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NATIONAL ASSEMBLY HANSARD 08 February 2018 44 39 1

PARLIAMENT OF ZIMBABWE

Thursday, 8^th February, 2018

The National Assembly met at a Quarter-past Two o’clock p. m.

PRAYERS

(THE ACTING SPEAKER in the Chair)

MINISTERIAL STATEMENT

CORRUPTION AT THE VEHICLE INSPECTION DEPARTMENT

(VID)

THE MINISTER OF TRANSPORT AND

INFRASTRUCTURAL DEVELOPMENT (HON. DR. GUMBO):

Thank you Mr. Speaker Sir. Yesterday, there was a request from Hon. Members through Hon. Maridadi that I must make a ministerial statement on corruption at the Vehicle Inspection Department (VID). I would like to thank you for affording me the opportunity to make this statement in respect of corruption at the VID.  The Zimbabwe driver’s licence is an internationally recognised document.  Since Zimbabwe is a signatory to the 1986 United Nations Convention, our citizens can obtain an international driving permit upon production of our driver’s licence.  Such a permit allows you to drive in other States that are signatories to the same.  It is the duty of the Government of Zimbabwe and indeed my Ministry to jealously guard against its status.

Mr. Speaker Sir, the public domain is awash with reports of driving school instructors who act as conduits in the alleged corrupt practices related to the issuance of drivers’ licences. In line with the stance adopted by His Excellency the President, Cde. E. D. Mnangagwa, I would like to warn all owners of driving schools and their staff that all allegations of corruption will be fully investigated and handed over to the ZRP for prosecution.  Where it is established that the driving school is involved, we shall ensure that it is closed.

Mr. Speaker Sir, we have also heard of VID driving examiners who corruptly issue certificates of competency and even provisional driver’s licences.  My Ministry is also aware that corruption at the VID is not only confined to the issuance of driver’s licences but has spread to other services offered such as certificate of fitness for vehicles.  On the

31^st of January, 2018…

THE ACTING SPEAKER (HON. MARUMAHOKO): Order,

Hon. Members to my left.  You are the very people who requested the

Minister to make a ministerial statement today.  He has humbly left the Politburo in session to come and deliver this important message to the nation and you are starting to make noise.

HON. DR. GUMBO: Thank you Mr. Speaker. On the 31^st of

January 2018, my Ministry met with representatives of driving schools, VID personnel, Traffic Safety Council of Zimbabwe and other stakeholders.  I reminded them that indecorous behaviour from public officials who betray the trust bestowed upon them as Government employees will no longer be tolerated.  I also appealed to the Director Vehicle Inspection Department and all Depot Managers to inform their staff that in this new dispensation, we will not accept any form of corruption.

Mr. Speaker Sir, I would like to assure this august House that within the context of the 100 days action programme, tangible action will be taken on errant officers by the office of the permanent secretary.  Any VID Driving Examiner who coerces driving school instructors to ask for bribes should be dealt with without fear or favour.

Fifty four officers have so far been fired when it was discovered that they were engaged in corrupt activities.  The stations affected include VID Chiredzi which issued 199 driver’s licences to undeserving applicants. The licences were subsequently cancelled by the Ministry.  Mr. Speaker Sir, officers from VID Eastlea, VID Belvedere, VID

Chitungwiza, VID Nyamapanda, VID Chinhoyi, VID Marondera, VID

Victoria Falls, VID Kwekwe, VID Chirundu, VID Mutare and VID Kadoma were also dismissed for engaging in corrupt activities.

Mr. Speaker Sir, I have also directed the Traffic Safety Council of

Zimbabwe to execute their regulatory responsibilities as outlined in the

Traffic Safety Council Act.  It is the duty of the council to enforce driving school regulations that we gazette under Statutory Instrument

309 of 1985.  Some of the requirements are as follows;

1. the need to register every driving school and do annual renewals of such registration;
2. all driving school instructors should be trained, certified and monitored regularly;
3. renewals by driving schools and instructors must be done timeously; and
4. driving schools should be inspected on a regular basis.

