Home / Blogs / ZELA Blogs / ZCDC’s publication of its annual reports commendable

ZCDC’s publication of its annual reports commendable

Compiled by Fadzai Lydia Midzi and Tafara Chiremba

It is commendable to note that the State Owned Enterprise (SOE), Zimbabwe Consolidated Diamond Company (ZCDC) has published its annual reports online for the years; 2016, 2017 and 2018[1]. Such a transparency step should also be adopted by other mining companies operating in Zimbabwe. The Marange diamond mining operations for long have been shrouded in secrecy. Communities residing in the diamond area are always asking questions concerning ZCDC operations and their production. For a long period , civil society organisations (CSOs) such as ZELA have been putting pressure on ZCDC and calling on the company to publish annual reports to demonstrate its commitment to uphold principles of transparency and accountability that are enshrined in the Constitution.

The move to release the annual reports is a step in the positive direction. This is a change in the transparency landscape for the diamond sector that ZELA and the other CSOs that constitute the Strengthening Transparency and Accountability in the Natural Resource Governance (STA-NRG) regard as progressive .  It has been a real struggle  to ensure that ZCDC publishes its yearly audited financial statements and these engagements are proving their effectiveness. Considering that ZCDC is state owned company governed by the constitution and Public Finance Management Act, issues of ZCDC’s performance regarding taxes – royalties, customs duty, withholding taxes and Pay As You Earn (PAYE) matter.  Audited annual reports provide a clue on how the entity is managing the country’s mineral wealth. The Natural Resource Governance Index (NRGI) on mining State Owned Enterprises ( SOE) regards public disclosure of financial audits as a necessary complement to strong corporate governance and SOC accountability.”

It has become apparent that government is backtracking on the adoption of the Extractives Industry Transparency Initiative (EITI)[2]. However, this recent development by ZCDC is a commendable effort towards the promotion of transparency in the diamond sector.[3]The quest to improve transparency and accountability in the extraction of diamond in Marange gave birth to ZCDC[4].  However, for some reasons, the entity has not been publishing its annual reports. It must be highlighted that the entity last produced its audited financial statements in 2013 courtesy of the country’s Staff Monitoring Programme (SMP). CSOs have been relying on Auditor General’s report to get insights on transparency and accountability issues in the management of revenue from diamond mining in Marange. For example, the 2018 OAG report on ZCDC’s 2016 financial statements revealed the failure by government’s joint venture partners in Marange to inject the agreed amounts, government not appointing its representatives to the boards of Marange diamond joint ventures, incomplete audited financial accounts and failure to pay taxes. Outside the Auditor General’s report, there has been no readily available information with regards to ZCDC’s income statement and balance sheets, income or losses during the last seven years.  A light touch on annual reports recently released confirms disclosure of information that is of public interest. Information that has been disclosed include measures that the entity has adopted to facilitate cleaning of the diamond, prices at which diamond was being sold at, efforts by the entity to curb revenue leakages.

While it is a positive step that the State-Owned Enterprise (SOE), ZCDC has released the reports for three consecutive years, there is always room for the entity to share these timeously, make them available and accessible to enable public scrutiny and subsequent consumption. Timely production of audited financial statements must be ZCDC issue of priority as it shows the company’s determination to comply with the country’s public finance management provisions. For example, ZCDC’s audited financial accounts for 2016 were released by the OAG in 2018. In this recent disclosure, ZCDC left out its 2019 Annual Report and to ensure that information is current, it is important for the company to ensure timeous production of its reports.

Conclusion

CSOs such as ZELA, Publish What You Pay-Zimbabwean Chapter and consortia such as the Strengthening Transparency and Accountability in the Natural Resource Governance (STA-NRG) commend ZCDC for   releasing   its annual reports. However, there is room for improvement especially with regards to timeous release and accessibility for public scrutiny. The momentum should be sustained while CSOs and CBOs who have keen interest in the management of diamond revenue should utilise  these reports in their advocacy initiatives while also ensuring that the information contained thereof is shared with communities.   

.


[1] https://www.zcdco.com/category/annual-reports/

[2] [2] https://www.theindependent.co.zw/2020/01/31/ncubes-eiti-move-sparks-cabinet-rift/

[3] https://www.zcdco.com/about-zimbabwe-consolidated-diamond-company/history-of-our-mines-location-and-operation/#:~:text=To%20enhance%20adequate%20investment%20in,and%20build%20bankable%20mining%20reserves.&text=To%20enable%20Government%20to%20manage,achieve%20better%20accountability%20and%20transparency.

[4] https://www.zcdco.com/about-zimbabwe-consolidated-diamond-company/history-of-our-mines-location-and-

Check Also

Diamonds failing to maintain their lustre

Compiled by Nyasha Chingono WHEN Marange witnessed a diamond rush in 2006, its inhabitants dared …

Leave a Reply

Your email address will not be published. Required fields are marked *