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NATIONAL ASSEMBLY HANSARD 12 JUNE 2013 VOL. 39 NO. 23

PARLIAMENT OF ZIMBABWE

Wednesday, 12th June, 2013

The House of Assembly met at a Quarter-past Two O’clock p.m.

PRAYERS

(THE ACTING SPEAKER in the Chair)

ORAL ANSWERS TO QUESTIONS WITHOUT NOTICE

  1. MAHLANGU: My question Mr. Speaker Sir, is directed to

the Minister of Constitutional and Parliamentary Affairs, Adv. Matinenga. Hon. Minister Sir, when is the Parliament going to be dissolved?

THE MINISTER OF CONSTITUTIONAL AND

PARLIAMENTARY AFFAIRS (ADV. MATINENGA): May I thank

the member for that question and the answer is very simple and clear. Firstly, the only person who dissolves Parliament in certain circumstances is the President of this country. If circumstances answer to the constitutional requirements, it is only the President who can dissolve Parliament and unfortunately, I am not privy to what his views are in regards to that dissolution. That is the first aspect of the response but secondly, if the President does not dissolve this Parliament by the 29th of June, this Parliament stands dissolved by operation of law. So, if he does not dissolve Parliament by then, the law forces him to dissolve Parliament on the 29th of June. So on the 30th of June this Parliament will no longer be in existence. I thank you Mr. Speaker.

  1. MLAMBO: My question is directed to the Minister of

Agriculture, Mechanisation and Irrigation Development, Dr. Made. Could you please tell us about the position of our harvest this season as a country?

         THE MINISTER OF AGRICULTURE, MECHANISATION AND IRRIGATION DEVELOPMENT (DR. MADE): Mr. Speaker,

this is not a policy but a technical question although I can answer it. This season, we are aware that in most areas like Matabeleland South and the southern parts of Midlands and Manicaland, there was a drought. Most crops were a complete write-off and that is why we are already

importing food from Zambia and as you know, it is 150 000 metric tonnes initially so that we can help those areas.

The second crop assessment is almost ready but I have to first report to Cabinet before I can talk about that but generally the production is low. That is what I can say. I thank you.

  1. CHIBAYA: Thank you Hon. Speaker. My question is

directed to the Hon. Deputy Minister Chidakwa, we have heard that the

Government bought the Quality International Hotel for the Parliament of Zimbabwe. So, could you please appraise us on this issue since it is more than three years now when the deal was said to have been struck but on the other hand, there seems to be nothing happening at the building? Could you please tell us about the current state of affairs pertaining to that effect?

THE ACTING SPEAKER: I do not know if Hon. Deputy

Minister Chidakwa got the question and whether her ministry was the one which was involved in the purchase? - [Minister Chidakwa having spoken to the Acting Speaker] So Hon. Chibaya, you may redirect your question to the relevant Ministry.

  1. MATSHALAGA: My question is directed to the Minister of

Agriculture. Given the effects of climate change and the propensity for areas to suffer from drought and low crop yields of the majority of our people who derive the livelihoods on agriculture, what policy is the ministry putting in place to encourage farmers to grow drought resistant and small grain crops. I thank you Hon. Speaker Sir.

         THE MINISTER OF AGRICULTURE, MECHANISATION AND IRRIGATION DEVELOPMENT (DR. MADE): I want to

thank the hon. member for raising that question. On the effects of drought, of course we have to look on the fact that there are several ministries involved since it has to be a multi-sectoral approach. There are several inistries which are involved in looking into this problem and the initial response is to intensify irrigation schemes in areas where the pattern of rainfall is such that you still have precipitation but it does not come evenly. So that will be the natural first point of reaction.

The second option to irrigation is of course to look at the different approaches as the hon. member has suggested but even in those drought resistant crops, we also have to supplement with irrigation even those crops. The small grain crops have been traditionally grown in the drier parts of the country but I think what is more important is to understand that inputs to farmers must always be provided on time and traditionally grown in the drier parts of the country but I think what is more important is to understand that inputs to farmers must always be provided on time and particularly early.  You may be able to harvest in some areas if you plant early.  This is why I am emphasising Mr. Speaker, that we must take a multi-prompt approach in looking at this particular problem.  We must also intensify livestock and not crops alone.  We should also look at suitable livestock for those areas as well.  I thank you Mr. Speaker.

  1. CHIMHINI: Thank you Mr. Speaker. To the Minister of Agriculture, given that we all understand that we have serious drought in the country, what policy measures have you put in place such that once we have maize that is coming into the country; it is fairly distributed to avoid allegations where people will talk about politicisation of food?

THE MINISTER OF AGRICULTURE, MECHANISATION AND IRRIGATION DEVELOPMENT (DR. MADE):  Mr. Speaker,

that question is very important.  The food that is coming into the country or even the food that we have in the country must be fairly distributed.  We have our structures on the ground and I want to appeal using the hon. member’s question that we all have to be alert.  Wherever there is a problem, at least, I want to undertake that if that problem is brought to my attention, I will be able to also interfere.  Otherwise, there is a structure that is in place.  It starts with the Governors of the provinces and they work with a local committee.  So far, I have not heard of any major problems.  Already, if you look at our Press, somewhere today, it was already reporting that there is maize that is being distributed in

Matabeleland North, Matabeleland South, parts of Midlands, parts of

Masvingo and I know there is grain now that is moving to parts of Manicaland.  So, if there is any problem anywhere, I urge members of the public to bring it to my attention.

  1. CHIMHINI: Minister is talking about structures, can you clearly state which structures you are talking about?
  2. MADE: The grain distribution structures have always been there. Like I have said, they are headed by the Provincial Governors.  It is a committee and it includes also the traditional chiefs and so on.  I do not have the list with me but there are existing structures that deal with the grain loan scheme as well as the distribution of grain to the vulnerable.  It includes the Ministry of Labour and Social Welfare, the Ministry of Agriculture, the Ministry of Local Government, etc.  It is quite a list of the committee that is involved at the provincial, district and at the local levels.  As I have said, if there is a complaint anywhere, let it be brought to my attention.

*MRS. CHADEROPA:  Thank you Mr. Speaker.  I would want to ask the Minister of Agriculture.  We have ARDA Estates in

Zimbabwe that fall under the Government.  Some of them, for example, at Sanyati, the ARDA Estate is now being called the Game Loft and there is no farming that is taking place.  There used to be some farming activities and they would deliver their grain to the GMB but now, there is no activity going on.  Instead, they are busy slaughtering beasts that were left by ARDA.

As the Minister, are you aware of that and we would want to know whether Government is benefiting from the Game Loft?

THE MINISTER OF AGRICULTURE, MECHANISATION AND IRRIGATION DEVELOPMENT (DR. MADE):  I do not think

that is a policy issue, it is a technical issue.  The hon. member has to put it in writing.

THE ACTING SPEAKER:  Hon. Chaderopa, your question

might need a detailed explanation.   Can you put the question in writing so that you get a detailed response?

  1. NCUBE: Is there any policy to protect our beef industry against the imports?

THE ACTING SPEAKER:  Hon. Minister, if you have anything to do with the beef imports that you may want to share with the House, you can go ahead and respond.

THE MINISTER OF AGRICULTURE, MECHANISATION

AND IRRIGATION DEVELOPMENT (DR. MADE):  Mr. Speaker,

I had the privilege of listening to the hon. member whispering ‘imports from Argentina’.  Generally speaking, from a policy point of view, we look after our farmers first and we look after our agriculture sector in terms of the overall policy.  As the hon. member and the House are aware, currently we are importing livestock from Botswana in a programme that is agreed to between the two countries.  We also have an appeal at the moment, from Namibia because all these countries are also affected just as we are, by the drought but they do not have the capacity to offload so many animals in terms of the capacities of their abattoirs.  As member states, in the SADC region, we do consider relationships that are brought up because of those natural factors that I have mentioned.  Today it is them, tomorrow it will be us; thus the consideration that we give but we do weigh also the position of the consumers.  Our burden is to look after everybody but we are obligated to look after each other in terms of the regional interests as well.  I thank you Mr. Speaker.

  1. DZIRUTWE: Thank you Mr. Speaker. My question is directed to the Minister of Agriculture. Not too long ago, there was some kind of get together between the ministry and the Committee on Agriculture where we were trying to promote the stakeholders in the industry of millers. They were supposed to fund maize or flour production like tobacco out-growers’ farmers but in yesterday’s paper, they were explaining that only 2000 hectares of wheat had been put under cultivation by deadline.  So, this disconnects what was recommended and what is on the ground.  How do you explain that?

THE MINISTER OF AGRICULTURE, MECHANISATION

AND IRRIGATION DEVELOPMENT (DR. MADE):  The hon.

member is correct in stating that, that is the position but we must also relate to the timing of that.

