How Can Communities Benefit From Natural Resource Extraction
Zimbabwe is endowed with abundant natural resources that include rich mineral deposits, wildlife, arable lands, forests, and surface and groundwater.
It is generally believed the nation has about 30 percent of the world’s diamond reserves and is the second largest platinum producer in the world behind South Africa. Surprisingly though, the majority of Zimbabweans, especially those living in the communities endowed with the vast natural resources, still live on less than $2 a day. Zimbabwe is a mineral rich country with a thriving mineral processing industry that accounts for 4.5% of the nation’s employment. Despite these notable contributions to the country’s development, there has always been a debate on the impact of mining and the broader extractive industry on the environment and communities where these are found.
The reality is that people in resource rich areas are living in abject poverty, yet their land is blessed with such valuable natural resources. In most cases, declining crop and livestock production due to a degrading land resource base and changing climate, among other biophysical and socio-economic constraints associated with the extractive industries, have increasingly forced rural communities in Zimbabwe and other parts of Southern Africa to rely on common natural resource pools (CNRPs) to supplement their household food and income, which makes it crucial for them to have their fair bite of the cherry.
As part of efforts to address this awful situation, the Zimbabwean Government introduced the indigenisation and economic empowerment regulations wherein all foreign-owned companies are required by law to cede 51 percent shareholding to locals. The government went further to enact the Indigenization and Economic Empowerment Act that seeks to broaden the economic base by involving the majority indigenous Zimbabweans in the mainstream economy. To achieve this, the Government has among other strategies, prescribed for direct equity participation by the communities within which businesses are exploiting natural resources on commercial basis, through Community Share Ownership Trust Schemes (CSOTs).
Section 14(b) of Statutory Instrument 21 of 2010 provides for the establishment of CSOTs, which shall hold shares in qualifying businesses on behalf of their respective communities. CSOTs in Zimbabwe have been used as development vehicles for broad based community empowerment and socio economic development. In this case CSOTs have come to be viewed as a national initiative championing development and empowering rural communities by affording them a 10 percent stake in all businesses involved in the exploitation of natural resources in their areas.
On paper, the policy has all the ingredients of goodness but it is the execution, implementation and monitoring part of it that has remained a huge challenge. Most companies have not fully honoured their pledges to the CSOTs. The other big challenge noted with the Indigenisation and Economic Empowerment Act is that the generality of Zimbabweans is not economically capacitated to buy shares in the foreign-owned companies they will be working so the highly-connected ones, usually politicians and Government officials end up muscling the economically weak citizens out to secure the shares for personal benefits.
For starters, there are different models of benefitting for local communities especially where the resource is from mining. Mining companies can promote local communities by procuring some of the materials they use from the community. In this case communities can supply the required accessories, food and most importantly, labour. If there are companies from the community that can provide equipment or machinery for lease, then it also becomes another form of benefitting.
There is also the Gwanda CSOT that has proved to be an outstanding example of how CSOTs should be handled. Gwanda’s Blanket Mine is the only mine that is fully indigenised, a development that saw community members getting certificates that confirm them as shareholders of the Gwanda CSOTs. However there is need for interrogation on how in practical terms are communities in Gwanda benefitting from the CSOT.
The worst scenario however, has been in the Zimunya-Marange CSOT where the companies extracting diamonds in the area were expected to invest US$10 million into the community but to date they are said to have only released something in the province of US$300 000. The rolling out of the scheme left more questions than answers to the local communities given that it excluded people from neighbouring Nyanyadzi and Hot Springs areas who host mining companies and bear the brunt of environmental degradation yet the CSOT included Zimunya, which is seventy or so kilometres away from the Diamond fields.
It is people from the areas that were left out that had their environment polluted from the mining activities, which leaves one wondering how the geographical boundaries are decided when the schemes are rolled out. There is also the Mhondoro- Ngezi-Chegutu-Zvimba CSOT that surprisingly includes Zvimba district, which geographically falls under Chinhoyi. Again this demonstrates the lack of transparency with which some of the schemes are being rolled out.
The other problem also comes as a result of lack of capacity to run the schemes by the communities in which CSOTs are running. In most cases the trustees are traditional leaders who assume the trustee roles by virtue of being point of contact persons in the communities and also due to the fact that they are considered the custodians of the resources on behalf of Government yet they have no expertise to run the schemes profitably and professionally.
The majority of the traditional leaders generally lack the technical expertise needed for the task so they fail to nurture critical synergies especially with local authorities that in some cases are involved in the revenue collection process and ultimately in the deployment of the revenue to needy areas.
There is widespread agreement that local communities should be involved in all initiatives of natural resource management in their locality if such initiatives are to succeed. The issue of natural resource management is closely related to the issue of resource ownership. Unfortunately, extractive industries, especially those involved in gold and diamond mining, have neglected local communities in pursuit of profits.
In response to this problem, organisations such as the Zimbabwe Coalition on Debt and Development (ZIMCODD), Centre for Natural Resources Governance (CNRG), Zimbabwe Council of Churches (ZCC) and Zimbabwe Environmental Law Association (ZELA), have for some time been involved in coordinating activities aimed at strengthening the capacities of local communities in demanding participation in the management and governance of natural resources. The Provincial and National Alternative Mining Indabas convened ZIMCODD, ZELA and ZCC have proved to be an effective platform for engagement, lobby and advocacy among communities and stakeholders in the extractive industries. Community dialogue meetings held in areas such as Shurugwi, Gwanda, Mutare and Norton have also facilitated platforms for engagement.
Local communities have been capacitated to participate in decision-making processes related to the conservation, management and sustainable use of their natural resources if Zimbabwe is to make great strides in alleviating poverty among its populace. CSOTS in general have not accorded women, the disabled and young people the opportunity to air their views simply because they are not included in most decision making situations. Their seats in decision making roles are usually filled in by people appointed by leadership, not chosen by them.
At their inception, CSOTs were rooted in the CAMPFIRE model, which enabled communities to benefit vastly but lack of sustained monitoring and comprehensive consultations within the stakeholders have always been cited as the biggest challenges that may easily see CSOTs crumbling in the same manner the CAMPFIRE programme suffered
Equitable access to natural resources can be attained only after having an all inclusive and effective natural resources governance and management process, including access to information, where communities endowed with natural resources are able hold the Government and the corporate world accountable to enhance transparency. The citizens of Zimbabwean have the right to social and economic justice in natural resources, and this is one of the key areas ZIMCODD is concerned with and is therefore working with communities and key policy makers throughout the country in highlighting the need to adopt a holistic approach to the issue of sustainable resource management and extraction within the communities. ZIMCODD is also campaigning for and raising awareness of the UN Guiding Principles on Business and Human Rights in order to promote sanity in the natural resources and extractives sector in Zimbabwe and the region.