Civil society organizations in ZIMBABWE have raised new concerns over the high plunder of the country’s resources by multinational corporations and are pushing to close the loopholes.
At a crucial resources conference last week, leading resource activists said they were also concerned that as clear looting and looting took place, the government was pampering the same companies with tax incentives.
These ideas emerged during the Zimbabwe Alternative Mining Indaba (ZAMI), which revealed that the resource-based lending (RBL) model was unsustainable.
ZAMI was hosted by the Zimbabwe Coalition on Debt and Development (Zimcodd), the Environmental Law Association of Zimbabwe (Zela) and the Zimbabwe Council of Churches.
“There is a clear plunder of resources by capital/corporations without reinvesting them in host communities,” Zimcodd said.
“The government, in turn, gives tax breaks to these companies, making the situation worse.”
ZAMI follows recent revelations that $28 billion of platinum was mortgaged for a $200 million loan from China in 2006 to buy Chinese agricultural equipment.
The revelation angered civil society, which called for full disclosure of similar RBL deals.
Conference delegates were told that nationals of the Asian giant were the biggest illicit traffickers of gemstones in Zimbabwe.
A report by the local resource watchdog, the Center for Natural Resource Governance, had previously raised similar concerns.
“The Ministry of Mines should expedite the drafting of the gemstone policy to guide producers, investors, marketing and trade in the gemstone sector. The government should pursue the harmonization of all applicable mining laws to facilitate doing business in the mining sector,” Zimcodd said after last week’s conference.
“The government should refrain from propaganda about potential mining discoveries for political purposes, as this raises the hopes of the country and increases unsustainable borrowing. resources is not viable.”
Calls have also been made for the rapid implementation of an Extractive Industries Transparency Initiative (EITI) or local equivalent.
The EITI is an international standard that aims to promote good governance in gas, oil and mineral resources for the promotion of good governance issues concerning the extractive sectors.
Currently, only 50 countries are implementing the EITI.
“It is essential to promote transparency and accountability in the management of mining revenues,” Zela said in his recommendations.
He said that mineral resources were finite, that they should be mined in a way that would ensure that future generations will also benefit.
The Ministry of Mines and Mineral Development has predicted that the mining industry will grow to $12 billion next year from $5 billion in 2021.
“The context of the mineral contribution to the US$12 billion is that US$4 billion will come from gold, US$3 billion from platinum, US$1 billion from diamonds, US$1 billion from coal, US$1 billion in chromium, ferrochrome and carbon steel, half a billion in lithium and US$1.5 billion in other minerals, for a total of US$12 billion,” Zela said.
“However, there are many challenges to this endeavor such as illicit financial flows, weak fiscal regime, tax evasion, corruption which cripple the ability of development institutions to deliver services to citizens.
“Poor and marginalized groups, especially women, youth, people with disabilities and the elderly, are hardest hit as they rely heavily on public services – health, education, water and sanitation,” the report said.