Legal and policy handbook on extractive industries

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Key issues in Zimbabwe's Extractive Sector

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Legal and policy handbook on extractive industries

  1. 1. EXTRACTIVE INDUSTRIES POLICY AND LEGAL HANDBOOK ANALYSIS OF THE KEY ISSUES IN ZIMBABWES MINING SECTOR Case study of the Plight of Marange and Mutoko Mining Communities f FZimbabwe Environmental Law Association (ZELA) EUROPEAN UNION Authors: Shamiso Mtisi Mutuso Dhliwayo Gilbert Makore
  2. 2. Extractive Industries Policy And Legal HandbookPublished by: Zimbabwe Environmental Law Association (ZELA)Sponsored by: European Union and the Ford FoundationCopyright: 201 Zimbabwe Environmental Law Association (ZELA) 1. This publication may be reproduced in whole or in part and in any form for educational or non-profit uses, without special permission from the copyright holder, provided full acknowledgement of the source is made. This publication may not be offered for sale or other commercial purposes without the prior written permission of ZELA.Disclaimer: The views expressed in this publication do not reflect those of the European Union or the Ford Foundation but those of the authors.Year of Publication: January 2011Layout: Suneagles GraphixAvailable from: Zimbabwe Environmental Law Association (ZELA), No. 6 London Derry Road, Eastlea, Harare, Zimbabwe: Tel: 253381; 252093, Email: zela@mweb.co.zw, Website: www.zela.org
  3. 3. TABLE OF CONTENTSACKNOWLEDGMENTS ………………………………………………………………………………………….................................... 5LIST OF ACRONYMS …………………………………………………………………………………………......................................... 6FOREWORD …………………………………………………………………………………………............................................................... 7INTRODUCTION ………………………………………………………………………………………….................................................. 10CHAPTER 1CONCEPTUAL BACKGROUND …………………………………………………………………………………………......................... 14Contribution of Mining to Economic Growth and Impact on Livelihoods ……………………………................ 14Defining Environmental, Economic, Social and Cultural Rights …………………………………………….................... 15Judicial Enforcement of Economic, Social and Cultural Rights ……………………………………………………….......... 17Relevance of Environmental, Economic, Social and Cultural Rights ……………………………………………….......... 19CHAPTER 2THE LEGAL AND POLICY FRAMEWORK ON COMMUNITYPARTICIPATION, MINERAL RIGHTS ACQUISITION ANDREVENUE MANAGEMENT ……………………………………………………………………………………………………....................... 21Land Tenure and Compensation: Communities Displaced by Mining Operations ........................................... 21Relocation and Provision of Basic Services ………………………………………………………………………………..................... 23Community Participation in Mining and Indigenisation ………………………………………………………………............. 24.Assessment of Environmental Impact of Mining Operations and Community Participation……………….. 27Mining Rights and Contract Negotiation ………………………………………………………………………………….................... 28Mining Taxation ………………………………………………………………………………………………………………………........................ 30State Participation in Mining ……………………………………………………………………………………………………….................. 32Transparency and Accountability in the Mining Sector ………………………………………………………......................... 34Corporate Social Responsibility in the Mining Sector …………………………………………………………........................ 37CHAPTER 3CASE STUDIES: MARANGE AND MUTOKO …………………………………………………………………............................... 39Marange Diamond Mining: Impact on Community Rights …………………………………………………….................. 39Human Rights Violations …………………………………………………………………………………………………………...................... 39Litigating Economic Social and Cultural Rights in Chiadzwa ………………………………………………………............. 41Non-compliance with Environmental standards by diamond mining companies …………………………....... 43Marange Diamonds and the Kimberly Process Certification Scheme …………………………………………….... 44Plundering the Nations Mineral Resource …………………………………………………………………………………........ 45Mutoko Black Granite Mining: Impact on Community Rights ………………………………………...............…. 47
  4. 4. CHAPTER 4POLICY AND LEGAL OPTIONS AND RECOMMENDATIONS …………………………………............………… 49Measures to Promote Transparency and Accountability …………………………………………………............... 49Constitutional Reforms ………………………………………………………………………………………………………………........ 49Joining the Extractive Industry Transparency Initiative (EITI) ……………………………………………………....... 50Role of Parliament ……………………………………………………………………………………………………………………............. 51Voluntary Reporting by Mining Companies ……………………………………………………………………………........... 52Mining Rights and Contracts …………………………………………………………………………………………....................... 52Awarding Mining Rights to Investors …………………………………………………………………………………………........ 52Review of Existing Mining Contracts …………………………………………………………………………………………......... 52Mining Contract Negotiation ……………………………………………………………………………………………………......... 53Revenue Generation and Community Participation in Mining ……………………………………………......... 54Mining Taxation Regime …………………………………………………………………………………………………….................... 54Creation of Inter-Generational Fund …………………………………………………………………………………………....... 55Community Participation in Mining and Indigenisation ………………………………………………………………. 55Corporate Social Responsibility …………………………………………………………………………………………………....... 57Position of Relocated/Displaced Communities ……………………………………………………………………............. 58Legal Reforms in the Mining Sector ………………………………………………………………………………....................... 58Proposed Diamond Law ……………………………………………………………………………………………………….................. 58Amending the Mines and Minerals Act ………………………………………………………………………………………...... 59etablihment of an Environmental Court ……………………………………………………………………………………........ 60Compliance with International Standards ………………………………………………………………………................... 60Compliance with the Kimberly Process Certification Scheme Requirements ………………………………. 60Working with Civil Society and Communities …………………………………………………………………................... 61REFERENCES ……………………………………………………………………………………………………………...............................… 62
