PRESIDENT Emmerson Mnangagwa’s Statutory Instrument (SI) 189 of 2022, announced on November 4 to legalise payment of miners’ royalties partly in kind has been described as not just being illegal but a step back into the medieval era.
The Chamber of Mines, which represents major mining companies, said it was not worried about the pronouncement because it would not increase existing royalty rates. “We respect the government’s position.
“It’s their prerogative. All they are saying is they are changing payment modalities,” Chamber of Mines Chief Executive Isaac Kwesu told Reuters news agency recently.
However, a scathing analysis of the SI released by Veritas, a local legal watchdog, details the illegality of Mnangagwa’s move and how it could backfire on the Zanu PF government if forced on miners.
SI 189 of 2022 amended the Mines and Minerals Act to stipulate how royalties were to be paid by gold, diamond, platinum, lithium and other minerals.
Those affected by the amendment are now expected to pay 50% of their dues in kind, that is: “…in a form and purity or quality prescribed by the Reserve Bank of Zimbabwe (RBZ) in a statutory instrument. 10% in foreign currency (in cash) and 40% in Zimbabwe’s currency.
“Royalties for other minerals must be paid, 50% in foreign currency (not necessarily cash, and 50% in Zimbabwe’s currency.”
The SI was also amended to allow the RBZ to maintain reserves of diamond, platinum and lithium.
Veritas has since, in its analysis published last week, queried the manner in which it was formulated, announced and the tenets it seeks to promulgate and amend in the Mines and Minerals Act.
“There are at least four grounds on which the SI might be held to be invalid. Section 3 of the Presidential Powers Act requires the President to consult the public before making regulations under the Act.
“Who will keep records and inventories of the minerals that have been delivered? Will Parliament and the public be informed regularly about how much gold and other minerals have been delivered to the Reserve Bank?
“The President did not engage in public consultation before publishing SI 189 of 2022, and it is hard to discern any urgency that would have made it inexpedient for him to do so. Perhaps the need for consultation did not even cross the President’s mind, because neither he nor his predecessor ever consulted the public before making regulations under the Act,” reads the analysis.
“The SI is retroactive, as we have said, and the law generally frowns on retroactive legislation. Such legislation infringes vested rights and “due respect for vested rights” is one of the founding values set out in section 3 of the Constitution. This SI infringes the vested right of miners to pay their royalties in money.
“Wide though this power is, it must be read with the Constitution, which says in section 298(2): “(2) No taxes may be levied except under the specific authority of this Constitution or an Act of Parliament.
“Another fundamental reason for regarding SI 189 of 2022 as invalid is that the Presidential Powers Act is itself unconstitutional. In Veritas’ view, the Act amounts to an abrogation or delegation of Parliament’s primary law-making power in violation of section 134 of the Constitution.”
Section 134 of the Zimbabwean constitution dictates that all SIs be laid before parliament and submitted to its legal committee for scrutiny before being published.
Veritas’ analysis noted how SIs were against democratic tenets that promote public involvement in formulation of laws and governance.
It added: “Making laws through presidential powers rather than through Parliament is inimical to democracy.
“If the Government really has faith in the Zimbabwe dollar, why must royalties be paid in kind and in foreign currency?
“Who will keep records and inventories of the minerals that have been delivered? Will Parliament and the public be informed regularly about how much gold and other minerals have been delivered to the Reserve Bank? Generally, what safeguards will be put in place against corrupt theft or misappropriation of the minerals?”