Q&A – 16 April 2018

Beachwear in place of worship

We are travelling for a destination wedding to Tanzania and wondering if it is acceptable to wear beachwear in places of worship as we will be around the beach all the time and I don’t want to carry extra clothes with me. It will really upset me if you say that we cannot wear whatever we want in places of worship in Tanzania. Please help me?

Let us start by upsetting you. Under Tanzanian culture we have never seen anyone wear beachwear (bikinis, swimming trunks etc) when attending places of worship. Infact, even the so called liberal more advanced countries, will likely not allow such distractive clothing to be worn.

Without trying to sound like a religious leader, places of worship are where the human tries to unite with the Almighty- it is one place where facebook, instagram, twitter, google are switched off (atleast an attempt is made!). Beachwear takes all the attention away from this noble cause as all eyes will be on you.

If this is a publicity stunt, we recommend you try it elsewhere. We say so because it is also a criminal offence for you to wear indecent clothes to a place of worship in Tanzania as you will cause disturbance and will likely be insulting the religion. Such disturbance or insult is a criminal offence under our Penal Code.

We strongly recommend that you carry extra clothes with you, even if it means paying excess luggage as you may end up in trouble here. The excess baggage may work out cheaper than hiring a local lawyer when you are in trouble. Please note that this is very likely the position in other jurisdictions as well, and there is nothing abnormal about the legal position in Tanzania.

We wish you a pleasant stay in Tanzania and enjoy the wedding.

Local content for engineering company

We are a Tanzanian registered engineering company but the shareholders are non-Tanzanian. We do engineering work in the oil and gas, and mining sector. With the new local content laws how are we affected? What else should we know about local content and how to comply?
TT, Dar

It is true that the issue of local content is of concern to many stakeholders in the extractive industry such as your company. The Petroleum (Local Content) Regulations 2017 (effective from November 2017) and the Mining (Local Content) Regulations 2018 (effective from 10 April 2018) aim at promoting the maximization of value-addition and job creation through the use of local expertise, goods and services, businesses and financing in the mining/petroleum value chain. These Regulations oblige mining/oil and gas companies (and their subcontractors) to utilize services or goods locally available in Tanzania, use of local insurance and financial services and use of legal services to be provided only by local legal practitioners or local law firms.

A local company is defined as a company to which the Tanzanian citizens own more than 51% of equity shares. In this regard, your company being owned by foreigners by 100% does not qualify as a local company and will likely not be able to continue supplying services in its present state.

As regards to foreign companies such as your company, they must enter into a mandatory joint venture arrangement with local Tanzanian companies. In these joint venture arrangements, the Tanzanian company (or Tanzanian citizens) must hold an equity participation of at least 20% for the mining sector and 15% for the petroleum sector. Based on these local content requirements, for your company to qualify to offer engineering services in the extractive industry it has either to enter into a joint venture arrangement as required by the Regulations or change equity ownership to 51% to be owned by Tanzanian citizens or wholly Tanzanian owned companies.

The Regulations impose several compliance obligations to subcontractors in the extractive sector. For one, your company will be required to set up a project office within the district where the mining or petroleum project is located. Further to that, the Regulations impose a requirement for your company, before providing services to mining or petroleum companies, to prepare and submit a local content plan for approval by the Mining Commission, EWURA or PURA as the case may be. The local content plan should contain provisions to ensure that: first consideration is given to services provided within the country and goods manufactured in the country; qualified Tanzanians are given first consideration for employment; adequate provision is made for the training of Tanzanians on the job; guarantee to use locally manufactured goods amongst others. It is also stated that a local content plan must also contain 5 sub plans on (a) employment and training, (b) research and development, (c) technology transfer, (d) legal services and (e) financial services. Also, within 45 days of the beginning of each year, your company will be required to submit to the regulatory authorities an annual local content performance report covering all its projects and activities.

The Regulations require the regulatory authorities to establish a Common Qualification System for registration and pre-qualification of local content in the extractive industry. Only companies registered in this system will be allowed to provide services.

It is also a criminal offence to submit false plans, returns, or reports in respect of local content. It is an offence for a foreigner to connive with a citizen or an indigenous Tanzanian company to deceive the regulatory authorities as representing a local company. All these offences attract a fine of between TZS 50 million to TZS 10 billion or to a term of imprisonment of between 1 year to 5 years or both imprisonment and fine. The above is a non-exhaustive list and you are invited to read both the regulations for detailed compliance requirements.