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Corruption in the Mining Sector: Preliminary Overview 387
companies comply with laws, regulations, and license conditions; and
monitoring output and profit to ensure that the correct amounts of royalty
and tax are paid. The authorities’ respective responsibilities break
down as follows:
• Federal licensing authority. MOM acts as the federal licensing authority,
with responsibility for large-scale mining by domestic investors and all
operations by foreign investors
• Regional and city licensing authorities. The relevant regional or city
licensing authorities act as the licensing authorities in their respective
areas for artisanal mining, prospecting, exploration, small-scale mining,
and small- and large-scale mining of construction minerals, provided
that only domestic investors are undertaking these activities.
In view of the division of responsibility among licensing authorities,
the licensing process often requires liaison between authorities to determine
whether licenses have already been issued in a particular area. This
territorial overlap can result in delay and uncertainty.
To assist the licensing process, MOM operates a computer database
that shows the status of federal licenses (for example, type of license,
identity of license holder, nationality of license holder, location of license,
type of mineral) and the location of federal licenses on a map. Most
regional and city licensing authorities currently hold data in paper-based
systems or separate computer systems. The Ethiopian government is currently
developing a new computer database that will show all federal,
regional, and city licenses in the mining sector. This consolidated system
will enable applicants for new licenses (federal, regional, or city) to find
out immediately whether the areas that interest them are available and,
if so, to obtain immediate priority.
The Ethiopian government is also currently implementing BPR in relation
to the mining sector, affecting MOM and regional and city licensing
authorities. One objective of the BPR is to shorten significantly the time
frame for issuing licenses. In particular, the BPR aims to issue exploration
licenses within two days after application submission and to issue mining
licenses within 19 days after application submission.
Figure 9.1 illustrates the licensing process, from prospecting to issue of
a mining license. An Ethiopian national can reserve rights over discovered
minerals by way of a discovery certificate, which in turn provides the
right to apply for an exploration license, which in turn provides the right
to apply for a mining license (if, in each case, the national satisfies the