I would like also to appeal to Members of Parliament to advise prospective drivers in their different constituencies to use registered driving schools and not to tempt the instructor or VID driving examiner by offering them bribes.  I have also ordered the TSCZ to publish and avail to the public a list of all registered driving schools.

Mr. Speaker Sir, it is disheartening to note that the acts of corruption that I have alluded to have continued despite the introduction of innovative measures at the institution aimed at reducing the same.

These measures include the following:

• the balling system whereby a learner driver who would have come for a road test picks a ball from a basket with an office number leading them to the Examiner who will take them for the test. This strategy is envisaged to counter pre-arranged corrupt practices;
• In line with SADC harmonisation of standards for testing drivers, we have constructed in all VID yards, SADC standard hill-starts, three point-turn facilities, parallel parking facilities and reversing facilities.  This strategy enhances transparency and fairness by ensuring that 80% of the road test is conducted in the yard in full view of members of the public;
• With effect from 6^th March, 2016, all VID depots and vehicles are required to display toll free numbers so that members of the public can give feedback on service delivery and also to report corrupt practices;
• Erection of Notice Boards at all VID Depots informing members of the public to phone the supplied numbers if they have been asked for consideration or a bribe by VID Officials or anyone in order to pass a test or to pass a vehicle for a certificate of fitness;
• All depots have suggestion boxes strategically positioned for members of the public to air their views as feedback on service delivery;
• Senior Officers are allowed to recall all already inspected vehicles for check on five main systems on a vehicle and Managers are also allowed to randomly accompany Examiners on road tests for quality control purposes; and
• Frequent rotation of examiners so that they do not develop relationships with potential learner drivers and driving schools.
• There is a transfer policy which helps in mitigating against over- familiarisation of officers with members of the public which has a high propensity for corruption.
• In line with advancements in the global village, VID as a learning organisation will, in the near future, move towards automation of its services under the ZIMITS programme which will help to reduce direct human interface, thereby reducing corruption.
• Speaker Sir, the fight against corruption at the VID requires all of us to play our part. I therefore urge Members of Parliament, particularly the Portfolio Committee on Transport and

Infrastructural Development to play an active role to combat this scourge.  I thank you.

RECOMMITTAL TO COMMITTEE STAGE

FINANCE BILL [H. B. 1A, 2018]

First Order read: Recommittal to Committee: Finance Bill, [H. B.

1A, 2018].

House in Committee.

Hon. Chinotimba having stood up on a matter of privilege.

   THE ACTING SPEAKER: Hon. Chinotimba, I gave enough

time for anyone who had something to say and nobody stood up but now you start saying you have …

*HON. CHINOTIMBA: Thank you Mr. Speaker.  My point of

privilege is that I want to bid farewell to the august House as Ambassador of Happiness, I am going to Dubai.  I hope and trust that you will remain well and that no one will scold anyone.  My word to you as Members of Parliament is that you should go back to the constituencies and do your duty.  You should not stay here in Harare, instead you should go back to the people and get to know what their requirements are – [HON. MEMBERS: Inaudible Interjections.] –

        THE TEMPORARY CHAIRPERSON (HON. DZIVA): Order

Hon. Members, let us revert to Committee.

On Clause 37:

         THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Madam Chair, I move the amendment standing in my name with regard to Clause 37; it is a small amendment.  In the Bill, we referred to the Speaker as someone who has been a Member of Parliament.  That is not correct; you can have a Speaker who has not been a Member of Parliament. So, the amendment is deleting the words Member of Parliament and substituting with person.  I so submit Madam Chair.

Amendment to Clause 37 put and agreed to.

Clause 37, as amended, put and agreed to.

House resumed.

Bill reported with amendments.

Bill referred to the Parliamentary Legal Committee.

SECOND READING

PUBLIC ENTITIES CORPORATE GOVERNANCE BILL [H. B. 5,

2017]

Second Order read: Adjourned debate on the Second Reading of the Public Entities Corporate Governance Bill [H. B. 5, 2017] .

Question again proposed.

