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Despite the ongoing disruption and uncertainty of our current circumstances, it is safe to assume that mandatory continuing legal education will continue to be an obligation for all practicing lawyers.
We wanted to check in with the ATL audience and get a sense of how you feel about mandatory continuing legal education during these unprecedented times.
Which of the following best describes your circumstances? Take a quick poll here.
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Like a lot of the South, Louisiana is in the midst of a COVID infection spike. While the governor has responded swiftly and called to defeat the disease with three days of prayer and fasting, the state supreme court opted for a more grounded response when it came to the looming bar exam.
In a narrow vote, the Louisiana Supreme Court just granted a qualified diploma privilege option for many prospective attorneys. All those not covered by the conditions of the order will have the option of taking a remote bar exam.
If an applicant had registered for the July or October exam, graduated either in the Spring or last December from an ABA-accredited school, and not previously sat for the exam, they are eligible to skip the written bar examination. Other requirements such as the MPRE are still required.
Anyone admitted under this provision will have until the end of 2021 to complete the following added requirements:
a. Complete 25 hours of CLE. 12.5 of the credits shall be obtained in accordance with the requirements set forth in Supreme Court Rule XXX(3)(b), and the remaining 12.5 hours may be in any other approved subject matter.
b. Complete all requirements of the Louisiana State Bar Association’s “Transition Into Practice” program.
The Transition Into Practice program is a mentoring program that seeks to provide practical lawyering skills to new attorneys.
This decision generated some amazing dissents that underscore exactly why states like Louisiana are suffering massive outbreaks. A justice declared that canceling the in-person July exam was an “overreaction to the virus.” Another dissenter branded it “gifting a license,” while yet another declared:
This Order labels this free pass as an “emergency admission.” And I ask, “Just what is the emergency?”
Hmm. Where could that emergency be? On June 22, Louisiana’s three-day rolling average of infections was 575. Yesterday, it was 2,667. So, yeah, there’s the emergency.
In fairness, Justice Genovese pivots from this to claiming that there’s no reason to let any of these applicants practice law because there are already enough lawyers in the state by his estimation. He also zeroes in on the canard that because 25 percent of examinees fail the bar exam this order will mean a quarter of these new attorneys will lack competence, which isn’t how bar exam scoring works and it takes very, very little effort to do the research to figure that out.
“There’s no emergency! It’s all an overreaction!” This is what a death cult looks like.
Thankfully, cooler heads narrowly prevailed in Louisiana.
(Full order on next page.)
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.
The coronavirus and the resulting government shutdown orders have profoundly altered our way of life. Most had to work from home while some couldn’t work at all. In-person meetings with clients and colleagues became impractical or even illegal in order to control the spread of COVID-19.
The existing tax law applied to the new normal will create some tax surprises. Here are a few situations.
Fewer deductible auto expenses. Due to the shutdown orders, many people did not drive as much as they used to. The good news is that people are paying less in gas and maintenance bills. Many insurance companies offered to (or were required to by law) reduce insurance premiums during the shutdown period.
But this also means that self-employed people will have less in automobile deductions. Generally, auto expense deductions are claimed using one of two methods. The standard mileage method generally allows a deduction for every mile driven for business purposes. The actual expense method generally allows a deduction for the expenses actually paid, such as gas, maintenance, depreciation, registration, and lease payments. But the deduction is prorated, based on the percentage the car is used for business purposes. For example, if you spent $1,000 on auto expenses for a car that is used 80% for business, you are allowed to take an $800 deduction.
I doubt that the IRS will make special accommodations for the auto expense deduction rules due to COVID-19. Just keep in mind that if you are driving less and spending less on auto expenses, expect to get less in tax deductions as a result.
Meal expenses. Currently, the rule on meal expenses connected with a business activity is that 50% of the cost is deductible if the price is not extravagant or lavish, the taxpayer or their employee is physically present, and the meal is provided to a current or potential business contact.