First and foremost, the farmers and the bankers or anyone who supports farmers also considers the security of wheat growing in terms of electricity. Wheat is not a crop where you grow and you take chances in terms of rainfall, you have to have 100% security in terms of electricity. It is totally dependent on full irrigation. I would say, that is the most critical factor and a good number of farmers as you know right now, have their electricity switched off because they owe ZESA money. That is the most critical factor and the bankers as well as the investors also look at that. So that is the most difficult part of the winter crop.

  1. CHINYADZA: I know that some aspects of this question were asked last time when we had question time but I would like to have clarification from Minister Matinenga with respect to what is actually going on relating to the issues of elections, dates of elections and the registration that is taking place. We know that there is a mandatory 30 day voter registration that is supposed to be taking place and yet we know that at any station, in fact, it has been publicised that it will take only four days on the outside, in some cases only two days. I do not know whether this has got any impact in terms of our timetables for the general elections, and obviously taking into consideration the ruling by the Constitutional Court that elections should be held before the 31st of July, 2013.

        THE MINISTER OF CONSTITUTIONAL AND

PARLIAMENTARY AFFAIRS (ADV. MATINENGA): May I thank

the Hon. Member for the more than one question which he has posed.

Let me begin by making reference to the judgment of the Constitutional Court, a judgment which obliges the President to proclaim harmonised elections for this year by the 31st of July, 2013.

Mr. Speaker Sir, the judgment of the Constitutional Court as our most senior court is a final judgment and this Government or anybody associated with it is obliged to accept that ruling. The law does not sanction the impossible and even when the most senior court makes a ruling, if that ruling is impossible to carry out then there are other recourses to follow in order to enhance that judgment of the

Constitutional Court.

Mr. Speaker, we have got a brand new Constitution which imposes obligations on all our part before the holding of the harmonised elections. What are these obligations? The first one as the Hon. Member has pointed out is the obligation to carry out an intensive voter registration exercise. We are all aware, and the Registrar General’s office and ZEC have made it very clear that this exercise only commenced on Monday, 10 June, 2013. In terms of Schedule 6, Section 6, sub-Section 3 of our Constitution, this voter registration exercise must take at least 30 days. What it means therefore, is that this voter registration, if we want to follow our Constitution, will take us to the 9th of July, 2013.

Again, in terms of our Constitution, a period of 14 days is mandatory from proclamation to nomination court but one cannot have a proclamation or nomination before a roll is closed. So it stands to reason with respect, that you can only have a proclamation when that roll is closed on the 9th of July, 2013. What it means therefore, is that if one has to factor in the constitutional provision for a nomination court which must be at least 14 days from the date of that proclamation, then you only need or you start counting from the 10th of July, 2013 and the nomination will be on the 24th of July, 2013.

Thereafter Mr. Speaker, and again this is our Constitution, polling must then be held 30 days after nomination court day. If your nomination court day is on the 24th of July, 2013, it means that 30 days thereafter will be the 25th of August, 2013 which is now your polling day. What this means then is that your constitutional judgment, unfortunately, has ordered the impossible. So what must be done in the circumstances? Nobody, and I want to repeat this, nobody is saying that we must be or that the President must be in contempt of the Court. No, but there are legal avenues which can be explored in order to, in fact, give credence to the Constitutional Court position. What does one do?

Mr. Speaker Sir, one can approach that Court which gave that decision, in this instance, the Constitutional Court, and seek an indulgency to carry out the Order in an extended period. What should be done with respect is that an approach should be made to that same Court and that same Court, on proper convincing, will not find any difficulty in extending that Order of performance which it set for the 31st of July, 2013 so that it gives possibility to the various processes which are set out in our Constitution. By so doing, we are in fact enhancing the power of the Constitutional Court. It is not being in contempt but it is to realise that certain things can simply not be done within the time this Constitutional Court says it must be done.

This is not something new. Indeed, there are a lot of situations where, for some reason or other, a court has not been favoured with all the factors it should have taken into account when coming to a decision. When that court is approached, it is being approached in humility with respect and it is being advised that there were certain factors which were not placed before it when it came to a decision. Again Mr. Speaker, hon. members will be aware that in respect of the three by-elections in Matabeleland North, the President saw it fit to approach the court to seek an extension within which he was supposed to announce those dates.

There is nothing inconsistent in what the Constitution says. There is nothing inconsistent with the dates which I have set out because that is perfectly within our Constitution and that is perfectly within what our courts are able to do under the circumstances.

Hon members will agree with me that it would be very unfortunate if our brand new Constitution, which is bringing in these new values, is breached well before the ink is dry on that very document. Obviously, when one looks at the dates which I have set out, we are already encroaching on the period when the UNWTO is going to be held. Obviously, these are the other exigencies which may not have been placed before the Constitutional Court when it came to make its decision. When this is done and when there is this clash, obviously, one will have to say we need to weigh our priorities. I can say you look at an election in this country, maybe it can be held in the first two weeks of September.

  1. CHINYADZA:  My question relates to the issue of voter registration and the interpretation of the law itself. When you say 30days, does it mean 30-days of the Registrar General’s Office going out or it is 30-days of people registering at a particular ward or registration centre? What does the law say?

ADV MATINENGA: I thank the hon. member for the question

and maybe I should apologise to him because this question was actually part of the first question which he raised which I inadvertently did not address.

When you look at the Constitution, the interpretation given to Schedule 6, Section 6 subsection (3) in regard to the intensive voter registration is very clear and unambiguous. That provision speaks about the conduct of an intensive voter registration exercise in terms of this Constitution. That conduct, as I said in my earlier response, is a conduct which clearly recognises the office of the Registrar General, supervised by ZEC, going out to carry out that exercise.

Those two offices have been very clear as to when they commenced the conduct of an intensive voter registration exercise. It is the 10th of June 2013, two days ago.

  1. MAHLANGU: You have mentioned about the voter

registration and voter inspection which is currently taking place now.

Since there is voter registration and inspection, what will happen to those new voters when they are registered in terms of inspecting the voters roll? Are we going to have another voter inspection exercise again?

ADV MATINENGA: I thank the hon. member for this question.

Again, I want to go back to the provisions of the Constitution and the provision which we are addressing today talks about voter registration and inspection. That is what the provision says.

In practice, what is happening is that, when these teams go out at a particular site to do what it needs to do, firstly you have a line where a person who is attending will have to check whether his name is registered or not. If that person is not registered according to the roll at that particular station, that person then goes into another line where he is registered. Assuming that person does not qualify or does not have a national registration card, he then goes to a line where he can get an identity card. You have at a particular registration station a combo of services which answers to all the complaints which may arise at any particular given time.

Where that person is a new registrant, what we have said and we have agreed to this in Cabinet is that, at that stage when he registers, he must be given a slip so that the slip can be taken to a polling station and he can be able to vote with that slip together with his identity card. There is no need for him to go again and inspect because already he has got that registration slip and he cannot be prejudiced in him trying to exercise his right to vote come election time.

  1. MATONGA: In his presentation, the minister seems to have

indicated that the Constitutional Court, in its wisdom or absent of it, coming to a judgment may have been misled into coming to a judgment. Could the hon. member highlight the information that was either withheld of misleading to the Constitutional Court in coming to their decision?

ADV MATINENGA: Let me thank the hon. member for

misinterpreting what I said. I never said that the Constitutional Court was misled. In fact, Hansard will vindicate me on this aspect. What I said is this – when a court makes a decision, it makes a decision on the facts which are presented to it. The Constitutional Court made a decision on the facts which were presented to it and I said that a court does not seek to make a decision which is impossible to carry out. If a person can be able to go before it and say in terms of the provisions of our Constitution, we are unable to do a, b, c, d, and convince the Supreme Court, then the Supreme Court will act accordingly.

  1. CROSS: Thank you Mr. Speaker. I would like to ask the

Minister of Constitutional and Parliamentary Affairs to outline to this House what legislative programme lies in front of it in the next two weeks? We have two weeks remaining for this House after which it will be dissolved. In those two weeks, we have to pass a number of pieces of legislation related to the implementation of the Constitution, the first of which was approved by Cabinet yesterday. I would like to ask the minister what pieces of legislation does he envisage coming to this House in the next two weeks and when does he expect them to be presented to us?

        THE MINISTER OF CONSTITUTIONAL AND

PARLIAMENTARY AFFAIRS (ADV. MATINENGA): Thank you Mr. Speaker. May I thank the hon. member for the question he has asked. It is a question which is important, particularly as we look at our new Constitution and as we go for elections. It is indeed true that the Electoral Bill was presented in the Cabinet yesterday. Cabinet discussed that Bill, a Bill which is the product of negotiation between the three main political parties.

I am glad to report that Cabinet did reach a consensus on the presentation yesterday. Before I left Cabinet yesterday to come to Parliament, I specifically asked the Minister of Justice and Legal Affairs as to when he anticipated bringing this Bill to Parliament. What he told me is that he is only able to do so next week. Mr. Speaker Sir, I am unfortunately unable to tell the member how many pieces of legislation are going to be brought before this august House before it is dissolved on the 29th of June 2013.

