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Minister Nhema

Lloyd Gumbo Senior Reporter
DIAMOND mining companies in Chiadzwa who deny the existence of the US$50 million Marange-Zimunya Community Share Ownership Trust are not only lying to the nation, but are also disrespecting President Mugabe who launched the scheme; Youth Development, Indigenisation and Economic Empowerment Minister Cde Francis Nhema told legislators in Harare yesterday.
Minister Nhema said there were no formal contracts creating community share ownership trusts (CSOTs), but all miners — except those digging for diamonds in Chiadzwa — had honoured the “gentlemen’s agreements”.

Mbada Diamonds, Marange Resources, Anjin Investments, Jinan and Diamond Mining Company, Minister Nhema said, agreed to put US$10 million apiece into the Marange-Zimunya CSOT.

Minister Nhema was giving oral evidence to the Parliamentary Portfolio Committee on Youth, Indigenisation and Economic Empowerment, chaired by Zanu-PF MP for Gokwe-Nembudziya, Cde Justice Wadyajena.

Diamond miners in Chiadzwa told the same committee last month that they had not pledged US$50 million to the trust which President Mugabe launched.

Minister Nhema said his predecessor, Saviour Kasukuwere; Local Government, Public Works and National Housing Minister Dr Ignatius Chombo; and Manicaland Provincial Affairs Minister Christopher Mushohwe, met representatives from the firms on June 13, 2012.

“During this meeting, the company representatives were urged to start disbursing money to the CSOT, US$10 million being the baseline for each company. Other direct meetings had been held before and others held after the June 13, 2012 meeting.

“The matters are very well-known to the companies and attempts to mislead the nation will not be countenanced. In essence, the companies are belittling and defying the President and disrespecting the resource nationalism-based aspirations of the whole nation and African continent.

“Questions must be asked, namely should company leaders and business in general really be allowed to make determinatory pronouncements on matters that impinge on the fundamental governance responsibilities of the State?” Minister Nhema asked.

On written documentation to this effect, Minister Nhema said: “Unfortunately when (the diamond) companies pledged US$10 million over a meeting, I don’t have it in writing. Neither do we have correspondence pledging that Unki will give US$10 million.

“If the understanding in the ministry is ‘you go to discuss business with a company such as Mbada and you agree, like we agreed with Zimplats and they have given US$10 million. You agree with Unki and they give US$10 million, you cannot then select and say, I am waiting for a letter of pledge from the other one’.

“I believe it’s a gentlemen’s agreement, they (diamond mining houses) were in the meeting. They should honour the obligation. Government operates on goodwill … That is why we accepted US$10 million from Unki without any written pledge…That is why we still accepted US$10 million from Zimplats without any letter of pledge…That is why we accepted US$1,3 million from Blanket Mine without a letter.

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“These companies are expected to meet their obligations. It is anticipated that the monies to be contributed by these companies will benefit the whole of Manicaland province and should Government so decide, part of it will be transferred to the Sovereign Wealth Fund.”

Cde Wadyajena asked if the ministry had actually informed the miners that they were expected to pay US$10 million each.
Minister Nhema said this was a “gentlemen’s agreement” founded on goodwill as with all other CSOTs.

However, he said there were minutes of the meetings where the agreements were reached as well as letters the ministry wrote to the five firms.
Cde Wadyajena said it was unheard of that Government operated on “gentlemen’s agreements” on such matters.

Minister Nhema said Government operated on goodwill, but took note of the intervention and agreed that a written contract would have been ideal.

He said the fact that diamond miners claimed to have thought they were expected to contribute US$10 million collectively did not exonerate them from paying US$10 million each.

Minister Nhema pointed out that each miner presented President Mugabe with a US$10 million dummy cheque at the trust’s launch and there was video evidence supporting this.

But when Cde Wadyajena probed if the firms had actually pledged US$10 million each, Minister Nhema appeared to backtrack and said he would confirm the exact figures.

He also said he had not himself seen the dummy cheques or the pledge letters.
The minister said he was looking for the originals of letters from the ministry to diamond miners recently published by The Herald.

“I have asked our security guys to try and look into it and see which file those letters came from. But I did not see any reference. And I have asked the permanent secretary… I have asked everyone to say ‘please give me the file where these letters came from’. I have not been able to establish,” he said.

Nketa MP Mr Phelela Masuku (MDC-T) asked if the diamond mining companies were taking advantage of the fact that there was no written agreement.

Zanu-PF MP for Makoni West, Cde Kudzanai Chipanga asked if CSOTs were only limited to districts with natural resources, which Minister Nhema confirmed.

Zanu-PF MPs Cdes Beatrice Nyamupinga (Goromonzi West) and Melody Dziva (Midlands) queried why some CSOTs were operating without being fully constituted.

Minister Nhema said it was up to the Trusts to fully constitute themselves and they could convene meetings as long as they constituted a quorum.
Marondera East MP Cde Jeremiah Chiwetu (Zanu-PF) asked if it was procedural for CSOTs to pay consultation fees to National Indigenisation and Economic Empowerment Board representatives.

Minister Nhema said Trusts were not supposed to pay NIEEB representatives except when they needed compliance certificates.
Nkulumane MP Mr Thamsanqa Mahlangu (MDC-T) asked what mechanisms the ministry was putting in place to make the Indigenisation and Economic Empowerment Act investor-friendly; claiming that it scared away investors.

Minister Nhema said foreign investors were happy with the law because it sought to improve the livelihoods of Zimbabweans.