HON. CHAPFIKA:  

         1.0    INTRODUCTION

The Finance and Economic Development Portfolio Committee conducted public hearings on the Public Entities and Corporate

Governance Bill, 2017 currently before Parliament from 21^st to 26th

January, 2018. The hearings are in compliance with Section 141 of the Constitution, which requires Parliament to ensure interested parties are consulted before passing a piece of legislation in Zimbabwe. The Public Entities Corporate Governance Bill was gazetted on the 21st of July 2017 in line with Chapter 9 of the Constitution of Zimbabwe, which provides for the administration of public institutions or Government controlled entities. Sections 194 and 198 of the Constitution mandate the State to adopt and implement policies and legislation aimed at developing integrity and financial probity in all institutions and agencies of Government at every level and in every public institution.

The proposed Public Entities Corporate Governance Bill will ensure uniformity in the operations of all the public entities in

Zimbabwe by regulating the conditions of service of board members and the senior staff of the public entities as Government strives to arrest corruption, improve service delivery as well as boost the performance of these institutions. The expectation is that by improving the internal management structures of parastatals and other public entities, this should lead to an improvement in their performance. Public entities such as State Enterprises and parastatals play a critical developmental role in the provision of public goods and services.

         2.0    METHODOLOGY

Pursuant to the provisions of section 141 of the Constitution, the Committee invited members of the public to express their views on the proposed Bill in public meetings and through written submissions. The public hearings were conducted in all the country’s 10 provinces, in the following areas; Harare, Bulawayo, Chinhoyi, Plumtree, Gweru,

Lupane, Marondera, Masvingo, Bindura, and Mutare. The turnout was modest to good, with Bulawayo achieving the highest number of people followed by Gweru and Chinhoyi. Generally, attendance was based on interest and knowledge on the topic at hand and given that this was a very technical Bill, it did not attract the attention of many people since they felt it did not affect them although they were affected. Thus, this report therefore, summarises the views of the people of Zimbabwe during these public hearings.

         3.0 SUBMISSIONS BY MEMBERS OF THE PUBLIC

         3.1    Appointment of Board Members

On the appointment of board members, it is proposed that the board members be appointed in consultation with relevant Portfolio Committees of Parliament. Some members of the public submitted that it is vital for such board members to be publicly appointed as is the case with the Judges as these people are responsible for managing public assets on behalf of the people of Zimbabwe.

Furthermore, people observed that the maintenance of a database of qualified candidates for board appointments by the Corporate Governance Unit and not the Minister is probably a good move as it may stem corruption and abuse of office. However, the people should be allowed to submit nominations in addition to the database kept by the

CGU.

         3.2. Term Limits for Board Members

The members of the public welcomed the provision to set term limits on the tenure of office for board members to one term of four years. Although there is provision for reappointment for another fouryear term, members of the public submitted that board members should serve for one term only because Zimbabwe is endowed with people with capacity.

         3.3            Appointment and Tenure of Office of Chief Executive

Officers of Public Entities

The members of the public pointed out that the position of CEO is at the centre of the organisation since he/she is the one accountable for the organisation’s performance. Therefore, it was noted that fixing term limits for the CEOs to two terms exposes the public entities since there will not be any continuity within the organisation which is important in the long run for the organisation to achieve its objectives. Members of the public suggested that term limits for CEOs should be removed and allow the qualified and experienced CEOs to be hired probably on contractual basis until retirement if his/her performance is satisfactory. However, others lamented that hiring management on contractual basis may lead to inefficiencies; while others argued that it will enhance efficiency within the public entity as the CEOs would work to prove him or herself for re-appointment. Therefore, it was recommended that CEOs tenure of office should be limited by performance contracts and by age rather than term limits since the CEO runs the organisation and there is need for continuity.

         3.4    Limit on Number of Boards an individual can serve at a time

In addition, members of the public welcomed the provision that no one shall be allowed to serve on more than two boards at a time. While this is an improvement from the current situation whereby some of the board members have been serving in many boards for many years. Some members of the public also were of the view that they would have expected that the Bill provides for a board member to strictly serve on one board for enhanced efficiency, competency and effectiveness of the individual board member since he/she will not be overwhelmed by the demands that comes as a result of serving on many boards. Members of the public highlighted that there is a large pool of competent and skilled

Zimbabweans qualified to serve on the boards of these public entities.

