Nigeria Content Online

Prospective
investors in real estate have been advised to go for “house hunting”
during rainy season to ensure their desired properties are not prone to
flooding.

Some project
managers said the recent floods in some parts of the country call for
proper investment education on real estate acquisition, particularly
landed properties.

Olayemi Shonubi, a
quantity surveyor and project development consultant at DWAB
CostPrudence Company, a project management firm, said it is difficult
to get a signpost on flood levels for a particular neighbourhood unless
one has a friend or relations who is familiar with the place to ask
necessary questions as to level of flooding.

Proper inspection

Mr. Shonubi, who is
also the spokesperson for the Nigerian Institute of Quantity Surveyors,
Lagos Chapter said, “I have always jokingly though advised people that
the best time to go house hunting is at the peak of the rainy season,
which used to be the second week in June; that period will reveal areas
prone to flooding. But I reckon maybe with the benefit of hindsight,
the best time might be October after the release of water from Oyan
Dam.”

“It is my humble
opinion that prospective buyers should always, in course of their
viewing and inspection of any property prior to signifying interest in
same, look out for signs of rising damp as well as tell tale signs of
mark of previous flooding on walls -both in the interior and exterior
of the house as well as the fence,” he said.

Mr. Shonubi said if
the buyer is in doubt, the person should engage a competent
professional, preferably a building surveyor, to checkout for property
hunting clues and other defects before making any commitment on price.

Climate change

A building
consultant at TeeA Investment, a real estate management company, Toyin
Adedoyin, also said that the best time for investors to buy property is
during raining season.

Mr. Adedoyin said,
“We often tell our clients to be patient before paying for any
property, particularly those who like highbrow areas that are prone to
flooding. Because you like a water viewing house does not mean you
should risk your life.”

He said a proper
inspection and evaluation of the property must be carried out by
professionals before, during, and after raining season to assure safety
for the owners.

However, Mr.
Adedoyin said, “Some clients still don’t mind buying properties in
areas that are prone to flooding probably because those areas are
highly valued,” adding that “to those clients, flooding is not a new
phenomenon because they believe it’s a seasonal occurrence that will
soon pass away.”

Meanwhile, a recent
study by the Intergovernmental Panel on Climate Change (IPCC), an
organisation established by the United Nations Environment Programme
and the World Meteorological Organisation for the assessment of climate
change, shows that as the global temperatures continue to rise, many
cities will be threatened by flooding.

“As global
temperatures rise, oceans get warmer. And when water heats up, it
expands and sea levels rise. Densely populated, low-lying areas, such
as large river deltas and small islands, are at the greatest risk from
flooding,” IPCC warned.

Manageable situations

Jamiu Fatomi, a
retired real estate agent and a landlord in Lagos State, said areas
with flooding that occurs as a result of drainage problem are good for
prospective investors because such flooding is rectifiable.

Mr. Fatomi said
flooding in areas with drainage channels resulted from clogging of
those drainages. He said when people do not do the needful to ensure
the free flow of drainages in their areas, such attitude come back to
hurt them in the form of environmental problems like erosion and
flooding which will eventually result in loss of valuable property.

He said in many
part of the country, most drains are more than half full with refuse
from homes and shops, adding that when the rain comes the water has no
path through which to flow; it eventually takes over homes and roads as
pathways.

Mr. Fatomi said, “For such problem to be controlled, landlords must
ensure that their houses have the proper soak-away or septic system
that guarantees that every waste from the kitchen and bath goes into
the system.”

Online business
operators say they are always working on improving technology to curb
fraud and protect their customers, which may be one of the reasons
e-payment is emerging as a thriving business in Nigeria.

From clothing and
accessories, to shoes, bags, and services like satellite television
payment fees, telephone and blackberry charges, utility bills payment,
flight tickets, and books, more Nigerians are making purchases online
thereby signing on to a worldwide trend. It is also erasing the unfair
stereotype of Nigerians as online fraudsters.

The number of
people purchasing goods and paying for services through the internet
has continued to rise over the years. Operators say there are certain
levels of guarantee given by the online stores for customers who wish
to purchase goods and pay for services.

Damien Azu, a banker, says if one is careful and follows instructions, e-payment for goods and services is relatively safe.