The reason why I am unable to do so is that in terms of the manner in which we operate, each particular ministry is mandated with administering various statutes and the responsibility to bring to Parliament any amendments or any repeals in regards to those statutes rests with that particular minister. If I had the responsibility to look at all legislation to see that it complies with our Constitution, I would be looking at a lot of pieces of legislation. You have your Rural District Councils Act, Urban Councils Act, Political Finances Act, Defence Act, Police Act, which must be realigned with the Constitution.

As I said, these particular pieces of legislation are the responsibilities of the various ministers who administer those pieces of legislation. One is always hopeful that those ministers will be allowed the irresponsibilities and that they will be able to then bring those pieces of legislation in so far as they impact on an election which is going to come very soon.  I thank you.

  1. J. M. GUMBO Thank you Mr. Speaker. In view of the answer that the Hon. Minister has given and the number of the pieces of legislation that he thinks can be brought to the House, what will happen in the event that the President prorogues Parliament before those Bills come into the House? Does it mean that the Minister is going to recommend that the life of this Parliament gets extended or what happens? Thank you.

ADV. MATINENGA: Thank you Mr. Speaker. I would like to thank the hon. member for that question. The life of this Parliament is not going to be extended, at least not on my recommendation. I say so

Mr. Speaker, yes, Parliament’s life can be extended but it can only be extended in certain prescribed circumstances. For instance, if we are in an emergency or in a time of war. Despite the various fights we have, I do not really believe by any iota of imagination that we can qualify for the extension of Parliament.

So what it means is that come the 29th of June, 2013, if what needs to be done has not been done, then we just have to proceed in that manner. But, the President still has in reserve the temporary Presidential Powers Act. It is a piece of legislation which I am not fond of, but in the event that the President feels that it is necessary to give effect to certain issues which cannot be given effect to come the 29th June, 2013, he may care to look at that piece of legislation but as I said, it is not a piece of legislation which I would recommend anybody to look at.

  1. KANZAMA: I still have a problem hon. minister. So I still want to refer my question back to the issue of elections. I do not know whether it is a suggestion or whatever explanation. You are saying if none of you in cabinet approaches the court to seek extension of their ruling, how are you going to compromise for the country to go for elections by 31st July, 2013?

ADV. MATINENGA: Thank you Mr. Speaker. I want to thank the hon. member for that follow up question. Let me make this clear. The judgement of the Constitutional court is final but it does not mean that there are no ways to seek an extension for the performance of a duty imposed by that judgement. So what it means is this; if the President does not want to be in contempt, then he must find common ground with his partners. They have to agree on a date and then to approach the Constitutional court to seek an extension so that elections are then held by that date which is agreed by all the parties.

*MR. CHIMBETETE: Thank you Mr. Speaker Sir. My question

is directed to the Minister of Constitutional and Parliamentary Affairs. I do agree that the 30 days which is agreed upon for the re-registering has started. So if they are taking 30 minutes to serve one person, how many people will be registered in a day? I do not know what could be done to see how many people are being registered at each centre so that they have covered enough people.

THE MINISTER OF CONSTITUTIONAL AND

PARLIAMENTARY AFFAIRS (ADV. MATINENGA): Mr. Speaker

Sir, let me thank the hon. member for that question.  It is a technical question but thank God from the experience I have had in my Constituency, I can answer this question.

Firstly, Cabinet has decided that we are going to do a seven-day registration per ward.  After that seven-day registration, we are going to reassess the position.  If we have to go back to certain sites, we are going to do so, so that everybody who needs to register has been registered.

What is happening on the ground Mr. Speaker Sir, I had the fortune to phone my Constituency during the lunch hour because there is a unit at a place called Nerutanga Primary School which is registering people as I speak. The information I got is that as of 1330 hours, 736 persons had been registered from Monday.  Yesterday, the registering unit went well into the night to finish everybody who had attended.

So, as long as we are able to track what is happening at these sites, we should be able to bring corrective measures in the event that this process is not going properly.  What the Minister of Justice has undertaken is to be available every time so that this information is put either to ZEC or the Registrar-General, so that any problems which are arising at any given Constituency or at any given site are addressed as soon as possible.

So, indeed if there are problems in Nyanga South as the Member of Parliament seems to suggest, I am quite happy to get the details. If he does not want to approach the Minister of Justice, I can approach the Minister of Justice on his behalf, so that whatever problems being experienced can be addressed.

MR DZINGIRAI: As you are well aware, the life of Parliament comes to an end on the 29th June, 2013.  What is the situation regarding the outstanding allowances?

THE MINISTER OF CONSTITUTIONAL AND

PARLIAMENTARY AFFAIRS (ADV. MATINENGA): I wish we

can change seats so that the Clerk of Parliament can come and answer that question.  Yes, whilst I sympathise with the question raised, I am sure that this is a technical administrative issue.   The Clerk of

Parliament will circulate a minute to tell members what the effect of the dissolution of Parliament, with regards to their allowances is going to be.

  1. GWIYO: My question is directed to the Minister of Constitutional and Parliamentary Affairs. Is it correct to also assume that the decision of the Constitutional Court has the effect of amending the requirements in terms of the timeframe of calling for an election?

THE MINISTER OF CONSTITUTIONAL AND

PARLIAMENTARY AFFAIRS (ADV. MATINENGA): Thank you

Mr. Speaker.  Mr. Speaker Sir, there are there arms of State, you have

the Executive, the Legislature and the Judiciary – [AN HON.

MEMBER:  Aahh, legislature haina basa] - Do not worry, there is going to be light at the end of the tunnel.  This new Constitution will look after that.

Mr. Speaker, when the Constitutional Court or any Court for that matter sits to decide on a particular matter, what that Court is doing is not to take the power from another arm of Government but simply to exercise its power in terms of the Constitution.  What the Constitutional

Court was doing is simply to interpret the Constitution, in this case, the

Lancaster House Constitution Section 58 and Section 63 of that Constitution and to determine as to when the obligation to call for an election was to be.

That does not mean that the Constitutional Court is rewriting the

Constitution because it cannot do so.  It has got no competence to do so.

In fact, when we look at the judgment, particularly the judgment of

Justice Malaba, he says very clearly ‘that whilst a Constitution may say something which you do not like, that does not mean then that we fight against that Constitution because there is something we do not like’.  The Constitution may say anything, whether you like it or not, that is the Constitution.

So, whether you like it or not, the Constitution has set out various stages in respect of which we need to go through those stages before we go to an election.  We then do not follow those stages, we face our Constitution peril.

MR CHIMHINI: My question is directed to the Minister of Constitutional and Parliamentary Affairs.  Can you clarify the position regarding the registration of aliens? Reading today’s paper, there is a lot of confusion.  What is the correct position?

THE MINISTER OF CONSTITUTIONAL AND

PARLIAMENTARY AFFAIRS (ADV. MATINENGA): Thank you

Mr. Speaker, may I thank the hon. member for that question.  I think Constitutional provisions regarding what are called aliens or not aliens have never been clearly understood in this country.  If you look at the

Lancaster House Constitution, that Constitution clearly said that anybody born in Zimbabwe of a Zimbabwean origin or a parent who is a Zimbabwean citizen is a citizen of Zimbabwe.  What it meant was the following; assuming your father came from either South Africa, Mozambique, Zambia or Malawi and your father then married somebody from Dotito or from Buhera, it then meant that one of your parents was a Zimbabwean citizen by birth and you were automatically, in terms of the Constitution, before this new Constitution, you are a citizen of this country’.  What we then experienced was, I do not know whether it was a completely misunderstanding of the position by the

Registrar-General’s Office or just a refusal by that office to implement that provision because we know that the Registrar General was taken to court on numerous occasions by persons similarly situated.

We always used to refer to these people as aliens when in fact they are not aliens in terms of the Lancaster House Constitution.  So we need to be very clear that before the new Constitution, that was the

Constitution dispensation despite the fact that the Registrar General did not follow the law with respect to aliens.

When we come to the new Constitution, we have carried that same provision which makes that person who is an alien or who was described as an alien to say look, this person is not an alien, he is a Zimbabwean citizen.  But we have gone further and we have put in place what is contained in section 43 of the Constitution which now looks at those persons who are born of parents who come from SADC countries.  So what it means is that, your father is born in Mozambique, he comes into Zimbabwe.  Your mother is born in Zambia, she comes to Zimbabwe. They came to Zimbabwe at different times, and they fall in love and as a result have got a child.  They bear a child in Zimbabwe, that child in terms of our new section 43 of the Constitution, is a citizen of

Zimbabwe by birth.  So there should be no confusion at all in regards to what is a so called alien or not.

However, there is one thing which people must be able to distinguish, is that whilst the progeny of these two people is a Zimbabwean citizen by birth, the mother and father are not necessarily citizens of Zimbabwe by birth for obvious reasons.  So, they need to go through the process of acquiring Zimbabwean citizenship if they want to be Zimbabwean citizens.

