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Transparency and Accountability: Why it became an important Research and Advocacy Issue in the mining sector

Compiled by Mutuso Dhliwayo -Zimbabwe Environmental Law Association

Introduction

Zimbabwe is a country that is endowed with a significant mineral resource base, which has resulted in it being called the “ Persian Gulf of Minerals”.  The Zimbabwe Geological Survey of 1990 lists Zimbabwe as having no fewer than 66 base and industrial mineral deposits. Of these 66, 40 are currently being exploited. Reports estimate Zimbabwe as having the second largest reserves of both Platinum Group Minerals and chrome in the world after South Africa. [1] Further, reports estimate Zimbabwe to have between 20-30% of potential world diamond production. Although these statistics are not supported by current and reliable geological data, they are indicative of the mineral potential that Zimbabwe has. Apart from diamonds, chrome and platinum, Zimbabwe also has gold, lithium, asbestos, nickel, copper, coal and emeralds among other minerals. With Zimbabwe’s current social and economic problems, it is argued that its ability to recover, stabilize and eventually grow will to a large extent be dependent on the mining sector. [3]A 2014 World Bank Report predicts that by 2018, the value of the minerals produced in Zimbabwe could be nearly US $8 billion and that the sector could contribute some US$ 700 million to government revenues.[4]   While the sector has already has already overtaken other sectors of the economy in its contribution to the Gross Domestic Product, it is failing to reach its maximum potential and fulfill expectations in terms of contributing to socio-economic development. Zimbabwe is ranked a lowly number 156 out of 187 on 2014 the Human Development Index. [5] (This is according to the time of writing)

While there a number of reasons why Zimbabwe’s mining sector has failed to reach its potential and fulfill expectations by contributing to Zimbabwe’s economic recovery, stabilization and growth[6], this section will focus on limited/lack of transparency and accountability as one of the major factors for this unfulfilled potential.  Lack of transparency and accountability is a cancer that is affecting Zimbabwe’s mining sector. The presence of mineral resources represents a comparative but not necessarily a competitive advantage. It is against this background of the failure of the mining sector to fully contribute to economic development that the Zimbabwe Environmental Law Association (ZELA) began to programme on transparency and accountability issues in Zimbabwe’s mining sector through one of its most active, exciting and high profile programmes, the Extractive Industries Programme. [7] The objective of the programme is to promote transparency and accountability in the whole mining value chain through various initiatives so that the exploitation and management of mineral resources and revenues benefits that greater majority of the citizens rather than a few economically and politically connected individuals.[8] This chapter profiles the activities that ZELA has done to promote transparency and accountability within the mining sector with Government, CSOs and CBOs, legislators and business, the achievements and challenges.

UNDERSTANDING THE MEANING OF ACCOUNTABILITY AND TRANSPARENCY 

Transparency refers to the provision of information to stakeholders.[9] The mining sector has a number of interested and affected stakeholders. These include other Government Ministries and Departments other than the Ministry of Mines and Mining Development (MMMD) like the Ministry of Finance, Zimbabwe Revenue Authority (ZIMRA), Zimbabwe Mining Development Corporation (ZMDC), Minerals Marketing Corporation of Zimbabwe (MMCZ), Civil Society Organisations, Community Based Organisations, Parliament and the media. All these stakeholders need information to make informed decisions. Transparency therefore entails Government Ministries, Departments and other bodies opening up to public scrutiny by providing access to information. However, the information has to be credible, accessible and timely.

Accountability entails holding the State, the private sector and individuals to account for their actions and their impact (negative or positive) that they have on people’s lives.[10] It means that those who are affected by actions, have the right to be heard and to have their views taken on board in the policy and decision making processes. It means that those with power who make decisions that affect the lives of others have a duty to listen and respond and in those instances where these decisions impact negatively on people’s livelihoods, they have to be sanctioned.  Transparency and accountability are not exclusive of each other but dovetails and reinforce each other. Transparency is a precondition for accountability. Without access to timely, accessible and credible information, there is no basis for accountability. Transparency and accountability increases a sense of responsibility by decision makers and curtails the risk of corruption and mismanagement and supports democracy, good governance and sustainable development.

Transparency and accountability in the mining sector is necessary because the resources belong to the citizens. State institutions like the MMMD, ZMDC and the Minerals Marketing Corporation of Zimbabwe (MMCZ) manages them on behalf of citizens. The primary objective of transparency and accountability in the mining sector is to ensure mineral resource exploitation benefit all people and not individuals who are politically and economically connected. The way mineral resources are extracted and revenue managed and distributed determines whether or not they will be able to contribute to sustainable development. Through transparency and accountability, citizens protect resources from spoliation and rent seeking by both local and outside actors. Furthermore, transparency and accountability ensures that revenues are distributed equitably and also promote pro-poor policies to alleviate poverty. Through transparency and accountability, stakeholders are empowered with the necessary information to hold the private sector and government to account. [11] But why is  transparency and accountability important in mineral resources governance?  The story continues next week!!!


[1] First Report of the Portfolio Committee on Mines and Energy on Diamond Mining (with special reference to Marange Diamond Fields) 2009-2013 presented to Parliament in June 2013, Fifth Session , Seventh Parliament. See also the Parliamentary Portfolio Committee Report on Chrome Mining Sector in Zimbabwe, 2013

[2] Zimbabwe Mining Revenue Transparency Initiative, 2011

[3] Zimbabwe Agenda for Sustainable Socio- Economic Transformation is Zimbabwe’s economic blue print which was adopted by the Government of Zimbabwe after the outcomes of the harmonized elections held in July 2013. 

[4] Chamber of Mines presentation at the Working Group on Extractive Industries

[5] The Human Development Index measures the average achievements in three basic dimensions namely healthy life, knowledge and decent standard of living. The 2014 Human Development Index ranking is available at http://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index

[6] These include an old and archaic legal framework, limited Foreign Direct Investment which is affecting the availability of working capital for recapitalisation, sanctions, skills flight, frequent power outages and inefficient infrastructure.

[7] The Extractive Industries Programme was started in 2010 with support from the Ford Foundation Office for Southern Africa.

[8] Transparency International Zimbabwe, 2012. A look at the mining sector in Zimbabwe : Gold, Platinum and Diamonds

[9] Kabemba, C.  Building the Understanding of Transparency and Accountability in the Mining Sector, 2010. Presentation at the Multi Stake Holder Meeting on Transparency and Accountability

[10] ibid

[11] Kabemba, C.opcit

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