         3.5  Appointment of Public Officers as Board Members

Members of the public felt that Clause 11 (5) of the Bill which provides for full-time employees of the State to be appointed to boards of public entities (although they cannot form a majority on any such board), allows too much interference in the running of the public entity by Ministry officials. Participants however liked the provision which bar permanent secretaries from being appointed to or holding office as a member of any such board. In the past, this has been abused by permanent secretaries, with some of them running the entity as a oneman band and engaging in rampant abuse and theft of the entity’s financial resources and assets.

         3.6    Powers of the Minister

Another major concern emanating from the public hearings was that line Ministers still have too much control over the appointment of board members of public entities. The only change is that the ministers must avail the names of the proposed members for inspection by the Corporate Governance Unit. It is strongly felt that Parliament should be given such powers through the relevant Portfolio Committee. In other words, the Minister should not have the final say, but should recommend names for approval by Parliament. Too much power conferred to

Ministers in the management of the public entities means that the Corporate Governance Unit will be weakened in its statutory role of enforcing compliance.

The members of the public felt that the powers of the Ministers must be limited to ensure transparency. It was observed that the Minister hires, appoints, dismisses and supervises the same people within the institution and there was no separation of powers. Given that boards and CEOs are key people in public entities, members of the public felt that their appointments and dismissal should involve key stakeholders such as Parliament to avoid the abuse of office and cases whereby the appointed owes their existence to the Minister and seeks to please them. It was recommended that the Ministers be there to set progressive policies and guidance only to the institutions and allow the public entities to perform their mandate.

         3.7                 Fixing of Fees and Remuneration of board members and

senior staff

Clause 14 and 20 intends to fix fees and remuneration for board members and senior staff of public entities. The Bill assigns the responsibility to the line Minister and the Minister of Finance only. The members of the public felt that the Bill seems to be giving the powers to fixing remuneration to the Minister who “formulates the model conditions of service for the board members and the senior staff.

Members of the public have asked that “since when have Ministers become experts in fixing remuneration?” The members of the public highlighted with concern that the same principles being used in practice today are still being considered. Some members of the public recommended that the CGU be involved in the fixing of such fees and remuneration since its role is advisory to line Ministries. It was also suggested that the best practice is for board fees to be paid per quarter instead of per sitting to reduce the level of abuse. The level of board fees should always be based on affordability and sustainability.

Clause 20 also gives the Minister the power to cap remuneration of the CEO and Executives. The members of the public felt that this provision may cripple the operations of some public entities that hires critical and specialised staff. The State entities will lose qualified staff into the private sector especially the second and third level

Executives. The overriding factor in fixing remuneration at whatever level should always be affordability and sustainability and that their salaries must not exceed thirty per centum of that entity’s revenues or operational budget in the past financial year as proposed in the Bill.

         3.8    Strategic Plans

Clause 22 – gives a framework for strategic plans. The members of the public argued that this provision may not work because by the time the Bill is presented to the National Assembly, they will have been overtaken by events. The problem is not that they do not have strategic plans; the problem is implementation which is even going to be made even more difficult by this new clause.

         3.9    Performance Contract

Members of the public welcomed the proposed measure of performance assessment of board members and senior staff of such public entities. However, members of the public felt that there is just too much interference by line ministries in the running of State entities that will make it difficult to hold any CEO or board member accountable. It was pointed out that Government has been implementing performance contracts with its civil servants and this has proved not to be effective as nothing is done to non-performing officers.

        3.10  Monitoring and Evaluation

Members of the public noted with concern the lack of time frames, monitoring and evaluation systems in place. It was noted that there was lack of implementation of recommendations raised by the Auditor-

General’s office and monitoring of public entities. The members of the public welcomed the provision on strategic plan and performance contracts as very progressive and recommended for the strong monitoring and evaluation of such to be put in place.

         3.11 The members of the public welcomed the provision that both the senior staff and board members of the public entities should be appointed based on merit, regional representation and the 50/50 gender balance. The process must be transparent. Inclusion of the younger generation in the boards was also key so that the public entities would benefit from the younger generation.

         3.12 While the Government should be applauded for taking steps to address corporate governance issues in public entities through the Public Entities and Corporate Governance Bill, it should be noted that the major perennial problem with State entities has not been lack of legislation to deal with violations of standards, but lack of political will to implement the various remedial measures available in the current statutes. Participants were not sure how this Bill will address the lack of political will in taking remedial action in State entities.

         4.0    COMMITTEE’S FINDINGS AND

RECOMMENDATIONS

  4.1 The Committee noted that general feedback from the people is

that the Bill is a good piece of legislation in as far as it tries to bring sanity in the public enterprise sector. It is public knowledge that the majority of the entities are mismanaged, have been posting perennial losses and receiving Government financial bailouts. Their burden on the fiscus has been massive, thereby contributing to the unsustainable fiscal deficits that have caused severe headaches for the fiscal authorities. According to statistics from the Office of the President and Cabinet, 38 of the 93 State-owned enterprises (SOEs) audited in 2016 incurred a combined $270 million loss as a result of weak corporate governance practices and ineffective control mechanisms. Of the 93 SOEs, 70% of them were ‘technically insolvent’ or ‘illiquid’ presenting an actual or potential drain on an already overburdened fiscus.

         4.2  The Committee also noted that violations of governance all over the world are carried out by people who are not aware of what needs to be done. These violations are perpetrated by people who are very educated and knowledgeable about how businesses are run. At the core of most of the corporate governance problems in State enterprises is the selection of people of low integrity who easily “morally disengage” and find themselves involved in illegal activities.

         4.3  The Committee further observed that there is no mechanism in Government to select people based on merit and this problem affects all State entities. Thus, it was concluded that unless the above two problems are addressed; the Bill when it becomes law is likely to have very little impact on how state enterprises are run.

         4.4  The Committee is also concerned that in setting fees and remuneration for board members and executives, the Bill refers to experience and qualification instead of referring to both the entity’s performance and the individual performance of board members or executives. It is recommended that the Bill provides for the fees and remuneration to be commensurate with the entity’s performance and individual performance and not only experience and qualifications.

         4.5  A closer look at the Bill shows that nothing has changed from the current practices for running State entities. In the Bill, Ministers are still empowered to appoint board members for State entities supervised by their ministries.  This has been the practice before. The only change is that they must avail the names of the proposed members for inspection by the Corporate Governance Unit.  Secondly, the Ministers still fixes fees for board members and any other allowances. This has been there before. Thirdly, the board fixes salaries for executives but the Ministers approve salaries for executives and that has been the case before as boards always sought approval from the Minister.  It is very likely that the status quo will continue. The Committee recommends that the relevant Parliamentary Committees be involved to enhance transparency and accountability of public resources.

         4.6  The Bill introduces new areas that are likely to present new problems. The first problem is that the Bill allows the board to fix exit packages for executives in advance. This is an archaic practice that will be too costly for the Government. The Labour Act is very clear that on exit, an employee is entitled to two weeks’ salary for every year served (minimum) and why would the Government want anything more than this to be fixed in advance.  This will leave room for boards and appointed executives to negotiate for exorbitant exit packages. This practice is not there in the private sector because it is costly and why would the Government with its limited resources want to adopt this practice. It is therefore recommended that the provision be removed and allow the Labour Act to be applied in all public institutions

         4.7  While the introduction of regional balance in appointments of executives sounds good on paper, it brings an unnecessary burden on the entities administratively and will bring accusations and counter accusations. Yes, the Constitution talks about bringing in regional balance in the appointment of people to public entities but the overriding factor should always be merit on the appointment of executives. The application of regional balance should be limited to board members only.

         4.8  It is interesting that this Bill does not give the Corporate Governance Unit enough power to ensure compliance as the Ministers still hold most of the power in relation to the management of State entities. The Unit will be run by a permanent secretary level person. The Committee supports the establishment of the CGU, which is housed in the President’s Office since it will be well equipped to supervise line Ministers and the public entities.

