New push for diamond policy enforcement

via New push for diamond policy enforcement by Owen Gagare November 22, 2013 Zimbabwe Independent

CIVIL society, academics and economists have urged the government to operationalise its diamond policy to ensure the country benefits from its gems whose mining has been shrouded in secrecy, shady involvement of the security sector and under-remittance of proceeds to Treasury.

Zimbabwe approved a diamond policy in November last year which seeks to “promote the sustainable development of the diamond industry for the benefit of all Zimbabweans” but has not implemented it amid allegations some Zanu PF elites and securocrats were looting the precious mineral.

This was one of the major resolutions which emerged from a seminar titled Zimbabwe: The Political Economy and Minerals (Diamonds) held in Pretoria, South Africa, a fortnight ago.

The seminar was organised by the African Public Policy and Research Institute and Africa University, with the aim of interrogating issues in Zimbabwe’s diamond mining sector.

It was also meant to develop policy options to hand over to government and civil society for possible modification and adoption.

The policy has been viewed as a sound document which could bring about transparency in the sector by, among other things, ensuring “access to diamond trade and financial records of all companies involved in diamond activities” by government and its various arms.

Under the policy, the Ministry of Mines is tasked with ensuring all diamond revenue is collected and remitted to Treasury.

The policy is also aimed at ensuring ordinary Zimbabweans and future generations, even those living in areas without diamonds, benefit from the resource through channelling proceeds from royalties to the Sovereign Wealth Fund.

The funds accrued will then be invested in other sectors of the economy.

Delegates who attended the seminar concurred that ordinary Zimbabweans were yet to truly benefit from diamonds although government ostensibly introduced the indigenisation programme specifically for that purpose.

“Even after flushing out artisanal miners in preference for corporate miners, there has been a limited inflow into the national fiscus,” said Tinashe Nyamunda from the University of Stellenbosch.

“This has further defeated the concept and policy of indigenisation and economic empowerment as the local indigenous people and broader national indigenous population are both disenfranchised from benefiting from the Marange resource.

“Ultimately the revenues from Marange have a limited direct impact on the ordinary Zimbabweans and their livelihoods; therefore questioning the credibility of indigenous and economic empowerment in the case of these diamond fields.

“For the people of Chiadzwa and Marange, the economic empowerment and indigenisation policy has turned out to be a pie in the sky.”

Last year, then Finance minister Tendai Biti cut his 2012 budget from US$4 billion to US$3,4 billion, blaming poor revenue inflows from diamonds.

Biti said of the US$600 million which was expected from diamonds last year, only US$41,6 million was received by Treasury during the first half of the year.

Associate Professor Pamela Machakanja from the Institute of Peace and Governance Leadership at Africa University said a new mindset was needed to ensure the link between mineral endowment and development.

“In Zimbabwe, the stepping stone must be in the operationalisation of the diamond policy which was adopted in 2012. Once operational, this can set the country on a trail towards ensuring that the diamond resource is channelled towards national development,” said Machakanja.

The seminar also recommended that the ownership of mining companies in Chiadzwa be “interrogated, together with production levels and revenue generation, and be made public”.

This is also in line with the diamond policy, which advocates for transparency and remittance of revenue to Treasury.

There was a recommendation that the conflict between the state, local communities and diamond companies in Chiadzwa be addressed urgently. People in Manicaland, including the Minister of State for provincial affairs Chris Mushowe, have been complaining bitterly that the province, particularly Chiadzwa community, is not benefitting from the gems.

Obvious Katsarura, an academic from Wits University, said the inter-phase of the coming in of corporate miners and elbowing out of the artisanal miners resulted in conflict and socio-economic distortions.

“People were moved away from their traditional locations to make way for the establishment of mines. In this process they lost their social, cultural and economic entitlements that were geocentric,” he said.

The Kimberly Process (KP) has often come under attack for giving the nod to Zimbabwe to trade in diamonds despite allegations of secrecy, militarisation, looting and human rights abuses.

Ambassador Wellile Nhlapo, the chairperson of the KP, however, highlighted that the original mandate of the KP does not include oversight over democratically elected governments, although current demands are that this be the case.

He said even if the definition were to change, KP would still face “a bigger challenge” of who makes the call on which democratically elected governments need to be investigated and censured.

Nhlapo said KP should never encroach into the sovereignty of nations “otherwise it continues being seen as a mechanism for regime change.