The role of Environmental, Social and Governance (ESG) Reporting in promoting responsible sourcing and investment in the extractive sector.


09 September 2022

On the 5th of September, the Zimbabwe Environmental Law Association (ZELA) held a session on the role of Environmental and Social Governance (ESG) reporting in promoting adoption of international practices in addressing environmental impacts, water access and other human rights concerns that emerge from mining activities. The session was held during the side-lines of this year’s edition of the Zimbabwe Alternative Mining Indaba (ZAMI) being held in Bulawayo from the 5th to the 9th of September. One of the windows that can be leveraged on when it comes to advancing access to information on ESG is the Statutory Instrument (SI) 134 of 2019. Through the Statutory Instrument, companies that are listed on Zimbabwe Stock Exchange are required to produce an ESG report which shows how mining companies are addressing social, economic, and environmental related concerns in the areas which they are operating. The objective of the side event was to discuss legislation regarding ESG, the state of ESG compliance by mining companies registered on the Zimbabwe Stock Exchange, challenges, and opportunities.

The meeting was also used as a platform to learn from other countries on legislative frameworks around ESG reports including legislation on ESG in China. During the meeting, it was observed that Zimbabwe has gaps when it comes to legislation that supports addressing social and economic rights concerns that emanate from mining. These include the lack of legal framework on Free, Prior and Informed Consent (FPIC) (the right of indigenous people to give or withhold their consent for any action that would affect their lands, territories, or rights) and sharing of mining royalties between central government and local authorities and the communities. In addition, Zimbabwe still lacks a clear and legally binding framework on investments related displacements.

The Chamber of Mines made a reflection that the issue of ESG reporting is still new to the mining sector in Zimbabwe and the full realisation of its benefits is affected by the lack of a common framework of reporting among other challenges. Commendably, the Chamber of Mines highlighted that there is a process that is still at early stages to develop framework to share mining royalties between the central and local authorities.

Another issue that emerged from the meeting was with regards to the difficulties that are being faced when it comes to accessing ESG information from Chinese investors especially those that are entering into Joint Venture Agreements with the Government of Zimbabwe. Commendably the Zimbabwe Development and Investment Agency (ZIDA) Act requires investors that pass-through ZIDA to protect the environment and operate responsibly. However, the lack of regulations on responsible investment at ZIDA is crippling efforts to hold the investors to account.

It was also noticed that whilst the ESG reports that are produced by mining companies are informative in terms of disclosing what the companies are doing to address the social, environmental, and economic related concerns of communities where mining is taking place, monitoring of ESG by communities is very low.

Our key Recommendations/ Key Demands

• There is need to include key environmental conditions as part of the mining title to ensure that there is an easily enforceable agreement between the company and affected communities.

• Make use of the Mines Bill to incorporate provisions on sharing of mining royalties between the central government, local authorities, and mining communities

• There is need for Government to develop common standards for ESG reporting.

• ZIDA should speed up the development of the regulations to guide actions that investors are supposed to comply with on ESG. ZELA will be exploring efforts to support lawyers to draft model regulations and use them to engage Government.

• Building the capacity of communities to take part in the monitoring of ESG reports produced by mining companies and engaging mining companies on ESG data validation.

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