Statutory Instrument 116 of 2010.1
[CAP. 14:33
Indigenisation and Economic Empowerment (General) (Amendment) Regulations, 2010 (No. 2)
IT is hereby notified that the Minister of Youth Development, Indigenisation and
Empowerment, after consultation with the Board has, in terms of section 21 of the
Indigenisation and Economic Empowerment Act [Chapter 14:33], made the following
regulations:—
1. These regulations may be cited as the Indigenisation and Economic Empowerment
(Amendment) Regulations, 2010 (No. 2)
2. The Indigenisation and Economic Empowerment Regulations, 2010, published in
Statutory Instrument 21 of 2010 (hereinafter called the “principal regulations”) are amended in
section 2 (“Interpretation”)—
(a) in the definition of “appropriate person” by the deletion of “section 8(1)” and the
substitution of “section 10(2)”;
(b) by the insertion of the following definitions—
“ “dispose”, in relation to the disposal of shares or interests in a business, means sell,
donate or otherwise dispose;
“management share ownership scheme or trust” means an arrangement the dominant
purpose or effect of which is to enable the managerial employees of a company or
group of companies to participate in or receive profits or income arising from the
acquisition, holding, management or disposal of the stock, shares or debentures of
the company or group of companies concerned:
Provided that a management share ownership scheme or trust shall not include
a share option scheme operated for the benefit of any managerial employee;
“managerial employee” means a person of any one or more of the following
descriptions—
(a) any person who is the principal executive officer, corporate secretary, chief
financial officer or human resources manager of a business, by whatever title he
or she may be designated and whether or not, in the case of a company, he or
she is a director;
(b) any employee of a company who, in the discharge of his or her functions, is
directly answerable to the board of directors of a company;
(c) any employee whose contract of employment requires or permits him or her to
hire, transfer, promote, suspend, lay off, dismiss, reward, discipline or adjudge
the grievances of other employees;
“net asset value”, in relation to the net asset value of a business, means its net worth,
that is to say, the total value of its fixed assets and other assets less the total value
of its liabilities;
1 This statutory instrument was published as a supplement to the Zimbabwean Government Gazette
Extraordinary dated 25th June 2010.
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“sector of the economy”, “subsector of the economy”, “sectoral” and “subsectoral”
refer to a sector or subsector of the economy specified in the first or second
column of the Table appearing under item 3 of Form IDG 01;
“share option scheme” means an arrangement to benefit employees of a company
whereby shares are offered to them for purchase at a future date at a price fixed in
advance:”;
(c) in the definition of “notifying party” by the deletion of “section 8” and the substitution
of “section 10(1)”;
(d) by the repeal of the definition of “qualifying scheme or trust” and the substitution of
the following—
““qualifying scheme or trust” means an employee, management or community share
ownership scheme or trust that qualifies in terms of section 14, 14A or 14B for the
purposes of being used to assess the extent to which a business that is a company
has achieved or exceeded the minimum indigenisation and empowerment quota.”.
3. Section 3 (“Objective of regulations”) (a) and (b) of the principal regulations is amended
is amended by the deletion of “cede” and the substitution of “dispose of”.
4. Section 4 (“Every business to notify extent of present or future compliance with
indigenisation”) of the principal regulations is amended by the repeal of subsections (1) and (2)
and the substitution of—
(a) in the section heading by the deletion of “Every business” and the substitution of
“Every non-indigenous business”;
(b) by the repeal of subsections (1) and (2) and the substitution of—
“(1) Every business in Zimbabwe with a net asset value of or above five hundred
thousand United States dollars (US $500 000) in respect of which fifty-one per centum
of the shares or a controlling interest is not held by indigenous Zimbabweans shall,
through the appropriate person—
(a) in the case of business existing on the fixed date, submit to the Minister no later
than the 30th June, 2010, Form IDG 01, duly completed; or
(b) in the case of business commenced after the fixed date, submit to the Minister
Form IDG 01, duly completed, within seventy-five days from the date of
commencement of the business.”;
(2) Every business referred to in subsection (1) shall¾
(a) in the case of business existing on the fixed date, submit together with Form
IDG 01, duly completed, a provisional indigenisation implementation plan inaccordance with any guidelines provided by
Form IDG 01; or
(b) in the case of business commenced after the fixed date, submit together with
Form IDG 01, duly completed, a provisional indigenisation implementationplan in accordance with any guidelines provided by Form IDG 01.”.
