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SENATE HANSARD 13 MARCH 2018 27-28
PARLIAMENT OF ZIMBABWE
Tuesday, 13th March, 2018
The Senate met at Halfpast Two o’clock p. m.
(THE HON. PRESIDENT OF THE SENATE in the Chair)
ANNOUNCEMENT BY THE HON. PRESIDENT OF THE
JOINT SITTING RULES OF PARLIAMENT
THE HON. PRESIDENT OF THE SENATE: I wish to inform
the House that the proposed Joint Sitting Rules of Parliament were circulated through Hon. Senators’ pigeon holes. Hon. Senators are requested to submit their inputs to the Counsel to Parliament by
Thursday 22nd March, 2018.
BUSINESS OF THE HOUSE
THE DEPUTY MINISTER OF FINNANCE AND
ECONOMIC DEVELOPMENT (HON. MUKUPE): Madam
President, I move that Orders of the Day, Numbers 1 to 3 on the Order Paper be stood over until Order of the Day, Number 4 has been disposed
Motion put and agreed to.
PUBLIC ENTITIES CORPORATE GOVERNANCE BILL [H. B. 5A,
Fourth Order read: Second Reading: Public Entities Corporate
Governance Bill [H. B. 5A, 2017].
THE DEPUTY MINISTER OF FINANCE AND ECONOMIC
DEVELOPMENT (HON. MUKUPE): Madam President, it is my honour to move that the Public Entities Corporate Governance Bill H.B. 5A, 2017 be read a second time.
Madam President, section 195 of the Constitution of Zimbabwe provides that all companies and commercial interests in which the State has a significant interest must conduct their business in order to ensure commercial viability and they must abide by generally accepted standards of good corporate governance.
Hitherto, our State entities which could otherwise have been, amongst other things, playing a vital role in contributing to the revenue realised by Government, presenting employment opportunities to our citizens, producing export receipts as well as products for domestic consumption have been instead the proverbial albatross around the neck of our national economy.
The vicious and costly cycle of underperformance plaguing the parastatals sector requires an urgent and focused intervention and this, in part, has informed the reason behind the development of the Public Entities Corporate Governance Bill.
Previous efforts to encourage compliance with sound corporate governance principles such as the Corporate Governance Framework for
State Enterprises and Parastatals in 2010 and more recently, the National Code on Corporate Governance in 2015 have been largely unheeded by most public entities and in equal extent by their responsible line
Resultantly, the Auditor General’s Report on State Enterprises and Parastatals for the year ending 31 December 2016 once again, revealed ongoing deeprooted and farreaching governance problems within the State enterprises sector and self evidently underlined the continuing failure by line Ministers to meaningfully address those problems.
That notwithstanding, Madam President, this Bill signals the latest step in Government’s ongoing efforts to bring order and rationality to
the parastatals sector and to ensure that such entities once again make a positive contribution to national economic growth.
In many instances, management blames poor performance and unsatisfactory service delivery on the prevailing economic situation even where the company they superintend has a virtual monopoly and Government support in the sector in which it operates. However, upon closer scrutiny, the reality that invariably emerges is that in a good number of the cases, it is the management itself which is the root cause bedeviling the company.
Madam President, while primary responsibility for the management of public entities lies with the boards and management of the public entities, it is also clear that line Ministers, under whose jurisdiction a parastatal falls, have been failing to provide effective oversight over the entities which fall under their purview.
Ministers must consider the success of their respective parastatals as a measure of their own effectiveness and should insist on compliance with sound corporate governance principles in order to curtail some of the shocking management excesses which have emerged and have become a defining attribute of the sector. I speak here in respect of some of the vulgar salary and benefit packages some managers and board directors have awarded themselves during their incumbencies.
The Public Entities Corporate Governance Bill is designed to address these issues by bringing order, structure, transparency and consistency to this important sector of our economy. It also seeks to further empower line ministries to exercise far stricter oversight of their respective entities and to ensure that those entities operate in line with sound corporate governance principles and practices as enshrined in the Bill.
In essence, amongst other aspects, the Bill gives legal force and effect to the National Code on Corporate Governance which is incorporated into the Bill as the First Schedule.
Madam President, I shall now proceed to highlight a few aspects of the Bill for the benefit of the House and in order to add some perspective to what the Bill seeks to achieve.
Scope of Application
As far as the coverage of the Bill is concerned in terms of Clause 3 as read with Clause 2 (1), the Bill shall apply to all public entities which are identified as institutions whose operations or activities are substantially controlled by the State or by a person on behalf of the State whether through ownership of a majority of shares in the entity or otherwise and these include:
- A statutory body;
- A public commercial entity; and
- An entity established under an agreement for a partnership or joint venture between the State and any other person.
Save as otherwise provided for in the Bill, it shall therefore be mandatory at law for all institutions falling under this description to abide by the tenets of the corporate governance principles espoused herein.
Corporate Governance Unit
Clause 5 of the Bill will create a new Corporate Governance Unit as a department within the Office of the President and Cabinet whose functions shall be:
- To provide an advisory and centralised support mechanism for line ministries to ensure strict compliance by all public entities with the provisions of the Act;
- To advise line ministries with regard to the regular evaluation of the performance of public entities and their boards and employees;
- To oversee the discharge by line ministries of their responsibility to monitor compliance by boards and senior management with the performance contracts;
- To establish and maintain up to date, a comprehensive directory or database accessible to all line Ministers and boards that will enable them to identify suitably qualified candidates for appointment to boards of public entities; and
- To advise on the provision by line ministries of programmes for the professional development of board members and senior management of all public entities under their purview, including board induction programmes and corporate governance training for board members, chief executive officers and other senior members of management.
In other words, the Corporate Governance Unit will offer continuing support to the line ministries and the public entities concerned to ensure compliance with the tenets of good corporate governance.
Madam President, the appointment of board members must be carried out in the most transparent way possible and each appointment must be based purely on merit.
As such, it shall be incumbent upon the appointing authority to furnish the unit with the qualifications of the proposed appointee and to explain what distinguishes that appointee from the rest. I refer Hon. Members to Clause 11 (12) on this point.
Board appointees and senior management shall have a duty to declare their assets prior to assumptions of office in terms of Clause 37. Declaration of assets will place a duty upon an appointee to explain the source of their income under circumstances in which there is an inordinate expansion of wealth during or immediately after their incumbency.
