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March 25, 2019

Modernizing permitting to drive development of Myanmar’s mining sector

Plans to overhaul how mineral and gemstone rights are issued are an opportunity to promote good governance and boost investment. But political will is needed to ensure success.

Farmer looking at Tiggyit open pit coal mine: PHOTO: Suthep Kritsanavarin for NRGI
  • By Sebastian Sahla

In September 2018, officials from Myanmar’s Ministry of Natural Resources and Environmental Conservation (MONREC) participated in a study trip to Zambia. They went seeking to learn lessons about how other countries manage their mining sectors and to gather insights into ongoing reforms of Myanmar’s approach to extractive permits.
Permitting in Myanmar is notoriously complex. Several MONREC departments and enterprises have the power to grant permits. Despite recent reform efforts, there is very little clarity on who exactly is involved in reviewing applications and what procedures are to be followed. Permit information is stored across multiple departments, often in hard copy only.
This makes permitting extremely slow, opaque and unpredictable. The lack of clear procedures is a burden on government officials, disincentivizes investment by responsible companies and increases the risk of corruption and mismanagement.
To help address these challenges, MONREC is preparing to develop a national register of mineral and gemstone permits known as a “cadastre.” The cadastre is a requirement of the Extractive Industries Transparency Initiative (EITI), a global initiative to promote good governance in the oil, gas and mining sectors, in which Myanmar is a candidate country.
The intention is to establish a system to administer and monitor all mineral and gemstone rights. Companies will submit permit applications through the cadastre. Cadastre officials will then record their applications in a digital system and consider them in a streamlined and legally defined process before granting (or denying) exploration or production rights.
To support implementation of this project, the Myanmar EITI and the Natural Resource Governance Institute (NRGI) supported the visit of officials from the Department of Mines, Department of Geological Survey and Mineral Exploration, Myanmar Gems Enterprise and Myanmar Pearl Enterprise to the Zambia Cadastre Office in Lusaka, the capital city. There the visitors from Myanmar were able to see how a cadastre functions in practice.
The experience of Zambia shows that a well-functioning cadastre helps to promote sustainable growth of the mining sector by making permitting faster and more predictable. Zambian officials reported that it can take them as little as two months to issue certain kinds of mining permits. In Myanmar, the equivalent process can take more than a year. A well-functioning cadastre could incentivize investment and generate additional revenues for the government.
The cadastre will also help to reduce administrative burdens. At the click of a button, officials will be able to see the status of all mining permits in the country. This will make it easier to monitor revenue payments and crack down on companies operating with invalid permits. The system will also automatically check for overlaps between new applications and any active or pending permits, which will reduce the need for officials to conduct manual checks and thereby reduce the scope for human error.
Importantly, the cadastre is an efficient tool for good governance. By requiring all investors to follow the same procedures, the scope for discretion and corruption is reduced. In Zambia, key pieces of information – like company names, approval and expiry dates and permit status – are also made available on an online public portal. This empowers accountability actors like parliamentarians, civil society organizations and journalists to better monitor the mining sector.
So what needs to happen next to ensure the success of Myanmar’s cadastre? Currently work is underway to clean up existing permit data across MONREC’s departments and enterprises. The next step is for MONREC to actually establish the cadaster in order to store this data and handle future permitting processes. MONREC officials should use this opportunity to revise and streamline permitting procedures with a view to increasing efficiency, predictability and transparency. This should include clearly defining which institutions are involved at each stage of the permitting process, and establishing objective criteria and timelines for decision-making.
MONREC should roll out the cadastre to the states and regions as soon as possible. Under the new mines rules, permitting responsibilities for artisanal and small-scale mining (ASM) are being decentralized, while medium and large-scale permits remain the responsibility of MONREC. Similar changes are underway in the gemstones sector. Decentralizing ASM governance is consistent with international trends. In countries ranging from Mongolia to Madagascar, subnational authorities are issuing ASM permits. Decentralization also reflects the broad-based desire within Myanmar to empower subnational institutions and to ensure that those stakeholders directly impacted by mining have a greater say in how the sector is managed.
Decentralization does come with risks, however. At whatever level decisions are made, it is important that permitting authorities share information within a unified system. Otherwise the Union ministry and states/regions might issue overlapping permits. There is also the risk that every state and region will use different procedures and criteria for evaluating and granting permits. This could make it challenging to maintain minimum social, environmental and governance standards. The cadastre could help to mitigate these risks.
Myanmar’s cadastre represents a unique opportunity to improve governance and attract investment. Its success now rests on the political will to implement it.
Sebastian Sahla is an associate at the Natural Resource Governance Institute in Yangon.

 

The opinions expressed in this article are those of the author and do not necessarily
reflect the views of the Global New Light of Myanmar.—Ed

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