Zim’s top investors under scrutiny

The Centre for Natural Resource Governance (CNRG), in a recent report, accused the top three investors in Zimbabwe of shortchanging the economy through questionable operations in Zimbabwe.

According to the Zimbabwe Investment Authority, China led in investment in 2013 with $374.8m, followed by Russia ($40.1m) and then South Africa ($39m). These three are part of the BRICS group of countries (Brazil, Russia, India, China and South Africa).

In the report – The Dark Side of BRICS Investment – CNRG said: “BRICS investments in Zimbabwe over the past decade have been often highly controversial and of little consequence to employment creation and revenue generation.”

Several Russian companies currently operate in the mining sector, among them DTZ-OZGEO (Pvt) Limited that is jointly owned by the Development Trust of Zimbabwe (DTZ) and Russia’s Econedra, which mines diamonds and gold in Manicaland and the Midlands provinces.

Other Russian companies, Rostec and Vneshekonombank are waiting in the wings to invest in platinum.

“DTZ-OZGEO has performed poorly in terms of transparency, environmental management and corporate social responsibility,” said CNRG.

President Mugabe has also criticised the mining company for failing to release revenue to Treasury and for lacking transparency.

In August last year, the firm, which has also been accused of failing to give back to the community, was fined for damaging the environment, and temporarily stopped from operating.

India came under attack from CNRG for murky deals that haf taken too long to bear fruit or were skewed.

Essar, one of the Indian companies, won the rights to revive the Midlands based Ziscosteel company in 2011 after an international tender, but operations are yet to resume.

Another Indian company, National Mineral Development Corporation (NMDC), which is set to exploit diamonds, gold, chrome and iron ore was criticised for taking advantage of Zimbabwe’s economic crisis to pressure the government into signing a lopsided deal.

The memorandum of understanding gives NMDC equal shares with Mosi-oa-Tunya, a local government operation, in contravention of the indigenisation law that obliges foreign companies to give 51 percent to Zimbabwean companies.

“BRICS nations appear to be taking advantage of Zimbabwe’s stand-off with western nations to negotiate deals that prejudice the Zimbabwean economy of billions of dollars at a time the Zimbabwean economy is in a comatose state. Zimbabwe needs investors who inject life into its struggling economy, not those who take advantage of its situation to plunder resources,” said CNRG.

China has been accused of importing its own nationals to work at its firms instead of employing the locals. Firms have also been accused of labour law contraventions and human rights abuses.

“Critics have argued that Chinese aid and investments in Africa, Zimbabwe included, have done little to improve human security, but rather have strengthened military and political ties at the expense of development,” said CNRG.

The value of South Africa’s investment, through companies such as Gold Fields, Implats, Aquarius Platinum and Anglo American plc, is questionable, said the watchdog, which argued for improving western ties as they came with ”better regard for human rights, better working conditions and better corporate social responsibility”.