Questions without Notice were interrupted by the Acting Speaker in terms of Standing Order No. 34

WRITTEN ANSWER TO QUESTION WITH NOTICE

CRITERIA USED IN THE SELECTION OF BEAM

  1. MR GARADHI asked the Minister of Education, Sport, Arts and Culture to explain to the House the criteria used in the selection of Basic Education Assistance Module Beneficiaries.

THE MINISTER OF EDUCATION, SPORT, ARTS AND

CULTURE (SENATOR COLTART):  The Community Select

Committee established at each primary school will select the vulnerable and neediest children from those that submit applications and consider the following:

Orphans with both parents deceased and have no one to pay for their fees and levies;

Orphans with one parent who are unable to pay;

Children in school but failing to pay or having difficulties in paying levies, tuition and examination fees;

Children who have dropped out of school due to economic circumstances;

Children of school going age who have never been to school due to economic reasons;

Children in special schools with disabilities;

Children from child headed families; and

The support for each pupil will be re-evaluated annually provided they continue to meet the requirements.

Community Selection Committee (CSC)

Councillors, who are civil leaders elected democratically convene meetings of communities living in the catchment area of a primary school and preside over the election of the CSC;

At least six months community representatives are elected by the community members;

Three members of the school Development Committee, one of whom is head of the school are elected into the CSC but cannot be office bearers;

Each CSC should ensure that at least 30% of their memberships are women;

The CSC shall have a term of office of one year;

After the elections, the CSC will call for, receive and vet applications for assistance for children in their community at both primary and secondary school level as per submitted budget;

The CSC will prepare and submit approved lists of beneficiaries to the district Education Officer who check together with the District Social Welfare Officer consistency and corrections before passing on to the PMU for disbursement of funds; and

The District Office will compile lists to the PMU and provincial Education Director for information and onward transmission to Head Office.

MOTION

BUSINESS OF THE HOUSE

THE MINISTER OF CONSTITUTIONAL AND

PARLIAMENTARY AFFAIRS: I move that Orders of the Day,

Number 1 to 3 be stood over until all the Orders of the Day have been disposed of.

Motion put and agreed to.

MOTION

FIRST REPORT OF THE PORTFOLIO COMMITTEE ON

MINES AND ENERGY ON THE DIAMOND MINING WITH

SPECIAL REFERENCE TO MARANGE DIAMOND FIELDS

  1. CHINDORI CHININGA: I move the motion standing in

my name, that this House takes note of the First Report of the  Portfolio Committee on Mines and Energy on the Diamond Mining with Special Reference to Marange Diamond Fields.

  1. MUNENGAMI: I second.
  2. CHINDORI-CHININGA: The Committee on Mines and

Energy through its oversight responsibility conducted an enquiry into the diamond mining sector for the period 2010 to 2013. The purpose of the enquiry was basically to hold the Executive accountable for its programmes, policies and actions in the sector, taking into account the fact that the financial hopes on revenue proceeds for Government, in 2012 and 2013 have been premised on the buoyant performance of the diamond sector. The findings and observations of the Committee span over a period of four years. The delay in tabling this Report has largely been due to two reasons. Firstly, there was a contestation of power between the Executive and the Legislature over access to information and entry by the Committee to carry on site visits in Marange. Secondly, the Committee was compelled to keep pace with rapid changes and developments in the sector, which made it imperative to base the findings and recommendations on relevant and accurate information.

During the enquiry the Committee was also cognisant of the fact that a lot of negative information on Marange diamonds had been churned out by both national and international media, hence it was also important for the Committee to get accurate information, which it could convey back to the citizens as their elected representatives. The enquiry was fraught with a number of challenges but there were also positive outcomes which emerged during the process such as the KP certification of most of the mining companies in Marange. The Committee unearthed a number of irregularities and loopholes at each of the different stages of the diamond value chain. Despite these challenges, the Committee believes that if proper mechanisms, strong administration and adherence to both national and international laws are observed, the country would be able to derive maximum benefit from its diamonds.

               1.     Background Information

There are a number of diamond mining companies operating in Zimbabwe which include: River Ranch, Murowa Diamonds, Mbada

Diamonds, Anjin, Marange Resources and Diamond Mining Company (DMC). Government, through ZMDC entered into joint venture agreements with a 50/50 shareholding in the following companies,

Mbada, Anjin and DMC. Marange resource is owned 100% by ZMDC. When the Committee began its enquiry in 2010, another company was in operation known as Canadile Miners but it has since been de-listed by

Government and its special grant was taken over by Marange Resources. The sector has remained largely small for a very long time until the huge discovery of deposits in Marange. It is estimated that the country now has the capacity to supply 25% of the global diamond market.

               2.      Methodology

The Committee held several consultative meetings and conducted three on-site visits.  Two meetings were held in camera upon request from the witnesses.  During the data gathering process, the Committee noted with concern that there was no free flow of information because some of the witnesses were either too defensive or uncooperative or unwilling to attend the Committee's meetings.

The key stakeholders in this enquiry were:  the Minister of Mines, Hon. O. Mpofu; the former deputy Minister of Mines, Hon. M. Zwizwai; the KP Monitor for Zimbabwe, Mr. A. Chikane;  the former Permanent Secretary of Mines and Mining Development, Mr. Musukutwa, former and current Zimbabwe Mining Development Corporation (ZMDC)

Board and its officials, Minerals Marketing Corporation of Zimbabwe

(MMCZ) officials, ZRP Minerals Unit, Mbada Board members,

Canadile Miners Board Officials,  Murowa Diamond     Mining

Officials,  River Ranch Mine Officials, Marange Resources officials,

DMC officials and Anjin Officials.  The Committee also met the Taskforce on Relocation of the community affected by mining operations.

The Committee conducted its first field visit in 2009 where it went to Murowa Diamonds in Zvishavane, River Ranch in Beitbridge and

Marange Resources in Chiadzwa. During that period, Government had not yet signed any joint venture agreement with any company to operate in Marange. After a number of joint venture agreements were signed from the period 2010 onwards, the Committee was denied entry twice to conduct on-site enquiries. The Committee was only granted entry into Marange in 2012, two years later after the enquiry had begun. The Committee had an opportunity to visit four mining companies operating in the area, that include, Anjin, DMC, Mbada and Marange Resources.

Mbada Diamonds and DMC were not very co-operative during the Committee's visit whilst Marange Resources and Anjin were forthcoming in sharing information and showing the Committee their operations. The Committee failed to conduct a public hearing with the community living in Chiadzwa and was advised that it was inappropriate due to security reasons. However, the Committee managed to visit Arda Transau where some of the re-located communities were now living.

               3.      Findings

               3.1    Ministerial Accountability to Parliament

During the four year period of the enquiry, the Committee observed with concern that the Executive and its officers were generally not willing to be held accountable by Parliament. This was evidenced through the Committee's experiences as it conducted this enquiry. This goes against the basic universal principles of Ministerial Accountability to the Legislature as enshrined in national or international law.  Erskine May, the well renowned writer on Parliamentary Practice says 'Ministers have a duty to Parliament to account and be held to account for the policies, decisions and actions of their departments; it is of paramount importance that ministers give accurate and truthful information to Parliament, correcting any inadvertent error at the earliest opportunity....  [1] In other words, Parliament has a universal right to hold the Executive accountable and to acquire accurate information for it to effectively discharge its constitutional obligations.  These were the experiences and observations of the Committee as it tried to hold the Executive Accountable:

3.1.1 Committee's Witnesses

Standing Order 167 empowers Portfolio Committees to call anyone except the Head of State, to appear before it to give evidence. In 2010, on several occasions the Committee invited the mining companies operating at the time, Mbada Diamonds and Canadile Miners to appear before it to give evidence on their operations. There was resistance from the two companies and the Committee was left with no option but to invoke Section 9 of the Privileges, Immunities and Powers of Parliament Act, which states that Parliament may issue summons, delivered by the police to a witness to attend before it. It was only then that the company officials attended the Committee's hearings.  The Committee also observed that there seemed to be a lot of influence by the Ministry of

Mines in discouraging these company officials from attending the Committee's hearings.

The second incident was where the former board Chairperson of ZMDC, Ms. G. Mawarire lied twice to the Committee whilst giving evidence.  This was clearly in violation of section 19 of the Privileges Act which says “any person who willfully and corruptly gives before Parliament or a Committee a false answer to any question material to the subject of enquiry ….shall be guilty of an offense”'[2] The Committee observed that the lack of disclosure of accurate information by some witnesses was due to fear of being reprimanded, by someone in authority in the parent Ministry. Erskine May goes on to say one of the principles of Ministerial accountability to Parliament is that 'Ministers should require civil servants who give evidence before Parliamentary

Committees … to be as helpful as possible in providing accurate, truthful and full information in accordance with the law [3] The Committee observed that some of the officials from the Executive and from the mining companies were not very helpful in terms of providing accurate information.

