Zimbabwe minister's mine fees 'illegal'

Bad idea: A parliamentary committee says Mines and Mining Development Minister Obert Mpofu’s new regulations would discourage investment.

Bad idea: A parliamentary committee says Mines and Mining Development Minister Obert Mpofu’s new regulations would discourage investment.

Mines and Mining Development Minister Obert Mpofu may be forced to reverse new mining fees after the Parliamentary Legal Committee said regulations that he recently enacted are unconstitutional and recommended that they be repealed, the Mail & Guardian reveals.

In its report, the committee, whose members are from Zanu-PF and the two Movement for Democratic Change (MDC) formations, unanimously agreed that the new fee regulations would discourage investment in the mining sector because the fees are too hefty and are not in line with the Constitution or the Mines and Minerals Act.

The regulations set several fees for applications, special licences, registration and export permits, among other things. For instance, as part of the new regulations, registration of ordinary platinum claims have been set at $2.5-million from $500, and application fees for diamonds have been pegged at $1-million from $300. The funds are nonrefundable, even where an application is unsuccessful.

The ministry has, in the past, argued that the increases in mining fees and levies were aimed at discouraging the speculative holding of mineral claims that it said was rampant.

"To this end, the Parliamentary Legal Committee decided to exercise its mandate in terms of the Constitution of Zimbabwe as well as the standing orders of the House of Assembly," reads the parliamentary committee report.

"Thus acting in terms of this standing order, the Parliamentary Legal Committee formulated the view that the statutory instrument is unconstitutional in that it contains matters that are more appropriate for parliamentary enactment.
This is in violation of the said standing order, which was duly made in terms of the Constitution of Zimbabwe."

Provisions that are ultra vires
The report says the amendments have provisions that are ultra vires (beyond the powers of) the ministry's Mines and Minerals Act.

MDC-T MP Shepherd Mushonga chairs the committee. Its other members are Zanu-PF's Paul Mangwana and Beatrice Nyamupinga, MDC-T chief whip Innocent Gonese, and Thandeko Mkhandla from the smaller MDC formation. In the report, the committee says Mpofu appears to have come up with the regulations with little, if any, input from ordinary Zimbabweans through their elected representatives.

Asked for comment, ministry of mines and mining development permanent secretary Prince Mupazviriho said: "We do not agree that they are unconstitutional, but come later to the office for an official statement on that." There was no official statement by the time of going to print.

Speaking to the M&G, Mushonga insisted that the law was unconstitutional. The lawmaker said chances are high that the regulations would be set aside. "We have put it on the order paper and I will appear in Parliament to move for the adoption of the report, once it is adopted the nullification would be automatic. They [the mining ministry] want to raise funds suspiciously."

After the verdict by the committee, MPs are set to vote either to uphold the law or automatically repeal it based on the recommendation.

Zimbabwe's Acts of Parliament allow ministers to make regulations or subsidiary laws that do not need to be passed by Parliament first, but within two months the Parliamentary Legal Committee has to make a ruling on their constitutionality to determine whether or not they should be repealed or remain in force, a decision made by the adoption or rejection of the committee's report by a plenary session of Parliament through voting.

Mining companies have previously objected to the increases, saying they act as a barrier to firms entering the sector and reduce the profitability of those in operation. Small-scale miners have also said that the fees will kick them out of business and undermine the country's indigenisation and empowerment programme.

The report comes at a time when a mining industry watchdog, the Centre for Natural Resource Governance (CNRG), has criticised some aspects of the government's diamond policy, which was unveiled in November.

In its analysis of Zimbabwe's diamond sector policy, the watchdog says it relies too much on the Mines and Minerals Act, which, itself, is outdated. It came into law in 1961 and gives excessive powers to the mines minister to make unilateral decisions that may have far reaching consequences for the country. The analysis also says the Act ensures the appointment of a Mining Affairs Board that is only ceremonial in nature because decisions to grant applications ultimately lie with the minister.

CNRG said the policy should be strong on community participation in contract negotiation, mining activities and marketing of diamonds. It added that the Diamond Board should be appointed by an inter ministerial committee, not just by the minister of mines.

"NGOs, community interest groups, mining consultants and citizens should be enabled by law to obtain mining information. Information availability is essential for transparency and accountability," said the CNRG.

It also says the diamond policy is silent on the role of traditional leaders, yet most diamond claims are in rural and semi-rural areas that fall under traditional leaders' jurisdiction.

The Parliamentary Legal Committee report concludes: "The powers of the minister and the president regarding the identification of investors and issuance of licences must be reduced and diffused to various institutions such as the Parliamentary Portfolio Committee on Mines and the Diamond Board."

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