  5. 5. “All peoples shall freely dispose of their wealth and natural resources. This right shall be exercisedin the exclusive interest of the people. In no case shall a people be deprived of it”. Article 21(1) ofthe 1981 African Charter on Human and Peoples Rights“All peoples shall have the right to their economic, social and cultural development with dueregard to their freedom and identity and in the equal enjoyment of the common heritage ofmankind”. Article 22 of the 1981 African Charter on Human and Peoples Rights
  6. 6. ACKNOWLEDGMENTSThe authors would like to express their gratitude to the people of Chiadzwa and Mutoko for invitingthe Zimbabwe Environmental Law Association (ZELA) to help advance and protect theirenvironmental, economic, social and cultural rights through various legal strategies. The peoplehave remained steadfast in seeking to extricate themselves from the shackles of poverty, abuse,deprivation and exploitation at the hands of the state, unscrupulous mining companies and greedpoliticians.In addition, the authors would like to thank the Parliament of Zimbabwe particularily the PortfolioCommittee on Mines and Energy and the Committee on Environment and Natural Resources foragreeing to work with ZELA and for trusting ZELA in assisting legislators on the politically sensitiveissue of promoting transparency and accountability in the mining sector. The authors are alsograteful to all the ZELA staff members for spending long hours and difficult times in implementingrights based projects aimed at protecting the rights of the people of Chiadzwa and Mutoko. Last, butnot least this publication and all the project work would not have been possible without thefinancial assistance of the European Union and the Ford Foundation. 5
  7. 7. LIST OF ACRONYMSACHPR African Charter on Human and Peoples RightsAIPPA Access to Information and Protection of Privacy ActACR Africa Consolidated ResourcesAIM Alternative Investment MarketBSGR Benny Steinmetz Group Resources LimitedCAMPFIRE Communal Areas Programme for Indigenous ResourcesCBNRM Community Based Natural Resources ManagementCCDT Chiadzwa Community Development TrustCSR Corporate Social ResponsibilityEESCR Environmental, Economic, Social and Cultural RightsEIA Environmental Impact AssessmentsEITI Extractive Industries Transparency InitiativeEMA Environmental Management AgencyESCR Economic, Social and Cultural RightsRDC Rural District CouncilICESCR International Covenant on Economic, Social and Cultural RightsICCPR International Covenant on Civil and Political RightsKPCS Kimberley Process Certification SchemeMMCZ Minerals Marketing Corporation of ZimbabweSWF Sovereign Wealth FundsZMDC Zimbabwe Mining Development CorporationZIMCODD Zimbabwe Coalition on Debt and DevelopmentZELA Zimbabwe Environmental Law Association6
  8. 8. FOREWORDAs we were busy writing the last Chapters of underground mining pits to the air conditionedthis book, the Minister of Finance in his offices of government officials and miningNational Budget Statement for 201 reported 1 company executives in Harare. Moreso, it is athat the mining sector in Zimbabwe had, by story of environmental degradation andDecember 2010, contributed about 65% of pollution of water systems, loss of livelihoods,the total national exports for the country and forced evictions and relocations, drug shortageshad surpassed other sectors such as agricultureand manufacturing.1 It was also stated that at rural hospitals and clinics, dilapidatedfor 2010 the major mineral exports that school infrastructure, collapsed bridges andunderpinned the recovery in exports perfor- poor roads networks in areas where themance were platinum which contributed mining companies are operating. There areUS596.2 million, gold US$306.8 million, gross violations of human rights especiallydiamonds US$126 million and nickel environmental, economic, social and culturalUS$52.2 million among others.2 The growth rights of the people who live adjacent toin exports was attributed to increasedinvestment in the sector in response to mining areas.firming international mineral prices.3 Top ofthe mineral resources for export in Zimbabwe Corruption is also rife. The sector hasare platinum, gold, chrome, copper, diamonds witnessed the emergency of some miningand nickel among others. The National Budget companies that have just sprung up and actwas presented to Parliament in November 2010. like get-rich-quick outfits, paying bribes andIt was subsequently approved by Parliament in offering kickbacks to horn their way into theDecember 2010. lucrative mining sector such as alluvialWhat is clear from the above extracts from the diamond mining.4 The bottom line is thatbudget statement is that most minerals in natural resources are being exploited for theZimbabwe are being extracted for export either benefit of a few politically and economicallyby multinational or local mining companies. It connected individuals, a few state institutionsalso shows the immense potential of minerals and foreign nations to feed their insatiableto contribute to economic growth and poverty markets with raw materials at the expense ofreduction. However, the situation on the all Zimbabweans. In that respect, foreignground tells a different story. It is a story of countries and companies benefit more thanpoverty, corruption and mismanagement of the domestic economy and the localmineral resources, starting from the communities. This is manifested by high 71 Ministry of Finance, 2011 National Budget Statement, presented on 25 November 2010. Page 2432 Ibid at page 2433 Ibid at page 2434 Ian Smillie (2010), Blood on the Stone; Greed, Corruption and War in the Global Diamond Trade, International Development Research Centre.