3.1.2 Denial of Entry into Chiadzwa Diamond Fields

Apart from Committee meetings, oversight over the Executive is also achieved by conducting field visits. Over a period of two years the

Committee was denied entry to conduct on-site inspections of the

mining companies operating in Marange. The first attempt was made in April 2010 where the Committee was denied entry when it had already camped in Mutare. The first attempt was very unpleasant because the Committee was constantly mobbed by security agents during the three day encampment in Mutare. The second attempt was in August 2010 where the Committee was denied entry before it had even left the precincts of Parliament building. On both occasions, the Committee was denied entry on the grounds that it needed clearance from the police since the area was protected under the Protected Places and Areas Act.  What baffled the Committee was that while it was being denied entry some of its stakeholders during the enquiry that included, the KP Monitor on Zimbabwe, Mr. Abbey Chikane and other international monitoring groups were allowed free and easy access into Marange.

Permission to tour Marange was finally granted in April 2012.

3.2    Financial Contribution of the Sector to both Treasury and the Economy

3.2.1 Contribution to Treasury

The Committee observed with concern that from the time that the country was allowed to trade its diamonds on the world market, Government has not realised any meaningful contributions from the sector. This is despite the fact that production levels and the revenue generated from exports has been on the increase as shown on the table below. There are serious discrepancies between what Government receives from the sector and what the diamond mining companies claim to have remitted to Treasury.

 YEAR PRODUCTION

(CARATS)

EXPORTS (US$)
2011 8,719,000 233 741 247
2012 12,000,000 563 561 495
2013 16,900,000 (anticipated) -

 

Table 1: Diamonds Production Levels and Revenue Generated from

Exports

(Source: Budget Statement: 2013)

In June 2012, the Chairman of Mbada Diamonds, the largest producer of diamonds in the country informed the Committee that their company had remitted over US$293 million to Treasury.  The breakdown of the remittances is shown in the table below:

NB: This section relates to correspondence we wrote to ZMDC and Ministry of Mines and Mining Development. The Committee sought to secure information from the Ministry of Finance in writing. The Ministry of Finance advised us to obtain information directly from companies and/or through Ministry of Mines. They stated that, for purposes of safeguarding the confidentiality of information received from tax payers, release of such information to the Minister is restricted as provided through section 34A (3a) of Revenue Authority Act. This legislation limits the provision of information only to total as opposed to disaggregated amounts. A similar letter was written to the Ministry of

Mines and no response was received.

The only company that was willing to provide this information is Mbada Diamonds which is as follows;

Line Item Amount US$
Royalties  76 192 302
Resource Depletion Fee  33 943 338
Marketing Fees    5 965 412
Dividends 117 202 859
Corporate Tax   43 515 858
Withholding Tax   17 829 562

 

Table 3: Remittances submitted to Treasury by Mbada Diamonds[4]

However, the Minister of Finance in 2013 Budget Statement lamented the low proceeds to Treasury and in 2012, Government only received a total dividend of US$41 million.  This was also the same amount that was remitted to the fiscus in 2011, yet Mbada Diamonds claims it remitted a dividend of over US$117 million which is far above what Treasury received for the combined period of 2011 and 2012. Notwithstanding these poor inflows in 2011 and 2012, Treasury still hopes in 2013 to receive US$400 million from diamond proceeds to fund critical national programmes such as the referendum, the harmonised elections and the UNWTO to be held in August this year.

These were the observations of the Committee on the financial discrepancies:

               (a)    Sanctions

The United States of America has placed sanctions on diamond companies operating in Marange. This has made it difficult for the companies to effectively market and trade their diamonds at competitive prices. Currently, the diamonds are sold at below 25% of the normal price. In the process, the sanctioned diamond companies are trading their diamonds through unconventional means because major international banks, insurance companies and couriers do not want to be associated with Marange diamonds. As a result of these financial restrictions, a number of loopholes have been created leading to fiscal leakages, promotion of corruption and national insecurity. The USA seems adamant not to remove the sanctions because a letter was written in 2011 by the Minister of Finance requesting for the removal of restrictions because of the impact it was having on the socio-economic development of the country. In an act of solidarity, the World Diamond Council also called for the removal of the sanctions at a Diamond Conference that was held in Victoria Falls in 2012.

The irony is that the companies operating in Marange were certified as KP compliant, hence should have the freedom to trade equally like all players on the world market.  However, these companies have been denied that privilege based on unconfirmed allegations that they were involved in undemocratic practices aimed at undermining democracy and human rights abuses in Zimbabwe.  The Committee believes if the situation remains as it is, the country will not be able to realise optimal benefits from its diamonds.

               (b)    Taxation System

Generally, the mining sector has a poor taxation system. This is probably one of the reasons why there are discrepancies between what Treasury claims to have received and what the mining companies would have remitted.  In the past few years, the Ministry of Finance has introduced piecemeal measures to improve on revenue proceeds from the mining sector. Taxation from diamond sector is in the form of corporate tax, PAYE, VAT, royalties and other levies. The Committee observed that the Ministry of Finance usually targets an increase of royalties on diamonds without necessarily looking at the other forms of taxes. In 2012, the same Minister approved a Statutory Instrument which regulated fees and levies for the mining sector. The Statutory Instrument introduced astronomical charges which is choking the growth of the diamond sector and other sectors in mining. The Statutory Instrument was certified as invalid by the Parliamentary Legal Committee and constitutionally has to be repealed but the Executive took no action. It is the Committee's contention that revenue proceeds to the fiscus will continued to be low and irregular if the Ministry of Finance does not introduce a comprehensive taxation law.

               (c)    Legal and Policy Framework

Government has been procrastinating in introducing a comprehensive law to regulate the operations of the diamond sector. Such a law is critical in that it will clearly highlight the financial system to regulate the industry and to hold any offenders accountable. The Committee noted with concern that there was divided discourse within the Executive on whether to introduce a Diamond Bill or to amend the Precious Stones Trade Act as the principle law to govern the diamond sector.  Such delays in introducing the law will have a negative bearing in promoting financial accountability and transparency of revenue proceeds from diamonds as well as clearly laying out the policy framework for the benefit of potential investors. Although a diamond policy was formulated in 2012, it does not have the force of law in ensuring there is compliance, transparency and accountability in the industry.

3.2.2 Investments made by Joint Venture Companies

One of the ways in which the economy grows is through direct investment. The Committee observed that Government may have been prejudiced through the overstated amount of investments that were made by its joint venture partners. In 2010, the Committee was informed that the shareholders agreement stipulated that Mbada Diamonds and Canadile Miners were to contribute US$100 million each, for purposes of financing the operations. In 2012, Mbada Diamonds informed the Committee that it had made investments worth US$185 million. However, ZMDC in its due diligence report expressed reservations on this matter when it stated that 'the acquisition of equipment and other assets for the joint venture company, tender procedures and valuations must be observed and values be agreed to by both parties. This is important in order to avoid overpricing by investors'.[5]  ZMDC also told the Committee it had not done a full audit of the investments made by the two companies.

The Committee observed with concern that the true value of investments made into the country cannot be ascertained in the absence of a proper valuation from Government agencies. It is possible for these companies to finance their operations from the proceeds of the mining operations which is in violation of the Companies Act. At the same time, the Committee was concerned about the manner in which certain equipment was brought into the country, for  instance in 2010, ZMDC was given a directive to purchase equipment at Hot Springs that belonged to J W Lotter for R5.6 million and ZIMRA was paid US$46

  1. However, the owner of the equipment demanded a further US$125 000 for transport charges and yet under normal circumstances when duty is paid it includes transport.

3.3    Transparency and Accountability in the Diamond Sector

Since the inception of formalised mining in Chiadzwa, the Committee observed that the sector has been dogged with issues of transparency and accountability in the production, marketing, fiscal contributions and general administration. The Committee noted with concern that there was lot of work that still needed to be done to improve on transparency and accountability in the entire value chain of the country's diamonds. The key areas that the Committee observed which touched on transparency and accountability include: the aborted auction sale, the selection process of joint venture partners, corporate governance systems in the joint venture companies,  the smuggling and leakages of diamonds from Marange as well the mining contracts signed by Government.

3.3.1 Aborted Auction Sale

When formalised operations began in Marange in 2009, there were two companies operating, namely, Mbada Diamonds and Canadile Miners. In January 2010 Mbada Diamonds attempted to auction its diamonds, in violation of both national and international law. The aborted diamond auction sale opened a pandora's box, revealing several irregularities and loopholes in the entire diamond value chain.  These were the observations of the Committee following the aborted auction

sale:

  • Relevant Government institutions that are involved in the entire diamond value chain professed ignorance about the auction sale.

This was a sign that the institutions were not well coordinated in the production and marketing of the diamonds in Marange. The relevant      institutions include ZMDC, MMCZ, ZRP Minerals Unit and the Ministry of Mines. It seems Mbada Diamonds took advantage of this weakness and attempted to auction the diamonds  without the knowledge or presence of these institutions. At the same time, out of the ten board members of Mbada Diamonds only two members, Dr. Mhlanga and Mr. Kassel admitted of having knowledge of the attempted auction sale. So a major decision of auctioning the diamonds was made by a minority board decision which is uncharacteristic of any healthy company.

