Corrupt govt officials besiege Chinese firm

THE Chinese have expressed outrage at the Zimbabwean government following a siege laid on one of its investors by corrupt government officials amid complaints about the rule of law, property rights, political bullying, criminality and corruption, it has emerged.

BY BRIDGET MANANAVIRE

The situation has tensed up the two countries’ diplomatic relations, while testing their strength. Harare considers Beijing its all-weather friend and strategic partner, but the Chinese this week openly questioned that posture after one of its investors was put under siege by local politicians and their supporters without protection.

This comes as Chinese company Sunny Yi Feng Tiles Zimbabwe (Pvt) Ltd, which has invested US$50 million into its Norton-based floor tile production factory, has decided to abandon its expansion plans, citing persistent harassment and demands for bribes by politicians and government officials.

The Zimbabwe Independent understands the Chinese Embassy in Harare this week engaged government over the issue and demanded protection for its investors, more so considering the two countries’ cordial relations.

China has various companies in Zimbabwe involved in mining, energy, construction, infrastructural development and manufacturing, among other economic sectors.

A Zimbabwe ministerial delegation consisting of Information minister Monica Mutsvangwa, Industry and Commerce minister Nqobizitha Mangaliso Ndlovu and Justice minister Ziyambi Ziyambi, as well as Information permanent secretary Nick Mangwana toured the company on Wednesday under pressure from Beijing to protect its investors.

In a damage-limitation exercise, Mutsvangwa invoked longstanding relations between Zimbabwe and China dating back to the liberation struggle, before calling for mutual appreciation of differences in culture and customs between locals and foreign investors.

Sunny Yi Feng started manufacturing tiles in May. The company produces between 30 000 and 35 000 square metres of tiles per day, exporting 70% of the tiles to Sadc countries, including South Africa, Malawi, Zambia, Botswana, Democratic Republic of Congo and Mozambique.

In addition, the company, which employees 1 193 locals, is setting up equipment in preparation for establishing a tableware manufacturing plant.

However, it was in the news recently after one of its employees allegedly assaulted Chief Chivero on June 17.

Sunny Yi Feng, however, denies the allegation and insists the chief actually assaulted its employee in front of two police officers and scores of people who were seeking employment. The company says police officers from Norton Police Station took statements from witnesses who exonerated the company employee and implicated the chief.

It also says it has been under siege from local politicians and their supporters. It has had run-ins with Norton MP Temba Mliswa over the alleged assault incident. Mliswa has also accused company officials of ill-treating and sexually abusing workers, failing to respect environmental laws and illegally mining gold.

His tweets accusing the Chinese of illegal gold mining and gang-raping workers have gone viral. The gold-mining and rape claims were this week dismissed by the company and the Chinese Embassy which has been angered by the issue.

The embassy has, however, initiated dialogue between Sunny Yi Feng and Mliswa, while encouraging the company to ensure it abides by the country’s labour and environment laws.

Chinese Embassy deputy ambassador Zhao Baogang told the Independent this week said government should protect foreign investors against such sort of problems.

Zhao also said the Chinese company, for its part, needs to address some labour and environmental issues which have arisen, but insisted investors should be protected.

“An MP should not always interfere in the operations of an investment project, acting like a government official or a policeman. It is the job of government officials to deal with such issues. Obviously, this is also what is expected under the ‘Zimbabwe is Open for Business policy’,” he said.

“Foreign companies, including Chinese companies, have to follow Zimbabwean laws; labour laws and environmental laws, but when problems arise they should be solved amicably without harassing investors.”

Zhao said Zimbabwe and China enjoy a longstanding friendship dating back to the liberation struggle in the 1960s and this should be reflected in trade and investment relations, not just in rhetoric and symbolisms. Beijing has fought in Harare’s corner during dark days after the liberation struggle.

