Responsible Investment in The Natural Resources Sector: An Analytical Profile of The Mining Sector in Zimbabwe

RESPONSIBLE INVESTMENT IN
THE NATURAL RESOURCES SECTOR

An Analytical profile of the Mining Sector in Zimbabwe
Published by:
Zimbabwe Environmental Law Association (ZELA)
Authors:
Rodney Ndamba & Lenin Tinashe Chisaira
Supported by:
Ford Foundation
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Copyright:
2016, Zimbabwe Environmental Law Association (ZELA)
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. No use of this publication may be made for resale or other
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Disclaimer:
The views expressed herein do not necessarily

represent those of the Ford Foundation but those
of the authors.
Year of Publication:
2016
Available from:
Zimbabwe Environmental Law Association (ZELA)

No. 26B, Seke Road, Hatfield, Harare.
Email: zela@mweb.co.zw,
Website: www.zela.org;
Twitter:@ZELA_Infor
CONTENTS
1.
2.
3.
4.
5.
6.
7.
7.1.
7.1.1.
7.1.2.
7.1.3.
7.1.4.
7.1.5.
7.1.6.
7.2.
7.2.1.
7.2.2.
8.
9.
10.
11.
4
INTRODUCTION
6
LITERATURE REVIEW
CONCEPT OF RESPONSIBLE INVESTMENT 8
CONTEXTUAL ANALYSIS OF RESPONSIBLE INVESTMENTS
10
IN ZIMBABWE
INVESTMENT IN THE NATURAL RESOURCES SECTOR 12
RESPONSIBLE INVESTMENT PRACTICES IN THE EXTRACTIVE
SECTOR IN ZIMBABWE 15
LEGAL, POLICY AND POLITICAL ASPECTS GUIDING
16
RESPONSIBLE INVESTMENTS IN ZIMBABWE
LEGAL FRAMEWORK 16
The Constitution of Zimbabwe 16
The Zimbabwe Investment Authority Act 20
Mines and Minerals Act 21
Environmental Management Act 25
Labour Act 26
Indigenisation and Economic Empowerment Act 28
POLICY FRAMEWORK 29
Zimbabwe Agenda for Sustainable Socio-Economic
Transformation (Zim Asset) 29
Political Environment 33
UN GUIDING PRINCIPLES ON BUSINESS AND HUMAN RIGHTS
RECOMMENDATIONS OR OPPORTUNITIES FOR RESPONSIBLE
INVESTMENTS IN THE EXTRACTIVE SECTOR 37
CONCLUSION 41
42
BIBILIOGRAPHY
35
ACRONYMS
CRISA
Code for Responsible Investing in South Africa
EMA
Environmental Management Agency
ESCAP
Economic and Social commission for Asia and the Pacific
ESG
Environmental, social and corporate governance
FDI
Foreign Direct Investment
INSAF
Institute for Sustainability Africa
SRI
Socially Responsible Investment Index
UNPRI
United Nations Principles for Responsible Investment
ZCDC
Zimbabwe Consolidated Diamond Company
ZELA
Zimbabwe Environmental Law Association
ZIA
Zimbabwe Investment Authority
ZIM ASSET
Zimbabwe Agenda for Sustainable Socio-Economic

Transformation
ZMDC
Zimbabwe Mining Development Corporation
Ii
Pg 4
RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR
1. INTRODUCTION
The call for responsible investments has been rising slowly in the past four
years in Zimbabwe. A number of initiatives have been placed and more
need to be placed in order to respond to rising corporate failures and poor
corporate governance practices by shareholders and investors especially
those in the natural resources sector. Some mining companies in
Zimbabwe have been accused of unsustainable business practices that
ignore community rights and environmental impacts. Above all, the
investment environment in Zimbabwe has largely been characterised by
lack of shareholder activism, unsustainable business values, poor corporate
governance and corruption. In an ideal setting, investors must use their
collective position to drive sustainable business values in the companies
they invest in. This paper explores the fundamental concept of responsible
investments, gives a contextual analysis of investment practices in the
natural resources sector while exploring opportunities for driving
sustainable and responsible investing in Zimbabwe. The natural resources
and extractive sector remains one of the major fiscal contributors, although
it is associated with high social, economic, political and environmental impacts. In
early 2016, the President of Zimbabwe, Robert Mugabe exposed that amounts
going up to US$15 billion have been externalized by diamond mining
companies operating in the Marange area. This is highly significant in a
country whose annual budget is a mere US$4 billion.
A nation that places people's needs as a priority above private profits
should particularly ensure that investments and business decisions are
done after thorough assessments of human rights and environmental justice.
However, political inconsistences and doubtful capacities on the part of the
Zimbabwean government agencies and authorities have characterised the
response to investment in the country. Zimbabwe's legal, policy and
political environment has been characterised by glaring inconsistences and
political whims. Much study is needed to constantly re-look at the impacts
of the legal, policy and political environment on investments in the country.
RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR Pg 5
The existing laws contain some important provisions that should guide
responsible investments, however lack of capacity and sometimes lack of
political will has hindered progress towards responsible investment. To
determine whether responsible investment is effectively catered for and
enforced, the existing legal and policy framework on investment needs to
be reviewed. The review will further be aimed at ensuring that future
investment initiatives result in considerable gains and benefits for the
majority of the people surviving in the current set-up of an economy that
has been branded as an enclave economy.
Pg 6
2. LITERATURE REVIEW
Recent materials and researches on responsible investment in Zimbabwe
and the entire world have reached the conclusion that there is urgent need
for a change in outlook on the part of business and sometimes government
to depart from purely profit oriented irresponsible practices to people and
sustainability oriented procedures.
A research produced by the Zimbabwe Environmental Law Association on
the impact of chrome mining in the Great Dyke area of Zimbabwe points
out that whilst the ideal system is one of sustainability and responsibility on
the part of business leading to community development and happiness,
in reality, the socio-economic charm and benefits from mineral
wealth abundance has been privatised by corporates and few
corrupt, politically well-connected individuals. Host mining
communities find obscured the C in the Charm of mineral wealth
abundance but only see the Harm. The Great Dyke has been
tainted into The Great Threat. 1
The research report gives some key recommendations that should be taken
into consideration on the drive to attain responsible investment in
Zimbabwe. The report recommends that Open and unsecured mining pits
that are disused or in use must be rehabilitated or fenced by mining
2
companies to eliminate the risk posed to people and animals and goes
further to charge that, in the country, Issuance or renewal of mining license
should be merit based considering the performance on issues such as
environmental rehabilitation, corporate social investments and a social
3
license to operate.
Another important addition to the literature on responsible investments in
the natural resources sector, comes from the authoritative United Nations'
Economic and Social Commission for Asia and the Pacific (ESCAP) which
released a report titled Responsible Business and Sustainable Investment
1
Sibanda, M, From the Great Dyke to the Great Threat, page 3

