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Thursday, March 1, 2012


 President Jakaya Mrisho Kikwete arrives last night at the launching ceremony of the Presidential Award on the Extractive Industry Corporate Social Responsibility and Empowerment held at the Kilimanjaro Hyatt Regency hotel in Dar es salaam. Right is the Minister for minerals and Energy Mr William Ngeleja and left is the Dar es salaam Regional Commissioner Mr Meck Sadik.

 President Jakaya Mrisho kikwete greets the chairman of Tanzania Extractive Industries Transparency Initiative (TEITI), Judge Mark Bomani (rtd) last night at the launching ceremony of the Presidential Award on the Extractive Industry Corporate Social Responsibility and Empowerment held at the Kilimanjaro Hyatt Regency hotel in Dar es salaam. Looking on is ambassador Juma Mwapachu.

 President Jakaya Mrisho Kikwete speaks last night at the launching ceremony of the Presidential Award on the Extractive Industry Corporate Social Responsibility and Empowerment held at the Kilimanjaro Hyatt Regency hotel in Dar es salaam.

Hon. William Ngeleja, Minister for Energy and Minerals;
Hon. Ministers, Deputy Ministers,
Hon. Regional Commissioners;
Hon. Members of Parliament;
Ambassadors and High Commissioners;
Mr. Joseph Kahama, President of the Tanzania Chamber of Energy and Minerals;
Ms. Catherine Lyombe, Mining Stakeholders Forum;
Invited CEOs of Extractive Companies and Related Services; Representatives of Financial Institutions;
Distinguished Guests;
Ladies and Gentlemen;
I thank you honourable Minister for inviting me to participate at this historic event of launching the Presidential Award on the Extractive Industry Corporate Social Responsibility and Empowerment Programme (CSRE). I am delighted that the Award will be contested annually and companies with outstanding performance will be acknowledged.
Ladies and Gentlemen;
I am happy with the key indicators developed to evaluate the scores for the Award. In this regard, I consider very pertinent indeed, to include in the indicators things like;
1. Community well-being and sustainability;
2. Human resource development and training;
3. Local industry participation;
4. Community safety, water and environment;
5. Social infrastructure such as housing and health services; and,
6. Infrastructure development such as roads, electricity etc.
I commend you, and all those involved in conceiving the ideas and all those who made it happen as we are witnessing today.
The Presidential Award on CSR and Empowerment that we are launching tonight is an important milestone in the history of the extractive industry in Tanzania. It is intended to align corporate policies and practices of companies in the extractive industry with sustainable development. It is about making local communities where companies operate, benefit from the operations of the companies. And, it is about the companies benefitting from the friendliness, harmony, understanding and cooperation that will ensue with the government and the people in the areas where the companies operate.
Business leaders;
Ladies and Gentlemen;
The concept of CSR is not new to Tanzania, the world and to all of us gathered here this evening. Nowadays, it is increasingly becoming a normal international practice. Almost all major companies in the country have put corporate social responsibility in their mission statements, policies and internal management systems. What is new to us Tanzania, therefore, is the Award we are launching tonight. Otherwise, companies have been working to ensure that local communities receive some direct benefits, and contribute to broadening social and economic sustainable development.

If principles of Corporate Social responsibility are observed and delivered, companies will enjoy very good relations with the communities around them. If companies pay taxes that are due to the State, rightfully and timely, they will have good relations with the government. Likewise, if the government and communities aptly deliver on their part of the responsibilities they will enjoy good relations with companies.

 In the end everybody benefits and a win-win situation will be realised. I believe, this is the best insurance policy one can long to have as an investor and as an investment destination. If this is absent there is every risk of friction which is not healthy for business and may put the investment in jeopardy. Everybody will be at risk losing.
Ladies and Gentlemen;
As alluded to earlier, under CSR and Empowerment, companies are expected to contribute to the provision of important social and economic services to the communities where companies are located. Besides that, I would like to mention and underscore two or three importance things.

 The first one is about sourcing goods and services locally. Companies should make it their policy to engage local companies and local people in this regard. 

 There are services which can be sourced locally, there is no need of importing them from abroad. This is the best way to promote local empowerment and an excellent way of promoting socio-economic growth in the economy of the area and the country.

This way, the company is integrating itself in the socio-economic life of the people by creating jobs and incomes. It engenders, what economists call backward and forward linkages. This will make the people strongly feel a sense of ownership and an obligation to protect the investment.

 But if such things are absent people will have no stake in operations of the company. As a result, they may care less about the presence, survival and progress of the company. They may even turn hostile. May I make a humble appeal to all companies in different sectors to take this matter seriously.

The other thing I would like to mention with regard to CSR policies is the relationship between large companies and small companies and local people engaged in the same industry. It is incumbent upon large companies to realise that assisting local players to make progress is in their best interest.

Big companies should use their economic strength and technological capacity to help small players improve their operating systems, increase productivity, production and improve their affairs in general. 

 I believe, it will reduce jealousies, minimise friction, avoid unnecessary hostility and increase friendship and cooperation. Take the case of artisanal mining activities in the vicinity of large mining operations in Tanzania.

 If the latter assists the former and treat each other as partners, instead of competitors or contenders, it will very much improve relations between the two players who need each other. It will clear undue misunderstanding and remove the mistrust and resentment. Attitudes of hostility, threats and violence can easily be avoided. In the end everybody benefits.
Ladies and Gentlemen;
The extractive industry can emulate the good practice of out-growers scheme around sugar plantations and sugar factories in Tanzania.

 In those cases, the large company supports small scale farmers, as out-growers, in several ways including provision of important services such as extension services, seedlings, technical know-how and market for their sugar cane.

 I think this is a good model to look into. It enhances local productive capacity and ensures sustainability of income to farmers. May this Award inspire companies in the extractive industry to emulate this example and strive to do what is possible to assist the local small scale investors grow and promote long-term economic and social sustainability.

Ladies and Gentlemen;
We in government consider CSR and Empowerment in the extractive industry very important indeed. By their very nature, most of the operations in extractive industry are not renewable. They get depleted as extraction continues. 

 As such if there are no proper arrangements for tangible benefits to the communities where the operations are located, they could easily become a source of discontent and resentment. When the resources are completely exhausted and operations are stopped, the questions people would hasten to ask is about how did they benefit? 

The centrality of having mechanisms whereby communities and the country benefits even at the end of the life of the operations, therefore, need no emphasis.

We would like to see when such eventuality comes, everybody says we have benefited. Contrary to that may create apprehensions and even resentment of large investors in the extractive industry especially when they are foreign based. I believe, this is doable. Let us heed the old adage “where there is will there is a way”. Let us gunner the will to do it for our sake.

Honourable Minister;
Distinguished Guests;
Ladies and Gentlemen;
Before I conclude, let me, once again, sincerely thank the Mining Inter stakeholders’ Forum (MISF) and the Ministry of Energy and Minerals for conceiving the idea and introducing the CSRE Presidential Award in Tanzania. We are a little bit late, but it is better late than never.

I am confident the Award will stimulate and encourage the extractive companies to take interest in the communities around them and deliver on corporate social responsibility and empowerment.
 I invite business leaders here tonight to heed this our call and rise to the challenge.

With these many words, I now announce that the Corporate Social Responsibilities and Empowerment Presidential Award on Extractive Industry is officially launched.
Thank you for your kind attention!

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