Remuneration of NonExecutive Members of Public Entities and Conditions of Service of Executive Members of Public Entities
Clause 12 of the Bill addresses issues surrounding the payment of nonexecutive members of public entities. Madam President, in short, the appointing Minister shall, in consultation with the Minister responsible for Finance, develop a remuneration framework which shall form the basis upon which payment scales are formulated. That remuneration framework is in turn submitted for Cabinet approval before it is implemented.
Issues such as the experience and qualifications of a member of the State entity as well as the prevalent salary scale amongst their peers will be of a persuasive value, but not in itself a benchmark upon which a board member can lay a demand.
The crucial issue here, Madam President, is that the salaries will be paid depending on how a public entity is performing and how profitable it is at a given time.
Clause 13 provides for the conditions of service of executive members of public entities. Similar to the above, the Minister responsible for the administration of the Public Sector Corporate Governance Bill shall develop model conditions of service for executive members which will be adhered to and subject to revision where exigencies require so.
Restriction on Remuneration of Board Members of Public
Madam President, Clause 14 is of vital importance in addressing the ludicrous remuneration that members of certain public entities have been awarding themselves.
Under subClause 1, the Minister assigned to the administration of the Act with the approval of the Minister responsible for finance and after consultation with the line Minister concerned, shall by notice publish in the Gazette specify the amount that may be received by way of remuneration, allowances and other benefits by members of the board of any public entity.
This clause will allow a ceiling to be set on the amount of remuneration board members may receive or even specify an exact amount payable if a member breaches the remuneration set in terms of this provision, they will become liable to a surcharge for the purposes of recouping the value of money improperly paid out to such members.
Strategic Plans of Public Entities
Madam President, each public entity shall be expected to draw up a carefully considered Strategic Plan that maps out their intended objectives over a period of two to six years and how they intend on achieving such objectives. This is in terms of Clause 22 of the Bill.
The strategic plan will include performance indicators against which the company can benchmark its own performance and will ensure that their entity strives for a commonly held and understood objective. These strategic plans will be available for public inspection.
Performance contracts with senior staff of public entities
- Closely related to this is the new concept of performance contracts that will be entered into by the Chief Executive Officer or a senior member of a public entity that clearly spells our his or her deliverables. These are provided under Clause 23.
- Where such a CEO or senior member of the public entity fail to achieve the set out goals, they become liable to dismissal in terms of the contract. The motivation to succeed here is apparent, and these officers must ensure that they deliver on their key objectives.
Meetings of boards of public entities
- Clause 33 will require boards to meet at least once every three months and to convene an annual meeting of stakeholders once a year to be known as the “annual general meeting”. They will also have to meet their line Ministers at least twice a year to provide feedback on operations and discuss any other such pertinent issues.
- Additionally, in order to ensure that the Board continues to function, if the membership of a board falls below a quorum, the board will be allowed to meet for up to 90 days pending the appointment of new members, but any decisions reached by the board during that time will be subject to ratification when a quorum has been formed in terms of subclause 2.
Conflicts of interest on part of board members and staff of public entities.
- Clause 34 will require members of boards and senior staff of public entities to declare conflicts of interest and prohibit them from taking part in their entities’ business where there is such a conflict. Failure to do so will result in the member or senior staff member ceasing to hold office.
Madam President, with this presentation, it is my singular owner and pleasure to move that the Public Entities Corporate Governance Bill
[H. B. 5, 2017] be now read a second time. I thank you.
*HON. SEN. MASHAVAKURE: Thank you Madam President.
I have heard what the Minister has said and what the Bill intends to address. I have one or two things that I will seek clarity on. He firstly said there will be a Corporate Governance Unit that will be based in the President’s Office. At times we talk of the deduction of civil servants but previous Bills were creating structures that increase the civil service. May you comment on that issue?
In other words, can he come up with alternatives that may not lead to the construction of the structure which will increase the number of the civil servants when we were indeed reducing civil servants? Secondly, he talked of a database of people who are believed to be qualified as members of these boards. In this database, is it going to have all the names because the majority of Zimbabweans are educated – who is going to shortlist these members and what criteria is going to be used to select these people? This may also lead to nepotism and all other malpractices where those who are not qualified end up being in that database. So I go back to the need for clarity on criteria of the members of this database.
He talked of need for strict supervision on these parastatals. A few years ago we heard that there were Permanent Secretaries who were chairpersons of boards and at one time he ran the boards single handedly. I think the Permanent Secretaries should not chair boards of public entities but to be exofficio members because if we make them the chairpersons and so on, we would have gone back to the problems that we have faced before. To me they did not draft form me this Bill in Braille so, I want them to tell me that when they read, was it written that the Permanent Secretaries and other senior Government officials who are civil servants would not become board members or chairpersons of such boards that we are talking about. Thank you Madam President.
HON. SEN. NYAMBUYA: Thank you very much Madam
President. I just want to make very few quick points in support of this very important Bill which the Minister has brought before this august House. In my view, this Bill was actually long overdue. I think we have gone for a very long time as a country without making the do’s and don’ts of State owned enterprises to the extent that, the way we have operated, some of them as a result of not having clear guidelines, have lead to poor management which in some cases leading to financial hemorrhage and unnecessary losses which could have been avoided. That is why I support wholeheartedly and indeed very strongly this Bill which aims to strengthen corporate governance, which is the heart and core of business if we want to manage businesses intelligently and properly.
The first point that I would want to make is, that we are moving in the right direction but we should go further than this. We should go further and ensure that the State owned enterprises which we have – make nomistake about that the State owned enterprises are good. They help to generate economic activity, they help to bring about competition and in some cases, and even prices are reduced as a result of participation by the Government in the economy. They are good, but I think that it is also high time that whilst we are doing this exercise that we ensure that some of these State owned enterprises which I now call dead capital must actually be gotten rid of in one way or another.
I think we need to expedite that exercise, otherwise they will remain dead capital and potential capital which is not being exploited for the benefit of Zimbabweans.
The second point again which I will make and I am glad that the Hon. Minister has actually done some justice to this area is the issue of ensuring that the boards which are appointed by Government do not become a burden on these SOEs. I have known and I have witnessed and seen some chairmen of these boards who act as if they are Executive chairmen. I have experienced and actually seen some boards that have not given direction but have interfered with management, to the extent that they render management irrelevant and their interference causes and results in poor management. So, I am glad once again that the Hon.