As above, page 10
3
As above, page 10
2
in the Natural Resources Sector in Asia and the Pacific. The report breaks
down challenges and problems in the natural resources sector into
sustainable development challenges which include environmental and
social challenges (land acquisition, involuntary resettlement, and lack of
respect for human and labour rights) and governance challenges which
include corruption and transparency issues. Furthermore, the reports outline
policy challenges which include investment and mining law issues as well as
investment agreements and contracts issues. The report recommends
that investors should participate in responsible investment initiatives such
as the Equator Principles and Principles for Responsible Investment (PRI).
Governments are also recommended to strengthen revenue management
and increase public participation into all stages of the natural resource
extraction project cycle as well as in the review of extractive laws and contracts.4
The last but not least piece of literature on sustainable development
viewed for this paper comes from Jantzi-Sustainalytics.5 The paper titled
Sustainability and Materiality in the Natural Resources Sectors highlights
that:
Without proper engagement with local communities and aboriginal
groups, there is a strong potential that opposition may impede a
miner's ability to maintain business operations. Miners operating in
conflict zones or countries with poor human rights records are
particularly exposed. 6
The encouragement here is that there should be a meeting of the minds
between a serious investor in the natural resources sector and the local
communities. This is an aspect which most of the investors in Zimbabwe
seem to have thrown out of the window, in the end there is everlasting
tension with most of the communities that have been forcibly dislocated
from their ancestral lands as well as those whose crops keep being mowed
ESCAP, Responsible Business and Sustainable Investment in the natural resources sector in Asia
and the pacific, Page 116
5
described as an international and independent sustainability research and services provider
6
Jantzi-Sustainalytics, Sustainability and Materiality in the Natural Resources Sectors, page 7
Pg 8
down in areas like Chisumbanje. Responsible investment encourages

private sector and community discussions as well as keeping track of the
needs of such communities and generally, the needs of all persons.
3.
CONCEPT OF RESPONSIBLE INVESTMENT
Responsible investment is differentiated from conventional investment by

its emphasis on the integration of environmental, social and corporate
governance (ESG) in investment options and decisions. Over the past years,
responsible investment has evolved from just consideration of ESG to a
value system that differentiate responsible investors from mainstream
businesses. The concept of Responsible investment has been largely
defined by the United Nations Principles on Responsible Investment
(UNPRI) as 'an approach to investment that explicitly acknowledges the
relevance to the investor of environmental, social and governance factors,
and of the long term health and stability of the market as whole'.7 Investors
tend to use the term 'sustainable investing' which takes into account EGS
factors that may impacts the performance of an investment portfolio.8 The
concept of responsible investing can be views from the perspective of
guiding the investment process and the framework of making an
investment decision.
The UNPRI approach to responsible investing is formulated through a set of
value statements and beliefs which guide the approach and behavior of
investors. This approach has been replicated in many parts of the World. In
South Africa, the UNPRI principles have been influential in developing the
Code for Responsible Investing in South Africa (CRISA) and Johannesburg
9
Stock Exchange's Socially Responsible Investment Index (SRI). The UNPRI
http://www.unpri.org/introducing-responsible-investment/
Ceres (2013) The 21st Century Investor: Ceres Blueprint for sustainable investing
9
Code on Responsible Investing in South Africa (2011)
provides Six (6) Statements of Commitment to Responsible investment

which require investors to demonstrate their commitment by signing up to
the value statement (Figure 1):
The UNPRI principles are mainly focused on institutional investors and
thrive on commitment and ability to uphold the values. The principles
have guided the management of Trillions of dollars in investment funds
around the world. As of 2015, there were no institutional investors under
Zimbabwe who were signatories to the UNPRI Principles.
Figure 1: UNPRI: The Six Principles

Principle 1: We will incorporate ESG issues into investment analysis and decision-making
processes.
Principle 2:
We will be active owners and incorporate ESG issues into our ownership policies
and practices.
Principle 3:
We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: We will promote acceptance and implementation of the Principles within the
investment industry.
Principle 5:
We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: We will each report on our activities and progress towards implementing the
Principles.
Source: UNPRI (2015)
Pg 10
4. CONTEXTUAL ANALYSIS OF RESPONSIBLE

INVESTMENTS IN ZIMBABWE
The subject of responsible investing is still finding its way in Zimbabwe's
investment world. Over the past four years, great efforts have been made
by the Institute for Sustainability Africa (INSAF) to influence responsible
investment through their project titled 'Shareholders and Investors Forum
on Sustainable and Responsible Investing in Zimbabwe' which is meant to
lead to the development of a Code on Responsible Investing in Zimbabwe
10
(CRIZ). Zimbabwe does not have an existing national framework on
responsible investing. Investment activities in Zimbabwe have been mainly
through institutional investors like pension fund, banks, nominees,
companies and limited individuals. As for the mining sector in Zimbabwe,
11
major investors have been large conglomerate mining companies and
pension funds.
Investments practices in Zimbabwe tend to focus on financial returns, as
compared to an integrated approach of incorporating social and
environments issues. An evaluation of the state of responsible investing in
South Africa (De Jongh et al, 2007) provides a contrast to practices in
12
Zimbabwe. The Investment community in South Africa has strong
consideration of environmental, social and governance issues, which could
be attributed to formal responsible investing and socially responsible
investments systems (De Jongh et al, 2007). The state of responsible
investing in Zimbabwe is largely attributed to the absence of a national
code of corporate governance, lack of shareholder/investor activism and
10
2015 Annual Shareholders and Investors Forum on Sustainable and Responsible Investing
11
KPMG (2013), Investing in the Mining Sector in Zimbabwe: A closer look at the investment
environment
12
The State of Responsible Investing in South Africa (2007)
weak demand for ESG disclosure practices by the investment community.

As such, environmental, social and governance issues have gone unnoticed
even within the natural resources extractive sector where those who take
them into account, do so on a voluntary basis. A research by Ndamba
(2009) showed that only 3% of Zimbabwe Stock Exchange listed companies
disclose information on their environmental impacts in Annual Reports.
In the past 3 years, there has been growing drive in pushing for responsible
investing in Zimbabwe through the Institute for Sustainability Africa
working with partners such as the Securities and Exchange Commission of
Zimbabwe, The Zimbabwe Stock Exchange and the Institute of Directors
Zimbabwe. In 2015, the Zimbabwe Association of Pension Funds (ZAPF)
was admitted by the UNPRI as Network Supporter in driving the
implementation of the Principles on Responsible Investment among
members.13 This development is expected to mark coordinated efforts
towards driving responsible investing in Zimbabwe through pension funds
that hold portfolio sectors such mining sector. However, significant steps
will be required in the banking and finance services sector to drive
responsible investing practices. Existing regulations in the banking sector in
Zimbabwe require improvement to explicitly integrate environmental,
social and governance issues in credit rating and lending processes.
13
UNPRI members 2015
Pg 12
5. INVESTMENT IN THE NATURAL RESOURCES SECTOR

The natural resources and extractive sector in Zimbabwe has been a
significant contributor to Foreign Direct Investment (FDI), especially
through investments in mining sector. The mining sector is mainly governed
through the Mines and Minerals Act (Chapter 21:05) while investment is
processed through the Zimbabwe Investment Authority (ZIA). Investment
processing is managed through a One-Stop Shop (OSS) investment centre
which also houses the Investment Facilitation and Aftercare, Registrar of
Companies, Immigration Control Department, Reserve Bank of
Zimbabwe, Ministry of Mines and Mining, Environmental Management,
and Ministry of Youth Development, Indigenisation and Economic
Empowerment (KPMG, 2013). This structure is meant to accelerate
investment processes across the economy including the mining sector. The
mining sector in Zimbabwe provides opportunities through minerals such
as gold, coal, platinum, chrome, nickel, copper, Iron ore, pegmatite,
dimension stones and diamonds. The marketing of the minerals is
exclusively regulated and monitored through the Minerals Marketing
Corporation of Zimbabwe (KPMG, 2013).
While there has been major investment in the mining sector in Zimbabwe,
the majority of investors have been institutional investors, Multinational
Mining Corporations and government. Major mining companies are
largely owned by multinational foreign owned mining companies who
tend to apply international standards and practices. In contrast, some of
the standards applied by local companies in Zimbabwe are still a bit low. To
profile investment in the sector in Zimbabwe, Table 1provides the account
based on major minerals. Table 1 show that local investment or ownership
has been largely in diamond and coal mining through joint ventures.
The investment structure in the mining sector in Zimbabwe is largely

