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Indigenisation Regulations not suspended - Bill Watch 17/2010
April 16, 2010
The House of
Assembly has adjourned until Wednesday 30th June, The Senate has
adjourned until Tuesday 15th June
Regulations not suspended
Regulations [Statutory Instrument 21/2010] have not been suspended.
They continue in force in the form in which they were gazetted on
29th January. One amendment is expected to be gazetted in the near
future to accommodate the views of the Parliamentary Legal Committee
[see below]. There are still ongoing consultations which may result
in further amendments but until these are gazetted, and there is
not sign of this yet, the present regulations hold good.
to meet Parliamentary Legal Committee objection
Legal Committee [PLC] found section 3(a) of the Indigenisation Regulations
violated the Constitution.
[Section 3(a) of the regulations requires businesses above the prescribed
threshold [asset value above $500 000] to “cede” a controlling
interest of not less than 51% to indigenous Zimbabweans within 5
years.] The PLC concluded that the word “cede”, without
any requirement of payment or the giving of value for a controlling
interest ceded, infringes section 16 of the Constitution [which
prohibits compulsory acquisition of property without proper compensation.]
The PLC decision was discussed with Youth Development, Indigenisation
and Empowerment Minister Kasukuwere, who gave the PLC a written
undertaking to amend the regulations in order to make it clear that
the cession of a controlling interest is a cession “for value
at the option of the owner”, i.e., that a compulsory free
handover is not required. A draft statutory instrument drawn up
by the Minister giving effect to the agreed amendment was approved
by the PLC, which then sent a non-adverse report on the regulations
to the Speaker, conditional on the Minister’s honouring his
undertaking to amend section 3(a). The report states that if the
Minister does not amend section 3(a) as promised, the PLC will replace
the non-adverse report with an adverse report. The Minister is expected
to gazette the agreed amendment in the next few days.
Regulations still in force notwithstanding “Null and Void”
reports on what Cabinet decided about the Indigenisation Regulations
at its meeting on Tuesday have caused much confusion. A statement
was issued by the Prime Minister’s spokesman, and later confirmed
by the Minister of State in the PM’s office, that following
a Cabinet decision the regulations were “null and void”.
This was roundly dismissed by the President and Minister Kasukuwere
the following day. The President did say, however, that a Cabinet
committee is looking at the regulations and that there would be
some revisions after consultations.
The present legal status of the regulations is clear:
- The regulations
can only be suspended or amended or repealed by the responsible
Minister, the Minister of Youth Development, Indigenisation and
Empowerment, by the gazetting of an appropriate statutory instrument.
- The regulations
can only be declared null and void by a court of law.
- A Cabinet
decision that the regulations are null and void/suspended/will
not be implemented has no direct, immediate legal effect, and
the same applies to an announcement of a Cabinet decision, whether
made by the Prime Minister’s spokesman or by the Prime Minister
himself. Until the responsible Minister gives effect to the Cabinet
decision by gazetting a statutory instrument, the regulations
continue in force in their original form, and businesses must
conduct themselves accordingly.
of section 4 of the regulations can certainly be slowed down by
the Minister – by the simple expedient of delaying action
in cases where businesses have failed to submit their IDG 01 forms
and indigenisation implementation plans [see below].
Attempts to lay down the law by Ministerial or official
announcement are to be deprecated. They are inconsistent with the
rule of law and they almost invariably cause unnecessary confusion,
as has happened in the present case.
April was last day for submission of forms and iIndigenisation plans
was the last day of the forty-five day period within which businesses
above the $500 000 asset value threshold had to submit their completed
IDG 01 forms and “indigenisation implementation plans”
[section 4 of the regulations], unless they had applied for and
been granted an extension. [Section 4(4) of the regulations provides
for the Minister to grant an extension of up to thirty days if a
business has “good cause” for it.]
to meet deadline not a criminal offence
many press reports, failure to meet the 15th April deadline, or
an applied for extended deadline which has been granted by the Minister
to a particular business, is not an offence. There is no penal sanction
for such failure. But the Minister has an administrative remedy
[see next paragraph].
powers if indigenisation implementation plan not submitted
If the deadline,
or extended deadline, passes and a business has not submitted its
IDG 01 form and indigenisation implementation plan, section 4(4)
of the regulations allows the Minister to, in effect, order the
business to do so. The Minister may do this by adopting either of
the following procedures:
- the Minister
may have a copy of form IDG 01 served on the business in any of
several specified ways, including personal delivery to the owner
or a responsible person at its head office or by registered mail;
- if service
on a business in any of the specified ways is “not possible
for any reason”, the Minister may publish a notice in the
Government Gazette notifying the business of “the requirement
to collect and complete Form IDG 01”.
of such an order is that the business concerned has thirty days
from the date that the IDG 01 form is served on it, or from the
date of the notice in the Government Gazette, within which to submit
its completed form and indigenisation implementation plan. [Note:
a thirty-day extension is possible in individual cases, on “good
cause shown”, but has to be applied for.]
to comply with minister’s order an offence: An offence
will be committed if a business fails to submit its Form IDG 01
and indigenisation implementation plan after being required to do
so by the Minister under this section 4(4) procedure. The owner
of the business, or the directors of the company concerned, will
be liable on conviction to a $2000 fine or 5 years in prison or
for slowing down implementation: The regulations do not
state a time-limit within which the Minister must take steps under
section 4(4) to compel the submission of forms and indigenisation
implementation plans, so this phase of the exercise could be indefinitely
delayed at the Minister’s discretion.
All Acts of
2009 have now been gazetted. [Note: the Audit Office Act, which
was gazetted on 2nd April, is not yet in force; its date of commencement
will be fixed by statutory instrument in due course.]
Bill in House of Assembly: Public Order and Security Amendment Bill.
[Private Members Bill in second reading stage]
Statutory Instruments: Statutory Instrument 81/2010
fixes, very belatedly, employers’ assessment rates for 2010
for the purposes of the National Social Security Authority’s
Accident Prevention and Workers’ Compensation Scheme.
makes every effort to ensure reliable information, but cannot take
legal responsibility for information supplied
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