Adoption of Community Development Agreements in the mining sector (MW0015)

1. What problem does the commitment aim to address?
The problem that the commitment seeks to address affects communities around large mining operations who oftentimes do not, in real terms, benefit from the proceeds of the mines. Some community members may, however, benefit through employment or trading their micro-small business merchandise to the workers of the mines. Furthermore, these local communities around the mines are often unable to hold public authorities and mining companies accountable for their actions and inactions in the mining operations that directly impact them in the long term, such as environmental degradation and pollution.

2. What are the causes of the problem?
The challenges are as follows:
(a) Limited community awareness and knowledge of policies and regulations governing the mining sector.
(b) Weak enforcement mechanisms and limited community participation in agreement negotiations.
(c) CDAs in the mining sector are a relatively new concept, particularly in large-scale mining operations in Malawi. CDAs are coming at an appropriate time when large-scale mining investments are rolling out. Apart from the resumption of the Kayelekera Uranium mine in Karonga, other large-scale mining ventures are scheduled to be rolled out shortly. Thus, learning from the experiences of the Kayelekera mine, it is expected that communities around the large mines will benefit from the proceeds of the mining operations through CDAs that are based on principles of openness, transparency, and accountability.

Commitment Description

1. What has been done so far to solve the problem?
The framework for CDAs has been developed. The Mines and Minerals Act, 2023, which was operationalized in the previous NAP, makes provisions for the allocation of mining revenues by companies to local communities. The MWEITI Bill has been drafted, and it includes provisions to support transparency in the mining sector. The commitment builds on ongoing extractive governance reforms and rising interest in large-scale mining projects.

2. What solution are you proposing?
This commitment will achieve:
(a) Enforced legal provisions requiring mining companies to commit to sustainable community investment. Mining companies shall contribute 0.45 percent annually to the community within a 20-kilometer radius of the mining operation (Section 164 of the Mines and Minerals Act, 2023).
(b) Expanded CDAs in the mining sector to include medium scale mining.
(c) Ensure that structures at the local level for managing finances are well instituted, transparent, and have the capacity to manage substantial financial resources.
(d) Provide policy, legal, and financial guidance to ensure proper implementation of the CDA.
(e) Ensure the community has access to accurate financial records.
(f) Publicly disclose CDAs, including mechanisms for monitoring how funds are allocated and used in various community projects.
(g) Implement capacity-building programs and oversight mechanisms to ensure transparency and effectiveness.
(h) Facilitate stakeholder collaboration to ensure long-term benefits from CDAs.

3. What results do we want to achieve by implementing this commitment?
This commitment aims to achieve the following results:
(a) Ensured local communities equitably benefit from mining operations.
(b) Improved community involvement in extractive sector activities.
(c) Fostered transparency in community investment funds and project implementation.
(d) Institutionalized public reporting and environmental accountability measures.

Commitment Analysis

1. How is this commitment relevant to MW2063?
MIP-1 seeks to increase and operationalize large-scale mining, such as Songwe Hill in Phalombe, Kanyika Niobium Mine, and Kasiya Rutile Mine, including facilitating increased cement production. Apart from communities benefiting from the mining operations directly, the MIP-1 prioritizes increasing the lengths of paved rural roads in mining potential areas to above 50 percent. Thus, communities in and around mining areas have been earmarked for infrastructure development, further enhancing their quest to demand transparency and accountability for rolling out of such projects.

Under the Industrialization pillar for MIP-1, one of the key interventions is to review and formulate laws to allow participation of communities, including the youth, through cooperatives.

2. How will the commitment promote transparency?
The commitment requires public disclosure of CDA terms, financial allocations and audit reports. It also supports transparency through regular status reports. Financial records will be accessible at the community level, promoting open governance and trust.

3. How will the commitment help foster accountability?
Accountability will be enhanced by enforcing mandatory CDA contributions and monitoring standards. Legal frameworks and environmental safeguards will hold mining companies responsible for both financial and environmental obligations. Community training and CSO involvement will strengthen local oversight, while status reports and audits will support further accountability.

4. How will the commitment improve citizen participation in defining, implementing, and monitoring solutions?
This commitment ensures that communities are actively engaged in CDA design, implementation and evaluation. Local structures will be trained to manage and monitor mining-related resources and activities, while public awareness initiatives will clarify community rights and responsibilities. Regular engagement with CSOs and mining stakeholders will sustain inclusive decision-making.

Commitment Planning

Milestones | Expected Outputs | Expected Completion Date

Enhance legislation requiring mining companies to commit to sustainable community investment
| MWEITI Bill enacted | July 2028

CDAs encompass medium-scale mining companies | — | July 2028

Enhance monitoring and capacity-building on CDAs | Enforced compliance with CDA standards and guidelines; Tailored mentorship and training for community structures managing CDAs | December 2028

Enhance CSO and community engagement on CDAs | Community awareness and monitoring of CDAs with a particular focus on community rights and responsibilities implemented | December 2028

Strengthen environmental accountability | Environmental standards and regulations for mining companies monitored and enforced | December 2028