  9. 9. offshore retention, transfer pricing, minimal In Zimbabwe the struggle has just started, thethreshold for royalty payment, export of raw battles are many and will be tough, pitting civilmineral wealth without value addition, low society and communities often againstemployment generation as a result of capital- government and mining companies. Thisintensive methods of production and policies tense relationship was aptly summed up byof labour sub-contracting.5 This situation is the African Initiative on Mining, Environmentsymptomatic of a general crisis in resource and Society (AIMES) when it stated that in aaccess, exploitation, distribution and utilisation number of African mining countries, the statecommonly known as the natural resources and its institutions are hostile towards citizenscurse or the natural resources paradox.6 In who are determined to defend nationalAfrica, millions of dollars often find their way interests, environmental protection andinto the pockets of corrupt state leadership human rights against violation by miningand mining companies. The corrupt practices companies.9 By the same token, there isin turn reproduce despotic and dictatorial increased use of state security agencies andleadership that further constrain citizen rights other institutions to repress the peoplein the extractive sector.7 especially communities and civil society activists in order to create unfettered spaceNevertheless, despite this gloomy picture, it and access to mining companies to exploit thehas been observed that there is a new vitality mineral resources.10in the Southern Africa region, evidenced by anincreased number of civil society organisations In the above context, it is the legislators dutyand organised communities focussing on to effectively assist civil society andeconomic justice, and demanding equal communities in the fight to call governmentdistribution of revenues, better work and mining companies to account for theirconditions in the mines, protection of the economic, social, environmental and culturalenvironment and respect for human rights by impact on communities livelihoods and rightsmining companies.8 By the same token, there based on their legislative, representation andare increasing demands for governments and oversight duties. Effective representation ofthe mining companies to be more transparent the interests of local people is key to theand accountable in managing mineral development of pro-poor, pro-sustainableresources to ensure that the benefits flow to all development policies and actions that willpeople and not only to foreign nations and a lead to poverty reduction and environmentalfew local elites. sustainability. Parliament can serve as a bridge 5 African Initiative on Mining, Environment and Society (AIMES), Ending the Race to the Bottom: A Collection of Statements of the African Initiative on Mining, Environment and Society, 2002, 2004 and 2009, page 23 6 Claude Kabemba (2010), “South African Mining Companies in Southern Africa, Corporate Governance and Social Responsibilities”. Published by the Southern8 7 8 Africa Resource Watch (SARW), page 13 Ibid page 14 African Initiative on Mining, Environment and Society (AIMES), Ending the Race to the Bottom: A Collection of Statements of the African Initiative on Mining, Environment and Society, 2002, 2004 and 2009, page 23 9 Ibid 10 ibid
  10. 10. Extractive Industries Policy And Legal Handbookbetween citizens and the state, and legislatorsare well positioned to represent the interestsof their electors. Legislators should have theautonomy, authority, capacity, or personalconviction to effectively perform theirrepresentation roles in the extractive sector.They should act as the institutionalized voiceof citizens and protector of democraticprinciples. They can perform this function bycalling government and mining companiesto be accountable on revenue generation,management and distribution, contractnegotiation, access to information, displacementof local communities, environmental protection,community participation in mining andrespect of human rights. These are the issuesthis book seeks to reveal and explain for thebenefit of legislators.Shamiso MtisiHead of Research / Environmental LawyerZimbabwe Environmental Law Association(ZELA) 9
  11. 11. Extractive Industries Policy And Legal HandbookINTRODUCTION authors in implementing a project initiated by ZELA to build the capacity of legislators to effectively play their representative, legislative and oversight role in the extractive sector. Thirdly, the authors drew a lot of informationThis handbook constitutes one of the battles from formal and informal discussions withbeing fought by civil society organisations to government officials, lawyers, industrypromote and protect the rights of officials, bankers, community representativescommunities living adjacent to mining areas and donor agencies over the past three years.against the operations of extractive industries, These discussions were invaluable in gainingthe state and other individuals who violate insight into the subject of community rights,their Environmental, Economic, Social and revenue transparency, corporate socialCultural Rights (EESCR). Its objective is to responsibility and environmental justice.assist legislators to further appreciate and Some of the thoughts and discussion pointsbuild their knowledge on the key issues that there from are included in this book. Fourthly,they should focus on in carrying out their the handbook drew some lessons as well fromrepresentative, oversight and legislative role in the public interest litigation work of ZELAthe extractive sector. The handbook seeks to which has seen the organisation assistingexplain some key concepts in the extractive communities affected by the operations ofsector and give policy and legal solutions mining companies and state actions by takingwithin the context of recent developments in legal action seeking for redress. Fifthly, thethe sector in Zimbabwe. The main thrust is to handbook draws a lot of information frompromote and protect the EESCR rights of extensive literature on the extractive sector.mining communities. The research that was undertaken by ZELA inThe handbook has a diverse foundational Mutoko and Marange was meant to provide abase from which the information was drawn platform for civil society to better understandby the authors. Firstly, it is anchored on the the trials and tribulations of the poor women,results of a research on the impact of men and youths in these resource rich areasextractive industries on the EESCR of caused by mining companies and governmentcommunities in Marange and Mutoko where action. The research also established the leveldiamond and black granite mining operations of legislative representation of EESCR ofare taking place respectively. The research was mining communities by the respectiveundertaken by the Zimbabwe Environmental members of parliament. Mutoko has the worldLaw Association (ZELA) in 2009. Secondly, renowned black granite that is being extractedthe book is based on lessons learnt by the mainly for export by 1 local and foreign mining 110
  12. 12. Extractive Industries Policy And Legal Handbookcompanies. In Marange, diamond mining by communities. In essence, it sought to build astate owned companies and foreign investors platform for engagement between the legislatorssince 2006 has resulted in a lot of human and the communities. Legislators have arights violations. In both cases one of the key duty to call government and miningresearch questions was whether the local companies to account for their impact on thecommunities are deriving any tangible environmental, economic, social and culturaleconomic benefits from mining and what has interests of communities living near miningbeen the impact of mining activities on areas. Therefore, within the above context, thiscommunity livelihoods from an environmental, handbook is meant to act as a guide to legislatorseconomic, social and cultural rights perspective. to effectively play their legislative, representativeConsequently, in both cases the research and oversight role over government action andidentified some of the major impacts of mining non-action in the extractive sector. It is also meanton the communities including environmental to demonstrate and expose cases ofdegradation, loss of land, water pollution, environmental, economic and social injusticehuman rights violations and mere plundering happening in Marange and