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Ethics body decries rampant corruption in mining sector

By Tendai Sahondo, News Editor – Saturday 29 June 2019

HARARE (Mining Index) – The Ethics Institute of Zimbabwe (EIZ) has decried the alarming levels of corporate misdemeanor and corruptive tendencies that have overrun the mining sector in recent years.

Speaking to Mining Index at the sidelines of the ‘Ethical Leadership, Managerial Ethics and Corporate Governance seminar,’ EIZ executive director, Bradwell Mhonderwa called on the mining sector to adopt a new ethical culture that would unlock value for the sector and the economy at large.

“The mining industry is riddled with retrogressive, corruptive and toxic tendencies that are harmful not only to the sector itself, but to the economy at large. We hear of scandals in the extractive industry day in and day out, and it becomes even more painful when we note that this is an industry that could be central to rejuvenating and modernizing our economy, given the vast mineral resource base we boast.  We have a lot of minerals but some are mined clandestinely and smuggled outside the country, with financial leakages and under-receipting reaching alarming levels.

“There is certainly urgent need to change behavior in the sector, and this can be achieved by adopting a new ethical culture. We need our mineral wealth to benefit the nation and not a select few,” he said.

A recent study has revealed that there is rampant under-invoicing in the mining sector particularly for minerals such as diamonds, gold and nickel. The study estimates that $1.3bln was illegally externalised between 2000 and 2013 for the purposes of tax evasion, quota avoidance and money laundering. The sector has been rocked by multiple scandals, chief among them being the Diamonds scandal in which former President Robert Mugabe alleged the country lost $15bln to transnational companies operating in the rich Chiadzwa diamond fields.

Mhonderwa said the ethics thrust should also encapsulate Corporate Social Responsibility (CSR) ushering in a dramatic change of attitude by mining companies towards communities residing in their vicinity.

“CSR is a key element of responsible business conduct and responsible corporate citizenship. It is important that organizations support communities in their vicinity as they should benefit from minerals in their area. It is sad to say the script is basically the same in most mining areas where issues of social corporate responsibility are ignored or simply given a lip service. Companies should refrain from such cruel conduct, and be willing to share a bit of their profits with the community. The concept of community goodwill should be engraved into mining companies,” he said

Mhonderwa however said the sector should take advantage of the prevailing unethical environment to embed strong and impactful ethical interventions that will ensure a quick behavior turnaround.

“The fact that we are in an environment that is so unethical gives us an opportunity to bring in quick behavior change through strong ethics. It takes more time to make people realize the value of ethics in an environment that is normal than in an environment that is chaotic as ours. Through ethics it is easy to identify, isolate and exterminate unethical behaviors by unmasking and pushing out bad apples from key decision making positions,” he added

Speaking at the same event, the assistant director of technical services in the office of the president, Clever Bangwayo said the President is serious about curbing corruption.

“President Emmerson Mnangagwa is very serious about tackling corruption, acting ethically and doing things differently. In his inaugural speech, the president said he wanted to introduce a new way of doing business. He said he wanted to in-calculate a culture of servant leadership. Servant leadership and ethics to me talk of someone who submits self to a bigger picture,” he said

Bangwayo said President Mnangagwa has taken practical and urgent steps in tackling issues that have been tabled in the public domain such as the corruptive personalities list that was published by the Zanu PF youth wing.

“This is a paradigm shift from past times when the dust would be allowed to settle with no action being taken. The president is therefore serious about crafting a culture of responsibility, a culture of ethics, a culture of owning up as this is the first step to taking corrective action. The country is therefore telling its own bad story, putting it in a position to be helped by those who have the capacity,” said Bangwayo.

Established in 2017, EIZ is evolving into an Ethics centre of excellence, providing ethical guidance to both the private and the public sector.

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