Minister has given due attention to this very important aspect.
The last point that I want to make Madam President, is the issue of a culture that is now existing in our society – a culture of entitlement. We have got a culture, especially in SOEs whereby people come, sit in their offices and do literally nothing or very little, but want to be paid at the end of the month, they want to be paid a salary. This is not in the public service alone but in the private sector as well. A culture of entitlement is not good for any country at all. People should ask themselves, what is it that they have done to deserve a salary at the end of the month? So I am again glad that this Bill is giving some attention to this disease of entitlement that is now harming our society. I therefore, would like to congratulate the Hon. Minister for a job well done and wish him well in this regard. I thank you.
HON. SEN. MARAVA: Thank you Madam President, first of all I want to bring this point to the attention of this House. This very important Bill is just being placed in the pigeonholes now and a lot of these Hon. Members do not have it – [HON. SENATORS: Inaudible interjections.] – As Hon. Members walk out, they will see it in their pigeonholes. Anyway– [HON. SENATORS: Inaudible interjections.] – musaramba zvandaona zviripo.
THE HON. PRESIDENT OF THE SENATE: Hon. Marava,
may I please advise you that this is an amended Bill that you have just received. The original was issued to us a long time ago. The National Assembly made some amendments, that is the one that is in front of us now – the amended one. – [HON. SEN. MARAVA: The amended one which should have been placed in our pigeonholes…] – But the original one, you have had it for a long time.
HON. SEN. MARAVA: But the amended one is the latest
version is it not?
THE HON. PRESIDENT OF THE SENATE: But this was just
passed last week and we are now sitting in here. The day it was passed they immediately advised us that they had passed the Bill and we announced it. – [HON. SEN. MARAVA: Madam President you are the authority.]. Today is Tuesday and this announcement was made on Thursday was it not? You see?
HON. SEN. MARAVA: It is fine Madam President, I am happy that at least you agree with me that we should have had the amended one.
Anyway Madam President, I want to thank you for recognising me.
It has been mentioned severally by our Government that loss making State owned enterprises were going to be privatised. It has been over and over again, but if you look at the action as to how many such enterprises have been privatised todate, you will be shocked. The percentage is almost very close to zero. Madam President, that system should be stopped and that situation has to change. It must be seen to be changing. We do not have to continue promising that lossmaking companies are going to be privatised then we do not action on it. I think action is very important when it comes to this because like what one
Hon. Member mentioned, people do not stop thinking what it that stops Government from privatising this thing? Is it chizivano or whatever, all those things? People will talk and will not stop talking.
Madam President, these Hon. Members will not be there to answer.
So please, mine is a short contribution, let us walk the talk. I thank you.
*HON. SEN. MAKORE: Thank you Madam President,…
THE HON. PRESIDENT OF THE SENATE: Hon. Sen.
Makore, I called upon Hon. Sen. Sibanda to contribute after thanking Hon. Marava for his contribution. I have to stick to the list that I have here because we list your names as you rise. So, it is only good to be fair.
HON. SEN. MAKORE: Thank you Madam President.
HON. SEN. SIBANDA: Madam President I think that certain jokes that one can make in the House are not necessarily recorded. I wanted to tell my colleague and surname sharer here that I am the bigger
Sibanda – [Laughter.] –
Be that as it may, I would like to make some contribution to the presentation made by the Hon. Minister. I have often received the answer; it is better late than never. I do not like the answer, I have never enjoyed it and I will not enjoy it. Hon. Minister, what I am getting at is that the national Constitution is about five years old. When we are dealing with commercial enterprises, we are dealing with business and it has taken our own Government five years to react to some lossmaking enterprises. It is unsatisfactory and poor performance.
The second point that I want to make is it is this poor performance that has led us to a plethora of Debt Assumption Bills and activities in these Houses. Once again, I am saying that debt assumption is the wrong way to run business and the wrong way to run a country. Unless we clean up our act, we will continue with debt assumption and talk about parastatals. Having said that, let me hasten to add that legislation is not the panacea to non performance.
For example, when we dollarized, a lot of parastatals and quasiGovernment institutions simply converted their Zimbabwe Dollar (Z$) figures into current salaries and we have been watching year by year, they are doing that. I do not believe that from a management point of view, we have got to wait for legislation before we intervene I believe that we could have intervened. There were several activities, maybe not necessarily from parastatal but from quasiGovernment institutions to reduce salaries. I am aware that certain of them were told to back off while the country continues to bleed. I am not happy.
I want to know Hon. Minister what you will do to make sure that a corporate governance unit is more acceptable than the Comptroller and Auditor’s report. I do not believe that because it is housed in the
President’s Office, it will necessarily supersede the authority of the Ministry of Finance and Economic Development which is derived from the President. So in my opinion, I echo the opinion that we appear to be increasing manpower whereas we have got the institution. I mean the Comptroller and AuditorGeneral, I must give it to her, produces beautiful reports that generally we do not debate in the House and that Government tends to ignore. What assurance do we have that this new animal, the corporate governance unit will perform better.
Madam President, I implore the Minister, we have just heard that a number of Chairpersons were from the ministries and some of them are still sitting permanent secretaries. It is my belief that part of their duties is to supervise entities that fall under their ministries – correct me Minister if I am wrong. They have not done it; I think they need a whip for them to do it. I believe the state, in which Zimbabwe is in today; ministers should roll up their sleeves, put on tackies and get on the job or at least ask their chief executive officers who are the permanent secretaries to fulfill that role. If we do not, Minister, I am afraid that with the best of legislation, we go nowhere. The point where I will agree with you is performance contract.
It is unfashionable today to be locking people into contracts of employment without periods of review. I actually believe that the best and the more senior heads of parastatals should have one year contract, if you do not perform, you are history. For us to be able to do that, all the structures in Government must stop some of the double dipping because we do not want excuses. We have heard that some people get their fair share from the Ministry and when they go around parastatals, they extract. If that is fact, then how do you discipline the head of the parastatal when you have your own omissions?
I agree with you, we need to do the best possible to prevent conflict of interest. However, it is the whole cultural scenario in Zimbabwe that should change. Why am I saying so? Because people craft ways of ensuring that their conflict of interest is hidden unless the ethics change and I do not know how to change. I have got my own primitive method which I cannot talk about here. I am not sure that we are still capable of changing that ethic in Zimbabwe. It applies to most of us; we have got to undergo a serious paradigm shift, a serious ethical shift for us to achieve that result that we desire.
