Kasukuwere censured again
http://www.financialgazette.co.zw
Friday, 22 July 2011 16:52
Clemence Manyukwe, Political Editor
PARLIAMENT has censured Youth Development, Indigenisation and Empowerment
Minister Saviour Kasukuwere over controversial directives to foreign-owned
companies, which the legislators said contravened the country’s
Constitution.
The Parliamentary Legal Com-mittee (PLC) noted that some of Kasukuwere’s
directives dealt with issues outside his jurisdiction.
In an adverse report tabled in the House of Assembly on Tue-sday, the
committee said General Notice 114 of 2011 gazetted in May this year was in
contravention not only of the country’s Constitution but also of the
Indigenisation and Economic Empowerment Act itself.
The censure of the minister by the PLC, which sat last Wedne-sday to
deliberate on the matter, is the second such action inside two months.
Even ZANU-PF members in the legal committee, Paul Mangwana and Beatrice
Nyamupinga, concurred with the Movement for Democratic Change (MDC-T)’s
Shepherd Mushonga, who chairs the PLC, and MDC-T chief whip, Innocent Gonese
as well as the MDC’s Thandeko Mkhandla in condemning Kasukuwere, who has
come up with a series of regulations meant to give effect to the
Indigenisation and Economic Empowerment Act which seeks to force foreign and
white-owned companies to cede 51 percent of their shareholding to indigenous
blacks.
In the condemned regulations, Kasukuwere directed that mining companies
should only sell the 51 percent shareholding to designated entities approved
by his ministry.
The designated entities are the Zimbabwe Mining Development Corporation, the
National Indigenisation and Economic Empow-erment Fund and a statutory
sovereign wealth fund. An employee share ownership scheme or Trust and
management share ownership schemes were also listed as designated entities.
“The net effect of these directives is that in order to achieve the
prescribed indigenisation quota, a mining business must sell its shares to
designated entities. In other words, mining business entities cannot achieve
the prescribed quota by selling their shares to partners of their choice.
The minister has already found partners for them. This is clearly a fragrant
violation of section 21 of the Constitution quoted above, which is the
freedom of association provision,” the PLC said in its report.
The report added that a 1985 Supreme Court judgment in a case between May &
Ors vs the Reserve Bank of Zimbabwe, had defined shares in a company as
property.
Shares in mining businesses are property and as such Kasukuwere’s notices
for the compulsory acquisition of those shares translates to compulsory
acquisition of property, in violation of section 16 of the Constitution that
provides for protection against deprivation of property, the committee said.
It said in General Notice 114 of 2011, the minister went beyond matters that
were allowed by law to be dealt with through notices.
According to the PLC report, one glaring contravention was that whereas the
enabling statutory instrument provides that only businesses with a net value
of US$500 000 or more must submit provisional indigenisation forms, the
minister’s general notice had reduced the figure to a single dollar.
“Therefore, from the foregoing, the learned opinion of the Parliamentary
Legal Committee is that General Notice 114 of 2011 should be repealed
because it is not good law. It is bad law because it violates sections 16
and 21 of the Constitution; it is bad law because it is ultra vires the
provision of the enabling statutory instrument, which is the Indigenisation
and Empowerment Regulation 2010,” said the PLC.
Kasukuwere is expected to respond to the criticism in Parliament in due
course.
Last month, the PLC also unanimously condemned a set of regulations that the
Indigenisation Minister had issued. The empowerment regulations stated that
businesses that failed to submit indigenisation plans or provisional plans
within 30 days of receiving a notice faced imprisonment of up to five years.
They also said investors who made investments resulting in them having
controlling shareholding without appro-val in a sector in which locals must
have majority control also risked imprisonment for up to five years.
The committee said the stipulated penalties were not proportionate to the
offences as required by the Constitution.
They added that an attempt by the regulations to impose prison terms on
businesses was unreasonable and absurd.