FACULTY OF LAW

CARBON TAXES: AN ASSESSMENT OF THE INFLUENCE OF MINING INDUSTRY ON

THE ENVIRONMENT IN ZAMBIA.

BY

O’BRIEN TEMBO

025-754

A DISSERTATION SUBMITTED TO THE FACULTY OF LAW OF THE CAVENDISH

UNIVERSITY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD
OF THE DEGREE OF BACHELORS OF LAWS (LLB).

CUZ 2021

i
 COPYRIGHT DECLARATION

I, O’Brien Tembo, Student Number 025-754 do hereby declare that this dissertation presents my
own work and that to the best of my knowledge, no similar piece of work has been previously
submitted for the award at this University or another University. Where work of another scholar
has been used, it has been duly acknowledged.

All rights reserved. No part of this paper shall be reproduced or reprinted without the author’s
prior authorization.

…………………………………. ………………………………….

Student’s Signature Date

ii
 SUPERVISOR’S APPROVAL

I recommend that the obligatory essay under my supervision

By

O’BRIEN TEMBO

(025-754)

Entitled:

CARBON TAXES: AN ASSESSMENT OF THE INFLUENCE OF MINING INDUSTRY ON

THE ENVIRONMENT IN ZAMBIA.

Be accepted for examination. I have checked it carefully and I am satisfied that it fulfils the

requirement pertaining to the format as laid down in the regulations governing obligatory essays.

………………………………………. ………………………..

Mr. Sebastiãno Pinoté- SUPERVISOR DATE

iii
 DEDICATION

I dedicate this paper to my late Parents – Jeffrey Tembo and Audrey Njamba. Thank you for
your guidance through life. I cannot exchange your advice for anything. You make life worth-
living.

iv
 ACKNOWLEDGEMENTS

My utmost thanks go to the Almighty God and The Wonderful Counselor for giving me the

opportunity to be part of the learned fraternity. I am deeply grateful to my family for supporting

me and enduring the hours I was away pursing this degree.

I am greatly indebted to my supervisor Mr. Sebastiãno Pinoté for his thoughtful contribution

insight to the research. Your guidance has truly been invaluable through the whole process.

v
 ABSTRACT

Mining has been the backbone of the Zambian economy since pre-independence times. This is

because Zambia has vast mineral deposits, the most mined being copper. Minerals are non-

renewable resources and more often than not, with their extraction come environmental

degradation owing mostly to the waste that is generated during and after the mining process.

Taxation is a way of generating revenue by Central government through the Zambia Revenue

Authority to spend on pubic goods and services. Environmental taxes, though uncommon in

Zambia, are one way in which the environment in Zambia especially in areas in which mines

operate can benefit. In establishing the problems caused by the adverse effects of mining on the

environment in Zambia, the current study seeks to answer questions such as whether there is

need to broaden the carbon tax base in Zambia. It examines environmental, mining and tax

legislation. The study further clearly shows the legislation and measure put in place to water

down the adverse effects of mining on the environment are insufficient as far as the goal is

concerned. Also, the research will lay down the need for carbon taxes to be extended to the

mining sector. Finally, the research will give the recommendations based on its findings with

regards to the extension of carbon taxes to the mining sector as well as point out what the

environmental and environmental tax legislation should encompass in order to adequately

address the environmental degradation caused by mining activity in Zambia.

vi
 TABLE OF STATUTES

1. The Constitution of Zambia (Amendment Act no.2 of 2016)

2. The Customs and Excise Duty (Amendment Act No.18 of 2015)

3. The Environmental Management Act No. 12 of 2011

4. The Environmental Protection and pollution Control Act Cap 204 of the Laws of Zambia

(repealed)

5. The Mines and Minerals Development Act No. 11 of 2015

vii
 TABLE OF CASES

1. James Nyasulu and 2000 others v Konkola Copper mines Ltd, Environmental Council of

Zambia and Chingola Municipal Council 2007/HP/1286

2. Konkola Copper Mines v James Nyasulu and 2000 Others Appeal No.1 2012.

3. Rylands v Fletcher 1868 UKHL 1

viii
 TABLE OF ACRONYMS

DOM DIRECTOR OF MINES

EIA ENVIRONMENTAL IMPACT ASSESSMENT

EMA ENVIRONMENTAL MANAGEMENT ACT

EPPCA ENVIRONMENTAL PROTECTION AND POLLUTION CONTROL ACT

GHGs GREEN HOUSE GASES

KCM KONKOLA COPPER MINES

MCM MOPANI COPPER MINES

MDGs MILLENIUM DEVELOPMENT GOALS

UNFPCC UNITED NATIONS FRAMEWORK CONVENTION on

CLIMATE CHANGE

UN UNITED NATIONS

ZEMA ZAMBIA ENVIRONMENTAL MANAGEMENT AGENCY

ix
 TABLE OF CONTENTS

Copyright Declaration ………………………………………………………………... ii

Dedication ……………………………………………………………………………. iv

Acknowledgement …………………………………………………………………… v

Abstract ……………………………………………………………………………… vi

Table of Statutes …………………………………………………………………….. vii

Table of Cases ………………………………………………………………………... viii

Acronym ……………………………………………………………………………… ix

CHAPTER ONE: GENERAL INTRODUCTION

1.1 Introduction ……………………………………………………………………… 1

1.2 Research Background …………………………………………………………… 1

1.3 Statement of the Problem ………………………………………………………... 3

1.4 Research Objectives ……………………………………………………………… 3

1.5 Research Objectives ……………………………………………………………… 4

1.6 Significance of the Study ………………………………………………………… 4

1.7 Methodology ……………………………………………………………………… 4

1.8 Outline of the Chapters …………………………………………………………… 5

1.9 Conclusion ………………………………………………………………………… 5

x
CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction ……………………………………………………………………... 6

2.2 Environmental Protection & Pollution Control Act (EPPCA) Repealed ………... 6

2.3 Constitution of Zambia (Amendment Act No.2 of 2016) ……………………… 7

2.4 Environment Management Act ………………………………………………… 9

2.5 Mines and Mineral Development Act …………………………………………... 10

2.6 Customs and Excise Duty Act …………………………………………………... 12

2.7 Literature Review ………………………………………………………………... 16

2.8 Conclusion ……………………………………………………………………… 19

CHAPTER THREE: RESEARCH METHODOLOGY AND DESIGN

3.1 Introduction ………………………………………………………………… 21

3.2 Research Methodology ……………………………………………………... 21

3.3 Research Strategy …………………………………………………………... 22

3.4 Research Framework ………………………………………………………... 23

3.5 Sampling Techniques ……………………………………………………… 23

3.5.1 Purposive Sampling ……………………………………………………. 23

3.5.2 Snow Balling …………………………………………………………… 24

3.6 Data Collection Instruments ………………………………………………... 24

3.7 Reliability and validity ……………………………………………………… 26

xi
 3.8 Data analysis ………………………………………………………………... 27

3.9 Ethical consideration ………………………………………………………. 28

3.10 Limitations of the study ……………………………………………………

29

3.11 Conclusion …………………………………………………………………

29

CHAPTER FOUR: DATA ANALYSIS AND RESULTS

4.1 Introduction ……………………………………………………………………. 30

4.2 Carbon Tax ……………………………………………………………………... 30

4.3 Advantages of Carbon Tax ……………………………………………………... 32

4.4 Pitfalls of Carbon Tax …………………………………………………………... 33

4.5 Polluters pays Principle …………………………………………………………. 35

4.6 Advantages of Polluter Pays Principle …………………………………………... 36

4.7 Disadvantages of Polluter Pays Principle ………………………………………... 36

4.8 Carbon Taxes and Polluter Pays Principle Compound …………………………... 38

4.9 Extending Carbon Tax Law to the Mining Industry in Zambia …………………. 42

4.9.1 Countries in Sub-Saharan Africa that have enacted Carbon Tax Law ………… 43

4.9.2 Advantages of having Carbon Tax Law on Mines ……………………………... 45

4.10 Research Findings ………………………………………………………………. 45

4.11 Conclusion ……………………………………………………………………… 47

CHAPTER FIVE: CONCLUSION AND RECOMMENDATION

xii
5.1 Introduction …………………………………………………………………… 48

5.2 General Conclusion …………………………………………………………… 48

5.3 Recommendation ……………………………………………………………… 48

5.4 Conclusion ……………………………………………………………………... 49

xiii
 CHAPTER ONE

GENERAL INTRODUCTION
1.1 INTRODUCTION

Zambia is known among other things for being home to some of the world’s biggest and most

productive copper mines. In 2016, it was reported that mining accounted for about 70% of

Zambia’s export portfolio and other minerals present are gemstones (emerald), coal, and the

recently discovered uranium.1 While these activities are good news for the economy, they

have adverse effects on the environment owing mainly but not exclusively to the fact that

Mines emit vast amounts of greenhouse gases into the atmosphere, polluting the air, and

contributing to the rise in global temperatures. The aim of this research is to examine as well

as discuss among other things Environmental protection legislation in relation to mining

pollution. In doing so, it will discuss the history of mining activity in Zambia, the impact of

mining activity on the environment. Furthermore, it will examine environmental, mining and

tax legislation and their provisions pertaining to the environment Vis a Vis carbon taxes.

1.2 RESEARCH BACKGROUND

Mining has been going on in Zambia since before the country gained independence in

October 1964.2 Until the mid-1960’s, all of Zambia’s coal requirements were met by

importing coal from southern Rhodesia.3 After the unilateral declaration of independence by

southern Rhodesia and subsequent U.N Sanctions, Zambia began to develop coal mines

within its own borders. By 1972, domestic production of coal had grown to about 936,500

tons and imports fallen to 10,000 tons.

1
https://www.worldbank.org/en/news/feature/2016/07/18/how-can-zambia-benefit-more-from-mining
accessed on 7th November 2017
2
The American University of foreign areas studies, Zambia: A country study. 3rd ed. 1979
3
The American University of foreign areas studies, Zambia: A country study. 3rd ed. 1979

1
That many authors and scholars on the subject of taxation, among them Mohammed

Mulenga4 put forward that that the Zambian taxation system has become more elaborate,

forceful and regular5 does not presuppose that the area of taxation is fully developed. On the

contrary, there are areas of this law that require serious attention and development. One such

area is the relationship between economic activity such as mining, how it affects the

environment and whether or not environmental taxes such as carbon tax should be imposed

on mining firms to address the GHG emissions that are a result of their mining operations into

the atmosphere.

