Mining companies publicly listed in the United Kingdom must disclose the payments they make to governments, including taxes, royalties, and license fees. But this is not always the case in South Africa. A data investigation by a team of journalists and activists highlighted how these large royalty payment amounts are reported, while miners have no way of knowing where billions of dollars paid went.
PRETORIA - The investigation tracked the payments of at least $1.076 billion to South African government agencies, made between July 2017 and December 2018 by 10 international mining companies. It also followed the lives of several locals, whose lives depend on the mining projects but they were starved of mining royalties.
The team of journalists used publicly accessible data from Resource Projects, an open-source repository for oil, gas, and mining payments around the world. They combined them with data from #MineAlert and collaborated with civil society organizations, such as Publish What You Pay South Africa, Publish What You Pay UK, and Global Witness.
"The #MineAlert team cleaned and analysed the data on Google spreadsheets, using filters to focus on the 10 UK-based companies and data in the 2018 financial year," said South African journalist, Andiswa Matikinca.
The investigation used a combination of qualitative and quantitative research methods to verify the payments and follow the money trail. The team started with desktop research into South Africa’s mining and petroleum resources royalties system to verify the publicly available payment data. But from the 10 companies, only one had responded to questions from the civil society collaborative.
"We reached out to seven other companies and got responses from three of them, and from mining-affected community representatives, as well as Corruption Watch," Matikinca said.
Then, the team added geolocation data to create their visualizations, she added.
The main challenge of this investigation was the access to data from local authorities, Matikinca said. "We spent a lot of time reaching out to affected local government entities in an effort to get their responses on whether the reported payments were received and how they were distributed for purposes of benefiting mine host communities. These efforts were mostly unsuccessful, particularly as a result of coronavirus outbreak restrictions. In most of our correspondences with municipalities, we did not receive any response. Also, four of the companies we approached did not respond to our questions," Matikinca mentioned.
The main aim of the investigation is to highlight the two mining royalty payments systems in South Africa. The first system allows for royalty funds to be paid out directly to the country’s tax-collecting agency and they are then redirected to the National Treasury. The second system is the contractual royalties system, which is paid to the owners of the land as part of an agreement between them and mining host communities.
"The desired impact of this story is to highlight the limited transparency on the mining royalties systems and how they are failing to reach and assist with the development and economic growth of mine host communities which face the direct impacts of the mining operations," Matikinca said.
Following South Africa’s mining millions - Oxpeckers, 14 July 2020
Communities starved of mining royalties amid lack of transparency - Business Day, 12 July 2020
Communities starved for mining royalties amid lack of transparency - M28investigates.com, 15 July 2020