Corporations prefer trials in Zambia

Mtwalo Msoni
Political article
«What do people in Zambia think of Glencore?», asked the Alliance Sud magazine "global" Mtwalo Msoni, national coordinator of the NGO Publish What You Pay in Zambia.

global: The visit by Swiss Foreign Minister Ignacio Cassis to Glencore’s Mopani mine left many shaking their heads in Switzerland. And in Zambia?

Mtwalo Msoni: Most people were hardly even aware of the high-level Swiss visit to Zambia, they have other problems. The meeting between Cassis and members of the Government in the capital Lusaka was only briefly mentioned in the media, because Zambia and Switzerland signed an air traffic agreement.

What in your view is the significance of mining in your country?

Zambia's mining industry was privatized in phases between 1991 and 2000. Since then, Zambia has been the perfect example of a country suffering from what is called the "resource curse". Mining accounts for 73 per cent of export earnings and is therefore the backbone of the economy, yet people see nothing of the country's commodity wealth, living conditions have not improved noticeably, and the government is unable to invest in infrastructure on the strength of tax revenues. The profits made by commodity companies in Zambia are only partly known and are hardly taxed at all. The tax legislation governing mine operators has been amended seven times over the past 10 years in an attempt to move away from profit-based taxation and toward taxing the agreed licence payments instead. The mining companies opposed this, however, threatening to dismiss workers and cut back their investments.

Glencore never tires of stressing how much it has invested in the Mopani mine…

In our view, the Mopani copper mine in Mufilura is a perfect illustration of how this type of mining does more harm than good. For decades now residents of the Kankoyo district in the immediate environs of the mine have been grappling with unacceptable air pollution, soil contamination and unresolved problems of collapsing houses. After privatization Glencore was able to buy up and register much land as its property. The company now dictates what may still be grown and built there.

What can local NGOs do about it?

Ultimately, not much. From the reports of the Extractive Industries Transparency Initiative (EITI), on which we are relying, it emerges that neither the local authorities nor the mining companies are providing the people with the services to which they committed themselves. Mopani is well known for not fulfilling its obligations towards the community.

Is there any political debate at all in Zambia about the role of Glencore?

There is indeed discussion as to whether and how the government could again increase its share in the mines so that more money can flow from mining into State coffers. But this opportunity was squandered with the privatization of the industry. Today, think tanks like the Economics Association of Zambia are openly advising the government to nationalize the industry. The NGOs are not alone in thinking that things cannot go on like this – the Mining Minister himself recently complained that Zambia's copper was in fact generating USD 6 to 8 billion in earnings each year, of which a mere 300 to 600 million were going to the Zambian State. For their part the Chamber of Mines as well as tax consulting firms argue that the mines will close if other fiscal models are adopted.

In Switzerland a vast NGO coalition is working for a popular initiative that would regulate the responsibility of corporations for respecting human rights. Is the Zambian elite aware of this?

No, we are hardly aware of this political debate in Switzerland. But naturally, we wholeheartedly welcome economic and human rights legislation that ultimately protects the people in countries where investments are made. It is important for companies to be held accountable in their countries of origin for what they do in host countries through their business practices, as our legal system is vulnerable to bribery. It was not without reason that the British mining company Vedanda Resources filed an appeal in London for a lawsuit brought by a village community over pollution by the Konkola copper mine not to be heard in the United Kingdom, but in Zambia.

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Economist Mtwalo Msoni is the national coordinator of the NGO Publish What You Pay in Zambia and co-author of several studies on the topic.