“I order for books,
games for my kids and some other stuff within and outside the country
and they get delivered. It is convenient,” Mr. Azu said.

Scepticism remains

However, despite
assurance by operators, some people are still sceptical of the thought
of letting their details out on the internet.

“Anything cards,
you can count me out,” Segun Adewale, an investment consultant said. “I
don’t believe in the use of cards, whether ATM or otherwise, not to
mention [posting] my details on the internet. I would rather do without
these cards. The frauds related to these things (cards) are more costly
when they happen than what it would cost me to do all I have to do
manually” Mr. Adewale said.

Despite efforts to
curb fraud, experts say e-payment system risks still abide both on the
part of the payer and the payee which include, on the part of the
customers; stolen identification or password, dealing with a dishonest
merchant, arising disputes over transactions, inappropriate use of
transaction details, among others, while on the merchant’s side, the
fear of forged or copied instruments, disputed charges, insufficient
funds in customers account and unauthorised redistribution of purchased
items still remain.

Business experts
urge operators to be ahead of cyber crime by thinking ahead and
innovating technology that would knock down any improved attacks by
fraudsters.

eTranzact, a
multi-channel electronic transaction switching and mobile payment
processing platform company says it is continually seeking to develop
new technology that would strengthen security and surmount fraud
threats to e-payment.

“We were recently
granted a patent in respect of an invention, the eSA – eTransact Strong
Authentication, described and claimed in complete specification
deposited at the patent office in the Republic of South Africa” Kumbi
Olorun-rinu, Business Development manager, eTranzact International said.

“It is a two factor
authentication for automated teller machines, point of sale terminals,
mobile and web transactions. This generates one time PIN for use on any
electronic payment channels. The utilisation of static PIN as the
singular parameter for electronic transactions is increasingly becoming
fraud prone” Mrs Olorun-rinu added.

She said card cloning and PIN disclosure have been, and are still, threats to card transactions.

“By leveraging on the dynamic PIN generation, which the company has acquired, this threat can now be surmounted” she added.

The technology
leverages on using customers everyday tool, the mobile phone. It is a
solution that allows the user’s mobile phone to generate a secure
token, a dynamic pin as opposed to the static pin issued to the issuer.

Mrs. Olorun-rinu
said even if a customer falls for a phishing scam or cloned website and
gives away both user name and password a third party can never defraud
the customer because they wouldn’t have the dynamic PIN which has to be
generated from the mobile phone.

More sites

A source at Kalahari, another online shopping site, says it has not had cases of fraud till date.

“Up till now, we
have not had any cases of fraud, since we started this and I hope we do
not, as days go by. It’s not like we have any hidden strategy for this,
it’s all about being careful” the source said.

Kalahari is one of
Nigeria’s online retailers which offer books, music, DVDs, games among
others. It has top-selling products, local payment options,
door-to-door delivery, wish list facilities, vouchers, and free
gift-wrapping among other convenient shopping packages.

Deliveries range
from seven to 24 days, according to the products purchased, while costs
range from N2500, for a five kg product to as much as N7500 for a 10 kg
product.

Information on the
website states that customers not satisfied with their products may
return it within 14 days of receipt and that faulty or wrong product
could be exchanged.

Also, the site says
that if you are not satisfied with your choice and the product is still
in mint condition, you may return it and we will refund you the
purchase price (excluding delivery costs).

Quick teller is another e payment website that deals mainly in
payment of services, utility bills, booking of flights, mobile recharge
among others. The site which is powered by Interswitch says payments
would be acknowledged by the respective organisation immediately.

The focus of this
column last week was on customer service and brand image. It was stated
that a customer-centric approach is important to maintaining a good
brand image.

A major imperative,
which also has a linkage with brand image, is negative perception. A
brand that does not focus on its perception by the target audience will
surely suffer in the market place. It is thus very crucial for brands
to measure, test, and evaluate the perception of the target audience on
a consistent basis.

Several millions of
naira is spent on marketing communication without a consistent
evaluation of consumers perception. This is a critical issue that
should be given a utmost priority by companies.