influenced by the type of mineral and the scale of investment required to
mine it. Highly sophisticated minerals like Gold, Platinum, Nickel and
Chrome tend to be largely dominated by foreign shareholder investments
while other less sophisticated mining process minerals like alluvial
diamonds have been dominated by state owned companies as joint
venture companies with foreigners. Observations from table 1 below
show that major foreign investors for the mining sector in Zimbabwe are
from Canada, South Africa, Australia, United Kingdom and China. It is also
noticeable that high value minerals like Platinum are predominantly
mined through investment from South Africa and Australia while alluvial
diamonds have been predominantly mined through partnerships
between governmentled companies through joint venture companies
with investors from China, South Africa, Lebanon and Mauritius. Table 1
provided as detailed profile major minerals, mining companies and their
ownership:
6.
RESPONSIBLE INVESTMENT PRACTICES IN THE

EXTRACTIVE SECTOR IN ZIMBABWE
Fundamental to responsible investment is the investor drive for

accountability and transparency in the companies they invest in.
Sustainability Reporting has been one of those instruments investors tend
to use to demonstrate their responsibility by demanding information from
companies prior to investing. Sustainability reporting using the Global
Reporting Initiatives (GRI) - Sustainability Reporting Guidelines provides
for disclosure of economic, environmental and social impacts of
14
companies. Social issues covered under the guidelines relate to issues of
labour, communities, gender, human rights, compliance and products
15
responsibility. However, these guidelines are gradually being adopted in
Zimbabwe. To date, the guidelines are contained in instruments such as
the National Code on Corporate Governance in Zimbabwe (ZIMCODE,
16
2015) and the Zimbabwe Stock Exchange Listing Rules.
A review of the mining companies in Table 1 show foreign owned platinum
and gold mining companies leading the disclosure of ESG information
which in turn can be a demonstration of the responsible investors behind
the companies. However, major concerns have been noted in some of
mining companies mainly in diamond and chrome mining. Concerns have
been associated with poor working conditions, health and safety of
workers, community rights (relocations) and environmental (rehabilitation
or mining closure procedures). These areas provide potential opportunity
for responsible investing consideration and improvements.
14
The Global Reporting Initiatives (GRI)

The Global Reporting Initiative GRI G4 Guidelines (2014)
16 The National Code on Corporate Governance in Zimbabwe (Zimcode)
15
Pg 16
7.
LEGAL, POLICY AND POLITICAL ASPECTS GUIDING

RESPONSIBLE INVESTMENTS IN ZIMBABWE
7.1. LEGAL FRAMEWORK

The legal framework governing responsible investment in the natural
resources sector in Zimbabwe consists of various pieces of legislation with
17
the main ones being the Zimbabwe Investment Authority Act, Mines and
18
20
19
Minerals Act, Environmental Management Act, Labour Act and the
21
Constitution of Zimbabwe among others. The Constitution of Zimbabwe
buttresses all existing legislation by providing for social and economic
rights that can be claimed by every person that are directly or indirectly
affected by business operations.
International law also influences responsible investment. This branch of law
usually refers to conventions, treaties, agreements and other sources of
international law as outlined in Article 38 of the Statute of the International
Court of Justice. Soft law instruments, (those international declarations that
may not have the force of law but usually have persuasive effects) are also a
necessity and encourage the inclusion of sustainable development models
and the protection of human and environmental rights as well as the
sovereign right of nations in their interactions with usually powerful investor
interests. To the soft-law category belongs the key UN Human Rights
Council document entitled 'Guiding Principles on Business and Human
Rights: Implementing the United Nations Protect, Respect and Remedy
Framework.'
7.1.1. The Constitution of Zimbabwe
The Zimbabwean Constitution is one of the newest in the world, and has
some very progressive clauses, on top of being the supreme law of the nation.22
17 [Chapter 14:30]
18 [Chapter 21:05]
19
[Chapter 20:27]
20
[Chapter 28:01]
21
Amendment (No 20) Act,2013
22
Sec 2 (1) of the Constitution
The Constitution for the first time provides for the right of every person to
an environment that is not harmful to health and that takes into
considerations ecologically sustainable development and use of natural
23
resources while promoting economic and social development. If utilised
well this would be the backbone of responsible investment in the natural
resources sector in Zimbabwe since natural resources would be utilised in a
considerate manner that advances the people's social and economic
livelihoods.
The objectives of the 2013 constitution present immense possibilities for a
clear responsible investment. The Constitution state that Zimbabwe is
24
founded on values and principles that include the following:
Fundamental human rights and freedoms;
Recognition of the inherent dignity and worth of each human being;
Recognition of the equality of all human beings;
Gender equality;
These values and principles are backed up by progressive provisions in
the National Objectives and in the Declaration of Rights. The national
Objectives are meant to guide the State and all institutions and agencies of
government at every level in formulating and implementing laws and
policy decisions that will lead to the establishment, enhancement and
promotion of a sustainable, just, free and democratic society in which
25
people enjoy prosperous, happy and fulfilling lives.
The specific National Objectives26 which have a bearing on responsible
investment include the objectives of fostering of fundamental rights and
freedoms which in essence promotes the realisation of the rights outlined
in the Declaration of Rights and which will be discussed later. The objectives
also include the attainment of national development; empowerment and
employment creation; culture; gender balance; the best interests of
children in matters relating to children; affirmative action programmes for
23
Sec 73 of the Constitution

25
26
See generally, Chapter 2 of the Constitution
24
Pg 18
youths; the respect, support and protection for elderly persons ;

recognition of the rights of person with physical or mental disabilities; work
and labour relations; provisions of shelter, health services and social
welfare; the preservation of traditional knowledge including knowledge of
the medicinal and other properties of animal and plant life possessed
by local communities and people (this is a very important objective,
since at times most multinational companies, especially those in the
pharmaceutical industry seek to patent medicinal knowledge at the
expense of traditional communities); Finally the last - but not least - national
objective is on the need for the Sate to ensure that all international
conventions, treaties and agreements to which Zimbabwe is a party are
incorporated into domestic law.
The state being the entity empowered with the enforcement of responsible
investment principles, and being also the overseer of the activities of
multinational investors indeed needs to ensure that all such engagements,
contracts and overseeing of the activities of investors in the extractive
sector are conducted within the ambit of the mentioned constitutional
values, principles and objectives.
The Constitution contains a very comprehensive Declaration of Rights that
27
protects the rights of every person such as labour rights, access to
29
28
30
information, administrative justice, environmental rights, and freedom
32
33
from arbitrary eviction,31 health care as well food and water. These rights
can easily be overrun by business operations in an environment where
investors are not socially responsible. This has already been observed in
areas such as Marange (diamond extraction), Chisumbanje (ethanol
production), Shurugwi (gold and chrome mining), Mutoko (granite
mining) and Zvishavane (platinum and other minerals).
27

29
30
31
32
33
28
However, it is important to note that the existence of these rights in the

Constitutions, gives a duty to every person, natural or juristic, to uphold
these rights. Juristic refers to corporates and this has implications on
corporate investors who are also expected to uphold Constitutional rights.
In terms of the Constitution, the obligations imposed in the document are
binding on every person, natural and juristic, including the State and all
executive, legislative and judicial institutions and agencies of government
34
at every level, and must be fulfilled by them.
The Constitution also contains other founding values, national objectives
and principles of good governance that can be used to promote
responsible investments by state entities as well as even private entities
35
including the need for transparency and accountability, personal integrity,
financial probity, and adoption of measures to expose, combat and
eradicate all forms of corruption and abuse of power by those holding
public office. In particular, Section 195 of the Constitution has a great
bearing on investments since it states that companies and other
commercial entities owned by the state must abide by generally accepted
standards of good corporate governance. They are also required to
establish transparent, open and competitive procurement systems. Further,
in terms of public administration in cases where state entities are involved in
investments, the officials may be bound by the principles of public
administration and leadership in Section 194 of the Constitution. In
particular, all public officials are bound by the following principles; timeous
response to people's needs, promote public participation in policy making,
accountable to the people and parliament, providing the public with
accessible and adequate information, ensuring that employment especially
within state entities and agencies should be based on merit and equality
between men and women.
34
35
Sec 2 (2) of the Constitution.

