Home » Industry » Business, Lawyers Endorse Amendments

Indigenous businesspeople and legal practitioners have implored Government to prioritise amending the Indigenisation and Economic Empowerment Act and the Labour Act when aligning laws to the new Constitution.

The stakeholders said the two laws were key to the successful implementation of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, Government’s five-year economic blueprint up to 2018.

Economic analysts have long expressed concern that current labour laws made it difficult to reduce staffing costs by aligning them with business realities, a development that increases production costs and weighed down the wider economy.

Cabinet has since resolved to review the Labour Act to address, among other things, the situation whereby employment constitutes up to 70 percent of the cost of doing business amid reports that most public sector debts related to outstanding salaries.

Government is also in the process of reviewing the indigenisation and empowerment policy to facilitate sector-specific implementation that retains 100 percent ownership of resources in the hands of indigenous Zimbabweans while allowing investors to recover their initial capital investment, receive an appropriate return on that investment and recoup operational costs.

NMB Holdings chief executive Mr James Mushore said companies were operating under outdated laws that made it difficult for them to succeed.

“The Labour Act makes it unaffordable for employees and employers to part ways,” he said.

“If companies want to rationalise their staff, they can’t afford it because of the retrenchment laws that need urgent review.

“When companies are down, they need to look at their staffing costs which are usually huge. We need to look at what other countries in the region are doing.”

Mr Mushore said there was also need for the Indigenisation and Economic Empowerment Act to be clearly spelt out.

“The Act itself is not a problem,” he said. “We like the softening that is happening now, but it shouldn’t be dependent on personalities. Investors like certainty, so let’s make sure our policies are consistent.”

Mr Mushore said there was also need to overhaul the Companies Act, saying the present law derived from the 1948 UK Companies Act.

Confederation of Zimbabwe Industries immediate past president Mr Kumbirai Katsande said for Zim-Asset to succeed, there was need for Government to prioritise re-alignment of economy-related laws.

“There is need to prioritise policies that quickly stablise the economy and business,” he said. “These are issues like the Labour Act because we need to stop the bleeding so that there can be a sense of hope.

“Government has to prioritise laws that can improve the quality of life of ordinary people. On the Indigenisation Act, the President has been clear, but there are still some complications. A lot of people want things to be done in the language that investors can understand.

“Let’s make sure we dot the ‘i’ and cross the ‘t’. It’s important to make sure there is clarity because at the moment, people are just waiting for what the President says, but the law must be made in such a way that it delivers growth, empowerment and jobs.”

President Mugabe has on several occasions said there is a gap between the spirit of the indigenisation policy and its implementation, at one point indicating that Government officials seemed to have failed to grasp the import of the thrust.

Lawyer Mr Farai Mutamangira said Government should prioritise putting a legal framework through a Constitutional amendment to give effect to Special Economic Zones.

“Constitutional amendment establishing Special Economic Zones will catapult us ahead of any competition in respect to attracting foreign direct investment,” he said.

“We certainly are way ahead of competition with respect to our resources as a country, but our policies and legislative framework have been criticised for inconsistency and over regulation, but all these will be relaxed in Special Economic Zones and that should jump start our attraction of FDI as a key element of the success of Zim-Asset.”

Mr Mutamangira said SEZ incentives would help the indigenisation law kick-start economic recovery in the short to medium-term.

He said there was need for a legislative framework that attracted investment considering that there was competition for capital.

Another lawyer, who requested anonymity, added: “Without amending the Indigenisation and Economic Empowerment Act, the Companies Act, the Labour Act and regulations on capital and capital repatriation urgently our economy won’t perform.

“These are areas that require urgent attention ahead of everything else. At the moment the Indigenisation Act is being interpreted differently by different people in Government which is not good for attracting investment. If the law is to be amended so that there can be consistency in terms of its provisions then so be it.”

The Justice, Legal and Parliamentary Affairs Ministry has said in all, 400 laws need ammending to align with the new Constitution with the Electoral Amendment Bill and the National Prosecuting Authority Bill already tabled in Parliament.

Criminal defamation laws and legislation related to the media have been cited by some observers as also needing immediate attention.

Some of the 400 laws needing changes require minor alterations to wording for them to comply with the Constitution but it is the Indigenisation Act and the Labour laws that stakeholders feel need urgent attention so that they can feed into the successful implementation of Zim-Asset.

Source : The Herald