Mines and mineral sector in Khyber district: Study delineates policy reforms, programmes to facilitate SMEs

PESHAWAR: A qualitative study of mines and mineral sector in the tribal district Khyber, Khyber Pakhtukhwa has suggested undertaking policy reforms as well as initiating programmes to enhance awareness and conducting training sessions to facilitate the local entrepreneurs.

The study namely micro, small and medium enterprises in the newly merged districts: Stone Crushing Industry is conducted by National Influencers, a newly established think-tank and a non-partisan independent entity in Khyber Pakhtunkhwa.

It said that Micro, Small and Medium Enterprises have a crucial role in promoting inclusive development. They are the primary vehicle for job creation around the world and the engine of innovation and growth. However, they are highly sensitive to the regulatory framework.

The study explores the influence of the Constitution of Pakistan on crush plants and mining operations in the Newly Merged District (NMD) district Khyber of Khyber Pakhtunkhwa. The study has been conducted during the period of April 30, 2022 to April 30, 2023.

The region along with six other districts, have been regulated under British era the Frontier Crime Regulations (FCR) since 1901. The region was merged with the province of Khyber Pakhtunkhwa in 2018 with the hope to initiate an era of prosperity in the region and bring it at par with the rest of the country. Nevertheless, the effects on the local business community especially crush plants and mine owners were less than desirable for the stakeholders.

The study endeavours to scientifically understand the situation by undertaking a qualitative study of various stakeholders from business and social sectors as well as the opinion of the most relevant government departments.

During the study, open ended interviews were conducted from 50 individuals including local businessmen, workers, owners and political representatives. The representatives of the three most relevant department i.e. mines and mineral, industries departments and environmental protection agency were also included. A thematic analysis of the collected data was undertaken where emergent themes allowed visibility to the views of the participants.

The findings show that the stakeholders are not satisfied with the new regulatory laws governing their businesses and their abrupt implementation mechanism. They consider the pre-merger time as the time of liberty and freedom with a single point of contact for regulating their businesses and nearly no intervention.

The post-merger scenario is considered a nightmare for crush plants and mining industry as they were all declared illegal overnight and asked to go through a tedious registration process.

They also complained about excessive taxation in the name of royalty, excise duty and other payments to local government institutions despite being allowed to operate tax free for the first five years. More than half of the crush plants and mining operations have been closed after being declared illegal due to variety of reasons. Local inhabitants have become jobless and are unable to find a source of livelihood. This may lead them to criminal or terrorist activities for survival.

The owners of crush plants perceived government officials as corrupt and in search of underhand payments. They were also not happy with the new court-based conflict resolution mechanism, which was more time-consuming and expensive. They also complained that court decisions are not enforced due to lack of writ of the government and require extensive documentation which they cannot fulfill.

The government officials viewed the situation from their perspective and considered the right implementation of laws to government the business. For them, it was more about performing their duty and collecting revenue to get high performance ratings and possible promotions. They did agree that their registration process is very time consuming and they lack resources to do things on time.

They also realized that closure of crush plants and mines can lead to unemployment and subsequent issues. Yet, they considered their role as instrumental in regulating business as per government’s well.

In light of the interviews of stakeholders, the study suggests undertaking policy reforms as well as initiating programmes to enhance awareness and conducting training sessions to facilitate the local business owners.

The study has also called for the implementation of strict and transparent laws through policies to check corruption and the stifling role of government officials. A gradual implementation mechanism should be envisaged and shared with all stakeholders and one-window operation should be created for approvals, licenses and taxation etc.

The study further suggests the delivery of visible and reasonable benefits of the new laws, which should be followed by raising awareness about the advantages of registration amongst businesses and how formal sector can lead to high growth.

The recommendations to policy makers and government institutions endeavour to bring to fore the ‘muted voices’ of the business community of the district Khyber. Changes in laws, regulations and implementation mechanism have also been suggested. The results are also disseminated through discussion sessions and social media among all segments of the society to create awareness regarding the issue.

Copyright Business Recorder, 2023