EDITORIAL COMMENT: Indigenisation: No one is above the law

EDITORIAL COMMENT: Indigenisation: No one is above the law | The Herald March 29, 2016

Youth, Indigenisation and Economic Empowerment minister Patrick Zhuwao told the nation disturbing news last week. He said Cabinet had endorsed a decision to stop the operations of all companies which had ignored the country’s indigenisation law. We hope that decision will not come to pass. We hold no brief for any of the companies likely to be affected by this Cabinet decision. We are largely looking at two key scenarios: first the implications and ramifications of that Cabinet decision being implemented and what it means for the economy and the workers.

Second, we want to believe the companies so affected have sense enough to weigh their options. They have a wide berth, to comply or to ignore the law.

Zimbabwe’s economy is in dire straits and Government has been trying to shore it up by promoting local initiatives like growing the informal sector and the Buy Zimbabwe campaign. Government is also trying to foster the consumption of local products to reduce the import bill on non-essential goods to save foreign currency.

There have also been efforts to attract meaningful foreign direct investment by improving the ease of doing business in the country. That explains why Government has remained engaged with the International Monetary Fund. This has also resulted in a number of business executives visiting the country to explore business opportunities. The latest was a South African delegation early this month which culminated in pledges to invest at least $500 million in Zimbabwe this year.

Locally, we believe there are companies which are doing their best to stay afloat under a difficult operating environment. Such efforts need to be commended and buttressed by Government incentives for them to save jobs.

Memories are still fresh and casualties aplenty of thousands of workers who lost their jobs following the Supreme Court ruling of July 17 last year that companies could terminate employment contracts on three months’ notice without giving a justification. Although the figures of people affected are contested, there is no denying the trauma that ruling caused.

Some people saw Government’s hidden hand in the Supreme Court ruling as it sought to meet the austerity requirements of the IMF’s Staff Monitored Programme to cut its payroll through “retrenchments”. It would therefore be risky to make light work of closing down companies and throwing more people on to the streets without any safety nets or alternative viable programmes of self-sustenance.

But Minister Zhuwao also pointed to something sinister: that there were people colluding with and influencing some companies not to comply with the country’s indigenisation laws. Such companies have been vocal about the need for policy consistency and clarification, albeit only through newspapers and social media instead of engaging Government directly to express their reservations.

Such companies, noted Minister Zhuwao, seemed to dare the President and his Government to a fistfight. If there is one thing which should be made clear, it is that no individual or company is above the law of the country. It is that simple. You may like or not like certain laws. There are ways of raising objections. Deliberately violating the law is not one of them.

Most of the big companies defying the law in Zimbabwe are very compliant in their own countries. They will not wilfully break the law in their own country simply because they don’t like it. Instead they will lobby, including bribing MPs if necessary, to have the law amended or repealed. They will succeed or fail depending on the reasonableness of their demands.

Indigenisation is one such very fundamental law to Zimbabwe’s economic well-being.

Now, when the same companies come to developing nations they want to arm-twist and manipulate the host country to maximise profits. They want to exploit the desperation of the host country to further plunder its resources for a penny in the name of employment creation. They are never interested in the prosperity of their host, but the size of their profit margin.

Such companies cannot try to hold the country to ransom in the name of jobs. They are simply not interested in doing business here except on their own terms.

We hope they will not call Government’s bluff, taking the April 1 ultimatum for a Fool’s Day joke.