fbpx

‘Political Interference Stunting Diamond Sector Growth’

MUTARE– Analysts say the enmasse resignation of the Zimbabwe Consolidated Diamond Company (ZCDC) board exposes how political interference in state enterprises is prejudicing revenue flow into the national fiscus.

The entire ZCDC board resigned in protest over predatory contracts signed with Non-Disclosure Agreements (NDA), penned with investors which they felt was likely to exacerbate revenue losses.

Ostensibly created to enhance transparency and accountability in the extraction of gems, ZCDC has failed to live up to expectations, says Zimbabwe Environmental Law Association (ZELA) board member Professor Tumai Murombo.

Speaking during a virtual webinar organized by ZELA to discuss emerging issues in diamond mining he said the sector is now worse off with ZCDC, as the country has failed to draw significant revenue and benefits.

Professor Murombo said these latest developments symbolize government’s conflicting plural roles in mining, evident in the lack of political will to enact a comprehensive legal framework to govern extraction of natural resources.

“Since the formation of ZCDC and the chasing away of the companies that were operating with Zimbabwe Mining Development Corporation (ZMDC), things have turned really for the worse.

“Up to now really if I am to be asked what we have benefited from Marange diamonds, it’s very difficult to pin point…but given the pronouncements government has made before it should not be difficult.

“We have a big challenge in terms of lack of political will not only to develop laws, we still have a specific diamond law outstanding, we still have Mines and Minerals Bill remaining a bill… as long as they remain bills or draft policies we are going nowhere, we are really on a merry go round,” said Professor Murombo.

“Government should move with speed to finalize and enact regulations that can enable it to extract maximum value from diamond resources in Marange.”

Professor Murombo said the enmasse resignation also raises questions on the autonomy of ZCDC from government interference and the company’s registration as a private entity which is wholly owned by government.

He said this political economy of natural resources is skewed and effectively disempowers regulatory bodies with one appointing authority like Environment Management Agency (EMA) from holding ZCDC to account.

Professor Murombo said State involvement in economic activities limits its capacity to balance management of mining business, providing effective legislation, oversight and management, while being transparent and accountable.

He said line ministry or other regulatory boards’ roles are compromised to monitor social consequences and environmental effects of mining and enforce compliance from ZCDC as the state controls appointment of its officials.

“There is one big argument that the state should rather stay out of economic activity and rather provide a framework that enable those with resources, capacity and political will, extract value from natural resources.

“Once the state gets involved in the exploitation of a resource it becomes an economic player in addition to being the regulator and the owner on behalf of the people.

“It becomes difficult for the regulators in the country to the State through its State Owned Enterprise currently ZCDC to hold it accountable for the various laws that are apply to the process of mining,” said Professor Murombo.

“So we need to decide as a country for how long are we going to allow the state to be the referee, player and also the owner of the soccer ball itself, because that is causing us a lot of challenges.”

On the enmasse resignation of the ZCDC board Professor Murombo said the board showed ‘some measure of integrity’ to resign as regulatory and statutory boards must be autonomous of the state.

He said focus should also be placed the process of appointing a new board to ensure that the community is consulted and leverages this as an opportunity for active participation as enshrined in the constitution.

“There are issues in terms of the legal status of ZCDC itself… it is actually a private company. That poses serious challenges because we have private company that is owned by government.

“The resignation of the ZCDC board in my view show that the board has some degree and measure of integrity to the extent that they found it difficult to continue playing the role of an effective board given what preceded their resignation.

“But the critical question is that how the ZCDC board is insulated by the political developments in the country, from the political moves to control access to resources. Once you see a board resigning it means that there was political interference.

“Now the question is how the new board is going to be appointed, what is the role of the public and how can the community affected by mining get involved in the process of appointment,” said Professor Murombo.

You cannot copy content of this page