  • The relevant Government institutions probably knew about the auction but because of fear of reprisals they would not admit it to the Committee. This is based on the fact that the aborted auction was announced through the State media and it is improbable that a subsidiary company  of ZMDC would make such

bold pronouncements without informing its overarching board and  the parent ministry.

  • Mbada Diamonds displayed a 'big brother' syndrome such that some of the Government institutions were rendered powerless to question Mbada's decisions or actions. The Committee noted that this was emanating from the manner in which Mbada was selected to partner with Government and also in the manner in which the board members were appointed to sit on ZMDC's subsidiary boards.

3.3.2 Selection Criteria of Joint Venture Partners

In 2009, Government through ZMDC entered into joint venture partnerships with Reclaim and Core Mining companies, leading to the establishment of two companies, Mbada Diamonds and Canadile Miners respectively. The number of companies operating in Marange has since increased to four excluding Canadile Miners which has been de-listed. The Committee noted with concern that the selection process of the companies to operate in Marange had a number of flaws. These were the observations of the Committee:

  • The selection of Reclaim and Core Mining to enter into joint venture partnerships with ZMDC was not done in accordance with any known precedents, procedures or with reference to any legislation in the country. The former ZMDC board chairperson, Mrs. Mawarire tried to mislead the Committee into believing that the choice of the two investors was made through a Cabinet decision. Later, she withdrew her submission when the Committee informed her that it had documentation of the Cabinet decision pertaining to that issue. The Cabinet minutes of 22nd July and 27th August 2008, simply encouraged ZMDC to enter into joint venture partnerships and did not specifically state that ZMDC should enter into joint ventures with Reclaim and Core Mining.

The Minister of Mines, Dr Mpofu, in a separate meeting with the Committee could not be drawn into revealing who chose the two investors to partner with ZMDC but stated that 'I was a new Minister and directed to go that way and that is the way it is'.[6]  However, the Minister went on to justify the selection of two joint partners on the grounds that the economic situation prior to the formation of the inclusive Government was untenable and very few investors were willing to risk investing in Zimbabwe. The Committee observed with dismay that the minister and his officials did not want to disclose who selected the joint venture partners. They created the impression that the selection process was done by an unknown person or body and this is clearly unacceptable.

  • There were a number of potential investors, during the period when Mbada Diamonds and Canadile Miners were chosen, who were willing to invest in Chiadzwa. The Committee was informed by the former Minister of Mines, Amos Midzi, that during his tenure in office, there were three companies that were willing to partner with ZMDC and that Reclaim and Core Mining were not among the three suitors. The question that the Committee could not find answers on was whether the two joint venture companies, Mbada Diamonds and Canadile Miners were the most suitable choice.
  • The selection process created several administrative problems for ZMDC and for the parent ministry. The ZMDC board conducted a due diligence exercise on the two companies and the fact that the board had to accept the two joint venture fait accompli would not have  changed the outcome of the due diligence. ZMDC seemed to have been coerced into accepting these two companies. It was not clear who or what exerted pressure on ZMDC to accept these two companies without following the normal acceptable standards and procedures.
  • The due diligence report by ZMDC revealed that two investors were probably not the best suitors for the country. The due diligence report highlighted that the investors 'have no diamond mining as part of their vision and growth strategy. However, the enthusiasm to enter diamond mining in partnership with ZMDC

was noted. The two investors were chosen mainly for their capacity to provide financial resources and state of the art security systems.    

  • The failure to get information on the process used to select the two initial investors was highly frustrating and could not motivate the Committee to seek further information on how the rest of the other investors, namely Anjin and DMC were selected or how future investors would be selected.

3.3.3 Corporate Governance Structures in the Joint Venture

Companies

The Committee noted with concern the manner and the type of people who were being appointed to serve on ZMDC's subsidiary companies. These were the observations of the Committee:

  • Board appointments to ZMDC's subsidiary companies were being made by the Minister of Mines, in clear violation of section 5 (2) of the ZMDC Act. In a letter written to the ZMDC Board Chairperson, the Minister stated that 'all appointments of Board members to subsidiary companies are done by the Minister of

Mines and Mining Development ...Any appointments that have been done outside this procedure are null and void”.  Section 5 (2) of ZMDC Act,  empowers the Minister  to appoint the ZMDC board members only and not the board members of the subsidiary companies. The ZMDC board then has the responsibility in consultation with the minister, of appointing members to its subsidiary companies. The ZMDC board was rendered powerless when it came to the selection and appointment of members who sit on its subsidiary companies. It's only function is to regularise the appointments made by the minister. This is probably one of the reasons why the ZMDC board has little control and information over its subsidiary companies, namely Mbada, Anjin and

DMC.

  • Mbada Diamonds showed no respect to the ZMDC board in a number of ways. The due diligence report by ZMDC board highlighted that, 'there is need for Reclaim (Mbada Diamonds) to recognise the

         ZMDC board's authority, independence and effectiveness vis-a-vis Reclaim's interaction with the Ministry of Mines and Mining

Development. Reclaim as an investor should appreciate the importance of the ZMDC board to process the investment proposal through its

7 This observation was made before the investors governance process’. had begun operations in Marange and this was a warning indicator that ZMDC was most likely going to face problems with its joint venture partners.

  • Due to the unilateral appointments to the subsidiary companies by the minister, certain individuals with a conflict of interest were appointed. The following people; Obey Chimuka, Ashton Ndlovu, Cougan Matanhire and Dr. Mhlanga had a conflict of interest. Dr Obey Chimuka used to be a board member of Marange Resources and yet he owned a company which traded in diamonds. Mr. Matanhire was a board member of Canadile Miners and yet he had links with MMCZ. Dr Mhlanga as Chairman of Mbada Diamonds was listed in the due diligence report of ZMDC  as a shareholder of

Liparm, which is part of Reclaim Group but  later crossed the floor,

                                                        

7 Due Diligence Report by ZMDC, pg 3

from being on the side of the investor to represent the interests of Government.  However, the Committee observed that if ZMDC board had been allowed to perform its legal mandate, such kinds of conflicts may have been avoided.

3.3.4 Smuggling and Leakages of Diamonds

In one of its hearings in 2010, the Committee was disheartened to hear that two senior security officers employed by Canadile Miners were found in possession of 57 pieces of diamonds at a ZRP road block at Hot Springs. This information came against a backdrop of disturbing articles circulated by the media concerning the historical profiles on some of the investors in Marange who were being accused of underhand dealings, such as drug trafficking and diamond smuggling. In one of the Committee's meeting, the joint venture partners denied the media allegations but in another separate Committee meeting, the Minister of Mines conceded that globally the diamond industry is run like a mafia, with very few 'clean' individuals. The Committee's worst fears were confirmed in November 2010, when Canadile mine was blacklisted by the Government following revelations that the company was involved in underhand dealings such as smuggling of diamonds.

3.3.5 Mining Contracts with the Joint Venture Partners

  • Contract with Grandwell: The contract with Grandwell (Reclaim) leading to the formation of  Mbada Diamonds showed that Government may be prejudiced in a number of ways. Of major concern is Clause 25.1 of the Shareholders Agreement where a 5% management fee will be paid to Grandwell (Reclaim) from the total turnover of the company's profits. At the same time, clause 25.5 provides a payment of 5% to Marange Resources in the form of a Resource Depletion Fee. Therefore by equating the 5% management fee with a 5% resource depletion is fundamentally flawed, unjust and not in the best interests of the country. The Committee also noted with concern that the 5% management fee on gross turnover is unrealistically high taking into consideration the fact that the same shareholders are entitled to an equal share on dividends.
  • The Committee made a comparison of the management arrangements in the different joint venture agreements. There was no shared management between (Grandwell) Reclaim and ZMDC whereas in Canadile which is no longer in operation, there used to be shared management. In essence, it implies that Mbada Diamonds has full reign of all the operational and financial activities of the mine. Whatever profits or dividends are declared by Mbada, the Government has to accept it in good faith. The

Committee is of the opinion that the same arrangement reached by ZMDC and Canadile Miners of shared management, should also prevail in Mbada Diamonds and in the other joint venture companies. There is no justification for different kinds of management arrangement taking into account the fact that Government has similar interests and one arm of Government,

ZMDC which is representing its interests in all the companies.

In 2012, the Board Chairman of ZMDC, Mr. Masimirembwa confirmed to the Committee that  the parastatal was not involved in the day to day running of operations of most of its subsidiary companies but believed that the information that they were given was correct. On a field visit to Marange in 2012, the Committee observed that ZMDC was more active in Marange Resources where Government has a 100% ownership whilst in the other companies, such as Anjin, Mbada and DMC, ZMDC behaved more like a bystander and yet Government has a 50% share ownership.