My last comment which I make regularly is; we have only one Zimbabwe, I do not know whether anyone of us here has got a second one, I have one. Those who are used to me know that I guard very jealously against any negative issues in this country. Therefore, I plead with all of us to have a positive revolution from an ethical and a cultural perspective. Madam President, I thank you.
HON. SEN. TIMVEOS: Thank you Madam President for giving
me this opportunity to contribute to the Bill that the Hon. Minister has brought to this Senate. I want to mention that this is a very important Bill. I have not had time to really go through it, I am happy it is in the pigeon holes and I will go through it. I just want to touch on some of the issues that the Hon. Minister has mentioned.
Madam President, parastatals in Zimbabwe have been known to be very corrupt and very dubious. I am hoping that this Bill is really going to look at a lot of issues. Can you imagine that these parastatals actually went for over 8 years without being audited? So, Hon. Minister, Madam President, this really needs to be looked at. Parastatals are actually meant to guard or to actually preserve and to make sure that Government actually gets money to operate. If parastatals are just left to do as they please, then we have a problem. If you look at almost all the parastatals, ZIMRA, ZINARA, NRZ, ZESA, NSSA, all these parastatals have been making headlines and I am hoping that the salaries of these managers – I remember last year or two years now, Cuthbert Dube, getting himself a salary of US$535 000 a month. Surely, how many countries did he visit, how many houses does he have when others cannot even get a job? If we multiply that money, can you imagine what Government could have done with that resource?
I am hoping that this Bill, when a boss is caught paying themselves huge sums of money, surely there has to be a way that they return it. Cuthbert Dube was fired and he just went home and stayed in his different houses until today, he changes houses and say I want to go to Kwekwe and so on. Why not actually sell these things so that we can get the money back so that it can actually be used to actually help Government – [HON. SENATORS: Hear, hear.] – Surely, even if you are educated, you do not deserve such. I also want to mention the boards. I am hoping that this Bill is going to actually may be stipulate or actually look at the board members how they are chosen because some, I know the Ministers also have an input. A minister can put his wife, girlfriend, and cousin, what exactly is making parastatals not work? Are these people that are appointed board members qualified to do so? This is why in the Constitution, the people of Zimbabwe insisted that boards must be independent, they must not be controlled by the Minister, this is what happens when they are controlled by an individual – [AN HON.
SENATOR: Taura hako.]
Boards are not for window dressing, board members should be of a high standard. Board members should know exactly what they are doing because what they are handling is Government funds. Madam President, a lot of boards in this country were actually used to siphon money out of this country and a lot of offshore accounts were created by over two hundred business people, some of them, I will not mention.
THE HON. PRESIDENT OF THE SENATE: I am glad you are not mentioning because you cannot mention anyone who cannot be able to come and defend themselves in the Senate.
HON. SEN. TIMVEOS: I thank you. Madam President, when I debate I do research and I took an oath, I do not open my mouth if I do not research. I want the Minister who has brought such a very critical Bill to look at these things and I hope His Excellency the current President is looking at this Bill realizes that the erstwhile President was never bothered with these parastatals and they did exactly what they wanted which killed this economy. Madam President, the building of Zimbabwe requires competent and committed people who have the nation at heart and not criminals who are out to strip the nation of hard earned resources. I am going to mention Cuthbert Dube because my heart bleeds. We have all these medical insurances – people go to hospitals and they do not get the service that they deserve but this man is paying himself. Hon. Minister, I hope this Bill is going to help build this nation. I thank you Madam President.
*HON. SEN. MAKORE: Thank you Madam President for giving
me this opportunity to debate on this Bill. I would like to thank the Minister for coming with this Corporate Governance Bill for 2017. The issue of building this country is a very important issue. When we talk of parastatals, we talk about business facets which should be run as businesses so that we raise resources for the country. For a long time, we see the Auditor General’s Report. This report gives us pointers that show that here there is money which is being siphoned; here, infrastructure is not up to date and so forth. Reports that are being given are different from what is obtaining. I hope that this Bill will address all the irrationalities that are being raised.
*THE HON. PRESIDENT OF THE SENATE: I would like to
advise Hon. Senators that our interpreting machines are malfunctioning at the moment. I kindly request that you speak in English.
HON. SEN. MAKORE: Thank you Madam President. I will do
so but normally, I enjoy speaking in vernacular. First of all, I would like to thank you for giving me this opportunity to sort of add a few words to this Bill which is in front of us. I would also want to thank the Minister for bringing this Bill of Corporate Governance before this august House.
My observation through all the auditors’ report is that generally, they were a number of irregularities and monopolies that were presented in this particular report. I support this Bill because it will bring sanity to the management system of corporate governance. Secondly, according to the wording here, it says that there were monopolies and gross irregularities which need to be corrected. I do believe that the board has come at a most opportune time to sort of correct these gross irregularities. I want to agree with the Minister that they have to employ new mechanisms because I believe that the purpose of parastatals is to operate as businesses that raise revenues but of course, it was mentioned before me that there was rampant corruption in these parastals. I believe that we experienced some big losses in these parastatals. Perhaps it also speaks to the way these people were recruited. In other words, if some other persons are given positions of authority, they will exercise that particular authority in a very wrong way – where you will recruit very incompetent people based on your relationship that exist. This has killed the systems so tremendously.
I believe the supervision of those parastatals – I do not want to lay fault on any individual but it became a system that there was loose supervision where those parastatals were doing their management in a willynilly nature of very bad production of expected results.
Lastly, on declaration of assets, it is important. It was mentioned here that some people do not go for a purpose of developing that particular institution but to amass a lot of riches for themselves and give themselves huge salaries to the detriment of that parastatal. I believe the declaration of assets as a pointer here to be taken very seriously by the board itself and also the remuneration must be pegged. It must be supervised and given stages that this is how far high we can go in which ever position.
I want to say that quite a number of things were mentioned – it is unfortunate. With these few contributions I have made, I want to thank you Madam President.
THE HON. PRESIDENT OF SENATE: May I please appeal to
the Hon. Senators that our Standing Rules and Orders encourage us not to repeat what has already been said. When we are going to contribute, let us make sure that we are bringing in new information that will help the Minister when he responds.