Mutoko for actionof resources without any tangible benefits by legislators. The hope is that this may thengoing to the communities. Instead when trigger legislative, political and communitymining companies decide at their own action to protect and promote the rights ofvolition to give back to the community, it will communities living adjacent to other miningbe donations of a few bags of food, fuel to areas in Zimbabwe as the problems in Mutokolocal politicians or traditional leaders and and Marange are a lens of the problemsother items that do not alleviate poverty. obtaining in the whole mining sector.The research was complimented by advocacy Drawing from the informal and formalwork that was aimed at influencing policy discussions with various stakeholders, literaturedecisions in the extractive sector around review and the public interest litigation cases,community participation in mining, revenue it is important to note that EESCR havegeneration and distribution, mining taxation, continued to be relegated to the periphery inenvironmental degradation, corporate social national discourse, implementation andresponsibility and respect of human rights in resource allocation as civil and political rightsmining communities. The target group for the are a preferred area of intervention inproject were legislators in the Mines and Energy Zimbabwe. This is despite the equality andPortfolio Committee and the Environment and indivisibility of all human rights. The judiciaryNatural Resources Committee. The project for example is not ready to defend thesought to increase the legislators knowledge environmental, economic, social and culturalof the impact of mining operations on rights of communities as evidenced by the 11
  13. 13. Extractive Industries Policy And Legal Handbookdecision of the High Court in a case involving bring government and other actors to accountthe relocation of Chiadzwa villagers that was for their actions. One of the problems thisdismissed by the court on the grounds that it publication seeks to address is the fact thatwas not an urgent matter. Further, a number of poor and vulnerable women, men and thecritical issues in the extractive sector were youths in rural and urban areas, eithernoted such as lack of transparency and individually or collectively, often lackaccountability by state institutions in adequate knowledge and resources toawarding mining contracts, corruption by challenge government actions, decisions orpublic officials, a poor and ineffective mining laws as well as private sector actions thattax regime that has failed to generate enough contravene their constitutional rights or therevenue for the state, absence of a corporate countrys obligations under international law.social responsibility framework for mining Further, when it comes to defendingcompanies to meaningfully plough back to themselves against overreaching government,communities, limited opportunities for too many citizens are afraid to call thecommunity engagement in mining and gross government and the private companies toviolations of human rights by the state and account for their actions. Hence the legislatormining companies especially in Chiadzwa can play a key role in that respect.diamond fields. These are issues the legislators In terms of structure, the book is dividedshould tackle as a matter of urgency if the into 4 Chapters. The first Chapter outlinesmining sector is to meaningfully result in the conceptual background of economic,community development and national environmental, social and cultural rights andeconomic growth. the human rights discourse in the context ofIn the above context, the publication of this the extractive sector. The Chapter positionshandbook acts as a strategy that can facilitate Economic, Environmental, Social andmore responsible government and private Cultural Rights (EESCR) as human rights.sector actions and deliver justice to poor and The contribution of the mining sector tovulnerable women, men and youths whose economic development is also outlined in therights are being violated in mining areas. In Chapter. Chapter 2 is a statement of the legalgreat part, this is also a contribution to the and policy framework on mining taxation,fight against poverty and vulnerability in the corporate social responsibility, communitycountry as it may trigger action for improved participation, mining contract negotiationenforcement and implementation of and transparency and accountability and howenvironmental, economic, social and cultural these concepts interlink with the rights andrights with the help of legislators. The interests of poor and vulnerable communitieshandbook may also be useful in helping to living adjacent to mining operations.12
  14. 14. Extractive Industries Policy And Legal HandbookChapter 3 profiles the case studies; the impact related to corruption, human rights abuses,of mining operations on Marange and environmental degradation and inequality inMutoko communities. It states the major wealth generation and distribution in theproblems faced by these communities mining sector.especially in the face of operations ofextractive industries. More importantly, the Lastly, Chapter 4 states the policy and legalChapter identifies some of the environmental, options and recommendations as well as nexteconomic, social and cultural problems being steps for decision makers especiallyfaced by people living in these two mining parliamentarians to focus on. Major policyareas. The Chapter is a demonstration of the recommendations and options revolveproblems faced by mining communities across around the reform of mining laws, promotionthe country and in many other African of transparency and accountability in thesocieties. The relevance of these two case extractive sector, equitable revenue manage-studies is that they can demonstrate to the ment and distribution and communitylegislators some of the practical aspects participation in mining. 13
  15. 15. Extractive Industries Policy And Legal Handbook its citizens.16 This entails that all things beingCHAPTER 1 equal, as the countrys economy grows, so does the standard of living. The mining sectorCONCEPTUAL BACKGROUND has potential to create jobs, bring in foreign direct investment and may result inContribution of Mining to Economic Growth development of infrastructure (roads, clinics,and Impact on Livelihoods hospitals, houses and schools) as well as otherIt is common cause that mining can contribute social services. The provision of these servicesimmensely to economic development and falls within the realm of economic, social andgrowth. Mineral resources have been cultural rights. Further, as mining contributesimportant in the social and economic to the treasury through mining taxationdevelopment of many countries in Africa. Its 11 (royalties, corporate and others taxes), ideallycontribution occurs on several interrelated the funds should be invested by thelayers; such as employment, foreign exchange government in improving social services andgeneration, social infrastructure development infrastructure, hence improving national andand the fiscus. 12 In Zimbabwe, taking into community development. Therefore, in anaccount the suppressed economic growth ideal situation, such contribution toover the years, mining became the fastest economic growth can lead to the fulfilment ofgrowing sector since 2009 with growth up environmental, economic, social and culturalfrom 33.3% in 2009 to an estimated 47% in rights.172010.13 The sector contributed 4.9% of the From the above, it should be noted that whileGDP in 2009 and 65% of the countrys the mining sector has the potential toexports in 2010.14 This means the mining contribute meaningfully to economic growthsector has the potential to trigger economic and community development, the sector hasgrowth in Zimbabwe over the coming years as not yet managed to do so in the two casethe country can capitalise on its abundant study communities of Mutoko and Marange.mineral resources such as diamonds, Furthermore, at the national level, miningplatinum, gold, chrome, coal and copper. This taxation in Zimbabwe over the past years hascan be cemented by increased investment in not generated enough money for the fiscus,the sector in response to firming international yet natural resources were being exported. Themineral prices.15 Ministry of Finance in its 201 Budget 1Extensive research in the mining sector has Statement stated that royalties collected fromshown the causal nexus between a nations precious metals amounted to a paltrymineral wealth and its potential to develop US$20.7 million from sales of US$593.8economically and raise the living standards of million during the period January to 11 African Initiative on Mining, Environment and Society (AIMES), Ending the Race to the Bottom: A Collection of Statements of the African Initiative on Mining, Environment and Society, 2002, 2004 and 2009, page 56 12 Chamber of Mines, (May-July 2010), “Mining Sector Contribution to the Economy”, Chamber of Mines Journal 13 Ministry of Finance, 2011 National Budget Statement, presented on 25 November 2010. Page 43 14 Ibid, at page 24314 15 Ibid at page 243 16 see generally the global research project reported as, Breaking New Ground: The Report Mining, Minerals and Sustainable Development Project 2002 <http://www.iied.org/mmsd/finalreport/index.html > 17 Tumai Murombo, (2009), “ Conceptual Framework on Economic, Social and Cultural Rights in Southern Africa”, in Securing Environmental, Economic, Social and Cultural Rights in the Natural Resources Sector: Country Experiences on Promoting Community Assets and Rights in the Mining Sector. Published by Zimbabwe Environmental Law Association (ZELA)
