- October 4, 2020
- Posted in LOCAL
THE surge in mining activities around the country has ignited calls for the Government to prioritise contract transparency within the extractive industry to avoid speculation and illicit trade of minerals that has seen the country losing revenue.
Stakeholders in the industry are advocating for a move that will improve the monitoring and evaluation of mining contracts as the Government targets a US$12 billion mining economy by 2023.
Under the contract transparency concept, mining companies and individuals who constitute the bulk of the artisanal and small-scale sector have to accept to publicly reveal the full text of any contract, licence, concession or other agreement governing the exploitation of oil, gas and mineral resources.
Failure to account for contract transparency, according to an academic researcher Dr Samukele Hadebe, has fuelled under-development in mining communities and left the country reeling in losses from an industry that is seen as the bedrock of economic development.
“African economies are hemorrhaging as billions of dollars are lost through illicit financial flows out of the continent. Without doubt much of these financial resources are from the extractive industries through mis-invoicing, tax evasion and outright smuggling. Zimbabwe is no exception. Historically, there have been deep concerns over the lack of transparency in the management of revenues arising from mineral extraction,” said Dr Hadebe.
He said the contract transparency issue was a problem that has seen developing countries rich in mineral resource being in perpetual loss.
“This concern derived from the paradox that those countries that are richly endowed in mineral resources tend to have some of the poorest communities. While profits from the country’s natural wealth skyrockets the poverty within communities deepens,” observed Dr Hadebe.
The proposed Mines and Minerals Bill is seen as the biggest step in addressing the mining contracts debacle.
“The country has to adopt provisions for contract and online register of contracts in the proposed Mines and Minerals Bill to provide for performance monitoring of mining contracts,” said Mr Tafadzwa Chikumbu, programmes manager at Transparency International Zimbabwe. The Mines and Minerals Bill must provide for parliamentary oversight of mining contracts be in line with section 315 (c) of the Constitution to ensure transparency and accountability in the negotiation of contracts.”
Mines and Mining Development Minister Winston Chitando, in an interview on Friday, said the Government is seized with the concerns coming from the industry and were fully considering implementing a system that spells out details of how mines permitted to operate are structured.
“The commitment by the Government to turn mining into a US$12 billion economy is real. In that course there is a need for all stakeholders in the mining sector to address problems that have always made the industry fail to achieve its goals.”
Publish What You Pay (PWYP) Zimbabwe coordinator Ms Joyce Machiri said transparency in the industry will ensure that there was total community participation in revenue generation and distribution from the lucrative mining sector.
“Transparency and accountability are key facets of just, equitable and sustainable exploitation of natural resources, which entail community sharing revenue from the extraction of finite natural resources, said Mr Machiri.
“The benefit-sharing campaign on transparency and accountability is critical.”
Even the Zimbabwe Council of Churches, who were co-hosts of the 2020 Zimbabwe Alternative Mining Indaba, said it was high time that the Government reins in on companies to disclose the nature of their contracts.
“The issue of transparency is one that benefits the nation. We need to create trust between the mining industry and the communities they live in. For effective monitoring of mining activities to be successful, information has to be availed,” said the ZCC president Bishop Lazarus Khanye.
Mr Dot Moyo, a small-scale miner in the gold-rich Inyathi area said while not much was known about contracts disclosure, it was good it was generating interest in the industry.
“Few of us knew about this. But I am positive that as the campaign draws wider, small scale miners will also get to understand what contract transparency means for the industry and the future of our operations,” said Mr Moyo.
The contracts, as experts in mining law, explain, are an important element in the legal framework on rights and obligations of all parties involved in the exploration and production of oil, gas and minerals. Contract transparency is a topical issue in the local mining industry since the time the New Dispensation committed to redress imbalances in mines.
Over the years, a lot of disgruntlement has arisen around the issuance of mining claims and licences, with some miners claiming unfair trade practices by those who would have covertly got permission to mine. Finance and Economic Development Minister Professor Mthuli Ncube, is on record saying the Government was in full support of pursuing transparency within the mining industry by joining the Extractive Industries Transparency Initiative (EITI). He said that in his 2019 budget speech.
The views of investors, market watchers and lobbyists in mining, during the ninth edition of the Zimbabwe Alternative Mining Indaba which was held last year, were hinged on how both the large-scale companies and emerging small-scale mines can turn around the fortunes of the industry by abiding to contract disclosure and accountability, without prejudicing the country.
This comes in the wake of the Ministry of Mines and Mining Development’s bold aim to curb all speculative mining activities, mineral leakages and reclaim unused mines that are kept for speculative activities.
Worldwide, disclosure of mining contracts has pushed more than 20 oil and petroleum companies to lead in the adoption of the practice.
Despite the growing moving in favour of contract transparency, there was still substantial pushback from companies against contracts disclosure.
The Sunday News