Republic of Zimbabwe President Robert Mugabe went on a fact-finding tour through two diamond mining projects in the Southern African nation. Zimbabwe is reported to be a large-scale depository of diamonds., a photo by Pan-African News Wire File Photos on Flickr.
Indigenisation under imperialist siege
Sunday, 17 February 2013 00:00
Ben Mutongi
Zimbabwe Sunday Mail
The Indigenisation Implementation Plan (IIP) deal between the Zimbabwe Platinum Mines Limited (Zimplats) and the Government of Zimbabwe has come under some distractive neo-imperial scrutiny that is intent on derailing the historic indigenisation deal.
The hullabaloo being raised in some media reports on the Zimplats indigenisation deal is clearly part of the blatant efforts by anti-indigenisation forces to not only disparage but also undermine the revolutionary empowerment drive being championed by Zanu-PF.
These heinous efforts are concomitantly backed by sycophantic forces that are feverishly trying to promote the reactive MDC-T policy dubbed Jobs, Upliftment, Investment, Capital and Ecology (JUICE). JUICE seeks to safeguard the capitalist interest of Western investors and confine indigenous people to the periphery of the economy as mere labour providers.
Going through most of the anti-indigenisation reports in the private media, one is struck by the phenomenal levels of data misrepresentation and stark disinformation domiciled in them. In these reports, the surrogate neo-liberal analysts concentrated more on peripheral sections of the multi-pronged Zimplats Indigenisation Implementation Plan (IIP) in a brazen attempt to adulterate the whole term-sheet.
In the reports, some analysts opined that since the platinum deposits at Zimplats naturally belong to Zimbabweans, the Government should not pay a cent for them in the indigenisation transaction. Such postulations are tantamount to advocating the nationalisation of the platinum deposits, which currently is not the policy of the Government of Zimbabwe.
Under the indigenisation programme, the Government will not expropriate equity in companies, but pay market rates for its value.
Nationalisation of resources would be inimical to the current Government thrust of proportionally sharing resources between indigenous people and foreign investors.
Such free grabbing of national resources would significantly raise the country’s risk perception and, thus, further malign the indigenisation drive.
Furthermore, it is mind boggling that some so-called financial analysts postulated that the deal immensely undervalued the asset value of Zimplats, saying the company should have been valued using international best practice. Such suppositions manifestly betray some subtle neo-liberal plans to overcharge the cash-strapped indigenous people for their equity in Zimplats.
If the indigenous people are presently struggling to pay their supposedly undervalued quota in the current deal, where would they get the money to pay for the ballooned market-informed values? This hypothesis is, thus, patently designed to throw more spanners in the indigenisation deal so as to frustrate indigenous people’s plans to rightfully claim their inherent right to control their God-given resources.
In their parochial attempt to scandalise the indigenisation deal, these analysts also raised false alarm, saying that any disputes arising from the indigenisation deal will be arbitrated in British courts. These are blatant and unashamed lies since the IIP Term Sheet only subjects the Vendor Funding clause to the jurisdiction of English law.
Part 9 of the Term Sheet on the Nature of Vendor Funding (VF) spells out that: “All arrangements relating to the VF, including, without limitation, the cession and pledge arrangements contemplated in Part 14, are to be governed and implemented in accordance with the English law.” This is so because there is a likelihood that the VF will be raised in offshore markets, hence the need to protect it under the law of the region of its origin.
Nonetheless, the rest of the deal will remain subordinate to the sovereign laws of Zimbabwe since the country will never be a colony again. Part 5 of the Term Sheet unmistakably identified the The Indigenisation and Economic Empowerment Act (Chapter 14:33) (Act 14/2007) (as amended) (the “Act”) and the indigenisation and Economic Empowerment (General) Regulations, 2010 (as amended) (the “Regulations”) as the Relevant Applicable Law of the deal.
Other analysts tried to dismember the indigenisation deal on the basis that it was concluded without any substantive consultations with various stakeholders, including Government entities such as the Reserve Bank of Zimbabwe. What should be understood is that the preliminary deal is merely a non-binding IIP agreement that builds into three very important agreements that will be concluded after extensive consultations with appropriate ministries and stakeholder authorities.
