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Emergency powers and government control
Media Monitoring Project Zimbabwe (MMPZ)
Extracted from Weekly Media Update 2004-36
Monday September 6th – Sunday September 12th 2004

ZIMBABWE’S repressive media laws, infamous for their crude suppression of alternative sources of information, have given rise to public perceptions of key national issues being largely shaped through the lens of the official media, which have long become dedicated messengers of pro-government propaganda.

This was clearly illustrated in the week by the government media’s failure to question the authorities’ continued abuse of Presidential decrees to promulgate laws that severely erode constitutionally guaranteed rights of Zimbabwe’s citizenry. For example, these media did not critically analyse the government takeover of businessman Mutumwa Mawere’s Shabanie and Mashaba Mines (SMM) Holdings through the recently gazetted Presidential Powers (Temporary Measures) (Reconstruction of State Indebted Insolvent Companies) Regulations 2004. Neither did they fully discuss the implications of the regulations on property rights enshrined in the Constitution. Rather, they demonstrated their ineffectiveness as diligent watchdogs of government policies by unprofessionally siding with the authorities on the matter. The private media, which have often tried to balance such disparities by providing alternative views, did not fare any better. Except for The Daily Mirror and its weekly sister, The Sunday Mirror, the rest either simply announced the takeover or ignored the matter altogether.

In their coverage of the development, the government media as illustrated by The Herald (7/9) and ZBC (7/9, 6 & 8pm) only provided one-sided reports on government’s takeover of SMM and tried to justify the move. For example, although The Herald quoted Justice Minister and a member of the Cabinet Taskforce on SMM, Patrick Chinamasa, saying government’s intervention was aimed at preventing SMM from "collapse", it did not challenge him on the technicalities surrounding the move. Instead, the paper attempted to defend government’s move by chronicling SMM Holdings’ alleged indebtedness to government arising from the authorities’ role as a guarantor in helping the company source funds on the local market.

The paper claimed that as part of its "restructuring" of SMM, government was also expected to assume liability for US$23 million, which is the balance of payments that African Resources Ltd (ARL), the holding company of SMM, still needed to pay for the assets of Turner and Newall in Zambia and Zimbabwe, which it acquired in 1996. To further justify government’s takeover, The Herald claimed that the mining company had suffered from "low capitalisation and diversion of cash resources" while "it is understood the company suffers from bad governance". Thus, it contended that the "collapse" of SMM was "inevitable" if government did not take "corrective measures and intervene".

ZBC took a similar stance that same evening. For instance, ZTV (7/9, 6pm) welcomed the government move saying it would "save thousands of jobs" and quoted Chinamasa adding that the takeover was done to "preserve national interests and the assets of the company". But it did not explain the extent of the extraordinarily broad powers contained in the "emergency" regulations or whether government would now apply them to all companies in financial trouble. Instead, TV and Radio Zimbabwe (8/9, 6am) tried to get public approval for government’s move by quoting selected individuals supporting the takeover and claimed that, "Zimbabweans have expressed concern at business people who fatten their pockets while workers get poorer…"

As if to address such concerns, Chinamasa was quoted in The Herald and Chronicle (9/9) saying the authorities could not just help SMM financially and leave it in the hands of Mawere because they did not want to "enrich" the business baron.

However, The Sunday Mirror (12/9), and its sister daily, The Daily Mirror (7/9 and 8/9), gave the other side of the story. The two papers contradicted claims by the government media that the grabbing of SMM arose solely from government’s sense of social responsibility to the nation by highlighting several irregularities that marked the "nationalisation" of the company. The Sunday Mirror especially, not only questioned the morality and legality of the Presidential decree that paved the way for SMM’s takeover by government but wondered "what the whole saga entails for the private sector". The paper claimed that a clique of unnamed businessman and politicians triggered the takeover by deliberately creating a financial squeeze on SMM and then fabricating corruption charges against its owner.

Mawere is facing corruption charges arising from the alleged externalisation of foreign currency.

The Sunday Mirror further alleged that SMM’s financial problems seemed to have been off-set by the central bank, which converted the company’s foreign currency at the rate of US$1: Z$824, leaving the mines starved of foreign currency needed for their operations.

Moreover, said the paper, from December 18 2003 to April 1 2004, the mines received US$9 million but only US$1 million was availed to them by the central bank for the purchase of imports.

The Sunday Mirror also attributed SMM’s problems to the Reserve Bank’s politicisation of the Productive Sector Fund (PSF) loans. It claimed that while government granted funds to other companies as PSF loans, in SMM’s case, they were termed "State loans". The paper argued that such treatment of SMM raised "speculation of a deliberate political move to bring the establishment to its knees so as to provide an excuse for a takeover". While The Herald and Chronicle (9/9) quoted Chinamasa claiming that Mawere did not "invest a cent in SMM" but acquired it through "financial engineering", The Sunday Mirror cited Mawere as having contested this. It reported that Mawere’s purchase of SMM was, on the contrary, not financed by the government through the Minerals Marketing Corporation of Zimbabwe’s (MMCZ) guarantee. Instead, the loan for which the guarantee was sought was merely meant for working capital purposes.

Apart from providing such background information on the operations of SMM, the Sunday weekly also sought comment from legal experts who observed that government’s rushed appointment of an administrator for SMM Holdings, barely a week after appointing an investigator, was irregular.

Constitutional lawyer Lovemore Madhuku told the paper that the very fact that the government had to use a Presidential decree to confiscate the mines showed that there was no law empowering it to do so. He added that the use of such powers was an "infringement" of Section 16 of the Constitution, which protects private property.

An unnamed legal source also quoted by the paper agreed, saying the normal procedure should have been for the courts to declare the company distressed and unfit to continue in business before government moved in. Besides, the source noted, it was also normally the prerogative of the board to make a determination whether liquidation was the only solution.

"However, this was a State-induced distress. A number of individuals naturally are using the State for their own selfish interests", added the source.

Although the private radio stations were largely reticent on the issue, SW Radio Africa (9/9) carried a related report that did expose government’s apparent disregard for private companies’ rights. It reported that, "four senior government ministers…visited Sable Chemicals recently and fired six company managers for allegedly failing to solve labour disputes" and appointed "Zanu PF functionaries" into key positions in the company. An unnamed employee was quoted alleging that the ruling party officials accused Sable employees of supporting the MDC.

Meanwhile, The Financial Gazette (9/9) helped expose some of the fallacy surrounding government’s commitment to weed out corruption in the corporate sector through its anti-graft crusade. The paper reported that a ZANU PF committee set up to investigate the operations of the ruling party’s companies had released a "watered down" report on the issue. The investigation, which the paper suggested was chiefly targeted at Speaker of Parliament Emmerson Mnangagwa as ZANU PF’s previous finance chief, was said to have "dismally failed to lift the lid off the complex and secretive operations of the ZANU PF companies or uncover any imprudent deals". This is despite the fact that the report had allegedly "exposed serious corporate governance issues".

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