HON. SEN. SHOKO: Thank you very much for allowing me to
contribute to this very important Bill.
I worked in a parastatal for about forty years and when we talk about these things, I understand the problems that are there in these parastatals. I am not talking from a book or newspaper experience. We need the Minister to look at the issue of having another parastatal in the President’s office. That issue must be looked at seriously. I think that the issue of the AuditorGeneral looking at these people that are going to apply is very important. We need an independent board or entity that is going to look at these people because if we are not very careful, we are going to go back again to our political parties where people that are going to go into these boards are going to be political animals. Let us try to avoid that. We can avoid it through the Auditor General because we have realised that we have got one of the best audit section or department in the country. When we think that the Minister must look at that instead of establishing another parastatal in the President’s office that is very important. If you establish that there, we are still going to have a problem when you are trying to appoint management.
I worked at the National Railways of Zimbabwe (NRZ). I started working there when I was 20 years and I retired there. You would find that when you want to appoint the General Manager of the NRZ, it would take five years because the people that are appointing are looking at a person who is compliant. In this country when you are said to be compliant, it is because you have got a particular political party’s card.
If you do not have that card, you are not compliant.
My name was submitted to a parastatal as one of the board members. I was told that the President’s Office had rejected my name because I was not compliant, and I am a security risk. I could not understand why I am a security risk because I am a Zimbabwean. My being a security risk is because I belong to another political party which was not the party that the President’s Office thought I should belong to.
So, I am simply saying…
HON. SEN. CHIPANGA: On a point of order, Madam President. Madam President, I rise to point out that the Hon. Member is talking about himself and not about the Bill. We are not talking about individuals here. If he wants us to talk about why he was rejected, that is another motion. I thank you.
THE HON. PRESIDENT OF THE SENATE: Thank you Hon.
HON. SEN. SHOKO: Thank you Madam President. I know where he is coming from, do not worry. We have our lines of communication – [Laughter.]
THE HON. PRESIDENT OF THE SENATE: Order Hon.
Shoko. Let us not go there please.
HON. SEN. SHOKO: Thank you Madam President for your
direction. I was still contributing on this issue and I am simply saying look, the companies that we are talking about are companies that are very pivotal in our development. The National Railways of Zimbabwe and all the companies that we are talking about that we are saying are going to remain from the ones we are going to get rid of, are very important for the development of our country and we need to have these companies manned by competent people. Those people must be looked at with an eye that understands where we are going.
I realise the Minister has said, we will have boards that are going to declare their assets. I support that very much. They must declare their assets because some of these board members, when they get to these companies start demanding. They either want to be there for the whole month because a board is not supposed to be there for all the time. They have entities and when I heard the Minister talking, he said they must have three meetings in a year and in any way they certainly will be allowed to have emergency meetings because those are allowed.
Board members have to have what you have just stated saying if they are going to get allowances, those allowances are known because when they get in there, they sometimes change everything and pay themselves exorbitant salaries, exorbitant allowances or exorbitant other issues that they would want to have.
I remember in the NRZ, we had a board member who wanted to act like the Chief Executive and we had problems because of that, where he wanted now to be operating every day. So, Minister, we think if you really look at that Act or proposal that you have just put on the table, it would be very important that you look at the areas that we have just talked about where these things are looked at by independent bodies and also the people becoming independent.
The issue of the Permanent Secretaries coming into the boards when a Permanent Secretary comes into the board and you are debating issues, the permanent secretary will tell the board look, the Minister has said this. So, it is very important that Permanent Secretaries should not be included in the boards because they stifle debate when they now say if the Minister wants this. That is also very important that if you want a board that is going to be operational, that is going to be effective, we have to avoid bringing in the Permanent Secretary as one of the board members. Certainly, we do not need a Permanent Secretary who will be the board itself. That will not be a very good situation because it will not help us.
Madam President, if you look at the King Report and the Young Report, some of these things that we are talking about are there where you have to separate the powers, where the board is able to help the Executive to run the company. Madam President, it would be very important for me to state that if the Act is adopted as it is or the things that have been put by the Minister are adopted as they are, we will have a problem in the areas that I have just talked about. I think the Minister must look at that carefully and reconsider the inputs that we have just put forward. I thank you Madam President.
HON. SEN. KHUMALO: Most of what I wanted to say really has been said. I will just give a few points. I am requesting that when the boards are created, we need standard salaries. The salaries should t be pegged so that people in the parastatals do not give themselves salaries which are unreasonable. The Government must come up with a set standard of salaries.
The parastatals themselves must have targets that, we are aiming at having so much by the end of the year. If they are not doing that, why keep the same Chief Executive Officer for two years? That CEO must be dismissed because he is not able. The parastatal is there to make money. If it is not creating funds, why is it being kept?
Finally, I would say the aim of having parastatals if we look at what happened internationally during the high inflation of 2007 to 2009; parastatals were used to rescue the country. The function of our parastatal is being rescued can we have parastatals that can rescue the country?
Somebody talked about entitlement. Senators are not coming to Parliament every time yet we are being paid. Are we not getting the entitlement whereby we are just given money when we are at home and not in Parliament? We are doing the same. Can we come and do our job and be paid. We said we want to be Senators. We did not say we want to be paid when we are at home. That is part of entitlement. We are blaming others when we are having entitlement. We should not have entitlement. Thank you Madam President.
THE DEPUTY MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. MUKUPE): Thank you Madam President.
Before I start making my responses, I think that there are just two points which I just want to bring to the attention of Senators. I am actually surprised that women did not ululate to the fact that there is going to be an equal representation of men and women on all the boards. I thought for those who are for women empowerment will be happy with that.
So, if you look at Clause 11, it actually says that there will have to be an equal number of men and women on all the boards and in terms of Zimbabwe’s regions, there should also be equal representation. So, I think that is a step in the right direction [Ululation]
I will start with Hon. Sen. Mashavakure. Firstly, he was stating that the Corporate Governance Unit in the Office of the President and Cabinet, in essence we are just increasing by head count and that do we need any more of these parastatals. I think what I need to point out is that there are corporate governance unities already in existence. I think if you look at the enabling legislation that resulted in this Bill being put in place, there is a law that relates to the Civil Service and the Civil Service sits as a department in the OPC. So, this is just an extension of an existing law.