Section 3(2)(g)
Pg 20
7.1.2. The Zimbabwe Investment Authority Act
36
The Zimbabwe Investment Authority Act is one of the key legal instrument
in discussing responsible investment in Zimbabwe. The Act was passed in
2007. The Act established the Zimbabwe Investment Authority (ZIA), a
statutory body whose main objective is the promotion and co-ordination
of investment in the country. It repeals the Zimbabwe Investment Centre
37
38
Act and the Export Processing Zones Act.
In terms of the Act, all persons intending to invest in Zimbabwe have to 40
39
make an investment application to an Investment Committee established
in terms of the Act. When considering an application for an investment
licence, the ZIA is obliged to take into account various aspects. Key
considerations taken into account include the extent to which skills and
technology will be transferred for the benefit of Zimbabwe and its people;
the extent to which the proposed investment will lead to the creation of
employment opportunities and the development of human resources; the
likely impact the proposed investment is to have on the environment and
the measures proposed to deal with those adverse environmental
consequences. The Investment committee is also responsible for making
recommendations to the ZIA Board to approve or refuse to approve any
investment applications submitted to the Authority by any prospective
domestic or foreign investors. The Board therefore has the powers to reject
or accept the application.
These provisions point to the availability of legislation that can provide for
responsible investment in Zimbabwe. Investors need to be oriented
towards developing the local populace and transferring skills rather than
merely focusing on profit-making. In this regards the Act is one part of the
investment legal framework that can be utilised to provide for responsible
investment in the natural resources sector.
36
[Chapter 14:30]
[Chapter 24:16]
38
[Chapter 14:07].
37
39
40
Sec 13 of the Zimbabwe Investment Authority Act

As above, Sec 6 (1)
7.1.3. Mines and Minerals Act
41
The Mines and Minerals Act is an old piece of legislation, whose main
objective was to protect mining interests and investments, although it also
contains provisions that can go a long way in ensuring that responsible
investment caters for the rights of both miners and the mining communities
including their land, water, social, health and environmental rights. There
are many provisions related to the issuance of mining licences and
actual mining operations that can be viewed as promoting responsible
investments. The Act identifies about six principal titles for mining and
exploration and these are; Exclusive Prospecting Orders (EPO) and Special
Grants for exploration in reserved areas. The mining licences have different
requirements to be satisfied by applicants that can be viewed as
requirements for all mining investors for both local and foreign depending
on the licence category. In terms of the Mines and Minerals Act, the Mining
Affairs Board has a duty to ensure that all applicants for mining licences
meet the application requirements. For example, foreign investors who
apply for Special Mining Leases in terms of Section 159 of the Mines and
Minerals Act are required to develop a Mining Development Plan that takes
proper account of environmental and safety factors, ensure that the
programme for mining operations will ensure the efficient, timely and
beneficial use of the mineral resources concerned. An applicant for a
Special Mining Lease miner is supposed to present proposals for the
prevention or treatment of pollution, the treatment and disposal of waste
and the protection of rivers and other sources of water, the reclamation and
rehabilitation of land disturbed by mining operation as well as on
monitoring the general effect of mining operations on the environment.42
The applicant for a special mining lease is also supposed to include
proposals for the procurement and use of local goods and services and the
43
employment of Zimbabwean citizens. This requirement enhances the
sharing of benefits from the extractive sector between foreign investor and
the local populace. Other conditions may be imposed as recommendations
44
by the Mining Affairs Board and these may be used to promote
responsible investments in the mining sector.
41
[Chapter 21:05]
Sec 159 (3)(e) (vii) of the Mines and Minerals Act.
43
As above, Sec 160 (2) (e)
44
As above, Sec 159 (3) (g)
42
Pg 22
The Mines and Minerals Act also outlines that no claim holder of a
registered mining location should be entitled to peg or acquire any site on
any town lands unless and until he has obtained the consent in writing of
the local authority concerned or, failing the consent of such local authority,
45
the consent of the President.
Furthermore, the Act also places limitations on miners' rights by prohibiting
holders of prospecting licences or of mining locations situated on town
lands from cutting indigenous wood or timber upon such lands without the
consent of a mining commissioner. The mining commissioner
himself/herself should only give his consent when such wood or timber
interferes with prospecting or mining operations or the erection of
buildings required for such operations.46
The Act also seeks to promote establishment of a responsible mining
industry in terms of the disposal of subterranean water. It provides that:47
(1) The holder of any mining location situated on town lands
shall lead into the nearest natural water channel any water
issuing from or brought to the surface of the ground from
the subterraneous working of such location and not being
used by such holder.
(2) The holder, while complying with subsection (1), shall not
pollute any water in such channel
In the Zimbabwean extractive sector, especially in the platinum rich areas
of Shurugwi and Zvishavane, there has been severe problems caused by
the effects of abandoned and uncovered mine pits. Rural and
neighbouring communities living in these areas have always complained,
especially after engagements with the Zimbabwe Environmental Law
Association, about how human life, livestock and children continue to
perish due to the uncovered and unfenced abandoned pits in the areas.48
45
As above, Sec 310

As above, Sec 311
47
As above, Sec 312
48
Page 5,6 of Community Voices on Mining Impacts, ZELA Publication, Harare,2015
46
Despite the presence of such human hazards, the Mines and Minerals Act
49
provides for ways and means of dealing with mine pits therefore signalling
that the problems with responsible investment in Zimbabwe's mining sector
is not necessarily the absence of proper laws but failure by the mining
investors to comply or failure by government to monitor and inspect
compliance with mining laws. The act provides for the protection and filling
up of open workings by prospectors by requiring that:50
(1) Every person digging a prospecting trench shall throw
out the earth in such manner as to form as far as possible
regular ridges on either side of such trench.
(2) Every person acting under and by virtue of any
prospecting licence, exclusive prospecting order or special
grant shall fence or enclose the mouths of all his shafts and
other open surface workings and excavations sufficiently to
ensure the safety of persons and stock, and he shall
maintain such fencing or other works in good and effective
repair while carrying on his work and before abandoning
any prospecting area, he shall fill in such shafts, workings
and excavations or shall so fence or deal with them as
permanently to ensure the safety of persons and stock, and
shall restore any work previously erected or constructed for
the protection of mine workings which he may have
removed or interfered with, and shall notify the occupier, if
any, of the land that he has completed the protection work
required under the provisions of this subsection:
Provided that if any such shaft, working or excavation is
within twenty metres of a public road or thoroughfare he
shall not fence it, but shall fill it in.
The provisions of the Mines and Minerals Act highlight that, despite the outdatedness and the history of the Act as a product of a colonial system that
was bent on ruthless exploitation of natural resources, there indeed exists
provisions in the same legislation that can make life more bearable for
communities living around mining locations. The solution is in the
49
50
Sec 370 of the Mines and Mineral Act

