Article originally appeared in the Malawi News

BY CHARLES MPAKA

Paladin Energy Limited and two other Australian mining firms operating in the country are under criticism back home for tapping into a tax-payer financed aid programme to shore up their corporate image and therefore legitimise their operations in Malawi and elsewhere.

Alongside six other Australian firms with projects in Africa, Paladin Energy, Globe Metals and IntraEnergy, rich in their own right, have been found to have accessed money from Australia’s Direct Aid Programme (DAP).

This is to the displeasure of Aid/Watch, an Australian watchdog on aid, trade and social and environmental justice.

Aid/Watch has described as “corporate green washing” the action by the Australian government in allowing the firms to access the tax payer aid money for their corporate social activities in their project locations.

Globe Metals used the money to install solar electricity and a vaccine fridge at the Etandweni Health Post near the Kanyika Niobium Project in Mzimba.

The Kayerekera uranium miner, Paladin, has used the money it accessed from the programme to construct a 3-classroom block and provision of furniture for the Karonga School for the Deaf.

Intra Energy, a new coal miner in Karonga, used the money for a group that seeks to empower women with skills to run business in Karonga.

“Aidwatch does not believe that the CSR [corporate social responsibility] work of mining companies in any way compensates or equates to the long-term social and environmental degradation borne by Malawians, or any community affected by mining.

“Nor should aiding a community serve to obscure that the greatest benefits of mining are held by the mining company,” said director for Aid/Watch, Thulsi Narayanasamy, in an email response to Malawi News questionnaire

The organisation argues that the aim of tax payer money, particularly aid money, is not to subsidise the work of mining companies that are already rich.

“The Australian government did make it clear that they were not going to be funding the corporate social responsibility schemes of mining companies; however they have now gone back on their word,” said Narayanasamy.
She said while the sums obtained may not be large as the fund is capped at 30,000 Australian dollars, what is important is that the money is being used to legitimise the activities of the firms whose projects have been mired in all manner of controversy.

Paladin’s General Manager-International Affairs, Greg Walker, admitted that his company had benefited from the fund.

“If Aid/Watch is suggesting that it would be better for countries like Malawi if resource companies did not spend money on corporate social responsibility projects, then I do not think many Malawians would agree with Aid/Watch,” he said, describing Aid/Watch as having adopted a hostile approach towards mining companies.

On the argument that the company is rich enough to fund its own programmes, Walker said “the fact is that there are many more demands from impoverished communities for support from Paladin than the Company is able to finance, hence we will work with others where we can.”

“There is always more demand for aid than there is aid funding available.  In the case of DAP funding, we submitted an application for the Karonga School for the Deaf Project. The [Australian] Government has guidelines and our application was assessed together with other applications received.  It is a decision for government as to which projects it will support,” Walker said.

Globe’s Manager and Acting Chief Executive Officer, Fergus Jockel, also did not deny having benefited from the fund for its CSR in Kanyika.  Jockel told Malawi News the company “will continue to follow a responsible and appropriate CSR course of action” to provide direct benefits to the community.

But Aid/Watch wants the money to be channeled through civil society organisations in Malawi instead of through the already advantaged mining firms.

“The position of AID/Watch is that if the Australian government wants to assist Malawians gain through the mining process, funding should instead be given to CSOs in Malawi to bolster the ability of mine-affected communities to bargain hard and utilise their right for free and prior consent.

“The answer is to give power to those who are in a disadvantaged position when minerals are identified on their land, not to give funding to the mine company which already holds the power, and often [gets] government support during this process,” said Narayanasamy.

The Australian Department of Foreign Affairs and Trade (DFAT) has since stood up in the defence of the mining companies. Responding to Australian media queries, DFAT said it does not consider use of DAP funds in this way as subsidising the CSR activities of the mining companies.

DFAT spokesperson Dana Robertson said decisions about the allocation of DAP money to projects are made independently of such considerations [of subsidising the companies], are subject to the DAP guidelines and assessed based on their merits.

The Paladin deal has been fraught with controversy all through and there have been calls recently that it be renegotiated, a proposal that Paladin has vehemently rejected.

Globe Metals has also been facing pressure from the Kanyika community which is demanding a 5 percent shareholding in the project, among other things.

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