I think he also pointed out the issue of qualifications of board members and he had a particular issue that there are these databases and who is supposed to come up with the databases. I think if you look at Clause 11, it actually says that the Corporate Governance Unit is the one which will maintain the databases and the databases actually come from the line ministries and there is nothing in the Bill that stops you as a private citizen to also make sure that if you have a person or a curriculum vitae that you want to be part of the database to be submitted; you are free to be able to take whatever names that you want to be in the database and you can actually submit them.
Then, there was an issue where he also said in terms of stricter oversight that Permanent Secretaries should not chair boards and that you should not have single chair boards, let me draw to your attention that any person who is in full employment of the State would be eligible to be appointed to the board and Permanent Secretaries are excluded from these. So, Permanent Secretaries are no longer going to be allowed to be appointed to the boards. So, that takes care of your concern.
Then Hon. Sen. Nyambuya, you stated the issue of having the new Constitution being in place over the last five years and that you are really thrilled that we finally have this Bill. It is something that was long overdue. I am happy that you are seeing things in the same way as the new dispensation. You also went on to say that the boards do not have to become a burden on the SOEs, especially the issues of interference by chairs. I think that these are some of the things that this Bill is trying to also address. There are so many cases where chairpersons had decided taking on executive positions and in essence becoming defacto executive chairs. When you go through the Bill, it is actually putting in safeguards around all those things where you hear of chairs giving executive orders and this is going to be a thing of the past in as far as this Bill is concerned.
You also spoke about the culture of entitlement and this is a key thing if you look at the Bill. It talks about that. They had become a culture of entitlement and issues of those that are on boards had actually found that it had become a career to be on boards and, it should be one of service as opposed to an issue of going on to these boards with a view that you are going to be entitled to all sorts of monitory benefits.
Hon. Sen. Marava, you spoke of loss making entities where there is a need to take action and I would want to draw your attention that this is exactly the reason why you have the State Enterprises Restructuring
Agents. That is what they do on a daily basis to make sure that all these State entities are actually delivering if they are commercial entities. I would also want to clarify that when I listened to most of the Senators speaking, I am getting the feeling that the Senators are believing that this Bill is just targeting commercial parastatals. What I would want to bring to your attention is that this Bill is actually targeting three types of entities. There are regulatory entities, there are commercial parastatals and there are noncommercial parastatals. So, I just wanted to make it clear that it is not targeting just the commercial parastatals.
Hon. Sen. Sibanda, you spoke about the five years to react to losses. I do not know where that is coming from. I would want to believe that you were talking about privatisation and what I want to bring to the attention of the Hon. Senator is, I see that sometimes Members get confused about the definition of the term ‘privatisation’ from a commercial perspective, what it means. Most of these commercial enterprises were privatised a long time ago. That is when we used to have the Privatisation Agency of Zimbabwe which has since been succeeded by an entity called the State Enterprises Restructuring Agency (SERA). So, what you are now talking about is for example, if we have a loss making commercial entity, you need to restructure its operations and management. It is no longer an issue of really privatising most of these entities. So, we have to be careful when we are using that term.
I agree with him that there is the issue of some of the debt assumption issues which are as a result of some of these governance issues and this is exactly what this Bill is trying to make sure that we do not have any more further losses or a burden on the fiscus as a result of governance related issues.
He also spoke of management intervention being necessary and not waiting for legislation. I agree with you, also making sure that the CGU is more acceptable than that of the Auditor General. I do not know where that is coming from because I would want to believe that the last time when Madam Chiri was being asked to be promoted to another position, there was an outcry and I believe from both Chambers. This is actually an acknowledgement that the Auditor General’s Office is doing its job and it is being celebrated. So, when you are saying it has to become more acceptable, I do not know maybe it is the English that I do not understand what you mean by ‘more acceptable’ – [HON. SEN. B.
SIBANDA: You did not get me right.] –
Can you protect me Madam President? I am just repeating the statement that was said and Hon. Sen. Sibanda also said that the Permanent Secretaries need a whip. I would want to believe that like there is the issue of performance targets, that is what this document is talking about. It is talking about strategic plans – that you have to submit and you have to be held accountable to the strategic plans. So, I believe that is the whip that probably he is also talking about.
He spoke about performance contracts and saying that he would want to see probably a situation where you have one year performance contracts. We would want to believe that if you are prescriptive to such an extent, it could actually be dangerous because if you are going to give someone a one year performance contract then their thinking and mindset is going to be of a shortterm nature and that could have disastrous consequences, but at the same time, if you also have very long performance contracts then you will also have some of the senior executives becoming relaxed. I think the answer is somewhere in between the two. I love the fact that he spoke about one Zimbabwe and us pulling together and basically supporting and making sure that the Government of the day functions well. I thank you for that.
Hon. Sen. Timveos, she says that parastatals are known to be very corrupt and dubious. I think that is a personal opinion and I would want to believe probably that comes from the constituency that she is representing. I would not make such a general statement in generalizing that all parastatals are corrupt and dubious. I would want to believe that there are some wellmeaning civil servants there and people in some of these senior positions who want to make a better Zimbabwe and who actually wake up every day to make sure that the parastatals that they are working for function. So to paint everyone with that brush, I think is a bit too much.
I think she stated that there were some parastatals that had gone for eight years without audits. I would want to believe that is now a thing of the past and if anything, Madame Chiri has done a fantastic and brilliant job where almost every parastatal is up to date in terms of audits. I do not think that we have such a situation anymore. I think the last time we had such a situation was probably about three years or so back when we had audits that were really outstanding. So I think that she has to be applauded for a fantastic job.
There was the mention of Cuthbert Dube and everything around the entity. All I can say is that this is exactly what the Bill seeks to do because I would want to believe that when you look at that case. It was a situation where the board had approved the salary. So as far as I am concerned, to say Cuthbert Dube is a criminal – I do not know where that is coming from because if the board had approved, it means that he is not a criminal. The issue that is there is that the Bill is saying that we have put in the measures that make sure that we end up making the same mistakes where boards pass ridiculous salaries and benefits. I think that is the thrust of the Bill.
Hon. Sen. Makore, the whole thrust of your speech was that parastatals should operate as businesses. Again, I would want to caution you that there are three types of public entities – there is the regulatory public entity, there are commercial and noncommercial entities. I think what you were probably alluding to were the entities that are within the commercial space. I take note and accept almost that you said that we need to correct any gross irregularities and any semblance of monopolies, we have to make sure that we deal with those.