5. Section 5 (“Approval and amendment of indigenisation implementation plans and
prescription of thresholds and timeframes”) of the principal regulations is amended—
(a) in the section heading by the deletion of “indigenisation implementation plans” and the
substitution of “provisional indigenisation implementation plans”;
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(b) in subsection (1)—
(i) by the deletion of “indigenisation implementation plan” wherever it occurs and
the substitution of “provisional indigenisation implementation plan”;
(ii) in paragraph (a) by the deletion of “subsection,” and the substitution of
“subsection (4),”;
(c) in subsection (2) by the deletion of “indigenisation implementation plan” wherever it
occurs and the substitution of “provisional indigenisation implementation plan”;
(d) in subsection (3) by the deletion of “indigenisation implementation plan” wherever it
occurs and the substitution of “provisional indigenisation implementation plan”;
(e) in subsection (4)—
(i) by the deletion of “On the basis of information gathered” and the substitution
of “Subject to section 5A, on the basis of information gathered”;
(ii) by the deletion of “within twelve months from the fixed date” and the
substitution of “as soon as practicable”;
(f) by the repeal of subsection (5).
6. The principal regulations are amended by the insertion of the following section after
section 5—
“Sectoral and subsectoral committees
5A(1) For the purposes of these regulations, there are hereby established sectoral and
selected subsectoral committees consisting of not less than nine and more than fifteen
members constituted in accordance with subsections (2) and (3).
(2) The Minister shall, for the purposes of assisting him or her to publish the notice in
the Gazette referred to in section 5(4), invite Ministers responsible for the sectors or
subsectors of the economy affected by the notice to submit nominations of persons (not
exceeding fifteen nominations per sector or subsector) for consideration to be appointed as
members of the sectoral or subsectoral committees constituted under this section.
(3) The Minister shall, from nominations submitted to him in terms of subsection (2),
appoint the sectoral or subsectoral committees, which shall each be chaired by a member of
the Board appointed by the Board.
(4) It shall be the function of each sectoral or subsectoral committee to make, in respect
of the sector of the economy for which it is appointed, written recommendations to the
Minister on the following matters—
(a) the appropriate minimum net asset value threshold above which a business in
the sector or subsector concerned is required to comply with these regulations;
and
(b) the lesser shares, maximum periods and weightings to be assigned to socially
and economically desirable objectives referred to in section 5(4)(a), (b) and (c);
and
(c) policies to overcome specified barriers and challenges to indigenisation in any
sector or subsector of the economy;
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(5) Every sectoral and subsectoral committee shall submit the recommendations
referred to in subsection (3) no later than ninety days after its appointment in terms of
subsection (3):
Provided that the Minister may, for good cause shown, extend the period here referred
to by a further period not exceeding thirty days.”.
7. Section 14 of the principal regulations is repealed and the following sections are
substituted—
“Employee share ownership schemes or trusts
14(1) An employee share ownership scheme or trust that complies with this section
shall be taken into consideration when assessing the extent to which a business that is a
company has achieved or exceeded the minimum indigenisation and empowerment quota.
(2) A qualifying scheme or trust under this section shall—
(a) not benefit managerial employees to an extent exceeding five per centum of the
shares or interests pooled in the employee share ownership scheme or trust;
and
(b) be constituted by a Deed of Trust registered with the Deeds Office, and shall
specify the actual percentage of the shares or interest in the business to be held
by or on behalf of the employees of the business, which percentage shall be
added towards the fulfilment of the minimum indigenisation and empowerment
quota.
(3) An owner of a business or employer wishing to use the qualifying scheme or trust
for the purpose of this section shall submit to the Minister Form IDG 04 together with a
copy of the Deed of Trust of the qualifying scheme or trust.
(4) Where an employer proposes to dispose of more than 28 per centum of the shares in
his or her business to his or her employees pursuant to an employee share ownership
scheme or trust, any shares in excess of 28 per centum shall first be offered in writing to the
Fund for sale, and the Fund shall have a right of first refusal over such shares:
Provided that the employer shall not offer for sale any shares in respect of which the
Fund has a right of first refusal at a price higher than that at which the shares are valued for
the purposes of the employee share ownership scheme or trust.