Taxation is the cheapest way of raising revenue for the government to provide goods and

services. However, taxes can serve purposes other than this, in this case, averting and

regulating the effects of pollutants from the mining industry on the environment. There has

very little development in the law pertaining to environmental protection that directly

addresses imposition of taxes on the emissions released into the environment through mining

activity and manufacturing activity in the past. In 2011, The Zambia Environmental

Management Agency (Hereinafter referred to as ZEMA) was established by The

Environmental Act6. The agency is mandated with the task of “doing all things necessary to

protect the environment and control pollution, so as to provide for the health and welfare of

persons, animals, plants and the environment.”7 Four years later the Customs and Excise

Amendment Act8 was enacted. Section 55 of the Statute provides for Carbon Taxation but the

provision only covers motor vehicles. While the Environmental Management Act speaks of

penalties and fines, and there is no mention of environmental taxes. Taxes have certain

characteristics that penalties do not possess such as equality, certainty, convenience and

4
Mohammed Mulenga, Taxation in Zambia,(Lusaka: Multimedia Zambia) pp 2.
5
Ibid .Mohammed Mulenga, Taxation in Zambia,(Lusaka: Multimedia Zambia) pp 2.
6
No. 12 of 2011
7
rd
http://www.zema.org.zm/index.php/about-us/ accessed on 3 November 2018
8
No.18 of 2015

2
economy.9 Fines and penalties on the other hand are only triggered once the set rules are

abrogated or in the event that certain requirements set out by the responsible body are not

met. Further, both the Environmental Management Act 10 and the Customs and Excise Duty

(Amendment Act)11 statutes have no express provision with regard to taxing the mines on the

toxic fumes they let into the atmosphere.

1.3 STATEMENT OF THE PROBLEM

Mining in Zambia has and continues to plays a key role in the economy. The Ministry of

Commerce Trade and Industry puts forward that the traditional focus of the Zambian

economy has been mining.129 However the mining industry is also on the list of the biggest air

polluters in Zambia, second only to the toxic fumes emitted by motor vehicles. Taxation apart

from being a tool for raising revenue to enable the government to provide public goods and

services can be used to regulate the amount of toxic substances that are let into the

environment. Notwithstanding the above, and despite the existence of institutions such as the

Zambia Environmental Management Agency and Statutes such as the Environmental

Management Act and other Tax legislation, there is want for statutory provision compelling

mines to pay environmental taxes (carbon tax in particular) on the greenhouse gases that are

emitted into the atmosphere.

1.4 RESEARCH OBJECTIVES

The importance of having carbon tax legislation extended to the mining sector.

Below a tabulation of the specific subsidiary objectives of this research are to;

9
https://economicsconcepts.com>publicrevenueandtaxation accessed on 15 November 2018
10
No. 12 of 2011
11
No. 18 of 2015
12
https://www.mcti.gov.zm accessed on 3 Dec 2018

3
a) To examine the legislative framework of environment, environmental tax as well as

mining legislation in Zambia.

b) To establish whether Carbon Tax is an essential for environmental protection and

sustainable development in Zambia

c) To compare and contrast polluter pays principle with environment tax (Carbon Tax)

in Zambia

1.5 RESEARCH QUESTIONS

The importance of having carbon tax legislation extended to the mining sector.

Below a tabulation of the specific subsidiary objectives of this research are to;

a) What is the legislative framework of environment, environmental tax as well as mining

legislation in Zambia?

b) How essential is carbon Tax for environmental protection and sustainable development in

Zambia?

c) How does polluter pay principle compare and contrast with environment tax (Carbon

Tax) in Zambia?

1.6 SIGNIFICANCE OF THE STUDY

Over the years, there has been remarkable growth in environmental awareness and the

dangers the extractive industry and its contribution to environmental degradation has raised

sparked interest both locally and internationally.13This research will highlight the problems

that the current polluter pays principle stance on mining pollution poses in light of sustainable

development. The research will further look at the benefits that extending carbon taxes to the

mining sector would have.

13
V.P Nanda, International Environmental Law & Policy. (New York:1995)

4
1.7 METHODOLOGY

This research will be anchored on qualitative principles. The methods that will be used will

be primarily desk research and will include primary data collection through textbooks,

interviews, local legislation, and secondary sources in the form of journal articles, research

papers, reports, dissertations and internet research on the subject matter.

1.8 OUTLINE OF CHAPTERS

The paper will be written according to the following layout. Chapter one provides a general

synopsis of the paper in speaking to the objectives, legal problem and outlines the roadmap of

the paper. Chapter two addresses the literature review in citing various scholars in their

scholarly work. Chapter three is the research methodology and design and so speaking to the

qualitative and quantitative methods. Chapter four will analyse the data and give the findings

and results. Chapter 5 will conclude and give recommendation of the research.

1.9 CONCLUSION

As mentioned earlier, environmental law and the law of taxation in Zambia have provisions

imposing a duty on the mines to pay taxes and fines respectively. However, the statutes do

not make provision for the carbon tax on mining firms. This lack of statutory provision has

seen mines expel toxic fumes into the atmosphere at the peril of the inhabitants of the land

and goes against the spirit of sustainable development.

5
 CHAPTER TWO

LITERATURE REVIEW
2.1 INTRODUCTION

The problems, implications and motivations of extending carbon taxes to the mining sector in

Zambia cannot be discussed in isolation, an examination on the various issues surrounding

the topic deserve attention. It follows from the foregoing, that this chapter will look at the

history and scope of environmental protection laws, current carbon tax legislation in Zambia.

Furthermore, the chapter will look at the legislative framework of environmental protection

as well as mining legislation provisions on environmental issues in Zambia.

2.2 THE ENVIRONMENTAL PROTECTION AND POLLUTION CONTROL ACT

(EPPCA)(Repealed)

Zambia’s first step toward developing a national policy for the environment was done

through the national conservation strategy (NCS) of 1985. The two main yields from the NCS

were a legislative review and comprehensive environmental education programme. The

legislative review resulted in the Natural Resources Act and drafting of the Environmental

Protection and Pollution Control Act (EPPCA). The Act established the Environmental

Council of Zambia to become a focal point for environmental affairs and to implement the

objectives of the EPPCA.14 Section 1 of the EPPCA describes the EPPCA as;

An Act to provide for the protection of the environment and the control of pollution; to

establish the Environmental Council and to prescribe the functions and powers of the

Council; and to provide for matters connected with or incidental to the foregoing.15

14
Bertha Osei Hwedie, Environmental Protection and Economic Development in Zambia. Journal of Social
Development in Africa. Pp 67
15
CAP 204 of the Laws of Zambia (Repealed).

6
The Environmental Protection and Pollution Control Act was subsequently repealed and

replaced in 2011 by the Environmental Management Act 16 in the year 2011 to cater to the

growing needs for environmental protection.

The EPPCA had dismally failed to adequately address the issues which where its objectives.

This was due to the fact pollution was rife, and there were inadequate measures in place to

protect the environment and address issues of environmental degradation and pollution.

The EPPCA had provisions on controlling pollution and setting emission standards in line

with international legislation such as the Kyoto Protocol and the United Nations Framework

Convention on Climate Change. Section 38 of the EPPCA17 provided that;

When establishing or prescribing emission standards the Council shall consider

Emission standards

(a) the rate of emission, concentration and nature of the pollutants emitted; and (b)

the best practicable technology available in controlling pollutants during the

emission process.

As earlier mentioned, in 2011 the EPPCA was repealed and replaced by a new Act which is

the current legislation on environmental matters. This Act is The Environmental Management

Act.18

2.3 THE CONSTITUTION OF ZAMBIA (Amendment Act No.2 of 2016)

As the mother of laws in Zambia, the Constitution of the Republic of Zambia 19 makes

provision for matters incidental to the environment. Article 255 of the Constitution20 provides

that

16
Section 135, Environmental Management Act no 12 of 2011.
17
CAP 204 of the Laws of Zambia (Repealed)
18
No. 12 of 2011
19
(Amendment) Act No. 2 of 2016
20
(Amendment) Act No. 2 of 2016

7
 a person has a duty to co-operate with State organs, State institutions and other

persons to (a) maintain a clean, safe and healthy environment; (b) ensure

ecologically sustainable development and use of natural resources; (c) respect,

protect and safeguard the environment; and (d) prevent or discontinue an act which

is harmful to the environment.

The above provisions of the constitution show that the state of the environment is of great

importance. It clearly states that persons (At law, a person can either be an individual Legal

person refers to a human or non-human entity that is treated as a person for

limited legal purposes. Typically, legal persons can sue and be sued, own property, and

enter into contracts.21) whether natural or juristic have the duty to work hand in hand or in

conjunction with organs of the state and other persons natural or juristic to ensure that a clean

and safe environment is maintained, ensure sustainable development and usage of natural

resources, have regard for as well protect diligently and to prevent and discontinue acts that

may be or are harmful to the environment. Further, Article 255 (b) of the Constitution of

Zambia22 states that;

“the person responsible for polluting or degrading the environment is

responsible for paying for the damage done to the environment.”

The aforementioned provision provides the basis for Zambia’s environmental policy which is

known as Polluter Pays Principle (PPP). The provision clearly provides that the person,

natural or juristic who pollutes the environment must be held liable. Furthermore, being the

mother of all laws, every other law spring from the constitution and must be consistent with
21

https://www.law.cornell.edu/wex/legal_person

22
Amendment Act no. 2 of 2016

8
its provisions. This perhaps, explains why the provisions of the legislation that will be

discussed herein under are structured in the way that they are.

2.4 THE ENVIRONMENTAL MANAGEMENT ACT

The Environmental Management Act23 (EMA) came into force in 2011. It replaced its

predecessor the Environmental Protection and Pollution Control Act (EPPCA). The

government institutions such as the Environmental Council of Zambia and the Zambia

Environmental Management Agency work hand in hand and are given guidance by the EMA.

