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Transparency and Accountability

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ANJIN INVESTMENT ALLEGEDLY SHORTCHANGING LOCAL COUNCIL

Story by Josphat Makaza Environmental Justice Community Paralegal

Whilst media is awash with reports that Anjin lnvestment (Pvt) Ltd grabbed the most lucrative diamond claims in Chiadzwa the mining company has not been faithful in paying development levies to the local authority.

During interviews with mine officials and the Mutare Rural District Council, Chiadzwa Community Development Trust and environmental monitors ,it was unearthed   that the Chinese mining company owe Mutare Rural District Council thousands of dollars in unpaid levies.

For the past two years, the company has failed to remit levies to the local authority citing the unfavourable diamond marketing environment and COVID-19. The mining company however has been fully operating during the lockdown period.

Anjin Investment Pvt Ltd Human Resources Officer, Mr Mhlanga admitted that the mining company had totally betrayed the traditional leaders and local council. “Ndichambogara pasi ndimbotaura nawo nezvese zvamataura”, Mhlanga said during a question-and-answer session in Marange recently.

Mutare Rural District Council officials confirmed the development and said promises made were unfulfilled.

 In Zimbabwe according to the Section 276 of the Constitution, local authorities have power to levy rates and taxes and generally raise sufficient revenue to carry out their responsibilities. The Rural District Councils Act (Chapter 29:13), Section 97 states that a council may impose a special levy for recovering expenses which have been incurred or which the council may consider reasonably incurred in carrying out any development project within the council jurisdiction.

This however has not been working well with Anjin. MRDC is currently struggling to improve service delivery in Marange. CCDT once questioned the coming back of Anjin after Robert Mugabe in 2016 accused the mining company of looting diamonds worth $15 billion. The communities are accusing the mining company of mining without doing justice to the environment and failure to be loyal to local authorities.

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AUDITOR GENERAL’s REPORT ON ZIMBABWE CONSOLIDATED DIAMOND COMPANY (ZCDC) HAUNTS MARANGE COMMUNITY

10 July, 2021

The Office of Auditor General (OAG) report of year ending 2019 came at the right time when the government of Zimbabwe is clamoring for a vision of an upper middle- income economy by 2030. As always anticipated by many, it brought some juicy news, surprises, and some shock as to how the State- Owned Enterprises (SOEs) have been operating. Our interest is the audit for Zimbabwe Consolidated Diamond Company (ZCDC). The Auditor General’s Report revealed the poor procurement standards, failure by ZCDC to properly account for diamond stocks, failure to comply with tender rules on the sale of diamond, failure to account for the amounts that the State-Owned Enterprise (SOEs) is owned by other entities among other issues. These issues raise red flags on its governance systems. There is a huge possibility that something could have been happening which points to leakages of diamond revenue.  

The consolidation of diamond companies in Chiadzwa brought hopes to people who were disappointed by the failure of previous diamond companies to bring community development and improve social service delivery in the area. The Zimbabwe Mining Diamond Corporation (ZMDC) gave birth to ZCDC and the government’s main drive for establishing ZCDC was to ensure transparency, accountability and optimal commercial exploitation and marketing of Zimbabwe’s diamonds. The community members and the nation at large thought mismanagement of diamond revenue as was witnessed in the previous era, where US$ 15 Billion was alleged to have been lost, would never be repeated with the government at the helm of diamond mining value chain. However, the revelations from the recently released Auditor General’s report on SOEs) proved the people otherwise. The report revealed glaring loopholes in how the nation’s wealth is being managed by the diamond mining giant.

The Auditor General’ report raised loopholes in procurement systems of ZCDC and heightened red flags on Illicit Financial Flows (IFFs) and this is a sad scenario for a community that is looking forward to receiving developmental benefits from diamond mining in Marange. There is anger in people whose hopes of benefiting from Chiadzwa diamond are fading away year in and year out.  It goes to support the Chiadzwa community’s assertion that, they benefitted more from the diamond during the diamonds rush period in 2006 better known by locals as “bvupfuwe” (abundance period). Their lives changed for the better. The formal diamond mining seems to indicate that it brought misery and more poverty to the locals. This revelation sets a bad precedent to other mining companies given that it is a SOE). Its formation in 2015 was mainly premised on the need to sanity into diamond mining sector. What is being revealed by the Auditor General’s Report is a proof that ZCDC is failing to live up to its standards and intended mandate.  In 2018, the government made a move to parcel out part of ZCDC’s diamond fields to other mining companies and this was after the government observed that ZCDC had capacity issues. This latest audit report seems to substantiate the observations by government.    

ZCDC is primarily domiciled in Chiadzwa where it does its operations. Already, there are pending projects that need to be completed besides the others eagerly anticipated by Communities. The road to Chiadzwa is in a dilapidated state and a few public vehicles still use that road making the area inaccessible. Most people now prefer to use the Hot springs route when coming to town, which is longer and more expensive.  The heavy vehicles of the mining companies have further damaged the company and do not care to construct the road. The former ZCDC chief executive officer Mr de Preto once agreed that ” it was high time the people of Chiadzwa witness meaningful development through various projects initiated by the company”. Here, we are in 2021, the community is yet to access meaningful benefits from the diamond endowment. In fact, the hopes of getting meaningful benefits from Chiadzwa’s diamonds are fading away  

While the past acts of mismanagement of previous funds as revealed by past audit reports of ZCDC’s predecessor, ZMDC may have been avoided, this current case sends tongues wagging.  For how long the communities and Mutare rural district council continue missing their benefits from diamond mining? The results of the Auditor General’s report comes at a time when the company has been recording persistent losses a situation that has been incapacitating the company to pay dividends to government and fund community development. The education system could have been uplifted by constructing classroom blocks, furnishing the schools with furniture and books or drilling boreholes, but not much was done other than doing renovations of few classroom blocks. The company made a promise to build classroom blocks at Rombe Primary school. However, it is now 5 years after this promise was made and there is not much meaningful progress. Apparently, school children are now walking more than 5 kilometers to and from home.

