Chingola District Commissioner George Sichula said almost all the local contracts involving Zambian companies have been terminated by KCM.
Mr Sichula said no reasons have been advanced by the mining company for terminating local contractors’ and suppliers’ contracts and that KCM had created a problem that needed to be addressed.
He said his office had been trying to engage KCM management into discussing the issue.
“Termination of contractors for Zambian companies is a serious issue which KCM should re-address because the company has created a problem and I thought we needed to call for a meeting and address the problem,” he said.
Mr Sichula said the number of contractors and suppliers operating in Chingola was huge and sending them on the streets was a big challenge to Zambians.
Some contractors affected had complained that KCM had offloaded them on the street due to termination of their contracts.
They said some contractors were only given contracts for three months despite being the longest serving at Nchanga Underground mine.
They complained that it was difficult to get long-term contracts from KCM while companies with Asian origins had better rates, better contracts and were paid on time.
KCM management could not be reached for a comment.
Meanwhile, Government has directed KCM to bear the liability of offsetting the huge amount it owes Zambia Revenue Authority (ZRA) after it underpaid its workers Pay as you earn (PAYE) for a period of four years.
Labour Minister Fackson Shamenda has since summoned the Vedanta Resources Plc management and union representatives for a meeting to chart the way forward, saying Government would not allow investors to flout the labour laws with impunity.
“My ministry has received reports that KCM underpaid ZRA its employees’ PAYE deductions and further that the mine will effect deductions from the affected employees. My ministry directs that KCM management bears the liability to ZRA to offset the difference in taxes due, no employee shall be affected,” he said.
Speaking when he addressed journalists yesterday, the minister said those summoned were expected to appear before him and other officials by this afternoon or tomorrow morning.
Mr Shamenda said KCM, as an agent of Government, had a legal obligation to deduct the appropriate and correct tax from employees’ emoluments and remit such tax to the relevant authorities.
According to an audit report, KCM had underpaid PAYE for workers to ZRA and effected deductions from affected employees who were in employment during the 2006, 2007, 2010 and 2011 period.