Based on
interactions with people and on the street insights generation, I have
discovered over time that several consumers are disenchanted with some
brands. Sometime ago, telecom companies and banks were identified as
the culprits in this column. The way customers are treated by banks
leaves much to be desired. Some customers have stopped their patronage
with such banks due to poor service delivery. The proprietor of a
renowned school in Lagos has a negative perception of a particular bank
and this has resulted in stoppage of business with the bank.
Ultimately, this creates negative perception for such brands.

Some salient
questions were asked last week based on how to deliver effective
customer service. One major one is, “what have you done to enhance
customer satisfaction?” It has been discovered that some organisations
do not have a coherent approach to retain brand loyalty. This
eventually leads to negative perception against the organisation and
its brands. It is important that concrete steps are taken to identify
grey areas that need immediate attention.

It is also
important to evaluate the perception of the target audience about a
specific brand. Some organisations do not even go the extra mile to
observe the values and belief system of their consumers. The consumer
who stopped patronage did not just stop suddenly; it is an accumulation
of complaints, murmurings, and discontentment.

When such situation
occurs, there is the need to observe change in the consumer’s behaviour
and purchase decision, while urgent measures are taken to address the
situation. The goal of some brands is just to sell, without even
feeling the pulse of their end users. Consumer insights come in useful
here. This to a large extent helps brands gain an inroad to determine
the level of acceptability of the brand in the market place. Insights
provide value to the brands as the objective voice of the consumers.

When these insights
are generated and thoroughly analysed, negative contents should be
given utmost priority. This will help the brand to contain such before
it becomes a full blown perception crisis.

Consumer insights
allow brands to improve service delivery, review perceptions, and open
new perspective on attitudes, behaviours, and consumer expectations. To
eliminate negative perception, there should be a consistent consumer
perception survey to serve as a feedback mechanism on the performance
of such brands.

Some organisations
do not realise the enormous damage of negative perceptions of their
brands. Some brands have been taken to publics’ opinion court and this
poses service threats to such brands; some consumers have even gone to
publish negative articles on some brands. When there is a structured
feedback mechanism in place, consumers, even though aggrieved, believe
their interest are receiving the deserve attention.

Brands will always
have negative consumer perception when they do not align with public
good, and receive a favourable perception if they serve public
interest.

It is important
that concrete efforts are made to establish an enduring relationship
with the consumers. The thinking here is to subtly appeal to them and
know the way they feel, think, and perceive a brand. Through this, any
negative perception about the brand can be noticed and quickly
eradicated.

Negative perception
can be further eliminated where brand is also transparent in its
dealing with consumers, who, on seeing such open mindedness, refrain
from spreading negative news about the brand.

The Central Bank of Nigeria (CBN) has so far released N88.53 billion under the Commercial Agriculture Credit Scheme (CACS).

According
to information posted on its website, out of 367 projects bids
submitted by the banks, only 91 have so far been considered as eligible
under the scheme.

“Since
inception of the scheme, the CBN has released the sum of N88.533
billion for disbursement to 79 projects/promoters and 12 State
Governments,” according to the statement.

This
is out of 337 projects and 30 state governments that applied. Total
undisbursed funds under the scheme, as at September 30, is N111.467
billion.

In
September, under the 2nd tranche, the state governments accessed N1
billion each for on-lending to farmers’ co-operatives and other areas
of agricultural interventions in their various states. The states are
Adamawa, Bauchi, Enugu, Gombe, Kebbi, Kogi, Kwara, Nassarawa, Niger,
Ondo, Taraba, and Zamfara. The funds were accessed through four banks
namely Fidelity Bank, Union Bank, UBA, and Zenith Bank.

In
August, nine state governments namely Adamawa, Bauchi, Gombe, Kebbi,
Kogi, Nasarawa, Ondo, Zamfara, and Niger accessed N1.00 billion each
for on-lending to cooperative farmers and unions in their various
states. Adamawa and Kebbi States accessed the funds through Zenith
Bank, Gombe and Niger States through Union Bank, while the five
remaining states were funded through UBA.

The
CBN also withdrew a total of N9.2 billion comprising N7.003 billion
from UBA, N581 million from GTB Plc, and N1.60 billion from First Bank,
as undisbursed funds to 11 projects from UBA and 1 project each from
GTB and FBN Plc during the second tranche.

