Download In pursuit of its constitutional mandate as provided for in

DISTRIBUTED BY VERITAS
Tel: [263] [4] 794478 Fax & Messages [263] [4] 793592
E-mail: [email protected]
Veritas makes every effort to ensure the provision of reliable information,
but cannot take legal responsibility for information supplied.
ADVERSE REPORT OF
PARLIAMENTARY LEGAL COMMITTEE
ON STATUTORY INSTRUMENT 34/2011
INDIGENISATION AND ECONOMIC EMPOWERMENT
(AMENDMENT) REGULATIONS, 2011 1
In pursuit of its constitutional mandate as provided for in section 40B of the
Constitution of Zimbabwe, The Parliamentary Legal Committee met on the 12TH
of May 2011 at 1200hrs to consider all the Statutory Instruments that were
gazetted during the month of April 2011. After deliberations, the Committee
unanimously resolved that an adverse report be issued in respect of Statutory
Instrument 34/2011 to the following considerations:
In the Statutory Instrument under consideration, Clauses 3(b), 4(b), 5(b),
and 8 imposes hefty penalties of up to five years imprisonment or level
12 fines.
Clause 3(b) states that, “A business which, having been granted an
extension under subsection (6) within which to submit its Indigenisation
implementation plan, fails to do so within the extended period, shall be
guilty of an offence and liable to a fine not exceeding level twelve or
imprisonment for a period not exceeding five years or to both such
fine and such imprisonment”
Clause 4(b) states that, “A business which, having been served with a
notice by the Minister under subsection (2) to submit a provisional
Indigenisation implementation plan, fails to do so within thirty days of
receiving the notice, shall be guilty of an offence and liable to a fine not
exceeding level twelve or imprisonment for a period not exceeding
five years or to both such fine and such imprisonment”
Clause 5(b) states that, “Any investor who, after the date of
commencement of the Indigenisation and Economic Empowerment
(Amendment) Regulations, 2011 (No.3), makes an investment in a
business belonging to any the sectors prescribed under the third schedule
which results in the investor owning or having a controlling interest in that
business shall, unless he or she has obtained for the investment the prior
written approval of the Minister and the Minister responsible for
administration of the Zimbabwe Investment Authority Act[Chapter 14:30] ,
shall be guilty of an offence and liable to a fine not exceeding level
twelve or imprisonment for a period not exceeding five years or to
both such fine and such imprisonment”
Clause 8 states that, “If after valuation conducted by the Minister in terms
of subsection 1 a business is found to have substantially (to the extent of
ten per centum or more) undervalued its net asset value, it shall be guilty
of an offence and liable to a fine not exceeding level twelve or
imprisonment for a period not exceeding five years or to both such
fine and such imprisonment”
All the offences created by the regulations are punishable by either a level
12 fine or a prison term of up to five years. No consideration of the nature
and quality of the offence is made. Although this penalty is permissible
under section 21 of the parent Act, it is permissible as the maximum
punishment applicable. It should not be taken as a one-size-fits-all
prescription. Regard must be had to the nature and quality of the offence.
1
\Note by Veritas. The receipt of the report was announced to the House of Assembly by the
Acting Speaker on 1st May 2011.
It is the view of the committee that the above penalties are
disproportionate to the offences committed. The law in Zimbabwe regards
penalties that are disproportionate to the offence as unconstitutional.
Chidyausiku C.J, in the case of Bennett v Mnangagwa NO & Ors, 2006
(1) ZLR 218 (S) clarified this position in the following terms:
“I respectfully agree with the view that a punishment that is
grossly disproportionate to the transgression constitutes a
violation of s15 (1) of the constitution, that is to say inhuman
and degrading… As long as the penalty is grossly
disproportionate to the offence, it is prohibited by section 15
(1) of the constitution”.
In the case of S v Ndhlovu 1987 (2) ZLR 246 (S) Gubbay JA (as he then
was) endorsed this line of reasoning when he quoted with approval the
American case of Weemes v United States 217 US 349 at 367. This
case lays down unequivocally that, under the protection afforded the
individual by the eighth amendment to the American constitution, any
punishment imposed upon a person by the state must be graduated and
proportionate to the crime he has committed. His constitutional right would
have been infringed if, having regard to the nature and quality of the
offence committed, the sentence is so unfit as to be grossly
disproportionate. Thus the effect of the punishment imposed by the state
must not be grossly disproportionate to what would have been
appropriate.
The same clause seeks to impose prison sentences on businesses, which
is absurd, as a prison term can only be imposed on a natural person.
“Business” is defined in section 2 of the principal Act as
Any company, association, syndicate or partnership of persons that
has for its object the acquisition of gain by the company,
association, syndicate or partnership, or by the individual members
thereof, whether the business is registered in terms of the
Companies Act [Chapter 24:03] or otherwise.
In this case a prison term will only apply to those forms of business
without a corporate veil such as sole traders. It is absurd that a company
whose members are protected by a corporate veil could be sent to jail for
violating the Statutory instrument. It is also unreasonable that only
businesses with no corporate veil are sent to jail while other forms of
business are punished more leniently by fines, since it is impossible to
imprison them.
It is the view of the Committee that this Statutory Instrument is ultra vires
the enabling Act because, in enacting the parent Act, that is, the
Indigenization and Economic Empowerment Act, Parliament never
intended such an absurd and unreasonable occurrence. It is also the view
of the Committee that any provision that is absurd and unreasonable does
not afford an accused person protection of the law. Such a provision
violates section 18 (1) of the Constitution, which provides that:
Subject to the provisions of this Constitution, every person is
entitled to the protection of the law.
Once the law is absurd and unreasonable, especially penal law, it fails to
protect persons. Instead of protecting citizens, the law now oppresses
them, contrary the to the spirit of the Bill of Rights.
Therefore, the finding of the Committee is that this Statutory Instrument is
both unconstitutional and ultra vires the enabling Act on the following
grounds

It imposes hefty penalties that are grossly disproportionate with the
offences committed, thereby being inhuman and degrading, and
thus violating section 15 of the Constitution of Zimbabwe.

By imposing prison terms on businesses, It is unreasonable and
absurd, thereby violating section 18 of the constitution which
provides for the right to the protection of the law.
Hon S.L. Mushonga
Chairperson
Parliamentary Legal Committee