Ministry of Lands, Mines and Energy Republic of Liberia Reg ulatory Roadmap for the Artisanal Mining Sec tor in Liberia Implemented by This Regulatory Roadmap for the Artisanal Mining Sector in Liberia has been prepared by Ms. Amy Sandhu in close consultation and cooperation with the Ministry of Lands, Mines and Energy and GIZ Regional Resource Governance Project. 2 Cover photos: Stakeholders attending a consultative workshop in Ganta, credit: GIZ Resource Governance Project; Artisanal mining in Lofa Bridge, credit: Emmanuel Myers/MLME July 2016 3 Contents Acronyms ................................................................................................................................. 5 Objective................................................................................................................................... 6 Executive Summary ................................................................................................................ 7 Justification for Intervention .................................................................................................. 9 i. Problem Statement ................................................................................................................. 9 ii. Needs Assessment Summary .............................................................................................. 11 AM Pre-Assessments…………………………………………………………………………12 AM Stakeholder Consultations……………………………………………………………..13 AM Formalization Policy Sessions…………………………………………………………15 iii. Outcome of Needs Assessment…………………………………………………………..16 Artisanal Mining Formalization Program Description ..................................................... 16 I. Program Overview ............................................................................................................... 16 a. Goal/Objective ..................................................................................................................... 16 b. Profile of AM Stakeholders ................................................................................................. 17 c. Program Strategy ................................................................................................................ 21 d. Dollar Amount ..................................................................................................................... 22 e. Implementation .................................................................................................................... 25 f. Geographic Areas ................................................................................................................ 25 g. Sector-level Coordination ................................................................................................... 25 II. AM Steering Committee .................................................................................................. 26 III. Technical Design ............................................................................................................. 28 Overview and Definitions ........................................................................................................ 28 Quick Wins .............................................................................................................................. 29 Spatial Mapping Exercise……………………………………………………………………………..31 Decentralization of MLME Governance Structures……………………………………………….32 Improvement of Accessibility to Licenses for Artisanal Mining………………………………….35 Tracing and Reporting of Mineral Production and Sale………………………………………….38 Piloting of Artisanal Mining Umbrella Organizations / Cooperatives………………………….41 Improvement of Artisanal Mining Environment Management Practices.………………………46 Enhancement of Artisanal Mining Health, Safety and Security Practices……………………...48 Demonstration of Social Responsibility……………………………………………………………..51 Monitoring and Evaluation .................................................................................................. 54 i. Monitoring ............................................................................................................................ 54 ii. Evaluation ........................................................................................................................... 55 Budget and Resource Strategy ............................................................................................. 55 Conclusion .............................................................................................................................. 56 References .............................................................................................................................. 57 Tables ...................................................................................................................................... 58 4 Acronyms AM Artisanal Mining CDA Cooperative Development Agency EPA Environmental Protection Agency FDA Forest Development Authority GDO Government Diamond Office GIZ GoL Government of Liberia ICMM International Council for Mining and Metals LGS Liberian Geological Survey LIPA Liberian Institute for Public Administration LRA Liberian Revenue Authority OPM Office of Precious Minerals MLME Ministry of Lands Mines and Energy MoC Ministry of Commerce MoL Ministry of Labor MFDP Ministry of Finance and Development Planning PWYP Publish What You Pay UNDP United Nations Development Program USAID United States Agency for International Development 5 Objective The overall objective of the Regulatory Roadmap for the Artisanal Mining (AM) Sector in Liberia is to present the groundwork required to formalize the sector. This Roadmap, and the associated AM Formalization Program interventions described within it, serves as the conceptual foundation upon which the Ministry of Land, Mines and Energy (MLME) will d v p L ’ AM regulations. The specific objectives of this Roadmap are as follows:  To present a high-level overview of the context of the AM sector and the groundwork that has been undertaken to date by the MLME to formalize the sector;  To highlight the key thematic policy areas that form the basis for the AM Formalization interventions to be implemented;  To describe the groundwork required to prepare the AM p “ g g z ” “ g p v ”, w w v MLME’ g z conduit for technical assistance to artisanal miners, and enhance monitoring of the sector; and  To present a preliminary activity plan and estimated budget which outlines how the AM Formalization Program technical strategy below will be implemented. The overall and specific objectives of the AM Formalization Program contained in this Roadmap are outlined in part I of the AM Formalization Program description. The Roadmap is a result of a series of recently conducted county-level surveys, stakeholder consultations, and policy sessions that were undertaken by the MLME in Liberia. A detailed description of these activities is in the Needs Assessment Summary section below. 