WHY THE APPOINTMENT OF DR. MUSOKOTWANE IS WRONG
By Ngomola Cengelo Muyembe
I have an ask
In 2011, Five NGOs namely Lausanne/Zurich/Paris/Lusaka, SHERPA (France), the Center for Trade Policy and Development (Zambia), the Berne Declaration (Switzerland), l’Entraide Missionnaire (Canada) and Mining Watch (Canada) filed a complaint against Glencore International AG and First Quantum Minerals for violation of OECD guidelines.
They filed this complaint before the Swiss and Canadian National Contact Points (NCP)and won, but Situmbeko Musokotwane, who was the Finance Minister in Rupiah Banda’s government, refused to take the case to court or demand for penalties that could have resulted in billions.
The Organisation for Economic Co-operation and Development (OECD) which was founded in 1961 to help stimulate economic progress and world trade in countries that are committed to Democracy and Market economy, came up with some rules to stop criminals organisations like Glencore and FQM from stealing from the poor people.
One of the OECD rules that these criminals violated was on Transfer Pricing, where Mopani would dig our Copper and sell to Glencore, their own mother company and pay taxes over that declaration. E.G Copper prices would be $9000/ton on the international market, but Mopani would sell to Glencore at $1000, therefore paying ZRA tax on $1000/ton instead of $9000/ton.
It is this criminal behaviour that prompted the complaint by the Five NGOs. The financial and accounting manipulations performed by the two companies’ subsidiary, Mopani Copper Mines Plc (MCM), were designed specifically to evade taxation in Zambia and steal from its people. It was not up to Musokotwane and his cohort to forgive because that is the people’s money meant for schools and hopsitals.
This complaint was based on the results of a 2009 audit performed at the request of the Situmbeko Musokotwane’s very own Zambia Revenue Authority at the time, with support from Norwegian government, by international accountants one of which the current President Hichilema has some interest namely, Grant Thornton and other being Econ Pöyry.
Among the criminal acts exposed by Mr Hichilema’s company and partners revealed by the report, were the unexplained increase in operating costs in 2007 (+ $380 million), stunningly low reported volumes of extracted cobalt when compared to similar mining companies operating in the region, and manipulations of copper selling prices in favor of Glencore which constitute a violation of OECD’s “arm’s length” principle.
The result of those various processes was to lower by several hundreds of millions dollars MCM’s net income for the 2003-2008 period, hereby substantially lightening the company’s tax burden. This was broad daylight banditry! Yet Situmbeko Musokotwane thought otherwise.
In view of the above vast experience of Dr. Situmbeko Musokotwane and not forgetting his dubious sale of Zamtel and the relinquishing all of ZCCM-IH shares in a hugely profitable Lumwana Mine, why would Mr Hichilema hire him as our Finance Minister?
It is not about his age but his behaviour! Not only did he botch the opportunity to make an example out of Mopani, but he also painted a very bad picture on the Zambian authority to those people that would want to help us catch criminals that are stealing from the people.
Can he atleast explain himself to the Zambia people so that we know he won’t do the same thing again?
#i_wish_i_had_more_time_to_write