Then the system of what you referred to as a ‘let lose system’. Yes, I think that is exactly what the Bill is alluding to in terms of making sure that you have strategic plans, performance contracts and you are measured against these so that it does not become a let loose system.
Hon. Sen. Shoko, yes, we thank you for the 40 years that you gave to the Government of Zimbabwe. I am sure bearing the political statements, there is a lot that some of us young ones can learn from your 40 years of service. I will not go into comments that you made on personal issues but will state that I like the fact that you support issues like there should be declaration of assets which is in the Bill. You also pointed out issues of making sure that the allowances and salaries are known. So I would want to draw you to Clause 12 which states that, “the Minister responsible for this Bill will be able to formulate standard sitting allowances, provisions for out of pocket expenses and other payments or benefits compatible with service as a nonexecutive board member.’ So it is there in the Bill, they will take care of your concerns.
Hon. Sen. Khumalo wants nonperforming chief executive officers (CEOs) fired – that is there in the Bill, if you are not performing, naturally you should be relieved of your position. I think it is also key what you spoke about the issue of the aim of parastatals that they were used to rescue the country. There is always the issue of we have been under sanctions at times and had to come up with sanction busting measures and some parastatals are used for that at times. So I agree with what you are saying, that is why you find that at times, certain parastatals may not make commercial sense that is why they are put into the noncommercial category. So that is why I wanted to caution Hon. Senators that not all parastatals are commercial parastatals.
You also spoke about issues around entitlement, which point I have already addressed. I thank you Madam President. – [HON. SENATORS: Hear, hear.] I now move that the Bill be now read a second time.
Motion put and agreed to.
Bill read a second time.
Committee Stage: Wednesday, 14th March, 2018.
BUSINESS OF THE HOUSE
HON. MAZIWISA: May I request that we withdraw Order of the
Day, Number 5, on today’s Order Paper, because according to Section 6 of the Presidential Powers, Temporary Measures Act, Statutory Instruments expire after 180 days and the 180 days in respect of this particular Statutory Instrument expire tomorrow.
Motion put and agreed to.
CONSIDERATION OF AN ADVERSE REPORT BY THE
PARLIAMENTARY LEGAL COMMITTEE ON STATUTORY
INSTRUMENT NO. 79 OF 2017AGRICULTURAL
MARKETING AUTHORITY (COMMAND AGRICULTURE
SCHEME FOR DOMESTIC CROP, LIVESTOCK AND
FISHERIES PRODUCTION) REGULATIONS, 2017
Sixth Order read: Committee Stage: Consideration of an Adverse
Report by the Parliamentary Legal Committee on Statutory Instrument
No. 79 of 2017 – Agricultural Marketing Authority (Command
Agriculture Scheme for domestic Crop, Livestock and Fisheries
Production) Regulations, 2017.
House in Committee
HON. MAZIWISA: This is an adverse report of the Parliamentary
Legal Committee on the Agricultural Marketing Authority (Command
Agriculture Scheme for Domestic Crop, Livestock and Fisheries
Production) Regulations, 2017.
In pursuit of its constitutional mandate as provided in Section 152
(2) of the Constitution of Zimbabwe, the Parliamentary Legal
Committee (herein referred to as “the Committee) considered the
Agricultural Marketing Authority (Command Agriculture Scheme for
Domestic Crop, Livestock and Fisheries Production) Regulations, 2017. After deliberations, the Committee unanimously resolved that an adverse report be issued in respect of the Statutory Instrument, due to the following reasons.
Command Agriculture is a Government scheme which provides access of inputs by the farmers. The Government scheme is governed by a civil contract between the Government and the farmer, just like any civil contracts regulated by the law of contract, thus there is no need to create a criminal offence under a statute where it is already provided for in terms of a contract. The Statutory Instrument 79 of 2017 seeks to protect the scheme through criminalising the misappropriation of agricultural inputs and contract produce through criminal punishment. This not only contravenes Section 49(2) of the Constitution which provides that “no person may be imprisoned on the grounds of inability to fulfill a contractual obligation”; it is the Committee’s view that this violates Clause 11 of the contract which provides that variation of the terms and conditions of the contract shall be in writing and agreed to by both parties. It does not mention a Statutory Instrument having the authority to vary the contract or any other law.
A contract constitutes a promise for which the law gives a remedy in case of breach. Formation requires mutual assent and consideration. Courts use an objective test. It does not matter what the parties subjectively believed during the contract’s formation, as long as they manifested the appropriate intent. A breach occurs when one party does not perform under the contract. This is a strict liability standard. If a party contravenes the terms of the contract, the party is in breach, regardless of the party’s motivations or state of mind. Crimes stand apart from contracts. The state can prosecute these acts and seek sanctions including imprisonment. A crime typically requires a wrongful deed or act, an actus reus, combined with a guilty state of mind, a mens rea. The defendant does not need to be successful in completing the prohibited act. As long as the person intended to cause the harm takes some affirmative action, this person can be punished. Crimes receive criminal punishment, but contract breaches only receive civil liability.
At law, the only remedy available to an aggrieved party is to approach the civil court and institute civil proceedings, thus any breach of material terms of a civil contract attracts civil remedies such as specific performance, rescission and payment of damages and not criminal punishment. The common phrase used here is that “criminal law punishes while civil law prices.” The aggrieved party cannot seek recourse from the criminal court because the cause of action emanates from a purely civil contract and thus attracts civil remedies not punishment. Criminalization of breach of contract is not an option whereas the strengthening of debt recovery laws governing loans (in whatever form) in cases of breach or default in repayment of loans is the solution.The mischief that Statutory Instrument 79 of 2017 seeks to remedy can be included under breach of contract under Clause 8 of the contract between the Government and the farmer. Thus any breach thereof will be dealt with under the civil law since the breach of contract between the Government and the farmer is like any other civil contracts regulated by law of contract.
Furthermore, Section 113 of the Criminal Law (Codification and
Reform) ActChapter 9:23 provides that:
“(1) Any person who takes property capable of being stolen
- knowing that another person is entitled to own, possess or control the property or realising that there is a real risk or possibility
that another person may be so entitled; and
- intending to deprive the other person permanently of his or her ownership, possession or control, or realising that there is a real risk or possibility that he or she may so deprive the other person of his or her ownership, possession or control;”.
