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Exploring NMB directors' decision
Alex Tawanda Magaisa
March 12, 2004

Alex Magaisa is Baker & McKenzie Lecturer in Corporate and Commercial Law at The University of Nottingham. Write to him at alex.magisa@nottingham.ac.uk

The crusade against corruption has generated great interest and concern across the country and beyond. On the surface it appears to be a noble effort to clean up the business sector and combat corruption.

Indeed the emphasis emanating from the Reserve Bank of Zimbabwe (RBZ) seems to indicate a desire to promote good corporate governance within corporate organisations. While it is a commendable stance, the approach raises a number of legal questions both in principle and practice.

It has recently been alleged that directors of corporate organisations such as NMB Holdings Ltd left the country in circumstances that suggest that they were evading the legal process. However, the background to this situation has not been clearly explained. We believe that the state's use of illegal and heavy-handed methods rather than the alleged guilt of the accused persons is the primary cause of their avoidance of the legal process. The fight against corruption to be a noble one should not be fought with illegality.

Laws that violate fundamental rights cannot be justifiably used as the basis for combating corruption or promoting good corporate governance. In our view no reasonable individual should succumb to laws that violate their rights. They will justifiably seek protection before such rights are eroded.
It is unlikely that the state will get assistance from other states if it seeks to enforce laws that blatantly contravene internationally recognised legal tenets. As a result its purported aim of combating corruption will ultimately fail in the long run.

Media coverage
Firstly, the sensationalism in the media has created the general impression that any accused individual is guilty of corruption. While it is accepted that the involvement of high-profile business executives, who enjoy celebrity status in a country shorn of celebrities of the normal genre, generates media excitement, the sensationalism is tantamount to trial by the media.

One of the crucial foundations on which our legal system rests is that an individual is innocent until proven guilty. It also explains why accused individuals are ordinarily entitled to bail pending trial. Adverse media publicity raises questions pertaining to the extent to which media coverage might affect the "due process of law".

In fact, unfair media coverage can affect the legal process since the accused person is entitled to and can argue that media bias jeopardises the fairness of their trial.

While the public is entitled to freedom of expression, courts have recognised that the right of the accused to a fair trial must not be sacrificed. Even where the accused is a public figure, he is entitled to a fair trial.
Therefore, when commenting on pending criminal proceedings journalists ought to bear in mind that there are limits of permissible comment especially in relation to statements that are likely to prejudice the chances of a person receiving a fair trial or to undermine the public's confidence in the role of the courts in the administration of criminal justice.

The major problem with the media coverage of these cases is that it is so adverse and perverse to the extent that it moulds the accused into a guilty individual or monster in the opinion of the community long before he is tried before a court of law. This might affect the impartiality of the court because it may be exposed to inculpatory information otherwise inadmissible at the actual trial.

Adverse media coverage increases the risk of leading extraneous information to impact on the court whereas the accused does not have the chance to cross-examine the journalists. Against the background of the overwhelmingly biased coverage in the state media one would think that the NMB directors are guilty. The state media has not ventured to critically assess why NMB directors decided to leave the country. The impression that has been created is that they escaped the legal process because they are guilty. Yet on the other hand it is arguable and highly probable that they actually left to safeguard the erosion of their legal rights under the draconian law that was recently promulgated.

Escaping illegality
A key point is that in enforcing corporate governance and combating corruption the state cannot fight illegality with illegality. A crucial question that is not being highlighted in the mainstream state media is why corporate executives are sceptical of the whole process and are therefore deciding to stay away from the country.

In my view, one of the crucial reasons is the reconstructed criminal justice system that undermines the foundations of natural justice. The recently promulgated amendments to the Criminal Procedure and Evidence Act, through the Presidential Powers (Temporary Measures) Act fundamentally affect the constitutionally protected rights of every individual. The net effect of the new laws is that it only requires a mere accusation to incarcerate a person for almost a month without allowing him recourse to the courts of law. This effectively means that a person accused under those laws loses his long-standing right to be presumed innocent until proven guilty in a court of law. In effect it amounts to a jail sentence for a mere accusation.