(5) The Fund shall have thirty days from the date of the offer made under subsection
(4) in which to respond in writing to the offer, and any failure to do so shall signify that the
Fund has declined the offer:
Provided if the Fund, through the Board, at any time before the expiry of the thirty days
referred to in this subsection, indicates in writing to the notifying party that it requires more
time to consider the offer, it shall have a further thirty days to indicate its approval or
declination of the offer.
Management share ownership schemes or trusts
14A(1) A management share ownership scheme or trust that complies with this section
may be taken into consideration when assessing the extent to which a business that is a
company has achieved or exceeded the minimum indigenisation and empowerment quota:
Provided that such scheme or trust shall only be taken into consideration to the extent of
five per centum of the minimum indigenisation and empowerment quota.
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(2) A qualifying scheme or trust under this section shall be constituted by a Deed of
Trust registered with the Deeds Office, and shall specify the actual percentage of the shares
or interest in the business to be held by or on behalf of the managerial employees of the
business, which percentage shall (subject to the proviso to subsection (1)) be added towards
the fulfilment of the minimum indigenisation and empowerment quota.
(3) An owner of a business or employer wishing to use the qualifying scheme or trust
for the purpose of this section shall submit to the Minister Form IDG 04 together with a
copy of the Deed of Trust of the qualifying scheme or trust.
Community share ownership schemes or trusts
14B(1) In this section—
“community” means—
(a) the residents of the Rural District Council established in terms of the Rural
District Councils Act [Chapter 29:13] whose natural resources are being
exploited by a qualifying business; or
(b) the residents of one or more wards of a Rural District Council specified in a
community share ownership scheme whose natural resources are being
exploited by a qualifying business; or
(c) any other distinct community of persons as defined in a community share
ownership scheme, who are affected by the exploitation of the natural resources
in or adjacent to their place of residence;
“natural resources” include—
(a) the air, soil, waters and minerals of Zimbabwe;
(b) the mammal, bird, fish and other animal life of Zimbabwe;
(c) the trees, grasses and other vegetation of Zimbabwe;
(d) the springs, vleis, sponges, reed-beds, marshes, swamps and public streams of
Zimbabwe;
(e) any landscape, scenery or site having aesthetic appeal or scenic value or of
historic or archaeological interest;
“qualifying business” means a company engaged in exploiting the natural resources of
any community;
“ward” means an area defined as a ward under the Rural District Councils Act
[Chapter 29:13].
(2) A community share ownership scheme or trust that complies with this section may
be taken into consideration when assessing the extent to which a business has achieved or
exceeded the minimum indigenisation and empowerment quota:
(3) A community share ownership scheme or trust shall be constituted by a Deed of
Trust registered with the Deeds Office and shall, subject to subsection (4), have the
following features—
(a) in the case where the beneficiary community are the residents of a Rural
District Council, the Rural District Council shall have the right to appoint the
trustee or trustees who will hold the shares or interest in the qualifying business
on behalf of the community (the actual percentage of which shares or interest
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shall be added towards the fulfilment of the minimum indigenisation and
empowerment quota); or
(b) in the case where the beneficiary community are the residents of one or more
wards of a Rural District Council, the manner of appointment of the trustee or
trustees who will hold the shares or interest in the qualifying business on behalf
of the community (the actual percentage of which shares or interest shall be
added towards the fulfilment of the minimum indigenisation and empowerment
quota) shall be as agreed between the Rural District Council concerned and the
qualifying business; or
(c) in the case where the beneficiary community are the members of a distinct
community of persons as defined in a community share ownership scheme, the
manner of appointment of the trustee or trustees who will hold the shares or
interest in the qualifying business on behalf of the community (the actual
percentage of which shares or interest shall be added towards the fulfilment of
the minimum indigenisation and empowerment quota) shall be as set out in the
Deed of Trust of the community share ownership scheme or trust concerned.
