Saturday, March 15, 2014

Zimbabwe 'Mining Companies Must Play Ball'

‘Mining companies must play ball’

March 15, 2014
Opinion & Analysis
Fortious Nhambura
The Interview

Our Senior Reporter Fortious Nhambura (FN) caught up with the Minister of Youth Development, Indigenisation and Economic Empowerment Francis Dunstan Nhema (FDN) to discuss the operation of CSOTs and the level of compliance with the indigenisation law among companies.

FN: Tell us the background of community share ownership schemes, what motivated Government to start them?

FDN: I think we have to look at it from a point of view of what is happening, what we used to call Campfire. Campfire was a programme for community based programmes in the utilisation of their natural resources to the benefit of the people. That’s the same concept we now have only that we have now taken it into the mining sector and then the other activities that happen within the mining sector. We are saying the background is that you as an operator within an area where there is a natural resource which you are taking out and benefiting from, the communities must also benefit. In other words we are saying you are there to assist the communities to extract whatever it is, be it diamond, gold or platinum – this should be done for the good of the communities. What we are saying is that the communities are going to be obviously affected by the activities and they must also benefit. That is the idea of community share ownership schemes.

FN: What is the response of the different communities in which the schemes are operating?

FDN: The communities are saying, yes, it is the responsibility to be involved, it is us who must participate, it is us who must benefit while we appreciate the companies who are coming to do the work must also benefit, that it is our natural resource and therefore we own it, it is ours and we have to benefit from it.

FN: Minister, how many share schemes are in operation in the country now?

FDN: I think as a country we almost have 70 that have been registered. You will realise that quite a number of some community trusts registered are based in the districts and in some we have more than one community trust that is registered. We are saying we should reduce them so that there is coordination and harmony. This is because more trusts you have the more disputes you have, the more the administration becomes a lot and confusion arises. The instrument we have in this ministry allows us to advise companies in setting up to community ownership trusts.However, because of a number of other interests you might have a community ownership that is looking for mines, another plantations and another in other activities resulting in confusion in these community trusts. That is why we are saying we must now streamline and harmonise them so that in any area one trust can operate.

FN: Critics of the Community Share Ownership Trust schemes say they were only meant to garner numbers for Zanu-PF in the run up to the elections. Are we likely to see more schemes being launched?

FDN: I think it is not about launching more schemes but about making people understand why we have those community share ownership schemes. And we must also impress upon the people who are administrators to understand why they are running them. I think what we did not do was to educate them, give them information why it is relevant to them to understand how it works; it must run as a business; as an entity and they must be sure that they are running it in an economical way and people must see the benefits.

FN: Judging by the performance of the community share ownership schemes established in the country so far, is the Government happy with the manner they have been operating?

FDN: l think a lot needs to be done. This is a new phenomenon to a lot of people, a lot of communities and unless they know and understand how it’s working it will be very difficult. It is early stages yet and I am therefore happy that people are now beginning to know that this is their responsibility, and that they are their own trust and that people must assist. They should not just stand aloof and say they are not working. It is their scheme. The trustees are made up of the chiefs, headmen and people of the area that must advise Government what they want and how the trust must operate. Let us not point fingers to anyone but to ourselves because we are the owners. Let us say why is it that our programme is not operating well when in other areas they are functioning well.

FN: There are allegations that not all is well in these share schemes with some companies still to honour their pledges, what is being done to ensure that companies fulfil their part of the bargain?

FDN: We must understand that not all companies are doing well. There are other companies that contributed early because they had the money and others that were still starting operations and did not have the money. There are others that have only paid a part of the contributions and we are encouraging them to pay up. Let us appreciate that many companies are closing because business is not good and we should not just force them to pay. We must not make noise over these payments but encourage them to pay. We are saying let them give us a timetable and let’s all develop together. What has been happening is that a number of them have been coming and explaining their programmes, when they will start processing or when they think they will be able to pay.

Some have paid up and what we are saying is we will continue discussing with them.

Some are failing to pay off debts and workers and to expect them to pay towards ownership schemes means doom for them. If we are to take the money and the company fails to buy machinery to continue with its operations what will be next?

FN: What is the Government’s understanding of the Marange situation where there have been conflicting reports over the companies’ contributions to the Marange–Zimunya Community Share Ownership Scheme despite making pledges and what is the way forward?

FDN: We are encouraging the players in that area to take up their social responsibilities. In other words we expect these companies to make sure that where they operate from people also benefit even though we have not moved towards any substantive dividend declarations. So we are saying in the process please be cognisant of the fact that the communities want assistance even though you have not realised a meaningful dividend.

FN: There are allegations of abuse of Trust funds in the community share schemes, what is being done to protect looting in these schemes?

FDN: The issue of abuse of trust funds is out of ignorance of what the responsibilities of the trust are and what the Trust must use that money for. In other words we must teach people of these areas how they must invest money and use the money so that people see the benefits. We perhaps did not outline that clearly to the people. Remember you are looking at local chiefs running institutions they had never run before. We cannot expect the chief who has not run a tuckshop, who has not run anything, let alone who has never been on a payroll to run these schemes.

FN: So, are trust monies really safe in the hands of people without the know-how to run business?

FDN: This is a process. Every one of us has not done business. As indigenous people we’re beginning to experience these things now. They monies are very safe because as a ministry we are going around and instructing them on how to operate and how to use the money. We are educating them on the procedures, business plan which must be put in place for it to make sense.

FN: There are reports of infighting in community share schemes — as in the case of Mberengwa and Zvishavane districts over the money pledged by Mimosa as the two communities contribute to the operations of the company, how is the situation being redressed?

FDN: That is natural. Wherever there is money or business there are different interests and priorities and therefore community trusts must therefore learn to prioritise their areas and agree on the best way to utilise the funds when, how and where. The mechanism is for them to find a project that is encompassing in all the districts. If there are four or five chiefs in the area they should look for the common denominator. It might be a central hospital that may be beneficial to all, it might be a road linking all, a secondary school or college that is central to all the chiefs. Even if it is electrification, it must move through every district so that all may benefit. That is the kind of training that we are giving them. We want them to think globally not individually.

The ministry is consulting business people to train the trustees. My appeal to them is to work together and translate this dream.

FN: To what extent has politics affected business in community share ownership trusts?

FDN: I think politics will always be with us. If you want to look for politics in anything you will get it. If you are looking to build a bridge, a road; surely you know what you want. Sometimes we worry so much about politics so that we forget who we are. Sometimes we give politics so much weight that is necessary. If you want breakfast just eat breakfast and if you want lunch just eat lunch and not worry about politics.

FN: What is the future of the indigenisation programme in the country? Are we likely to see Government increasing the pace of indigenising the economy?

FDN: My emphasis is not on indigenisation. I want you to understand that indigenisation is only a small part of the programme. The whole programme is about wealth creation, it is about employment, about Zimbabweans owning, running and creating their own companies. How do we do that, we do that by skills training. We are looking at those people who did not do well at Grade Seven, at ‘O’ Level and those are the people were sending back to vocational training colleges. We have 48 vocational training centres around the country and offering 35 disciplines that they must train for a year. We have your upholstery, painting, mental work, photography, woodwork, mechanics and tilling — the things that you do at home, non academic issues. After indigenising the 2000 companies that are supposed to be indigenised what do we do after that? If 2000 people have taken share in these companies what happens to the 14 million people? The emphasis is to create our own companies, giving them access to knowledge, information on creating wealth.

No comments: