(STICKY) (NEWZIMBABWE) SA’s EFF: From economic apartheid to true democracy
08/05/2014 00:00:00
by Garikai Chengu
CONTRARY to the Westernized, popular belief that South Africa is a “model democracy", it is one of Africa's most dysfunctional democracies.
South Africa's apartheid regime is remembered as one of the worst crimes against humanity of the 20th century. The economic system that underpinned it remains alive and well today. Whites comprise only 12 percent of the population but, thanks to the racist exploitation of blacks over the past 350 years, still own 75 percent of the country’s land.
US-based bank, Citigroup, recently ranked South Africa as the world’s richest country, in terms of its mineral reserves, worth an estimated $2.5 trillion. Whites and foreigners own a staggering 80 percent of this wealth. South Africa is, unquestionably, the world's most racially unequal society.
Democracy is not about holding elections, simply to choose which particular representatives of the elite class should rule over the masses. True democracy is about equalizing the economy and giving economic power back to the majority.
The Economic Freedom Fighters party campaigned for the just-ended elections on a platform of three pillars, designed to democratize the economy and overthrow the economic legacy of apartheid. First, expropriation of land for redistribution amongst the masses. Second, nationalization of mines and banks for the benefit of the people and, finally, free education and health care for all
This week marks the most important election in South Africa's post-apartheid history. The EFF is the party of the poor, and if given power by the electorate, it will do what the ruling ANC has failed to do since 1994: provide economic freedom for the poor African majority, at the expense of the predominately white capitalists.
Despite twenty years of South African democracy, five white-owned companies still control 75 percent of South Africa's stock market. It's the largest concentration of wealth and power on earth. Corporate powers, which underwrote apartheid in South Africa, are reminiscent of the great German companies that ran the Third Reich's economy. The only difference between the Third Reich and apartheid is that 'reconciliation' in Germany did not leave pro-Nazi financiers in business whereas in South Africa, those financiers are still firmly in control.
During apartheid, Britain was the single biggest investor in South Africa, followed by the United States, yielding the highest return on capital in the world. The United States and the other Western capitalist governments not only supported, but benefited from the racist apartheid regime. With economic control still concentrated in the hands of the white elite, we see no difference between the old and the new South African regimes. Blacks have reclaimed the political crown, but whites have remained with the crown jewels.
Today, Western media demonizes Julius Malema, the EFF's commander-in-chief, because he is the most outspoken proponent of economic justice. It is no surprise, considering Malema's ideologies threaten the economic stability of some of the most powerful white capitalists in the world.
To this day, a large portion of South Africa's budget pays apartheid-era debt to Western nations. This means the people pay for their oppression twice over. Clearly, the fabric of apartheid, which the Western media claims is long dead, still generates large sums of money, lining the pockets of the very same Western capitalists.
Neo-apartheid companies in South Africa made record profits for Western shareholders since democracy in 1994, all the while shedding hundreds of thousands of jobs. In fact, among the 295 companies on the Johannesburg Stock Exchange, only 4 percent of the CEOs are black. Far from being a “model democracy”, South Africa is an example of how not to practice democracy.
The equitable redistribution of land is the first pillar of the EFF's manifesto. Under the 1913 Land Act, blacks were not allowed to own, or even rent, land outside designated native reserves. By 1994, some 87 percent of agricultural land was in white hands. Precious little has changed during the intervening twenty years. One exception is that black people in rural areas have lost 600,000 jobs since “independence”.
At face value, the Economic Freedom Fighters' call for agrarian revolution may appear to be simply about land. But, it is about so much more. For Africans, land is not merely land. Land is a place to be born, a place to grow up, a place to call home, and a place to be buried. Land is a source of food, a livelihood, and an asset to bequeath to our next generations. Above all else, land is a source of African pride. Land is never merely land.
The second pillar of the EFF's manifesto is the nationalization of mines. Pick up the financial report of any major South African mining company, and one will understand why Malema is advocating nationalization. If you examine a sample income of 100 dollars from a typical South African mine, $22 flows directly into the mine owners' pockets and $17 goes to the corporate executives. Crucially, over 90 percent of these beneficiaries are white. The rest is shared between suppliers ($18), capital goods providers ($16), labour ($14), government in the form of taxes ($9), and debt providers ($4).
So the notion that “the nation’s resource wealth is in the hands of a few white industrialists and foreigners” is not one of Malema's populist fictions, but a cold, hard and uncomfortable fact. The EFF plans to use Venezuela as a model of how to nationalize mineral wealth for the benefit of the people. Venezuela, under Hugo Chavez, used its natural resources to go from being one of the most unequal countries in Latin America to the most equal one, in terms of income.
Democracy is not merely about elections. True democracy is also about equal opportunity through education and the right to life through access to health care. In Venezuela, the government has used nationalization of mineral resources to pay for free health care and free education for the masses. The EFF plans to do the same.
Every year, wealthy Western shareholders repatriate hundreds of millions of dollars from South African mines to Western countries in the form of rent, dividends and profits. Nationalization would channel money towards building bridges and clinics at home, as opposed filling Swiss bank accounts abroad. Unlike the ANC, the EFF will put the interests of local labour above foreign capital.
Any true African revolution has three stages: political, agrarian and economic. The ANC has failed on the second and third stages. The ANC liberated South Africa politically, but economically the ruling party shackles the majority by presiding over its white monopoly of bourgeois capitalism. Under the ANC, corruption is booming and the economy is stagnating, at a time when the rest of Africa is starting to boom. The EFF has vowed to tackle corruption by pledging to do away with Ministerial cars and houses. All EFF parliamentarians will be forced use public hospitals, private cars, and send their children to public school.
South Africa is the continent's most powerful nation, however it is also the continent's most economically colonized nation. Therefore, an EFF election victory would not only democratize and decolonize South Africa, it will encourage other African nations to do the same. A full half century after the first African nation gained independence, the World Bank estimates that a staggering 65 percent of Sub-Saharan Africa's best arable land is still controlled by white settlers or multinational corporations.
The World Bank also estimates that as much as 70 percent of the net wealth in Sub-Saharan Africa is owned by non-indigenous Africans or foreigners. The EFF stands to become a future model for all white-dominated, African economies. If the continent's most powerful nation can achieve political, agrarian, and economic independence, then the rest of Africa will follow suit.
"If the ANC does not deliver the goods, then the people must do to it what they have done to the apartheid regime", once remarked Nelson Mandela. Truth is, the ANC has failed the people of South Africa. The current ruling party has been thoroughly co-opted by neo-liberal, big business. It clearly no longer represents the interests of the poor and middle class. The Economic Freedom Fighters are now the party for progressive Africans to support.
Garikai Chengu is a scholar at Harvard University.
Labels: ANC, APARTHEID, BEE, ECONOMIC FREEDOM FIGHTERS (SA), LAND REFORM, NEOCOLONIALISM
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COMMENT - So now the South Africans are talking about a windfall tax on profits, as an alternative to nationalisation. Also check out:
(MnG) It's time for radical economic change, says Zuma, 26 Jun 2012, by Nickolaus Bauer.
Whites still control South Africa's economy: Zuma
26/06/2012 00:00:00
by Reuters
SOUTH Africa's economy is still mostly under the control of whites who held power under apartheid and the government needs to take more drastic steps to make sure the black majority can benefit from its wealth, President Jacob Zuma said on Tuesday.
Zuma, speaking at the start of a major policy meeting of his ruling African National Congress, said
the challenges of poverty, unemployment and inequality posed long-term risks for Africa's richest country 18 years after the end of apartheid."The structure of the apartheid-era economy has remained largely intact," Zuma told several thousand ANC delegates.
"The ownership of the economy is still primarily in the hands of white males as it has always been," he said.
The ANC has drafted a raft of policy documents that call on mining firms to pay more to the state to help finance welfare spending. The proposals also advocate relying on state-owned enterprises to be engines of job creation and growth.
"The time has come to do something more drastic towards economic transformation and freedom," Zuma said.
But some economists have warned it would be dangerous to rely on state-owned firms since almost all of them have been mired in debt and management problems.
[And is the private sector free of debt and management problems? - MrK]
Zuma also said the debate over how the country's mining wealth should be shared should go beyond simply the question of "to nationalise or not to nationalise."
The party produced a research paper earlier this year saying nationalising mines could bankrupt the state, but it suggested increasing taxes on windfall mining profits.
Zuma said the conference should consider how the state can obtain an "equitable share" of mineral wealth, which could be used more to benefit poor communities.
He also called for a new programme for land reform, saying the current "willing buyer-willing seller" policy had been too slow in returning white-owned farmland to blacks dispossessed by the apartheid state. But he did not spell out what alternative mechanisms of land ownership transfer should be adopted.
South Africa's black economic empowerment policy designed to give disenfranchised blacks greater ownership of the economy should be strengthened, Zuma added.
This policy has been criticised from within the ANC and by its governing allies in organised labour as only benefiting a small sliver of the population with political ties to the party that has ruled since apartheid ended in 1994.
The policy conference will end on Friday and its deliberations are being held behind closed doors.
Labels: APARTHEID, BEE, JACOB ZUMA, NATIONALISATION, WINDFALL TAX
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Law to benefit locals coming
By KATONGO CHISUPABOB2
GOVERNMENT will soon tighten employment rules to deliberately favour Zambians in the job market, Minister of Commerce, Trade and Industry Bob Sichinga has said.
Mr Sichinga said there is a law which favours positive discrimination for Zambians and that soon, the government will restrict certain jobs at certain levels to Zambians only.
“It is important for us to discriminate positively in favour of Zambians,” the minister said during a meeting with members of the North-Western Chamber of Commerce held in Solwezi at the weekend.
“We are aware that there a number of people from outside (foreigners) taking up jobs which Zambians can do. We are tightening that law,” he said.
The Minister was responding to concerns by some workers at Kansanshi Mining Plc, that some Zambians are more qualified than some of the expatriates employed in the mine.
They complained that Zambians perform duties for inexperienced and unqualified expatriates who get huge salaries at their (Zambians) expense.
Mr Sichinga said every citizen must benefit from the country’s resources since the mines operate in the country. He said Government is seeking to ensure that citizens have opportunities by creating more employment and wealth.
He said the mines should not discriminate on political party lines, but give contracts to Zambian companies on merit.
He said government will in the near future create industrial clusters to take care of micro, small and medium size businesses adding that several institutions such as the Citizens’ Economic Empowerment Commission, the banks and Technical Education, Vocational and Entrepreneurship Training Authority will be part of the clusters to help those businesses grow.
He said Government will put up deliberate structures for entrepreneur training in the country and promote five products in the North-Western region which have potential on the market.
These include honey from Kabompo, beans from Solwezi, and pineapples, sweet potatoes and timber from Mwinilunga.
Mr Sichinga said the strategy will be replicated in all provinces, taking into account, the resources found in the respective area.
Meanwhile, the minister is expected to travel to Vienna this week to meet with officials from the United Nations Development Organisations (UNIDO) and seek support for this venture.
The minister also said that he met with Australian businessmen during the Commonwealth Summit in that country, and that they pledged to invest 1.5 billion Australian dollars in Multi Facility Economic Zones in the country.
Labels: BEE, ROBERT SICHINGA
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COMMENT - A clear example to all neoliberal, free market ideologues, that existing businesses do not welcome competition, and will go to court to prevent it.
Intercape exposed
Saturday, 17 September 2011 19:42
By Augustine Moyo
WHITE-owned South African luxury coach operators Intercape Ferreira Mainliner (Private) Limited (Intercape) and Unitrans Passenger (Private) Limited operating as Greyhound have
put up a fierce legal battle to ban black-owned super luxury coach operator Tanaka from entering the Zimbabwean market, it has emerged.
Tanaka is owned and led by Zimbabweans. Trouble started when Tanaka applied to South Africa’s Cross- Border Road Transport Agency (CBRTA) for a permit to ply the Johannesburg-Harare route which was advertised in the SA Government Gazette in June this year.
The South African CBRTA is a very powerful organisation taken seriously by the South African government.
Intercape and Greyhound, through Mr Cuzen Randeree of Cuzen Randeree Attorneys, Notaries and Conveyancers, then filed an application opposing the granting of a permit to Tanaka by the CBRTA, arguing that “Tanaka seeks to obtain a permit on routes (‘the routes’) where our client, as well as other operators such as Intercape, already operate services in terms of permits issued to them”.
In documents opposing the granting of permits to a black-owned super luxury operator, Intercape and Greyhound argued there is an over-supply of buses available on the routes, adding that to allow Tanaka to operate its buses on the routes would “seriously impact on its business in the area and on the routes”.
Intercape and Greyhound further argued that the buses of the operators who conduct services on the routes are sufficient to cater for all passenger requirements.
“There is, therefore, no need for an additional operator,” reads Greyhound and Intercape’s objection.
Intercape and Greyhound did not shed light on the quality of services being offered by various bus operators.
The objection then forced the South African CBRTA to withhold issuing Tanaka a permit to enter Zimbabwe until a hearing was convened and both parties present their cases.
The hearing, which was convened last week and later postponed after Intercape and Greyhound sought postponement, sought “to establish the applicants prove the need for the particular service, taking into account the existing services on the route”.
Tanaka is arguing that Intercape wants to monopolise the luxury coaches’ segment on the Johannesburg-Harare route while at the same time it is offering semi-luxury coaches and service.
Passengers and stakeholders through petitions, affidavits and support letters are backing Tanaka’s service into Zimbabwe.
In some of the affidavits, passengers have complained that of late they have been forced to travel on non-luxury buses because Greyhound and Intercape are overbooked.
It is understood that Intercape, having been exposed, was last week trying to change its coaches that ply to Zimbabwe to justify that it is offering a luxury coach service. It has come to light that the luxury coaches that Intercape promised will ply the Harare-Johannesburg route and Johannesburg-Harare route at its launch at a local hotel last year did not actually materialise, instead it has serviced the route with semi-luxury coaches which had been de-commissioned from South African roads.
The CBRTA, in an invitation letter to both parties to attend the hearing, made it clear that “verbal statements cannot be accepted, only written submissions regarding statements made will be accepted. Evidence must be provided by calling witnesses and/or submitting documents such as petitions or letters from potential clients”.
Passengers who have petitioned CBRTA to issue Tanaka with permits have complained that Intercape buses on the route are old, the general cleanliness of the toilets leaves a lot to be desired and staff are rude as compared to the ones plying the Durban-Cape Town routes. In 2002, an Intercape coach was involved in an accident near Masvingo, killing 32 passengers.
Their coaches tow 10-tonne or 12-tonne trailers.
It has further emerged that other operators such as Pioneer, Citylink, Tombs, Gettingsons use the same coaches as Intercape, but call them semi-luxury.
It is further argued that luxury coaches do not tow trailers as they are meant for the top end of the market that does not want to mingle with cross-border traders.
“The coaches that Intercape is using on the Johannesburg-Harare route are not the same standard of coaches that it is using for its inter-city routes like Johannesburg-Cape Town and Johannesburg to Durban,” said a source.
The Sunday Mail Business, which had an exclusive interview with Mr Ferreira at the launch of Intercape last year, sent him questions in June asking why his company and Greyhound had objected to a black- owned company doing business in Zimbabwe, but to date he has not responded.
However, C-BRT Amendment Section 27 of Act 4 of 1998 states that: “Where the applicant is a South African carrier, the board must take into account the promotion of small business; the empowerment of persons historically disadvantaged by unfair discrimination and any relevant code of good practice or transformation charter published in terms of the Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)”.
Tanaka is a small business with only two super luxury buses — a Multego Mercedes-Benz and Paradiso 1550 lower driver super luxury coaches — and is owned and managed by previously historically disadvantaged individuals.
Interestingly, on the other hand, the objectors are conglomerates owning thousands of buses, having been established pre-1994 and historically benefited from the exclusionary apartheid laws.
Market watchers opine that in light of this, the objectors, who are the only South African-registered luxury coach operators on the said route, should in the spirit of black empowerment, actually be seen to be promoting the entry of historically disadvantaged small operators instead of doing everything in their power to block them and “maintain the sector as a preserve of the few previously advantaged cartels”.
Furthermore, Pathfinder and Munandi Tours and Travel, the Zimbabwe-registered coach operators who are in the same market segment as Greyhound and Intercape do not object to Tanaka’s market entry.
They have registered their support for Tanaka’s application through Zimbabwe’s Cross-Border Operators’ Association (CBOA) with whom they’re registered members.
Last week, CBOA head of secretariat Mr Alex Katsauro said Intercape is a luxury operator while Tanaka is a super luxury coach operator.
Tourism and Hospitality Industry minister Mr Walter Mzembi has gone further by personally endorsing Tanaka’s application in some of the affidavits presented at the CBRTA hearing last week.
In an interview, he confirmed endorsing that Tanaka be granted a permit.
“I also have interests in the cross- border coaches business and I must say that Zimbabwe is very liberal and accommodative to South African operators, almost to the point of even driving out our very own people out of business. Although they have not put it in black and white, the South Africans make it practically impossible for Zimbabweans to operate in South Africa.
“Here we are actually giving them a penalty kick. They are not reciprocating the good gesture that we are offering to them in terms of route permits, ranking for their coaches at Roadport and generally making it easy for them to operate here. They are slapping us on the cheek and we continue to give them the other cheek to slap.
“I will be leading a delegation of operators to lobby to the relevant Minister of Transport against this,” said Minister Mzembi.
Questions are being raised if it is because Zimbabwean operators, unlike Intercape and Greyhound, understand and empathise with the plight and struggle of the historically disadvantaged black operators in this industry.
While Intercape claims that its objection is in the public interest without alluding to the fact that in 2006 at the height of economic decline when sanctions severely hit the economy, human migration from Zimbabwe to South Africa was high and without consideration of the public traveller pulled out of servicing Zimbabwe passengers, leaving the public stranded.
Market watchers opine that the CBRTA should open up to more operators in the said sector, in a bid to safeguard the public interest should Intercape or any other conglomerate pull another 2006 stunt in future.
Intercape and Greyhound’s objection plea to competition from black-owned super luxury operators has been viewed as contrary to free enterprise and healthy business competition.
However, in their papers, they revealed that their answer to free competition is a reduction in fares and expenditure cuts in vehicle maintenance, measures which are seen to endanger public safety, instead of improving on client service delivery. -The Sunday Mail
Labels: BEE, TOURISM
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Zuma: 'Fronting' major obstacle to BEE
JOHANNESBURG, SOUTH AFRICA - Apr 01 2011 20:01
"Fronting" and tender abuse is an "unintended consequence" of an emphasis on diversity of ownership and senior management in implementing broad-based black economic empowerment (BBBEE), President Jacob Zuma said on Friday.
"The unintended consequence of this over-emphasis is fronting and tender abuse. We are happy that the council spoke out so strongly against fronting which is one of the major obstacles to the implementation of BBBEE. Fronting is an insult to the dignity of the poor and we have to act decisively against it. I am pleased that the council is so determined to work with us to act against this heinous practice,'' said President Jacob Zuma in a statement issued by the presidency.
Zuma was chairing a meeting of the Black Economic Empowerment Advisory Council who met at the Union Buildings on Friday.
It was agreed that fronting insulted the dignity of the poor and the practice had to be eradicated -- possibly through punitive measures against those found guilty of fronting practices.
The council recommended that government should "urgently ensure proper monitoring and evaluation" of the implementation of the BBBEE Act.
According to the act, heads of government departments and the chief executives of parastatals had a "legal obligation" to report on the performance of their institutions in implementing BBBEE.
During the meeting emphasis was placed on the new growth path and the role of BBBEE in creating jobs.
The presidency said the meeting "emphasised" that BBBEE was "not just about big business deals for a few individuals in society".
'Consistent implementation'
The council called for the "consistent implementation" of BBBEE in all parts of the economy to ensure that the policy had an impact on more South Africans.
CONTINUES BELOW
"Provisions in the new growth path were supported which require a much stronger focus on the broad-based elements of the BEE regulations, such as ownership by communities and workers, increased skills development and career-pathing for all working people and support for small enterprise and co-operatives, as well as a new emphasis on procurement from local producers in order to support employment creation," the statement read.
"It was pointed out that to contribute to job creation, BBBEE has to, amongst others, promote new enterprise development, encourage local procurement and enhance skills development and employment equity."
A progress report was presented by government on the work done in the past year to promote job creation.
This included, a budget of R41-million for the Cooperative Incentive Scheme paid out to 222 co-operatives, creating around 2159 new direct job opportunities and a further 745 temporary job opportunities, a total of 100 new small scale co-operatives with approximately 500 new job opportunities were established, and 113 cooperatives were supported to enhance access to markets through local and international exhibitions.
The council was appointed in December 2009 to advise government on BEE, review progress in the implementation of BBBEE and advise it on the draft codes of good practice. -- Sapa
Labels: BEE, JACOB ZUMA
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Mining charter has not achieved aims, says minister
PRETORIA, SOUTH AFRICA Sep 13 2010 12:31
A review of the mining charter had revealed that targets set down for the transforming mining industry in 2004 have not been achieved, Minerals Resources Minister Susan Shabangu said on Monday.
Speaking in Pretoria, Shabangu said that
despite the charter, mining assets ownership had remained relatively unchanged, with only 8,9% falling under black economic empowerment (BEE) ownership.
The 2004 charter required companies to sell 15% of their South African assets to black investors by the end of 2009, and 26% by 2014.
The purpose of the charter was to set the framework, targets and timetables for the implementation of the government's transformation policies through its power to regulate and grant prospecting and mining rights.
Shabangu said that the review also revealed that white women and men still dominated management and technical positions. She said that white people continued to earn more than their black counterparts, who had the same skills and experience.
Disappointed
National Union of Mineworkers president Senzeni Zokwana was disappointed with the results.
Nchakha Moloi, chairperson of the South African Mining Development Association, was also disappointed with the results and called on the government to start fining companies that did not achieve the charter's aims.
The new charter aims to see that a minimum 26% of mining assets are BEE owned by 2014.
It also aims to ensure that mining companies procure a minimum 40% of capital goods from BEE entities. At least 70% of services and 50% of consumer goods should be obtained from BEE entities by 2014.
Mineral resources director Sandile Nogxina said that companies that were found not to comply with the charter could face penalties that could even include the revoking of a mining company's licence.
He said that a lack of commitment by mining companies to transformation as well as problems with financing BEE ownership had contributed to the ownership targets not being achieved.
He said that before 2014, BEE ownership targets would not increase, but did not rule out increasing targets after 2014. He said he was not prepared to speculate on BEE ownership targets after 2014. -- Sapa
Labels: BEE, MINING, NATIONALISATION, SUSAN SHABANGU
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A brave new BEE dawn?
VERASHNI PILLAY | JOHANNESBURG, SOUTH AFRICA - Sep 10 2010 17:28
Cosatu's joint venture with Indian mining parastatal trumpeted as true empowerment India's largest iron ore producer, the government-owned National Mineral Development Corporation (NMDC), has joined forces with Cosatu's investment arm in a bid to exploit mining opportunities in South Africa, the two companies announced last week.
The deal with Kopano Ke Matla Investment Company, which is fully owned by Cosatu, has been 18 months in the making, Kopano chief executive Collin Matjila told journalists recently.
Indian parastatal NMDC is the eighth-largest producer of alloys in the world, producing about 30-million tonnes of iron ore and employing 6 000 people in India. This is the NMDC's second foray into Africa, following the acquisition of a gold mine in Tanzania in 2006. "This time our target is more coal, iron ore and manganese," NMDC chairperson and managing director Rana Som said.
With a portfolio of just R300-million and no mining experience, Kopano is teaming up with a company that had a 2009-2010 turnover of $1,38-billion. But Kopano -- which exceeds the government's black economic empowerment (BEE) requirements -- will enable NMDC to acquire mining assets in South Africa.
"Since NMDC has mining expertise, it was not necessary for its partner to have mining experience," NMDC's technical director, Narendra Kumar Nanda, told the Mail & Guardian.
The newly inked joint venture is being trumpeted as an alternative model to dubious South African BEE business deals that benefit elites.
The recent controversial R800-million BEE deal between mining giant ArcelorMittal and the politically connected Imperial Crown Trading (ICT) is a case in point. Talks to seal the deal, following the surprise granting of rights to ICT to prospect at the lucrative Sishen iron ore mine, were facilitated by the Guptas -- an Indian family who have increasingly aligned themselves with President Jacob Zuma. ICT is also 50% owned by Jagdish Parekh, a close associate of the Gupta family.
Kopano, on the other hand, is "a broad-based black company wholly owned by Cosatu, representing more than two million members", Matjila told the M&G.
"Kopano is genuinely broad based and is involved in the mining sector as a long-term strategy and not as a short-term opportunist move for quick profit-making," he said.
Whether the presence of labour interests will guarantee broad-based empowerment is yet to be seen. One of ICT's directors, for example, is Archie Luhlabo -- a former mine worker and trade unionist whose work in the Mineworkers' Investment Company led him into increasingly lucrative personal deals.
But Som constantly reiterated the ethical values of his company.
The pillars of NMDC's work, according to Som, are scientific mining -- or mining without wastage through beneficiation and blending -- environmental friendliness and a commitment to benefit communities where mining operations take place.
The company was not scared off by recent industrial action in the country. "Such situations occur in India also," Nanda said, adding that the company had to deal with a robust union culture in India, with strong alliances to both the ruling party and the opposition. "NMDC has been able to come out of this problem through continual dialogue, negotiations and by following a transparent policy."
Indeed, the promises to the company's future workers in South Africa are dazzling. NMDC pays for the education of every worker's child up to a postgraduate degree, offers lifelong medical care to workers and their spouses and provides all workers with family units. "We have finished our wage negotiations [in India] and our workers were awarded a wage increase of 27%, the highest in the country," Som said.
But NMDC acknowledged that the proof of the pudding would be in the eating-- when the two companies settled on a mine -- and said it welcomed journalists monitoring any coming deals. Much has been made of their shared values and the deal is also being punted by some close to the process as an alternative to the ANC Youth League's push for the nationalisation of mines.
But the spectre of nationalisation still looms over the deal. The powerful Cosatu-affiliated National Union of Mineworkers supports "strategic" nationalisation in the very minerals NMDC is targeting. While Kopano's Matjila would not comment, Nanda acknowledged it was an issue "we have to consider".
"We have to get more information about the issues raised and certain commitments from the government could be necessary to avoid the investment risk," he said.
Labels: ARCHIE LUHLABO, BEE, COSATU, INDIA, NUM (SA)
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Malema wants to 'reactivate' nationalisation
NATASHA MARRIAN | JOHANNESBURG, SOUTH AFRICA - Sep 08 2010 07:35
ANC Youth League president Julius Malema on Tuesday attacked ANC leaders who denied that nationalisation was party policy, saying they were "denouncing" the Freedom Charter.
"We have been listening to leaders of the ANC who understand the ANC better than all of us who have been saying nationalisation is not the policy of the ANC," Malema told the Mining for Change Summit in Sandton.
"They are correct when they say its not the policy of government, yes, we agree but it is the policy of the ANC and we want to reactivate it so it becomes policy of the government.
" ... If you say it is not the policy of the ANC ... you are simply denouncing the Freedom Charter ... and you can't be a disciplined member of the ANC who speaks against policy ... discipline means you must respect the policies of the ANC including the decisions of the ANC," he said.
"Everyone else junior and senior must respect the policies of the ANC. We want to nationalise because we want to make profit ... to increase the budget of the state for social development purposes."
Malema said the party adopted the Freedom Charter and nationalisation was part of the declaration, therefore, it formed part of ANC policy.
"This is what our leaders have fought for," Malema said.
Senior ANC leaders -- including treasurer general Mathews Phosa, secretary general Gwede Mantashe and president Jacob Zuma -- have all said that nationalisation of the mines was not ANC policy.
Last year Phosa told investors in London that nationalising the mines was not ANC policy, nor was it government policy.
Policy formulation a 'long process'
Mantashe said nationalisation of the mines was a debate and would have to be subjected to a rigorous process before becoming ANC policy.
Zuma made similar comments, saying policy formulation in the ANC was a "long process".
Malema said the ANC has not succeeded in changing the lives of ordinary South Africans but has failed because the "apartheid structure" of the economy and of patterns of ownership remained unchanged.
To change the conditions of the people of South Africa, a land revolution was also needed. The land revolution was a necessary one, but South Africa was not going to go the way of Zimbabwe, he said.
"We are not going to do it that way [like Zimbabwe]. We are going to pass legislation."
Malema said the state would make an offer to land owners which they would be compelled to take.
"You don't give us an offer ... you are too expensive," he said.
He said large parts of South Africa, in the Western Cape in particular, were in foreign hands.
"This country belongs to the people who live in it, black and white ... its important as we move forward that we redistribute this land to the people of South Africa."
In punting nationalisation of the South African mines, Malema said white men continued to get richer while black women, particularly rural women continued to get poorer.
"If we don't take a radical stance to intervene, rural women will never realise economic freedom in their lifetime."
Black women in rural areas were also denied land -- ownership of which plays a critical role in participating in the South African economy.
Earlier, ANC national executive committee member and former head of policy, Joel Netshitenzhe, said a strategic national plan for the mining sector needs to be developed before looking at nationalisation of mines.
"To pose that question now [nationalising] I think is to miss the point."
Comprehensive mining strategy needed
"The level of state participation ... will be informed by the effectiveness of the mining sector strategy arising out of a compact among all players," said Netshitenzhe.
"What the country needs is a comprehensive mining strategy."
Nationalisation of South African mines was expected to come under discussion at the ANC's national general council (NGC) later this month. The ruling party's youth league, resolved at its own NGC last month to push for it to become ANC policy.
"Ownership should not be treated as an end in itself, but a means of promoting the strategic imperatives," he said, adding that state ownership should be informed by the strategy.
The strategy was long overdue, and should have been formulated "by yesterday".
Black economic empowerment should be "subsumed" to the objectives of the country's mining strategy, he said.
South African Communist Party deputy general secretary Jeremy Cronin told the conference that the narrow black economic empowerment focus had "set back" South Africa's critical mining sector.
"The big nationalisation has already happened and it was nationalisation of the resources ... the state was made custodian of that resources on behalf of SA's people. On the face of it this was a major step forward but in my view this important advancement was seriously compromised from the very start," said Cronin.
" ... What began to trump all else, and this is the elephant in the room, was the 15% equity stake, a target for 2009 rising to 26%, that's the target, the BEE target by 2014.
"This has introduced many anomalies; you just have to open the newspapers in the last few weeks to get a sense of the enormous anomalies this has introduced."
Cronin said billions of rands in public money was spent on driving this "narrow BEE requirement".
He argued that the "potential leverage" for the state in trying to meet its socioeconomic demands by using the country's mineral resources was "squandered".
The debate over the nationalisation of mines has been "eclectic" and the league's position had changed over time, he said.
"There's even been a degree of populism. There was a "scholastic debate" in the ANC about what the meaning of the Freedom Charter --
which Malema charges stipulates that the mines had to be nationalised.
The left, Cronin said, largely supported nationalisation "in principle".
"Some elements on the more centre side of the political spectrum mainly some black junior mining houses, some not so junior, have supported some form of nationalisation.
"In the midst of the global recession ... some of the BEE but not just BEE but some of the mainstream mining houses were lobbying government and some of us as well to consider some kind of nationalisation as a bailout.
"In short the debate around nationalisation has been quite confused, often very acrimonious, I'm not sure how helpful [its been]."
Cronin said entering a discussion on how to leverage the country's resources through a debate on nationalisation was "unhelpful".
"Its far too narrow a doorway in which to enter into this important national discussion that we must have. Need to have serious discussion about how to leverage mining to benefit the SA people."
Cronin and Malema have markedly different views on nationalisation and have clashed publicly about the issue in the past. - Sapa
Labels: BEE, JULIUS MALEMA, NATIONALISATION
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Turning over the land
YOLANDI GROENEWALD | JOHANNESBURG, SOUTH AFRICA - May 14 2010 17:33
The government is preparing to overhaul land reform legislation, with the controversial Expropriation Bill coming off the shelf and the agriculture department looking at legislating targets for BEE ownership in the farming industry. In addition, the Department of Rural Development and Land Reform was due to present a Green Paper to the Cabinet last week outlining a new form of land ownership.
On Tuesday Beeld reported that Minister Tina Joemat-Pettersson had proposed a new empowerment charter for agriculture requiring farmers to sell a 40% share of their farms and land to black shareholders.
In her budget vote last month Joemat-Pettersson also alluded to possible black ownership targets in agriculture. Her comments provoked an angry reaction from commercial farm unions, with which she had previously enjoyed good relations.
Her spokesperson, Priscilla Sehoole, said that the minister had merely said that a process of rethinking the challenges of production on the land and its political economy was critical.
"The process will look at various options and stakeholders will be consulted," Sehoole said. "Government will release an official statement when finality is reached."
Joemat-Pettersson told Beeld the new agricultural shares scheme will be discussed in September at the ANC's interim national conference.
The land reform department would also not be drawn on the new scheme, referring all questions to Joemat-Pettersson's office.
The original target was for the transfer of 30% of farmland into black hands by 2014, but earlier this year the government admitted that this will not be possible because of an inadequate budget.
The government estimates that less than 6% of land has been transferred to black ownership since 1994. Some analysts agree that reform is moving at a snail's pace, but the figure has also been disputed because it takes no account of private land transactions.
The Green Paper that Rural Development Minister Gugile Nkwinti was due to submit to Cabinet at the end of April, outlining his department's plans, is still under wraps. But Nkwinti told Parliament during his budget vote that his department was considering moving towards a system of "freehold with limited extent" for private farmland.
At the end of last month President Jacob Zuma signalled that the government is looking at a new scheme to drive land reform. "The general view is that the willing-buyer willing-seller model has not worked adequately thus far," he said.
Zuma promised a more "pragmatic formula" to address South Africa's land problems, including less "costly ways" of purchasing land and significant changes in the current land redistribution model. He emphasised that all plans will follow the letter of the law and that South Africa will not go the Zimbabwean route.
A week later Public Works Minister Geoff Doidge announced that the controversial Expropriation Bill will be resubmitted to Parliament next January. The Bill was shelved in 2008 after objections that it allows government to expropriate farms in the national interest. Doidge said his department and the land reform departments are redrafting the Bill, which will have to be approved by the Cabinet before being presented to Parliament.
At the time the Bill was shelved the ANC said it believed that there had been insufficient time for its national executive committee and parliamentary caucus to consider it. Public hearings were "far too limited" and the Bill needed to go back for review.
As pressure mounts over the perceived slow pace of reform, many in the ANC believe it is now time to reintroduce the legislation.
Joemat-Pettersson's proposal has not been met with enthusiasm in commercial farming circles.
"To expect farmers to transfer 40% of their agricultural interest to black shareholders is outrageous and totally unacceptable," said Transvaal Agricultural Union president Ben Marais.
"We've been experiencing difficulty for some time in meeting the minister to discuss agricultural issues. Meetings were postponed and in the last case she didn't even bother to give notice that she would not be available."
Marais said organised agriculture had the impression "that she cannot meet us eye to eye because she knows what our reaction would be on this unacceptable and ridiculous plan".
He said that a 2001 study for the Development Bank indicated that the state and people of colour own more than 56% of South Africa's land.
Court stands by traditional communities
The Constitutional Court ruled this week that the Communal Land Rights Act -- regarded by some traditional communities as "a new apartheid" -- is unconstitutional and invalid.
The Act would have given traditional authorities the power to control property owned by families, subcommunities, trusts and communal property associations.
Four communities from Limpopo, Mpumalanga and North West challenged its constitutionality in the North Gauteng High Court, where they succeeded in having 17 subsections declared unconstitutional last October.
The offending subsections provided for the transfer and registration of communal land, the determination of rights by the minister of rural development and land reform and the establishment and composition of land administration committees.
The communities of Kalkfontein, Makuleke, Makgobistad and Dixie argued that the Act violated the Constitution by restoring "apartheid-era tribal units" and reinforcing tribal boundaries created by the architects of apartheid.
The Constitutional Court heard the state's appeal in March and upheld the high court judgment this week.
Judge Sandile Ngcobo found that the "inescapable conclusion" was that the Act's provisions substantially affected indigenous law and traditional leadership, areas of concurrent national and provincial competence.
Ngcobo ruled that the Act would have replaced the living indigenous law that regulates the occupation, use and administration of communal land. He also concluded that Parliament followed incorrect procedure in enacting the law.
The Act would have affected about 21-million people living under traditional leadership, handing administrative control of communally owned land to traditional leaders.
Its original intention was to give rural South Africans security of tenure. But its effect would have been to give traditional leaders much greater authority over their subjects.
The communities argued the Act would have given traditional leaders undemocratic and unprecedented powers and undermined women's rights and black ownership of land.
"We submit that the evidence shows that, far from securing the applicant communities' land tenure, the Act actually undermines their tenure and makes it more insecure," the communities argued in their application."
The Kalkfontein community feared that the law would have given their chief the power to take over their land.
The Dixie community, bordering the Kruger Park, feared that its valuable land could be sold from under them to developers.
Labels: BEE, LAND REFORM, LAND RIGHTS, SOUTH AFRICA
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Indigenisation regulations take effect
by Lebo Nkatazo
02/03/2010 00:00:00
A NEW law requiring “indigenous Zimbabweans” to take 51 percent shareholding in major foreign firms came into effect on Tuesday as a minister warned there was “no going back” on the controversial policy.
The Indigenisation and Economic Empowerment Regulations have caused a split in the unity government of President Robert Mugabe and former opposition rivals, Prime Minister Morgan Tsvangirai and Deputy PM Arthur Mutambara. Tsvangirai describes the policy as “dangerous” and claims he was not shown the regulations before they were gazetted.
“They were published without due process as detailed in the constitution and are therefore null and void,” Tsvangirai said two weeks ago.
But on Tuesday, Indigenisation Minister Savior Kasukuwere, a member of Mugabe's Zanu PF party, said: “The regulations are already in place. There is no going back.”
The regulations require all existing businesses with assets valued over US$500,000 to declare their shareholding status to the government within 45 days from March 1.
New enterprises would be required to do so within 60 days. Businesses that fail to meet the 51 percent shareholding are required to submit a plan within 45 days from March 1 on how they intend to meet the requirements.
The regulations give effect to the Indigenisation and Economic Empowerment Act passed by parliament in March 2008.
Labour unions and economists are warning that the new regulations will hurt the country’s chances of attracting critical foreign investment, an argument dismissed by Mugabe over the weekend.
"Our indigenisation policy, like the land reform programme, is meant to correct historical imbalances in the ownership of our resources," Mugabe said last Saturday.
Labels: BEE, CEEC, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), SAVIOUR KASUKUWERE
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Indigenization and hope for the future
Mon, 15 Feb 2010 04:28:00 +0000
ONE of the most gnarled and disingenuous arguments about Zimbabwe is that its people are mollycoddles incapable of developing themselves and running big viable businesses.
Interestingly, the same people who advance that argument are the same ones who argue that the brain drain has dealt the worst blow on the country; in recognition of the fact that the biggest asset Zimbabwe has is its people.
The paradox is that Zimbabweans have helped develop countries like South Africa, Botswana and even Great Britain with their businesses and skilled pool of engineers, lawyers, doctors, nurses, teachers, accountants and so forth.
These hard working men and women are the same ones credited for making Zimbabwe "the breadbasket of Southern Africa" after independence in 1980.
Indigenization in Zimbabwe is given a wildly disproportionate weight in the national debate on development. Right-wing opinion proclaims incessantly that indigenization and empowerment law is bad as it scares away investors.
That argument is weak.
India has been pursuing indigenization with greater fervour over the past few decades, recording major successes. The country pushed ahead with equipping its businesses with indigenous products. Today 70% of business resource requirements are met in-country.
Zimbabwe is endowed with many natural resources and its extractive industry is probably the most untapped and the most sought after in the world. The only way to include local businesses in the extractive industry, is to have indigenization policy.
Indigenization will counter the marginalisation of Zimbabwean companies by multi-national corporations in the context of globalization.
A 2008 survey of developing countries revealed that small businesses accounted for over 70% of total number of enterprises. Furthermore, they employ over 60% of the population.
The only way to promote these enterprises is to have indigenization laws that protect them, and cushion them from harsh competition from foreign-owned big businesses.
A lot of foreign investment comes from the United States. The suitability and efficacy of North American businesses and practices in non-Western contexts have been questioned.
Zimbabwe does not necessarily need people versed in the way the westerners do their business. Zimbabweans in Britain must do business according to British practices and laws.
Zimbabweans do not ask for more: If foreigners want to do business in Zimbabwe, then they must conduct business according to the laws of Zimbabwe. Zimbabwe's rules, laws, regulations and practices are paramount.
Local legislation will not hinder companies from investing in resource rich countries like Congo, Nigeria, South Africa, Sudan and Zimbabwe .
Take Nigeria, for example. Suppose Nigeria's Federal Government levies a healthy 50% to 80% tax on companies' windfall profits (which is not unusual in western countries), oil companies will still make a healthier profit than most companies in the western economy.
Where else would Exxon Mobil makes US$1,300 in profits a second, or Royal Dutch Shell US$990 a second, or British Petroleum US$660 a second, or Chevron US$590 a second, or Total US$570 a second; except in Nigeria? Even if they were to own 49% of those companies, they would still remain in that country.
The debate on indigenization should focus on the nature and implementation of the indigenization legislation, rather than its morality. The morality is unquestionable.
For indigenization to succeed, various initiatives should be explored to support and develop indigenized businesses, for example New Ventures Investor Forums, that bring together financial, government,
and business communities to generate mechanisms to actively support these businesses.
President Mugabe and Zimbabwe have emabarked on the long lonely road towards addressing issues sorrounding the centuries of plunder of its immense wealth and denial of its people. It is a dangerous, but necessary, road. It is a lonely road that was travelled by Patrice Lumumba, Kwame Nkrumah, Queen Nzingha, Yaa Asantewa, Shaka, etc.
Those who plundered Zimbabwe with such lack of compassion and with scant regard for the majority, should first look themselves in the mirror, before they criticize what is truly the only way to redress a colonial imbalance.
Zimbabweans have never been as hopeful of the future, and of becoming that which they saw in others, as they are today.
Enter comments and suggestions below or email: itayi *** talkzimbabwe.com
Labels: BEE, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE)
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Tsvangirai is not law unto himself
by Never Chiterera
Wed, 10 Feb 2010 17:55:00 +0000
PRIME Minister Morgan Tsvangirai, by saying the Indigenization and Empowerment Act (IEA) is null and void has embarked on a wild goose chase. No Zimbabwean has any power to reverse laws that were passed by Parliament, whether that Parliament existed before or after the formation of the inclusive Government.
On March 9, 2008 President Robert Mugabe signed the IE Bill into law after Parliament passed it. It was passed in September 2007. In any case, the IEA is not the only piece of legislation passed before, and signed into law by President Mugabe after, the formation of the inclusive Government.
Why did the prime minister not cry foul about the other pieces of legislation? This law was long overdue.
Zimbabwe has had a chequered history. 20 percent of the white population owned 90 percent of the means of production.
The inequalities that were brought about by colonialism have to be addressed.
Britain reneged on its obligation in redressing these inequalities and the government of Ziumbabwe ought to take on that role, without the former colonizer.
It is interesting that there are many Zimbabweans who today would still like to see whites only control the means of production in a country that is independent.
Reconciliation and cordial race relations mean that everyone should have access to the means of production. Because the black majority has been marginalised for a long time, the laws of the land have to be formulated to favor that group, without excluding other players.
That is the essence of the affirmative action initiative that the government embarked on.
As far as the Act is concerned, there is nothing that Prime Minister Tsvangirai can do. He is not the law unto himself.
This is a legitimate piece of legislation.
Labels: BEE, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), MORGAN TSVANGIRAI
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Indigenization Act passed
Ralph Mutema
Tue, 09 Feb 2010 23:06:00 +0000
ZIMBABWE has passed a law that compels all businesses with assets worth more than $500,000 to be 51 percent black-owned within five years.
The law, aptly titled as the Indigenization and Empowerment Act (IEA), published in the Government Gazette, comes into effect March 1 and stipulates prison sentences of up to five years for non-compliance.
IEA states that “every existing business” must submit forms detailing ownership of companies by April 15, along with plans for the disposal of 51 percent of their shareholdings to black Zimbabweans.
Businesses that fail to comply after a 30-day reminder will be guilty of an offense and liable to a fine and or a jail sentence of as much as five years, according to the gazette.
Foreign investors also need to meet an ''empowerment quota.''
The law, was passed by parliament in 2008 but was not immediately signed into law by President Mugabe.
IEA had been on hold until supplementary regulations were drawn up by the government. It was published in an official (public) gazette at the end of last week, with no need for any further formal announcement.
The new law may affect companies including Anglo Platinum Ltd., Impala Platinum Holdings Ltd. and Aquarius Platinum Ltd., three of the world’s four biggest producers of the metal, which all own mines in the southern African nation. Old Mutual Plc, Africa’s biggest insurer, owns properties and a life-insurance operation in the country.
Zimbabwe has the world’s second-largest reserves of platinum and chrome, after South Africa, along with deposits of gold, coal, diamonds and nickel.
Indigenous Zimbabweans are defined as anyone who before independence from colonial Britain in April 1980 was "disadvantaged by unfair discrimination on the grounds of his or her race and any descendant of such person". This includes the majority of black people who could not access the means of production and who were treated as second class citizens by the apartheid regime of Ian Douglas Smith.
There is still debate on how exactly the 51 per cent stake will be acquired by indigenous people. But under neighbouring South Africa's black empowerment programme, banks have leant large sums to black businesses to enable them to buy shares in major companies, often at a discount.
The Minister of Youth Development, Indigenisation and Empowerment, Saviour Kasukuwere, said the indigenization law should not worry investors.
His ministry is responsible for the regulations.
He said: "There were wide consultations with stakeholders ahead of publication of these regulations and there is flexibility available.
"We are not trying to damage the investment climate in Zimbabwe."
Prime Minister Morgan Tsvangirai summarily dismissed the passing of the IEA as "null and void".
"I am in charge of all policy formation in cabinet and neither myself nor the cabinet were shown these regulations before they were gazetted," Tsvangirai said in a statement.
"They were published without due process ... and are therefore null and void," he said, although the assent is only given by the president and parliament passed the IE bill back in 2008.
The publication of the IEA follows the appointment of the National Indigenisation and Economic Empowerment Board as provided for by the Indigenisation and Economic Empowerment Act.
The Board was appointed in January this year.
The 13-member board has representatives from interest groups, indigenisation and empowerment experts and other key sectors such as women, youth, the disabled and ministries of Economic Planning and Investment Promotion, Mines and Mining Development and Industry and Commerce.
Labels: BEE, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE)
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COMMENT - Interesting how opinions can change. PM Morgan Tsvangirai is often touted in the West as the 'former trade union leader', implying that he has the interests of ordinary workers at heart. However, this legislation is an excellent opportunity to advance those same workers. Even if it only meant that pension funds would become shareholders, it would direct money toward working people. However, like all neoliberal 'socialist' sellouts (Tony Blair comes to mind), he is more concerned about turning away 'investors'.
Tsvangirai rejects black quota law
by
09/02/2010 00:00:00
REGULATIONS published Tuesday in Zimbabwe declaring that large companies must hand blacks a 51 per cent stake within five years were summarily dismissed as "null and void" by Prime Minister Morgan Tsvangirai.
The regulations, passed under two-year-old black empowerment legislation, say that by mid-April, all businesses with assets valued over $500,000 will have to submit to the government a form detailing the racial composition of their current shareholding. The power-sharing government, headed by President Robert Mugabe, would then decide how much of its shareholding is to be 'ceded' to 'indigenous' Zimbabweans.
"I am in charge of all policy formation in cabinet and neither myself nor the cabinet were shown these regulations before they were gazetted," former opposition leader Tsvangirai said in a statement."'They were published without due process as detailed in the constitution and are therefore null and void."
A maximum penalty of five years in jail faces any business that misses the deadline, according to the regulations.
The same penalty awaits whites who use black employees as "fronts", according to the law. The country's minister of indigenisation will keep of list of "suitable candidates", to whom shares can be ceded.
"We are trying to come up with policies that attract investment into the country," said Tsvangirai's spokesman, James Maridadi. "The thrust is to portray Zimbabwe as a safe destination for investment. This is counter-productive, it is old thinking.'
He said Tsvangirai was to meet with Mugabe over the issue. The prime minister has also summoned Empowerment Minister Saviour Kusukuwere, a Mugabe appointee, to a meeting Wednesday.
Political analysts say the promulgation of the law appears to be a deliberate strategy by Mugabe's Zanu-PF party to try and shore up its shrinking support among the electorate. Mugabe has long used patronage as a means to secure loyalty.
"It will obviously turn off investment very strongly," said economist Tony Hawkins.
"It doesn't matter who they are, the Chinese, everyone. And the Chinese are the biggest investors."
Companies most likely to be affected were foreign-owned, he said, and investors on Zimbabwe's stock exchange.
Last week, Tsvangirai told big business at the World Economic Forum in Switzerland that "confidence has returned" to Zimbabwe following a decade of economic collapse. "This is the time to look at the country in a more positive light," he said.
Business executives expressed shock at the new laws. "First they took the farms, now they are taking businesses," said one executive.
The regulations take effect on March 1 and companies have 45 days in which to complete and submit to the government a form that gives the names, nationality and identity details of their shareholders, and whether they are "indigenous" or "non-indigenous" Zimbabweans.
Zimbabwe's racial profile has fundamentally changed since independence from white minority rule nearly 30 years ago, when the economy was heavily dominated by whites. Since then, the white population has fallen from 200,000 to around 30,000 and most major businesses are run by blacks.
At Davos last week, Rio Tinto diamonds and minerals chief executive Harry Kenyon-Slaney, said "the only threat to our operations is indigenisation programmes."
Labels: BEE, ECONOMIC EMPOWERMENT, MORGAN TSVANGIRAI, NEOLIBERALISM, TONY HAWKINS
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‘Govt won’t backtrack on empowerment drive’
Business Reporter
INDIGENISATION of the economy should not be mistaken for expropriation and the Government will proceed with the process while taking into consideration the thrust of empowering the majority of Zimbabweans, a Cabinet minister has said.
Youth Development, Indigenisation and Empowerment Minister, Saviour Kasukuwere at the weekend said while there were some misconceptions regarding the application of the country’s indigenisation laws, the Government would not back down on the empowerment drive.
"We have no apologies to make and we are proceeding to make sure that the economy of this country is put in the hands of the majority blacks. It is Government’s desire to change the landscape of this country and the majority should be involved in this development.
"We are being very reasonable and yes, some mistakes were made during land reform and we do not want to repeat that. We must empower our own people first and then we can look at outsiders," Minister Kasukuwere said.
Minister Kasukuwere was speaking at a fund raising function for the construction of a US$24 million Territorial Convention Centre for the Salvation Army in Waterfalls.
He said existing opportunities and many other openings in the economy should be made available to Zimbabweans to change their fortunes.
The minister said people had the prerogative to take it upon themselves to create wealth as there numerous opportunities available waiting to be exploited.
"This country is filled with opportunities. We have rivers flowing with gold and we have vast mineral resources and if you work hard, you can make money," he told hundreds of worshippers at the site of the proposed development which will be funded using local resources.
The subject of indigenisation has caused some consternation in some circles with many mistaking it for nationalisation of foreign owned companies instead of compliance with the country’s indigenisation laws. The Government has maintained that in terms of the indigenisation laws, at least 51 percent of the ownership of companies should be in the hands of locals.
Minister Kasukuwere donated 60 tonnes of cement to kick-start the project, while local businessman Mr Philip Chiyangwa offered the church a house valued US$150 000 to be raffled and raise money for the construction.
Labels: BEE, CEMENT
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Namibians hear of SA BEE failures - by Irene !Hoaës
WINDHOEK – Two-hundred and fifty billion rands were transferred via the black economic empowerment (BEE) policy between the years 2000 and 2005 in South Africa.
However, according to the president of the South African Black Entrepreneurs Forum (SABEF) Lebo Gunguluza, only a dozen people were truly enriched through the money.
Gunguluza, who was a guest speaker at the Namibia Tourism Board’s (NTB) stakeholders dinner recently, said BEE focus became narrow-based contributing largely to only two of the seven BEE pillars such as ownership and skills development.
Ownership recorded the highest levels of progress at 60 percent, while skills develoment recorded 42 percent.
The other five pillars of BEE are management control, employment equity, preferential procurement, enterprise development and socio-economic development.
Gunguluza said enterprise development scored the lowest process points against targeted points at only 12,2 percent.
“This may be ascribed to many enterprises adopting a wait-and-see approach coupled with the fact that big corporates started the elements of Broad Based BEE that had the most direct benefits to their enterprises,” the SABEF president said.
Gunguluza said the first phase of the Broad Based BEE in South Africa had benefited politically-connected and an educated group of black elite without sufficiently addressing the broader economic empowerment of the masses.
Among other constraints were the fact that the South African government spent too much time and resources on codes of good practice and sector charters, rather than looking at successful avenues of implementation, just creating an industry of consultants.
He further singled out the uneasiness of white businesses around the impact of BB-BEE to their businesses and economy, the general percentage of skills shortage of suitably qualified black job entrants as well as the direct and indirect fronting practices, which have crippled BEE efforts, as perceived constraints to the BEE process.
Gunguluza told NTB and its stakeholders that the role of transformational leadership in Namibia is therefore the way to go into business.
“Leaders have to strive to make their businesses learning organisations. This requires dynamism in leadership, rather than the maintenance mentality that has dominated South Africa in the beginning process,” he advised the gathering, which also saw the commissioning of the Road Show to Europe for the first group of BEE in the tourism sector.
He said BEE should not be seen as a compliance issue but a business strategy for the new times.
“Companies must ensure that their marketing teams, customer service and other critical teams are diversified to reflect the demographic and psychographic reality of Namibia,” Gunguluza noted.
According to Gunguluza, big companies need to pay attention to ensure that strategic projects are staffed appropriately.
“The most common approach to BEE is getting black recruits into junior, insignificant positions, while leaving the projects that are critical to black-owned enterprises’ growth solely in white hands.”
Gunguluza said to promote the participation of black people in the mainstream tourism space, it is important for the NTB to identify talented staff for business start-ups, select a core group of suppliers with potential and/or ability to deliver to the needs of big business and train them to become eligible or preferred suppliers.
“The philosophical approach is what Namibia needs to make the BB-BEE the driver for economic transformation and change, and even if it is currently not legislated, this will get the bulk of your black population actively involved in your economy,” the SABEF president said.
Labels: ANC, BEE
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Zim mining chamber proposes softer laws
by McDonald Dzirutwe
28/10/2009 00:00:00
ZIMBABWE'S Chamber of Mines has made proposals for the country’s mining bill that seek to strike a balance between attracting investors and indigenisation, to reassure foreign investors worried by talk of nationalisation.
An initial bill, which sought to force foreign mining firms to sell 51% shares to locals and gave 25% equity without paying in some companies, raised concerns among investors, but lapsed before it was passed.
That proposed bill led to the withholding of badly needed investment in Zimbabwe, which is struggling to recover from economic collapse under a unity government between President Robert Mugabe and old rival Morgan Tsvangirai.
Following the collapse of commercial agriculture [massively aided by Western economic sanctions such as ZDERA - MrK], mining has become the top foreign currency earner, with gold alone bringing in a third of total export earnings to a country that says it is unlikely to receive bilateral assistance soon.
As part of its proposals, seen by Reuters on Wednesday, the chamber of mines has asked the government to set mining firms a target of 25% local ownership within 10 years and use a scorecard system to measure empowerment levels in the sector.
The government will decide whether to include the proposals in a long-awaited mining amendment bill that is expected to be debated in parliament before the end of the year.
The mining chamber’s proposals, which have already been presented to the country’s mining ministry, require mining companies to set aside a minimum 10% equity for acquisition by locals within 10 years.
The chamber of mines said social and infrastructure spending, assistance to small-scale miners and release of mineral rights to government by miners would all contribute to the empowerment scorecard.
The chamber also proposes that miners be compelled to attain an empowerment score of 7% after three years, 18% after six years and 25% after 10 years.
“The empowerment score shall comprise the direct and indirect Zimbabwean equity ownership in the company plus the equity equivalent of other qualifying empowerment benefits provided by the company,” the chamber of mines said.
The chamber’s proposals are in line with a similar drive in South Africa, which has adopted the black economic empowerment (BEE) to include blacks in the mainstream economy after years of exclusion under apartheid.
South Africa, the biggest producer of precious metals, adopted BEE legislation four years ago compelling mining companies to sell 15% of their assets to black investors by 2009 and 26% by 2014.