Funding initiative

These
disbursements are part of the N200 billion agriculture credit fund
initiated by the Central Bank last year to boost commercial
agricultural enterprises in Nigeria. The purpose of the fund is to fast
track agricultural development in the country by providing credit to
commercial agricultural enterprises at a single digit interest rate.

It
is expected to enhance food security, reduce cost of credit in
agricultural production, and increase output and employment in the
sector. Target commodities under the scheme include the cultivation of
target crops (rice, cassava, cotton, oil palm, wheat, rubber, sugar
cane, fruits, and vegetable); livestock (dairy, poultry, piggery); and
fisheries.

According
to the CBN, 11 banks have been involved in the disbursement of the
funds across to farms and agro allied businesses as at September,
namely Access Bank, which disbursed N4.2 billion; Fidelity Bank, N1.5
billion; First Bank, N4.9 billion; Guaranty Trust Bank, N4.25 billion;
Oceanic Bank, N2 billion; Skye Bank, N7.6 billion; Stanbic IBTC, N450
million; Union Bank, N7.3 billion; United Bank for Africa, N38 billion;
Unity Bank, N5.5 billion; and Zenith Bank, N12.8 billion.

Eligibility

By
the eligibility guideline released by the Central Bank, borrowers under
the scheme shall be a limited liability company, with asset base of not
less than N350 million, and with prospect to grow the net asset to N500
million in the next three years and comply with the provision of the
Company and Allied Matters Act (1990).

Such
companies must also have a clear business plan, provide up-to-date
record on the business operation, if any, and satisfy the entire
requirement specified by its lending bank.

The
loan has a maximum tenor of seven years and/or working capital facility
of one year, with provision rolls over, while the scheme allows for the
moratorium in the loan repayment schedule.

United Bank for
Africa (UBA), at the Nigerian Stock Exchange on Thursday, posted
significant improvement in its unaudited financial result for the third
quarter ended September 30, 2010.

The bank, which
recorded a loss after tax of about N18.094 billion in the period in
view, 2009, posted a profit after tax of N6.648 billion this year,
reflecting a 136.74 percent improvement. UBA also recorded a 7.49
percent growth in its total net asset during the quarter, from N1.548
trillion to N1.664 trillion.

However, the bank’s turnover for the period declined by 6.86 percent, from N146.411 billion to N136.366 billion.

High deposits

Emmanuel Nnorom,
UBA’s group executive director, finance and risk, in a statement on
Thursday said, “This is a strong set of results that demonstrates both
the bank’s prudent management and continued commitment to its strategic
objectives,” adding that the bank’s focus on initiatives to reduce
costs resulted in improved efficiencies, with operating expenses
declining by 6.4 percent to N73.5 billion during the period under
review.

Mr. Nnorom said the
bank deposits’ rose by 7.4 percent from N1.25 trillion in December 2009
to N1.34 trillion as at September, and its shareholders’ funds reached
N189.7 billion.

Also, on Thursday,
Wema Bank released its audited third quarter accounts for the period
ended September 30, 2010. The result shows a 4.74 percent decline in
turnover, from N25.286 billion to N24.085 billion. The profit after tax
inched up by 105.50 percent, from a loss of N29.727 billion to a gain
of N1.635 billion.

Decline continues

Meanwhile, the
decline in the value of equities at the nation’s capital market on
Thursday cuts across all sectors of the bourse.

The resilient
nature seen in sectors like the breweries, conglomerates, food and
beverages, since the current downturn started this week, could not be
sustained after yesterday’s trading session.

The All-Share Index
declined by 1.42 percent, to close on Thursday at 24,537.02 basis
points from the previous day’s figures of 24,891.73. Market
capitalisation also followed with N87 billion losses to close at N6.011
trillion from Wednesday’s N6.098 billion.

The number of
gainers at the close of trading session closed higher at 16, compared
with the 14 gainers recorded on Wednesday, while losers also closed
higher at 47, compared with the 38 losers recorded the previous trading
day.

The banking
subsector yesterday led on the most active subsector table with 101.81
million shares valued at N737.29 million, as against the 311.78million
units valued at N1.65 billion recorded on Wednesday.

