Guinea’s Mining Reforms: A Time to Act for a "Government of Action"

Three years after its first democratic presidential election, and just three months after its first democratic legislative election, the Republic of Guinea faces a momentous opportunity to correct the wrongs of the past, prevent future corruption, and establish a stable and attractive investment climate.

President Alpha Condé last month named a “government of action” to deliver tangible results from the various policy reforms that his administration has undertaken since his election. Nowhere will these actions be more important than in the mining sector.

Guinea has a reformed mining law that includes a number of strong commitments to good governance, and it has undertaken to review all mining contracts that were in place at the beginning of Condé’s administration.

As a featured speaker at the World Economic Forum in Davos, Condé discussed the steps his government is taking towards transparency and sustainable development, and asked the international community to reciprocate. Condé explained that his government needs the support of public and private international actors to achieve his objectives of improving regional trade, diversifying Guinea’s economy, and stamping out corruption.  

Within Guinea, the new rules, systems and policies represent positive steps toward cleaning things up. In order to have lasting impact, and to move beyond words on paper, it is critical that the government follow through on its promise to change the way the mining business in the country is run. That’s why the government’s actions and decisions in 2014 will have such a major impact on Guinea’s future.

With its new mining code in place, Guinea must break from the sad tradition of many mineral-rich countries, which have often treated their own legislation as general guidance rather than binding law. Implementing regulations and establishing administrative standards on how to enforce the new rules will be critical. So will a strong and consistent adherence to the code’s transparency provisions: the government has published all of the contracts signed by its predecessors, for example, and should follow through and disclose new agreements as they are signed.

Similarly, the contract review process appears to be entering a decisive phase, with both the body charged with conducting the review and the international media suggesting that concrete results may be coming soon.

The technical committee leading Guinea’s review process is responsible for identifying and addressing :

• inconsistencies between terms in existing contracts and current legal standards
• severely disproportionate contract terms
• any evidence that a contract award may have been irregular

The technical committee is charged with carrying out the administrative review of each contract in turn, through a series of procedural steps, and making a recommendation to a committee of ministers that has final power to decide how to proceed with each contract.

Since August 2013, the technical committee has been working with international legal advisors recruited with funding from the African Development Bank, and has been analyzing the contract dossiers and engaging in a first set of negotiations. 

Guinea’s contract review process to date has built upon lessons learned in countries such as Liberia and Sierra Leone. The technical committee’s actions have been deliberative, its processes thorough and equitable. In order to achieve the goals of the review, the committees should apply prescribed procedures consistently and efficiently to make expeditious progress and produce the direct impact sought by the government.

Condé’s call for international support is warranted, given the considerable steps that his administration has taken, notably in the contract review process. Contract reviews are an increasingly common means to improving investment environments and establishing rule of law, but they are extremely delicate and difficult to execute. With less than a year left in the review mandate, and with several major mining investments on hold in the interim, eyes are increasingly on the review committee to produce fair and socially beneficial results.

Ultimately, the success of Guinea’s mining sector reforms depends on mutual accountability between global North and South: a consistent commitment of Guinea to ensure transparency and equity in the treatment of all investors; the active collaboration of foreign companies, open to scrutiny; and the determination of their home governments to root out corruption.

For more on RWI’s work in Guinea, visit www.revenuewatch.org/publications/fact_sheets/rwis-work-guinea.

Thomas Lassourd is an economic analyst and Patrick Heller is the head of legal and economic programs at the Revenue Watch Institute.