By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

The Attorney General yesterday said new legislation to regulate mining and extractive industries will help to diversify to the Bahamian economy and generate sovereign wealth through this nation’s natural resources.

Speaking in the Senate, Ryan Pinder KC said the Mining Bill aligns with the Davis administration’s economic plan and has provisions that protect the management of the industry.

“Under the present administration’s economic plan, proper exploitation of natural resources is proposed to diversify the country’s economy, to create jobs and create a more inclusive economy for the benefit of Bahamians. The Government’s economic plan also proposes utilisation of a modern sovereign wealth regime to receive revenue generated through natural resource development,” said Mr Pinder.

“Under the provisions of the Bill, not only will a mining industry be established but the revenues of such an industry are proposed to be allocated to a specific natural resource sub-fund under the National Investment Fund Act 2022. This also ensures the proper custody and management of public revenues derived from the mining industry.”

Mr Pinder said the Government - through receiving revenue from mining companies via royalties, levies and profit sharing arrangements - will have flexibility when negotiating commercial terms and providing oversight to the industry.

“A critical component of the legislation is the revenue-generating public-private partnership (PPP) opportunities between mining operators and the Government. Under the regime, the Government will be entitled to receive revenue generated through royalties, levies, profit sharing arrangements and state participation arrangements where desired by the Government,” he added.

“The contractual terms and conditions of these arrangements are proposed to be negotiated with mining operators by way of a mining agreement. A draft Mining Agreement template has been formulated which will form the basis of all agreements with mining operators,” said Mr Pinder.

“Structuring the economic benefit terms and conditions in this way allows the Government flexibility in negotiating terms, imposing additional oversight measures or imposing additional fiscal obligations relative to the scale, size and projected profits of a mining operator.”

During his contribution, Senator Darren Henfield, the Opposition’s Senate leader, pointed out many environmental risks associated with mining and the fact that the industry is currently challenged with finding more environmentally-friendly methods. He said multiple administrations have had challenges with oversight, while having the Minister of Environment responsible for the task is a conflict of interest.

“To hear the word oversight mentioned in the same sentence as the Government is almost laughable. To me, governments can’t oversee nothing. You’ve had challenges with that in The Bahamas, both administrations. No, I don’t cast aspersions on this side alone. Both administrations have had challenges with oversight,” said Mr Henfield.

“Management of the environment in this case, I believe might be jeopardised, with a minister being responsible for its oversight. I think it’s conflicting interest personally.”

The Andros Chamber of Commerce’s president Darin Bethel has voiced concerns over how the new mining law will impact Family Island communities given the seeming conflict of interest on the Government’s part.

He said there are questions relating to the strength of oversight as the Government will act as regulator while, at the same time, taking equity ownership interests and receiving profits from the same entities it is supervising. He said this system can present a conflict of interest, especially on Family Islands.

“We have to take into consideration what a project like this would mean and how it would affect our communities, specifically, the business community, and how would they benefit? What is there to assure the business community that there will be proper oversight for the project, considering the Government being a partner, the regulator and the legislator? That brings somewhat of a conflict,” said Mr Bethel.

The Mining Bill allows the Government to take a “minimum” 10 percent equity ownership interest in mining firms, while profit sharing also enables it to receive “a minimum of a 25 percent of the profits of the mining operations” along with royalties.

Mr Bethel said oversight of the industry could be enhanced if local communities partner with investors along with government oversight. He added that a portion of mining revenues should be given directly to the communities who will be impacted by the activities.

“I think that it’ll be more sufficient and beneficial if the community partnered with an investor with government oversight, rather than the Government itself partnering, and because the communities will be directly impacted, I feel as if a portion of the revenue should go to the communities and a portion of the revenue should go to central government,” said Mr Bethel.