There isn’t many socio -economically valuable projects that the company has accomplished since its operations began in 2016. Health facilities remain poor with women and girls walking about 10km to and fro to access clinics. The most disheartening situation is that the clinic doesn’t have basic supplies most of the time. There are no ambulances at clinics and with the state of roads in most cases, sick people get stuck on the road when they are in dire and immediate need of health care and as such complications and deaths in some instances are the order of the day.  After all health is a basic right as provided in Section 76 of the Constitution (Zimbabwean Constitution of 2013). There are 21 clinics in the district, and all need some facelift. They are short staffed, and medicines and drugs are not enough. According to Mutare Rural district council official, ZCDC has of late not been honoring its mandate of paying their taxes timeously”.

 We have missed opportunities to grow and develop economically as a nation through Illicit Financial Flows (IFFs) in the diamond sector. According to Malvin Mudiwa of Marange Development Trust, a community -based organization in Marange, ” The figures indicated in the report i are a wakeup call for communities to guide jealously on how their resources are being managed. It can be an indicator that fraud could have taken place “.

Community beneficiation remains a topical issue in Chiadzwa. This word is often used by politicians and some ZCDC officials without much care. It is with much hope that the dusty roads leading to Chiadzwa be attended to including their bridges. Apparently, the public transporter ZUPCO is shunning the 50 kilometers road because it’s not fit for use by bigger coaches. This has left the community at the mercy of private transporters who charge exorbitant fares. With the Covid 19 restrictions in place, this has made it difficult to travel. As a precautionary measure, the company is alleged to have been using soil to cover potholes and this does not last a distance. The roads simply need resurfacing since they were destroyed by Cyclone Idai in 2019. The community expects the resurfacing of the road because it regularly used by the mining companies.

Communities have a right to voice concern about the way funds are handled given that resources are found in their area. Section 13 (4) of the Constitution provides that communities must benefit from their mineral resources in their respective areas. ZCDC being a state entity is obliged to timely release their audited annual reports  for public scrutiny . While for the first time they have done so (for its 2016, 2017 and 2018 financial  it is worrying to note that they have been reporting losses for the past three years. According to Mr Chiadzwa, one of the traditional leaders, ” the company has been operating for 24 hours a day since consolidation. If they are not making profits why not stop?”  For sure the company invested more than a billion in the procurement of equipment imported from Belarus and the expectation was that this would translate into profits and revenue flows to government and local authorities. However, the results on the ground indicate otherwise.   We are not sure if the company’s performance in 2021 will improve. In 2020, the company indicated that they had about 2 million carats of diamond stock which was waiting for the market. We are not sure if these stocks changed the trajectory of the company’s financial performance in 2020.  We are in 2021 and the company has not yet published its audited annual financial statement for 2020.

While ZCDC claims to have carried a couple of Corporate Social Responsibility (CSR), this has not been justified in the eyes of the locals. For example, In 2018 the company built a state of art vegetable market mall in Sakubva. The company also donated some food hampers and agricultural input to some community members in Arda Transau and Marange end of 2018. To them this is far from meaningful development in their area. The families relocated to Arda Transau are going for several weeks without drinking water yet the company can simply drill approximately 100 boreholes to save the situation. A recent visit to Chirasika primary school revealed that some pupils were learning in disused wooden cabinets at the school. They have even gone on to do a makeshift wooden block to accommodate all local pupils. Proper management of the diamond revenue would have gone a long way to change fortunes of the community. According to a study by Veronica Zano and Joyce Machiri ,” Companies must invest in infrastructure ( portable water, electricity, schools, roads, hospitals), building social capital and human capital…” . They reiterated that there is ” need to instill public confidence in public institutions”.

It is quite unfortunate that Zimunya Marange Community Share Ownership Trust, an organization formed to spearhead development in the area has literally failed to live to their expectations. The last time they were given $5million United States dollars by ZCDC, the funding failed to make any meaningful impact due to different reasons. Among them was administrative bungling, change in currency exchange policy and procrastination. To show that the people of Chiadzwa are not a happy lot, they were once involved in a series of demonstrations. The company only rescued the situation by coming up with a Diamond security Indaba which to date has not meaningfully brought the intended progress to the community.

Conclusion

It is high time that ZCDC takes the needs of the people into consideration lest the community of Chiadzwa will be forced to lash out and demand the mining activities be stopped until a time the Government and mining companies are willing to ensure there is community beneficiation. The previous sporadic demonstrations in 2018 and 2019 should be taken as a key lesson for the company.  The community is aware that there is need to have the social license to operate and the social license to operate can only be obtained if the company addresses community’s demands.

Recommendations

There are several recommendations that can be made to address the challenges being experienced by locals where ZCDC is operating.

Government needs to investigate ZCDC’s mandate and revamp its administration so that there is transparency, accountability and practical will to fulfill its mandate.

