BY VENERANDA LANGA
TRANSPARENCY International Zimbabwe (TIZ) has warned that government’s ambitious programme to achieve a US$12 billion mining economy by 2023 would go up in smoke if it does not address issues of corruption and lack of accountability in mining revenue and mining contracts.
TIZ, in a paper titled US$12 billion Mining Economy by 2023: The Key Enablers, said:”The mining sector in Zimbabwe is faced with corruption, politicisation of the sector, State capture, resources being vested in the hands of individuals rather than the State, lack of geo-data, exclusion of communities, lack of transparency and accountability, and lack of access to information among others.”
“The mining sector is further characterised by the unequal distribution of revenues between the central and local government. The local governments are entitled to unitary tax which is charged per unit comprising of 10 unskilled labourers. The bulk of the revenue is distributed through national Treasury, leaving the mining community worse.”
The TIZ said some of the challenges with the current Mines and Minerals Act include that artisanal and small-scale miners are considered informal and, therefore, criminalised.
The anti-corruption organisation said if the country wants to achieve a US$12 billion mining economy by 2023, then mining contracts must not be shrouded in secrecy.
“The opacity in contract negotiations limits the ability of the State and communities to benefit from the sector. The opacity of these contracts leads to tax evasion and avoidance, which drain the country of the much-needed resources.
“By joining the (Extractive Industries Transparency Initiative) EITI, government will be committing itself to ensure full disclosure of information along the mineral value chain from how extraction rights are awarded to government revenues and how the public benefits from the sector,” the paper stated.
TIZ demanded that government should reveal information on who owns extractive companies in the country and the ultimate beneficiaries, as well as desist from giving harmful tax holidays.
“Government must desist from giving harmful tax incentives and abolish the indefinite carrying over of losses in the mining sector,” the paper read.
The anti-corruption organisation also said mining contracts signed must impose obligations on investors to respect human rights, including environmental, social and health protection of mining workers and mining communities in line with the United Nations Guiding Principles on Human Rights.