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COMMUNITY BENEFIT SHARING: The Key Takeaways

Compiled by Proud Nyakuni and Cosmas Sunguro.      

Dated: 31/08/2021


A picture of a pool resulting from irresponsible mining in Chiadzwa

Background and Introduction

Benefit sharing in Zimbabwe has been very contentious especially in resource rich communities that feel that they are being short changed, and they are not getting a fair share of the benefits derived from the extraction of natural resources in their host communities. In the face of the USD $12 Billion mining economy vision, communities continue to question the realistic nature of achieving this vision. If achieved, will it be of any benefit to ordinary Zimbabweans or it’s for the few elites. In a bid to assess the level of benefit by mining communities and the possible solutions to lack of Community beneficiation, Habakkuk Trust, Silveira House, Publish What You Pay-Zimbabwe and Zimbabwe Environmental Law Association (ZELA) hosted a webinar on 27th August 2021 whereby various mining communities and different stakeholders expressed their views on Community benefit sharing.

Key Issues raised

Contract Transparency

The negotiation and awarding of mining rights remains mystery that is only known by the President and Minister of Mine and Mines Development.  In 2020 the community of Marange demanded answers why Anjin was back in Chiadzwa even though it was one of the companies dissolved leading to the formation of Zimbabwe Consolidated Diamond Company (ZCDC). There was no meaningful response given. The secrecy shrouding their contracts makes it almost impossible to demand accountability from them let alone knowing their financial status. Thus, as communities demands transparency and accountability, these companies seem to be protected hence lack of community beneficiation as envisaged in Section 13 (4) of the Constitution.

Corporate Social Responsibility

The communities felt the fact that CSR is not compulsory but remains mining companies’s freewill is contributing to communities not being able to benefit from the minerals in their communities. Other companies such as Anjin in Chiadzwa are allegedly just mining without care of social license or of the community it operates in. The general observation was that Chinese companies in the mining sector are not making any effort in terms of corporate social responsibility. A speaker from Mutoko stated that, “As long as the Mines and Minerals Act is not revised, and CSR not endorsed we will continue to be negatively affected especially by the operations of the Chinese companies in Mutoko Nyamutsahuni Ward 10″.

Revenue Collection and Social Service Delivery

Most communities complained that payment of mining levies and taxes by mining companies to Local authorities was always delayed, it is even worse because it will be in Real Time Gross Settlement (RTGS) and would have lost its real value. This derails social service delivery because the money may end up being used for administrative work of local authorities and not for economic development. In the case of Mutare Rural district council, there was acknowledgement of payment by ZCDC, but nothing from Anjin and Gold mining companies. Thus, issue of resource mobilization from natural resources remains a great challenge for mining communities and it seems the authorities are hesitant to use legal routes available in fear of losing more funds.

Community Share Ownership Trusts (CSOT)

In other Communities such as Gwanda and Shurugwi mining communities testify that they had benefitted from mining companies, with Unki mine initiating several tangible projects. However, the same cannot be said of other communities especially from Chinese companies. Mutoko and Marange communities expressed that they did not effectively benefit from the CSOT funds as was expected when these were formed.  As of the case of Marange, the Board was imposed so there is need for citizenship engagement and participation, that includes appointment of local board members to ensure persons with interests of mining communities at heart are in the board and can advocate for development.

Opportunities Available for Community benefit Sharing

1.Demanding timeous Remittance of Mining Levies

Since payment of mining levies and royalties is a legal obligation, communities can demand effective resource mobilisation by Local authorities and the Government so that funds are available for social service delivery. Laws should not be cumbersome in recovering mining levies and royalties.  There is also need to relook in the issue of tax holidays and incentives as communities feel they are overrated at the expense of community beneficiation and local economic development.

2. Capacity building and Employment creation-

As Veronica Zano stated, there is need to enhance competencies for Zimbabweans by provision of full range of services required by Industry through interventions such as provision of scholarships, reinstatement of students grants and exchange programs.

There is an opportunity for recruitment of locals as well on job trainings to acquire the necessary skills as lack of technical expertise is mostly cited as a barrier for employment of locals especially in Chiadzwa. The good example is of Unki mine that was cited to have trained more than 20 employees for the jobs at the mining company.

3.Creating business opportunities for local firms

Ensuring compulsory local content requirements through bids, forward and backward linkages. Enforcement of local procurement and supplier development by unbundling large contracts in order to accommodate smaller businesses suppliers, to include businesses operated by women,  youth and persons with disabilities finding space in mining value chain and available linkages.

4. Zimbabwe Local Content Strategy implementation

Effective implementation of this principle will ensure community beneficiation, by promoting local value addition and linkages.

5. Section 159 (3) and 247 of the Mines and Minerals Act

The requirement for an applicant of Special mining license to furnish the Mining Commissioner with a marketing plan setting out proposals and timetable for beneficiation of the output of the proposed mine is an opportunity for locals to benefit.

Recommendations

1. Social license is a required standard for mining companies to acquire International accreditation, therefore, Corporate Social Responsibility should be compulsory and governed by the Mines and Minerals Act and not regarded as charity.

2. Contract transparency should be enhanced to ensure accountability by investors while ensuring community beneficiation. The Zimbabwe Extractive Transparency Initiative should be revived and become law to ensure good mineral resource governance.

3. Effective Resource mobilization through tracking and enforcement of revenue collection of mining levies and taxes.

4. Regular multistakeholders meetings that are effective and ready to implement the deliberations.

5. Parliament to continue playing its oversight role and ensure policies are implemented especially those that have to do with beneficiation.

6. According to Publish What You Pay, ” there is need to establish an online monitoring tracker on the implementation of recommendations made by the Office of the Auditor General (OAG).

Conclusion

Levels of Community beneficiation are so marginal as evidenced by lack of economic development, illicit financial flows, smuggling of minerals and poverty. Therefore, there is need for the civil society, communities and citizens in general to demand corporate accountability, contract transparency and effective implementation of laws in policies governing the mining sector to ensure beneficiation.  It is high time the citizens also petition the parliament to exercise its oversight role in the extractive sector lest the minerals will continue to be exploited and the powerful gets richer while the weak poorer which is a derail to an upper middle-class economy 2030 vision.

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