  • ZCDC should lead other mining companies by example by paying taxes to Mutare Rural District Council timeously while the money still has value.
  • There is need to establish a Community Forum consisting of all stakeholders that will have meaningful development dialogue from time to time and involve the community in prioritization and development of CSR projects.
  • The mining companies to seek social license to operate
  • There is a great need to close all loopholes leading to Illicit Financial Flows (IFFs) by being transparent and accountable in their operations.

 

 

PRESS STATEMENT ON CHINESE LABOUR PRACTICE IN THE MINING SECTOR

For Immediate Release!        Dated 05/07/2021.

Following the recent Article Of 17 June 202 in which the Chinese embassy and  Sun Yi Feng Public relations officer, Mr Mukumba accused the Zimbabwe Congress of Trade Unions (ZCTU) and its General Secretary Mr Japhet Moyo of tarnishing the image of the Chinese investors. In their statement they said, “The publications carry single stories from uninformed sources who, rather than being constructive, are more destructive to the image of the company. From the onset, the reports have been influenced by actions of conspiracy as a result of revenge distortion,” the company’s public relations officer, Alex Mukumba said. He expressed disappointment saying ZCTU had been allowed access to the company’s premises on mutual understanding not knowing the labour body had a hidden agenda.”

We would want to make the following statement. The call for the Chinese Embassy to put its investors in order has not started today. In June 2020 ZCTU petitioned the Chinese ambassador to Zimbabwe, Guo Shaochun to whip its members to order for violating labour and human rights, .following the  incident in which a Gweru Chinese businessman, Zhang Xueun shot and injured two employees – Wendy Chikwaira and Kennedy Tachiona – during an ill-fated wage dispute. Therefore, to say the Labour body has a hidden agenda is a low blow by the Company.

As Zimbabwe Diamond and Allied Workers Union, we would like to put it on record that we share the same sentiments with ZCTU. ZIDAWU is a registered  organisation working with mining employees,  mining and mining affected communities.  An organisation found by some former workers of Anjin in Chiadzwa after experiencing hardships in violations of human and labour rights. Therefore, the ruthlessness,  ill and degradatory treatment,  underpayment of wages, working long and unpaid overtime, poor accommodation facilities and food are not conditions known through hearsay but experience. Thus, the allegation that ZCTU is uninformed in its claim against the Chinese employers must fall away.

The statement made by ZCTU is true and we intend to lodge a national and  global campaign using the Zimbabwean labour law and ILO standards as it is clear that the firms are not willing to come to table with labour body but rather attack it, and paint it as a” distorted revenge seeker with hidden agendas”   We will not watch from afar while the labour movement gets to be unjustifiably politicised.

LET IT BE KNOWN THAT OUR POLITICS AS TRADE UNIONS IS OF THE STOMACH, AND NOT OF RULING THE COUNTRY, AS EMPLOYEES WE DEMAND DEMOCRACY AT WORKPLACE, RESPECT OF LABOUR AND HUMAN RIGHTS AND NOT TO BE SUBJECTED TO SLAVERY CONDITIONS.

Over decades , trade and labour relations with relations with foreign invsetors has become common place  that the locals’ rights have long since been sold for a dime along with the sold cooperate spaces : mining industry space and other forms of trade. So now our huge predicament is not only in china’s violations of workers’s and general human rights in general but has an undeniably strong bearing on the person(s) who stuck a price tag to our God-given rights. Period!  We have our local Ministers and political big wigs  who enter into ventures with the chinese and are actually  “feeding on proceeds” from the sales of our rights. Thus, the petitions and cry of employees to have their rights respected being adamantly ignored.

The workers at Anjin in Chiadzwa has been at workplace since 2020 Covid 19 Lockdown, working overtime that is erratically paid, with no leave of absence.  Leaving the premises warrants dismissal from work. The employees are being paid at somewhat similar rate irregardless of one’s grade of Work. There is no decent spacious accommodation even as Covid19 restrictions has to be followed. The living conditions of Chinese employees and that of Zimbabwean employees are significantly different. There is discrimination among local and Chinese employees. Any attempts to get hold of Anjin representative are futile as they are said to be in Harare all the time. The bottom line, is the Chinese employees are not complying with the labour laws and that is all that as worker’s representative we demand. We refuse to go back to slavery or to Smith regime. And we reiterate that, our politics is of the Stomach not of ruling the country or of who should invest. NEVER!

Zimbabwe is open for business. However,  Business and human rights aspect should be effectively addressed so that profits are not maximised at the expense of locals. Labels like ” authors of illegal regime change, suborteures of national socio-economic programmes,  treasonous and all that misnoma is old fashioned. We talk of the new dispensation and vision 2030 where all citizens should be treated as Upper middle class and the National Development strategy 1 of 2023 envisions an economy where all citizens will be at hundred percent in earning upper class middle income per household. How do we envision, re-engagement with the International community if that engagement is at the expense of the citizens of Zimbabwe?

We demand fulfilment of the following rights as embodied in Section 65 of the Constitution and the labour Act [Chapter 28:01] and its ammendments.

The right to fair remuneration,

Right to fair labour practices,

Right to safe working environment,

Right of affiliation/ membership to a relevant trade union of choice,

Right to form workers committee/ trade union,

Right to have a works council,

Right to be heard.

SHINGA MUSHANDI SHINGA!

A LUTA CONTINUA!

By Cosmas Sunguro

 ZIDAWU President.

For more information contact: +263772763209.  Email zidawuinfor@gmail.com

Mining in Zvishavane

Shurugwi mine gets 7-day ultimatum

Story by Happious Chingwaya (Shurugwi Community Development Trust)

EMA has issued Musasa mining syndicate in Shurugwi with a seven -day ultimatum to rehabilitate the environment after the company started operating without the mandatory environmental impact assessment certificate.

