Jonathan Moyo defending the indefensible

HARARE - Jonathan Moyo in an article entitled: “Cheap attempts to scuttle indigenisation” published in the Sunday Mail alleged that: “Last Monday and Tuesday Zimra visited the offices of Zimplats and Brainworks over a transaction which everybody now knows is yet to be finalised beyond the non-binding term sheet signed on January 11, 2013 apparently with a specific purpose of undermining community share ownership schemes that the minister responsible for Zimra, Tendai Biti, has opposed in ways that have exposed his political agenda against the empowerment of Zimbabwean communities.”

Biti, the minister of Finance, has charged that the Community Share Ownership Schemes (“CSOS”) is: “a dubiously-crafted piece of regulation in the Indigenisation and Empowerment Act that has no legal force.”
Biti is a lawyer and is expected to know better yet in this case it would appear that in so far as indigenisation and empowerment, the inclusive government is not working in unison.

It would appear that the government is divisible and the contention by Moyo that indigenisation and empowerment is a Zanu PF-conceived and executed programme that finds itself outside the ambit of the State is supported by the confusion regarding the legal status, if any, of the CSOS.

Any revolution must respond to the values and principles that informed it.

In the case of Zimbabwe, the liberation struggle sought to usher a new dispensation in which all the people of Zimbabwe have equal access to its potential and opportunities.

In fact, President Robert Mugabe captured the political and moral principles that guide this phase of the struggle by saying that: “Zimbabwe was richly-endowed with vast mineral wealth that should be used to develop the whole country.

“This is our heritage all of us as Zimbabweans irrespective of the area they are found and should be used to for the development of the nation,” meaning that progress must be generalised rather than restricted to communities that accidently or by design are geographically located where the creator deposited minerals.

The fact that the president by fully associating himself with the CSOS in attending their launches he is invariably bound by the version that may very well undermine the values and principles of the country’s constitution and laws that he took an oath to protect and promote.

Some would argue that when the Act was passed by Parliament, the expectation was that only individuals and not communities could legitimately claim injury of a commercial nature occasioned by the operation of the colonial order.

Something was varied after the Act was passed and it would seem that communities incorporated after independence is now part of the gravy train.

Biti’s contention that: “The scheme is in fact an afterthought which is not backed by the Empowerment Act”, is supported by facts for if it was the intention of the revolution to use borrowed State powers to level the economic playing field with nameless and faceless communities then the law should have been framed as such.

However, the CSOS is just but a vessel that can be used by communities who do not necessarily have to represent a homogenous group to deliver the promise of a better life.

Its constituents need not be of a certain age as the Act prescribes; rather even the youth who have no personal knowledge and experience of the colonial regime are now eligible for the largesse from indigenisation only because they happen to be born and live near the location of the enterprise.

The president signed the Act on April 10, 2008 and on that date what could have been his state of mind?

He was the bill’s last gatekeeper in the value chain and one is to expect that he applied his mind on behalf of the people of Zimbabwe and not just on behalf of members of his party.

He was not forced to give life to the Act but as a General he must have been alive to the challenges of putting in place an instrument that would be best suited to address the challenges of empowerment.

Biti was right on the mark by observing that: “you will not find the word community share trust, you will not.”

He then went on to state: “Then you come to the regulations, statutory instrument Number 30 that was passed or enacted by Saviour Kasukuwere, again you will not find the name community share trust.”

Surely it should be self evident to Biti’s fellow legislator like Moyo that it was not the intention of the legislature to permit the outcome that we now see otherwise there was no disability on the part of the executive from amending the bill to provide for the inclusion of communities and other players as beneficiaries.

Chairman Mao knew that it was the first step in a journey of a 1 000 miles that counted most for if one does not know where they are going any road is as good as another.

In this case, it took 27 years of post-colonial experience and reflection to put this legislation into life and yet it would appear that even after 27 years of a journey one did not actually know the destination and challenges on the way.

Kasukuwere with the unenviable task of delivering the promise of a revolution that only found its voice on this defining issue after 27 years and also a constituency of new players that were not born in 1980 was forced to be creative even if it meant violating the very values and principles of the revolution.

It was only in the third instalment of the regulations that for the first time, the term CSOS was introduced without any effort to amend the Act to accommodate the new thrust.   

It cannot, therefore, be argued that the CSOS was an after-thought and extra-legal construction.
The revolution promise a nation State governed by laws and not by decrees in the form of regulations that do not speak to the legislation in force.

In this unique case, it would appear that the revolution is nothing but a random walk where as you go, you keep on changing the goal posts.

It must have been recognised after the Act was passed that the version of empowering persons would be controversial and more significantly divisive to allow the theme of indigenisation and empowerment to be manipulated for political purposes.

The CSOS is more politically- attractive than what the Act provides for hence its inclusion in the regulations.

Kasukuwere must have been alive to the illegality but in a world where politics takes precedence, anything is possible.

The concept of extorting funds from taxpaying companies as part of the empowerment agenda has to be critiqued from the construction of the tax code that is premised on companies only deducting from income generated expenses related to that income.

One cannot argue that the funds paid by the target companies towards empowerment are tax deductable hence the interest of Zimra on behalf of the people of Zimbabwe to better understand the true nature of the deal.

The target company in giving a gift to communities is compelled to observe the laws of the country.

It may very well be the case that there is conflict of laws but it cannot be said that the Act takes precedence as has been suggested by Moyo in the blind defence of the Brainworks indigenisation scheme.

The basis on which post-colonial States were founded was on the observance of the rule of law and not rule by law.

Accordingly, there must be a value exchange between the community and the company in question that would give rise to money passing hands.

The president has been seen many times at the scene of crime whereby funds belonging to corporate citizens of the country have been donated on a pre-tax basis to communities who fall outside the ambit of the companies.

There is no doubt that lawyers like Sternford Moyo and the Mayor of Harare, Muchadeyi Masunda, who are beneficiaries of the empowerment game, are conflicted when the companies in which they are board members are being forced to operate outside the four corners of the law.

As beneficiaries of the scheme, I have no doubt they may have private views but would dare not make them public for fear of suffering the SMM disease where ministers can play football with people’s lives with impunity.

It is common cause that the shares in question are held outside the company.  

The company, therefore, has no legal obligation to cause its parents to comply.

Accordingly, a company registered in accordance with the laws of Zimbabwe has an obligation to obey the laws of the country including paying taxes in terms of generally accepted principles.

The shareholders of the company do have an obligation to lose part of their shareholding in Zimbabwean registered companies.

The entitlement to income of shareholders is not contractual and, therefore, shareholders only get the funds that the company they hold shares in does not need.

This being the case, it means that the bribe has to come from the shareholders from their dividends yet in the case of the deals concluded so far it would appear that the funds that are meant to come from parents are coming from the children.

There can be no better time to reflect on bad ways than now so that a new generation can emerge that is forward looking.

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