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2021 budget must speak to mining reforms: Zela

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THE 2021 National Budget must provide a clear government position on the Extractive Industries Transparency Initiative (EITI), including steps that the government will undertake to implement EITI or its local version, the Zimbabwe Environmental Law Association (Zela) has said.

The EITI was launched in 2002 at the World Summit on Sustainable Development in Johannesburg, South Africa in a bid to improve transparency and accountability in the mining industry, with Zimbabwe promising to ratify and join the initiative.

Zela said while the 2021 Pre-Budget Strategy paper recently presented by Finance minister Mthuli Ncube provided important measures in terms of mineral governance, more still needed to be done to strengthen the mining governance landscape.

“There is no mention of EITI in the just released Pre-Budget Strategy paper. The government has been missing in action in terms of providing a clear policy position on EITI perhaps suggesting that the country had a false start on EITI, a similar fate that the Zimbabwe Mining Revenue Transparency Initiative (ZIMTI) faced.

“Given that the Mid-Term Budget Review did not give an update on the adoption of the EITI standard, one would have expected the 2021 Pre Budget Strategy Paper to break the silence and provide a formal policy position on the way forward with regards to this initiative.

“EITI adoption presents an opportunity for Zimbabwe to quickly ventilate the mining sector, through making public mineral governance information such as contract awarding, licences and mining contracts, payments made by companies to government, revenues received by government, revenue appropriation by governments and the actual benefits to the citizenry, given the slow pace in realigning  transparency laws with the 2013 constitution.

“Currently, there is no public disclosure of information such as tax revenue that the government receives from mining companies , heightening the perceptions by the citizens that mineral revenue is not being managed properly,” Zela said.

The environmental lawyers added that the 2021 Pre-Budget-Strategy paper also made no reference to the new policy direction on the financing of Community Share Ownership Trust Schemes (CSOTs).

“Communities have a constitutional right to benefit from extraction of mineral resources in their communities. 

“The government of Zimbabwe established CSOTs in 2010 through the Indigenisation and Economic Empowerment (IEE) Act. CSOTs no longer have a legal backing due to the government’s reversal on the IEE Framework.

“The 2019 mid-term budget review statement and supplementary budget confirmed an end to the Indigenisation Framework. A proposal was made in the 2019 mid-term budget review that a new empowerment framework will be formulated after the IEE framework was reversed.

“Up to date there is no new policy framework that the government has managed to come up with on benefit sharing,” Zela said.

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