6 Executive Summary Recognizing the immense potential for the artisanal mining sector to generate national revenue and provide a sustained source of livelihood for over 100,000 gold and diamond miners in Liberia who depend on the sector for income, the Ministry of Land Mines and Energy has kick-started the process of formalizing the sector. The Regulatory Roadmap for Artisanal Mining in Liberia serves as a conceptual and technical strategy that outlines how the MLME w p L ’ A M g F z P g . To ensure that Artisanal Mining Formalization Program interventions address the real needs of mining stakeholders, the MLME adopted a participatory and demand-driven approach to policy formulation, marking the beginning of an innovative and transparent dialogue between the Government of Liberia and artisanal mining stakeholders. Gathering extensive data from five mining pre-assessments (semi-structured baseline studies) and four county-level consultations with over 500 artisanal mining stakeholders from Bong; Lofa; Nimba; Grand Cape Mount; Bomi; Gbarpolu; Grand Bassa; Margibi; River Cess; Grand Gedeh; Grand Kru, River Gee, Maryland, Sinoe and Montserrado counties in November and December 2015, and in February and March 2016, MLME has already begun formalizing the sector. Artisanal mining stakeholders have provided direct policy recommendations to the government to improve the sector, and these recommendations serve as the basis for the planned interventions described in this document. T d p v d x L ’ AM , d g exist for formalization to occur; the groundwork - both at field-level and at policy level - that the MLME has undertaken to formalize it; and outlines a preliminary activity plan and estimated budget for piloting the formalization Program. It presents eight (8) thematic policy areas under which the Artisanal Mining Formalization Program will be implemented. Below is a synopsis of the key recommendations given under each policy theme:  z MLME v S : d MLME’ capacity to monitor and provide technical support to the artisanal mining sector, decision- making authority should be devolved to county level; financial resources and institutional capacity of regional MLME governance structures should be enhanced; and reporting and communication protocol should be streamlined.  Improvement of Accessibility to Licenses for Artisanal Mining: The high cost and logistical barriers of accessing an artisanal mining license in Liberia are acting as a disincentive for miners to obtain licenses, thus causing them to revert to illicit mining. The authority for issuing licenses from Monrovia should be devolved to county level.  Tracing and Reporting of Mineral Production and Sale: Routine diamond theft; illicit brokerage; inaccurate mineral valuation; sale of minerals on the black-market, and smuggling to neighboring countries are some of the critical challenges faced by the AM sector in Liberia. The accessibility of the Office of Precious Minerals, including Government Diamond Offices should be increased by establishing offices at county-level, and measures should be taken to enhance their institutional capacity. 7  Piloting of Artisanal Mining Umbrella Organizations / Cooperatives: In order to provide an organizational conduit for miners to formalize, the Formalization program intends to p ‘ g p v ’ comprised of minimum 15 licensed artisanal miners each. These cooperatives will provide miners with the opportunity for technical training such as p v d v y d , p v d v d ( . . ‘ - mining); improved health, safety and security practices; the opportunity for members to engage in cost-sharing, and finally enhanced self-monitoring of the AM sector, with the intended result of reduced smuggling and theft of minerals.  Extension of Spatial Mapping Exercises and Supply-chain Analyses: Efforts to formalize the artisanal mining sector in Liberia are currently limited by comprehensive and empirical data about the dimensions of existing claims and accurate GPS coordinates of artisanal mining sites, as well as limited information about the artisanal gold and diamond mining supply chain. The MLME, in conjunction with the Liberian Geological Survey (LGS), will prioritize GIS mapping and socio-economic supply-chain studies in regions of Liberia where there is a high level of mining activity.  Improvement of Artisanal Mining Environment Management Practices: Land degradation as a direct result of abandonment of mining pits; pollution of rivers, creeks and streams via tailings and mercury; degradation of natural and protected forest areas; and improper waste disposal are only some of the numerous environmental impacts of artisanal mining. The artisanal mining Formalization Program prioritizes increasing environmental awareness and enhancing environmental stewardship, particularly with regard to building awareness of the hazards of mercury usage and integrating environmental training awareness programmes into the mining cooperative model.  Enhancement of Artisanal Mining Health, Safety and Security Practices: Health and safety negligence is widespread in the artisanal mining sector in Liberia. Stakeholder consultations revealed that accidents and injuries at AM mine sites are frequent, often owing to fallen trees, pit collapse, and unsafe equipment usage and that access to safe drinking water or adequate sanitation facilities is limited. The formalization Program prioritizes the integration of health, safety and security models into awareness programs for miners. A key activity will include the establishment of shovel and miner ID cards to better identify members of the sector.  