As above
Pg 24
capacitation of both business and government agencies that are

responsible for environmental rehabilitation.
From a human rights perspective however the Act seems to have loopholes
especially as regards the eviction of people living in the vicinity of a mining
location. Such people are referred to as squatters. The Act provides that if it
appears to the mining commissioner that a registered mining location
occupied by any person in reliance on mining title is being occupied
otherwise than for bona fide mining purposes in accordance with the rights
conferred on the miner thereof by section one hundred and seventy-eight,
he may serve an order upon the occupier to vacate the mining location.51
The problem with this provision is that if used against a community member,
it is usually very difficult for the person to effectively challenge the eviction
as there is supposed to be a certain sum of money to be paid on appealing
against the order. 52 This is unfair on community members who may have the
order issued against them without their knowledge, hence violating their
right to freedom from forced eviction.
It is however important to note that since 2015, Parliament and the
Executive are working on a Mines and Minerals (Amendment) Bill.53 If the Bill
pulls through, the amended act will add a whole new Part XVA focusing on
Environmental Protection. A significant development in environmental
protection will be the establishment of a Safety, Health and Rehabilitation
Fund into which every miner shall make an annual contribution. The Fund
shall be used for the rehabilitation of the environment with regard to
environmental degradation caused by, among others, the following mining
54
activities:
Mine fires and explosions;
Entrapments and inundations;
Ground subsidence;
51
As above, Sec 381 (1)

As above, Sec 381 (3).
53
An analysis of the Mines and Minerals Amendment Bill, 2015 is in the process of being
compiled by ZELA and the Publish What You Pay-Zimbabwe (PWYP-ZIM) coalition.
54
Proposed Sec 257E of the amended Mines and Minerals Act
52
Tailing and waste dump breaches and contamination;

Chemical spillage or acid mine drainage; and
Closed mine risks (chemical leaks, water contamination and collapse).
The amended Act will also require miners to fence off their mining
locations adjacent to pasture lands.55 Land owners and occupiers who have
been injuriously affected by mining operations will be entitled to recover
compensation from the mines through agreements or failing that, through
56
the determination of the Administrative Court. These provisions will go a
long way in addressing farmer-miner conflict.
7.1.4. Environmental Management Act
57
The Environmental Management Act outlines the environmental rights of

every person as well as some components of environmental governance.
In essence the Act guarantees every person the right to live in a clean
environment that does not cause harm to health. The Act also provides
that it is the right of every person to protect the environment for the
benefit of present and future generations. This means even corporates as
legal persons are also included. It is the further duty of every person, in
terms of the legislation, to participate in the implementation of reasonable
legislative policy and measures that prevent pollution and environmental
degradation, as well as measures that secure ecologically sustainable
management and use of natural resources while promoting justifiable
economic and social development.58
One of the major issues of concern to many investors has been the
requirement for carrying out and preparation of Environmental Impact
Assessment Reports by any project proponent whose proposed project is
59
listed in the Act as requiring an EIA. For example, before commencement
of any operations the following projects are required to be undertaken
55
As above, Proposed Sec 85A

As above, Proposed Sec 85B
57
[Chapter 20:27]
58
Sec 4 (1) (c) of the Environmental Management Act
59
Section 97
56
Pg 26
after an EIA has been carried out and an EIA Certificate obtained from the
Environmental Management Agency; mining water supply, irrigation,
agriculture, waste treatment, power-generation, oil and gas exploration,
various industries, infrastructure development, forestry, dams and
60
housing projects among others. EIAs are an important tool that can be
used to identify the potential environmental, social and economic impacts
of a particular project on the community or the nation as a whole. Once
the risks or potential impacts are identified, measures to address them
must also be identified. If followed properly EIA's are a sure way of
promoting responsible investments in the country. However, what has
been problematic in practice is that once the investors or project
proponents get the EIA certificate they fail to comply with their EIA
commitments and measures to address the negative impacts of their
operations on communities such as water pollution, land degradation,
displacement of communities and other commitments. Nevertheless,
while monitoring of compliance with EIA requirements has also been
affected by lack of financial and human resources at EMA, many investors
and mining companies in Zimbabwe have been complaining that EIA
requirements and other environmental obligations imposed by EMA are
stifling or affecting investments. This has led to calls by different
stakeholders including the corporate sector for EMA to carry out a study
on the impacts of environmental legislation and requirements on
investments.
The described provisions are main elements that make up the concept of
sustainable development. Such principles and measures of ensuring
sustainable development by the legislature are key factors in attaining
responsible investment in the exploitation and extraction of natural
resources.
61
7.1.5. Labour Act

There cannot be responsibility in investment if human capital in terms of
labour is not adequately catered for. Zimbabwe has a Labour Act whose
60
61
FIRST SCHEDULE (Section 2 and 97)

[Chapter 28:01]
main objective is the advancement of social justice and democracy in the

62
workplace. The legislation also supports the promotion of human rights
63
in the workplace through providing for non-discrimination on numerous
64
grounds including sex and race as well as fair labour practices and
employees' right to democracy in the workplace.65 This is an enactment
that will be essential in ensuring that labour, as a key human resource, is
cushioned from irresponsible investment. The protection of human rights
in the business environment must start with the labour rights of the
workforce.
The position at the moment is however disadvantageous for labour
following a High Court decision in July 2015 in the Don Nyamande and
66
Anor v Zuva Petroleum case. The judgement led to the loss of jobs at
unilateral three months' notices issued by employers. These developments
especially at a time when the government is busy courting investors by all
means, can easily throw efforts to attain real responsible investment down
the drain.
It is imperative however that labour rights be given priority and
considerations when it comes to investment deals and decision-making.
This is the sector which is directly involved in the production processes as
well as the one that would suffer the worst when it comes to labour rights
violations and irresponsible company shutdowns. Disregard for labour
rights in neighbouring countries like South Africa have in recent years led
to the death of miners after police confrontations in places like Marikana,
67
Rustenburg. At the moment in Zimbabwe, there are serious fights in the
natural resources sector in areas like Chisumbanje where Green Field
Ethanol Projects are being carried out, with serious conflicts68 between
62
Sec 2A (1) of the Labour Act.

