THAT the Mines ministry has refused to comply with a February 29 High Court order to allow Mbada Diamonds onto the Chiadzwa mining fields to secure their mineral and equipment and that the police have not moved out of the fields as directed by the court, is yet another example of how the Zimbabwean government continues to trample the rule of law.
CANDID COMMENT BY OWEN GAGARE
The move, which no doubt is being closely monitored by potential investors who have for long doubted Zimbabwe’s commitment to respecting property rights, will be yet another blow for the country’s bid to attract foreign direct investment.
Mbada Diamonds, alongside other companies operating in Marange, was on February 22 told to cease operations with immediate effect by Mines minister Walter Chidhakwa. The miners’ crime was to reject a proposal to form one company, the Zimbabwe Consolidated Diamond Company where the state wants to have 50% shareholding without injecting any capital.
The companies were given a 90-day ultimatum to remove equipment. They were however denied an opportunity to wind down operations or secure their equipment.
They were also not even given the chance to remove their diamonds from vaults at the mines. In a bid to reclaim their diamonds and equipment, which is at the mercy of artisanal miners who have invaded the fields, Mbada approached the High Court for relief.
Justice Joseph Mafusire then ordered government to give Mbada security “full access to the mining site, residential premises, equipment, diamond ore and other assets so that they are safeguarded.
The security personnel have however been barred from accessing the diamond fields, raising questions over the government’s commitment to the rule of law. It is therefore not surprising Chidhakwa was in court yesterday answering contempt of court charges.
The move is exacerbated by the fact that the government’s decision to abruptly stop diamond companies from operating was viewed by business as an assault on property rights, although the government claims the companies’ licences had expired.
Mbada, which is 50% owned by Grandwell Holdings and 50% by government, is challenging that assertion with Grandwell chair David Kassel saying the move “is designed to facilitate the nationalisation and/or expropriation of Mbada’s assets.”
Kessel maintains government, through its local partner Marange Resources, undertook to protect the rights of the foreign investor and to “observe the utmost good faith and not do, or omit to do anything which might prejudice or detract from the rights or interests” of the foreign investor.
Given the government’s track record, investors are likely to believe the diamond companies rather than the state, a development which will further militate against FDI.
Other than the forced closure of diamond companies, the government has since 2000 been grabbing farms and companies, creating a hostile business environment.
With such policies and inconsistencies, Zimbabwe can never be deemed to be an investment destination of choice.