The volume in the
subsector was driven by shares of Access Bank, First Bank, Guaranty
Trust Bank, and Diamond Bank. The total volume of 39.31 million units
valued at N433.98 million traded in the shares of the four stocks
accounted for 21.42 percent of the entire market volume.

President sympathies

Meanwhile, at the
ongoing annual conference of the Chartered Institute of Stockbrokers in
Abuja, President Goodluck Jonathan expressed his sympathies with
investors and stockbrokers that lost money in the stock market since
the downturn began in September 2008.

Aliyu Idi Hong, who
represented the president, said the government is working hard on ways
to ameliorate the losses that befell investors in the market in the
past two years.

Unless Nigeria
checks her domestic debt, which has been rising disproportionately to
external debt, the private sector may be crowded out of the debt
market. The World Bank recently sounded the alarm on the country’s
domestic debt, warning that it may stifle private sector growth.

Greenwich Trust
Limited, a diversified financial services firm, in its weekly report,
said the scenario could have a negative effect on the nation’s economy.

“The World Bank has
cautioned the Federal Government to check its rising domestic debt,
which has continued to accumulate compared to its external debts.
According to the World Bank, the rising domestic debt, which currently
stands at $21.8 billion (N3 trillion), may have a negative effect on
the economy, as the private sector may be crowded out,” the report from
the finance firm stated.

The finance firm
noted that the president has also requested for an approval from the
House of Representatives to borrow about $5 billion from foreign
sources to finance critical infrastructure projects, as part of the
external borrowing plan earlier approved by the National Assembly.

Managing the debt

In August, the Debt
Management Office (DMO) stated that it has pegged its borrowings next
year to $7.1 billion, in a bid to control public borrowing and keep
Nigeria’s debt within sustainable threshold.

In its latest
report on the national Debt Sustainability Analysis (DSA), the debt
office stated that the Net Present Value (NPV) of the country’s debt,
currently at 16.2 percent of gross domestic product, would crash to
about 2.2 percent by 2020 and 0.9 percent by 2029, if effective debt
management practices are put in place.

Abraham Nwankwo,
director general of DMO, said with this forecast, total public debt is
expected to grow from $31.4 billion presently to about $38.5 billion
next year, to be sourced from both domestic and external institutions
in a 60:40 proportion respectively, in line with last year’s DSA,
adding that the nation’s debt is sustainable.

Barely three years
after it exited the Paris and London Club debts, the Central Bank of
Nigeria (CBN) on Monday said Nigeria’s debt profile has risen to N3.4
trillion, with N551 billion owed external creditors. The second quarter
report released by the CBN in Abuja said the country’s total debt now
stood at N3.4 trillion, about 14.8 percent of the GDP.

The DMO said the
external debt was mostly owed multilateral institutions, with some of
the facilities having a 40-year repayment period and less than one
percent interest rate.

Judicious use of funds

Some finance
experts, however, said Nigeria, contrary to general opinion, is in fact
a highly under borrowed economy, and needs to venture into constructive
borrowing for the right reasons.

“If we had a
purposeful government that actually wants to address infrastructural
displacement, then they must borrow,” Ayo Teriba, managing director,
Economic Associate, said.

According to him,
the nation, at the moment, is not borrowing to invest. “We are
borrowing to pay pension allowances, to get voters register and the
likes. It shows the lack of vision on the part of the nation’s
leadership,” he added.

Sunday Salako, a
member of the National Economic Management Team (NEMT), said the
challenge for Nigeria is not if its presently over or under borrowed,
but if the funds are actually being appropriately utilised.

“The question is
how are these funds being utilised? You can borrow money if there are
issues you have that need to be addressed with the borrowed funds, but
not in a situation where there is nothing tangible that is ready to be
addressed,” he said.

In 2006, Nigeria
reached a deal with the Paris Club of creditors, which allowed for the
payment of $12.4 billion in order for the entire debt of over $30
billion to be cancelled. Nigeria’s debt profile rose to about $32
billion, owing largely to penalties and late interest payment fees over
the years.

Plans by the Securities and Exchange Commission (SEC) to raise the minimum capital for capital market operators is causing upset at the Nigerian capital market.

