, after the fi rst amendment came into force in 2008. The move comes after the Geology and Minerals Department was transferred from the Ministry of Energy and Mines recently, and now comes under the umbrella of the Ministry of Natural Resources and Environment.
The Ministry of Energy and Mines drafted the proposed amendment and hopes to see it passed despite the structural changes to the regulation of the sector. Under the government's structural reform, the Natural Resources and Environment Ministry will be in charge of the surveying, exploration and management of the country's mineral resources, including those to be reserved for future generations.
The Ministry of Energy and Mines will now focus more on the business side of mining, excavation and mineral extraction, so it has become necessary to amend the Minerals Law to better reflect the role of the ministry.
Minister of Energy and Mines Soulivong Daravong yesterday presented the draft law to the ongoing NA session for members to debate and assess its effectiveness. The changes are designed to ensure that revenue from the country's natural resources is used effectively for national development and poverty reduction.
Legislated in 1997 as a legal instrument to manage and develop the Lao mining industry, the law is seen to have some loopholes that need to be addressed to make full use of the country's mining resources both now and into the future, and to protect the long term interests of the nation.
Some of the loopholes have seen the law exploited or violated. Such instances include companies utilising mining concessions for sites or minerals other than those for which they were granted, the repeated extension of exploration or mining concessions in order to hold a lease, seeking extensions to projects without complying with contract conditions, and returning mining sites to the government after excavation has taken place.
The existing law is not specific enough on any of these issues for officials to properly regulate the conduct of miners. Government officials and National Assembly members are very concerned about the loopholes, which could adversely affect the country's future resource reserves and the national economy as a whole.
Mr Soulivong said many mining projects were signed between the government and investors but concession contracts were often not enforced within the set timeframe.
NA Vice President Dr Xaysomphone Phomvihane asked members to contribute their opinions on how to better manage the mining industry, including the current and future role of the Ministry of Energy and Mines.
Dr Xaysomphone told members that some companies did not intend to develop proposed projects but planned to reserve them for other purposes, which would create problems for the country.
Another issue in regard to lan d concessions for mining projects has been inadequate compensation for local people who have lost their land to make way for the projects.
The National Assembly says that extensive previous investment in the mining sector has created a lot of serious environmental concerns, but the existing law does not stipulate clearly what the environmental obligations for mining companies are, particularly in relation to rehabilitation.
Mining is the biggest income earner in Laos with revenue of US$862 million recorded during the October-March six month period of fiscal year 2010/11.
According to the United Nations Development Programme, the mining sector has grown rapidly since 2000. By 2007, it accounted for 8 percent of GDP and made up about 18 percent of total foreign direct investment in 2009.
