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orders revision of indigenisation law
Sifile and Ndamu Sandu, The Standard (Zimbabwe)
February 14, 2010
Morgan Tsvangirai's office has challenged the recent gazetting of
new empowerment laws forcing foreign owned firms to cede 51% of
their shareholding to locals, resulting in a government climb-down.
Last month the government gazetted the Indigenisation and Economic
Empowerment (General) Regulations 2010 which say that by mid-April
all businesses must give the state details on the racial composition
of their shareholdings. The directive wants companies to put a majority
of their shares in the hands of indigenous Zimbabwean blacks. It
calls for completion of the exercise within five years. Under the
new rules the government will determine what stake in an enterprise
must be ceded to indigenous Zimbabweans. Company owners missing
the deadline face up to five-years in jail.
yesterday said the regulations had already been discussed in the
Council of Ministers, which he chairs and that the Minister of Youth
Development, Indigenisation and Empowerment Saviour Kasukuwere had
been given up to March 1 to revise them. "There is an outcry
about the Bill. But let us look at the historical perspective of
this whole thing. Zanu PF passed the Bill. As the Council of Ministers,
we have resolved that the minister has until March 1 to sit down
with other relevant ministers affected by the bill. There has to
be consensus among ministers. For instance, there is a minister
of mines, investment, and industry. All these people have to be
consulted on the impact. It's either you incentivise or dis-incentivise
those that have an interest in investing in the country. It's a
very sensitive matter and the minister has been advised so."
strident opposition to the recently gazetted Indigenisation and
Economic Empowerment (General) Regulations 2010 had set the stage
for a showdown with Mugabe whose Zanu PF party has been angling
for the foreign-owned firms since the start of its chaotic land
reform. The PM's office has already prepared an analysis identifying
ways of challenging the move in Parliament, Council of Ministers
or in the courts, with the hope of getting it repealed or suspended
by Indigenisation Minister, Savior Kasukuwere or by President Mugabe.
Last week, Tsvangirai said the regulations were "null and void"
because according to the Global
Political Agreement (GPA) he is responsible for government's
policy formulation. He said Kasukuwere never consulted him or MDC-T
ministers whose portfolios would be affected by the new law.
The legal opinion
seen by the this paper points out that Cabinet and Council of Ministers
can challenge the decision on the basis of whether or not it reflects
current cabinet policy. The matter can also be taken for review
at the High Court, which under review can set aside the Statutory
Instrument (SI) if it finds it to have been unprocedurally passed
and whether their content is in conformity with the enabling Act.
The PM's office is also considering launching a challenge through
the Parliamentary Legal Committee under its Constitutional and Standing
Orders mandate. "The most effective manner of challenging the
regulations which may yield most effective redress is a policy challenge,"
reads one of the recommendations. "The Council of Ministers
(CoM) and the cabinet respectively, on the basis of the GPA are
charged with policy making and implementation. Admittedly the policy
has been made which led to the passing of the act (before the GPA).
However the drivers of the implementation of the policy are the
PM, cabinet and the CoM. This avenue may lead to the suspension
of the Statutory Instrument (SI)."
also note that Tsvangirai can cause "the SI to be repealed
or suspended by the relavant ministry or the president." Confusion
and disagreements around the new regulations have also brought to
the fore "competing and conflicting policies of the new government".
In an earlier statement, the party said the regulations were "clandestine
and nicodemous, provocative and anti-investment". "It
is simply a unilateral Zanu PF Bill which has failed to meet not
only the basic components of procedure, but has far-reaching negative
and dire consequences on the much-needed investment in Zimbabwe,"
MDC-T said. It said this was part of Zanu PF plans "to create
a new arena for looting and abuse", and warned that ordinary
Zimbabweans were unlikely to benefit from the new rules.
leaders responded angrily to the announcement, saying it cast a
dark cloud on potential investment. While supportive of the concept
of indigenisation, they said the timing and prioritisation was wrong.
Confederation of Zimbabwe Industries (CZI) president, Kumbirai Katsande,
said industry supports the programme but believes the government
should have addressed issues of recapitalisation first. "Civil
servants are on strike because the economy is not generating enough
money. How is indigenisation going to help create jobs? It is not
making sense and we need to get our priorities right," Katsande
said. Despite pronouncements by Tsvangirai and other senior government
officials that the regulations were null and void, Kasukuwere has
stuck to his guns saying he had done "enough consultations".
Victor Gapare, the Chamber of Mines president said industry had
submitted proposals on how the indigenisation programme could be
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