The Environmental Council of Zambia’s mission statement is as follows;

To regulate and coordinate environmental management, promote awareness, and ensure

environmental protection through enforcement of regulations and the prevention and control

of pollution in support of sustainable development-so as to provide for the health and

welfare of persons, animals, plants and the environment of Zambia.24

Furthermore, the core functions of the Environmental council of Zambia are to:

Draw up and enforce regulations related to water, air and noise pollution, pesticides and

toxic substances, waste management and natural resources management, advise the

Government on the formulation of policies related to good management of natural resources

and environment and last but not least advise on all matters relating to Environment

conservation, protection and pollution control, including necessary policies, research

investigations and training.25

The Ministry of Water Development, Sanitation and Environmental Protection as the arm of

23
No.12 of 2011
24
http://zm.chm-cbd.net/implementation/competent-institutions-and-national-authorities/statutory-bodies-under-
mtenr/ecz
25
http://zm.chm-cbd.net/implementation/competent-institutions-and-national-authorities/statutory-bodies-under-
mtenr/ecz

9
central government that formulates policy through institutions such as the Zambia

Environmental management Agency.

In terms of incentives, the ZDA Act provides for a wide range of incentives for companies

holding an investment license. These range from duty-free imports of most capital equipment

for the mining and agriculture sectors to a development allowance of 10% of the cost of

capital expenditure on the growing of coffee, banana plants, citrus fruits or similar plants.26

2.5 THE MINES AND MINERALS DEVELOPMENT ACT

Zambia is a country whose main economic activity is mining. Naturally this has huge impact

on the environment. As a result, mining legislation was enacted to provide for issues relating

to mining activity and ranging as far as environmental protection.

In Zambia, for one to mine legally they have to be issued a mining licence or mining

licences. The mining licence gives the individual or firm what are known as mining rights.

The two types of mining rights are granted through the exploration licence and the mining

licence as enshrined in the Mines and Minerals Development Act. (MMDA)27

The Director of Mines (DOM) and his or her counterpart the Director of Mines Safety

(DOMS) are given power to suspend the licence granted to a licence holder as well as the

power to shut down a mine in the event that uncontrollable pollution as a result of the mining

operation occurs.28

In addition, where the holder of a mining licence is using wasteful mining practices, the

DOM or the DOMS inter alia, shall order the holder to cease the wasteful mining practices as
26
NEPAD-OECD African Investment Initiative, Highlights of the policy framework for investing in Zambia. Pp
12
27
Section 12, Mines and Minerals Development Act No. 11 of 2015
28
Section 36, Mines and Minerals Development Act no. 11 of 2015

10
well as remedy any damage caused.29 The DOM or the DOMS have the power to also, to

suspend the mining operations until the holder takes remedial measures.30

The MMDA establishes the Environmental Protection Fund (EPF) under section 86. The

Environmental Management Act31 on the other hand establishes the Environment Fund.

Section 95 (2) of the EMA provides that;

The Fund shall consist of (a) such moneys as Parliament may appropriate for the purpose

of the Fund; (b) voluntary contributions to the Fund from any person or organisation; (c)

such sums as may be levied from, or donated by, a person, industry or developer conducting

an activity which has, or is likely to have, an adverse effect on the environment; (d) any

grants mobilised from any source, within or outside Zambia, for the purpose of

environmental management and protection; (e) interest arising out of any investment of the

Fund; and (f) such other monies as may be prescribed.32

Section 95(3) goes on to say that the foregoing does not apply to industries, facilities and

activities covered by the Environmental Protection Fund established under the Mines and

Minerals Development Act, 2008, and the Petroleum (Exploration and Production) Act,

2008.33

As earlier stated, the MMDA34 establishes the Environmental Protection Fund. 35

The fund

consists of deposits of many contributed by entities carrying out mining activities by entities

29
Section 84, Mines and Minerals Development Act no. 11 of 2015
30
Section 84, Mines and Minerals Development Act no. 11 of 2015
31
No. 12 of 2011
32
Section 95(2), Environmental Management Act no.12 of 2011.
33
The mines and minerals development Act were repealed and replaced by the Mines and minerals development
Act No.11 of 2015. However, the Environmental protection fund is enshrined therein under section 86 of the
Mines and Minerals Development Act no.11 of 2015.
34
No.11 of 2015
35
Section 86. Mines and Minerals Development Act no 11 of 2015.

11
in the carrying out mining activities in order to assist such entities in the fulfilment of the

conditions they are required to satisfy as holder of mining licences.

The above provisions of the MMDA 36 highlight a number of salient issues to do with the

environment. Among them is the concern for the environment. This has been demonstrated

by the establishment of bodies such as the Environmental Protection Fund. 37 The issue

however is the effectiveness of these bodies. If say a carbon tax was extended to the mining

industry, the monies could be paid into the fund but administrated by the Zambia Revenue

Authority since they are mandated to collect and administer issues to do with taxation on

behalf of the Central Government.

2.6 THE CUSTOMS AND EXCISE DUTY ACT

The Zambia Revenue Authority as the body mandated to collect taxes on behalf of the

government is governed by a number of Laws. The legislative framework of taxation in

Zambia is provided by the Income Tax Act and the Customs and Excise Act of the Laws of

Zambia. The taxation of companies in Zambia is marked by multiple rates and preferential

treatment. There are tax incentives and different tax rates across different sectors resulting in

a low yield in terms of corporate taxes.38

Carbon tax was introduced in Zambia by the Customs and Excise Amendment Act 39. Section

55 of the Statute provides for Carbon Taxation but only provides for motor vehicles. While

the Environmental Management Act speaks of penalties and fines, taxation would better deal

with issues of pollution because of the aspects of equality, certainty, convenience and

36
No.11 of 2015
37
S. 86 Mines and Minerals Development Act
38
NEPAD-OECD African Investment Initiative, Highlights of the policy framework for investing in Zambia Pp
12.

39
No.18 of 2015

12
economy40 owing to the fact that fines and penalties cannot be charged as consistently as

taxes. Further, both these statutes have no express provision with regard to taxing the mines

on the toxic fumes they let into the atmosphere.

However, it is not sufficient that motor vehicle owners be the only ones to bear the tax

burden for carbon emissions released into the atmosphere but that the statute governing

Carbon Tax also includes mines and other industries that emit vast amounts of carbon get the

piece of the tax cake that is due to them. This dissertation therefore will highlight, among

other related things, the need to include the mining and manufacturing industries to the

carbon tax base in Zambia.

The purpose of carbon Taxes, so called even though they cover a range of greenhouse gases,

is to internalize externalities associated with anthropogenic climate change. 41 Zambia is still

struggling to capture tangible benefits from this mineral wealth endowment for the wider

population. Every change of government has seen an adjustment for better or worse, with the

claim of serving the countries best interests to try and capture benefits for the local economy

from copper, the Zambian government has had many changes the mining taxation policy.

The government did not see this as an opportunity to be a leader in effecting a positive trend

for regional mining taxation. Activities that result in Carbon emissions, for purposes of this

essay, mining, have far reaching effects on the environment and its inhabitants, and the cost

of these emissions is borne by future generations.42 Taxes compel individuals to consider the

full set of consequences from these emissions.43

40
th

https://economicsconcepts.com>publicrevenueandtaxation accessed on 15 November 2017

41
David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Harvard Environmental Law. 2009
Pp1
42
Ibid David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Havard Environmental Law.PP1
43
Ibid. David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Havard Environmental Law.PP1

13
Among the concerns raised on the international front regarding carbon taxes, is the backlash

that the introduction of such a tax on mining would have on the international trade. 44 Is this

perhaps why from independence to date there has been no legislation pertaining to the

taxation of mining companies as regards carbon tax? Can it then be inferred that the clear

need for these taxes but the want thereof is a deliberate oversight in the form of government

intervention?

The issue of maximizing tax revenue in effect addresses the questions: What should the

magnitude of the tax mining imposed on industry be? How high can the total fiscal take be

before it becomes a serious disincentive for industry to invest in the country? 45Taxes can

ensure that government get a good share of the mineral wealth for public goods and services46

Environmental challenges are increasing the pressure on governments to find ways to reduce

environmental damage while minimising harm to economic growth. Governments have a

range of tools at their disposal, including regulations, information programmes, innovation

policies, environmental subsidies and environmental taxes. Taxes in particular are a key part

of this toolkit.

Environmental taxes have many important advantages, such as environmental effectiveness,

economic efficiency, the ability to raise public revenue, and transparency. Also,

environmental taxes have been successfully used to address a wide range of issues including

waste disposal, water pollution and air emissions.

Taxes can directly address the failure of markets to take environmental impacts into account

by incorporating these impacts into prices. Environmental pricing through taxation leaves

consumers and businesses the flexibility to determine how best to reduce their environmental

44
Ibid David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Havard Environmental Law.PP1
45
Zambia Chamber of Mines .Taxation and Mining Investment in Zambia
46
International Council on Mining and Society. Enhancing mining’s contribution to the Zambian Economy and
Society. P51

14
“footprint”. This enables lowest-cost solutions, provides an incentive for innovation and

minimises the need for government to attempt to “pick winners”.

The tax rate should be commensurate with the environmental damage. Environmental taxes

may need to be combined with other policy instruments to address certain issues.47

Taxation in itself isn’t bad, in fact it’s a necessary evil but the rates, the targets are what need

serious restructuring. The status quo will remain as is until we truly become alive to the fact

that speeches won’t change anything or much unless or until something is actually done about

it.

The mining industry is a sore topic for many Zambians; a source of pride and pain depending

on where you seat on the fence. Copper is the nation’s main export and the mines are the

largest formal employer after the civil service. Mining activities have contributed to the

growth of mining towns on the Copperbelt, Solwezi being the most recent development.

However, Zambia is still struggling to capture tangible benefits from this mineral wealth

endowment for the wider population

Every change of government has seen an adjustment for better or worse, with the claim of

serving the countries best interests. To try and capture benefits for the local economy from

copper, the Zambian government has had many changes the mining taxation policy.

The government did not see this as an opportunity to be a leader in effecting a positive trend

for regional mining taxation.

