Corruption stifling investment in Uganda’s mining sector: Rights group

The directorate, under the Ministry of Energy and Mineral Development, oversees the mining sector, including issuing exploration and production licences and enforcing rules.

By: Reuters | Kampala | Published:June 5, 2017 5:44 pm

Widespread corruption at the Ugandan government’s mines department, including using bribes to secure licences, is stifling investment in the sector and eroding benefits for Ugandans, a human rights group said on Monday. London-based Global Witness said it had conducted an 18-month investigation that uncovered evidence of bribery at the Directorate of Geological Survey and Mines (DGSM) and use of political connections to secure licences.

The directorate, under the Ministry of Energy and Mineral Development, oversees the mining sector, including issuing exploration and production licences and enforcing rules. Ministry spokesman Yusuf Masaba said officials could not respond to the allegations until they had read the report. “I have not read the report and we don’t know what is contained in the report so we cannot comment,” he said.

Global Witness said some exploration licenses had been granted in protected wildlife areas, including in Bwindi National Park which has the largest remaining concentration of mountain gorillas. “Corruption … at the DGSM is systemic and goes from some junior officials all the way to the top,” its report said.

“It is routine for investors to pay certain directorate employees a fee to ensure that mining applications meet all requirements.” Corruption and mismanagement were “stifling investment and preventing local communities from seeing any benefits,” the report said.

Global Witness said it had been told by the commissioner of the DGSM that “corrective measures” had been taken after the Ugandan government produced two reports on mineral licences in 2011/2012. Despite these assurances, however, Global Witness said it had been told by several sources that bribery was still commonplace.

Government surveys have shown the existence of various minerals in Uganda, including gold, base metals, uranium, rare earths, iron, titanium, vermiculite and diamonds. But the east African country has struggled to attract major investors to develop the sector which remains largely dominated by small-scale miners.

Paying bribes, embezzlement and misuse of public funds are common in Uganda and prosecution, especially of high level culprits, is rare. Critics of President Yoweri Museveni, 72, have long accused him of turning a blind eye to venality, particularly by his supporters as a way of buying their loyalty. Officials deny those accusations.

Last year Museveni acknowledged that corruption was a problem in Uganda, and said he would take personal charge of tackling it. Global Witness said its investigations found that DGSM staff were frequently paid by licence applicants to process paperwork.

“Indeed, if you do not pay or employ someone in the directorate, your licence applications are likely to be declined,” the report said. Global Witness said a wide gap between Uganda’s domestic gold production and exports suggested some gold was probably being smuggled into the country from conflict areas like eastern Congo.

Between mid-2009 and mid-2015, Uganda’s annual gold exports fluctuated between near zero to just under $40 million, according to central bank data. Gold exports rocketed to $204 million in the financial year ended in July 2016.

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