The New PVO Amendment Bill (Part 2)

Introduction

In Bill Watch 5/2024 [link] we began analysing the Private Voluntary Organisations Amendment Bill, which was published in the Gazette on the 1st March.  In this bulletin we continue our analysis.

Contents of the Bill (continued)

Assessment of risk for purposes of FATF standards

One of the stated objectives of the Bill is to regulate PVOs in line with recommendations of the Financial Action Task Force [FATF], and international body formed to combat money-laundering, terrorist financing and the illicit proliferation of nuclear, chemical and biological weapons.

Clause 9 of the Bill will insert a new section 22 into the Act requiring the Minister, at least once every five years and with the co-operation of the Reserve Bank’s Financial Intelligence Unit, to assess the vulnerability of PVOs and other similar organisations to being used for terrorist financing.  On the basis of this assessment the Minister will be able, so it seems (the provision is incoherent), to do one of two things:

• to require any PVO or organisation to take specified measures to mitigate their vulnerability, or
• to make regulations prescribing special measures to be taken by PVOs and organisations designated by the Minister in regulations as being vulnerable to misuse.

Designated PVOs and organisations will have 14 days in which to contest their designation on the ground that it was made in error, or that the measures they are required to take are unreasonable or disproportionate.

If a designated PVO or organisation fails to register as a PVO under the Act, it and its office-bearers will be guilty of a criminal offence and liable to a fine of level 14 (currently US$5 000) or ten years’ imprisonment.  In addition the Minister will be able to get the Registrar to revoke or suspend the organisation’s licence or registration and order the removal of its office-bearers.

PVOs and other organisations aggrieved by the Minister’s decisions under the new section will have a right to appeal to the High Court, but only on procedural grounds.

Comment:  there are several problems with the new section 22:

• The assessment of PVOs’ vulnerability will be done by the Minister and a unit of the Reserve Bank.  Individual PVOs will have no say in the matter.  This is contrary to what FATF itself says, that countries should work with PVOs and civil society organisations during the risk assessment process.
• The penalty for failing to register as a PVO is grossly excessive, completely disproportionate to the offence, and it is not clear how the new offence relates to the offence under the new section 6(5) of the Act, which is essentially the same and for which the penalty is much lower.
• There will be no effective appeal against the Minister’s decisions under the new section.

Civil penalties

Clause 12 of the Bill will insert a new Schedule providing for the imposition of civil penalties for certain contraventions of the Act, namely:

• if a PVO fails to apply for the amendment of its registration after there has been a material change in its original particulars of registration,
• if a PVO transferring its certificate of registration to another PVO without permission from the Registrar (section 13A(5))
• if the Registrar has information indicating that a PVO has “received any donation from an illegitimate or immoral source,” and
• if the Registrar has information indicating that a PVO has “not used formal channels (that is to say registered banking institutions or other financial intermediaries regulated in Zimbabwe or in any other State) for the transmission of … funds at every point from source to destination.”

In the event of such a contravention, the Registrar or a designated member of his or her staff will be entitled to serve a civil penalty order on the offending PVO and any or all of its office-bearers, obliging them jointly and severally to pay a civil penalty of up to US$1 000 unless they can show that:

• the civil penalty order was issued in error, or
• the contravention was not wilful, or
• the contravention was beyond the control of the PVO or its officers.

Failure to pay a civil penalty within 90 days of its issue will be a criminal offence for which the PVO concerned and “every one of its officers” will be liable to a fine of level six (currently US$300) or one year’s imprisonment or both.

Comment:  The constitutionality of civil penalties has not yet been tested in our courts, but these penalties are almost certainly unconstitutional for the following reasons:

• There is no provision for a court to confirm the imposition of a civil penalty and its amount, hence the penalty may be imposed arbitrarily and its amount fixed without proper regard to all the circumstances.
• No appeal is allowed against a civil penalty order, except to the official who imposed it and on very limited grounds, namely that the order was issued erroneously due to a material dispute of fact;  or that the default was not wilful;  or that the default was the result of circumstances beyond the defaulter’s control.  No other grounds, such as error of law, are allowed.
• All the officers of a defaulting PVO can be liable to pay a civil penalty, regardless of their individual fault.  They are also all criminally liable if the penalty is not paid.
• The provision for a penalty to be imposed on a PVO that receives funds from an “illegitimate or immoral” source is far too vague for a penal provision and offends against the rule which demands that laws, particularly penal ones, must be intelligible, clear and predictable.

Inadequate provision for appeals

Appeals against the Registrar’s refusal to register a PVO or against a decision to cancel the registration of a PVO will be made to the Minister under a new section 14.  The Minister’s powers on appeal will be very limited.  Unlike the existing section in the current Act, which allows the Minister to confirm the decision appealed against or to give such other decision as he or she considers should have been given, the new section will allow the Minister to set aside a decision only on procedural grounds:  for example, if the Registrar showed bias or malice, or failed to take relevant factors into account, or if the decision was grossly unreasonable.

Comment:  The new section effectively makes the Registrar’s decisions final, immune from appeal except on narrow procedural grounds.  It would be far better if the new section gave a genuine right of appeal to a court such as the Administrative Court.

Abolition of PVO Board and increase in Registrar’s powers

The Bill will abolish the PVO Board, a body with some PVO representatives which is responsible for approving the registration and de-registration of PVOs and advising the Minister.  The Board’s functions will be transferred to the Registrar, a civil servant in the Minister’s Ministry.  The Registrar will be largely under the Minister’s control:  he or she will have to comply with general policy directives the Minister may give in terms of the new section 22D.

Comment:  Abolition of the PVO Board, which provided some representation for PVOs, is regrettable.

Annual PVO forums

The Bill will insert a new Part IIA into the Act requiring the Registrar to convene annual forums bringing together representatives of PVOs to discuss issues of mutual interest.  A pre-forum committee appointed by the Registrar will propose a list of participants to attend a forum and an agenda of matters to be discussed at the forum, but the final decision on those matters will rest with the Minister.

Comment:  The forums will be controlled by the Registrar and the Minister, so they are unlikely to be particularly useful except in ensuring that PVOs adhere to Government policy.

Conclusion

Some effort has been made to remove the more egregious inconsistencies and drafting errors contained in the previous Bill, but the new Bill remains completely unwelcome.  Within Zimbabwe its provisions will be used as weapons against civil society, free speech and freedom of association.  Internationally it will tarnish Zimbabwe’s image and inhibit the Government’s efforts to get debt relief and much-needed foreign investment.  Even if it is not enacted the damage will have been done, because many observers will take it as revealing the Government’s attitude towards independent civil society organisations in particular and constitutionalism in general.

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