The former president Benjamin Mkapa (right)and his energy and minerals minister Daniel Yona.
-Various sections of Leadership Code of Ethics Act quoted
THISDAY REPORTER Dar es Salaam
FORMER president Benjamin Mkapa and senior minister Daniel Yona are now understood to have acted illegally in the privatisation and takeover of the Kiwira Coal Mine in Mbeya Region, by failing to disclose their personal vested interests in the matter and using information obtained while executing public office duties for their own personal gain.
According to the Public Leadership Code of Ethics Act of 1995, a copy of which has been availed to THISDAY, a public leader shall be considered to have breached the Act if he or she acquires any significant financial advantage, or assists another person to acquire such gain, by ’’improperly using or benefiting from information which is obtained in the course of his/her official duties and which is not generally available to the public.’’
With full access to all confidential information regarding the state-owned coal mine and its operations by virtue of their powerful positions in government, Mr Mkapa and Yona founded Tanpower Resources Company Limited in December 2004, when one was sitting president of the United Republic and the other served as minister for energy and minerals respectively.
Just a few months later, in mid-2005, the company that was apparently the brainchild of Mr Mkapa, Yona and some of their immediate family members took over control of the Kiwira Coal Mine.
Stated objectives of Tanpower Resources include ’’to carry on the business of miners of coal and iron; to process such coal and iron and generally treat, prepare, render marketable, sell and dispose of such coal and iron or by-products resulting therein in their raw or manufactured state.’’
The company was also licensed to ’’deal with coal mining in order to generate electricity for consumption and sale; to generate power generators, transmitters and general distributors; and to provide power and general projects management, project appraisers and consultants.’’
The first listed directors of Tanpower Resources were named as the then first lady Mrs Anna Mkapa; the then minister for energy and minerals Daniel Yona; Nicholas Mkapa (the president and Mrs Mkapa’s son); Joseph Mbuna (Nicholas Mkapa’s father-in-law); and one Evans Mapundi.
Mrs Mkapa sat on the board as a representative of ANBEM Limited; Yona from DEVCONSULT Ltd; Mkapa junior from Fosnik Enterprises; Mbuna from Choice Enterprises; and Mapundi representing yet another company, Universal Technologies Limited, in which he shares ownership with one Wilfred Malekia.
Both Mr Mkapa and Yona ? as president and energy/minerals minister respectively - were deeply and directly involved in the privatisation of the Kiwira Coal Mine, and were privileged with full access to all confidential information regarding its assets, operations and business potential.
They are understood to have engineered the acquisition by Tanpower Resources of 70 per cent shares in the Kiwira Coal Mine, as part and parcel of the ’fast-track’ privatisation process. This was later increased to 85 per cent, with the remaining, token 15 per cent shares being retained by the government of the day. ''
However, states that a public leader shall be considered to have breached the law if he knowingly acquires any significant financial advantage or assists in the acquisition of any such advantage by another person by the following manner:
Apart from improper use of, and benefit from, information obtained in the course of carrying out official duties and which is not generally available to the public, Section 12 (1) of the Public Leadership Code of Ethics Act also states other ways in which a public leader will be considered to have breached the law, including:
’’By directly or indirectly converting government property for personal or any other unauthorised use, for the purposes of reaping private economic benefit.’’
Furthermore, section 13 (1) of the same legislation also states that ’’a public leader shall not speak in the Cabinet, National Assembly, in a local government council or a committee thereof, or in or at any other official forum or part of it, on any matter in which he has a direct pecuniary (financial) interest unless he has disclosed the nature of that interest to the Cabinet, the Assembly, the council, committee or such other forum or part of it.’’
Section 13 (2) of the same law states that ’’the separately owned assets of the spouse or minor children of a public leader shall be deemed to constitute an interest for disclosure by him.’’
And section 14 (1) requires that ’’where a public leader has an interest in a contract that is made, or is supposed to be made by the government, and has not made a sufficient declaration under subsection (4) in relation to the contract, the public leader shall as soon as practicable make a declaration of his interest in relation to the contract, specifying the nature and extent of his interest.’’
Section 14 (3) states that ’’the interest of the spouse or spouses, or of the children of a public leader in relation to the government contract, shall be deemed to be the interest of the public leader.’’
Under this law, a public leader has an interest in a government contract ’’if he will derive any material benefit, whether direct or indirect, from the contract; or if one party to the contract is a firm or body corporate and he has a material interest, whether direct or indirect, in the firm or body corporate.’’
It has been established that very few government functionaries were even aware of the real people behind Tanpower Resources when it took over control of the hitherto state-owned Kiwira Coal Mine, and that the company and its operations were from the outset shrouded in heavy secrecy.
Tanpower Resources is currently the majority shareholder in the renamed Kiwira Coal and Power Limited company which in March 2006 entered into a controversial, $271.8m (approx. 340bn/-) contract with the state-run Tanzania Electric Supply Company (TANESCO) for the supply of 200 megawatts of electricity to the national power grid.
It has also emerged that with Tanpower Resources at the helm, Kiwira Coal and Power Limited was also given control of a separate, additional area with lucrative coal deposits that was formerly owned by the government. Our sources say the Kabulo Coal Prospect, also in Mbeya Region where the Kiwira mine is located, was wrestled away from the control of the State Mining Corporation (STAMICO) - a government-run agency - and handed on a ’silver platter’ to Kiwira Coal and Power Ltd.
Previous studies commissioned by the government itself have shown that the Kabulo area, which lies within the East African Rift Valley system in south-western Tanzania, has proven reserves of up to 14 million tonnes of coal.
Before being sidelined, STAMICO had been actively promoting the Kabulo area with the intention of attracting a strategic investor to develop a coal-fired power station.
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