Mining CSR regulations invalidated

Our company operates in the Southern part of Tanzania in the mining sector. We recently received news that the Court has nullified the Corporate Social Responsibility (CSR) Regulations which provided for how mining companies should support development projects in mining host communities. What does this mean for host communities and companies? Kindly clarify.

JM, Mwanza

We are aware of this decision in which the High Court invalidated some (not all) provisions of the Mining (Corporate Social Responsibility) Regulations, 2023 which had introduced a 60% allocation of CSR funds to local government authorities and only 40% to host communities. This decision stemmed from the application challenging the legality of the Regulations that introduced 60/40 CSR funds allocation, alleging that the Minister for Minerals exceeded his powers given by the Mining Act. The Court held that this directly conflicted with section 136 of the Mining Act, whose intention is for CSR resources to fully benefit host communities. By imposing the 60/40 formula, the Court held, the Minister acted ultra vires, as subsidiary legislation cannot override or defeat the purpose of the parent Act (the Mining Act). It is, therefore, not the entire Regulations that have been nullified, rather a regulation that provided for CSR funds allocation.

The Court also found that the affected host communities were not meaningfully consulted, rendering the process procedurally flawed and contrary to principles of natural justice. Accordingly, the provisions were declared null and void, reaffirming that host communities are the primary beneficiaries of CSR funds. This is a significant development especially for communities living around mining projects and it is interesting how the 60/40 rule came and went almost as quickly as it appeared. If you had submitted the approved CSR plan with the Mining Commission, we advise you to directly contact the Mining Commission for more guidance on how this decision should be implemented.