SEZs indigenisation exemption gets Parly nod

Source: SEZs indigenisation exemption gets Parly nod | The Herald May 11, 2016

Golden Sibanda : Senior Business Reporter

The Parliamentary Portfolio Committee on Finance has endorsed a legal provision in the Special Economic Zones Bill exempting SEZs entities from the Indigenisation and Economic Empowerment and Labour Acts despite some public objection. The Committee undertook public consultations from 11 to 16 April 2016 in Harare, Mutare, Masvingo, Bulawayo, Victoria Falls and Kwekwe ahead of enactment of the SEZs Bill into an Act of Parliament.But the committee said that in spite of the objection from some stakeholders to exempting SEZs entities from both the Indigenisation and Economic Empowerment Act and the Labour Act on grounds that this would violet provisions of the Constitution, the provision should stand in line with global practice.

“The Bill seeks to exempt the application of the Labour and Indigenisation and Economic Empowerment Act.

The stakeholders expressed reservations with the exemption of the two Acts.

They (stakeholders) felt that this exemption contravened Section 65 of the Constitution of Zimbabwe, which guarantees the rights of workers and that indigenous Zimbabweans should benefit from the establishment of the Special Economic Zones.

“In line with the practice on SEZs throughout the world, the committee recommends that the exemption should stand,” the committee chairperson said David Chapfika in his report to parliament.

Special Economic Zones are modern economic zones which enjoy special privileges, such as tax free incentives, compared to non-SEZ areas in a country.

SEZs are established to promote exports and attract investments by concentrating resources along with relaxation in rules in some pockets (designated as SEZs).

SEZs have been mooted by Government of Zimbabwe in the face of sluggish economic growth and slow recovery amid fickle FDIs and a manufacturing industry performing at grossly low levels.

In general, Mr Chapfika said that expectations were high that the Bill would have provided for the demarcations of the SEZs and the incentives that go with investments in the declared Zones.

Participants at the public hearings, particularly those in Victoria Falls expressed great difficulty in discussing the provisions of the Bill in the absence of such information.

The Committee and the public, therefore, eagerly await the publication of the regulations. The Bill is recommended to the House for approval subject to the following issues being seriously considered by Minister of Finance and Economic Development.

There also was strong representation on why it is necessary to establish a new authority and board in view of the current economic situation. It was suggested Zimbabwe Investment Authority could be used with slightly amended responsibilities and the necessary powers to implement and service the new Bill.

The committee also recommended that anyone with a previous criminal conviction should be disqualified from holding office.

“Considering the rampant abuse of public funds, abuse of positions and failure by appointed members to practice good corporate governance, such a stance would sent a clear message to all Zimbabweans that it’s no longer business as usual.”

The committee said it is its view that while it is a function of the Special Economic Zones Authority to declare any area or premises to be a Special Economic Zone, amend, add or abolish any Special Economic Zone, it is essential that all stakeholders must be consulted before such decisions are made.