Scam fears in community trusts

DISCLOSURES by diamond firms operating in Marange that they were not aware of the existence of the Marange-Zimunya Community Share Ownership Trust point to the possibility of a wider scam on the indigenisation crusade, critics have warned.

Government established a number of community share ownership schemes across the country under an indigenisation and economic empowerment campaign that anchored ZANU-PF and President Robert Mugabe’s election campaign last year.

Traditional leaders and other stakeholders from Marange have told Parliament that former empowerment minister, Saviour Kasukuwere, could have misrepresented facts to President Mugabe about the value of funds donated by five diamond mines to the Marange-Zimunya Community Share Ownership Trust. The cheque that Kasukuwere handed over to President Mugabe was reported to be worth US$50 million, with each of the five companies in Marange donating US$10 million to the Trust. Donated funds to community share schemes across the country are expected to benefit local communities.

But while appearing before a Parliamentary Portfolio Committee last week, heads of diamond mines operating in Marange refuted claims that they had agreed to donate US$10 million each. They said they had only pledged to donate US$1,5 million each to the Trust, while others professed complete ignorance of the existence of the Trust, which they claimed was set up without consultation.

Mutuso Dhliwayo, director at the Zimbabwe Environmental Law Association, said companies operating in the diamond fields were exploiting legal loopholes to dodge donating to the communities. “The challenge lies in the legal framework that establishes the community trusts,” he said.

“There are too many designated entities that the mining firms have to dispose of shares (to). And it is not mandatory that mining firms have to deposit funds to community share trusts. They may choose to donate to other designated entities. That is why companies are taking advantage of the loopholes,” he said.
Independent economist, John Robertson, said the administration of community share trusts had been affected by political meddling. The diamond companies were also equally affected by political influence, he said.

“The ruling party has been controlling these mines, and for the ruling party, regulations do not apply,” he said.

He said there should have been specific statutory instruments to back every share ownership trust formed by government but the lack of such statutory support made them “unaccountable”.

“There is no accountability. They feel they are not answerable to anyone. There is no transparency in the diamond mines. That is why diamonds have disappeared without trace,” Robertson said.

Funding of community trusts is in line with Statutory Instrument 114 of 2011, which compels mining firms to dispose of shares to several designated interests, among them community trusts, which are expected to receive 10 percent shareholding in the mines.

But in the case of the Marange-Zimunya trust, which was launched by President Mugabe on July 25, 2012, even former mines and mining development minister, Obert Mpofu, told the State media this week that he was not aware of its existence.  He said he was not present when it was launched.  Yet Kasukuwere insisted that everything had been done above board and that all interested parties had been informed about the launch of the Trust.

Acting director at the Mutare-based Centre for Research and Development, James Mupfumi, said on Tuesday the Marange-Zimunya Trust was not set up to benefit communities. “In Marange, even the diamond firms and their deals are shrouded in secrecy and the communities were just thrown (in) the dustbin. The ministers only wanted to please (President) Mugabe,” Mupfumi said.

Kasukuwere told the State media that the community share schemes had been established transparently. “For anybody to try and suggest they were not aware of the legal provisions contained in our laws and the instruments which were gazetted is really, really deceitful,” Kasukuwere said.

“In all the ceremonies that were held, all the ministries-Mines and Mining Development, Local Government and the President’s Office-were all involved in setting up these community trusts.

“For one to say they did not hear or they didn’t know about it is just displaying dishonesty of the highest order. You cannot display dishonesty to this level and the communities of Marange deserve what is due to them. They (the mining companies) must be responsible and show respect,” Kasukuwere, who has now been moved to the climate change ministry, was quoted as saying.

“Kasukuwere does not work in a bank to come up with a dummy cheque. How do I know the signatures of the bank officials?” he said.

  • ivor payne

    S.I. 114 of 2011 does not provide as stated in this article. But I am not surprised that you struggle to understand this Government Notice. It is unintelligible, unenforceable and ultra vires the Act and regulations. It has been ignored in its entirely by everyone in the mining industry as a result. Be careful of believing that this legislation says what the Herald and various Minister claim. They are invariably wrong.

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