A parliamentary committee has recommended the amendment of Zimbabwe’s indigenisation law to insert a requirement that compels mining firms to contribute at least 25 percent of pledges to community share trusts to facilitate their speedy set up.
The Parliamentary Portfolio Committee on Indigenisation and Empowerment has also recommended inclusion of statutory provisions for application of punitive measures against mining houses that fail to meet the legislation by December.
“The Ministry of Youth, Indigenisation and Economic Empowerment must immediately review the Indigenisation and Economic Empowerment Act to include a requirement of a minimum of 25 percent of the amount pledged by the qualifying companies towards the seed capital of the Community Share Ownership Trusts,” the committee said after reviewing progress in Mudzi and Mutoko.
The Indigenisation and Economic Empowerment Act compels foreign owned companies to sell at least 51 percent to locals and makes provisions for foreign companies to contribute towards the establishment of community share schemes.
The committee on Indigenisation and Empowerment enquired into the operations of community share ownership trusts and employee share ownership schemes to assess progress made towards the implementation of these trust schemes in accordance with the requirements of the indigenisation law.
The owner of Kilwright Mine in Mudzi, which has not been operational due to lack of funding after foreign partners in the venture pulled out, assured the committee that he would comply with the indigenisation Act once operations commence.
The Deed of Trust for Mudzi district’s share ownership trust was produced in 2010. However, there is no compliance to the requirements of the Indigenisation and Economic Empowerment Act from any company operating in this district.
Among the local authority and Government officials who presented evidence to the committee were Mutoko District chief executive Peter Sigauke, District Administrator Kutamahufa Tavadira, former Mines and Mining Development secretary Professor Francis Gudyanga and deputy indigenisation minister Mathias Tongofa.
Mashonaland East Provincial Minister Retired Brigadier General Ambrose Mutinhiri, also appeared before the Committee on the endeavours that his office had undertaken to engage the mining companies in Mudzi and Mutoko districts
Part of the major findings of the Parliamentary committee were that the local communities were not benefiting from the mining activities in Mutoko and Mudzi, as there was no tangible development due to the rampant illegal mining activities.
This was further, compounded by the non-compliance to the requirements of the indigenisation law by the four qualifying companies that are operating in this district. Traditional leaders were not involved in the regulation of mining activities, yet they were the custodians of the areas in which the mining takes place.