The mine was carrying out illegal alluvial gold mining near Mutevekwi River located just outside the mining town along Shurugwi-Zvishavane highway.

The miner was issued with a level 14 ticket and ordered to rehabilitate the area within seven days.

Over the years, both illegal and legal mining activities along Mutevekwi River have resulted in the blocking of the river with farmers downstream failing to draw water for irrigation purposes.

Mining activities in the mining town have left severe environmental degradation with chemicals used by miners such as mercury and cyanide polluting water bodies.

Some villagers have been complaining about losing their domestic animals to poisonous substances.

Farmer-miner conflicts have also been on the increase in Shurugwi with stakeholders calling for laws that harmonise the two.

Diamonds failing to maintain their lustre

Compiled by Nyasha Chingono

WHEN Marange witnessed a diamond rush in 2006, its inhabitants dared to dream of a better life.

Nearly two decades after the diamond rich soils were invaded by massive mining companies, government and individuals looking to stick their fingers in the honey pot, Marange is a trail of poverty.

A drive along the vast swathes of the diamond rich planes of Marange, one is greeted with deep despair. A community that never benefited from its vast resources.

Far away in the city, the rich who plundered the resource, live large in opulence.

The curse of owning rich minerals still haunts Marange years after big mining consortiums descended on their land.

“We have nothing to show that we ever had diamonds here,” Clever Mupasi, 60, a community elder in Marange said.

He makes a cursory gaze across the vast swathes of land which have been reduced to piles of sand and deep pits.

“This is what is left of our beautiful land. When diamond was discovered here, we thought the future of our children was now set but we were wrong. We listened to their lies and curse ourselves for ever believing in the capitalists,” Mupasi said, gazing to the clear blue skies as if to summon divine strength. 

While the government made it mandatory for mining companies operating in communities to cede 10% to the community through the Community Share Ownership Trust, the Marange community has not seen development in their land. 

Despite committing to uplifting livelihoods in Marange-Zimunya, Zimbabwe Consolidated Diamond Company (ZCDC) is yet to implement meaningful projects in the area.

“We were sold a dummy. These empty promises continue to hurt our community, hope is fading daily,” Moses Mhlanga, another community elder said. 

“We are yet to get our share of the profit these companies have made from diamond activities.” 

The companies have left a trail of irreparable destruction while other diamond companies continue to plunder the resources.

The Marange-Zimunya Community Share Ownership Trust (MZCSOT) was launched by the late former President Robert Mugabe in 2011 with the goal of communities benefiting from their resources.

But years after the launch, people here are still clinging to hope for better schools, health facilities and livelihoods.

With poverty stalking the community following repeated droughts, the Marange community is desperate for interventions. About 8 million Zimbabweans are facing hunger this year, the World Food Programme (WFP) says.

In a bid to help communities’ benefit from their resources, the Publish What You Pay (PWYP) is pushing to influence mining revenue transparency and benefit sharing in the extractives sector in Zimbabwe.

In a report entitled Tracing the progress towards revenue transparency and revenue sharing in the extractives sector in Zimbabwe (2013-2019), the advocacy campaign seeks to help mining communities to realise benefits of the community share ownership trusts some of which have either been forfeited by companies. 

The PWYP Zimbabwe  was birthed in the same year that government came up with regulations for setting up mining community share ownership trusts. 

The campaign’s focus on mining transparency and accountability issues remains as critical as ever. With a huge mineral wealth potential, mining could be leveraged to support Zimbabwe’s economic recovery, stabilisation and growth agenda,” reads the report. 

Since the 2000 land reform, the mining sector has been one of the biggest contributors to economic growth. The sector contributed US$2.9 billion, accounting for 60% to country’s

total export earnings in 2018. 

Mining employs around 35,000 people, of which 99% are indigenous Zimbabweans, an average of 75% are from the local communities, and nearly 7% are female, the report reads.

While the mining sector contributes immensely to economic growth, the community should also benefit from the resources.

Therefore, the right of communities to benefit from resources in their localities is enshrined in the Zimbabwean Constitution.

According to the report communities are unaware of how they should benefit from the community share ownership trust, hence it is difficult for PWYP.

“On the ground, some service delivery points like schools and clinics are not aware of how they are supposed to benefit from the revenue sharing arrangements between central government and local governments. But a big challenge already lies ahead for civil society, especially the PWYP campaign, to ensure transparency, accountability and citizen participation in the management and utilisation of devolution funds,” the report reads. 

PWYP also laments the lack of clarity in the constitution on how communities can access mining benefits. “Particularly PWYP members, have been pushing for policy and practice reforms to improve the development impact of CSOT on LESD. All this work has been precipitated by the government’s thrust to open the mining sector for investment, taking a pro large-scale investor stance in the process and disregarding the constitutional right of communities to benefit from resources in their localities,” reads the report. 

The report notes that the mining sector transparency framework in Zimbabwe fails to meet the bottom bar. 

As a result, citizens and civil society lack the information leverage to effectively ask the government and corporates hard questions on how their resources are managed to deliver an optimal national development dividend.

The report notes that there is a need for robust advocacy to ensure that community’s benefit from their resources and the creation of a transparent environment by mining companies. 

Lockdown not a time for CSOs to hibernate, but reflect and be creative

Despite posing many challenges, the lockdown, a move to stem the spread of COVID 19, must not lead to the hibernation of civil society actors. Under these difficult times, the lock down delivers a rare opportunity for civil society actors to deeply reflect and explore ways of achieving greater impact on the socio-economic justice front.