2.7 LITERATURE REVIEW

Taxation and the environment are critical issues and play key roles in the development of any

country. In countries like Zambia where mining activity takes centre stage on the economic

landscape, the need for the integration of the aforementioned cannot be overemphasised. A

47
OECD Environmental Taxation (A Guide for Policy Makers)

15
number of authors have sat out to write to illustrate the importance of environmental

protection as well as taxation as a tool that can be used to address environmental concerns in

relation to mining. The literature on taxation as well as environmental law will be presented

with specific reference carbon taxes as well as the adverse effects of mining on the

environment.

Professor Muna Ndulo48 has discussed mining legislation as well as mineral development in

Zambia. In discussing this he has pointed out the various laws surrounding these activities but

he also noted that in matters pertaining to environmental pollution among other things, the

process of discussing measures of punishment when a mining firm is in breach of the said

provisions, the mining company will most likely be excused if only it can prove that it was

not responsible for the breach.49 This is reflective of the current stance on environmental

pollution better known as polluter pays principle as enshrined in the republican constitution.

Conversely, environmental tax proponents argue that with environmental taxes, there would

be no need to wait until the mining firm is found guilty of polluting, but they would know

from the onset that they have the obligation to pay and that this payment has to be made

consistently, and not only in the event that an event whose effect is to breach the provisions

of the law occurs.

Professor Muna Ndulo50 further puts forward that a legal framework is required for most

human endeavours, whether it be to apply justice or to establish codes of public conduct or to

provide facilities for the conduct of social or economic life by regulating and thus enabling

such activities to be carried out in an orderly manner. 51Mining activity today brings to the

surface novel and intricate questions that are based upon developments in technology,
48
Muna Ndulo, “Mining Legislation and Mineral Development in Zambia”, Cornell International Law Journal 1,
19 (1986) Pp 32
49
Muna Ndulo, “Mining Legislation and Mineral Development in Zambia”, Cornell International Law Journal 1,
19 (1986) Pp 32
50
Muna Ndulo, Legal and Regulatory Frameworks for resource exploration and extraction- Global experience
51
Muna Ndulo, Legal and Regulatory Frameworks for resource exploration and extraction- Global experience.
Pp 2.

16
multiple use of mineral bearing lands, multiple methods of taxation inter alia. 52 The key aim

of any country’s mining legislation is to encourage the orderly exploitation and development

of its mineral resources so as to maximize economic benefit to the country. 53To attain this

objective the laws must create a regime which is conducive to the mining industry, thereby

attracting investment and innovation and at the same time ensures that the host country is not

left in shambles or in a deplorable state but benefits from the mining activity.54

David Weisbach et al55 puts forward that the purpose of carbon Taxes, so called even though

they cover a range of Greenhouse Gases (GHGs), is to internalize externalities associated

with anthropogenic climate change.56 Activities that result in Carbon emissions, for example

mining, have far reaching effects on the environment and its inhabitants, and the cost of these

emissions is borne by future generations.57 Carbon taxes compel individuals to consider the

full set of consequences from these emissions. 58 The authors go on to say, in contrast, among

the concerns raised on the international front regarding carbon taxes, is the backlash that the

introduction of such a tax on mining would have on the international trade. 59 There is fear

among stakeholders especially in developing countries that once this tax is introduced, it

negatively affects Foreign Direct Investment (FDI).

Yoshinori Ikenaka et al60 put forward that that mining is the biggest industry in the Zambia

boasting of vast reserves of copper, lead, zinc among others. However they argue that with

52
Muna Ndulo, Legal and Regulatory Frameworks for resource exploration and extraction- Global experience.
Pp 2.
53
Muna Ndulo, Legal and Regulatory Frameworks for resource exploration and extraction- Global experience
Pp2.
54
Muna Ndulo, Legal and Regulatory Frameworks for resource exploration and extraction- Global experience
Pp2.
55
David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Harvard Environmental Law. 2009
56
David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Harvard Environmental Law. 2009
Pp1
57
Ibid David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Havard Environmental Law.PP1
58
Ibid. David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Havard Environmental Law.PP1
59
Ibid David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Havard Environmental Law.PP1
60
Yoshinori Ikenaka et al, “Heavy metal contamination of soil and sediment in Zambia”, African Journal For
Science and Technology Volume 4, No 11 (2010) http://www.academicjournals.org/AJES

17
the extraction of these mineral comes environmental pollution. As a result of the pollution of

the environment, human beings and animals alike are negatively affected.

It follows from the foregoing that in a country whose mineral reserves are vast and whose

economic portfolio is largely mining, measures must be taken to ensure that sustainable

development is attained and that the mining activity benefits not only the mining firms but

that the damage done to the environment is contained. What this entails legally speaking is

that solid environmental policies must be put in place to protect the interest of those most

affected by the pollution.

Dr Stephen Simukanga61states that when it comes to environmental pollution, mining is

among the major sources of air pollution in Zambia. The effects of mining pollution can be

felt by those that live in mining areas. The author further contends that the effects of

Greenhouse Gases (GHGs) such as sulphur dioxide are more pronounced in Kankoyo

Township of Mufulira in the Copperbelt province. Vegetation in this area is scarce as it is

almost impossible for it to thrive due to the levels of pollution. Respiratory diseases such as

bronchitis are rampant and the walls of the houses are stained and paint peels off.

According to Kundhavi Kadiresan a representative of the World Bank group , “Zambia is

blessed with abundant deposits of copper and other minerals. Increased copper production has

contributed much to Zambia’s high economic growth rates. Recent geological analysis

suggests that the deposits of copper in Zambia are larger than previously estimated. A new

wave of investment in mining is needed to realise the potential of this wealth.” The

sentiments by Mr Kadiresan suggest the possibility of more mineral exploration, leading to

more mines and more greenhouse gas emissions. This being said, the need to introduce

carbon tax on mines to ensure they are taxed for the pollution cannot be overemphasised.

61
Stephen Simukanga, “Status of air pollution”

18
Ronald Coase, in his renowned Coase theorem puts forward that the most efficient solution to

resolving interdependent uses of the environment, including pollution cases, is a bargaining

process among relevant property holders.62

To state expressly that Zambian legislation turns a completely blind eye to issues of

environmental taxation would be grossly inaccurate, for there are statutory provisions in place

whose intention is clearly to keep environmental damage at a minimum. However, whether or

not the intended objective or objectives have been achieved is another matter altogether. This

paper will therefore delve into the details of how environmental taxes, Carbon Tax in

particular, can be used to deal with the damage caused by mining on the environment as a

tool to avert as well as address the negative effects of mining pollution on the environment in

Zambia.

2.8 CONCLUSION

This chapter establishes that in theory and to a large extent, Zambia has shown its

unwavering commitment to environmental protection and sustainable development goals by

putting in place regulations and environmental protection laws that cover key sectors of the

economy of the country as well as various forms of environmental degradation. This

notwithstanding, the chapter establishes that in practice, the general Zambian law on

environmental taxes is inadequate as our economic development goals are put prioritised at

the expense of environmental protection and sustainable development goals.

Furthermore, the chapter highlights the weaknesses and inadequacies of existent

environmental protection and environmental tax policies vis a vis the adverse effects of

mining on the environment in Zambia.

62
https://www.google.com accessed on 14 March 2018

19
 CHAPTER THREE

RESEARCH METHODOLOGY AND DESIGN

3.1 INTRODUCTION

20
This paper will then discuss the research methodology and approach, research design, sources

of data, sampling frame, sample size, sampling techniques, data collection techniques,

reliability and validity, ethical considerations, and limitation of the study.

3.2 RESEARCH METHODOLOGY

This research employed a qualitative-analytical approach of semi- structured interviews to

address the research questions. Qualitative research methodology relies mostly on descriptive

data. This approach is mostly interpretive rather than scientific. Qualitative researchers

pursue to understand, of human action63. The qualitative methodology approach was preferred

because it allows one to investigate the ‘how and why’ questions in decision-making which

allows for in-depth analysis. Though this approach may be limited by subjectivity, it is also

theoretically generalizable.

Regarding the generation of knowledge, qualitative research is characterised as dynamic and

developmental, and is devoid of the use of prescribed structured instruments 64. It involves the

systematic collection and analysis of subjective narrative detain an organised and intuitive

fashion to identify the characteristics and the significance of human experience 65

3.3 RESEARCH STRATEGY

The present study is an in-depth investigation of the laws and policy. The research strategy to

be employed is a case study research. Generally, information in a case study research is

sought from different sources and through the use of different types of data such as survey,

interviews, observations, and analysis of documentary evidence. Data will mostly be

qualitative with a mix of quantitative.

63
Schwandt (2001),
64
Holloway 2005 :4-6
65
Holloway 2005:47-51

21
Burns and Grove66define research design as “a blueprint for conducting a study with

maximum control over factors that may interfere with the validity of the findings”. A

research design has been described as “a plan that describes how, when and where data are to

be collected and analysed”67.Furthermore this study, can suitably be referred to as a

descriptive study. Descriptive research is devoted to the gathering of information about

prevailing conditions or situations for the purpose of description and interpretation 68.

Therefore, this form of research design is not merely a massing and tabulating facts but

includes appropriate analyses, comparisons, interpretation, identification of trends and

relationships.

Case study approach is more specific descriptive, explanatory. The purpose of the case study

research was to establish a framework for discussion through the investigation of existing

legislation, prior academic research, previous studies and through conducting in-depth

interviews with respondents to draw appropriate conclusions. Yin defined case study

research “as an empirical inquiry that investigates a contemporary phenomenon within its

real-life context: when the boundaries between phenomenon and context are not clearly

evident; and in which multiple sources of evidence are used.”