(4) An owner of a business wishing to use the qualifying scheme or trust for the
purpose of this section shall submit to the Minister Form IDG 04 together with a copy of
the Deed of Trust of the qualifying scheme or trust:
Provided that, in considering whether a community share ownership scheme or trust set
up for the benefit of a community referred to in subsection (3)(a) or (b) should be accepted
as a qualifying scheme or trust, the Minister shall have regard to whether the scheme or
trust provides that the monies accruing to the scheme or trust will be applied to any or all of
the following purposes—
(a) the provision, operation and maintenance of—
(i) schools and other educational institutions and facilities and amenities
connected therewith, and educational scholarships; and
(ii) hospitals, clinics and dispensaries;
and
(c)2 the provision and maintenance of dipping tanks; and
(d) the provision, development and maintenance of roads; and
(e) the provision, development and maintenance of water works and water
sanitation works; and
(f) gully reclamation and other works related to soil conservation and the
prevention of soil erosion, and the conservation of the environment generally.
(5) All dividends or other monies accruing to the beneficiaries by virtue of a
community share ownership scheme or trust in terms of this section shall—
(a) in the case of a community referred to in subsection (3)(a) or (b), be recorded
in a separate account of the Rural District Council concerned, as will ensure
that the amount of such dividends or other monies may be ascertained
separately from any other revenue accruing to the Rural District Council
2 (sic) Paragraph numbering reflects that of the gazetted statutory instrument. Veritas.
7
. (b) in the case of a community referred to in subsection (3)(c), be credited and
disbursed in the manner set out in the Deed of Trust of the community share
ownership scheme or trust concerned.
8. Section 15 (“Identification of potential counterparties to notifiable transactions”) of the
principal regulations is amended by the insertion of the following subsection after subsection
(4)—
“(5) The Fund shall, where—
(a) a person referred to in subsection (2) is unable, after having had access to the
database referred to in subsection (1), to identify any suitable indigenous
Zimbabwean to acquire a controlling or lesser interest in his or her business;
and
(b) it considers the investment referred to in paragraph (a) to be to its advantage
and for the benefit of the indigenous people of Zimbabwe;
be the purchaser of last resort of the controlling or lesser interest concerned.”.
9. Section 16 (“Valuation of businesses where truth or accuracy of valuation disputed”) of
the principal regulations is amended—
(a) by the deletion of “of the value of its assets” and the substitution of “of its net asset
value”;
(b) by the insertion after “valuator” of “registered in terms of the Public Accountants and
Auditors Act [Chapter 27:12]”.
10. The First Schedule (“Form of Notification of Extent of Indigenisation and
Indigenisation Implementation Plan”) of the principal regulations is amended in Form IDG01—
(a) by deletion from the “Notice to Person Completing this Form” of “cede” wherever it
occurs and the substitution of “dispose of”;
(b) by the insertion of the following items after item 2—
“2A. Physical and other addresses (including electronic mail address, if any) and telephone
number(s) of the head office of the business:
…………………………………………………………………………………………………………………
……………………………………………………………………………………..
2B. Physical and other addresses (including electronic mail address, if any) and telephone
number(s) of the principal place of business in Zimbabwe of the business, in the case where
the head office of the business is outside Zimbabwe:
…………………………………………………………………………………………………………………
……………………………………………………………………………………”;
(b) by the deletion of item 5 and the substitution of—
“5. Net asset value of the business at the date of this form:
…………………………………………………………………………………………………………………
……………………………………………………………………………………..”.
11. The Second Schedule (“Form of Notification and Application Required by Sections
3(1)(b), (c), (d) and (e) and 4 of Act”) of the principal regulations is amended in Form IDG 02—
(a) by the insertion of the following items after item 2—
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“2A. Physical and other addresses (including electronic mail address, if any) and telephone
number(s) of the head office of the business:
…………………………………………………………………………………………………………………
……………………………………………………………………………………..
2B. Physical and other addresses (including electronic mail address, if any) and telephone
number(s) of the principal place of business in Zimbabwe of the business, in the case where
the head office of the business is outside Zimbabwe:
…………………………………………………………………………………………………………………
……………………………………………………………………………………”;
(b) by the deletion of item 5 and the substitution of—
“5. Net asset value of the business at the date of this form:
…………………………………………………………………………………………………………………
……………………………………………………………………………………..”.
10. The Fourth Schedule (“Form for Indigenisation Assessment Rating”) of the principal
regulations is amended in Form IDG 03—
(a) by the insertion of the following items after item 2—
“2A. Physical and other addresses (including electronic mail address, if any) and telephone
number(s) of the head office of the business:
…………………………………………………………………………………………………………………
……………………………………………………………………………………..