         4.9  The Bill allows a board member to be on the board of a public entity and also on the board of its subsidiary. This violates the principle of checks and balances commensurate with the normal corporate governance practices. The Committee recommends a separate board to be appointed for the subsidiaries of public entities to ensure transparency and accountability.

         4.10  The Committee noted with concern that the role of the Ministry in the management of public entities has not changed, while that Bill is silent on the role of Parliament. This has been the major source of most governance problems in public entities especially interference by Ministry staff in the running of public entities.

Therefore, it is recommended that the role of Parliament, especially, that of relevant Portfolio Committees, be visible, especially on hiring, appointing and dismissal of CEOs and board members.

         5.0  MAIN RECOMMENDATIONS

         5.1  Parliament’s Oversight Role

Parliament, through its relevant Portfolio Committee, should be actively involved in the approval and dismissal of board members and CEOs of public entities. The relevant Portfolio Committees should also be appraised on the public entities’ strategic plans to enhance its oversight role on the public entities and ensure transparency and accountability.

         5.2         Harmonisation of Executive Remuneration and Board

Fees

The Committee has noted the huge differences in fees and remunerations on the different boards and executives of public entities and recommends for the harmonisation of such fees and remuneration.

         5.3    Rationalisation the CGU and the SERA

The Bill sets up a Corporate Governance Unit (CGU) in the

President’s Office while there is already the State Enterprise Reform Authority (SERA) in existence. The Committee feels that the two institutions’ roles should be rationalised.

         5.4    Harmonisation of Laws

The Committee also recommends for the harmonisation of the

Local Government Act and this Bill, once it becomes law.  

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): Mr. Speaker Sir, I now

move that the Bill be now read a second time.

Motion put and agreed to.

Bill read a second time.

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Mr. Speaker Sir, there are

a number of amendments that I want to effect to the Bill as well as to take into account the submissions which have been made.  I would want more time to consider those submissions.  I accordingly move that the

Committee Stage be next Tuesday, 13^th February, 2018.

Committee Stage: Tuesday, 13^th February, 2018.

ANNOUNCEMENT BY THE ACTING SPEAKER

NON-ADVERSE REPORT RECEIVED FROM THE

PARLIAMENTARY LEGAL COMMITTEE

THE ACTING SPEAKER: I have received a Non-Adverse

Report from the Parliamentary Legal Committee on the Finance Bill [H. B. 1A, 2018].

Consideration Stage: With leave, forthwith.

CONSIDERATION STAGE

FINANCE BILL [H. B. 1A, 2018]

Amendment to Clause 37 put and agreed to.

Bill, as amended, adopted.

Third Reading: With leave, forthwith.

THIRD READING

FINANCE BILL [H. B. 1A, 2018]

THE MINISTER OF FINANCE AND ECONOMIC

DEVELOPMENT (HON. CHINAMASA): Mr. Speaker Sir, I now

move that the Bill be read the third time.

Motion put and agreed to.

Bill read the third time.

MOTION

BUSINESS OF THE HOUSE

THE MINISTER OF JUSTICE, LEGAL AND

PARLIAMENTARY AFFIARS (HON. ZIYAMBI):  Mr. Speaker Sir,

I move that Orders of the Day, Numbers 3 to 5 be stood over until Order of the Day, Number 6 has been disposed of.

Motion put and agreed to.

CONSIDERATION STAGE

ESTATES ADMINISTRATORS AMENDMENT BILL [H. B.

8A, 2016]  Amendment to Clause 9 put and agreed to.

Bill, as amended, adopted.

Third Reading: With leave, forthwith.

THIRD READING

ESTATES ADMINISTRATORS AMENDMENT BILL [H. B.

8A, 2016]

THE MINISTER OF JUSTICE, LEGAL AND

PARILAMENTARY AFFAIRS (HON. ZIYAMBI): Mr. Speaker Sir,

I now move that the Bill be read the third time.

Motion put and agreed to.

Bill read the third time.

On the motion of THE MINISTER OF JUSTICE, LEGAL AND

PARLIAMENTARY AFFAIRS (HON. ZIYAMBI), the House adjourned at Six Minutes past Three o’clock p. m. until Tuesday, 13^th February, 2018.