Some of the key players in Zimbabwe include Impala Platinum Holdings (Implats), the world’s second largest producer of the metal, which has the biggest mining investments in Zimbabwe. Its bigger rival Anglo Platinum and Rio Tinto also have mining interests in the country.
Zimbabwe has the world’s second-biggest platinum reserves and large deposits of diamonds, coal and nickel.- Reuters
Labels: BEE, CHAMBER OF MINES, CORRUPTION, NATIONALISATION, NEOCOLONIALISM
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Nestlé Zimbabwe should close shop, says AAG
Our reporter
Sun, 25 Oct 2009 20:37:00 +0000
THE Affirmative Action Group (AAG), the vanguard of black economic empowerment in Zimbabwe, has condemned the decision by Nestlé Zimbabwe to stop buying milk from Gushungo Dairy Estate on the pretext that the First Family's business is under so-called targeted sanctions.
In a statement released to the Zimbabwe Guardian on Sunday, the pressure group said if Nestlé cannot buy milk from Gushungo Dairy Estate, a company run by Zimbabwe's First Family, they "should close shop in this country as the action is an affront to black economic empowerment and an unacceptable spate on the champions of Zimbabwe’s liberation and economic emancipation."
Nestlé Zimbabwe stopped buyig milk from Gushungo Dairy Estate under pressure from the west.
The company has its headquarters in Switzerland, a non-EU country, and consequently is not obliged to comply with the sanctions regime imposed by the EU.
The international food giant had first started buying milk on a temporary basis in early 2009. This was because a local privatized marketing firm which controls much of the milk industry in the country was unable to make purchases during the economic crisis.
"The First Family cannot be made to pay a heavy price on their unwavering commitment to the economic liberation of Zimbabweans," read the statement.
"They are being made to pay dearly for their efforts to give black Zimbabweans land and as AAG, we will not accept any attempt to victimize the President and his family for having fought for liberating blacks in the mind and economically.”
The group said while it saluted Nestlé for keeping its investments in Zimbabwe even under difficult economic times, it was shocked that the company could buckle under pressure from "Rhodesian right wing elements" who are so desperate to destabilize Zimbabwe's inclusive Government.
"It must be noted that Gushungo (Dairy Estates) is not stealing the milk, but it is providing it through hard work and honest means.
"To stop buying from the company on the basis of illegal sanctions against the First Family is not only immoral, but a serious violation of our country’s laws which are clear on discrimination.
“If Nestlé is convinced about its actions, then it must stop doing business in Zimbabwe because the first family is also likely to be buying its products.
"If they cannot buy from Gushungo Dairy Estates, how can they operate in an environment were the First Family is going to buy its products”? asked AAG.
Last week, AAG President Mr Supa Mandiwanzira said the organisation would soon be taking legal action against Nestlé Zimbabwe. He added that the company should be indigenised to avoid such actions in the future.
AAG called upon the United States, Britain and the rest of the EU to lift illegal sanctions imposed on Zimbabwe. The group also urged all Zimbabweans to speak "clearly and louder against them."
Labels: AAG, BEE, GUSHUNGO DAIRY ESTATE, NESTLE, SANCTIONS
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Amend Indigenisation Act
Zimbabwe faces two priorities when it comes to investment: we need external capital to develop rapidly, and we would like the benefits of this development to be shared by the people rather than solely going to the investor.
To answer this second requirement, there are provisions in the Indigenisation Act that can theoretically force external investors to sell off 51 percent of their business to indigenous Zimbabweans, and even force local non-indigenous citizens to do the same.
There are also provisions in the Mines and Minerals Act for high levels of local investment although in that legislation there is also provision for this to be varied where there is a substantial foreign investment; but it is not an automatic right.
Investors are seeking changes; they say that the present requirements, even when not enforced, are unreasonable and discourage them from making the sort of investments they would like to make.
An additional problem is that the legislation as it exists would favour wealthy indigenous Zimbabweans, rather than the small investor and even the State.
At the same time some of the large investors have created whole new industries and towns in Zimbabwe to support their operations, already giving quite a bit to the country.
We refer to the comments by President Mugabe on his several visits to Zimplats when he has referred most favourably to the sort of development the largest single investor since independence has created.
We do not see a major conflict between the twin desires of external investment and local benefit. But we believe that there should be far more options than those laid out in the Indigenisation Act and that some of these options should allow ordinary Zimbabweans to participate and should allow the State to benefit as well.
The Zimbabwe Stock Exchange offers an obvious vehicle for raising local capital and allowing ordinary people and pension funds to invest in major projects.
So one option might be to encourage external investors to list on the local bourse.
We might need a special category of shares, so that only Zimbabweans and local funds, rather than foreigners, could buy these shares, but that should not be an insurmountable obstacle. The external investor would have some of their investment covered by local capital.
In the mining world, we should remember that the Zimbabwe State owns the mineral rights, having bought them off the British South Africa Company in the 1930s. Owners of mineral rights can set royalties and the BSA Company used to set some pretty stiff ones once. Governments here though have set a zero royalty.
Perhaps we need to change this. Zambia now sets a very modest royalty, of 3-5 percent, and has found this solves a lot of problems. There is no argument over mining taxes, a notoriously difficult subject, no problem with transfer pricing, no need for a State shareholding and an immediate benefit to the people as a whole.
The very small percentage royalty in terms of income would be equivalent to the profits on a far vaster shareholding; the royalty being pure income with the investor still covering costs. South African companies dislike royalties, not really understanding them since in that country a landowner owns the minerals underneath, but they have adapted well in Zambia.
It should be possible to introduce in Zimbabwe a complex formula whereby the percentage of shares that need to be sold locally, the royalties payable and the investment into infrastructure could all be offset against each other. It might be possible, for example, for infrastructure investment, or at least a significant percentage of this, to be taken from the future royalties.
A percentage of dividends payable to local investors could also be deducted from royalties.
The formula would present options to the investor. One who spent much on infrastructure and floated a modest percentage of shares on the ZSE would pay minimum royalties. One who wanted to keep everything and invest as little as possible in ancillary development would pay royalties at the top rate.
In all cases Zimbabwe and its people would benefit, one way or the other, yet an investor would be able to choose how they paid for the right to mine.
Obviously, this sum for mining rights could not be set too high, but it should be possible to work out a price that will not discourage investment yet still benefit the people and so, through options and offsets, ensure continued investment and ensure that Zimbabwe benefited as well.
Labels: BEE, MINES AND MINERALS ACT
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Indigenise Nestle: AAG
Herald Reporters
The Affirmative Action Group has implored Government to indigenise Nestle Zimbabwe, saying its decision to stop buying milk from Gushungo Dairy Estate was illegal and against the spirit of the Global Political Agreement.
Addressing journalists in Harare yesterday, AAG president Mr Supa Mandiwanzira, said Nestle Zimbabwe’s actions were a result of failing to indigenise some of the local firms.
"As AAG, we cannot accept this continued harassment of the Head of State. The First Family is a symbol of economic empowerment and they have taken a battering, simply because of the steps they have taken to empower the majority.
"We are taking a legal approach against Nestle Zimbabwe and not a confrontational approach. What we are now seeing are the consequences of not indigenising. Nestle Zimbabwe should be indigenised," said Mr Mandiwanzira.
He defended the indigenisation programme, saying it should be viewed as a guarantor of any foreign investment.
"Indigenisation is a guarantor of investment. Anyone who wants to operate in Zimbabwe should partner locals so that they secure their investment," he said.
Mr Mandiwanzira said the refusal by the Switzerland headquartered company to purchase milk from the First Family’s dairy farm was illegal.
"It is illegal to segregate customers and it is illegal to segregate suppliers. They are against the laws of the country. We cannot have a company operating in Zimbabwe perpetuating an imperialistic agenda. It is unacceptable and Nestle Zimbabwe has crossed the line.
"When the Prime Minister was in Spain, he called for the removal of the restrictive measures.
"Nestle Zimbabwe’s actions are going against the gain in the inclusive Government and the progress it has made. Nestle Zimbabwe has buckled under the pressure of right wing Rhodies who do not want the inclusive Government to work," said Mr Mandiwanzira.
Labels: BEE, DAIRY, GLOBAL POLITICAL AGREEMENT
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