Despite its strategic economic importance and potential, mining continues to give rise to economic problems. Corruption and lack of transparency and accountability in licencing, contract negotiation and revenue distribution stand as the main challenges. Some of the problems are linked to the old legal and institutional framework run on a political patronage system that affects effective and beneficial contract negotiation and oversight by parliament. Further, there is no public disclosure of disaggregated revenues and contracts. An attempt at promoting public disclosure of revenues through the Zimbabwe Mining Revenue Transparency Initiative (ZMRTI) in 2012-2013 was peremptorily rejected by the Ministry of Mines and is in limbo. It was part of efforts to create a domestic version of the Extractive Industries Transparency Initiative (EITI). Going forward, we will push for workable measures and tools to promote transparency and accountability in the coming five years through the Publish What You Pay coalition.
Tax evasion, illicit financial flows and undeserved tax exemptions are some of the challenges in the mining sector. The Mines and Minerals Act gives too much power to the Minister of Mines to offer tax exemptions to mining companies without public or parliamentary scrutiny for appropriateness. This deprives the country of revenue. In addition, illicit financial and mineral flows are another challenge. There is a perceptible increase in criminality, smuggling and leakages of minerals such as gold and diamonds at mines and across the country’s borders due to poor monitoring systems and low prices offered. Therefore, in the coming five years our focus will be on finding ways and tools to fight tax evasion, illicit financial and mineral flows and corruption.
Violations of environmental, economic, social, cultural rights and other freedoms in the mining sector are increasing. We are ready to fight this scourge. Mining causes loss of land, displacement of communities without compensation, pollution of rivers and loss of livelihood sources. The rights of workers are also not being respected particularly at Chinese mines where working conditions are slavish. State participation in mining through state owned companies has led government to abdicate its duty to protect the people. State complicity in human rights violations may be linked to failure to apply and implement the concept of business and human rights as enunciated in the UN Guiding Principles on Business and Human Rights. Further, compliance with and monitoring of Environmental Impact Assessments to address potential impacts and risks on communities by mining companies and environmental authorities has been very weak. In all this, what has been missing is a community based social accountability tool and or an independent EIA Monitoring Protocol that can be used to assess compliance EIA commitments. ZELA is committed to develop the tools and enhance compliance monitoring in the next five years.
The implementation of the Indigenisation and Economic Empowerment Programme while noble, is another controversial issue we will deal with. Many Community Share Ownership Schemes face transparency and accountability challenges including; misuse of funds, manipulation by politicians, failure to consult or report back to the people on operations and absence of a clear and predictable legal and policy implementation framework. What also remains as a major challenge is the existing old and colonial legal architecture especially the Mines and Minerals Act. The Act does not adequately deal with environmental protection, transparent issuance of mining rights and public disclosure of mining revenues. Since 2007, there are several stalled legal reform processes initiated by government such as the Mines and Minerals Amendment Bill, Draft Minerals Policy, Income Tax Bill, Sovereign Wealth Fund Bill, a diamond law and exploration law. Up to now nothing has materialized. Legal research and advocacy is our forte hence hence we will initiate processes to promote and influence legal reforms in the coming five years.
A detailed analysis of the above and other challenges in the extractive and mining sector are included in a mining and extractive sector programme document we produced in 2013 titled, “Our Thinking: Strategic Interventions and Focus Issues in Zimbabwe’s Extractive and Mining Sector –The Next Five Years 2014 -2019”. The document defines and specifies ZELA’s strategies and focus areas in the mining sector. The strategic document will be used as a supplementary reference guide to our signature activities and interventions identified in this strategic plan in the coming five years.