  16. 16. Extractive Industries Policy And Legal HandbookSeptember 2010.18 In order to generate more cultural rights of the poor women, men andmoney for the fiscus the Ministry increased youths living around mining areas. Violationsthe royalties of gold from 4% to 4.5% and of community rights in mining areas areplatinum from 4% to 5%.19 For diamonds the mostly caused by the actions or non-action ofroyalty was increased from 10% to 15%. This the state and either local or multinationalwas meant to ensure that at least the sector mining companies. In sum, the deepcontributes significantly to economic growth. imbalance in the distribution of mineral wealth and the environmental destructionConversely, the extraction of minerals can also caused by mining activities continue to be acause social and cultural destabilisation, and major cause of poverty and the source of 20in some cases even violent conflict , hence tensions and conflicts of various levels ofthe adage “resource curse”. Further, mining intensity which result in violation of a bundleby its nature is inherently destructive of of human rights.23the environment and may have negativesocial, economic and cultural impacts on Defining Environmental, Economic, Socialcommunities. As mining companies embark and Cultural Rightson extracting minerals they take away valuableland from communities; degrade the quality of It is vital therefore, at this point to state andland, lead to deforestation, cause water and explain the conceptual framework ofair pollution and siltation of rivers.21 Environmental, Economic, Social and Cultural Rights (EESCR). ESCR have their roots in theIn some instances, communities are forcibly Universal Declaration of Human Rights. Theseevicted from their traditional homes and rights protect peoples claims or entitlementsresettled elsewhere ostensibly to pave way for to economic, societal and cultural benefits. Inmining activities. However, in the process of 1966, the United Nations adopted theeviction and resettlement, communities are International Covenant on Economic, Socialoften not consulted and their consent is not and Cultural Rights (ICESCR) which sought tosought, hence they are denied access to protect economic, social and cultural rights.information and participation. These forced This was in addition to the Internationalevictions affect communities rights to an Covenant on Civil and Political Rights (ICCPR)adequate standard of living, right to housing of 1966 which protects civil and politicaland right to culture as community institutions, rights. Some of the economic, social andsocial cohesion and livelihoods are disrupted.22 cultural rights provided for in the ICESCR include the following; the right to an adequateThe above scenario constitutes an assault on standard of living that encompass adequatethe economic, environmental, social and food, shelter, clothing, education, work18 Ministry of Finance, 2011 National Budget Statement, presented on 25 November 2010. Page 28319 Ibid at page 28320 Mugabe J& Tumushabe, GW, Ecological Roots of Conflict in Eastern and Central Africa: Towards a Regional Ombudsman in L. Zarsky, Human Rights and the Environment, Conflicts and norms in a globalizing world (2002) 241.21 15 Shamiso Mtisi (ed), 2009, Securing Environmental, Economic, Social and Cultural Rights in the Natural Resources Sector: Country Experiences on Promoting Community Assets and Rights in the Mining Sector, Zimbabwe Environmental Law Association (ZELA)22 ibid23 African Initiative on Mining, Environment and Society (AIMES), Ending the Race to the Bottom: A Collection of Statements of the African Initiative on Mining, Environment and Society, 2002, 2004 and 2009, page 4
  17. 17. Extractive Industries Policy And Legal Handbook(including safe working conditions), the right political rights (right to life, freedom ofto form and join a trade union of ones choice movement, association, the right to vote and 24and the right to social security. At the freedom of expression among others).continental level, the African Charter onHuman and Peoples Rights (ACHPR) provides Second generation rights include economic,the framework for the realisation of economic, social and cultural rights. They are generallysocial and cultural rights and just like the regarded as positive rights due to theirICESCR, it makes provision for the right to requirement for the duty bearers (the state) towork, health, culture, housing and education take positive action like the enactment ofamong other rights.25 appropriate laws and policies, the development of programmes as well as theHowever, human rights have traditionally provision of resources that will result in thebeen grouped into three categories namely fulfilment or realisation of economic, social 26first, second and third generation rights. and cultural rights. The impact of theFirst generation rights encompass civil and extractive sector on these rights is great aspolitical rights which are mainly enjoyed on it is manifest in violations of the culturalan individual basis. The main objective of civil and traditional systems of lives throughand political rights is to protect the individual displacement and relocation, poor workfrom the excesses of the state hence the conditions in the mines and failure by miningreference to them as negative rights. The most companies to invest in communitydistinctive feature of civil and political rights is infrastructure that improves the health,that they are justiciable which means they are education and standard of living of adjacentlegally enforceable in a court of law. In Africa communities.the extractive sector has contributed to theviolation of civil and political rights in many The third category of human rights is calledways. In some countries mineral resources like third generation rights and these are alsodiamonds have been used to fund civil wars as called solidarity or group rights. Unlike otherthe revenue is used to pay for weapons in rights, third generation rights emphasise onrebel wars. As a result over the past two the group or the community hence the namedecades millions of people have died in wars solidarity or group rights. Their enjoymentthat have been fuelled by or fought for and violations in many cases affect a 27diamonds. This becomes part of what is community or a group. Examples of thirdcalled the resource curse. In some cases states, generation rights include the right tothe political elite and mining companies development, the right to a clean and healthcollude to use revenue from mineral resources environment, peace, self determination andto suppress all basic freedoms and civil and the rights of minorities.28 There is no 24 Articles 6,7,8 , 11 and 13 of the ICESCR respectively 25 Articles 15, 16 and 17 of the African Charter on Human and Peoples Rights respectively16 26 27 Karel Vasek, a professor of human rights is credited with the categorisation of human rights into generations. He made the proposal in 1979 Ian Smillie (2010), Blood on the Stone; Greed, Corruption and War in the Global Diamond Trade, International Development Research Centre, page 25 28 Farai George Chiweshe, Shupikayi Blessing Chimhini and Solomon Franck Sacco. Reference Book on Human Rights Monitoring and Enforcement Mechanisms , 2007.