Several articles have been generated, all making a compelling case on how poor, but resource rich African countries are incapacitated to respond to fight COVID 19. Most of the articles concur, developed countries are struggling to cope but it can be an apocalyptic scenario for poor African countries.

The World Economic Forum (WEF) in its report warns “malnutrition and disease means COVID-19 could be more deadly in Africa than elsewhere in the world. And health systems in Africa have limited capacity to absorb the pandemic.”

All this evinces that civil society has a mountain to climb in its quest to ensure benefits from extractives cushion citizens from pandemics like COVID. Already, Mukasiri Sibanda, the Zimbabwe Environmental Law Association (ZELA)’s Economic Governance Officer argued in his blog “without brushing off Chinese Aid, where is money from our mineral wealth going?”

Because now is the time to reflect and explore, one area we believe civil society in Zimbabwe can leverage to increase transparency in the governance of extractives, is effective engagement with the office of Registrar of Companies. The Registrar of Companies registers companies and other business entities with a responsibility of making sure companies comply with the Companies and Other Business Entities Act.

More often, emphasis on revenue transparency overshadows the need to understand the DNA of behind mining activities. No wonder why the Extractive Industry Transparency Initiative (EITI), a global standard that elevates open and accountable management of the oil, gas and mineral sector embraced public Beneficial Ownership (BO) registry in its new standard. This goes beyond the numbers. The thrust is about telling a story of the real people who hide behind corporate masks to unfairly benefit through corruption and illicit financial flows.

Importantly, Zimbabwe which appears to have shut its doors on EITI, included a BO registry under the new Companies and Other Business Entities Act. Government’s move on BO registry was necessitated by the desire to comply with Financial Action Task Force (FATF) directives on curbing money laundering and finance for terrorism. A major challenge with the new BO requirement in Zimbabwe is that the BO register is not open to the public, note Anna Sophie Hobbi in her blog post Joyce Nyamukanda, Publish What You Pay Campaign (PWYP) campaign coordinator laments that “Space is closed for civil society to pivot the BO register for accountability purpose when the register is confidential.”

Interestingly, there are data morsels from the Registrar of Companies which the public can digest to improve the advocacy diet for the transparency and accountability in the mining sector. Such an initiative, perhaps, can help to mend the wheels of Publish What You Pay (PWYP) campaign in Zimbabwe. Government’s timid efforts on joining EITI has punctured the campaign.

What is even worse is that the mining transparency framework has not been aligned to the Constitution. Information which the campaign can feed on from the Registrar of Companies’ offices include company details of directors and physical address. On the surface, such information appears to be of less use on fuelling accountability demands. But a close and keen eye can unearth advocacy opportunities from such data.

Because a company is not a natural person, but a juristic person, its intelligences are its directors. Knowing the names of the directors enables civil society and communities to understand the identity of the company’s aspiration, motives and ethics. Knowing and understanding the person making decisions creates avenues for engagement. Such avenues include exploiting social capital, for instance, at church, sports club or bar.

A human touch to the struggle is important. If the director goes to the church, this is an opportunity to reach out to the pastor, for example, to bring out community concerns against the company he or she directs. Knowing the directors of a company shifts gears on engagement with the mining company which is largely focused on the management or other lower level employees.  The management is accountable to the directors who have a fiduciary duty to protect the interest of the company.

By profiling the directors of a company, civil society and communities can gain intel whether the directors have strong political ties or government officials are involved. Pending before the courts is a case in which the former deputy minister of higher education procured computers from a company he directed together with his daughters. What this case proves is, at times, without digging deeper, corruption red flags can easily be raised by gleaning simple publicly available records.

ZELA piloted this work in Mutoko and Marange under its community data extractors project. Malvern Mudiwa, from Marange Development Trust (MDT) made interesting observations after his interactions with the office of the Registrar of Companies in Harare. Malvern explained that “it is costly for a community member to travel to Harare to access the office of the Registrar of Companies.”

He argues “it is important community-based organisations (CBOs) to rely on official documents to cement advocacy initiatives with credible data rather than relying on hearsay.” His regrets were “we failed to access the any details on Mbada diamonds.”

Failure to access documents which are supposed to be publicly available can be an advocacy asset. It is a clear demonstration of the gaps between the law and practice. If such evidence is harvested from different communities and made public, it can jolt the Registrar of Companies into action as she/he becomes increasingly aware the office is being watched publicly.

For companies that are directly listed locally or international like Zimplats, the details of directors can be accessed from their websites. The challenge is that they are very few listed companies operating in Zimbabwe and the bulk of which do not have their own websites. This is also another research opportunity for community data extractors.

Aside from opportunities associated from accessing details of directors, knowing the physical address of the mining company civil society or communities want to engage with is also critical in many ways. A mere glance of the physical premise of the head office of the company can tell a lot in terms of the integrity of the company we are dealing with.

Obviously, we must not loose track of the old wisdom – don’t judge a book by its cover. It can be possible that a company may not be operating at the registered premise or have no legible name of the company at their premises. Simple walk in at the company head office can also create space for civil society actors and communities interact with the top management of the companies. The top management of several mining companies may not be operating at the mining site, but head quartered in big towns like Harare or Bulawayo.

From Malvern’s experiences, community data extractors must be empowered by PWYP to interact with the office of the Registrar of Companies, document their stories on how hard or easy it is to access the data.

