Zimbabwe Debates "Piece of Cake" for Communities

By Nyashadzashe Ndoro

Chief Reporter

Zimbabwe's Parliament is currently engaged in a robust debate on a motion to establish a new Act of Parliament for mandatory community share ownership schemes, with proponents emphasising the need for companies to invest back into local communities, particularly those rich in natural resources.

The discussion frequently draws comparisons to South Africa's "Social and Labour Plans" (SLPs), highlighting a desire to emulate successful models of community benefit from resource extraction.

The motion, brought by opposition MP Clifford Hlatywayo, seeks to replace the current voluntary Corporate Social Responsibility (CSR) model with a legally binding framework.

Supporters argue that the voluntary approach has proven inadequate, leading to communities surrounded by wealth remaining underdeveloped, with poor infrastructure, schools, and healthcare.

Maxmore Njanji, for example, called for a mandatory 10% share for local communities, arguing it's "imperative, if not long overdue," to align with Vision 2030 and the national mantra of "Nyika inovakwa nevene vayo" (A nation is built by its own people).

Historically, Zimbabwe had the Indigenisation and Economic Empowerment Act of 2007, which mandated a 51% indigenous Zimbabwean ownership, with a provision for mining companies to cede at least 10% ownership to local communities. This led to the formation of Community Share Ownership Trusts (CSOTs) in various districts, with notable successes in infrastructure development in places like Zvishavane, where a CSOT reportedly received US$12 million for education and health projects.

However, the Finance Act of 2018 largely repealed this law, making community contributions voluntary for most sectors, except for diamond and platinum. This repeal is widely cited as the reason for the current lack of tangible benefits for communities.

Hurungwe North legislator, Pax Muringazuva presented a compelling example of the Royal Bafokeng Kingdom in South Africa, which, through its Royal Bafokeng Holdings, holds a significant stake (13% in Impala Platinum at one point, though recent reports indicate Impala has acquired a controlling interest in Royal Bafokeng Platinum) in major mining operations.

The arrangement allowed the Bafokeng people to build a US$45 million World Cup stadium and accumulate substantial wealth, demonstrating the transformative potential of community share ownership.

He directly contrasted this with Zimbabwe's current situation, where companies offer "breadcrumbs" through voluntary CSR, rather than a "piece of cake" through mandated ownership.

While acknowledging the principle of corporate social investment, Leslie Mhangwa raised concerns about overtaxing businesses, particularly those in "survival mode."

He suggested that a flat percentage levy might not be suitable for all sectors and advocated for a South African-inspired model where companies engage directly with communities to develop five-year Social and Labour Plans (SLPs). This approach, he argued, allows for larger, more sustainable projects, ensures funds are utilized at the point of origin, and can be spread over multiple years.

Mhangwa, further, proposed that mandatory incubation programs, graduate traineeships, and apprenticeships, alongside investment in public infrastructure like roads and clinics, should be recognized as part of a company's social responsibility, empowering locals beyond mere handouts.

Concerns were also raised about the current voluntary CSR model's susceptibility to abuse. Hon Nkani highlighted how the absence of a binding law allows individuals with influence to solicit funds directly from companies under the guise of community development, with the money often diverted into private pockets. He stressed the need for strict accountability mechanisms for any new trust funds, proposing that rural district councils serve as accounting officers and that the Auditor General be mandated to audit these funds, with chiefs and Members of Parliament acting as committee members rather than signatories.

"I also propose that rural district councils should be accounting officers to these funds. Looking at the lower ranks of accounting officers at district levels, when it comes to censure, when it comes to auditing, we know no one can threaten even the auditors. If we put people of high ranking in these committees, for example, it is not bad to have chiefs in these committees but to be signatories, Mr. Speaker says, I do not think it is a noble idea.

"Chiefs should be part of the committees but should not be signatories. Members of Parliament and councillors should be members of these committees but not signatories again. Let us have lower-ranking people be signatories so that they become accountable when it comes to responsibility.

"I also recommend that the Auditor General should be allowed to audit these funds. If we say they must be audited or checked at local levels, truly speaking, there is nothing that we would be doing. So, I recommend that the Auditor General do the audits for the Community Share Ownership Trust. I so submit, Mr. Speaker says," the MP stated.