In 2012, a new conservation area was legally established through Decree no. 42/2012 of 12 December (the "Decree no. 42/2012") – the Environmental Protection Area of the Primeiras Islands in the District of Pebane and the Segundas Islands in the Districts of Angoche and Moma.

The Environmental Protection Area of the Primeiras e Segundas Islands ("EPAPSI") was established with the aim of preserving and protecting marine and coastal species and their habitats, as well as contributing to the restoration of ecological processes, the renewal of fisheries resources and the maintenance of biological diversity. EPAPSI is an area with an abundance of natural resources, thus it is attracting great interest from investors who are currently conducting prospecting activities in the area as a potential economic hub for future projects.

The areas covered by EPAPSI may overlap identified areas for economic activities such as mining, oil and logging for timber production. For this reason, it is important to assess to what extent the establishment of EPAPSI can affect the pre-existing rights of current projects, specifically mining and oil projects.

Firstly, it should be clarified that the exercise of commercial or economic activities in protected areas such as EPAPSI must be carried out under a special license issued under the land legislation.

Although Decree no. 42/2012 refers to the applicable legislation for the proper contextualization, it also requires that any exploitation of resources on EPAPSI be performed in compliance with the terms of a Management Plan previously approved by the Government.

The Management Plan is a document that defines the activities allowed and prohibited in EPAPSI, the management mechanisms, and also includes proposals for solutions regarding the safeguarding of pre existing rights in the area. It acts as guidelines for the exercise of commercial activity in a given protection area.

The Management Plan is approved by the Minister of Land, Environment and Rural Development, after consultation with the Minister of the Sea, Inland Waters and Fisheries, the Minister of Mineral Resources and Energy, the Minister of Culture and Tourism and other relevant entities. According to the EPAPSI's Management Plan, Decree no. 42/2012 provided that it should have been approved within 18 months of the date of enactment of Decree No. 42/2012. However, at the time of writing this article, the Management Plan is yet to be approved, but there is a draft dated March 2016. For that reason, in this review we will refer to the draft as the "Management Plan Proposal".

With a few exceptions, Law no. 5/2017 of 11 May (the "Conservation Law") prohibits the extraction of resources in conservation areas, exceptionally allowing solely the use of natural resources within the limits provided by Law and as per the approved Management Plan. For this purpose, the Management Plan Proposal requires the subdivision of the EPAPSI in order to clearly identify and delimit prohibited areas and those available for the exercise of commercial activity. The delimitation of the conservation area is an integral part of the approved Management Plan and its main objective is to reduce potential conflict over the use of resources in those areas and thus open up space for important activities.

According to the Management Plan Proposal, the subdivision plan must be in accordance with the categories of pre-established zones, namely: (i) Integral Natural Reserves (which may be marine or terrestrial ); (ii) Sanctuaries; (iii) Community conservation areas; (iv) Multiple Use Areas (Terrestrial) or Tourist Investment Zones.

Both the Management Plan Proposal and the Conservation Law establish that the Integral Natural Reserves are defined as areas with a high level of protection, where extraction of resources is not permitted under any circumstances.

Therefore, according to the Management Plan Proposal and the Conservation Law, we can conclude that if a mining or oil concession area coincides with an area recognized as an Integral Natural Reserve, the concessionaires will be prohibited from performing mining and oil activities within said area once the Management Plan is approved. This prohibition shall also apply to concessions issued prior to the approval of EPAPSI. That is, once the Management Plan is approved, no acquired rights over an Integral Natural Reserve will be considered.

However, if on the other hand, it is proven that the concession area coincides with another zone pre established by the subdivision, but different from the Integral Natural Reserve, the concessionaires may continue to carry out mining and oil activities within such an area and, shall for this purpose, obtain a Special License under the terms of the Management Plan Proposal, taking into account the Environmental Impact Study.

The concessionaires will have a period of three years after the approval of the Management Plan to change their environmental management plan in order to comply with the provisions of the approved Management Plan.

In the case of a total prohibition of activity in areas classified as Integral Natural Reserve, the concessionaires will not be able to invoke the legal stability in order to continue to carry out their activities, as per international principles of good environmental practice, which state that for the purpose of maintaining a balanced environment, acquired rights cannot be invoked against the safeguarding of the environment.

As a rule, the extractive industries should be regularly monitored in order to comply at all times with (new) environmental standards, thus fulfilling their public duty of conservation, protection of the environment and sustainable exploitation of natural resources.

It should be noted that international environmental practices are recognized and adopted in Mozambique in accordance with the principle of international cooperation resulting from the Conservation Law. This principle establishes that the State should promote cooperation with other countries and international organizations for the sharing of good practice in the various fields of conservation areas.

Therefore, in spite of the EPAPSI Management Plan Proposal not presenting any solutions regarding the safeguarding of the Concessionaires' rights, nor regarding compensation mechanisms for the prohibition of the exercise of their rights, in principle the current international practice will be applied, and concessionaires will not be protected by the legal stability clause normally found in concession contracts.

Notwithstanding the foregoing, only the approved Management Plan will dictate the final position on safeguarding the rights acquired in EPAPSI.

 

Originally published in the SAL & Caldeira Advogados LDA client newsletter, No 30. It is reproduced with permission from SAL & Caldeira.

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