In November 2013, I was privileged to be the guest of the Church of Sweden at a community workshop in Jokkmokk. The aim of the workshop was to present and discuss the SwedWatch report Problematic Platinum – The responsibility of Swedish corporations in South Africa. The workshop also learned about the work of the Bench Marks Foundation, an organisation associated with the South African Council of Churches and the Bench Marks Centre for Corporate Social Responsibility at the University of the North West in South Africa and the Southern African Development Community (SADC).
The workshop was well attended and the discussions that the followed presentations were lively. It afforded me as a representative of the Bench Marks Foundation the opportunity to learn more about the sami community and the challenges they face in maintaining their culture and way of living in the face of increasing threats from mining development in the North of Sweden. Specifically also the challenges faced by the citizens of Jokkmokk in the face of a mining development by Beowulf Mining, a British company planning to establish an open cast iron mine in Kallak, with an estimated life of mine of only ten years.
What is extremely surprising are the similarities with African near mine communities that the Jokkmokk residents and the sami people are faced with. One would have expected that the Swedish Government would be far more sophisticated in its approach to mining than what became evident in the meeting. It is reported that Fredrick Reinfeldt, Sweden’s Prime Minister said: “The mining industry is for Sweden what oil is for Norway”. This is the kind of statement that one would associate with a desperately poor Third World country. The differences between Sweden and Norway are stark and the comparison entirely unfounded.
Oil in Norway is largely state owned through Statoil in which the Norwegian government owns 67% of shares. Cumulative corporate tax in Norway far outweighs any tax regime for mining in Sweden, thus in Norway the taxation of petroleum activities is based on the rules governing ordinary business taxation. There is considerable excess return (resource rent) associated with the extraction of oil and gas. Therefore, a special tax of 50% on income from petroleum extraction has been introduced, in addition to the ordinary income tax of 28%. Consequently, the marginal tax rate on the excess return within the petroleum sector is 78%.
The crucial difference therefore is that the income derived from oil in Norway benefits the people of Norway. The agreement with Beowulf will see must of the profits from iron mining by this company draining out of Sweden. In terms of the environmental impact, any mine that only has a ten-year lifespan will leave a huge externalised cost to society in terms of its negative post mining legacy. Social, economic, cultural and environmental damage, which in most cases will be irreparable and last for hundreds of years.
Finally, I want to suggest that mine impacted communities in Sweden and Southern Africa link up in solidarity in defence of mine affected peoples and the environment.
David van Wyk
David van Wyk is a researcher working with Bench Marks Foundation, a partner organisation of Church of Sweden. Bench Marks Foundation participated in the production of the report Problematic Platinum – The responsibility of Swedish corporations in South Africa (Platinautvinning med risker – vilket ansvar har svenska företag i Sydafrika?)
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