3.4 RESEARCH FRAMEWORK

A sampling frame is any material or device used to obtain observation all access to the finite

population of concern.69A population is a comprehensive set of all items and possible

observations of the type that is being investigated, such as among others, institutions,

individuals, households or items from which a sample is obtained 70. A sample is the actual

66
Burns, SN & Grove, SK. Understanding nursing research. 3rd edition. Philadelphia: Saunders, 2003, at p.195.
67
ParahooK. Nursing research: principles, process and issues. Basingstoke: Macmillan; 1997 at p.145
68
Salaria, N. Meaning of the term-descriptive survey research method. International Journal of Transformations in Business Management
htp://www.ijtbm.com/ (IJTBM) 2012, Vol.No.1, IssueNo.6, Apr-Ju199n accessed on 13/05/20.
69
S.J. Taylor and R. Bogdan (1998). Introduction to qualitative research methods: A guide book and resources. 3 rdEd. New York: John
Wiley & Sons.
70
N. K. Denzin and Y. S. Lincoln. Collecting and interpreting qualitative materials. Thousand Oak: sage Publication, 1998.

22
cluster or group selected used for a study using any appropriate sampling techniques and, it

must be of Sufficient size to allow the research have confidence in the inference, while the

sampling technique is the process of drawing a sample from the population. In order to carry

out a critical evaluation of Zambia’s mining laws and policy the Ministry of Mines was

identified as a suitable body to provide the population to which this research is relevant.

3.5 SAMPLING TECHNIQUE

A sampling technique is the process of drawing a sample from the population 71. The two

sampling techniques were applied to the members of the population in this study.

3.5.1 PURPOSIVE SAMPLING

In purposive sampling (sometimes called judgmental sampling), the researcher Specifies the

characteristics of a population of interest and then tries to locate the individuals who have

those characteristics72. As soon as the group is located, the researcher asks those who meet

the inclusion criteria to participate in the research study. In brief, purposive sampling is a

non-random sampling technique in which the researcher solicits persons with specific

characteristics to participate in a research study.

In this study, the characteristics of the population of interest comprises of people with a good

understanding of the legal framework of the extractive sector since the study if focused on

Zambia’s fiscal law – Custom and Excise, Environmental Laws. Members of a sample who

were selected from both the formal and informal sector. The sample comprised of

purposively selected representatives in the relevant interest groups.

71
Johnson, B & Christensen, L. Educational Research: Quantitative, Qualitative and Mixed Approaches.
SAGE, 2010 at pp. 231.
72
S.K. Verme and M. A. Wani (2001). Legal Research and Methodology. Ed. Indian Law Institute.

23
3.5.2 SNOW BALLING

Snow balling is a nonprobability sampling technique where existing study subjects recruit

future subjects from among their acquaintances with knowledge of the subject area. Hence

the sample group is thought to grow like a rolling snowball. McNealy 73notes that it is critical

in those uncommon scenarios where identification of crucial candidates can be specifically

done by somebody with specific knowledge that a particular individual possess the requisite

knowledge required, association or qualities to be incorporated and/ or used in the study. This

form of networking helped the researcher to gather reliable data

3.6 DATA COLLECTION INSTRUMENTS

The data collection methods used to carry out the study are semi-structured interviews for

gathering primary data and desktop data analysis. In-depth semi-structured interviews were

conducted with government officials, academic experts and policy makers in the mining and

mineral resources field. The research used semi structured interviews, which are important

tools for acquiring factual data and valuable information from the context of participants’

experiences, and to also permit respondents to express their knowledge and insights in their

own frameworks. Structured interviews and observations for instance were not chosen as they

are limited in terms of getting additional information. Observations merely provide

researchers with the meaning, but do not explain why the situation or the economic status is

like that for instance. Consequently, observations frequently paint a picture that is based on

subjectivity. While quantitative methodology is widely accepted as objective, it does not

sufficiently address the why question. In addition, the use of mathematics and statistical

numbers in quantitative methodology can be bias if the figures are not carefully

disaggregated.

73
1999

24
In ensuring that this paper was a success the institution of focus was Zambia Revenue

Authrity (ZRA), Custom and Excise Act Chapter 322 of the Laws of Zambia and the

Environmental Management Authority (EMA).

The research also used other primary data that has been already collected. This primary data

was accessed from government policy and statistical documents and other relevant bodies.

The study also utilised secondary data such as books, scholarly journals, articles, and online

sources to critic, interpret and complement the primary data. Secondary data is necessary for

this study as it help to provide explanation, analytical views, and understanding of the debate

around resource led economic development and resource curse thesis principally in Africa.

The secondary data analysis is critical in remedying bias from interview participants. This

study employed a qualitative analysis approach in order to gain insights of how to address the

legal shortfalls in Zambia’s mining industry.

A number of official government documents including policy will be analysed to establish

the changes in the area of social security. Apart from the Zambia documents being analysed,

the inclusion of international documents on best practices will also be the source of

information to ensure the best comes out from this paper.

3.7 RELIABILITY AND VALIDITY

Reliability and Validity are important concepts in research as they are used for enhancing the

accuracy of the assessment and evaluation of research work 74.These have different definitions

meanings under the different types of research i.e. quantitative and qualitative research 75. In

quantitative research, reliability refers to the consistency, stability and repeatability of results.

74
Creswel, R. Research design: qualitative, quantitative, and mixed methods approach. USA: Sage Publications, 2014 at pp. 201.
75
Twycross, A. & Shields, l. Validity and reliability-What's it all about? Part2 Reliability in quantitative studies. Paediatric Nursing,
2004 at p.36

25
This is the outcome of a research is considered reliable if consistent results have been

obtained in identical situations but different circumstances.76

Validity is the extent to which any measuring instrument measures what it is projected to

measure77. Moreover, it is possible for a measurement to be reliable but invalid; however, if a

measurement is not reliable, then it cannot be valid 78. Under the qualitative research,

reliability is referred to as when a researcher’s approach is consistent across different

researchers and different projects79. Therefore, validity is when a researcher applies certain

procedures to check for the accuracy of the research findings 80. Consequent in order to

strengthen the validity of research data and instruments, the researcher applied the method of

triangulation. Which comprises of the process of collecting data through several sources:

Questionnaires, interviews and classroom observations etc.81Gathering data through one

technique can be biased, weak and questionable. Conversely, collecting information from a

variety of sources and with a variety of techniques can confirm findings82.

Therefore, if the researcher obtains the same results, he/she can become sure that the data is

valid, through triangulation. Since on can gain qualitative and quantitative data in order to

corroborate our findings83. The study applied two data collection methods, namely; interviews

and self-administered questionnaire.

76
Thatcher, R. Validity and reliability of quantitative electro encephalography (qEEG). Journal of Neurotherapy 2010, 14, at
pp.125, viewed on 16/05/20
77
Thatcher, R. Validity and reliability of quantitative electroencephalography (qEEG). Journal of Neurotherapy 2010, 14, at
pp.36, viewed on 16/05/20
78
Yin 2009, cited in Creswel, R. Research design: qualitative, quantitative, and mixed methods approaches. USA: Sage
Publications, 2014.
79
Gibbs, 2007 cited in Creswel, R. Research design: qualitative, quantitative, and mixed methods approaches. USA: Sage
Publications 2014, p. 201
80
Zohrabi, M. Mixed Method Research: Instruments, Validity, Reliability and Report Findings; Theory and Practice in Language
Studies, Vol. 3, No.2, pp. 254-262, February 2013@ 2013 ACADEMY PUBLISHER Manufactured in Finland, at pp. 258 viewed on
16/05/20.
81
Zohrabi, M. Mixed Method Research: Instruments, Validity, Reliability and Report Findings; Theory and Practice in Language
Studies, Vol.3, No. 2,pp. 254-262, February 2013 @ 2013 ACADEMY PUBLISHER Manufactured in Finland, at pp.258 viewed
on16/05/20
82
Zohrabi, M. Mixed Method Research: Instruments, Validity, Reliability and Report Findings; Theory and Practice in Language
Studies, Vol.3, No.2, pp.254-262, February 2013@ 2013 ACADEMY PUBLISHER Manufactured in Finland, at pp.258 viewed
on16/05/20.
83
Ibid.

26
 3.8 DATA ANALYSIS

In this case study a qualitative analysis was done on the interviews conducted. The primary

focus of the qualitative analysis was to analyse the data collected and to attract themes that

would best support the case study. Although qualitative analysis was seen as subjective. As

the data was viewed from a more personal viewpoint such as personal life experiences and

personal opinions that were found in the interviews conducted with the relevant respondents.

A desktop data analysis was then performed in two sections. The first section was a desktop

analysis on the laws mentioned in the study and the second part of the desktop analysis was

done on the interviews to understand if there was a similarity between the identified

discrepancies in the laws and the answers provided in the interviews.

3.9 ETHICAL CONSIDERATION

Bryman and Bel84 apply the following ten principles of ethical considerations have been

compiled as a result of analyzing the ethical guidelines of nine professional social sciences

research associations:

i. Research participants should not be subjected to harm in any ways whatsoever.

ii. Respect for the dignity of research participants should be prioritized.

iii. Full consent should be obtained from the participants prior to the study.

iv. The protection of the privacy of research participants has to be ensured.

v. Adequate level of confidentiality of the research data should be ensured.

vi. Anonymity of individuals and organizations participating in the research has to be

ensured.

84
Bryman, A. & Bel, E. Business Research Methods, 2nd edition. Oxford University Press 2007.

27
vii. Any deception or exaggeration about the aims and objectives of the research must be

avoided.

viii. Affiliations in any forms, sources of funding, as well as any possible conflicts of interests

have to be declared.

ix. Any type of communication in relation to the research should be done with honesty and

transparency.

Any type of misleading information, as well as representation of primary data findings in a

biased way must be avoided. The aforementioned ethical were considered in this research.

The researcher communicated these ethical issues to the various respondents and tried to

create a climate of comfort for the respondents; letting the respondent know that participation

is on a volunteer basis. It can be noted that respondents, were assured that their responses

were treated as confidential and used only for academic purposes in this study. The

researcher introduced himself before the questioner was presented and before the start of any

interview to all respondents to ensure that they participate in the study voluntarily and from

an informed point of view.

3.10 LIMITATIONS OF THE STUDY

This study will not investigate how cooperation and benefit sharing is achieved. As it is for

every study, the following limitations among others, are those generic to qualitative research

which were experienced during this study:

Some respondents selected for the study had to be persuaded in to opening up as they were

either suspicious of the use of information being gathered or they thought that the study

would work against them to provide much needed information because they were afraid of

being implicated or victimized after responding. Owing to financial constraints, the study was

limited to Lusaka without looking at those found in other parts the country. Some of the

28
respondents required approval from relevant authorities to give information, and did not get

back to the researcher.