The problem is that the shutdown orders prohibits dining-in at restaurants. Also, when the shutdown orders are lifted, most restaurants are limiting the number of guests in order to meet social distancing guidelines. So most business lunches with business contacts are done virtually at home.
Despite the restrictions, it is possible to comply with the rule. For example, a business owner can invite a colleague to his home and discuss business. Food can be ordered and delivered to his home. However, I do not see people doing this on a regular basis.
But the shutdown order can create ambiguities. For example, suppose one person can pay for the food and have it delivered to their contact. But if they talk virtually using video, are they physically present?
What I realistically see happening is that people will pay for their own meals when participating in a virtual meeting with business associates. Since the meal is not provided to a business contact, is the meal expense still deductible? What if I made the food at home? Are the cost of groceries tax deductible?
I am hoping the IRS will issue some guidance — either through a notice or temporary regulations — that addresses business-related meal costs in these situations. Virtual meetings — either by phone or video chat — should temporarily be considered meeting the “physically present” requirement.
Also, food purchased from a restaurant for personal consumption should be deductible so long as it was purchased before a scheduled virtual business meeting. That can incentivize businesses to order more often from struggling restaurants. And the tax deduction can help since we are paying not only for the food but also tax, tip, delivery fee, the health insurance surcharge, the living wage surcharge, the climate change surcharge, and now the COVID-19 surcharge.
Unemployment income is taxable. Currently, unemployment benefits are taxable income. Why? I have no idea.
With the federal Pandemic Unemployment Assistance providing $600 per week on top of the state’s existing unemployment benefits, some people can receive substantial money, which can mean substantial surprise taxes. I say surprise taxes because most people mistakenly (but understandably) think that unemployment benefits are tax free.
This tax tends to be most painful to those who are already in a mid- to high-tax bracket and received benefits in the high four-figure range.
Expenses paid with PPP money are not tax deductible. Many businesses received money through the federal government’s Paycheck Protection Program (PPP). The money is a loan, although it can be forgiven if a certain portion is used for payroll and the rest for certain expenses such as rent and utilities. Thankfully, the forgiven amount is not considered taxable income.
However, the IRS has ruled that if expenses are paid with PPP money, and the loan is forgiven, those expenses are not tax deductible. The rationale is that since the forgiven money is not taxable income, it is only fair that you cannot take a deduction using that money.
The problem is that a lot of people — particularly gig economy independent contractors — will either not know about this rule or forget about it. Some bookkeepers and accountants also might not know about the rule or may not apply it correctly for a number of reasons. Given the low audit rates at the IRS, this might make the rule difficult to enforce.
I anticipate that the SBA will issue a tax form to the IRS informing them of the PPP loan amount the taxpayer received and whether it was forgiven. The IRS will then require the taxpayer to complete a special form detailing what the PPP funds were used for and then add the amount back to taxable income.
So if you received PPP money and managed to get it forgiven, just remember to expect a higher tax bill.
Take advantage of the home-office deduction. As most of us are forced to work from home, our home utility bills are likely to rise as a result. If you are self-employed, then a portion of these expenses are tax deductible if your home is considered a home office.
To qualify for a home-office deduction, you must regularly use part of your home exclusively for conducting business.
Also, the home must be the principal place of business. This means that you use your home regularly for administrative or management activities and you have no other fixed location to do so. Alternatively, your home is the principal place of business if you physically meet clients and customers there.
Before COVID-19, some self-employed people did not qualify for the home-office deduction because they had a separate office location, and that is where they did most of their administrative work and physically met with clients or customers.
But now, most government shutdown orders and landlords prohibit or severely limits when business owners can enter their offices. There are also similar prohibitions and limitations on when business owners can meet with their clients or customers. So an argument can be made that your home is the principal place of business because there is no other fixed location to perform administrative or management duties. And it is difficult or impossible to meet clients in your office due to the shutdown orders.
Some people did not take a home-office deduction even though they qualified for it because they thought it would turn them into an audit target or the compliance rules were just too difficult. But now that working from home is the new normal, more people will claim this expense.