Conclusively, Statutory Instrument 79 of 2017 undermines a constitutionally entrenched right that is founded on fairness and justice to all.The Statutory Instrument goes against the founding principle of good governance, which binds not only the Ministry of Agriculture but all agencies of State, being the principle of transparency, justice, accountability and responsiveness, iterated in Section 3 (2) (g) of the Constitution. Accordingly, the Committee unanimously resolved to issue an adverse report on the Statutory Instrument. I thank you.
HON. SEN. B. SIBANDA: I congratulate the Parliamentary Legal Committee. You have shown a learned opinion which protects the ordinary person who would not have otherwise understood the implications and legal side of the agreement in which they got into and would therefore be adversely protected by the new regulations. I thank you.
HON. SEN. MASHAVAKURE: I think I need something to be
clarified because in its presentation to this House, the Committee persistently talks about misappropriation. To the ordinary mind, misappropriation is next to mischief but they site for instance, Section 49 of the Constitution and relate the misappropriation to contractual obligation or something along those lines.
I think that once you talk about misappropriation, you are probably talking of some kind of an offence being committed. If somebody deliberately misappropriated inputs that were meant for this Command
Agriculture – well at least the ordinary person like myself, there must be some small crime being committed there. It could be theft by conversion but our learned friends saw it legally prudent to say that the statutory instrument cannot criminally penalise those who misappropriate items associated with Command Agriculture because of whatever reasons.
Again, the other suggestion seems to be that maybe these people who convert what is meant for Command Agriculture to their own personal use probably did not know. I think that I heard from some other legal gurus that ignorance is no defence. Whatever they do, whether they know it or not, they are probably committing a crime and it should be up for some other forums for these people to defend themselves by putting evidence to show that they were not committing a crime.
How does the Committee arrive at the conclusion that this is a civil matter and not a criminal matter when it can possibly be a case of theft by conversion? I thank you Mr. Chairman.
HON. SEN. CHIMHINI: I think the Adverse Report is a welcome gesture and I fully support it.
Here, we are looking at commission of an offence. I think it is clear in the report that there are ways of coming up with a penalty. The report is not absolving any act or commission or omission. It is simply indicating that there are other means to get a redress. I think this is what the adverse report is all about. Let us not criminalise and use criminal penalties when we can use civil remedies. I think this is a milestone in terms of looking at issues separately this is not criminal, this is civil because people will take advantage where they would want to put everything under criminal law when it is not. I think this adverse report is appropriate. I thank you Mr. Chairman.
HON. SEN. SHOKO: Thank you Mr. Chairman. I was listening attentively when the presenter, Hon. Maziwisa, was talking about this Statutory Instrument. I agree certainly with the Committee when they said look, there are two people here that have made an agreement you give me your cow and say you can take it for a while for milk and then you take the calves for your own use. You will see certainly, that must be a civil issue. It cannot be called criminal and I think the Committee did a very good job because otherwise, we were going to have all the farmers in jail having failed to carry out what they had agreed on. So, I must congratulate the Committee for the good work and we thank them for redirecting the issue for the Senate to look at. I thank you, Mr.
THE ACTING CHAIRPERSON OF THE
PARLIAMENTARY LEGAL COMMITTEE (HON. MAZIWISA):
I want to thank the Hon. Senators for their respective contributions. I think the bulk of them were in agreement with our opinion as the Legal Committee. What that does is that it gives us enormous confidence that we seem to know what we are doing. So, I thank you very much indeed for that.
I think the Hon. Senator Mashavakure has been very capably responded to by his fellow Hon. Senator there. When we consider that something must not be criminalised, we are not saying that if there is any breach of contract, the person who is in breach of the contract should just walk scot free. The argument is simply that there is a civil route that must be followed and I think that this is the argument that we have been making in this report, which is that there is a whole host of remedies that are available to the aggrieved party which in this case would be the Government. These include recession of the contract, specific performance and even in some cases when they approach a court, they may even request that the person refunds the equivalent amount of whatever inputs were given to him.
So, it is important that we stick to that approach because the Constitution is very clear and the Constitution says that it is the supreme law of the land. There is no way, as legal experts, that we were going to act in a manner or to give an opinion that is contrary to what the
Constitution is directing us to do in section 49 (2). It is very clear that where two parties enter into an agreement, the recourse must eventually be a civil one and we tried as much as possible to stick to that. So, I thank you very much. I seek leave that the Chairperson reports progress and seek leave to sit again.
Motion put and agreed to.
Committee to resume: Wednesday, 14th March, 2018.
PROVISION OF ALTERNATIVE RESETTLEMENT AREAS FOR ZVEHAMBA, MAHATSHE AND MATANKENI COMMUNITIES.
Seventh Order read: Adjourned debate on motion on the call on the Executive to provide alternative resettlement areas for communities from Zvehamba, Mahatshe and Matankeni.
Question again proposed.
HON. SEN. MARAVA: I move that the debate do now adjourn.
HON. SEN. MASHAVAKURE: I second.
Motion put and agreed to.
Debate to resume: Wednesday, 14th March, 2018.
PROTECTION OF CONSUMERS FROM UNSCRUPULOUS
Eight Order read: Adjourned debate on motion on protection of consumers from corruption.
Question again proposed.
HON. SEN. MAWIRE: I move that the debate do now adjourn.
HON. SEN. MARAVA: I second.
Debate to resume: Wednesday, 14th March, 2018.
FIRST REPORT OF THE THEMATIC COMMITTEE ON
INDIGENISATION AND EMPOWERMENT ON THE
CIRCUMSTANCES SURROUNDING THE NONESTABLISHMENT
OF THE COMMUNITY SHARE OWNERSHIP TRUSTS
Ninth Order read: Adjourned debate on motion on the First Report of the Thematic Committee on Indigenisation and Empowerment on the circumstances surrounding the nonestablishment of Community Share
Ownership Trusts in Mudzi and Mutoko districts.
Question again proposed.
HON. SEN. TAWENGWA: Mr. President, I move that the debate do now adjourn.
HON. SEN. MOHADI: I second.
Motion put and agreed to.
Debate to resume: Wednesday, 14th March, 2018.
On the motion of HON. SEN. TAWENGWA, seconded by HON. SEN. MOHADI, the Senate adjourned at TwentySeven Minutes to Five o’clock p.m.