  18. 18. Extractive Industries Policy And Legal Handbookinternational legal instrument that recognises second or third generation rights are allthird generation rights. What mainly exist are important and must be treated in the samesoft law declarations like the 1992 Rio manner in terms of implementation andDeclaration on Environment and Develop- resource allocation. For example, the right toment. However, despite the lack of an life which is a civil and political right can notinternational legal instrument to back them, be enjoyed in a dirty and polluted environ-some countries have enshrined third generation ment. A dirty and polluted environment willrights such as environmental rights in their compromise the right to life. The inter-Constitutions making them justiciable.29 dependence of rights was brought to the fore by the 2008 cholera outbreak which claimedEnvironmental rights for example are key to the lives of 4 000 people and infected manyhuman health and the protection and thousands. An analysis of the causes of theconservation of the environment and natural cholera outbreak shows that they were purelyresources. They include the following; the environmental. Firstly, the failure to provideright to live in an environment that does not clean water. Secondly the failure to remove 30cause harm to health (accessing adequate refuse and thirdly the failure to repair burstand safe water, clean air and provision of sewer pipes. The failure to address theseproper sanitation facilities), the right to access environmental problems which impact on theenvironmental information, the right to right to a clean and healthy environmentparticipate in environmental decision making affected the right to life which is a civil andprocesses and the right to access justice when political right. All this is against the 31environmental rights are violated. Most background that environmental, economic,operations of mining companies impact social and cultural rights have traditionallynegatively on environmental rights. As stated been viewed as not capable of being enforcedabove mining by it nature is inherently in a court of law and that states can only fulfildestructive of the environment and it causes them progressively as they require a lot ofwater pollution, air pollution and in many resources.cases the right of people to use and benefitfrom their natural resources wealth is affected. Judicial Enforcement of Economic, Social and Cultural RightsHowever, it is important to note that thedivision of human rights into categories is One of the disturbing, but dying perceptionsslowly losing momentum as a concept. This is about ESCR has been that they are notbecause these rights are interlinked and enforceable in a court of law or justiciable.interdependent at a more practical level. In However, recent court rulings in otherother words, human rights, be they first, jurisdictions have shown that ESCR are indeed29 Examples include South Africa and Mozambique whose constitutions recognise the right to a clean and health environment.30 Section 4 of the Environmental Management Act (Chapter 20:27) includes some of these rights.31 The right of access to information, public participation in decision making and access to justice are recognized in Principle 10 of the Rio Declaration on Environment and Development of 1992. 17
  19. 19. Extractive Industries Policy And Legal Handbookjusticiable. South African and Indian court mineral prospecting rights on land belongingdecisions help to shed light on the judicial to a community. A government departmentenforcement of economic, social and cultural had granted a private mining company rightsrights which are poverty related rights. The to prospect on the land without consulting orcourts in these countries decided a number of notifying the community. In turn the communitycases based on socio-economic rights such as also wanted to prospect for minerals on theaccess to housing, health care, food, water, land, but its application was ignored by thesocial security and entitlement to natural state. Therefore, the community approachedresources wealth. the court seeking an order to set aside the granting of a prospecting right on their landFor example in the South African case of to the company. The Constitutional Court 32Grootboom V Oostenberg Municipality the accordingly, set aside the decision to grant thecourt pronounced the importance of food, mineral prospecting right to the miningclothing and shelter to human dignity, company. In reaching the decision the courtfreedom and equality that should not be inter alia stated that the community had been 33denied to people. The case involved 900 treated unfairly by the state as it had not beenpeople who alleged violation of their right to afforded a reasonable opportunity to makeaccess adequate housing after they were representations in relation to the applicationevicted and settled on nearby land. In the case for prospecting by the company. 34of Hoffman V South African Airways thecourt decided that refusal to employ a person Although the court in this case did not makebecause he was HIV positive violated the right any direct reference to economic, social andto equality and that people living with HIV cultural rights, the case itself is instructive andmust not be subjected to “economic death” important in promoting and protecting thesethrough denying them equal opportunity in rights in communities living on land whereemployment. mineral prospecting may take place. The case protects the rights of community landholders.Recently, the South African Constitutional Further, the case also recognizes the right ofCourt decided a case on the allocation of such communities to be involved inmineral prospecting rights pitting a tribal prospecting for minerals on their own land. Allcommunity against a company in the case of these issues are important in the debate onBengwenyama Minerals and Bengwenyama- promoting environmental, economic, socialYe-Maswazi Council and others Vs. Genorah and cultural rights. Therefore, to a largerResources (PTY) LTD and Minister of Mineral extent the case turns on protecting the rights 35Resources and others. The case was based of a community to be informed abouton the lawfulness of the grant to a company of decisions related to extraction of minerals18 32 Constitutional Court of South Africa, CCT 11/00, 4 October 2000 33 Mokate Lindiwe, Monitoring Economic and Social Rights in South Africa, South Africa Human Rights Commission accessed 25 August 2007, www.inwent.org/ef-texte/human_rights/mokate.htm 34 Hoffman V South African Airways 2001 (1) SA 1 (CC) 35 th Constitutional Court of South Africa: Case CCT 39/10; (2010) ZAC 26. The case was decided on the 30 of November 2010.