For single people, I would recommend using the largest room in the house as an office to maximize the deduction. Since these are usually the living and dining rooms, this strategy is not feasible for family households.
While I think IRS auditors will be understanding if the home-office deduction becomes an issue, it would be very helpful if they issued guidance on claiming the home-office deduction in light of COVID-19 and the shutdown orders.
Due to the lifestyle changes we were forced to make due to COVID-19, we are spending less money on tax-deductible expenses. Assuming income remains steady, some businesses might expect a higher tax bill. It is best to know about it now and prepare for it.
Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at sachimalbe@excite.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.
Ken Griffin is known to be rather particular about the security and use of his trade secrets. And, as it turns out, those of his clients as well.
Over a two-year period until September 2014, the market-maker removed hundreds of thousands of large OTC orders from its automated trading processes, according to Finra. That rendered the orders “inactive” and so they had to be handled manually by human traders.
Citadel Securities then “traded for its own account on the same side of the market at prices that would have satisfied the orders,” without immediately filling the inactive orders at the same or better prices as required by Finra rules, the regulator said….
Nearly half of the 467 limit orders reviewed by the regulator in the six years until September 2018 were found to violate Finra’s requirements to display orders. The bulk of the violations were for failing to execute trades against existing quotations in a timely manner, Finra said.
Whoever could have seen such a conflict of interest coming at a trading outfit owned by a hedge fund manager?
US regulator fines Citadel Securities over trading breach [FT]
As readers of ATL know by now, or should know if they’re reading ATL, the California Supreme Court has decreed some changes to the California Bar Exam for 2020. Originally set for the end of this month, the Court first deferred the exam to September and now to October. Instead of examinees hacking and coughing around each other, especially now considering the pandemic, the two-day exam will be online.
That’s not the only order the court made. The court also ordered the state bar to expedite creation of a provisional licensure program under supervision to 2020 law school graduates — effective until they can take and pass a California bar exam and expiring no later than June 1, 2022.
But wait, there’s more. The court permanently lowered the “cut score” from 1440 to 1390. There’s so much to discuss that my head is about to explode.
Let’s take the change in the exam date first. It was a foregone conclusion that the bar exam date would be changed; the issue was when? Would it be September as originally thought? Now it’s October, and that date seems fixed. It’ll be online, a first for California and other states who have thoughtfully moved the bar exam date and methodology to accommodate the pandemic.
Moving on to the provisional licensure program under supervision, many questions surround the creation and implementation of such a program. Hopefully, the state bar saw this coming, and creation and implementation of such a program will not gobble up most of the available time, which ends in less than two years.
How will the bar recruit volunteers? Thousands are registered for the bar exam. How many lawyers will agree to supervise? Will there need to be an incentive for lawyers to be willing to undertake that supervision? Will malpractice carriers be willing to add provisional licensees as additional insureds? Or will carriers tell lawyers, “you are on your own, counsel.” I can’t imagine, given our lack of appetite for risk, that many lawyers will undertake supervision without some assurance that by going out on a limb, it will not be sawed off either by the malpractice carrier or zealous bar disciplinary counsel.
And last but not certainly least, the reduction of the infamous “cut score,” from 1440 to 1390, a difference of 50 points. Law school professors, deans, and students should be pleased. But will cutting the cut score really make a difference in the passing rate?
Examinees have always done well on the MBE. It’s the essay portion that snares them. Whether it will continue to so so is anyone’s guess. One hopes that the reduction in the passing score requirement will lead to the admission of more, but I am not so sure.
Over the years, I have critiqued essays for students at various law schools, and the results have been almost uniformly dreadful. As more and more of legal practice is submitted “on the papers,” with oral argument rarely the difference between winning and losing, the ability to write cogently and fluently takes on even greater importance.
Some law students today simply don’t know how to write coherent sentences. Their sentences are run-on, meandering, and don’t get to the point, even if the writer finds it.
