Govt owes €16m
http://www.financialgazette.co.zw
Wednesday, 19 December 2012 19:18
ZANU-PF has acknowledged that the takeover of farms covered by the Bilateral
Investment Promotion and Protection Agreements (BIPPAs) during the chaotic
land reform programme over the past decade plunged the country into debt,
which it will be forced to pay up despite claims by the party that
compensation for farms taken was out of the question.
A Central Committee report to the ZANU-PF 13th people’s conference held two
weeks ago revealed that the farms covered under the BIPPAs remain a headache
to the government after Dutch farmers approached the International Centre
for Settlement of Investment Disputes (ICSID) and won a claim of 16 million
Euros.
Although the report does not say how many BIPPA farms were acquired, ZANU-PF
acknowledges this debt along with another yet to be finalised claim by a
German family, of US$600 million.
“The Dutch farmers who took the country to the ICSID and won have not been
paid. In addition, a German family, the Von Pezolds’ have also taken us to
the ICSID for their farms (Forrester Estates and Border Timbers properties),
which we acquired and partly resettled,” says the report.
Some of the farms since acquired by government covered by BIPPAs are of
nationalities from Denmark, Germany, Italy, Malaysia, Netherlands and
Switzerland.
The BIPPAs require that government pay fair compensation in currency of
former owners’ choice for both land and improvements for farms acquired.
According to the ZANU-PF report, the Dutch farmers who won at the ICSID
still remain unpaid.
The report states that the Attorney General’s Office is preparing the
country’s defence outline with regards to the Von Pezolds’ claim of US$600
million.
According to the Bretton Woods project, the ICSID, which is part of the
World Bank Group, is an arbitration forum between governments and foreign
investors to settle investment disputes.
Investment and free-trade treaties offer compensation to foreign investors
if the government from the ‘host’ country ‘expropriates’ the investment or
disrupts it. Most treaties contain an investor-state dispute resolution
mechanism.
Using this mechanism, companies can by-pass domestic courts and go directly
to international arbitration when they believe their contracted rights have
been violated.
The website www.brettonwoodsproject.org states that ICSID is known as a
secretive court as no arbitration has permitted public attendance.
“Reports of the tribunals need not be published if a disputing party
objects. ICSID, operating as an ad hoc arbitration panel and not a court
with permanent judges, lacks a formal appeals process. Instead there is a
review committee, which lacks the power to overturn judgments made by the
original panel,” says the website.
The Bretton Woods project says 70 percent of ICSID cases have favoured the
investor with the legal fees and arbitration costs borne by the losing
party.
Meanwhile, the ZANU-PF Central Committee report states that there are 210
former white farmers under prosecution for failure to vacate gazetted land
as required by the Gazetted Land (Consequential Provisions) Act Chapter
20:28 of 2006, the majority of who had been given time to wind up their
operations.
“Some of these whites are citing support from party members for refusing to
vacate their former farms,” says the report. — Staff Reporter