As above, Sec 5.
64
As above, Sec 6.
65
As above, Sec 7.
66
SC 43/15
67
http://photoblog.nbcnews.com/_news/2012/08/16/13317646-south-africa-police-fire-onstriking-miners-killing-34
68
Newsday, accessed at
https://www.newsday.co.zw/2014/05/26/green-fuel-petitioned-boundary-clashes-villagers/
63
Pg 28
the community, the company, the underpaid workers and the police
continue to ring out. These problems are the natural result of serious
human rights, environmental and labour issues and point out to
irresponsible investment.
7.1.6. Indigenisation and Economic Empowerment Act 69
The Indigenisation and Economic Empowerment Act was a bold move by
the Zimbabwean government to ensure that business profits also
benefit a significant part of historically disadvantaged people. The Act has
influenced policies and statutory instruments that cater for, among others,
Community Share Ownership Trusts and Employee Share Ownership
Trusts.
The Minister of Youth, Indigenisation and Economic Empowerment
70
indicated the following as noteworthy provisions under the Act:
The key objective of the Act is to achieve at least 51% indigenous
shareholding in the majority of businesses in all sectors of the
economy.
The provisions that indigenous Zimbabweans must be suitably
represented in the governing bodies in all these businesses.
The provisions for the establishment of the National Indigenisation
and economic Empowerment Charter. The Charter will provide for
ethical business conduct for all businesses and outlines the
fundamental principles, which have to be observed and followed
by businesses as they undertake their day to day activities.
The provision for the National Indigenisation and Economic
Empowerment Fund. The Fund will provide financial assistance for
share acquisition, warehousing of shares under employee share
ownership schemes or trusts, management buy ins and buy outs,
business start-up, consolidation and expansion.
69
70
[Chapter 14:33]
Kasukuwere, S (Hon), Government Perspective on the Historical and Contextual background to
indigenisation and Empowerment Reforms in Kempton Makamure Labour Journal, Vol 3:2011
(Zimbabwe Labour Centre & KMLLS Board, University of Zimbabwe) ISSN 2223-5337
It must be mentioned that the Act has led to significant economic

participation and social service delivery in areas like Zvishavane,
Shurugwi, Tongogara and Runde due to the works of Community Share
Ownership Trusts. Furthermore, the Act has ensured that businesses do
not always hide under the voluntary nature of corporate social
responsibility but also empower communities to attain developmental
goals from the proceeds of natural resources found in their localities.
7.2.
POLICY FRAMEWORK
7.2.1. Zimbabwe Agenda for Sustainable Socio-Economic

Transformation (ZimAsset)
The Zimbabwean economic blueprint (2013-2018) is known as Zim Asset.
The blueprint offers some insight into the relevance of both the natural
resources' sector and the need for local empowerment in the sector in
order to enforce responsible investment. The drafters of Zim Asset state
that the blueprint was crafted to achieve sustainable development and
social equity anchored on indigenization, empowerment and
employment creation which will be largely propelled by the judicious
exploitation of the country's abundant human and natural resources.71
This is a clear indication that government policy is now greatly influenced
by the exploitation of the natural resources' sector, however coupled with
the creation of employment and empowerment of locals.
In terms of state policies on responsible investment in the natural
resources sector much needs to be said. Recent times saw the increased
role of Asian countries such as China, India and Japan investing in
Zimbabwe as a result of the pronounced Look East Policy. The involvement
of Asian countries has had adverse impact on the social, political and
economic set up of the nation, with incidences where responsible
71
Foreword to Zim Asset.
Pg 30
investment considerations have been thrown out of the window. These

incidences include the controversial allocation of a licence for the
construction of the Chinese Shopping Mall called Long Cheng Plaza on a
72
wetland in Harare. In addition, the use of diamond revenues from Anjin
Pvt to pay a loan for the construction of a military academy by
government instead of making the money available for social services and
other pressing social needs also raises concerns about responsible
investments by the Chinese and the Zimbabwean government.
Since 1980 government came up with various economic policies, which
were at times meant to respond to the global and national dynamics at
each stage of the country's developmental history. These included
structural adjustment programs at the fall of the Soviet Union and the
ending of the Cold War as well as economic recovery strategies after the
73
economy went into a free-fall in the 2000s.
The key economic policy at the moment is the Zimbabwe Agenda for
Sustainable Socio-Economic Transformation (ZIM ASSET) with the vision
outlined as Towards an Empowered Society and a Growing Economy
and the mission being To provide an enabling environment for
sustainable economic empowerment and social transformation to the
people of Zimbabwe. The policy will run from 2013 up to 2018 when the
current government term of office will end and the next general elections
will be held.
The objective of ZIM ASSET is to accelerate economic growth based on
indigenization, empowerment and exploitation of natural resources.
Sadly, Zim Asset woefully misses specific and concrete strategies on
fighting corruption, mismanagement of natural resource revenues,
human rights violations and transparency and accountability. The
programme has four strategic clusters that are identified as; Food Security
and Nutrition; Social Services and Poverty Eradication; Infrastructure and
72
73
http://nehandaradio.com/2013/12/18/chinese-mall-opens-despite-warnings-from-environmentalists/
B. Raftopoulos, 'The Labour Movement and the Emergence of Opposition Politics in Zimbabwe,'
in B. Raftopoulos and L. Sachikonye (eds), Striking Back: The Labour Movement and the PostColonial State in Zimbabwe, 19802000 (Harare: Weaver Press, 2001), pp. 124.
Utilities; and Value Addition and Beneficiation. On funding, the following,

interalia, have been identified as financing mechanisms for Zim Asset; tax
and non-tax revenue, leveraging resources, creation of a Sovereign
Wealth Fund, re-engagement with the international and multilateral
finance institutions and focusing on Brazil, Russia, India, China and South
Africa (BRICS).
From the above, there are a number of scenarios that may be important to
focus on from an investment perspective. Firstly, given the centrality and
potential of mining as an economic growth factor, there is need to focus on
contract and revenue transparency in the extractive sector. This is because
a lot of mining contracts will be signed with many investors as the country
is trying to re-engage other countries and international players. The most
notable countries are China, India, Brazil and South Africa (the BRICS
countries) as these are viewed as friendly by the new ZANU PF
government. The focus on BRICS is stated in the Zim Asset. It is likely that as
the country faces the economic squeeze due to ZANU PF's
uncreditworthness, in order to attract investors, it will give away many
mining contracts to investors from these countries. The mining investment
deals are likely to be without any stringent terms and conditions. These
companies may as well get a lot of tax exemptions and other incentives.
Further, Zimbabwe may also be an attractive destination for opportunists,
daring and get rich-quick mining outfits and investors that will be attracted
by the use of the United States dollars (US$) and tax incentives in the
country. This is because other countries are hesitant to invest in
Zimbabwe. The opportunists are likely to snap up, in many cases corruptly,
a lot of mining rights and start mining or resell the rights at a much higher
price. This situation would clearly necessitate adoption of measures by civil
society to promote contract and revenue transparency initiatives.
ZIM ASSET also recognises the governments' position on sanctions and
states that the country is experiencing worse conditions in the social and
economic sphere as a result of illegal economic sanctions imposed by
74
Western countries.
74
Executive Summary of the Zimbabwe Agenda for

Sustainable Socio-Economic Transformation (ZIM ASSET)
Pg 32
Further, other natural resources related issues pointed out in ZIM ASSET
include its acknowledgement that the country faces severe environmental
management challenges such as pollution, poor waste management,
deforestation and land degradation, veld fires, poaching and biodiversity
75
loss. The economic blueprint also acknowledges that the country is
susceptible to perennial floods and droughts caused by climatic changes
emanating from global warming. In the end all these factors affect the
natural resources sector and climatic issues have an adverse impact on the
country's agro-based economy.
The ZIM ASSET document looks at environmental management as one of
its key result areas under the Food and Nutrition Cluster. The outcome for
that area is to attain improved natural resources management. This will be
achieved by the strengthening and implementation of a climate and
disaster management policy, putting in place a comprehensive veld fire
management framework, capacitating Local authorities and EMA to
manage pollution and waste.
The strategies adopted by the ruling government in terms of ZIM ASSET
consists of continuous advocacy and awareness campaigns, the
enactment of legislation to effectively manage the environment and the
formulation of a national climatic change policy. In this vein, it is sufficient
to note that the Zimbabwe government has already put strides into
coming up with a national climate change policy document, the national
climate change response strategy.
However, it is interesting to note that the Zim-ASSET policy document has
been developed in a country that has witnessed ravages on human rights
violations yet, there is no single mention of the term human rights in the
entire ZIM ASSET document. Meanwhile the document continues to
blame sanctions for the lack of investment on the sanctions imposed on
the country.76 In a nutshell, the policy document does not effectively cater
75
Clause 2.23 of ZIM ASSET