Let me be clear. I do not fault law students for this situation. I fault the law schools and the instructors, the latter who are more interested in publishing, in their own scholarship, than in helping students succeed. It’s akin to “we take your money, and you take your chances,” which is not the way it should be. Critiquing exams can be deadly dull and a huge time suck, but if the goal is to get students to pass the essay portion, then law schools and faculty need to step up their game and help students get what they need. If the written bar exam goes away some day, so be it. However, until that day, we’re stuck with what is.
It’s one thing to review past exams and issue spot until you can’t stand to look at one more. It’s another thing to sit at your laptop, see issues and then write, write, write. That is what should make the difference between pass and fail. I have no idea how the bar grades essays, but I would imagine that if most of what they read is dreck, then it won’t matter what the cut score is.
Here’s an example of how discrimination rules the bar exam world, as if it didn’t already rule the practice world, but that’s a topic for another time. No joke. Outrageous, isn’t it?
At least for those states that are providing an online bar exam this summer/fall, women shouldn’t have to deal with the humiliation. What about those who must sit for a Covid-ridden in-person exam? Will there be body searches to make sure there’s nothing that should not be there? Could the Rule Against Perpetuities be written on a tampon? You tell me. Please tell me how taking feminine hygiene products into the testing room encourages cheating.
This is just one more example of how the bias against women lawyers will never change in my lifetime, which is nearer to the end than to the beginning. More than 40 years ago, I had hope. Now, not so much.
Jill Switzer has been an active member of the State Bar of California for over 40 years. She remembers practicing law in a kinder, gentler time. She’s had a diverse legal career, including stints as a deputy district attorney, a solo practice, and several senior in-house gigs. She now mediates full-time, which gives her the opportunity to see dinosaurs, millennials, and those in-between interact — it’s not always civil. You can reach her by email at oldladylawyer@gmail.com.
Hopewell Chino’no being taken to court this morning.
1000hrs: Our lawyers are ready. We have Beatrice Mtetwa, Adv Nkomo, Jeremiah Bhamu, Gift Mtisi and Doug Coltart are ready
1002hours : The accused have taken to the holding cells waiting for trial. No time has been given yet as to when the trial will commence
1004hrs; MDC A VP Tendai Biti is in attendance for solidarity and legal advice
1013 hrs: The police have been very cooperative. Some of our comrades have been denied entry at the gate. There is a sizeable number of people in solidarity outside
LIVE UPDATES
There is a lot of confusion at the courts as our President and Convener of 31 July Movement Jacob Ngarivhume and co-accused Hopewell Chin’ono are shunted from table to another. It seems the state is not ready for trial
1057hrs
The court is now seated ready to start. Very few allowed in the court room due to covid 19 safety regulations
1111hrs:
Reza response..
– No double profiling done
– reads out the charges.. Inciting public violence as the main charge.
– gives evidence of the charges by reading tweets purportedly from JN’s twitter handle
– advises the court to keep the accused on remand
Reza and Murombedzi prosecuting for the state. Adv NKOMO in defence
1100hrs
Adv outlines the President’s complaints against the police.
– after arrest he was dumped at law and order for 6 hrs without a charge being levelled against him
– 48 hrs required by the law have lapsed before he appears before you
– he was not allowed access to his lawyers immediately after arrest
– was profiled twice. The police said were not aware of the first profile done by an unknown female officer raising serious security issues
1117 hrs
Reza’s response..
-rejects the placing of client to bail.
– calls Inv Officer Detective Inspector Naison Chirape to the witness stand.
– Chirape says JN must not be given bail as he can abscond. He said many Bishops are in support of JN so the demo with succeed and turn out to be violent
– Chirape reads out JN’s tweets saying the following on these tweets is too much
– Chirape said JN tweets are national and the whole country will follow him in demonstration and coz havoc. He says JN has called for war
Post published in: Featured
The Crisis in Zimbabwe Coalition (CiZC) notes the exposé by lawyer Dr Alex Magaisa demonstrating how the Reserve Bank of Zimbabwe (RBZ) loan facility designed to support commercial agriculture between 2007 and 2008 was politicised, polluted and plundered.