Further, community data user stories can be generated to pick and reflect on variety of experiences from different community data extractors. PWYP is in the process of recruiting more members especially from Matebeleland and Midlands provinces. Having a clear value proposition, for instance, work members can do can help to manage expectations and reduce conflicts associated with workshopping opportunities.

COVID 19 is certainly causing mayhem for now, but civil society and communities must be forward thinking. Undoubtedly, strategies to mitigate the COVID 19 are critical. However, they must not drain the focus on the bigger picture. The Punctured PWYP campaign in Zimbabwe must using the lockdown opportunity to find innovative ways to mend its advocacy wheels. ZELA’s community data extractors programme, which drew energy from PWYP international offers interesting learning points for the campaign.

Who wins if Zim joins EITI?

RECENT news, which the government has not disputed, suggested that Zimbabwe is not keen on joining the Extractive Industry Transparency Initiative (EITI). By joining EITI, the mining sector — the main engine for economic growth, would have been opened for citizens to question government and industry on how past and current mining deals are best tailored to contribute to Sustainable Development Goals (SDGs). In October last year, the government launched a blueprint to grow mining sector earnings by 344% to US$12 billion in 2023, up from just US$2,7 billion earned in 2017.

Based on past records and the plunder on Marange diamonds citizens have, however, become sceptical that the envisaged mining sector growth will revamp education and health services.

What the country needs is a framework like the EITI to help surface issues, bring sectors together and build trust among them so that they all come up with solutions together.

Given lack of traction on joining EITI, it is pertinent to reflect on the potential governance gains associated with implementation of EITI. Who wins if Zimbabwe joins EITI?

Winner: Government

According to the Transparency International’s 2019 Corruption Perception Index (CPI), Zimbabwe continues to perform badly when it comes to fighting corruption.

With a total score of 24 over 100, Zimbabwe is lowly ranked 158 out of 180 countries by the CPI. Fighting corruption is on the top of government’s agenda; but the public remains sceptical, though.

Joining the EITI will not increase transparency overnight, but it will help the government manage the extractives sector in a more inclusive and transparent manner. Raising transparency will also help minimise speculations and distrust towards the government.

Winner: Host communities, civil society and organizations (CSOs)

Zimbabwe has a lot to work when it comes to citizen engagement. According to the World Governance Index 2017 edition, Zimbabwe scored -1,196 when it came to the “Voice and Accountability” indicator which indicates weak performance.

By joining the EITI, mining communities and CSOs earn a platform to access information and constructively engage with companies and the government.

For a government that seeks to rebrand as a “New Dispensation” and breaking away from old habits of keeping citizens in the dark on mining deals, joining EITI is critical to winning doubters.

Winner: Mining investors, companies

While Zimbabwe was not ranked lowest when it comes to the Mining Investment Attractiveness Index 2018 of the Fraser Institute, it also fares badly on Policy Perception Index compiled by the same institute.

The Investment Attractiveness Index blends mineral wealth potential and policy attractiveness. Joining the EITI can become a game changer for the country as it aims to open the country for business to attract more investments into the mining sector.

Transparency helps level the playing field and ensure that no affiliate of those in power gets more favourable mining contracts. By supporting transparency initiatives, investors can freely compete with one another regardless of affiliation.

It also makes doing business in Zimbabwe less riskier for international investors who are bound by laws on foreign corrupt practices like those in the US and Australia.

Should Zimbabwe join the EITI?

A country like Zimbabwe, whose economy is dependent on its vast mineral wealth, embracing EITI is a critical building block to curb corruption, prove the seriousness of the agenda to open Zimbabwe for business, and to regain public confidence and trust.

Regressive elements in government will always find excuses not to open up the mining sector for public scrutiny.

To prove that this is a new dispensation, actions should speak louder than words. Joining EITI can show that the government is walking the talk.

Transparency and challenging path to accountability, lessons from Gwanda community

Giant strides, in the past decade, have been made by Publish What You Pay (PWYP) campaign to improve the extractive sector transparency landscape world over. The results are quite telling. 51 countries are now implementing the Extractive Industries Transparency Initiative (EITI) – a global best practice on promoting open and accountable management of the extractive sector. In addition to EITI, Canada, EU and Norway now have mandatory disclosure rules which compel extractive companies listed in their jurisdictions to disclose payments made to local, regional and national governments per project per country. With all this progress, focus is shifting to how citizens and civil society are making use of disclosed information to improve development, fight inequality and strengthen accountability.

lTo confront this conundrum or challenge, the Zimbabwe Environmental Law Association (ZELA), Gwanda Residents Association (GRA) and Publish What You Pay (PWYP) Canada are currently working on a joint study, assessing the impact of Caledonia’s Extractive Sector Transparency Measures Act (ESTMA) reports in Gwanda district, Matebeleland South province of Zimbabwe. The focus of this article is to share preliminary findings from the field study which was conducted last week in Gwanda, 22 to 26 January.

“I hear I forget, I see I remember, I do I understand” Confucius.

One of the main challenges when collecting and analysing data from communities on development issues is to ensure community ownership and buy in of the whole process. A challenge we tried to mitigate by deliberately working together with community-based organisations to conduct key informant interviews (KIIs), Focus Group Discussions (FGDs) and to assess emerging patterns from the collected data. We worked with Gwanda Residents Association, Gwanda Economic Justice Network Community Trust (GEJNCT), and Gwanda Youth in Mining. With GRA, we went a step further and we are working together on compilation of research. The benefits are mutual. Working with community-based organisations (CBOs) enabled us to have a more nuanced understanding of the local context, to leverage existing relationships to strengthen participation and to overcome the language barrier risks. Working with the CBOs on this study was also a mechanism to do on the job training for research skills. Before we started the data collection, we spent a half day going through the conceptual framework for the research to check for blind spots together with CBOs.

