Non-compliant firms face closure
Happiness Zengeni and Conrad Mwanawashe
Cabinet has directed line ministries to cancel licences of all foreign-owned firms which would not have submitted their indigenisation compliance plans by the gazetted deadline of March 31. The country’s Indigenisation and Empowerment Act states that at least 51 percent of the shares of every company and any other business should be owned by indigenous Zimbabweans.Addressing journalists yesterday, Youth, Indigenisation and Economic Empowerment Minister Patrick Zhuwao said, Cabinet had on Tuesday unanimously passed a resolution directing that from April 1, 2016 all line ministries proceed to issue orders to licensing authorities to cancel licenses of non-compliant business within their respective sectors of the economy.
“Cabinet has directed that on April 1, 2016, all line ministers invoke Section 5 of the Indigenisation and Economic Empowerment Act (Chapter 14:33) Act against all non-compliant businesses in their sectors Invoking of Section 5 of the Act is purely a technical process which shall come into effect by pure operation of the law,” said Minister Zhuwao.
Watch the clip below
Under the process, line ministers shall issue orders to licencing authorities to cancel licences of non-compliant businesses.
The line minister shall notify non-compliant businesses in writing of the intention to cancel licences; non-compliant businesses may show just cause why the licence should not be cancelled; the line minister will then direct the non-compliant businesses to become compliant; failure of which the line minister will proceed to notifying third parties likely to be affected by cancellation of the licences; and licencing authority, shall without notice, cancel licenses of businesses that remain non-compliant after 30 days of having been given the room to comply.
Minister Zhuwao said Cabinet had also directed that all line ministries must make available to the National Indigenisation and Economic Empowerment Board (NIEEB) a full and comprehensive list of all companies that are licensed to operate within their sectors within a week from March 22 2016 for the purposes of verifying their indigenous status.
“This welcome decision by Cabinet will ensure that the laws of Zimbabwe, specifically the Indigenisation and Economic Empowerment Act (Chapter 14:33), are respected and enforced.
“The message to those companies that have not complied is very simple, comply by that deadline (March 31). What we will be looking at are those companies that have not complied,” he said.
Due process will, however, take precedent before the cancellation of licences.
“Before the minister cancels a license he notifies a company that is non-compliant that you are not complying with the law, is there any reason why your license should not be cancelled?
“If a non-compliant business has a reason or just cause why it should not comply then that’s very clear. I am very comfortable and confident of the ability of the line ministers to be able to determine what just cause is and what is not.
“But even given that that line minister is also required to report to Cabinet to also explain to Cabinet that there is company X,Y,Z that has not complied and the reasons they had not complied are as follows and I believe as minister that this is just cause. If the minister has made error in judgment I am sure Cabinet will correct that,” said Minister Zhuwao.
Cabinet also scrapped the proposed levy for non-compliant businesses after discussions with business and is now expecting full compliance.
“We engaged business and business has indicated that they are not comfortable with the levy. We have listened to the business and therefore we will not have a levy. What we will have instead is full compliance. Its either you comply or you close shop,” said Minister Zhuwao.
He does not expect any inconsistencies given that all line ministers agreed with the enforcement of the indigenisation laws and were part of the unanimous decision to begin the implementation process.
“There was complete and total agreement with regards to enforcing the law. There was not a single line minister in Cabinet who did not approve of this or even raise an issue that they do not agree with this. There is no inconsistency with what I want to achieve. There is a law and the law is very clear. And I think it is a fair law.
“I believe that these measures directed by Cabinet shall remedy the long standing disregard for the Indigenisation and Economic Empowerment Act (Chapter 14:33) by non-compliant businesses. It is only such contemptuous businesses that must face the full force of the law. It is reassuring therefore to law abiding Zimbabweans whose aspiration is that they must own their economy through indigenisation and economic empowerment, that Cabinet has boldly spoken against such lawlessness that has continued to deprive the indigenous majority ownership of their economy,” he said.
Minister Zhuwao said Cabinet’s decision also follows the pronouncement by President Mugabe, in his closing speech, at ZANU PF’s 15th Annual National People’s Conference in Victoria Falls on December 12, 2015 following the brazen disregard of the indiginisation laws.
“There are companies in this country that still refuse to accept our empowerment policy within the mining sector.
“But certainly come January 2016 that stubbornness and resistance we say should end in 2015.
“In 2016 we will not accept a company which refuses and rejects our policy of indigenisation and empowerment in the manner we inscribed it,” President Mugabe said at the Annual People’s Conference.