The laws clearly violate Section 13 of the Constitution, which protects the right to personal liberty and Section 18, which protects the right to the protection of the law. The laws illegally oust the jurisdiction of the courts thereby contravening the tried and tested principle of separation of powers, which divides state power between the executive, judiciary and parliament. The Act under which the new laws were passed has always been criticised as being autocratic since it by-passes parliament and gives law-making powers to the executive. In the case of the judiciary, the executive is dictating to the courts vis-à-vis its powers, which are protected by the Constitution. The executive cannot arbitrarily determine and demarcate the powers or jurisdiction of the courts.

In addition the laws violate the basic tenet that the state has the burden to prove guilt in criminal matters. The laws place the burden of proof on the accused, which also violates the presumption of innocence. Ordinarily the police are entitled to arrest a person on reasonable suspicion that the person has committed an offence. Yet these laws permit the police to arrest a person first and investigate while he is in detention.

The country has regressed to the days of preventive detention of the early 1980s, which the likes of Dumiso Dabengwa know very well as they were incarcerated under those laws. In Tanzania, the late President Julius Nyerere also used similar draconian laws towards the end of his dictatorship, locking up people for even carrying a bar of soap or packet of toothpaste. It was alleged that these things had been obtained from the parallel market when that market was thriving during the bitter days of the failing Ujamaa socialism.

The case of the beleaguered businessman James Makamba clearly shows the effect of the application of these laws and provides ample ground to show why persons who risk being accused, whether rightly or wrongly, to take evasive action in order to safeguard their legal rights. In that case Justice Ziyambi of the Supreme Court recently indicated that the new laws were patently unconstitutional.

There is no doubt that a properly constituted Constitutional Court, exercising good judgement will declare the laws to be unconstitutional. But the nature of our legal procedures is such that people can still be incarcerated under these patently unconstitutional laws and therefore will lose their legal rights in the meanwhile. To say people should succumb to the laws that are so bad simply because they are the laws is tantamount to endorsing the view that individuals should lose their rights first before challenging their constitutionality. That clearly is a wrong view since the constitution is meant to prevent the erosion of rights - the very thing that is happening to the likes of Makamba right now and that could happen to any person who happens to be accused even if the accusation is wrong.

In any event as we have seen due to the slow legal process in Zimbabwe, challenging the constitutionality of laws might take months or years and in the meanwhile legal rights are eroded. Even if the court were to declare the laws unconstitutional, Makamba has already lost his legal rights. If he is found not guilty he will effectively have served a sentence for an offence he did not commit. It is hardly surprising therefore that any reasonable person who might be accused will not wait for the police to arrest him and suffer the loss of legal rights under clearly unconstitutional laws.

Under such a patently unconstitutional legal regime it is likely that people vulnerable to accusations will continue to evade for purposes of protecting the legitimate legal rights. In my view NMB directors or people in their position are perfectly entitled to safeguard the loss of their rights particularly in a case in which it is not even known who the complainant is. I would think any corporate director is making plans to leave the country lest they face the wrath of unconstitutional laws without getting recourse to the courts. Surely that is not the way to enforce corporate governance. The state has indicated that it will seek the assistance of Interpol or other foreign state authorities in order to bring the directors to Zimbabwe.

Conclusion
In my view, Interpol and other state authorities operate on the basis of legality and would not reasonably work to undermine internationally recognised legal rights. There is nothing wrong with bringing people to justice but the laws under which people are being charged contravene fundamental rights. There is enough room for abuse of legal powers for various reasons including targeting individuals whose political persuasions might not be in line with those in power. It is difficult to resist the temptation that it is using the legal process to punish opponents disguised under the cloak of the otherwise commendable anti-corruption drive.

I do not think any international organisation would bring itself to participate in a process that is illegal. In my view if the state adopts proper legal procedures and adheres to the rule of law, I do not think people would run away from the system. At present they will continue to seek refuge elsewhere because the current laws catch even the innocent within that all-inclusive net and punishes them for offences they did not commit.

Given that current exchange control laws deal with these situations and normally civil or criminal actions are preferred against corporate entities, I do not think it is the guilt that has driven the executives away; rather it is the oppressive and unconstitutional laws under which they risk losing their legal rights that will continue to drive them away.

In my view, that is not the way to promote good corporate governance. You cannot fight corruption with illegality.

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