Indigenisation And Economic Empowerment Act [Chapter 14:33]

 

Chapter 14:33

Indigenisation And Economic Empowerment Act

Act 14/2007

ARRANGEMENT OF SECTIONS PART I

PRELIMINARY Section

1. Short title and date of commencement.

PART II

INDIGENISATION ANDECONOMIC EMPOWERMENT: GENERALOBJECTIVES AND MEASURES

3. Objectives and measures in pursuance of indigenisation and economic empowerment.
4. Power of Minister to review and approve indigenisation and empowerment arrangements.
5. Enforcement of notification and approval requirements.
6. Referral to Minister of proposed notifiable transactions in respect of which no counterparties have yet been identified.

PART III

ESTABLISHMENT AND FUNCTIONS OF NATIONAL INDIGENISATION ANDECONOMIC EMPOWERMENT BOARD

7. Establishment and appointment of National Indigenisation and Economic Empowerment Board.
8. Functions of Board.
9. Chief executive officer and staff of Board.
10. Reports of Board.
11. Minister may give Board directions in national interest.

PART IV

NATIONAL INDIGENISATION ANDECONOMICEMPOWERMENT FUND

12. Establishment and objects of National Indigenisation and Economic Empowerment Fund.
13. Unit Trust Account of National Indigenisation and Economic Empowerment Fund.
14. Composition of Fund.
15. Administration of Fund.
16. National Indigenisation and Economic Empowerment Charter.

PART V

LEVIES

17. Imposition of levies.
18. Failure to pay, collect or remit levies.

PART VI

GENERAL AND TRANSITIONALPROVISIONS

19. Minister mayrequest information.
22. Transfer of assets, obligations, etc. of National Investment Trust to Fund.
23. Transfer of employees of National Investment Trust to Board and conditions of service of transferred employees.

SCHEDULES First Schedule: Provisions applicable to Board and committees.

Second Schedule: Rules of Unit Trust Account of Fund.

Third Schedule: Provisions Applicable to Administration of Fund.

Fourth Schedule: National Indigenisation and Economic Empowerment Charter.

AN ACT to provide for support measures for the further indigenisation of the economy; to provide for support measures for the economic empowerment of indigenous Zimbabweans; to provide for the establishment of the National Indigenisation and Economic Empowerment Board and its functions and management; to provide for the establishment of the National Indigenisation and

Economic Empowerment Fund; to provide for the National Indigenisation and Empowerment Charter; and to provide for matters connected with or incidental to the foregoing.

[Date of commencement : 17th April, 2008.]

PART I

PRELIMINARY

1    Short title and date of commencement

This Act may be cited as the Indigenisation and Economic Empowerment Act [Chapter 14:33].

                       2    Interpretation

(1) In this Act—

“approve”, in relation to a transaction referred to in section 3(1)(b), (c), (d) or (e), means approve in terms of section 4;

“Board” means the National Indigenisation and Empowerment Board established in terms of section 7(1);

“business” means 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;

“business association” means any voluntary organisation representing the interests of any class of business;

“chairperson” means chairperson of the Board appointed in terms of section 7(2);

“Charter” means the National Indigenisation and Economic Empowerment Charter set out in the Fourth Schedule;

“chief executive officer” means the chief executive officer of the Board appointed in terms of section 9;

“controlling interest”, in relation to—

• a company, means the majority of the voting rights attaching to all classes of shares in the company;
• any business other than a company, means any interest which enables the holder thereof to exercise, directly or indirectly, any control whatsoever over the activities or assets of the business;

“employee share ownership scheme or trust” means an arrangement the dominant purpose or effect of which is to enable employees of a company or group of companies to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the stock, shares or debentures of the company or group of companies concerned:

Provided that such stock, shares or debentures are held on behalf of the employees in a trust or in the form of units in an employee unit trust scheme registered or exempted in terms of the Collective Investment Schemes Act [Chapter 24:19] (No. 25 of 1997);

“empowerment” means the creation of an environment which enhances the performance of the economic activities of indigenous Zimbabweans into which they would have been introduced or involved through indigenisation;

“fixed date” means the date fixed in terms of section 1(2) as the date of commencement of this Act;

“Fund” means the National Indigenisation and Economic Empowerment Fund, established in terms of section 12;

“indigenisation” means a deliberate involvement of indigenous Zimbabweans in the economic activities of the country, to which hitherto they had no access, so as to ensure the equitable ownership of the nation’s resources;

“indigenous Zimbabwean” means any person who, before the 18th April, 1980, was disadvantaged by unfair discrimination on the grounds of his or her race, and any descendant of such person, and includes any company, association, syndicate or partnership of which indigenous Zimbabweans form the majority of the members or hold the controlling interest;

“member” means a member of the Board;

“Minister” means Minister of State for Indigenisation and Empowerment or any other Minister to whom the President may, from time to time, assign the administration of this Act;

“private company” means a company as defined in section 33(1) of the Companies Act [Chapter 24:03];

“public company” means a company which is not a private company or a company licensed under section 26 of the Companies Act [Chapter 24:03];

“vice-chairperson” means the vice chairperson of the Board appointed in terms of section 7(2).

