The French uranium mining firm Areva is facing calls to end its practice of securing tax exemptions from the government of Niger, one of the poorest countries in the world, as contract negotiations between the two reach a critical stage.
Uranium makes up about 70% of exports from Niger, but only 5.8% of the country’s GDP. Campaigners say that one of the reasons for this is a series of national tax opt-outs that the company has secured in its existing contracts.
“Areva is benefiting from tax exemptions, notably on customs rights and VAT,” Anne-Sophie Simpere, an advisor to Oxfam France told EURACTIV. “They also pay a lower rate of royalties because under the current contracts, they are exempted from Niger’s 2006 Mining Law.”
“Under a provision pour reconstitution de gisement, another 20% of their profits are protected from Niger’s corporate tax regime,” Simpere continued, “According to the tax administration in Niger, they also do not pay tax on the fuel they use – and they use a lot of fuel.”
Oxfam has just released a report – 'Areva in Niger: Who benefits from the uranium?' – slamming the company's record. Oxgam points to Niger’s yearly budget of $2.5 billion – around a quarter of Areva’s annual turnover – and ask why the company should be granted special dispensations.
Niger was ranked 186th out of 186 states in the UN’s Human Development Index for 2012, and 60% of its people earn less than a dollar a day.
The country should be in a strong negotiating position as it provides 40% of the world’s uranium, but negotiations over Areva’s tax payments are taking place behind closed doors, without civil society oversight, stoking fears about the eventual results.
A recent French senate report called for French extractive industries, including those part-owned by the French state, such as AREVA, TOTAL to comply with transparency, social and environmental norms and regulations and go further by "demonstrating that French companies are reliable and respectful partners long-term interests of African countries."
France owns an 80% stake in Areva, but the company has not disclosed its tax accounts.
Simpere said that she did not want to accuse France of hypocrisy but noted that they had championed a country-by-country reporting directive in June requiring transparency of Europe’s extractive industries, which its own firms appeared to be flouting.
“At the moment it is a double standard, but we want to give them a chance,” she said.
An Areva spokesman declined to comment on the report, but the company claims that in 2012, Niger received 70% of revenues from its uranium mining operations, with 27% going to Areva, and 3% to the company's business partners.