  20. 20. Extractive Industries Policy And Legal Handbookresources and its participation in prospecting Bruce Porter (2000) thinks that the limit to afor minerals that can later result in economic constitutional guarantee of a right againstbenefits for the community. In Zimbabwe poverty could be a claim by government ofthese rights have not been protected as will be scarce resources and competing needs.40 Lackoutlined in Chapter 2 on the rights of of resources as an alibi by governments hascommunal residents versus those of mining been the major constraints to the rights basedcompanies. approach. However, given the nature of African governments, it can be safelyFurther, the Indian courts also made decisions concluded that the relegation of economicthat shows that environmental, economic, and social rights as just guiding principlessocial and cultural rights are enforceable. In under the guise of lack of resources is a way ofthe constitutional case of Olga Tellis and avoiding fulfilling their obligation and duty toOthers Vs Bombay Municipality Corporation provide services for the people as they area municipality wanted to evict all pavement busy making wrong investments andand slum dwellers from the City. The court development priorities. But the cases aboveordered the State to implement its pledges to are a good example of demonstrating theprovide housing sites for the people and to enforceability of ESCRs and these cases aredelay evictions.36 In Peoples Union for Civil applicable to the position of poor 37Liberties Vs Union of India and Others the communities who are affected by operationsIndian court upheld the right to food and of mining companies or government actions.affirmed that where people are unable to feedthemselves adequately, the government has an Relevance of Environmental, Economic,obligation to provide food for them. Other Social and Cultural Rightsjudicial decisions based on economic, socialand cultural rights in India include cases on the It is also vital to note that environmental,right to education38 and the right to health.39 economic, social and cultural rights are critical in the promotion, protection and fulfilment ofDrawing from the decisions by the South rights of the greater majority of citizens inAfrican and Indian courts, Kauffman (2007) developing countries.41 They are central toconcluded that these decisions demonstrated promoting sustainable development. This isthat economic and social rights provided in because they have a bearing on all thethe Constitution have not remained empty indicators of poverty, hence they are suited topromises. He candidly stated that through address the development needs of developingsuch decisions the courts have demonstrated countries. In that regard, it has been said thattheir willingness to implement directly environmental, social and economic justiceenforceable socio-economic rights. However, issues are not best addressed by civil and36 Olga Tellis and Others Vs Bombay Municipality Corporation 1985 (2) Supp SCR 51; (1987) LRC (Const) 351 (Supreme Court of India).37 Peoples Union for Civil Liberties Vs Union of India and Others, (Supreme Court of India), 2001, Unreported, 2 May 2003.38 Mohini Jaini V State of Karnataka 1992 (3) SCC 666 (India Supreme Court)39 Pashchim Banga Khet Mazdoor Samity V State of Western Bengal (Supreme Court of India) 1996 4 SCC 37 1940 Bruce Porter (2000), Judging Poverty: Using International Human Rights Law To Refine the Scope of Charter Rights, (15 Journal of Law and Social Policy), Centre for Equality Rights in Accommodation , accessed 22 August 2007, www.equalityrights.org/cera/docs/poverty/htm41 Some are even of the view that in some instances, economic, social and cultural rights are even more important than civil and political rights. See Deprose Muchena “ The Place of economic and social rights in human rights and development discourse”. Open Space Volume II , Issue 4 , 2009.
  21. 21. Extractive Industries Policy And Legal Handbookpolitical rights which are individualistic in the extractive sector. However, the country hastheir focus but by environmental, economic, not been very good at implementing andsocial and cultural rights whose objective is to taking measures to promote the realization ofprotect vulnerable members of society by these rights due to various reasons including 42focusing on group and community rights. It mere violations of these rights by stateshould be noted that the immediate negative institutions, limited resources, lack of judicialimpact of mineral extraction in many activism and lack of political will. All thesecommunities are on the environment, rights are relevant to the communities inculture, social life and livelihoods of the Mutoko and Marange as they depend onpeople living adjacent to mining areas. This natural resources for their livelihoods. Themeans mining has a great impact on obligation to protect these rights lies on theagricultural systems, water availability, state and the mining companies. On the otheraccess to other natural resources and on hand, all decision makers including legislatorssocial living and culture. have the responsibility and duty to promote the economic, social and cultural interests ofZimbabwe ratified both the ICESCR and the their communities. The legislature is the armACHPR and is therefore obliged to put of the state through which citizens interestsmeasures in place that will result in the are in principle brought into national decisionrealisation of economic, social and cultural making processes. Without effective legislativerights by its citizens. The state and other actors representation, communities interests arehave a duty to respect and fulfil these rights in largely ignored.20 42 Marius Pieterse . Beyond the Welfare State: Globalisation on the Neo-Liberal Culture and the Constitutional Protection of Social and Economic Rights in South Africa. Stell Law Review pp 1-26, 2003
  22. 22. Extractive Industries Policy And Legal Handbook granite. In that respect, mining companiesCHAPTER 2 especially from South Africa, Mauritius, India and China have been heavily investing in theTHE POLICY AND LEGAL FRAMEWORK platinum and diamond mining sector in theFOR COMMUNITY PARTICIPATION, country.43 The question in that regard is to what extent has the local populationMINERAL RIGHTS ACQUISITION AND participated in the mining sector and haveREVENUE MANAGEMENT they derived any economic benefits to reduce poverty and assist in the realisation ofThe purpose of this Chapter is to explain a environmental, economic, social and culturalnumber of different conceptual, legal, policy, rights.ideological and even practical aspects that arecritical in the mining sector and have In this section community participationimplications on the rights of communities entails many aspects such as engagement inliving within the precincts of mining areas. mining operations, job opportunities,T h e s e a s p e c t s i n c l u d e c o m m u n i ty participation in decision making processes,participation in the mining sector, revenue access to information on mining operationsmanagement (especially transparency and and even access to justice. What is trite at thisaccountability), mining taxation, mining point is to take note of the different gaps thatcontract negotiation and corporate social exist in the current mining legislation that mayresponsibility in the mining sector. These hinder community participation. Below is anaspects should be understood by legislators outline of the major legal and policy gaps inand other decision makers to enable them to promoting community participation in miningeffectively play their oversight, legislative and to reduce poverty and help address therepresentation roles on issues related to the economic, social and cultural problems beingextractive sector. faced by communities living adjacent to or within mining areas.The mining sector has often been associated Land Tenure and Compensation: Communitieswith the flow of mineral resources from the Displaced by Mining Operationsmines to foreign markets. This is because someminerals are extracted for export and only get The Mines and Minerals Act (Chapter 21:05)to meaningfully benefit foreign countries and does not protect the rights of communities.markets than the local population. A few Firstly, the Act is old and perpetuates theexamples of minerals that are extracted for colonial legacy and still greatly affectsexport in Zimbabwe include platinum, communal land rights. In terms of landdiamonds, copper, nickel, chrome and black ownership and establishment of mining 2143 Shamiso Mtisi and Mutuso Dhliwayo (2010), A Citizens Guide to Understanding Ecological Debt, Zimbabwe Coalition on Debt and Development (ZIMCODD); ZIMPLATS and MIMOSA are notable players in the platinum mining, while Anglo-American also operates UNKI Mines for platinum
