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PM orders revision of indigenisation law
Vusumuzi Sifile and Ndamu Sandu, The Standard (Zimbabwe)
February 14, 2010

Prime Minister 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.

But Tsvangirai 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."

Tsvangirai's 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ways of challenging the move in Parliament, Council of Ministers or in the courts, with the hope of getting it repealed or suspended by Indigenisation Minister, Savior Kasukuwere or by President Mugabe.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)."

The recommendations 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.

Meanwhile, business 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 implemented.

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