Community share ownership trusts (CSOTs) as policy instruments for economic empowerment: The case of Marange-Zimunya CSOT (2012-2015).

Abstract

This study is about Community Share Ownership Trusts (CSOTs) introduced in Zimbabwe as one of the several policy instruments in the implementation of the Indigenisation and Economic Empowerment Act, Chapter 14: 33. CSOT are an empowerment vehicle into which qualifying businesses exploiting the natural resources of a community can dispose 10% of their shareholding towards complying with the minimum 51% indigenisation of Zimbabwe‟s economy. The Marange-Zimunya Community Share Ownership Trust (MZCSOT), which is the focus of this study, is expected to contribute to the economic empowerment of the Marange and Zimunya communities through proceeds from the diamond mining activities at Chiadzwa in Marange. Economic empowerment is the process of bringing the previously disenfranchised indigenous Zimbabweans into the mainstream economy. The study was predicated on the hypothesis that „CSOTs have produced perverse effects on economic empowerment in target communities‟. Perverse effects are effects that defeat or erode the purpose for which a policy is implemented. In general, economic empowerment initiatives, outside Zimbabwe, have met with the challenge of being hijacked by some strategically positioned, mostly politically connected, elite in society, to the detriment of the target groups. This is notably the case when one makes reference to the Malaysian and South African experiences reviewed in this study. Notwithstanding recorded successes, the above allegations have constituted the critique of economic empowerment initiatives in the named countries. The research utilised the qualitative methodology. Documentary search and key informant interviews were utilised in obtaining the data to test the stated hypothesis. Thematic analysis was used in presenting and analysing the findings. The broad research questions that the research sought to answer are: What are CSOTs as policy instruments? What are the policy goals of the MZCSOT? How effective has the MZCSOT been in enhancing economic empowerment? and How can the efficacy of the MZCSOT be improved? The study established that whereas CSOTs are potential vehicles for ensuring economic empowerment, and are a historical necessity in Zimbabwe, as are empowerment initiatives in Malaysia and South Africa among other countries, their contribution to the benefit of the target population is not a given. In the MZCSOT, evidence gathered points to more of adverse effects than benefits to the communities. Whereas the communities have lost their livelihoods, land, livestock; have suffered from water, air, and noise pollution; were relocated without compensation; and are struggling to access basic necessities such as water, little development in terms of project implementation by the MZCSOT has been realised. Challenges cited include lack of funding, lack of full time employed personnel at the MZCSOT, and mismanagement of financial resources. There have also been allegations of political interference and corruption, and controversy over the compensation of relocated people. The study concluded that CSOTs have the potential to enhance economic empowerment, the MZCSOT was not much effective in economically empowering target communities, and the targeted beneficiaries have suffered adverse effects. The study therefore recommends the enacting of legislation to compel mining companies to honour their pledges, having full time employees at MZCSOT, depoliticising the scheme, investigating corruption allegations, redefining the beneficiary community, and ensuring that the MZCSOT works with the Environmental Management Agency to ensure that mining companies avoid land degradation and pollution, among other things.