  23. 23. Extractive Industries Policy And Legal Handbookoperations, the Mines and Minerals Act in sum at specified intervals to any localSection 188 (2) provides for the payment of authority within whose area the registeredcompensation by holders of mining rights to mining location is situated. This is also meantprivate land owners where a mining location is to ensure that mining companies contributeestablished. In that respect, the rights of to development in rural areas. Except in theprivate land owners are protected since the case of Mutoko where mining companies arelaw gives them the right to claim payment as paying levies, it is not very clear how manycompensation for being denied the right to mining companies are paying a levy for theuse and enjoy his/her property/land.44 land to RDCs as required by the law. However, in Mutoko, granite mining companies haveHowever, the position is different for been resisting payment of levies charged bycommunal residents who do not own the land the local authority under the pretext that theyon which they use for agricultural purposes, are very high (see case study on Mutoko). Thesettlement and pasture. Section 188 (7) states case was referred to the High Court and it isthat the Rural District Council (RDC) will act as still pending.the land owner if the mining location is oncommunal land and the payment will be made The existing legal position makes it veryto the District Development Fund. The local difficult for communal residents to directlyauthorities as the planning authorities are receive compensation and payment fromexpected in turn to use the money for mining companies in a situation wheredevelopment of the area under their minerals are discovered at a personsjurisdiction. It is through the provision of such homestead, field or grazing land. This isinfrastructure that the communal people are because communal residents do not own theexpected to benefit from the payments by land. The land is owned by the state in termsminers. However, the situation on the ground of the Communal Lands Act (Chapter 20; 04).has shown that many RDCs have not All communal land is vested in the Presidentprioritised community development projects and it is managed on his behalf by RDC. Theand have not ploughed back the monies they law only gives the communal people usufructget from mining companies to assist rights or use rights in respect of land forcommunities. agriculture, housing and pasture.45 TheThe Act also provides for other payments that situation on the ground is that the state holdscan be made by miners to local authorities. In de jure [legal] ownership over land in ruralterms of Section 255 the Minister may by areas, while the rural communities andstatutory instrument require any miner of a individuals exert de facto [factual or on theregistered mining location, to pay a specified ground] rights.22 44 Maxwell Maturure (November 2008), A Review of the Legislative and Policy Framework for Community Based Natural Resources Management in the Mining Sector; Study Commissioned by the CBNRM Forum. 45 Section 2 of the Communal Lands Act namely the right to plough, to cultivate the land, to graze animals and to build houses among others.
  24. 24. Extractive Industries Policy And Legal Handbook companies to achieve justice and equity inCumulatively, this situation leaves communities dealing with communities that are evictedin mining areas vulnerable to evictions and or displaced for purposes of developmentdisplacement by mining companies who may projects. The United Nations Committee onin most cases just pay the local authorities and Economic, Social and Cultural Rights madestart removing people without giving them comments on forced displacement of people.any direct compensation. The rights of private General Comment 7 of the United Nationsland owners are better protected. Further, Committee on Economic, Social and Culturalwhat also make the position of local Rights recommends consultations with thecommunities in mining area vulnerable is that affected people, reasonable notice ofin some cases the government itself instead of relocation and updates to the people byprotecting the people, is involved in mining government officials about the process.47operations through government owned Further, the Committee in Comment 7 alsomining companies and engages itself in stated that evictions should not result inpushing the people out of their traditional individuals being rendered homeless orhomes. The situation in Marange is most vulnerable to the violation of other humanapposite in that respect. rights. Where those affected are unable toRelocation and Provision of Basic Services provide for themselves, the State party must takeAs noted earlier, mining operations often all appropriate measures, to the maximum of itsresult in displacement of communities, hence available resources, to ensure that adequateaffecting and changing their way of life, social alternative housing, resettlement or access tofabric, economic activities and culture, as they productive land, as the case may be, is available.48will be resettled elsewhere. Research into In addition, in 2007, the United Nationsdisplacement have found nine other potential Special Rapporteur on Adequate Housing alsorisks that deeply threaten sustainability; developed the Basic Principles and Guidancethese include joblessness, homelessness, on Development-Based Evictions andmarginalization, food insecurity, loss of Displacement.49 The purpose of the Principlescommon lands and resources, increased health was to guide states on how to deal with casesrisks, social disarticulation, the disruption of of involuntary displacement and evictions andformal educational activities, and the loss of ensuring compliance with international lawcivil and human rights.46 and standards as well as respecting the rightsWhile there is no specific law that protects of affected population. The Basic Principlesthe rights of displaced communities at the call states to ensure that evicted or displacednational level, there are internationally accepted people are provided with just compensation,standards that may help the state or mining shelter and housing, food, water and sanitation,46 23 Theodore E. Downing, (April 2002), Avoiding New Poverty: Mining-Induced Displacement and Resettlement, International Institute for Environment and Development (IIED) page 347 UN Office of the High Commissioner for Human Rights, “The right to adequate housing (Art.11.1): forced evictions” (05/20/1997), CESCR General comment 7. (General Comments); Sixteenth session, 199748 Ibid Clause 16 of Comment No. 749 http://issuu.com/unhousing/docs

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