2018 Elections

Parliament Report on The Missing $15 Billion Diamond Revenues

THE PROTFOLIO COMMITTEE ON MINES AND ENERGY ON THE DIAMOND SECTOR IN ZIMBABWE FOR THE PERIOD 2009 – 2016

In 2016 the Former President of Zimbabwe, His Excellency Cde Robert Mugabe made announcement to the nation, during his birthday interview, that over 15 billion dollars’ worthof diamond revenues could not be accounted for, at a time the country was experiencing severe liquidity challenges and economic contraction. In line with Section 160 of the Standing Orders of Parliament, read together with section 119 (2) of the Constitution, the Committee on Mines and Energy conducted an enquiry to get a deeper understanding of the diamond sector in Zimbabwe focusing on the investors and investments made, the monitoring and tracking systems on production and revenues, the marketing of the diamonds as well as the legal and policy frameworks regulating the industry. The discovery of diamonds in Marange created a huge expectation among the ordinary citizens to the extent that the industry would contribute towards the eradication of the triple challenges facing the country, namely, unemployment, poverty and economic recession. The enquiry will outline the challenges experienced and the lessons learnt so that the diamond sector can emerge from the murky waters and take its place among the key minerals that will make meaningful economic and social contribution in the country.

Methodology

In order to understand how the alleged fifteen billion dollars’ worth of revenues could not be accounted for, the Committee engaged various stakeholders, mainly through oral evidence sessions held between February and May 2018. The commitment of the Committee was evidenced throughout enquiry with one oral evidence session lasting for a period of ten (10) hours. The Committee had an opportunity to engage the following stakeholders:

  1. 2.1  Hon W. Chitando – Minister of Mines and Mining Development;
  2. 2.2  Hon W. Chidhakwa – Former Minister of Mines and Mining Development;
  3. 2.3  Hon Dr. O. Mpofu – Former Minister of Mines and Mining Development andFormer Minister of Home Affairs;
  4. 2.4  Hon Dr. S. Sekeramayi – Forrmer Minister of Defence;
  5. 2.5  Dr I. Chombo – Former Minister of Home Affairs;
  6. 2.6  Mr D. Mutasa – Former Minister of State Security,
  7. 2.7  Mr G. Matanga – Commissioner General of Police;
  8. 2.8  Ambassador I. Moyo – Director General of Central Intelligence Organisation;
  1. 2.9  Retired Major General H. Bonyongwe – Former Director of General of Central Intelligence Organisation;
  2. 2.10  Professor F. Gudyanga and Mr P. Mupazviriho -Former Permanent Secretaries of Mines and Mining Development;
  3. 2.11  Mr M. Munodawafa – Permanent Secretary of Mines and Mining Development
  4. 2.12  Mr M. Matshiya – Permanent Secretary of Home Affairs and Culture;
  5. 2.13  Mr M. Rushwaya – Permanent Secretary of Defence;
  6. 2.14  Ms F. Mazani – Zimbabwe Revenue Authority [ZIMRA] Commissioner General;
  7. 2.15  Former joint venture partners of Zimbabwe Mining Development Corporation(ZMDC), that include, Mbada, Canadile Miners, Anjin, DMC, Kusena, ReraDiamonds and Gye Nyame;
  8. 2.16  DTZ OZGEO Company,
  9. 2.17  The Board of Rio-Zim and Management of Murowa Diamonds,
  10. 2.18  Mr G. Masimirembwa and Mr D. Murangari, former and serving boardChairperson of ZMDC respectively,
  11. 2.19  Management of ZMDC,
  12. 2.20  Board and management of the Minerals Marketing Corporation of Zimbabwe(MMCZ),
  13. 2.21  Board Members of Sino-Zim who were in partnership with ZMDC ;
  14. 2.22  President of Chamber of Mines – Mr Manhando
  15. 2.23  Officials from the Ministry of Finance;
  16. 2.24  Former and serving members of the Border Control and Minerals Unit,
  17. 2.25  Former and serving members of the Zimbabwe Republic Police;
  18. 2.26  Civil Society including Mr F. Maguwu from Center for Natural ResourceGovernance and Mr S. Mtisi the Global Kimberly Process (KP) Civil SocietCoordinator and;
  19. 2.27  The Mining community in Chiadzwa represented by the Marange Development Community Trust.

The Committee managed to conduct an on-site visit to Murowa Diamonds located in Zvishavane in April 2018 inorder to get an appreciation of security and accounting systems at the mine. The Committee encountered challenges in securing the attendance of the following people: Mr Farai Mutamangira, Dr A. Chihuri, Mr T. Biti and Former President of Zimbabwe, His Excelllency Cde R.G. Mugabe. Dr Chihuri could not attend because he was indisposed whilst Mr Mutamangira was not able to attend citing client-privilege confidentiality. The Committee sought legal advice on his submissions and was advised that the privilege he sought to rely on was not absolute and his appearance before Parliament will be dealt with at an appropriate time in the future as the inquiry conducted by the Committee did not exhaust all the sticking issues. Mr T. Biti, Former Minister of Finance was also unavailable during the period of the enquiry due to other commitments. The Former President His Excellency Cde R.G. Mugabe was unable to attend at the appointed hour and the Committee was due to meet to consider summoning him as a measure of last resort but after consultations with the Hon Speaker, he was recused from attending.