Gwanda not benefiting fairly from mining activities: mixed reactions

To try and loosen up the conversation on assessing the impact of Caledonia Mining Corporation’s ESTMA reports, we sought to find out the general perceptions of residents on their take concerning mining contribution to local development. Generally, most people interviewed were clear that Gwanda is not benefiting from mining activities. There was wide acknowledgement that Gwanda Community Share Ownership Trust (GCSOT) has made noticeable strides to improve health and education services, an achievement made during the first years of its operations. Communities now barely see the contribution of GCSOT on improving local service delivery. The GCSOT administrator concurred with the observations, and further explained “GCSOT has shifted its focus on local social service provision to support income generating projects to address sustainability concerns. We have not abandoned altogether the thrust to improve service delivery.” Whilst most interviewed people in Gwanda rural lamented little benefits from mining activities, they acknowledged GCSOST’s tangible contribution to local service provision – health, education and water infrastructure. A striking observation is that few people interviewed outside Gwanda knew that interventions made by the GCSOT were funded through dividends from the mining companies.

The opposite is true for residents in Gwanda town. They are clear that mining companies, Caledonia’s Blanket mine particularly, finance the operations of GCSOT. Residents of Gwanda town are not happy that they are directly affected by the impacts of mining activities due to their proximity to the town, yet they are excluded from the benefits of the GCSOT which is focused on rural development.

Upon seeing the payments made by Blanket mine to Gwanda Rural District Council (RDC), a woman artisanal and small-scale miner (ASMer) remarked “we ASMers are not encouraged to pay taxes to Gwanda RDC as communities are not seeing any development from what is contributed by large scale miners.” This clearly demonstrates the far-reaching consequences of how a lack of transparency and accountability in the management and utilisation of mineral revenue can impact on domestic resource mobilisation buy in.

Transparency matters according to communities

Virtually all respondents solidly agreed that transparency in the mining sector is crucial. Several respondents were clear that transparency matters to them because the gold being mined is owned by the communities and they want to know the details of how much is gold is extracted, value realised, royalties, taxes and levies paid, what is received by various government institutions and how the mining revenue is spent since it impacts not only this generation but future generations.

“Leaders must be just as transparent as companies.”

Only a few demanded to know the terms and conditions for the mining agreements so that they could check if the deals were well negotiated to deliver on local development and for monitoring purposes as well. There was limited reference though to the Constitution. Only one respondent revealed that access to information is guaranteed under Section 62 of the Constitution, therefore, public access to information on mining is their right. There was no reference to other constitutional provisions like Section 298 (1) on principles of public financial management which calls for transparency and accountability in all public financial matters. Transparency and accountability during negotiation of mining agreements and for performance monitoring purposes is provided under Section 315 (2) (c) of the Constitution.

Another pattern that emerged from the KIIs and FGDs was that transparency is critical to build public trust and confidence among stakeholders – mining companies, government and civil society. Several allegations were raised mainly against Blanket mine which were hinged on transparency issues.

“The gold mined by Blanket Mine is used to develop Canada, we want the gold to be sold in Zimbabwe and proceeds used to develop this country.”

“We heard that some people from Canada visited Gwanda to see the mine which is behind the development of their country.”

“Gold is sold in foreign currency, we want to know if Blanket mine is paying dividends to GCSOT in foreign currency as well as local tax payments to Gwanda RDC.”

“We do not know how much gold is produced, how much is earned, and taxes paid by Blanket Mine.”

“If the Blanket Mine achieves record gold production and with the gold price soaring, does this mean more dividends to the community trust and taxes paid to government?”

Even though they are several large-scale mines operating in Gwanda, largely, the focus of respondents was on Blanket mine, because of its leadership role in gold production and recent media coverage. From the above comments or questions on Blanket mine’s opaque operations, effectively, it can be discerned that transparency is not only about disclosure but making data to be more accessible and easily palatable for communities. This is so because Blanket Mine on its notice boards displays monthly its performance data related to tonnage milled, gold recovered, gold price, earnings, profits and bonuses paid. Further, Caledonia’s ESTMA reports available online reveal various payments made to government institutions on annual basis. The company is also listed at the Toronto Stock Exchange (TSX), therefore, it is compelled to public release its operational and financial performance data which is available online. On paper, you can hardly ask for more from such as mining company, especially in Zimbabwe, a country that is not part of EITI, so the data produced by Blanket mine is gold. The main challenge though is, the company is failing to make use of transparency as a currency to engage with communities, build public trust and confidence. Civil society organisations (CSOs) have been found wanting on making data as widely accessible and easily understood by the communities.

Gwanda ESTMA FDG

Figure 1: Following the focus group discussion, participants discuss how to find ESTMA data online at www.resourceprojects.org

According to Gwanda CSOT administrator, when Blanket mine achieves record gold production, dividends paid to the community trust also spike. However, since GCSOT received an advance dividend payment of USD4 million as seed capital, the dividends are used to offset this loan and interest that has accrued – it was mentioned that the loan will likely take another 12-15 years to pay off.

Transparency alone is not enough, communities want to see clinics, schools and roads

There was special emphasis by communities that transparency is only a first step – what is critical is to see the development impact stemming from taxes paid by mining companies. Even though we are not sure that the companies are paying their fair share of taxes, it is important to see development from the little resources that are being paid.