As above, Clause 2.10.
76
for responsible investment that takes into account human rights principles
in Zimbabwe. The government should come up with an investment
strategy that takes into consideration the human rights aspect of business.
7.2.2. Political Environment
Political infighting both internal and external in the Zimbabwe's biggest
political parties and most importantly since the early 2000s, have led to a
situation where the country's investment environment has become highly
inhospitable. The controversies on the fast track land reform program and
elitist grabbing of businesses under the guise of Indigenisation and
Economic Empowerment also added up to the lack of predictability in
investments in the local economy.
The fighting that rocked Zanu Pf towards the party's congress in 2014
centred on allegation and counter-accusations of political elites who were
in the habit of demanding certain percentages of shares as paybacks for
facilitating investment deals as well as entering into illicit diamond deals
77
and embarking on extortion. The infighting led to the expulsion of the
country's Vice-President. 78
These political fights have contributed to the country itself being regarded
as a high risk destination in terms of foreign investment. Presenting the
2014 National Budget, the Minister of Finance and Economic
Development, Patrick Chinamasa admitted that amongst the key
economic challenges for the country was limited external inflows in the
form of foreign direct investment, lines of credit and grants linked to high
country risk premium resulting in low of confidence by investors.79
77
78
79
The Herald, accessed at http://www.herald.co.zw/vp-mujuru-on-the-ropes/

The Herald, accessed at http://www.herald.co.zw/vp-mujuru-8-ministers-fired/
The 2014 National Budget Statement, towards an Empowered Society and a Growing
Economy Presented to the Parliament of Zimbabwe on 19 December, 2013
Pg 34
The political environment in the country is one that has been marked by
human rights violations and glaring lack of policy initiatives by the
government. These violations have become the harbingers of almost
every election in the country. And have the danger of derailing investment
and also bringing down the morale of the labour force, which in many
cases in the violence-prone areas.
Surrounding communities in investment sites have borne the brunt of
political and state or private company-sponsored violence in the past five
years as well. A report released by Human Rights Watch noted that in 2011
even though there was some decrease in violence at the Marange
diamond fields, a research found that Zimbabwe police and private
security guards employed by mining companies in the Marange diamond
80
fields were implicated in abuses against local unlicensed miners.
It is imperative that the nation be committed to upholding democracy,
transparency and human rights if responsible investment strategies are to
work in Zimbabwe. This could involve the crafting of leadership codes for
public office holders in which they make commitment to the eradication of
corruption and lack of transparency in investment ventures in the natural
resources sectors. In this regard the National Code on Corporate
Governance needs to be made into legislation. Furthermore, there must
be rule of law so that no individual, however powerful abuses the state and
natural resources under the guise of political affiliation or supremacy.
80
Human Rights Watch, World Report 2012, accessed at

https://www.hrw.org/world-report/2012/country-chapters/zimbabwe
8. UN GUIDING PRINCIPLES ON BUSINESS AND

HUMAN RIGHTS
In the extractive sector, principles of international economic and
environmental law are very persuasive in the attainment ad safeguarding
of responsible investment. It remains a matter of political will, however for
the governing powers to utilise such instruments in their homes states. In
this regard the UN Guiding Principles on Business and Human Rights is
very illustrative. However, this remains a soft-law instrument, i.e., it is not a
legally-binding document, as compared to Conventions for example. The
document contains a set of 31 standards, the majority of which are aimed
at the attainment of responsible investment and a sustainable human
rights centred relationship between business, government and the
people. The Principles basically state that whilst it is the responsibility of the
state to provide for the human rights of its citizens, business also have the
responsibility to respect such rights. Furthermore, people affected by the
actions or neglect of business or the state, have the right to efficient and
quick access to remedies.
The Guiding Principles on Business and Human Rights specifically
encourage the state to come up with policies that ensure that human
rights are bot violated by private business concerns. The Principle states
that:
States must protect against human rights abuse within their territory
and/or jurisdiction by third parties, including business enterprises. This
requires taking appropriate steps to prevent, investigate, punish and
redress such abuse through effective policies, legislation, regulations
and adjudication.
In that regard, it would be beneficial for the Zimbabwean government to
ensure that investors carry out their business in a responsible manner
through the formulation of laws and policies that protect the human
rights of all persons as well as providing for environmental protection
and sustainable development. The state should take into account that
Pg 40
though the Guiding Principles are not legally binding, their provisions
can be accommodated into domestic statutes and policies and have
the force of law.
The Guiding principles go on to encourage business enterprises to
highlight their commitment toward the respect of human rights. The
respect for human rights by business is a fundamental aspect of
responsible investment. The principles state that businesses should avoid
infringing on the human rights of others and should address adverse
81
human rights impacts with which they are involved. These rights are
outlined to involve at a minimum, those expressed in the International Bill
of Human Rights and the principles concerning fundamental rights set out
in the International labour Organization's Declaration on Fundamental
82
Principles and Rights at Work.
These specific sources have significant impact on worker-and communityrelations with businesses especially in the natural resources sector. In a
country like Zimbabwe, where relations have often times soured between
the two parties and companies, it is a matter of urgency for the state to
include the framework on business and human rights in the country's
investment and labour laws.
81
82
Principle 11 of the UN Guiding Principles on Business and Human Rights.

As above, Principle 12
9. RECOMMENDATIONS / OPPORTUNITIES FOR RESPONSIBLE

INVESTMENTS IN THE EXTRACTIVE SECTOR
While Responsible Investing in the extractives in Zimbabwe is still to be
fully developed and understood, the subject provides a number of
opportunities for active development and policy influence. There are also
a number of options that can be utilised in order to ensure the proper
promotion of human rights, environmental sustainability and social
responsibility. These include the involvement of impacted stakeholders in
investment decisions and operations, legislative reform and capacitating
institutions involved in responsible investment in Zimbabwe. Potential
options for ensuring overall responsible investments would be for:
The Government through ZIA - OSS to incorporate responsible

investing requirements at the stage of mining contract negotiation
and licensing. Further frameworks can be developed for
monitoring and evaluation progress.
Driving the implementation of the National Code on Corporate
Governance in Zimbabwe (ZIMCODE) which provides an
opportunity for investors to invest in companies that take into
account environmental and social impacts. This code has
requirements for sustainability reporting.
The Zimbabwe Stock Exchange listing rules can be used to speed
up implementation of sustainability reporting across companies
for investors to investing responsible companies.
The Zimbabwe Association of Pension Funds (ZAPF) should
encourage its members to consider environmental, social and
governance issues under the UNPRI when investing mining
companies to drive responsible investing.
The Zimbabwe Investment Authority which is a gateway to
investment in the mining sector to provide policy requirements for
Pg 36
83
investors to consider ESG issues when investing.

