sharing in governance of extractive industries
Concerned that the community in Mutoko is unhinged from the main economic activity in their locality, black granite mining, Mutoko Rural District Council (MRDC) supported by The Civic Forum on Human Development (CFHD), Silveira House and Zimbabwe Environmental Law Association (ZELA) organised a district alternative mining indaba. The indaba was held at Nyamakwere hotel, Mutoko centre from 13 to 15 June 2018.
Participants comprised of mining affected communities, Community Based Organisations (CBOs), Civil Society Organisations (CSOs) traditional chiefs, local government officials, Ministry of Mines, Zimbabwe Revenue Authority and Natural Stones- a mining company. Altogether, 95 people participated at the indaba, 22 women and 73 men. Here are five interesting things to note concerning the indaba.
Africa Mining Vision inspiring Mutoko community
Government is yet to hit top gear on implementation of the Africa Mining Vision (AMV), Mutoko community certainly view domestication of the AMV as a panacea to the resource curse. Realising that Africa should not continue to squander the opportunity to hinge development on her vast mineral wealth, the Union Heads of State and Government adopted the AMV in 2009.
AMV envisages transparency, equity and the optimal development of mineral resources to underpin broad-based sustainable growth and socioeconomic development in Africa. Key talking points that enabled Mutoko community to warm up to AMV include the following;
AMV encourages government to acquire knowledge of the mineral wealth potential of the country to create better opportunities to optimally gain from the disposal of mineral rights. Areas known to have high mineral wealth potential should be sold through competitive bidding to choose a bidder who offers optimal development dividend, taxes, development of local supply chains, infrastructure, skills and technological transfer.
Mutoko community was deflated to know that the country’s mining regime uses the First In First Assessed (FIFA) principle to grant mineral rights, stifling space for competitive bidding. To acquire mineral rights based on FIFA principle, an investor pays $200 for a prospecting license, $300 to get a mining title and $100 annually to renew the mining title. An ordinary block of black granite mining covers 25 hectares.
To make Mutoko community relate better to the costs of acquiring black granite mining claims, the costs were converted to livestock-goats and cattle. It costs 6 goats to get a prospecting license, 1 cow to get a mining title and 3 goats, to renew the mining title. Clearly, Mutoko community can afford to own black granite mining titles in their area.
Taking a leaf from the recent government-Zimplats deal on the release of platinum claims, Mutoko community should press government to negotiate the release of black granite claims to Mutoko Community Share Ownership Trust (MCSOT). The trust will negotiate with potential investors through competitive bidding, a process that can create better local and economic development opportunity than the current scenario.
The above is a short to medium solution, ideally, the reform of the Mines and Minerals Act to accommodative competitive bidding for the award of mineral rights in areas with high mineral wealth potential is a necessity.
Mutoko Alternative Mining Indaba Unique and Refreshing
As the Alternative Mining Indaba (AMI) celebrates its 10th anniversary, Mutoko district AMI stands out among several AMI’s achievements. The AMI was created as a response to the regional Mining Indaba, a platform in Cape Town, South Africa, for investors and government officials to discuss investment opportunities and risks in Africa’s mining sector.
Disturbed by the fact that communities affected by mining activities did not have a seat at the table at the Mining Indaba, led by the Nowergian Church Aid, CSOs started the AMI movement in 2009 as an annual event. Zimbabwe started its national AMI in 2012 under the leadership of ZELA with support from Zimbabwe Council of Churches (ZCC) and Zimbabwe Coalition on Debt and Development (ZIMCODD).
In 2013, Zimbabwe scored a first by devolving AMI to provincial and local level. Mutoko local indaba is unique and refreshing in that it is driven by Mutoko RDC through partnership with CSOs. It is Mutoko RDCs that was at the forefront of inviting stakeholders and crafting the agenda, of course through a participatory approach. Hopefully, other resource rich RDCs will be inspired by Mutoko example to spread and strengthen the AMI movement.
Limited Transparency and Accountability of Corporate Social Responsibility Activities
Although mining companies in Zimbabwe are not legally compelled to practice Corporate Social Responsibility (CSR) activities, to gain and maintain a social license to operate, it is desirable for mining companies to contribute to local economic and social development programmes. It is disheartening to note that CSR activities carried out by black granite mining companies are barely transparent and prune to capture by corrupt politicians, government officials and traditional chiefs. One company bragged that it supports national events. For example, the entity donated 1,900 litres of fuel to the recent visit by the President to enable transportation of people from different places. The visit by the President was a ZANU PF campaign rally for 2018 national harmonised elections pencilled on 30 July 2018. This raises the risk of abuse of CSR activities to finance political campaigns. Corporates, therefore, can easily go into bed with politicians to suppress policy reform process that positions mining as a tool for development as envisaged by AMV.
Another development is that black granite mining companies in Mutoko are no longer enjoying the CSR expenditure allowances for mining companies provided under the Income Tax Act. Dr Muvhuro, the human resources director for Natural Stones argued that the changes came with the reclassification of black granite from a mineral to a quarry under the new Finance Act. It is important to know that only Natural Stones is visible on CSR activities, and the other companies such as Ilford, ZIQ, CRG, Quarrying Enterprise and Surewin are barely active.
Stakeholders at Mutoko indaba discussed and agreed that black granite mining companies should come up with a publicly known formula for determining their annual CSR budgets. Further, CSR should feed into the local development plans and targets set by the local authority in consultation with local stakeholders. However, there will be room to deviate from local development plans in case of emergence.
Section 276 (2) (b) give local authorities powers “to levy rates and taxes and generally to raise sufficient revenue for them to carry out their objects and responsibilities.” The Rural District Council Act gives resource rich local authority the power to collect local taxes from mining activities. In this regard, Mutoko RDC collects local taxes, $1 per tonne of black granite mined. $1 is equivalent to a loaf of bread. In 2017, Mutoko collected $160,000 from black granite mining activities. Approximately, there are 164,000 people in Mutoko, meaning that mineral income per head amounts to $0.98 per annum. There is no transparency concerning production and marketing of black granite in Mutoko. Mutoko RDC suggested that having a weigh bridge would be beneficial to independently verify production figures.
In addition, there is need to engage Minerals Marketing Corporation of Zimbabwe (MMCZ) to understand how the institution to understand black granite revenue, success and challenges concerning black granite marketing.
Also, it was discussed and agreed ZELA should look at the changes in the Finance Act to come up with legal advice on opportunities for Mutoko RDC to get royalties from black granite mining. Notably, before 1994, Mutoko RDC used to get royalties from black granite mining activities which were classified under quarrying helped to construct Mutoko high school, council offices and a commercial building in town.
Black granite miners are accused of causing water stress, water sources like streams, wells and boreholes are now drying up easily. Another challenge is dust pollution linked with haulage trucks that are operating in dust roads. Blasting activities are allegedly causing houses and schools to crack. Mining activities are also destroying cultural sites.
Mutoko RDC decried the fact that it has failed to access Environment Impact Assessment (EIA) documents from Environmental Management Agency (EMA) and the mining entities operating in Mutoko.
ZELA should take legal action to stop mining companies from operating without EIAs and explore legal opportunities for challenging EIAs which were fraudulently done without proper public consultations.
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