In 2008, China defended Zimbabwe at the United Nations Security Council when some veto powers of the UN wanted sanctions to be imposed on the country. Beijing vetoed the UN Security Council resolution that would have condemned the country into being a global pariah. Russia abstained.

“In the new era the relations have been elevated to a comprehensive strategic level and I think that the way we treat each other should reflect that. We have confidence in the leadership of President Emmerson Mnangagwa and we want our relations to continue to grow. We, however, wish the government would take more proactive measures to protect investors,” Zhao said.

“I am not talking about Chinese investors only, but investors from all over the world. Investors all over the world look at how you treat other investors before coming to invest.

“The government is talking about re-engagement and being open for business. Actions, however, speak louder than words. If you treat investors fairly and projects succeed, investors will be watching and will throng to your country.”

Zhao said China has been consistently assisting Zimbabwe with concessional loans attracting low interest rates of between 2% and 2,5%, while also contributing to investment, job creation and major infrastructural projects. He said this showed it wanted to promote productive relations which were being undermined by investor disruptions.

“The Chinese assistance and investment should be acknowledged and appreciated, even if it is not, it should not be denigrated. Those groundless accusations in the social media against investors are not acceptable,” Zhao said.
However, Zhao said the Chinese Embassy appreciates measures subsequently taken by government to rectify the situation, “including sending ministers to the company to show their support”.

Chinese President Xi Xinping in April last year expressed displeasure to Mnangagwa over how Harare was treating Chinese investors despite the two countries enjoying warm relations. This was after government unilaterally and unlawfully cancelled Anjin’s mining concession in Chiadzwa alongside six other companies a few years ago.

Sunny Yi Feng vice-managing director Wang Xiaojing told the Independent the company’s board had become so frustrated by the persistent harassment and threats that they decided not to expand operations in the interim. He said the company would consider halting operations should the harassment, extortion and threats continue.

Wang said the company had planned to invest in more projects in Zimbabwe, but has now decided to look elsewhere in the region for oportunities.

“Our board has resolved to stop the expansion that had been planned and instead concentrate on the current project. They wanted to open four more factories here but that is not going to happen anymore. And if this persists we might also be forced to shut down,” he said.

“So far we have invested US$50 million on this project, but all in all we wanted to invest US$1,2 billion in Zimbabwe. We wanted to invest US$300 million in Masvingo for linen production. The plan was to provide seed and capacitation for farmers. But now we are thinking of taking the projects to Zambia, Angola or Mozambique.”

Wang said the while company was prepared to weather the storm in the midst of economic problems, it was worried about criminal and political issues.

“Political pressure, threats and demands are unnecessary and difficult to understand,” Wang said.
He said besides bullying by politicians and regulatory bodies, the company has to deal with power and fuel shortages, among other issues, adversely affecting production, inducing low sales volumes due to the depressed economy.

“Some of these allegations are designed to put pressure on us and every day we get different people coming here with different demands or threats. We get visits from politicians and teams from the government with different agendas,” he said.

“For example, just today alone we got visits from two different teams from the Ministry of Health one from Chegutu and another from Harare. Why not have one team? The National Social Security Authority will also be making its way in the afternoon or another visit,” Wang said.

“The MP also approached us and wanted us to purchase or hire equipment through him and also recruit employees via him. We have a problem with that. Last week he came here and chanted slogans, while threatening to get one of our directors deported.

“He has also made demands to do with the welfare of workers and we have agreed and are addressing those issues. The gang-rape allegations and gold extraction claims are totally false and if anything like that happens a report to the police should be made.”

Mliswa, however, said he was protecting the interests of the people in his constituency who are employed by the company and has no sinister intentions.

“I have been accused of so many things, but if I did those things where is the affidavit, why did they not report to the police. Let’s not lose focus. Are they complying with the laws of the country? No. Even they have said that there have things they need to sort out,” Mliswa said.

“We have been engaging and they did say that there are things that need to be fixed. They just need to comply with the regulations. We must not compromise for Norton, at what cost?”