The amendments to Mines and Minerals Act (Chapter 24:05)should
provide additional provisions that require investors to explicitly
consider environmental and social impacts in their investments.
Mining sector associations such as the Chamber of Mines of
Zimbabwe should adopt a framework for extractive companies to
consider ESG issues like human and community rights as part of
responsible investing and company practice.
The Banking sector can play a role of ensuring that investors are
assessed on their consideration of ESG issues before receiving
financing for their investment options.
The Insurance sector should ensure that environmental and social
issues are covered as part of risk profiling and assessment before
mining investment insurance provision.
Active campaigns by civil society in bringing attention of investment
regulatory authorities, government and institutional investors on
the need for responsible investment in sectors like mining which has
high environmental and social impacts.
Clear consultation with the community and other sectors affected
by investments to ensure the realisation of the constitutional right
for every Zimbabwean to gain access to information, especially the
information required for public accountability on investors. 83
Investors as the most direct beneficiaries of investment projects
should start respecting human and environmental rights. As an
important step in that direction, Zimbabwe must adopt the United
Nations' Guiding Principles on Business and Human Rights. These
are international best practice guides that were endorsed in June
2011 by the Human Rights Council. The principles state clearly that
states are obliged to protect against human rights abuse within
their territory and/or jurisdiction by third parties, including business
Sec 62 (1) of the Constitution
84
enterprises. This requires taking appropriate steps to prevent,

investigate, punish and redress such abuse through effective
84
policies, legislation, regulations and adjudication.
Strengthening the capacity of human rights bodies and other
agencies working on environmental sustainability and social
responsibility to support responsible investments. Such bodies
that need strengthened institutional capacity include the
Environmental Management Agency (EMA), the Zimbabwe
Human Rights Commission and the Zimbabwe Investment
Authority. These bodies should be adequately trained on human
rights and business as well as on ways of correctly analysing
company operations. Furthermore, these bodies need to be
scrutinised with the aim of coming up with legal reforms that make
the institutions truly independent or at least, reasonably outside
the grasp of politicians and business.
EMA should closely look at how it can promote and contribute
meaningfully to responsible investments and economic growth. A
research of the impacts of its policies on investments and
community rights is vital.
The Zimbabwe Investment Authority to move from having a Board
almost entirely appointed by politicians (Ministers) and business. It
would be a reasonable that the Board responsible for foreign
investments should also have the representation of civil society,
community leaders as well as labour.
Alignment of legislation with the 2013 Constitution is vital. The
state must commit itself to pass laws that ensure that investors
respect human rights and environmental justice in their operations.
Alignment of legislation such as the Labour Act, Mines and Minerals
Act and the Zimbabwe Investment Authority Act is therefore a
necessity.
Art 1 of the UN Guiding Principles on Business and Human Rights.
Pg 38
Clear and strong political will on the part of the government to

ensure responsible investment is also important. In this regard,
while government policies such as the Look East Policy are
commendable in light of the economic growth experienced by
countries in the East, these partnerships need to be viewed from a
human rights and environmental justice lens. Furthermore,
political leaders and representatives must take serious note of the
grievances raised by their communities at multi-stakeholder
engagements forums such as the Zimbabwe Alternative Mining
Indaba and during public consultations by Parliamentary Portfolio
Committees responsible for the natural resources sector.
Civil society should strengthen its capacities to claim and demand
for the respect of the rights of communities affected by natural
resources investments. This also applies to labour bodies and
community organisations whose constituencies are greatly
impacted by investment decisions.
10. CONCLUSION
Responsible investment practices in Zimbabwe are still under-developed

and require efforts in policy formulation to ensure the extractive sector
strongly consider environmental and social issues in their investment.
Driving responsible investing will require raising awareness, influencing
policies and practices of investors in the extractive sectors in Zimbabwe.
Achieving responsible investment in Zimbabwe is largely going to depend
on policies and the framework for doing business in the extractive sector.
Investment by nature has social and environmental impacts which should
be mainstreamed in risk profiling process. From this perspective,
responsible investing should be a principle that guides investment
decision making, performance appraisal, risk management and
accountability.
On the legal, policy and political frameworks, the existing legal
environment reasonably covers responsible investment in the country's
natural resources sector. However, the lack of political will and weakened
state institutions and agencies make it difficult for the society and people
to enjoy the fruits of a human and environmental rights friendly business
sector. It is therefore the position of this paper that among the
recommendations for the achievement of responsible investment, there
must be legal reforms that provide for democratic consultation of the
affected sectors whenever investment decisions are being made.
Furthermore, there is need for political will, stronger community based
and civil society organisations involved in the campaigns for human rights
and environmental justice in the natural resources sector.
Pg 42
BIBILIOGRAPHY
A.
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i.
B. Raftopoulos and L. Sachikonye (eds), Striking Back: The Labour

Movement and the Post-Colonial State in Zimbabwe, 19802000
(Harare: Weaver Press, 2001)
De Jongh.D, Ndlovu.R, Coovadia. C and Smith.J, The State of
Responsible Investing in South Africa: A survey of approaches and
perceptions of South Africa investment community to
environmental, social and governance issues (UNEPFI, Noah &
UNISA, 2007)
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(ZIM ASSET)
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Pg 44
Notes

Responsible Investment in The Natural Resources Sector: An Analytical Profile of The Mining Sector in Zimbabwe

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RESPONSIBLE INVESTMENT IN

THE NATURAL RESOURCES SECTOR

Zimbabwe Environmental Law Association (ZELA)

Rodney Ndamba & Lenin Tinashe Chisaira

2016, Zimbabwe Environmental Law Association (ZELA)

This publication may be reproduced in whole or in part and in any

The views expressed herein do not necessarily

Zimbabwe Environmental Law Association (ZELA)

Code for Responsible Investing in South Africa

Environmental Management Agency

Economic and Social commission for Asia and the Pacific

Environmental, social and corporate governance

Foreign Direct Investment

Institute for Sustainability Africa

Socially Responsible Investment Index

United Nations Principles for Responsible Investment

Zimbabwe Consolidated Diamond Company

Zimbabwe Environmental Law Association

Zimbabwe Investment Authority

Zimbabwe Agenda for Sustainable Socio-Economic

Zimbabwe Mining Development Corporation

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR Pg 5

An Analytical profile of the Mining Sector in Zimbabwe

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR

Sibanda, M, From the Great Dyke to the Great Threat, page 3

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR Pg 7

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR

down in areas like Chisumbanje. Responsible investment encourages

CONCEPT OF RESPONSIBLE INVESTMENT

Responsible investment is differentiated from conventional investment by

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR Pg 9

provides Six (6) Statements of Commitment to Responsible investment

Figure 1: UNPRI: The Six Principles

We will work together to enhance our effectiveness in implementing the Principles.

Source: UNPRI (2015)

An Analytical profile of the Mining Sector in Zimbabwe

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR

4. CONTEXTUAL ANALYSIS OF RESPONSIBLE

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR Pg 11

weak demand for ESG disclosure practices by the investment community.

UNPRI members 2015

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR

5. INVESTMENT IN THE NATURAL RESOURCES SECTOR

An Analytical profile of the Mining Sector in Zimbabwe

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR Pg 13

The investment structure in the mining sector in Zimbabwe is largely

An Analytical profile of the Mining Sector in Zimbabwe

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR Pg 15

RESPONSIBLE INVESTMENT PRACTICES IN THE

Fundamental to responsible investment is the investor drive for

The Global Reporting Initiatives (GRI)

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR

LEGAL, POLICY AND POLITICAL ASPECTS GUIDING

7.1. LEGAL FRAMEWORK

Sec 2 (1) of the Constitution

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR Pg 17

Sec 73 of the Constitution

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR

youths; the respect, support and protection for elderly persons ;

Sec 65 of the Constitution

RESPONSIBLE INVESTMENT IN THE NATURAL RESOURCES SECTOR Pg 19

However, it is important to note that the existence of these rights in the