The exposé shows that the Farm Mechanisation looting is one of the greatest scandals in Zimbabwe post the new Millennium with at least US200 million dollars taxpayers money being looted by government Ministers, ruling party officials, clergymen and many other individuals who are connected to the ruling party.
The Crisis in Zimbabwe Coalition calls on the government of Zimbabwe to repeal the RBZ Debt assumption Bill and we, therefore, demand that everyone who benefitted from the loan facility MUST pay back the loans with interests.
We call upon the law enforcement agencies to do all they can to ensure that all the money that can be recovered must be paid back in full, including attaching properties of the individuals who benefitted from defrauding of the Farm Mechanisation loan facility. Now that the list is available, the Coalition expects the police to swiftly act on those who should be held accountable. The admittance by Gono in 2007 that the Farm Mechanisation programme was a loan facility which farmers were supposed to pay back is evidence enough to lay criminal charges against the beneficiaries. And to avoid conflict of interest, all the Judges and officers of the court who benefitted from this state loan facility must recuse themselves.
The shocking revelations only serve to confirm our long-held claims that corruption by the government, ZANU PF heavyweights and their connected elites are one of the largest contributors to the crisis in Zimbabwe.
The high-level corruption in Zimbabwe is going unchecked at a time when the government has failed to pay civil servants and when most of the country’s citizens are grovelling in grinding poverty. What is more embarrassing is that at the time of issuing out these loans, Zimbabwe’s economy was on its knees with rising cost of living, ever-increasing inflation, industrial output at its lowest and a weak local currency.
The Coalition maintains that the government should stem out the growing tide of corruption which has left the country on its knees. Endemic mismanagement has resulted in failure to prioritize pressing needs such as paying salaries of our hardworking civil servants.
Lack of will by the government to act on recommendations from the Auditor General’s office regarding corruption in government departments, including the President’s Office is also a pointer that corruption is going on unabated in Zimbabwe.
The so-called new administration led by President Mnangagwa has failed to deliver its promises to uproot corruption in the country as evidenced by an increase in the number of corruption cases including members of the First Family and their immediate connections.
Section 196 of the Constitution provides that public officers in leadership positions must abide by the following principles – honesty in the execution of public duties; accountability to the public for decisions and actions. Section 308 adds that it is the duty of every person who has custody or control of public property to safeguard the property and ensure that it is not lost, destroyed, damaged, misapplied or misused.
The Coalition also highlights the reality that the people of Zimbabwe now know that under Mr. Mnangagwa and the ZANU PF government has been reduced into systemic corruption and web of lies reflected in the many lies and distortions performed by public officials, notably former RBZ Governor Gono who lied to Zimbabwe about the Farm Mechanisation programme.
We, therefore, demand that the Government of Zimbabwe takes corrective measures to bring sanity and soberness to our nation by urgently instituting a Commission of Enquiry tasked with further investigating the RBZ loan saga.
Post published in: Featured
Morgan Komichi
Komichi believes that the organisers of the protest are putting the lives of people at risk for money as the country battles widespread coronavirus infections. Said Komichi:
I don’t know the rationale of this, but this does not smell good. Why put people’s lives at risk for money, why the protests now? As the MDC we will not be part of the charade.-
The Zimbabwe People Party (ZPP) has also distanced itself from the demonstrations.
In a letter to its members, the ZPP said it will not be part to the planned demonstrations, saying the main organiser, Transform Zimbabwe leader Jacob Ngarivhume, did not outline the safety measures that will be taken to protect the marchers. Part of the statement read:
The ZPP guidelines value the safety of members and Zimbabweans at large and in the absence of Covid-19 safety precautions and guidelines from Mr Ngarivhume, it is hence very difficult for ZPP members to take part because their safety is not guaranteed.
Mr Ngarivhume has also not shown us police approval for the demonstration and issues of a police escort for the demonstration.