         3.5    Relocation of the Chiadzwa Community

The Committee was informed that about 4 300 families will have to be relocated from Chiadzwa and about 1 800 will be relocated to Arda Transau near Mutare.  Since 2010, a total of 693 families have been relocated. At least 780 households and 6 businesses have been evaluated and are set to receive compensation. The financial obligation to relocate and compensate the families and businesses has been placed on the joint venture companies and Government, through the Manicaland Provincial Relocation Committee headed by the Governor, provides technical and logistical support. The Committee had an opportunity to visit Arda Transau farm and was impressed with the infrastructure that has been put in place, such as houses, schools, shops and clinics. The Committee observed with concern that only 780 households have been evaluated and yet there are about 4 300 households that would be re-located. This will most likely prejudice the rest of the households from getting fair compensation. The Committee was also informed by the Provincial Administrator for Manicaland that the mining companies were not willing to co-operate in the construction of an irrigation project at Arda Transau so as to build stable and sustainable livelihoods for the communities. The Committee would like to implore the mining companies to re-consider their positions and build an irrigation scheme for the community.

However, the Committee was disappointed in that it failed to hold a public hearing with the community to hear of their re-location experiences and to get an understanding of how the valuation of their properties for compensation purposes had been done. At the same time the Committee observed that ZMDC and the Provincial Task force did not have a clear re-location policy to guide the mining companies in the re-location programme. It was left to the discretion of the mining houses. During the Committee's field visit in 2012, DMC stated that its primary purpose was to make profits and that the exhumation and re-burial of the communities’ graves was secondary.

The Committee had requested to hold a public hearing to hear from the community on the impacts of the mining operations and the impending re-location programme. Parliament Secretariat informed the Committee that authority to hold the hearing was refused by the relevant authorities. The Committee also noted with concern that there was lack of effective communication between the mining companies, the provincial relocation committee and the communities on the relocation programme.  As a result, some households still living in Marange suspended most of their livelihoods such as farming on the grounds that they would be relocated. As a result, this caused anxiety and food insecurity within the community.

Below, is a table of the relocation status by the mining companies.

Company Total number of

Houses to be

Constructed

Total Number of Houses Constructed Total Number of

Households

Allocated

Anjin

Investments

474 474 474
Mbada

Diamonds

487 100 100
Diamond

Mining

Company

114 30 30
Marange

Resources

350 184 116
Jinan

Investments

350 110 31
Rera Diamonds 92 0 0
Total 1947 989 751

 

Out of the construction, Anjin has done far much better than the other companies. Discrepancies in CSR mandate Government to come up with a standard.

3.6          Empowerment of the Indigenous People in the Diamond

Sector

The diamond industry has the potential to stimulate substantive socio-economic growth through the development of upstream and downstream industries. The Committee observed that this will be difficult to achieve in the absence of a strong policy and legal framework. These were the observations of the Committee:

3.6.1 Cutting and Polishing Industry

The diamond policy that was adopted by Government in 2012, stipulates that 'a quota of all locally produced rough diamonds as set by the Minister of Mines and Mining Development shall be reserved for local beneficiation.'[7]  In a meeting with the association of local cutters and polishers, the Committee noted with concern that Government was not very supportive in developing this sector. This was evidenced by the vague policy by Government in terms of the quota and the quality of gems to be supplied to the local cutters and polishers. At the same time, some local cutters and polishers lost their money to Government after paying licence fees without a corresponding duty of accessing the diamonds. The Committee would like to implore Government to seriously consider the development of local cutters and polishers as this has the potential to create more wealth and employment for the economy. The country's diamonds are being exported in raw form, creating more jobs and wealth for other countries. This is indeed a travesty of justice.

The Committee noted with concern that some of the diamond producers had plans to actively participate in the cutting and policy industry.  This creates a conflict of interest and has the potential to stifle the growth of upcoming local cutters and polishers. The growth of the local cutters and polishers was also being impeded by exorbitant licence fees which were increased in 2012 to US$100 thousand renewable every year and yet there was no guarantee of receiving a parcel or reimbursement if the parcel is not delivered. Although the licence fees have since been reduced to US$50 thousand, the Committee observed that the majority of keen Zimbabweans would not be able to effectively participate in the sector. As a result, a number of local cutters and polishers had to fold up their operations and yet they had invested heavily through the acquisition of machinery and training of personnel.

The third observation made by the Committee was that Ministry of Mines had the responsibility of licensing the cutters and polishers and yet other players who are involved in value addition such as granite cutting and polishing as well as steel making, were under the responsibility of the Ministry of Industry. Government should come out clearly on which ministry should spearhead value addition of the country's resources to avoid inconsistent policies applying to the same industry.

3.6.2 Supply Based Empowerment

The upstream industry in the form of local suppliers of goods and services have not benefited much since the establishment of diamond mining companies. The Committee had an opportunity to meet the business community of Manicaland who highlighted that it was almost impossible to supply goods and services to companies operating in Chiadzwa. As a result, there has not been much development in Mutare, the capital city of Manicaland. However, the Committee observed with concern that the business community, through its affiliates such as the Confederation of Zimbabwean Industries (CZI) did not have a structured position on how the province could fully benefit from the resource. Some well renowned cities such as Dubai have become world centre attractions with huge volume of business and trade following the discovery of minerals such as oil. Given that the Marange diamonds is considered to be one of the largest recent deposit discoveries in the last decade, significant socio-economic developments should overflow into the nearby towns and communities.

3.6.3 Mining Communities

The KP Joint Work plan adopted in Swakopmund in 2009 which was submitted to the Committee states that Government should identify and develop small-scale mining so as to curb illegal mining by panners. The area of Chiadzwa has very low rainfall patterns and hence there is not much agriculture that takes place in the area. The Committee noted that not much progress has been made towards empowering the local communities by involving them in small-scale mining. Currently, the mining community has to rely on Corporate Social Responsibility by the mining companies, especially when their fields do not yield a good harvest. The community expressed interest in actively participating in small-scale mining. At the same time, the Committee observed that the mining companies were not keen in buying directly agricultural produce from the mining communities. This was one way of promoting sustainable livelihoods of the mining communities.

               3.7    River Ranch and Murowa Diamond Companies

In 2009, the Committee had an opportunity to visit River Ranch

Mine and Murowa Diamonds to get an appreciation of their operations. Both companies are KP compliant. However, the Committee observed with concern the glaring absence of Government officials at the two mines given Treasury’s outcry of low revenue inflows from the sector.

Both companies told the Committee that they would like to see a review of the Mines and Minerals Act so as to promote sector's growth through investment. There have been some changes, for example, the presence of ZRP Minerals Unit and Zimra Officials at the mine.

               3.8    Global Monitoring Resource Groups

During the enquiry, the Committee had an opportunity to meet members of the Kimberly Review Team on Zimbabwe which comprised of NGOs and World Diamond Council Members.  The Committee also had an opportunity to interact with the KP Monitor on Zimbabwe, Mr.

  1. Chikane. The members of these global resource monitoring groups provided some insights on how the diamond sector could be developed.

The Committee concurred with some of the insights which included:

  • allegations of human rights abuses in Marange should be handled by other internationally recognised bodies such as the SADC or the African Union and not by KPCS.
  • sanctions imposed on diamond producers have to be removed because the companies  operating in Marange were KP compliant.
  • there was need to establish a tripartite relationship between Government, business and civil society so as to build confidence in investors and buyers of Marange diamonds. However, the

Committee noted with concern that the relationship between Government and civil society groups working in Chiadzwa was still very shaky.

               3.9    Future Outlook of the Diamond Sector

The Committee was informed by the mining companies that their operations had a lifespan of about 20years.  The Committee observed that the future outlook remained uncertain in a number of areas which include:

3.9.1 Exploration Work

The Committee was informed that diamonds in Chiadzwa are found in an area covering 123 thousand hectares, the greater part of which has not been fully explored. Therefore it becomes imperative for Government to set aside resources for exploration work before inviting more investors into the area. This will enable Government to negotiate contracts from a strong and informed position.   Mining of diamonds in Chiadzwa on mining areas for Mbada Diamonds, and Marange Resources is moving from alluvial to conglomerate mining as mining of alluvial is limited in their present areas of mining. Anjin has been mining conglomerate while DMC is for now limited to alluvial diamond mining. The mining of conglomerate requires major investments in explorations, drilling, blasting and process equipment, capital, experts and labour  by Mbada Diamond, Marange Resources and Anjin in order to continue mining  the diamonds and determine the potential of future diamond mining in Chiadzwa.

3.9.2 Demilitarisation of Chiadzwa

A lot of land in Chiadzwa is still under the protection of the army and inadequate studies have been conducted to ascertain the presence of the diamonds. The Committee observed that de-militarisation of

Chiadzwa is going to take a long time and it was important that it’s done in phases so as to reduce any negative perceptions about Chiadzwa.

               4.      Recommendations

4.1 The Executive and its officials must, by law respect the constitutional oversight authority of Parliamentary as this is one of the prerequisites for efficient and effective governance and a working democracy.

All state institutions have the obligation to adhere to the rule of law and to promote good governance and democratic principles which must permeate through natural resource management.