Operators who perceive that the commission is contemplating moves in this direction, said the regulators should instead work at improving investor confidence and efficiency in the system.

Lanre Oloyi, SEC’s spokesperson, said though the commission had muted the idea in the past, he is not aware of the latest development, he said in a telephone response.

No official communication

Joshua Omokehinde, managing director of Marimpex Finance and Investment Limited, a stock broking firm, said there have been plans in the past for an increase, adding that there is no official communication from the commission to operators on the issue.

Mr. Omokehinde said the commission should shelve whatever plans it has on increasing minimum capital, as the market is in a fragile condition at the moment.

“It is the anticipation of increase in minimum capital that brought about the problem we have in the capital market today, as many stock broking firms began to undertake margin loans in order to increase the volume of their business and shore up their capital base,” he said.

He said while an increase in capital for capital market operators may be desireable, it would not be feasible for now, as it would plunge the market into further crisis.

“Stockbrokers act as intermediaries and so may not need too much capital to operate. If the market is efficient, we would not have the kind of problems we are faced with today,” he said.

Integrity, not huge capital

Mr. Omokehinde said the major issue in the capital market is integrity, and not huge capital.

“Some small operators even have more integrity than the big firms. SEC should be able to know those firms that have integrity and label them as such,” he said.

SEC, in April 2007, announced a new capital base of N1 billion for stock broking firms from N70 million; while issuing houses’ capital base was increased to N2 billion from N150 million. The deadline for compliance was December 2008.

Prior to that, the capital was raised in December 2005 from N20 million, and N40 million for stock broking firms and issuing houses. However, with the global financial crisis, which also led to the massive depreciation in the Nigerian capital market, the commission had to put this latest increase on hold.

The report of the February 2009 Dotun Suleiman-led SEC committee on the Nigerian Capital Market recommended that capital requirements for different market operators should not be unilaterally set at a uniform amount for all operators within a category.

The report suggested that start-up capital requirements for new operators should be based on minimum required start-up costs plus risk-adjusted weightings (to be reviewed periodically).

“For dealers, capital requirements should be determined on a risk-adjusted basis, increasing as levels of risk taking grows for each individual dealer, and weighted in line with the risk profile of instruments traded and assets held,” the report said.

The retreat witnessed at the Nigerian Stock Exchange (NSE) on Tuesday continued yesterday, as the performance of equities closed on a negative note.

The market capitalisation of 199 first-tier securities closed lower, as market net worth dropped by N78.64 billion at the close of Wednesday’s transaction. The NSE All-Share Index retreated by 1.26 percent, to close on a negative note.

Market watchers said equities’ value declined because short term traders focused on reaping part of the attractive profit recorded in recent rally sessions.

Equity research analysts at GTI Capital Limited, a stock brokerage firm, said most investors were scared-off the market due to the slight drop noticed on Tuesday.

“It sounds wise to take the little profit before it goes with pull back. Nevertheless, we advise that all investment decision should be linked with trend on each security; panic selling should be strictly avoided,” the analysts said.

The Exchange sectoral indexes reflected selling activities yesterday as NSE-30, which measures the performance of blue chips in the market, dropped by 1.21 percent. The NSE Food/Beverages dropped the highest points by 2.25 percent, followed by Banking, which dropped by 1.97 percent; the Oil/Gas dropped by 0.67 percent, while the NSE Insurance, the only gainer, appreciated by 0.23 percent.

Most active

The banking subsector on Wednesday led on the most active subsector table with 311.78 million shares valued at N1.65 billion, as against the 217.45 million units valued at N1.92 billion recorded on Tuesday.

The volume in the subsector was driven by shares of Unity Bank, Oceanic Bank, BankPHB, First Bank, and Guaranty Trust Bank. The total volume of 183.51 million units, valued at N899.87 billion, traded in the shares of the five stocks, accounted for 45.36 percent of the entire market volume.

Gainers decrease

The number of stocks that gained at the close of trading session on Wednesday closed lower at 14, as against 30 stocks recorded the previous day, while losers closed higher at 38, compared with the 28 recorded on Tuesday.

