A new law designed to regulate Afghanistan's nascent mining sector could increase corruption, lead to forced displacements and even allow armed groups to take control of the sector, transparency groups have warned. The law, passed by parliament earlier this month, is likely to lead to the signing of several key deals to extract the country’s newfound minerals—estimated to be worth as much as $3 trillion. Yet the transparency organization Global Witness warned that the law "does not include basic safeguards against corruption and conflict." Government officials deny the claim, saying that further protections are to be written in later. Afghanistan's discovery of huge reserves of key minerals in recent years has raised hopes of a bounty of deals that could potentially help the country’s economy grow, and stabilize the country, following the pullout of US troops at the end of 2014. Yet the bids have been delayed by what were perceived as an unfriendly legal framework for business. Sayed Hashemi, legal director at the Afghan Ministry of Mines and Petroleum, said a previous law signed in 2010 was seen as too tough on companies as it did not allow them to turn exploration licenses into exploitation. "No investor was interested to come into Afghanistan," he told IRIN. Hashemi said the new law is intended to make investing easier.
Yet critics charge that the new law is open to abuse and actually worse than its 2010 counterpart. Stephen Carter, Afghanistan campaign leader at Global Witness, said the law falls far short of many of these standards. He said anti-corruption measures, protection for those affected by the mining, and basic safeguards for the allocation of licenses are missing from the law. "Afghanistan already sees a lot of the revenue it should be getting from mining disappearing due to bad governance. This [law] is likely to make it worse," he said.
One of the key criticisms of the law is the lack of a specific clause demanding that the ownership of all companies involved in deals be made public. Carter said the decision not to specify it in the law was "deeply worrying."
Javed Noorani, a senior researcher at Integrity Watch Afghanistan, argued that the law failed to protect the sector from armed groups. Without new protections, he said, the already fierce competition over minerals was likely to increase conflict. "[Contracts] will go to the powerful mafia, insurgent groups operating in provinces. The sector will be completely captured. The bidding process will be as non-transparent as possible," he said. "We may relapse into a conflict over natural resources. The revenue will go to pockets and that will take a flight out of the country."
The country already has chronically high levels of corruption. Afghanistan scored 155th out of 157 countries in Transparency International's 2013 Corruption Perception Index, while in 2010 the US temporarily suspended aid after allegations that billions of dollars were being stolen.
From the Integrated Regional Information Network (IRIN), Aug. 28
See also: Afghan lithium bonanza bad break for Bolivia?, World War 4 Report, June 14, 2010