Compiled by Tafara Chiremba-Zimbabwe Environmental Law Association
On the 16th of November, I attended a meeting that was convened by the Zimbabwe Anti-Corruption Commission (ZACC). The objective of the meeting was to disseminate the findings of a study that ZACC undertook on corruption in the mining sector. According to ZACC, the study is expected to drive the institution’s engagement with government on empirically informed strategies to curb corruption in the mining sector. Present in the meeting was a diversity of stakeholders including the academia, Civil Society Organisations (CSOs), Ministry of Finance and Economic Development and Ministry of Mines and Mining Development. It was my honour to be part of the meeting representing the Zimbabwe Environmental Law Association (ZELA). Below are the notes that I generated from the launch of ZACC’s study.
Objectives of the Study
The Zimbabwe Anti -Corruption Commission (ZACC)’s study on corruption in the mining sector was premised on 5 objectives namely;
- To establish factors and institutions perpetuating corruption in the mining sector
- To establish how corruption impacts on Artisanal Small Scale Mining sector ( ASM) sector
- To establish the forms of corruption in the sector
- To identify existing institutional frameworks that seek to combat corruption
- To explore best possible recommendations to combat corruption in the mining sector in Zimbabwe
Key Findings of the study
Factors and Institutions perpetuating corruption
- The process to apply for a mining licence and have it approved is very cumbersome. There is bureaucracy and lack of transparency in all these processes.
- There are genuine chances of double allocations or multiple ownership of claims because the mining cadastre systems is not computerised
- There is lack of protection of whistle blowers in the mining sector and this perpetuates corruption
- Corruption is also perpetuated due to lack of disclosure of the owners of the mining claims and mining contracts
- Poor law enforcement on corruption
- There is no security of property rights and this is a breeding ground for corruption
- The study revealed that he administrator of policies and legislation regulating the mining sector, Ministry of Mines and Mining Development (MMMD) is one of the key institutions which is implicated in corruption in the mining sector. Corruption thrives at different stages of mining including awarding of mining of mining claims.
- The study also revealed that Provincial Mining Directors are also figured in corruption mainly because they are the ones who know where mining claims are
- Politically Exposed Persons ( PEPs),mining inspectors and geologists were cited as players in corruption deals within the mining sector
Nature and Forms of Corruption in the Mining Sector
Some of the forms of corruption established by the study include;
- Under declaration of profits from mining companies resulting in Illicit Financial Flows (IFFs)
- Lack of up to date geological data
- Illegal selling of mining claims
- Abuse of power by administrators of mining policies and laws
Impact of Corruption in the ASM sector
- The study revealed that corruption has undermined the contribution of the ASM sector especially the ASGM sector to the country’s Gross Development Product (GDP).
- The huge part of gold that is produced in the ASM sector is not delivered to Fidelity Printers and Refiners (FPR) due to unfavourable pricing and trading conditions. A significant portion of gold that is traded on informal markets is smuggled out as traders pounce on lucrative prices offered by buyers in South Africa and other countries and resulting in the country losing a lot of revenue
Institutional Framework Regarded as Key in Combating Corruption
- Institutions established by government to fight corruption include the Ministry of Mines and Mining Development, Auditor General’s Office, Reserve Bank of Zimbabwe (RBZ), Zimbabwe Republic Police ( ZRP) Minerals Unit and Parliament ( Parliament Portfolio Committee on Mines)
- Mines and Minerals Act was established as a key legal instrument available to deal with some of the problems of corruption in the mining sector. The study revealed that the process to amend the act which is currently underway was said to be a key opportunity to plug out loopholes in the current legislation. The current legislation for example does not contain transparency aspects such as contract and beneficial ownership disclosure.
Key recommendations of the study
Some of the recommendations that the research established include;
- Government must speed up computerisation of the mining cadastre system
- There is need for a policy framework through which mining companies can disclose their production levels
- There is need for a legislation on contract disclosure. Aspects of the contracts that are of public interest should be disclosed
- There is need to improve corporate governance in the mining sector
- There is need for laws to empower communities and local authorities to participate in mining contracts negotiation and the awarding process
- There is need to reduce bureaucracy in mining licencing application and approval processes
- There is need for a law on whistle blowing on corruption.
My Key Take Away from the Meeting
There is acknowledgement that corruption in the mining sector undermines the capacity of the country to leverage on its resource endowment to achieve sustainable economic recovery and development. There is need for different stakeholders to join hands in upscaling efforts to fight corruption in the mining sector. Reforming mining policy and legislative instruments should be a centre of all efforts to combat corruption. Our mining laws and policies must be watertight on transparency and accountability in the mining sector. The current process to amend the Mines and Mineral Amendment Bill presents a huge opportunity which must not be squandered. The issues of property rights, beneficial ownership and contract disclosure, involvement of communities in contract negotiation are some of the issues that should be included in the Mines and Mineral Amendment Bill.