Custodian Insurance and Honeywell Flour topped the price gainers’ chart with an increase of 13 kobo and 11 kobo on their opening prices of N2.62 and N5.27 per share respectively. On the flip side, Flour Mills and Cadbury topped the chart with a decrease of N1.54 and N1.48, to close at N71.01 and N28.31 per share respectively.

Meanwhile, the Exchange, in a statement on Wednesday, said that Dangote Cement, which is billed for listing on 26th October, has submitted its unaudited results for nine months ended September 30.

The live coverage of the rescue of the 33 miners who were entombed in Chile’s copper and gold mine for 69 days captured a global audience. It was one of the few moments when good news eclipsed the bad. It was a celebration of human resilience and a picture of the efforts of humanity to search for resources at extreme locations. Spare a moment to ask how many miners would have emerged alive if such an accident had occurred in your country.

In all the celebrations that followed the rescue, few questions were asked about why the mine collapsed in the first place. Was this a rare occurrence here and elsewhere? It is reported that the San Jose mine was so unsafe in 2007 that it had to be closed down for a while. We note that on 30 July, six days before the mine accident, the Chilean labour department had warned again of “serious safety deficiencies.” Until the 33 miners got sealed up in the mines, the government is not known to have taken any action.

Official data in Chile shows that 373 workers died in mining accidents in the last decade. In 2010 alone, 31 lives have been lost.

The mining sector is Chile’s main economic powerhouse. The largely privatised mines reap huge profits. However, fatal mining accidents in this country is as high as 39 every year. As the miners emerged from the tomb, the government lapped up the limelight – who wouldn’t – and the applause that resounded across the globe. It was also interesting to see President Evo Morales of Bolivia visiting the mine to meet with the lone Bolivian miner who was among the rescued men. This miner had immigrated to Chile for lack of employment in his home country. President Morales offered the man a promise of a job as well as a house. Hopefully, it will not be a job in a Bolivian mine.

With regards to the San Jose mine, in 2007, there was a complaint filed at the Chilean appeals court and the National Geology and Mining Service by workers of the company together with unions of other companies following deaths in the mines. At that time, the workers demanded the closure of the mine due to poor mine ventilation and lack of proper escape routes. The mine was shut on 22 September 2007 and reopened in 2008, without any changes in the safety provisions.

Stories of industrial accidents emerge regularly around the oil industry. The oil spills of the Niger Delta are daily in occurrence. The massive sludge spill from an aluminium company in Hungary raised huge safety issues about industrial practices, but was almost eclipsed by the reports of the Chilean rescue efforts. As this piece is being written, reports are emerging of a collapsed mining tunnel in Ecuador where four miners are said to be trapped.

As pictures of the families of the Chilean miners camping at the site ran on television screens and websites, viewers could not pick out the fact that some key players were missing. We are talking about figures such as Alejandro Bohn and Marcelo Kemen, the businessmen owners of the San Esteban mines. They left the mine two days after information was obtained that the miners were alive. They did not return there for over two months.

Mining deaths

Thousands of deaths are recorded annually in mining accidents around the world. Recorded figures run as high as 12,000 deaths of workers in the sector every year. In China alone, 2,631 miners died in 2009, while 200 perished in Sierra Leone. In the USA, 26 fatal accidents at her mines were recorded in 2007, and 23 in 2008.

Recent deaths from mine accidents in South Africa are 309 in 1999 while 220 died in 2007. In 2008, the deaths added up to 171, while 165 died in 2009. In the first half of this year, 67 deaths were recorded. A rockfall accident in the Marikana mine killed 6 mine workers.

It is shocking that only 24 countries have ratified the Safety and Health in Mines Convention of the International Labour Organisation (ILO) signed in 1995. Chile has not ratified this instrument.

Some analysts have argued that there is already no need for certain minerals to be mined anymore, as enough of the substance have already been brought out of the mines; an example is gold.

As for crude oil, there is an urgent need for the world to move away from fossil fuels and embrace renewable energy sources. The direct and indirect deaths resulting from mining and utilization of these products should urge us to pause and think.

The resurrection of the Chilean miners, and their return from the bowels of the earth may receive our applause, but we cannot continue to push our luck with unsafe mines, reckless pursuit of capital, and cheap dispensation of human lives.