Companies big violators of human rights

BY LYDIA SHEKIGHENDA

The country’s weak tax regime has led to huge loss of revenue, with multinational corporations easily profiting from resource extraction, leaving majority of the people suffering, a human rights report has said.

The report titled ‘Human Rights and Business in Tanzania’ released by the Legal and Human Rights Centre (LHRC) yesterday says there is a serious tax evasion problem by a number of corporate entities in Tanzania with some using indigenous elements to circumvent liabilities.

The situation is affecting the fundamental right to development of communities and the citizens of the country as a whole, says the report.

Briefing journalists, LHRC Programme Officer for Corporates and Environment Flaviana Charles referred to the Bomani Commission Report (2008) which pointed out that despite the presence of huge mineral reserves in Tanzania, contribution of the sector to the national economy and community development has not met citizens’ expectations, especially when compared to other sectors in the economy.

“This is the real life around the mining sites, where common people do not really benefit from the resources extracted from their backyards,” she said.

She said some of the problems were a result of the existing loopholes in the country’s laws, citing the Mining Act of 2010 which restricts disclosure of information on, inter alia, issues of accounts.

She said the restriction can be abused by mining firms to deny useful information to the public.

“The restriction treats information from mining companies secret, and it is their sole discretion to disclose it or not,” she said, adding: “This contravenes the public right to know, especially when the information relates to issues that directly impinge on their interests.”

She noted that the Income Tax Act provides a leeway through which unscrupulous companies can abuse the people’s rights.

“The Act is clear that the companies are required to render true account of their operations that includes compliance with tax obligations but apparently the trend with many firms was different as records relating to tax issues were kept secret thus creating doubts about the faithfulness of such companies in relation to tax payments,” she said.

The report further assessed the real situation regarding discrimination at workplaces whereby the field report indicated that the problem still prevails, especially where firms are owned or manned by foreigners.

It also found that there has been continued violation of labour rights in the country including forced labour.

Speaking at the launch of the report, Energy and Minerals Deputy Minister Stephen Masele admitted that a big part of the report directly concerns his ministry, saying they have started taking action to resolve some of the problems.

He said the report has come at the right time when the country was undergoing massive economic, social and political reforms.

“Under these reforms there are a number of challenges relating to human rights, for example, big and small investments, increasing demand for land and other resources like minerals,” he said.

On corporate social responsibility, he said, the government is finalising preparations for the oil and gas policy in order to protect interests of the people.

He said currently CSR is voluntary but the government is looking for a possibility of enacting a law to emphasise companies’ accountability to the society.

Masele said the government is also closely monitoring workers welfare to ensure their interests are safeguarded.

He however said the government will overhaul the board of directors of State Mining Corporation (Stamico) and Tanzania Electric Supply Company (Tanesco) to ensure only members who are competent, patriotic and capable of defending the interests of the nation get in.

The Tanzania Development Vision 2025 focused on making the country a middle income nation, he said, adding that the ministry’s role is to ensure that Tanzania does not slide back into being a poor country.

“We have abundant of resources …what we need is good laws and close supervision, with strengthened institutions that are capable of managing the economy,” Masele said.

He pointed out that his ministry has crucial institutions such as TPDC, Stamico and Tanesco which if empowered can greatly contribute to the development of the economy.

He said that the minister has already overhauled TPDC board of directors by advertising the posts and he will do the same for Stamico and Tanesco.

Masele said that the government is in the process of acquiring 50 percent shares in Tanzanite One, adding that with reformed Stamico board the corporation would be able to take care of the government’s interests.

“Tanzanite One’s license has expired but we cannot issue a new one unless we agree with them on the above share disposal issue,” Masele insisted.

Explaining, Masele said that the country’s Mining Act directs that gemstones must be mined by locals but they can enter into joint venture with foreigners if they need support.

For her part, LHRC Executive Director Dr Helen-Kijo Bisimba said: “We decided to conduct this study due to the ongoing violation of human rights in the country and the increased level of corporate business.”

“We used to see the main violators of human rights as government and its institutions, but now we have discovered that violation of human rights are also committed by companies and even here at home.”

The government is supposed to come up with laws which will hold accountable people who violate human rights, she said.

SOURCE: THE GUARDIAN (04/10/2012): http://www.ippmedia.com/frontend/index.php?l=46532