In its current state, the deal is just a framework that will feed into three legally binding agreements, namely: i) the Shareholder Agreement, which will deal with all aspects to do with relationships between Zimplats shareholders together with issues to do with corporate governance and voting rights, ii) Vendor Finance Agreement that will detail the terms and conditions of the Vendor Loan Agreement; iii) Share Sale Agreement, which among other things will dwell upon how shares are going to be sold and transferred to the indigenous entities.
In this regard, the deal is not yet over. The Zimplats IIP can only be implemented after the conclusion of the aforementioned agreements. Extensive consultations with the pertinent authorities will be made in due course in order to capture the best minds on issues pertaining to the three contractual and legally binding agreements.
Whether erroneous or mischievous, the analysts’ contention that the consultancy firm will be paid US$45 million is a naked lie meant to post some cheap pro-JUICE propaganda. The figure is deliberately inflated and is misleading since it included a 2,5 percent fee, which is falsely claimed to be due to the consultancy firm for raising the VF.
In the IIP it is clearly stated that Zimplats, not the consultancy firm, is enjoined to provide the VF to the indigenous players.
Part 14 of the IIP reads: “Zimplats Holdings, as the Facilitator, will provide VF to the Indigenous Entities to enable them to purchase the VF Shares.”
Such computations would drastically trim the figure to around US$18 million, which is due to the consultancy firm for its services. After all, it is normal practice that the consultancy firm should get paid for its services since no one would expect it to dispense its services free of charge.
Although these reports have misleadingly disclosed that the consultancy fees will be paid by the National Indigenisation and Economic Empowerment Board (NIEEB), information from a reliable source on the indigenisation board indicates that the much-talked-about consultancy charges will be met by Zimplats.
More worryingly, the reports falsely avowed that the indigenisation deal will only benefit the surrounding communities in 10 years.
This is sheer disinformation meant to deride the indigenisation drive as facts on the ground reveal that Zimplats, as part of the deal, has already made a US$10 million donation for community development projects. Part 15 of the IIP Term Sheet on Additional Support openly says: “In accordance with the terms of the Community Trust Deed, Zimplats will provide the Community Trust by way of donation an aggregate amount of US$10,000,000, payable in three annual installments.”
Of the US$10 million, Zimplats has already paid US$3,3 million and pledged to fully pay the balance by October 2013. This donation has already made some notable and commendable footprints in the three districts surrounding Zimplats in the form of social infrastructure development projects such as the building of schools, clinics and the upgrading of roads. More benefits for the community will accrue in the medium to long term period upon fruition of the indigenisation deal.
On that note, it is incorrect and patently deranged for the neo-liberal analysts to claim that the Zimplats indigenisation deal only benefits the elite.
Some economists are also perplexed by the argument in these reports that claim that the indigenous entities are set to lose their majority share in Zimplats because of their likely failure to service the Vendor Funding loan or through dilution.
The economists contend that the indigenous people’s equity is fully protected by the indigenisation law that clearly stipulates that all companies should ensure that 51 percent of their shareholding remains in the hands of indigenous people.
In this sense, it is therefore incumbent upon Zimplats to avail vibrant corporate policies that enable the local investors to service their loan obligations as per the agreement and thus maintain their majority shareholding.
Besides, in Zimbabwe no commercial transactions could supersede the national laws thus the indigenous entities’ interests in the Zimplats deal are imperviously protected under the indigenisation law.
The way the Zimplats indigenisation deal is being unfairly scandalised in the imperialist media shows that the anti-indigenisation crusade is on the rise against the backdrop of the electioneering season.
However, the fact remains that the Zimplats deal in particular and the indigenisation programme in general are set to materially benefit Zimbabwe’s indigenous people, who for long have been confined to the periphery of the economic activity as mere labourers.
Ben Mutongi is a researcher and social commentator who can be contacted on benmutongi@gmail.com.
No comments:
Post a Comment