4.2 The diamond industry is operating without a clear legal framework and administration to provide assurance that the people’s resources are being protected.

The country must have put in place all necessary institutions and regulations to improve on diamonds extraction and commercialisation. The Government must desist from signing new contracts before the institutions and legal framework have been properly reformed.  For this reason, the Ministry of Finance, diamond producers and the Ministry of Mines need to engage in dialogue to remove impediments that contribute to low revenue flows to Treasury.

4.3 Government must put in place an advocacy strategy to ensure that sanctions imposed by the USA on entities producing in Marange are removed taking into account the fact that the producers are KP compliant and the sanctions have resulted in low revenue inflows to Treasury.

Government, mining companies and civil society, in the national interest, must work together and call for the removal of these sanctions.

4.4 The Ministry of Finance should speedily enact a comprehensive taxation law which will address some of the taxation discrepancies in the mining sector hence improve on revenue inflows to the fiscus. However, most of the discrepancies that occur in revenue collection find their origin in how mining contracts were negotiated. It is now common practice for negotiation of contracts to be

scrutinised by the public through their parliamentarians and communities and civil society should be allowed to make comments on the contracts before they are implemented. The law should allow for mining development agreements to be overseen by Parliaments. For this reason, the clause of confidentiality has lost its relevance. To enforce transparency and access to information mining contracts must be published.

Equally these ministries, including the MMCZ, ZMDC and ZRP must have sufficient capacity to manage key information, such as production figures, statistics, sales, taxes and other data in order to track the sector’s performance.

4.5 Government should consider establishing a one-stop mineral administration systems with sufficient capacity to deliver on their critical mandate.

4.6 Because of the discrepancies that exists between the amount that companies pay to Government and what Government

report to have received, companies are encouraged to publish what they pay to Government and Government is equally encouraged to publish what it received from companies. It is therefore important for Government to operationalise a domesticated Zimbabwe Mining Transparency Initiative

(ZMTI).

4.7 The Ministry of Mines should be encouraged to put in place a  comprehensive law, whether a Diamond Bill or amendments to the Precious Stones Trade Act in order to promote legal certainty, introduce a level of predictability to  lure investment [and layout the fiscal regime for the sector—This part can be deleted . It is already suggested in 5.4].

4.8    To avoid transfer pricing, an audit should be done to ascertain the true value of the capital investment injected by the joint venture companies so as to reduce the possibility of the investors financing their operations from the diamond proceeds. Equally, a proper evaluation of new investment in

the project is critical to limit the overpricing by mining companies.

4.9    In many SADC countries, revenues from extractive companies are not equally distributed. Many times concession agreements are biased in favour of extractive companies due to the weak negotiation capabilities of the host Government; it seems Zimbabwe is not different.

The Executive should clearly layout the selection criteria for joint venture partners in the mining sector.  Equally, contract negotiation with venture partners must be led by a legitimate institution of the state. The principle of complete public transparency must operate prior to the awarding of contracts and the contracts themselves must be made public.

  1. Government must develop the necessary human capacity to negotiate contracts effectively. Contract negotiation must be all inclusive[8] and cover areas such as environmental mitigation and protection measures, land use and rights, displacement and resettlement of local communities and their rights, mining closure, corporate social responsibility, disaster management and water use.
  2. Negotiations can only start after due diligence studies have been conducted to ascertain whether the company has the technical and financial capability to actually mine to avoid selecting companies with no mining experience like in the case of Mbada.
    • Government needs to ensure that results of due diligence exercise on potential suitors are taken into consideration in order to attract the best possible partners.
    • A law should be developed that will enable Parliament to ratify all major mining contracts. This will enable Government to sign credible contracts.
    • Stern measures should be taken by the Ministry of Mines to discipline any company in mining of diamonds for the illegal attempt to auction or illegally sell the country's diamonds. Government has the right to apply sanctions retroactively to discipline a mining company; just as Government has the right to renegotiate dubious mining companies.
    • The Ministry of Mines is duty bound to observe the law in the appointment of people to sit on the ZMDC board and its subsidiary companies or any state enterprise. Personnel appointed to sit on the ZMDC boards and its subsidiary companies should be thoroughly vetted, employed based on merit to ensure they do not have a conflict of interest. ZMDC needs to be more pro-active in protecting Government's interests in the joint venture companies so that the country's investments are protected whilst at the same time reaping maximum benefits. ZMDC must also provide regular reports to the public on its participation in the joint venture and the health of the mining project
    • A standard re-location model should be developed by the national and provincial task force on relocation of communities to reduce any inconsistencies and ensure that the communities concerns are treated in a humane manner. The development of these standards should be done in consultation with all relevant Government institutions, communities and civil society
    • There is need for Government to enact relevant legal statutory measures to reserve a quota for indigenous players to supply goods and services to diamond producers and all mining companies so as to promote the growth of upstream and downstream industries. Diamond companies and all mining companies must prioritise the procurement of local goods and services in a transparent manner in order to promote local development and development of local industries in manufacturing, civil engineering, construction etc
    • MMCZ should be encouraged to carry out a study on ways of developing the growth of cutting and polishing industry so as to generate more wealth and employment for the country. Government should encourage local entrepreneurs to get involved and it should deliberately set favorable conditions for local entrepreneurs. Similarly investment policies and fiscal regimes must be put in place to encourage foreign investments in joint ventures with local entrepreneurs in cutting and polishing industry.
    • The local cutting and polishing industry should be moved from the Ministry of Mines and placed under the Ministry of

Industry in line with best practices

  • Exploration work should be conducted by Government in partnership with investors so as to ascertain the true value of the minerals. This will enable Government to sign credible contracts which will benefit the country. Put differently,

Government must be in possession of  correct geological

data on the quantity and quality of its resources before entering into negotiations.

  • A strategy to integrate community participation into the diamond sector should be developed by both Government and the mining companies so as to empower the local communities.
  • There is need for tripartite dialogue between Government, the diamond producers and civil society groups in order to manage the negative perceptions about the sector both nationally and internationally. The tripartite engagement must go beyond just dialogue to provide space for real consultation and participation by civil society in policy formulation and monitoring of the diamonds industries. The civil society must put national interest first in their engagement with

Government recognising that Government is elected and both have a national role to play in the economic development of Zimbabwe. Government must recognise that they registered and authorised civil societies operations to play a role that support national building.

  • Many communities are being relocated without proper resettlement plan which put communities in danger of losing their livelihood system, especially access to fertile land. Government must develop a national land use plan complimented by other laws at the relevant administrative levels, which define land use plans according to the suitability of the land and the quantity and quality of resources, in order to guide investments.

               6.      Conclusion

The challenges that have beset the diamond sector in the last few years are not insurmountable. It is possible that with the presence of a modernised administration founded on the principle of transparency and accountability, and strong legal and policy framework as well as its implementation, this sector could become the bedrock of the economy, as in other  countries such as Botswana.  The sector also has the potential to create many jobs through the establishment of upstream and downstream industries. At the same time, the Executive, the Legislature and civil society should be encouraged to work together in order to rebuild the battered image of the country due to the bad publicity over the diamonds in Marange. Last but not least, the rights of the re-located communities should be respected and observed in line with the country's laws.

Finally, we must congratulate the Minister, the Ministry of Mines officials and the Diamond Mining companies for the investment and work they have done to make diamond mining in Chiadzwa a reality and for working hard to make Zimbabwe diamond KPCS compliant. We encourage Government and the diamond mining companies to take all measures necessary to properly resettle the Chiadzwa communities and provide adequate compensation to the villagers and business people.

Government should consider developing a town plan for Hot springs Business Centre and encourage companies mining diamonds in Chiadzwa to build their operational and administration offices at Hot Springs as well as encourage banks, shopping centres and industry that support the mining and community to be developed. It is encouraging that BancABC has already built and opened operations at Hot Springs.

          

THE MINISTER OF CONSTITUTIONAL AND

PARLIAMENTARY AFFAIRS:  Madam Speaker, this is an extremely important motion and because of its importance and to give members sufficient time to debate it, I move that the debate do now adjourn.

Motion put and agreed to.

Debate to resume:  Thursday, 13th June, 2013

         On the motion of THE MINISTER OF CONSTITUTIONAL AND PARLIAMENTARY AFFAIRS, the House adjourned at Seven

Minutes past Four o’clock p. m.

 

 

[1] Erskine May: Treatise on the Law, Privileges, Proceedings and Usage of Parliament; 22nd Edition, pg 63

[2] Privileges, Immunities and Powers of Parliament Act

[3] Erskine May: Treatise on the Law, Privileges, Proceedings and Usage of Parliament; 22nd Edition, pg 63

[4] Oral Evidence by Mbada Diamonds Chairperson

[5] ZMDC Due Diligence Report, pg 3

[6] Oral Evidence by the Minister of Mines

[7] Zimbabwe Diamond Policy, pg 7

[8] Governments must be held accountable for all contracts they enter in, especially, when it concern non-renewable resources, the need for scrutiny is even more pressing.

 

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