3.11 CONCLUSION

In summation Chapter three discussed the methodology used in conducting this research.

This research adopted a qualitative research method where qualitative data was collected to

make a comprehensive analysis of the research findings. The study applied purposive and

snowballing sampling techniques and adopted the following data collection methods:

Questionnaire, and Interviews. The research further discussed ethical considerations, which is

one of the most important parts of the research, and outlined the limitations of the research.

CHAPTER FOUR

DATA ANALYSIS AND RESULTS

4.1 INTRODUCTION
29
As pointed out in the preceding chapter, the central government in conjunction with the

legislature have over the years been making strides towards environmental protection by

putting in place laws aimed at addressing environmental damage. For instance, enshrined in

the Constitution of Zambia85 under Article 255 (b) which states;

“the person responsible for polluting or degrading the environment is responsible for

paying for the damage done to the environment.”

As a country that relies on the polluter pays principle policy, environmental pollution such as

that which comes from the mines has been ill addressed and it was discussed in the previous

chapter that carbon tax laws which at present are have not been extended to the mining

industry may be used to address these issues. This chapter seeks to give an overview of

carbon taxes as well as compare and contrast them with the fines and penalties for polluting

the environment.

4.2 WHAT IS CARBON TAX?

Carbon tax is a tax on fossil fuels, especially those used by motor vehicles, intended to reduce

the emission of carbon dioxide. When a hydrocarbon fuel such as coal, petroleum or natural

gas is burnt, its carbon is converted to carbon dioxide and other compounds of carbon. 86 It is a

form of pollution tax, which levies a fee on the production, distribution and use of fossil fuels

based on how much carbon their combustion emits. The government sets a price per ton on

carbon, then translates it into a tax on electricity, natural gas, coal etc. Since the tax makes

the use of “dirty fuels” more expensive, it encourages utilities, businesses and individuals to

reduce consumption and increase energy efficiency. Carbon tax also makes alternative energy

more cost competitive with cheaper polluting fuels like coal, natural gas and oil.

85
(Amendment) Act No.2 of 2016
86
https://en.m.wikipedia.org/wiki/Carbon_tax accessed 15th November 2018

30
The purpose of carbon Taxes, so called even though they cover a range of greenhouse gases,

is to internalize externalities associated with anthropogenic climate change. 87Activities that

result in Carbon emissions, such as mining, have far reaching effects on the environment and

its inhabitants, and the cost of these emissions is borne by future generations. 88 Taxes such as

carbon taxes compel individuals to consider the full set of consequences from these

emissions.89

Carbon taxes cannot be properly explained or understood without talking discussing a bit of

economic theory. They are based on the economic principle of negative externalities.

Externalities are costs or benefits generated by the production of goods and services.

Negative externalities are costs that are not paid for. When utilities, businesses or

homeowners consume fossil fuels, they create pollution that has a cost on society; everyone

suffers from the effects of pollution. Proponents of carbon tax believe that the price of fossil

fuels should account for these costs.

Carbon dioxide is a heat trapping gas which causes global warming which damages the

environment and human health. Since greenhouse gases are a result of the combustion of

fossil fuels, and are closely related to the carbon content of the respective fuels, this negative

externality can be compensated for by taxing the carbon content of fossil fuels at any point in

the product cycle of the fuel.90

Carbon taxes offer a potentially cost-effective means of reducing greenhouse emissions. They

are a type of Pigovian Tax91 (Often employed to deal with issues such as environmental

pollution). According Further, carbon taxes help addresses the problem of emitters not facing

the full social cost of their actions.

87
David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Harvard Environmental Law. 2009
Pp1
88
Ibid David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Havard Environmental Law.PP1
89
Ibid. David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Havard Environmental Law.PP1
90
Ibid.
91
ibid

31
4.3 WHAT ARE THE ADVANTAGES OF CARBON TAX?

It is a well-known fact that environmentalists and persons who push the agenda of a greener

cleaner world have been pushing for more environmentally friendly legislation. As a

pollution and environmental tax, carbon taxes have a vast range of benefits. However, the

primary purpose of carbon tax is to lower greenhouse gas emissions. The tax charges a fee on

fossil fuels based on how much carbon content they emit into the atmosphere when

combusted. So in order to reduce the fees they might have to pay, businesses and individuals

attempt to use less energy derived from fossil fuels.

This means individuals, firms and businesses are forced to resort to greener methods such as

using public transport and replace incandescent bulbs with compact fluorescent lamps 92. A

business on the other hand may resort to solar powered equipment inter alia.

Carbon taxes further encourage alternative energy by making it cost-competitive with

cheaper fuels. In addition, carbon taxes raise additional revenue 93.Carbon taxes like any good

tax are predictable. The price of carbon can fluctuate with changing weather and changing

economic conditions. This makes carbon taxes very stable94.

As discussed in the preceding chapters, carbon taxes are currently only levied on motor

vehicles in Zambia. During the course of this research in a bid to understand why the

aforementioned is the case, I interviewed a few individuals at the Zambia Revenue Authority

but they sought anonymity. I found out that the reason the Carbon Tax was introduced

through Section 55 of the Customs and Excise Duty Act 95 is because over the past decade

there have been a high number of imported second hand vehicles which depend on petrol and

92
https://science.howstuffworks.com/environmental/green-science/carbon-tax2.htm accessed on 3rd July
2018
93
ibid
94
ibid
95
No.18 of 2015

32
diesel. Both fuels when combusted produce high levels of Carbon elements hence the

decision to put that provision into force.

4.4 THE PITFALLS OF CARBON TAX

Like everything else that has advantages, Carbon taxes though aiming to promote efficient

use of resources has its disadvantages. Among the concerns raised on the international front

regarding carbon taxes, is the backlash that the introduction of such a tax on mining would

have on the international trade.96 In a country like Zambia where Foreign Direct Investment is

heavily relied upon to increase employment opportunities inter alia, the extension of carbon

taxes to the mining industry in Zambia would raise serious issues. And if the mining industry

reacts negatively to the imposition of this environmental tax, instead of benefitting, it would

actually end up hurting the economy. Is this perhaps why from independence to date there has

been no legislation pertaining to the taxation of mining companies as regards carbon tax? Can

it then be inferred that the clear need for these taxes but the want thereof is a deliberate

oversight in the form of government intervention?

While carbon taxes can generate a lot of revenue if extended to the mining sector in Zambia,

the very issue of maximizing tax revenue in effect addresses the questions: What should the

magnitude of the tax mining imposed on industry be? How high can the total fiscal take be

before it becomes a serious disincentive for industry to invest in the country?97

Furthermore, it is incredibly difficult to know the true cost of carbon emissions on the

environment and on future generations.98 Scientists and economists must agree on which

assumptions to use when determining the external cost of each ton of the greenhouse
99
emission. A recent report by the Organisation for Economic Cooperation and

96
Ibid David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Havard Environmental Law.PP1
97
Zambia Chamber of Mines .Taxation and Mining Investment in Zambia
98
https://www.thebalance.com/carbontax-definition-how-it-works-4158043 accessed on 14th March 2019
99
ibid

33
Development100 found that the average carbon price across 42 major economies was around

$8 per tonne in 2018. The price differential means that governments are finding it politically

difficult to charge enough to reduce emissions significantly.

The OECD’s secretary general Angel Gurria opined thus; “The gulf between today’s carbon

prices and the actual cost of emissions to our planet is unacceptable. We are wasting an

opportunity to steer our economies along a low carbon path and losing precious time with

every day that passes.”101

Every change of government has seen an adjustment for better or worse, with the claim of

serving the countries best interests to try and capture benefits for the local economy from

copper, the Zambian government has had many changes the mining taxation policy.

The government did not see this as an opportunity to be a leader in effecting a positive trend

for regional mining taxation.

In order to make carbon taxation work, middle ground has to be found so that the economy

isn’t hurt by its imposition and at the same time sustainable development goals as well as

environmental reparation is done using the monies raised from these taxes.

4.5 WHAT IS POLLUTER PAYS PRINCIPLE?

The ‘polluter pays principle’ states that whoever is responsible for damage to the

environment should bear the costs associated with it." (Taking Action, The United Nations

Environmental Programme.)102

100
http://www.oecd.org/environment/few-countries-are-pricing-carbon-high-enough-to-meet-climate-
change-targets.htm accessed on 14th March 2019
101
Ibid.
102
Roy E Coradato, Institution for research on the economics of taxation, studies in social cost, regulation and
the environment. No. 6

34
Polluter Pays Principle (PPP) requires that an environmental polluter should be held

responsible or should pay compensation to victims and the cost of remedying harm done to

the environment occasioned by pollution caused by the polluter.103

Polluter pays principle is also defined as the “commonly accepted practice that those who

produce pollution should bear the costs of managing it to prevent damage to human health or

the environment. For instance, a factory that produces a potentially poisonous substance as a

by-product of its activities is usually held responsible for its safe disposal”104.

The polluter pays principle is a part of a set of broader principles to guide sustainable

development worldwide (formerly known as the 1992 Rio Declaration).

As earlier indicated, polluter pays principle is enshrined in the Constitution of the Republic of

Zambia.105

Few people could disagree with the proposition that those who cause damage or harm to

others should "pay" for those damages. It appeals directly to our sense of justice. Forcing

polluters to bear the costs of their activities is also said to enhance economic efficiency.

Appropriately applied, policies based on a polluter pays principle (PPP) should enable us to

protect the environment without sacrificing the efficiency of a free market economic

system.106

4.6 WHAT ARE THE ADVANTAGES OF POLLUTER PAYS PRINCIPLE

The Polluter Pays Principle serves as a deterrent measure to the potential polluter. It follows

therefore that if the potential polluter examines the likely consequences of its intended
103
Osandu C. Ajuzie. Our Common Environment: Understanding the Environment, Law & Policy (University of
Lagos Press) P.94
104
http://lse.ac.uk/GranthamInstitute/faqs/what-is-the-polluter-pays-principal/ accessed on 14th March 2019
105
Amendment Act no.2 of 2016
106
Roy E Coradato, Institution for research on the economics of taxation, studies in social cost, regulation and
the environment. No. 6

35
activity as well as the fact that they will have to foot the cost of remedying the situation, it is

very likely that they will be deterred from engaging in the activity.

