• International Lawyers Project

ILP and CNRG collaborate to reform the extractives industry in Zimbabwe

Updated: Feb 1

International Lawyers Project and the Centre for Natural Resource Governance are collaborating to provide a legal analysis and constitutional review of Zimbabwe’s extractives industry, with the aim to bring the industry, and the regulations underpinning it, up to standard.


Background


Zimbabwe is a nation renowned for its deposits of the world’s most valuable resources. As of 2018, mineral exports accounted for 60% of the country’s export earnings, and as of this year, the sector accounted for around 12% of the country’s gross domestic product. The minister of mines claims that the sector has the potential to generate US$12 billion annually by 2023 if the government addresses challenges such as persistent power shortages, foreign currency shortages, and policy uncertainties.


Despite the abundance of resources, political instability and rampant corruption have contributed to deep economic problems including poor infrastructure and regulatory flaws, as well as unemployment, hyperinflation and environmental degradation. Zimbabwe’s extractives industry has been constantly under scrutiny for its underdevelopment and lack of up-to-date regulations. This is becoming an increasingly pressing issue as the Covid-19 induced global financial risk is creating a renewed wave of mining activity, which is driving the country towards an extractive industry dependency mode.


The Africa Mining Vision and the African Minerals Governance Framework were formally established by the African Union in 2009, seeking to promote equitable, broad-based development through the prudent utilisation of the continent’s natural wealth. They sought to combat illegal mining and tax-avoidance practices by establishing a progressive fiscal regime that could curb the haemorrhaging of the continent’s resources. Despite being a member state to the African Union, Zimbabwe’s efforts in harmonising the African Mining Vision and the African Minerals Governance Framework missions with national legislations have been slow and is potentially a contributing factor to the fiscal losses from the extractives sector.


The need for a constitutional review


Between 2018 and 2019, a 36% decrease was seen in the output of the diamond mining sector, a 16.8% decrease in the output of the gold mining sector, and a 25% decrease in the coal mining sector.


A key contributing factor to the current crisis is the country’s lax licencing laws. Foreign companies are permitted to own 100% of a mine licence for any commodity, except for platinum and diamonds, in perpetuity. Thus, firms can hold cheaply acquired licences for years, without pressure to develop them into producing mines, ultimately, cutting into Zimbabwe’s potential production and depriving smaller and local companies from opportunities to develop projects. Moreover, gold smuggling is common in Zimbabwe. Authorities estimate between 30 tonnes and 35 tonnes of gold are being smuggled annually.


In 2019, Zimbabwe experienced its worst power cuts in three years, lasting up to 10 hours daily in some areas, and threatening mining output in one of the world’s biggest mineral resource producers. Multiple companies that operate in the mining industry have stalled the rolling out of their projects and sites, which includes diamond mining companies. Altogether, recurrent and prolonged power outages have contributed to at least 20% of output losses to the country’s mining sector.


Rural communities, especially those in Eastern Zimbabwe, where many underdeveloped mines and minerals reside, have been continuously removed from their land and poorly compensated, creating widespread community displacement. Over 30,000 people, six communities in total, were said to have been displaced in 2019 to pave way for new mining companies without compensation according to the Centre for Natural Resource Government, a mining watchdog, resulting in them surviving under near-starvation conditions.


Mining also left a big environmental footprint in the country and on the continent as a whole. Since 2012, the Government of Zimbabwe has been conducting bi-annual reports on environmental damages by the extractives industry. They have since found signs of widespread heavy metal and chemical pollution in waterways and rivers, many of which are relied upon by rural communities as water sources. Mining companies have also been steadily removing forests and natural vegetation in order to gain access to the ores beneath them, contributing to nearly 20% of the annual deforestation in the country.


In 2019, more than 40 illegal gold miners were believed to have died after being trapped deep underground following a flash flood in the Kadoma region, where heavy rains sent a wave of water pouring into shafts that were up to 100m deep. At the end of 2020, a further 30 illegal miners were feared dead after being trapped in the country’s Bindura mine. With the fall of Zimbabwe’s economy, thousands of people have been forced to find alternative means of survival. Many have engaged work in the mining industry, excavating areas abandoned by major commercial companies.


The Centre for Natural Resource Governance voiced their concerns towards Zimbabwe’s environmental management agency over the outdated infrastructure of mining companies and for failing to protect lives by properly decommissioning disused mines. They stressed that a proper procedure should have been followed to seal the mine to avoid tragedies of this nature.


The government outlined ambitions to quadruple the extractive sector’s total value to $12 billion USD by 2023 as it seeks to take advantage of the country’s abundant natural resources. However, the current regulatory regime is still at its infancy, creating plenty of opportunities for illegal mining, a source of income many turn to as the country goes through its worst economic crisis in a decade. This makes it much more important to review the current framework and keep Zimbabwe on track with its 2023 goal and its long-term Africa Mining Vision and African Minerals Governance Framework mission.


A collaborative approach


The Centre for Natural Resource Governance seeks to defend the rights of communities that are impacted by the extractives industry, especially in rights violations, such as land and water grabbing, pollution and direct violence. International Lawyers Project received a request from the Centre for Natural Resource Governance and is now working with them to provide guidance and support on a constitutional review of the existing laws and regulations in the extractives sector, as well as the 2020 Civil Society Organisation position on a constitutional review.


By analysing the existing legislation, policies and regulations that govern the extractive sector, International Lawyers Project pro bono experts and the Centre for Natural Resource Governance can identify areas that need to be updated in order to align with the 2013 Constitution, the Africa Mining Vision and the African Minerals Governance Framework, bringing the legislation up to modern standards. While, reviewing and adding the Civil Society Organisation position paper on constitutional review and community groups will facilitate to include a public angle to the paper. These action points aim to remedy the lack of a communal voice in the policy making process and the lack of access to information regarding the amendments to laws and policies.


Bringing attention to the issue at hand is imperative to addressing the historically under-regulated and exploited extractives sector, prevalent worldwide. Considering that Zimbabwe possesses much of the world’s precious metals, the country’s extractives sector is in dire need of reform. This is doubly important considering how much Zimbabwe depends on the future growth of their natural resources sector to help develop their economy. International Lawyers Project and the Centre for Natural Resource Governance believe a good starting point is to critique how legal policy gaps are perpetuating injustice in society, to better understand and improve the mineral governance system. Looking into the future, we plan to engage other civil society organisations to form a strong network of like-minded individuals, eager to join hands and push the reform agenda together.


Annabel Yu – Legal Fellow, International Lawyers Project



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