Ngarivhume was arrested on Monday alongside corruption whistleblower and prominent journalist Hopewell Chin’ono.
The two were charged with contravening Section 187(1)(a) as read with section 37(1)(a)(i) of the Criminal Law [Codification and Reform] Act, Chapter 9:23, “incitement to participate in public violence’.
Post published in: Featured
Loice Matanda-Moyo
The Zimbabwe Anti-Corruption Commission (ZACC) seems to have extended its activities beyond simply investigating and combating corruption. For example:
ZACC is a constitutional body, as we shall explain shortly, and like all other such bodies it can only exercise functions that are given to it by the Constitution or which Parliament confers on it through an Act of Parliament. In this and subsequent bulletins we shall analyse ZACC’s functions relating to the investigation, prosecution and punishment of corruption and other criminal conduct, and see what if any limits the law imposes on those functions.
Establishment of ZACC
ZACC was originally established as a constitutional commission in 2009 by the 19th amendment to the previous (Lancaster House) Constitution. Its establishment was only formal, however, because no members were appointed until it was re-established in 2013 by section 254 of the present Constitution.
Functions of ZACC under the Constitution
Section 255 of the present Constitution gives ZACC the following functions:
Several inferences can be drawn from the way the Constitution expresses these functions:
One further point is that section 342(2) of the Constitution gives all constitutional bodies, including ZACC, “all powers necessary for them to fulfil their objectives and exercise their functions.”
Another point is that section 321(1) of the Constitution states that an Act of Parliament may confer additional functions on constitutional commissions. Parliament did this for ZACC when it enacted the Anti-Corruption Commission Act in 2004 [link].
Functions of ZACC under the Anti-Corruption Commission Act
Section 11 of the Anti-Corruption Commission Act sets out what it calls “the objects” of ZACC [they are really functions]. The first of these is:
“to promote the investigation of serious cases of corruption and fraud”
This suggests that ZACC should concentrate on serious cases, not petty ones ‒ and in a later bulletin we shall deal with the different sorts of corruption that are legally recognised. Note, incidentally, that the objective mentions corruption and fraud separately, indicating that Parliament did not regard all cases of fraud as necessarily involving corruption.
Section 12 of the Act gives ZACC additional functions, in particular the monitoring of procurement systems of public and private institutions. Procurement in Zimbabwe and elsewhere is a particularly fertile field for corruption so it is little wonder that the Act mentions procurement specifically.
The Schedule to the Act gives ZACC the following powers, amongst others:
It should be noted that in this outline of ZACC’s constitutional and statutory functions we have not mentioned ZACC’s important advisory and educational functions. Both the Constitution and the Anti-Corruption Commission Act give ZACC powers to make recommendations on ways to enhance integrity and accountability in the public and private sectors, to promote public awareness about corruption and its harmful effects, and to assist in the formulation of systems and procedures to prevent corruption. We have not mentioned these functions because in this bulletin we are concerned with ZACC’s powers in relation to the investigation, prosecution and punishment of corruption and other criminal conduct.
Additional Power of Arrest given to ZACC officers
ZACC officers have the same power of arrest as police officers. They were given this power by SI 143 of 2019, which declared them to be peace officers for the purposes of the Criminal Procedure and Evidence Act [CP&E Act] [link]. We explained the effect of this declaration in our Commissions Watch of the 17th July 2019 [link], but briefly the CP&E Act gives police officers and other so-called “peace officers” the same power to arrest criminals and suspected criminals. Hence the declaration of ZACC’s officers as peace officers effectively equated them with police officers in regard to their powers of arrest.