An added benefit of the polluter pays principle is explained by its name, the person or firm

responsible for causing pollution or polluting behaviour pays for their actions instead of

others bearing the brunt of what they did not do.

4.7 THE DISAVANTAGES OF POLLUTER PAYS PRINCIPLE

In instances where there is no causal link between the polluter and pollution, the polluter pays

principal fails dismally.107 This means that the polluter goes unpunished and does not bear the

cost or the burden of his activities and others suffer for it.

Another instance is where the polluter actually caused the pollution but a Novus interveniens

supervenes to break the causal link. Criticism for polluter pays principle also happens where

there is joint and severable pollution. If for example, there are people who cause pollution the

reason for polluter pays principle may become defeated. A further disadvantage to polluter

pays principle is that in a situation where the harm done cannot be quantified, based on

monetary considerations what course of action is taken to ensure the polluter pays?

Finally, it is important to note that even though polluter pays principle can be used as a

deterrent, it often does not work that way. It usually works as a corrective measure as

opposed to being a preventative one. The damage would have already been done and the

reparation can sometimes put the environment in a worse state that it was before. Though the

polluter pays principle is the current environmental policy on pollution in Zambia and has

been enshrined in the Constitution under article 255 108, polluter pays principle has more

disadvantages than advantages.

107
M. Larrsson, The Law of Environmental damage, Liability and Reparation (Kluwer Law International 1999)
108
Amendment Act no. 2 of 2016

36
The judges in the celebrated case of Rylands v Fletcher109 in their ratio decidendi stated:

We think that the rule of law is, that the person who for his own purpose bring out onto his

land and collects and keeps there anything which is likely to do mischief if its escapes, must

keep it at his peril, and if the does not do so, is prima facie answerable for all damage for all

damage which is the natural consequence of its escape.110

The stance by the learned bench reflects the polluter pays principle stance, whatever one

brings onto the land, they should bear responsibility for the perils and damage it causes

others.

In the Zambian case of James Nyasulu and 2000 others V Konkola Copper Mines, 111 the

decision arrived at is reflective of the stance of the court in the aforementioned renowned

case of Rylands v Fletcher.112 In this case there was leaked into the Kafue river, acidic

effluent which caused mischief by way of causing residents of Chingola on the Copperbelt

Province of Zambia diarrhoea, chest pains inter alia.113

4.8 CARBON TAXES AND POLLUTER PAYS PRINCIPLE COMPARED

The more the world advances through technology and productivity, the more harm it appears

is done to the environment. These environmental challenges are increasing the pressure on

governments to find ways to reduce environmental damage while minimising harm to

economic growth. Governments have a range of tools at their disposal, including regulations,

information programmes, innovation policies, environmental subsidies and environmental

taxes.

109
(1868) UKHL 1
110
W.V.H. Rodgers, Winfield & Jalowciz: Tort. (Gloucester: Sweet & Mawell) Pp 764.
111
(2007) HP 1286
112
1868 (UKHL 1)
113
James Nyasulu and 2000 others v Konkola Copper Mines Ltd (2007) HP/1286.

37
Environmental taxes have many important advantages, such as environmental effectiveness,

economic efficiency, the ability to raise public revenue, and transparency. Also,

environmental taxes have been successfully used to address a wide range of issues including

waste disposal, water pollution and air emissions. Regardless of the policy area, the design of

environmental taxes and political economy considerations in their implementation are crucial

determinants of their overall success.

Proponents of using taxes to address environmental pollution 114 argue that Taxes can directly

address the failure of markets to take environmental impacts into account by incorporating

these impacts into prices. Environmental pricing through taxation leaves consumers and

businesses the flexibility to determine how best to reduce their environmental “footprint”. 115

This enables lowest-cost solutions, provides an incentive for innovation and minimises the

need for government to attempt to “pick winners”. Environmental tax bases ought to be

targeted to the pollutant or polluting behaviour, with few if any exceptions. The range of an

environmental tax if possible should be as broad as the scope of the environmental

damage.116The tax rate should be commensurate with the environmental damage.

The tax must be credible and its rate predictable in order to motivate environmental

improvements. Environmental tax revenues can assist fiscal consolidation or help to reduce

other taxes. Distributional impacts can, and generally should, be addressed through other

policy instruments.

Mitigation is about minimizing future climate change by weakening the link between

economic growth and carbon emissions. Adaptation is about facing up to the fact that climate

114
David A. Weisbach & Gilbert E. Metcalf, “The Design of a Carbon Tax”, 33 Harvard Environmental Law
Review 449
115
ibid
116
David A. Welsbach & Gilbert E. Metcalf, “The Design of a Carbon Tax”, 33 Harvard Environmental Law
Review 449

38
change is inevitable and that many of the threatened countries have the least capacity to

adapt. 117

Clear communication is critical to public acceptance of environmental taxation.

Environmental taxes may need to be combined with other policy instruments to address

certain issues. Scholars acknowledge that without government intervention, there is no

market incentive for firms and households to consider environmental damage, since its

impact is spread across many people and it has little or no direct cost to the polluter.

Therefore, protection of the environment generally requires collective action, usually led by

government.

Taxes directly address the market failure that causes markets to ignore environmental

impacts. A well-designed environmental tax increases the price of a good or activity to reflect

the cost of the environmental harm that it imposes on others. The cost of the harm to others –

an “externality” – is thereby internalised into market prices. This ensures that consumers and

firms take these costs into account in their decisions.

Most regulatory approaches involve the government specifying how to reduce emissions or

who should do the reduction. The higher cost of the polluting activity that results from the

environmental tax makes the activity less attractive to consumers and businesses. In contrast

to regulations or subsidies, however, a tax leaves consumers and businesses full flexibility to

decide how to change their behaviour and reduce the harmful activity. This allows market

forces to determine the least-cost way to reduce environmental damage.118

117
Ambuj Sagar Climate Change, Energy and Developing Countries. Vermount Journal of International Law 7
(2005-2006)
118
David A. Weisbach & Gilbert E. Metcalf, “The Design of a Carbon Tax”, 33 Harvard Environmental Law
Review 449

39
Many countries impose significant taxes on motor fuels like petrol and diesel because their

use contributes to global warming and local air pollution. The resulting increase in the cost of

driving a vehicle is an incentive to reduce emissions that could be achieved in a number of

ways, in both the short-term and the long-term:

Mining licences vest in the holder the right to mine, i.e. the right to perform the entire

operation from the extracting the minerals to processing them for industrial use.119

The government of South Africa, like the government of Zambia, possesses the right to mine

and grant mining licences. South Africa has held a great deal of influence in shaping the

Zambian mining laws and South African cases therefore offer some instruction for Zambian

courts.120 The imposition of a tax on mining rights will tend to affect investment decision-

making in several ways. In order to understand these influences, the cost-price structure of an

extractive industry must be reviewed.121

Coal is a key component in the mining industry in Zambia. This is because coal is used to

generate the much-needed electricity used in the extraction and processing of copper in

Zambia. However, unbeknownst to many, coal when combusted releases vast amounts of

greenhouse gases, and seeing as the mining industry is the largest consumer of coal in

Zambia, the mining industry as a consequence emits vast amounts of greenhouse gases into

the atmosphere. A visit to the mamba collieries website showed that Mamba Collieries is

committed to the management and preservation of the natural environment and to achieve

this, the company will eliminate, mitigate or remediate the environmental impact of its

activities by reducing harmful emissions into air, water and land.

Continually improve the efficiency of usage of raw materials, energy and natural resources
119
Muna Ndulo, MINING LEGISLATION AND MINERAL DEVELOPMENT IN ZAMBIA. CORNELL INTERNATIONAL
LAW JOURNAL VOUME 19 NUMBER 1. PP 18.
120
Muna Ndulo, MINING LEGISLATION AND MINERAL DEVELOPMENT IN ZAMBIA. CORNELL INTERNATIONAL
LAW JOURNAL VOUME 19 NUMBER 1. PP 20.
121
Muna Ndulo, MINING RIGHTS IN ZAMBIA. PP 220.

40
Reduce direct and indirect greenhouse gas emissions. 122 Avoid net losses or degradation of

natural habitats, biodiversity and landscape reduce generation and toxicity of wastes

Undertake training and education initiatives to promote environmental awareness among all

its employees, suppliers and contractors work with its stakeholders to mitigate the

environmental impacts.

We are in a period of unprecedented expansion of energy demand. Energy use has grown by

more than 50% since 1990, fuelling a global economy that has more than doubled in size. 123

Mining has been an integral part of the economic growth the world has seen in recent

decades. It has provided the vital supply of industrial metals, such as copper, without which

no industrialisation and development is possible. This dependence on the global mining

industry will continue, and energy will be an integral part of it.124

4.9 EXTENDING CARBON TAX LAW TO THE MINING INDUSTRY IN ZAMBIA

The role that mines have played and continue to play in the Zambian economy cannot be over

emphasised. They employ huge numbers of Zambians as well as contribute significantly to

the government coffers through the taxes imposed on them. 125 As highlighted in the preceding

chapters, mining is entails extraction of mineral resources which are non-renewable. This

often leaves the areas on which the mining activity desolate and the land more often than not

have no use after that. This chapter therefore seeks to address the advantages that extending

the carbon tax base to the mining industry would present as well as highlight the difficulties

122
https://miningforzambia.com/energy-and-the-mining-industry/ accessed on 18th August 2018
123
https://miningforzambia.com/energy-and-the-mining-industry/
124
https://miningforzambia.com/energy-and-the-mining-industry/
125

41
that extending carbon taxes to the mining industry would pose. It will further discuss other

countries within Southern Africa that have enacted this law and highlight how this has been

working in these other jurisdictions. In achieving this set objective the essay will look at the

advantages and disadvantages that extending carbon taxes to the mining industry have

presented. Following this, a conclusion will be arrived at.