PART II

INDIGENISATION AND ECONOMIC EMPOWERMENT: GENERALOBJECTIVES AND MEASURES

                       3    Objectives and measures in pursuance of indigenisation and economic empowerment

(1) The Government shall, through this Act or regulations or other measures under this Act or any other law, endeavour to secure that—

(a) at least fifty-one per centum of the shares of every public company and any other business shall be owned by indigenous Zimbabweans; (b) no—

• merger or restructuring of the shareholding of two or more related or associated businesses; or
• acquisition by a person of a controlling interest in a business; that requires to be notified to the Competition Commission in terms of Part IVA of the Competition

Act [Chapter 14:28] shall be approved unless—

• fifty-one per centum (or such lesser share as may be temporarily prescribed for the purposes of subsection (5)) in the merged or restructured business is held by indigenous Zimbabweans; and
• the indigenous Zimbabweans referred to in subparagraph (iii) are equitably represented in the governing body of the merged or restructured entity;
• no unbundling of a business or demerger of two or more businesses shall, if the value of any business resulting from the unbundling or demerger is at or above a prescribed threshold, be approved unless—
  • fifty-one per centum (or such lesser share as may be temporarily prescribed for the purposes of subsection (5)) in any such resulting business is held by indigenous Zimbabweans; and
  • the indigenous Zimbabweans referred to in subparagraph (i) are equitably represented in the governing body of any such resulting business;
• no relinquishment by a person of a controlling interest in a business, if the value of the business is at or above a prescribed threshold, shall be approved unless the controlling interest (or such lesser share thereof as may be temporarily prescribed for the purposes of subsection (5)) is relinquished to indigenous Zimbabweans;
• no projected or proposed investment in a prescribed sector of the economy available for investment by domestic or foreign investors for which an investment licence is required in terms of the Zimbabwe Investment Authority Act [Chapter 14:30] shall be approved unless a controlling interest in the investment (or such lesser share thereof as may be temporarily prescribed for the purposes of subsection (5)) is reserved for indigenous Zimbabweans;
• all Government departments, statutory bodies and local authorities and all companies shall procure at least fifty per centum of their goods and services required to be procured in terms of the Procurement Act [Chapter 22:15] from businesses in which a controlling interest is held by indigenous Zimbabweans;
• where goods and services are procured in terms of the Procurement Act [Chapter 22:14] from businesses in which a controlling interest is not held by indigenous Zimbabweans, any subcontracting required to be done by the supplier shall be done to the prescribed extent in favour of businesses in which a controlling interest is held by indigenous Zimbabweans.

(2) For the purposes of subsection (1)(d), the relinquishment of a controlling interest in a business— (a) does not include the donation or disposal otherwise than for value of a business to—

• a member of the family of the person relinquishing it; or
• any other partner or shareholder of the business, in the case of a business that is a private company or partnership;

(b) includes the disposal by the liquidator of a company or other body corporate or the trustee of an insolvent estate of a business or of a subsidiary, unit or division of a business that is capable of being operated as a separate business.

(3) The objectives or measures specified in subsection (1) may be implemented by the Government specifically on behalf of any one or more of the following groups of indigenous Zimbabweans— (a) women; and

• young persons under a prescribed age; and
• disabled persons as defined in the Disabled Persons Act [Chapter 17:01].

(4) The Minister may, by notice in a statutory instrument, prescribe anything that may be prescribed under subsection (1) or (3):

Provided that the Minister shall not prescribe anything for the purposes of—

• subsection (1)(b), except after consultation with the Minister for the time being responsible for the Competition Act [Chapter 14:28];
• subsection (1)(e), except after consultation with the Minister for the time being responsible for the Zimbabwe Investment Authority Act [Chapter 14:30];
• subsection (1)(f) and (g), except after consultation with the Minister for the time being responsible for the Procurement Act [Chapter 22:14].
• The Minister may prescribe that a lesser share than fifty-one per centum or a lesser interest than a controlling interest may be acquired by indigenous Zimbabweans in any business in terms of subsections (1)(b)(iii), (1)(c)(i), (1)(d) and (e) in order to achieve compliance with those provisions, but in so doing he or she shall prescribe the general maximum timeframe within which the fifty-one per centum share or the controlling interest shall be attained.
• In order to ensure that the Government’s policies and objectives of indigenisation and economic empowerment are implemented, the Minister shall carry out an indigenisation and empowerment assessment rating of every company, which rating shall be done in the prescribed manner.