During the enquiry some witnesses were either hostile or fearful and hence were unwilling to disclose information, such as those from the ZRP, CIO and the Former Minister of Mines and Mines Development, Dr Mpofu. The Committee observed that serving members of ZRP were unwilling to disclose information for fear of losing their jobs, especially in the wake of a police shake up that took place in January 2018, where several senior police officers were retired from service.

Read Full 16 Page  Report on the Missing 15 Billion Diamond Revenues

Recommendations

Resolution

Action

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Timeline

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1.

The forensic audit should be conducted as a matter of urgency on all the companies that were operating in Marange.

The Permanent Secretary of Mines and the Auditor General, should engage in earnest all the joint venture partners that were involved in mining of diamonds in Marange.

Immediately

2.

The Minerals and Border Control Unit should be given adequate resources that include vehicles and surveillanceequipment to monitor and reduce incidences of smuggling of diamonds.

 

The Ministry of Finance should give adequate budgetary support to the police for effective monitoring and surveillance

Immediately

3.

An investigation should be conducted on the diamonds and revenues produced by Gye Nyame

Zimbabwe Republic Police (ZRP) and ZACC should investigate the operations of the Gye Nyame so that that all those who abused office and engaged in shady deals are prosecuted.

Immediately

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4.

Investigation on Hon. Dr O. Mpofu on directives on monies paid by MMCZ, Marange Resources and Canadile Miners for legal services to Mr Farai Mutamangira which were not specified need to be interrogated.

The Law Society of Zimbabwe, Auditor General, the Zimbabwe Anti-Corruption Commission should investigate monies paid to Mr F Mutamangira for legal services that are not specified.

Immediately

5.

The indigenisation threshold on the diamond sector should be removed

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The Minister of Finance should remove the 51/49 percent threshold on the diamond and platinum sectors in order to attract investment.

Immediately

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6.

Regular lifestyle audits should be conducted on Minister of Mines, its officials and parastatals under the Ministry in order to curb corruption.

The Civil Service Commission should appoint an independent body to conduct regular lifestyle audits on persons working at the Ministry and parastatals under the Ministry.

Immediately

7.

Officials from the Ministry of Mines, ZMDC and its subsidiaries should declare their interests and assets on assumption of office or during their term of office to curb

The Office of the President and Cabinet should ensure employees at the Ministry, ZMDC and its subsidiaries declare their interests and assets during or at commencement of

Immediately

corruption.

work.

8.

ZCDC must be dissolved immediately because it was not properly constituted and the Ministry must revert to the pre- February 2016 position of the concession holders.

The Minister of Mines must follow due process.

Immediately

9.

DTZ OZGEO should be restored its claim given that it is not within the Marange area and has never been in joint partnership with ZMDC.

ZMDC should focus its energy on the Marange diamond deposits because the area has not be fully explored or exploited. Concessions in Chimanimani should be given back to the former owners.

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Immediately

10.

Members of the Executive should be held liable for their actions whilst in Office and even after they leave office.

The President, His Excellency Cde E.D. Mnangagwa should not hesitate to invoke section 108 (1)(a) of the Constitution read together section 106 (2)(c) in order to curb corruption and abuse of power by Members of the Cabinet.

Immediately

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11.

The Former President His Excellency Cde R.G. Mugabe need to clear the air on the missing 15 billion dollars’ worth of revenue.

Closure on the alleged missing 15 billion diamond revenues is possible if the former President clears the air on the context he made the assertion that the country lost such an amount. The 9th Parliament must pursue the matter to the logical conclusion.

Immediately

12.

A whistle blowers policy or law should be put in place to encourage and protect personswho desire to divulge information that is of national importance.

The Minister of Finance should put in place a policy that will protect whistle-blowers so thatthe country will not continue to loose revenues through illicit financial flows, smuggling and other forms of corruption.

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Immediately

 

 

 

13.

Government arms such as the Zimbabwe Republic Police, Zimbabwe National Army and Central Intelligence Agency should not be involved in mining ventures. These must concentrate on their core business.

The Government must adequately fund these institutions.

Immediately

Conclusion

The lustre of the diamond industry in Zimbabwe has been damaged due to shady deals and operations. The new Minister of Mines, Hon Chitando has a tall order to ensure that transparency and accountability is inculcated into the industry. The new strides made by the Minister of Mines to announce proceeds of diamonds sales whenever an auction is conducted should be commended. However, there are a number of unresolved issues that still need to be resolved so that the diamond industry can contribute meaningfully to the growth and development of this country.

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