Respondents had a wider view of transparency beyond mineral revenue. There was also interest in employment data, to see how many locals were employed and push for preferential local labour recruitment. Another area of interest was openness of procurement to enhance the development of community enterprise development, for example, provision of catering services, personal protective equipment, and security services. Additionally, some respondents mentioned they wanted to understand safety procedures that are in place to protect employees, how minerals are process, how waste is disposed, the environmental impacts of the mine’s operations, and the CSR investments that are made (since these may be exempted from paying taxes).

Gwanda Bridge

Figure 2: Bridge that leads from Gwanda to Blanket Mine.

Community members lamented about how the bridge has weathered with heavy use by trucks from mines, and described challenges of flooding. When it floods, respondents described how people cannot get to work, children cannot get to school, and pregnant women and those that are ill cannot reach the hospital.

Devolution can provide answers to the mismatch of impact of mining activities and poor local economic and social development

From majority of the key informant interviews, the demand for devolution, to enable provincial and district structures to have more control, responsibility and power to participate in decision making processes was echoed. A notion which firmed up more when the respondents noted after being shown Caledonia’s ESTMA reports that local government received a meagre share of revenues compared to central government. For example, in 2018, Blanket Mine paid a total of US$5,227,855 to various government institutions out of which the local government, GRDC received a 2.77% share which amounted to US$144 760. This evidence shows that despite having constitutional powers to mobilise revenue through taxes and levies, Section 276 (2) (b), resource rich local governments struggle to get a fair share of mineral tax revenue.

Caledonia ESTMA report 2016

Figure 3: Re-printed from Caledonia Mining Corporation 2018 ESTMA Report (https://www.caledoniamining.com/wp-content/uploads/2019/05/Extractive-Sector-Transparancy-Measures-Act.pdf)

For Ward 22 which host the key gold mines, Blanket and Vumbachikwe, a key informant interview showed a clear demand that revenue sharing arrangements between the host community and the local government are needed. “We want to get an allocation from what the local government receives from mining companies operating in our Ward. That way, the host communities can be guaranteed of getting some benefits from the mining activities in their area.”

ESTMA data must inspire domestic legal reforms to enhance transparency in the mining

Upon seeing the ESTMA data, several respondents were clear that Zimbabwe must have legal reforms which delivers on open and transparent management of the mining sector. They indicated that this should include a requirement for all companies operating in Zimbabwe to disclose information including production, revenues, and the payments made to governments as well as compel local authorities to share how these revenues are used.

What it takes to make data more accessible

“The biggest challenge is that communities do not know this data exists.”

One of the key research questions was how to make Caledonia’s ESTMA data more accessible and easily palatable for women, youths, and men. Responses varied it was suggested that fact sheets, newsletters, newspapers, radio, ward level local information hubs, WhatsApp groups, twitter, Facebook, and meetings should be used to achieve wider distribution of information. There was emphasis that the fact sheets should have figures and explanatory notes in local languages. As for the meetings, the suggestions were that local accountability structures at village and ward levels must be utilised to ensure wider sharing and greater usage of the Caledonia’ ESTMA reports. One councillor lamented that “…the local planning structures are not effective because they lack information which is useful to effectively plan for development which is hinged on mining revenue…”. It was also mentioned that community-based organisations can be a key channel for information.

It was also revealed that due to lower levels of education, women need more attention when it comes to understanding the meaning of various payments made to government institutions by Blanket mine. Traditional beliefs in the area have not prioritised the girl child when it comes to education. The impact of early child marriage was noted but its severity could not be established. Another important factor as to why the transparency drive must be women focused was that because of their care giving role, they are more affected by service delivery challenges compared to men and they further cannot travel as far for meetings given the many responsibilities. Channels to share information are important and should consider how best to reach women in the community. It was emphasized however by a number of respondents that men and women should get the information in the same way so that they can share the information together, and the information source will not be challenged.

It is a struggle to take the next steps to demand accountability based on ESTMA data

Majority of the Community Based Organisations (CBOs) showed knowledge of Caledonia’s ESTMA which was gained through workshops organised by ZELA. Only one CBO, Gwanda Residents Association (GRA) gave an account of how they have tried to use ESTMA data to demand accountability. Using ESTMA data, GRA followed the money paid to Gwanda Rural District Council (GRDC) and to the Rural Electrification Agency (REA). GRDC management confirmed awareness of the reports but councillors lacked awareness of the reports. Further, GRDC was not keen on discussing opportunities and challenges hinged on disclosure of Caledonia’s ESTMA data. After GRA approached REA, the agency asked them where they accessed the data and general lack of awareness on the contributions made by mining companies in Gwanda to RDC. Beyond this engagement, GRA has yet to follow-up to attempt to assert its right to this information, as outlined in the Constitution.

“When information is limited on what you can do, you are limited.”

Artisanal and small-scale miners have their own version of transparency

Apart from revenue transparency, opacity in the allocation of mining claims especially tributes from large scale gold mines like Blanket mining was also topical according to majority of the respondents. A mining tribute is a result of the allocation of a mineral right or a claim to a third party in exchange of a fee, an arrangement the is recognised under the Mines and Minerals Act. There were strong allegations that senior politicians are the main beneficiaries of lucrative tributes from large gold mining companies in Gwanda. ASMers clearly expressed disappointment that as the largest contributors of gold deliveries to government, automatically they contribute significantly to royalties, but the plough back in producing communities is lacking. In Gwanda, infrastructure deficits, poor road and power networks are hampering productivity of ASMers.