MPs grill Kapata for failing to remit Mukula proceeds to Treasury

Opposition members of parliament yesterday grilled Minister of Lands and Natural Resources Jean Kapata on why government decided to spend all proceeds from the sale of illegal Mukula on revamping Kawamba Tea without first remitting the money to the Treasury.

And Kapata revealed that the total value of Mukula logs confiscated as at December 2017 was K75,350,400.

Meanwhile, Kapata failed to justify why ZAFFICO was selling Mukula at US$600 per tonne when the market price was US$2,500 per tonne.

Responding to a question from Chifubu PF member of parliament Frank Ng’ambi who wanted to know what the total value of Mukula logs confiscated as at 31st December, 2017 was, whether the government was aware that the Mukula logs are losing value due to the exposure to the sun and rain, and if so, what measures the government is taking to secure the logs and avoid total loss of value, what measures the government was taking to control the indiscriminate cutting of the Mukula tree and whether the measures are yielding desired results, Kapata revealed that ZAFFICO had been selling Mukula logs at US$600 per tonne.

“The total value of Mukula logs that were confiscated as of 31st December 2017 was US$7,535,000.40 and in kwacha, that’s K75,350,400. The total logs of the Mukula tree species confiscated in this case were 62,792 translating into 12,558.40 tonnes. The price for Mukula logs is $600 tonne and this is dependent on the quality of the logs and other incidental costs associated with exporting the Mukula logs. In (b), government is fully aware that the mukula logs are losing value due to exposure to the sun and the rain. It should be noted that timber loses its value due to extended and uncontrolled exposure to adverse weather conditions such as heat and rain. This affects the wood properties of the timber thereby reducing its market value,” Kapata said.

“(c), Mr Speaker, in order to secure the logs and avoid total loss of value, the government has engaged the Zambia Forestry and Forest Industries Corporation (ZAFFICO) to mop up the illegally harvested Mukula logs and export them to where the market for Mukula logs is readily available. This is to allow government to salvage some economic value from the illegally harvested logs. Furthermore, the government gave an amnesty to the concessional license holders who had legally harvested the Mukula tree species before the ban on the 13th of June 2017 to move the Mukula logs to safe places and ware houses so as to avoid wastage.”

She said the measures which government had put in place to curb indiscriminate cutting of trees were yielding positive results.

“The measures outlined above have indeed yielded results evidenced by marked reduction in illegal activities in all the hot spots where the mukula tree is prominent. The ministry, working in collaboration with the defence and security wings, has continued to impound truckloads of illegally harvested mukula logs and surcharged appropriate penalties in line with the Forest Act number 4 of 2015 to a fine not exceeding 100,000 penalty units or imprisonment to a term not exceeding two years or both,” she said.

When Milenge PF member of parliament Mwansa Mbulakulima asked Kapata whether a special account had been created for the Mukula proceeds, the Minister replied in the affirmative but hastened to mention that the resources were being used to revamp Kawambwa tea.

“An account has been opened through ZAFFICO and the proceeds coming from the illegal sale of Mukula, Mr Speaker is being revamped into Kawambwa Tea company which I think had folded up and it has now been given to ZAFFICO to run. So all the proceeds that are being collected from this particular sale is going to revamp the Kawambwa tea,” she said.

But Liuwa UPND member of parliament Dr Situmbeko Msokotwane, who is a former minister of finance, wondered why the resources were not passing through the Treasury.

“By law, disposal of those properties should have gone into the Treasury, account 99. Can I find out why you decided to take the money to ZAFFICO without appropriation from this House?” asked Dr Msokotwane.

In response, Kapata said it was government policy to take the money straight to Kwambwa Tea.

“Mr Speaker, it is government’s decision to take the money and revamp into Kawambwa tea because we think as a government, Kawambwa Tea Company is viable. It is a viable company and it is a company that has employed local people in Luapula and therefore, it is government’s stance and policy that the money be diverted to revamp the Kawamba Tea Factory,” she said.

Kabompo UPND member of parliament Ambrose Lufuma asked Kapata whether that was not an abrogation of financial regulations.

“Minister this is a follow up question to honourable Dr Musokotwane’s question. By regulation, any government revenue should hit account 99 before any decision is made to disburse it to other activities and that decision must be appropriated by Parliament. Now you are transferring this money to Kawambwa Tea because you say it is viable. Don’t you think this is an abrogation of the financial regulations and the law?” asked Lufuma.

In response, Kapata said; “I mentioned that it is government’s stance and as we stand today, sir, ZAFFICO is a timber company and it is 100 per cent owned by government and the people who are in ZAFFICO are also foresters and therefore, if government saw it fit that we need to revamp Kawambwa Tea and we have money that has not been budgeted for, money that we have confiscated from illegalities, government had the right to divert that money to revamp the ailing company and that’s what we did so it is government’s stance and it is a policy from government’s side.”

Solwezi West UPND member of parliament Teddy Kasonso wondered why government was breaking the law with impunity.

“Minister, why is your government breaking the law with impunity? The current law is very clear that such funds should first go into account 99, nobody is against the revamping of Kawambwa Tea after that, your government could have taken money to Kawambwa Tea but you are taking money directly to Kawambwa Tea, you are breaking the law, why are you breaking the law with impunity?” asked Kasonso.

But Kapata insisted that government was not breaching any regulations.

“Mr Speaker, I find the member of parliament for wherever, from Solowezi West, for being upset. Government is not making any mistake. It is government’s position and we will have to follow what the government wants to see. I have said it in very simple words that we have not misused that money, that money has gone into revamping a company that has gone obsolete, is it? Bankrupt or something like that. Mr Speaker, government is not breaking the law, it is government’s policy,” she said.

Meanwhile, Kapata failed to justify why ZAFFICO was selling Mukula for US$600 per tonne when the market price was US$2,500 per tonne.

“The US$600 per tonne is the only amount of money that ZAFFICO has been selling this particular product. The buyer from ZAFFICO pays customs duty, they also have insurance costs, they also have transport costs much that by the time they are landing the mukula wherever its going, it costs them more than US$2,500 per tonne,” said Kapata in response to a question from Mangango UPND member of parliament Naluwa Mwene.

         

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