2B. Physical and other addresses (including electronic mail address, if any) and telephone
number(s) of the principal place of business in Zimbabwe of the business, in the case where
the head office of the business is outside Zimbabwe:
…………………………………………………………………………………………………………………
……………………………………………………………………………………”;
(c) by the deletion of item 5 and the substitution of—
“5. Net asset value of the business at the date of this form:
…………………………………………………………………………………………………………………
……………………………………………………………………………………..”.
12. The Fifth Schedule (“Form for Qualifying Employee Share Ownership Scheme or
Trust”) of the principal regulations is amended in Form IDG 04—
(a) by the deletion of the title of the form and the substitution of “Details of Qualifying
Scheme or Trust”;
(b) by the deletion of “Explanatory Notes” (a) and (b) and the substitution of the
following—
“(a) This form is submitted for the purpose of enabling a fixed percentage to be added
towards the fulfilment of the minimum indigenisation and empowerment quota in
favour of businesses that empower their employees, managerial employees or residents
of any community in a Rural District Council or other defined community in which
they operate through the establishment of qualifying employee share ownership
schemes or trusts.
(b) “qualifying scheme or trust” means an employee share ownership scheme or trust,
management share ownership scheme or trust or community share ownership scheme
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or trust that qualifies in terms of section 14, 14A or 14B of the Indigenisation and
Economic Empowerment (General) Regulations, 2010, for the purposes of being used
to assess the extent to which a business that is a company has achieved or exceeded the
minimum indigenisation and empowerment quota;”;
(c) by the insertion of the following items after item 1—
“1A. Physical and other addresses (including electronic mail address, if any) and telephone
number(s) of the head office of the business:
…………………………………………………………………………………………………………………
……………………………………………………………………………………..
1B. Physical and other addresses (including electronic mail address, if any) and telephone
number(s) of the principal place of business in Zimbabwe of the business, in the case where
the head office of the business is outside Zimbabwe:
…………………………………………………………………………………………………………………
……………………………………………………………………………………”;
(d) by the insertion after item 2 of the following items—
“2A. Current ownership structure (where participating shares or interest are to be held by a
“managerial employees” as defined in section 14A of the Regulations)
Name and Nationality
of shareholder(s)/
partner(s)/owner(s)
National I.D.
No./ Passport
No.
Extent of participating /benefiting managerial employee’s
shares/interests held by respective participating/benefiting
managerial employee expressed as percentages
Indigenous Zimbabwean(s) Non-indigenous Zimbabwean(s)
2B. Current ownership structure (where participating shares or interest are to be held by a
“community” as defined in section 14B of the Regulations)
Name and
Nationality of
shareholder(s)/p
artner(s)/
owner(s)
National I.D.
No./ Passport
No.
Name of Rural District Council(s) in whose area of jurisdiction the
Communal Land(s) mentioned below are
located:…………………………………………………..
Name of Communal Land(s) and of Chief(s) of the community
(communities) whose natural resources are being exploited will be or
are being exploited by the qualifying business
Communal Land(s) and
ward(s)
Chief(s)
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In the case of a community other than the residents of a Rural
District Council or communal land, give a precise description below
of the community and its location:
13. The Sixth Schedule (“Request to Minister to Identify Indigenous Zimbabweans as
Potential Counterparties to Notifiable Transactions”) of the principal regulations is amended in
Form IDG 05—
(a) by the deletion of the title of the form and the substitution of “Request to Minister to
Identify Indigenous Zimbabweans as Potential Counterparties to Notifiable
Transactions”;
(b) by the insertion of the following items after item 2—
“2A. Physical and other addresses (including electronic mail address, if any) and telephone
number(s) of the head office of the business:
…………………………………………………………………………………………………………………
……………………………………………………………………………………..
2B. Physical and other addresses (including electronic mail address, if any) and telephone
number(s) of the principal place of business in Zimbabwe of the business, in the case where
the head office of the business is outside Zimbabwe:
…………………………………………………………………………………………………………………
……………………………………………………………………………………”;
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(c) by the deletion of item 5 and the substitution of—
“5. Net asset value of the business at the date of this form:
…………………………………………………………………………………………………………………
……………………………………………………………………………………..”.
This statutory instrument was published as a supplement to
the Zimbabwean Government Gazette Extraordinary dated 25th June 2010.