4.9.1 COUNTRIES IN SUBSAHARAN AFRICA THAT HAVE ENACTED CARBON

TAX LAW

Though Africa is known for its vast natural resources, environmental taxes whose aim is to

attempt to repair the damage done while these natural resources are extracted from the land

are strangely uncommon. Environmental taxes in Africa are not as popular and as widespread

as other taxes. In Sub-Sahara Africa alone, only three countries have implemented Carbon tax

namely Zambia, South Africa and Zimbabwe with Zambia and Zimbabwe only charging the

tax on motor vehicles. South Africa on the other hand went a step further and extended the

tax to cover fuel combustion as well as industrial processes emissions. South African

President Cyril Ramaphosa signed into law a carbon tax to cut emissions in the continent’s

worst polluter.126

South Africa has been planning to implement the carbon tax since 2010 but has faced many

challenges.127 South Africa heavily relies on coal for its energy supply and is currently the

14th largest polluter in the whole world.128 As demonstrated in the preceding chapters, coal is

used heavily in mines and is a big culprit when it comes to carbon emissions.

126
https://www-aljazeera-com.cdn.ampproject.org/coal-hungry-south-africa-introduces-carbon-tax-
190527113256102.html accessed on 5th June 2019
127
ibid
128
ibid

42
South Africa and Zambia are both situated in Southern Africa. Though they belong to

different jurisdictions, they have much in common. Both are developing countries, both have

huge mining operations that use vast amounts of coal. South Africa has set an example of

how carbon taxes can go beyond just motor vehicles and fuel and demonstrated that even the

heavily polluting industries such as the mining industry can also be levied this tax and that

the said tax can go a long way in bringing the situation under control.

4.9.2 ADVANTAGES OF HAVING CARBON TAX LAW ON MINES

As previously elaborated, the policy in Zambia on dealing with mining pollution is rooted in

polluter pays principle.

An added concern with imposing taxes on in-between goods is that the implied tax rates on

emissions are not necessarily transparent, which can contribute to inaccurate measurement of

tax rates. For instance, a “carbon” tax of a fixed amount per litre that applies to both gasoline

and diesel would not reflect the fact that a litre of diesel produces more Carbon dioxide

emissions than a litre of gasoline. Discrepancies of this nature can weaken the practicality of

carbon taxes by implicitly favouring a “dirtier” fuel. 129

An improperly formulated environmental tax that has no direct bearing on the source of

environmental harm can impose added fiscal costs. A general principle of taxation is that

taxes should as far as possible be imposed on final production, consumption and incomes.

Taxes levied on intermediate products impose additional economic costs by distorting

methods of production. Of course, the aim of environmental taxes is precisely to provide

incentives to change production techniques to make them less polluting. 130

129
OECD, Environmental Taxation. A guide for policy makers 2011 Pp 4.pdf

130
OECD, Environmental Taxation. A guide for policy makers 2011.pdf

43
The scope of an environmental tax should ideally be as broad as the scope of the

environmental damage. The appropriate scope of an environmental tax depends on the scope

of the environmental damage being addressed. This has implications for the level of the

political jurisdiction that imposes the tax. For some problems, like soil contamination, the

impacts are generally limited to a relatively small area. Therefore, a tax or charge on waste

disposal or harmful garden chemicals might effectively be imposed at the level of a

municipality or township. 131

Notwithstanding the above, at the other extreme, greenhouse gas emissions from one location

contribute to atmospheric changes that affect climate on a national, regional and global

basis.132 The reality however is the fact that it is not always politically feasible to apply taxes

uniformly across multiple jurisdictions.133

The tax rate should as a matter of importance, be commensurate with the environmental

damage. This implies that the rate at which the tax is being levied should be reflective of the

value of the environmental damage done by the polluting activity, other negative spill over

effects of the activity, as well as the need to raise public revenues which can be channelled

into a reparation fund for impacted areas.134

Furthermore, environmental taxes ought to reflect the damage done to the environment. This

ensures that prices faced by producers and consumers mirror the environmental cost of their

actions.135

131
OECD, Environmental Taxation. A guide for policy makers 2011.pdf

132
OECD, Environmental Taxation. A guide for policy makers 2011.pdf

133
OECD, Environmental Taxation. A guide for policy makers 2011.pdf

134
OECD, Environmental Taxation. A guide for policy makers 2011.pdf
135
OECD, Environmental Taxation. A guide for policy makers 2011.pdf

44
4.9.3 CHALLENGES OF HAVING CARBON TAX ON MINES

The benefits of extending carbon taxes though great, can potentially give rise to a number of

issues. As earlier discussed, some of the deepest concerns raised on the international front

regarding carbon taxes, is the backlash that the introduction of such a tax on mining would

have on the international trade.136 Zambia depends heavily on Foreign Direct Investment

(FDI) for employment so imposing a carbon tax on the mines might trigger the mines to lay

off some workers which is counterproductive.

4.10 RESEARCH FINDINGS

The findings of this research were that there is legislation as well as environmental policy in

Zambia. However, the current legislation on environmental taxes is inadequate and could be

broadened so as to ensure all key sectors are covered. It was found during the course of this

research that Zambia does have environmental taxes, and that carbon taxes are in place and

that currently they only apply to motor vehicles.

Carbon taxes have not been extended to the mining industry despite the mines having being

in existence since pre-colonial Zambia and using vast amount of coal which naturally

produces a lot of GHGs. Further, this research found that although environmental issues vis a

vis sustainable development are a huge concern held by stakeholders, the interests of the

foreign investors are taken into account in that owing to the fact that Zambia is heavily reliant

on the mining sector and it is imperative that the investors are not is put off by too many

taxes.

Furthermore, the research found that currently, there is in place a concept known as polluter

pays principle as enshrined in the Republican Constitution 137 under Article 255 (b) where it

states that

136
Ibid David A. Weisbach, Gilbert E. Metcalf “The Design Of A Carbon Tax ” 33 Havard Environmental Law.PP1
137
(Amendment) Act No.2 of 2016.

45
 “the person responsible for polluting or degrading the environment is responsible for

paying for the damage done to the environment.”

The research also found that the government is interested in bringing to book culprits who

contravene current legislation on the subject on the adverse effect of mining activity on the

environment. For one, the Zambia Environmental Management Agency through the

Environmental Management Act imposes fines on firms and persons who contravene the

provisions of the law.

Notwithstanding the foregoing, this research also found that it appears that there is a failure to

balance between economic development and sustainable development. The former seems to

have taken priority over the latter and that appears to be the reason environmental taxes such

as extending carbon tax to the mining sector has not been implemented. While mining

activity is inherently detrimental to the environment by way of the mining waste produced by

the mining process, there is a concern by environmentalists that the since this is a well

understood phenomenon. The failure to put into force such legislation flies in the face of

Zambia’s strides and efforts in engaging in sustainable development whose goal is to ensure

the present generation leaves a habitable environment for future generations.

4.11 CONCLUSION

This chapter has endeavoured to show the need for carbon tax legislation to be extended to

the mining sector in Zambia notwithstanding the challenges that the extension would pose. It

discussed countries in Sub-Saharan Africa, (Southern Africa to be precise) that carbon taxes

currently have carbon tax law and discussed South Africa which took the Carbon tax Law a

step further by stretching it to the mines and industries as well provided they produced

considerable amounts of greenhouse gases and carbon emissions.

46
 CHAPTER 5

RESEARCH FINDINGS AND RECOMMENDATIONS

5.1 INTRODUCTION

This Chapter will strive to lay out the findings as well the recommendations of the research.

It is evident that the government has recognised the importance of the protection of the

environment through the promotion of sustainable development by way of putting in place

mechanisms such as environmental impact assessment by putting in place a legislative,

institutional and policy framework. However, it is apparent from the foregoing chapters that

environmental issues remain relegated into the background.

47
5.2 GENERAL CONCLUSION

This research has shown throughout the preceding chapters that there is room for much

improvement in environmental as well as environmental tax legislation and policy in Zambia.

Our country has vast natural resources, mineral wealth in particular.

It is therefore imperative that the policy and law makers consider the goals of sustainable

development as economic development take place for if sustainable development is thrown

by the wayside, future generations will be the ones to bear the brunt of a severely damaged

environment which could have been minimised had the right measures been taken.

5.3 RECOMMENDATIONS

The research appears to have uncovered that there is no law imposing mining companies to

pay carbon taxes on the pollution they emit into the atmosphere. The only carbon tax law
138
currently is the one imposed by the Customs and Excise Duty Act and it only goes to

provide for motor vehicles. Environmental policies are in place, but they are hinged on

polluter pays principle as enshrined in the Supreme Law of the land, the Constitution 139 under

Article 255.

The extension of carbon taxes to the mining industry in Zambia as uncovered by the study

could steer restructuring of the carbon tax legislation and legislative framework of institutions

involved. The Zambia Revenue Authority can also equally benefit from this as they are the

sole tax collecting entity. On the production side, mining firms will adjust their short term

and long-term operational budgets in line with likely upward costs adjustments hinged on the

incoming tax regime.

138
No.18 of 2015
139
Amendment Act No. 2 of 2016

48
5.4 CONCLUSION

This paper has found that mining is an inherently cumbersome and heavily polluting process

that tampers with the environment and as such requires environmental impact assessment as

well as follow up policies which ensure sustainable development as well as the safety of the

inhabitants of the land. In the event that disaster strikes and heavy pollution occurs, mining

firms are required to pay a fine as the polluter to the principle, being the person or

organisation affected by the pollution. However, fines may only occur once in a while

whereas a tax because of the consistency attribute of taxes, will occur periodically and both

the organisation responsible for collecting tax on behalf of the government of the Republic of

Zambia (The Zambia Revenue Authority in this case). I therefore recommend that carbon

taxes be extended to the mining sector in Zambia and the monies realised from these taxes be

used to repair or redevelop the areas damaged by mining. Furthermore, more research should

go into the area of environmental taxes as they can help broaden the tax base thus realising

additional revenue for the government of the Republic of Zambia while promoting

sustainable development so we can leave a better Zambia for future generations to enjoy.

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climate-change-targets.htm accessed on 14th March 2019

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