Demonstration of Social Responsibility: Given the important role communities could play in assisting the government to monitor the AM sector, the formalization program will improve relationships between miners and host communities and formalize commitments to county-level community development. In addition, gender mainstreaming and integrating child labor laws into AM regulations will be prioritized. Decentralization, increasing accessibility to licenses for artisanal mining and tracing and reporting of mineral production and sale are necessary groundwork required to formalize the AM Sector in Liberia. The MLME recognizes that in order for cooperatives to be successfully piloted, these groundwork processes must be underway and achieving measurable success in the intended outcomes. Coordination and collaboration with key relevant government agencies are integral to the formalization process and will ensure sustainable win-win-win outcomes for miners, host communities and the government. 8 Justification for Intervention i. Problem Statement Artisanal mining of gold and diamonds serve as a highly critical form of livelihood for an estimated 100,000 miners in Liberia (World Bank, 2012). The AM sector, however, remains largely under-regulated and informal. The potential of the sector to produce significant national mineral revenues, and to contribute to local community development and economic growth, is not currently being realized. Previous surveys commissioned by USAID estimated that 60-80 percent of diamond mining claims are unlicensed (Siegel, 2014). AM attracts both local and foreign miners in Liberia due to its low barriers to entry in the form of rudimentary technical equipment required to mine. Despite this, artisanal miners face numerous barriers to mine legally, and their mineral recovery remains low. The primary barriers faced by miners in Liberia to enter into legal mining activity, and maximize mineral recovery are the following:  High cost of artisanal mining licenses ($150 license fee, $150 survey fee and $50 “ ”), p g x economic burden on miners in already subsistence income households;  Limited knowledge about productive and safe mineral recovery techniques;  Inability to access credit or microloans through which mining activities can be financed;  Limited knowledge about Mining Law and existing rights within the law;  Complex and often convoluted supply-chains which often make miners, supporters and shovel boys susceptible to exploitation (not getting a fair price for their minerals);  Lack of clear meaning on who a supporter is, and what their role is;  Low level of knowledge among miners about diamond value and pricing;  Difficulty in accessing diamond and gold appraisal/valuation services;  Absence of strong regulatory framework and resistance to producing and selling minerals through legal channels; and finally  Lack of a traceable mineral supply-chain and formalized market linkages through which to produce and sell minerals. Due to these barriers, artisanal miners are trapped in a cycle of crude, illegal and non- productive work activities, resulting in range of negative health; safety; security; environmental and socio-economic impacts that affect miners and other stakeholders, such as local communities. These impacts, described in further detail in the technical design section of this Roadmap, are currently difficult to mitigate owing to the absence of artisanal mining g g w ’ v g v d. dd , and financial capacity of relevant government agencies (Ministry of Land Mines and Energy, Environmental Protection Agency, the Forest Development Authority) to monitor the sector is heavily constrained. Finally, the under-developed road infrastructure in the rural counties of Liberia, where mining communities operate and dwell, further impede efforts to monitor the 9 sector due to lack of accessibility to artisanal mining sites. Within this context, the g L ’ dg d y development remains adversely low. L ’ 14-year civil war ending in 2003, foreign direct investment in L ’ d g , resulting in a significant number of international large- scale industrial mining companies operating in the country, was expected to bolster the y’ xp , produce mineral revenues, and produce concrete socio- economic benefits for local mining communities. However, declining global commodity prices, particularly the rapidly declining price of iron ore which constitutes a significant mineral endowment in Liberia, as well as the adverse impacts of the Ebola outbreak in 2014 and 2015, have significantly reduced investor confidence in Liberia. With limited large-scale industrial mining, and an absence of a formalized artisanal mining sector, mining is not producing the concrete socio-economic benefits that stakeholders had envisioned. The MLME views this current context of reduced economic activity in the mining sector as a challenge that should be transformed into a strategic opportunity to establish a robust legal framework and policy environment, in which both the large-scale and artisanal mining sectors y . T p v pp d d g y p L ’ g for future commodities upturn. T MLME’ g v p y d v g tion and contributions of the AM sector to the national budget. The MLME envisions that formalization of the sector will reduce rural poverty; enable opportunities to enhance rural capital for small micro-enterprise investment; generate proceeds to build rural community infrastructure such as schools, clinics and roads; and above all, build sustainable livelihoods L ’. The MLME has based this strategic vision on extensive groundwork in the form of county-level fact-finding missions, analysis, and policy-design sessions. The MLME recognizes that AM sector formalization is a highly integral component of Mining Legal and Regulatory Framework reform in Liberia. It is high-priority on the MLME’ p y g d , v d d y x v g dw k MLME d k to date to formalize the sector. AM Formalization is embedded into a more comprehensive mining sector reform. The v L ’ ( L) M y L d M d Energy, in partnership with the German Technical Cooperation (Gesellschaft für Internationale Zusammenarbeit, “ ”) F d M y Economic Cooperation and Development and in partnership with the Government of Australia under the RRG Project (Regional Resource Governance in West Africa), is currently undertaking a series of mining sector reform processes in Liberia. These reform processes include, but are not limited to, updating and reviewing the Liberian Minerals and Mining Act; drafting a full set of mining Regulations; developing a capacity development plan for the MLME, and formalizing the AM sector. The section below includes a high-level overview of the approach and activities that MLME has completed to kick-start the process of AM Formalization. Key additional stakeholders whose participation and collaboration is 10