Conclusion
We are now in a position to sum up ZACC’s functions in regard to the investigation, prosecution and punishment of corruption and other crimes [which for convenience we shall call “corrupt conduct”]:
o The power to arrest suspects. Like all ZACC’s powers, the power of arrest must be exercised in accordance with the law, in particular the CP&E Act. This means that arrests must be reasonable and must be done only to prevent suspects escaping or to prevent them committing further crimes or interfering with evidence. Suspects must be told why they are being arrested and their rights must be explained to them, in particular their right to remain silent and to consult their lawyers. Suspects who are arrested without an arrest warrant must be brought to a police station [not ZACC’s offices] as soon as possible and brought to a court for remand within 48 hours.
o The power to obtain search warrants. While ZACC can obtain warrants, its officers cannot search premises under a warrant because only police officers can do that in terms of Part VI of the CP&E Act.
o The power to enter premises and to question people. Note that ZACC’s officers can ask questions, but cannot search the premises. Note too that no one is compelled to answer ZACC’s questions, not even suspects: they have a right to silence under the Constitution.
o The power to instruct the Commissioner-General of Police to investigate particular cases. The Commissioner-General must comply with the instruction.
o The right to recommend that the Police arrest people suspected of corrupt conduct. The Police are not obliged to act on any such recommendation, because their powers of arrest are discretionary under the CP&E Act. A police officer cannot be ordered to arrest a person, unless a warrant for the person’s arrest has been issued ‒ and ZACC does not have power to issue arrest warrants. ZACC’s officers do however have power to arrest people, as explained above.
In exercising these powers ZACC should remember that it is supposed to concentrate on serious cases of corruption, as suggested by section 11 of the Anti-Corruption Act. In the next bulletin in this series we shall look at what amounts to corruption in law, and whether the law classifies corruption according to its seriousness.
To be Continued in Part 2
Veritas makes every effort to ensure reliable information, but cannot take legal responsibility for information supplied.
Post published in: Featured
Russia’s Alrosa (MCX:ALRS), the world’s top diamond producer by output, has begun prospecting and preliminary exploration works for deposits in Zimbabwe, as part of a partnership with the country’s Consolidated Diamond Company (ZCDC).
The move is a welcome boost to the southern African nation’s attempts to expand diamond mining revenues. Zimbabwe first began allowing foreign companies to dig up precious stones in 2018, opening the door to private investors.
Mines minister Winston Chitando said at the time that his office was considering letting foreigners hold majority stakes in local operations on the condition that part of their output is reserved for domestic downstream industries.
“Following the signing of a joint venture agreement with Zimbabwe Consolidated Diamond Company to develop diamond deposits, we are progressing well towards the initiation of the full-scale prospecting works this year,” Alrosa’s deputy chief executive, Vladimir Marchenko, said in the statement.Alrosa opened an office in Zimbabwe’s capital Harare in 2018. First employees arrived early last year and the joint venture with ZCDC was formalized in December.
Most of Zimbabwe’s diamond fields are in Marange, in the eastern part of the country, where production is dominated by ZCDC.
In 2008, hundreds of artisanal miners were killed and thousands had to leave their homes as the military, under the former government of dictator Robert Mugabe, forced them to leave Marange.
International advocacy groups accused Mugabe of looting about $2 billion from the diamond-rich fields. The European Union lifted sanctions that curbed diamond exports from Zimbabwe at the end of 2013.
In early 2016, however, Mugabe evicted all diamond miners after they declined to merge with ZCDC.
President Emmerson Mnangagwa, who took office in 2018, has moved to end the country’s international isolation and attract foreign investment to boost an economy in tatters.
Campaign group and accountability watchdog Global Witness has said that Mnangagwa’s handling of the nation’s diamond industry would be the ultimate test for his commitment to economic reform and anti-corruption.
According to the organization, good governance of the country’s diamond sector is a barometer of the direction that Zimbabwe is taking more broadly in the post-Mugabe era.
“It will attest to the credence of President Mnangagwa’s claims of a zero tolerance approach to corruption and transformed economic governance,” Sophia Pickles, Campaign Leader at Global Witness, said.
Alrosa has committed to invest $12 million in Zimbabwe from 2020 to 2022. Most of the diamond fields are in Marange in eastern Zimbabwe, where production is dominated by ZCDC.
Post published in: Business