By Shamiso Mtisi and Michelle Matsvaire (Zimbabwe Environmental Law Association)
9 March 2020
Discussions on the amendment of the Constitution of Zimbabwe have resumed without any significant strides having been made in implementing and upholding already existing key provisions. The Constitution of Zimbabwe (Amendment) Bill No. 2 was gazetted on 17 January 2020 with the aim of amending several sections in the Constitution. Constitutional amendments are allowed and provided for in Section 328 of the Constitution, but the question of necessity and desirability arises in the present case. Many of the proposed amendments, as is apparent, will effectively result in consolidation of power in the office of the President (akin to the Lancaster House Constitution) and will have significant impacts on different sectors including the mining sector. This article seeks to highlight the impact of Clause 23 of the Bill on the mining sector in Zimbabwe.
all Clauses in the Amendment Bill will have some form of effect on the mining sector,
Clause 23 if retained in its current form will have the biggest impact. It
affects the negotiation, review and monitoring of mining contracts in Zimbabwe.
Clause 23 seeks to amend Section 327 of the Constitution which provides for the
signing, conclusion, execution and approval of international conventions,
treaties and agreements and their approval by Parliament.
Section 327(3) states that;
agreement which is not an international treaty but which; a) has been concluded
or executed by the President or under the President’s authority with one or more
foreign organisations or entities, and (b) imposes fiscal obligations on
Zimbabwe, does not bind Zimbabwe until it has been approved by Parliament’’
Clause 23 provides that;
327 (“International conventions, treaties and agreements”) (3) is amended in
paragraph (b) by the deletion of “foreign organisations or entities” and the substitution of “international organisations”.
327(1) of the Constitution defines International
organisations as “an organisation whose membership consist of two or
more independent States or in which two or more independent States are
What is the effect of Clause 23?
23 has two fundamental effects. First, it means Section 327(3)(b) of the
Constitution will only apply to agreements with organisations made up of States
-the equivalent of the United Nations or other international organisations in
which states are represented. Other examples include the International Monetary
Fund, the World Bank, the African Development Bank, the European Investment
Bank and the Asian Development Bank. These organisations include independent
States as members. The organisation must have at least two States for the
provision to apply to it.
the deletion of the words ‘foreign organisations or entities’ means
Section 327 will cease to apply to agreements with non-state entities even if
the agreement imposes fiscal obligations on Zimbabwe. Examples of such entities
may include international financial institutions such as Credit Suisse, other credit
banks or other foreign companies. In most cases international agreements
imposing fiscal obligations on a country come in the form of loan agreements,
Government guarantees or other forms of credit facilities that create a debt or
liability on a State.
Consequently, the proposed Amendment of Section 327(3) means Parliament
will no longer have the constitutional power to approve loan agreements with
such foreign non-State institutions or entities giving sole discretion to the
Executive. This may also apply to any
Government guarantees imposing fiscal obligations on the State. The
consequences are drastic. What it also means is that the Government of Zimbabwe
can enter into a loan agreement with Credit Suisse, the Export-Import Bank of
China, the China Construction Bank, the Industrial and Commercial Bank of China
or the African Export-Import Bank without Parliamentary approval since their
membership does not include two or more independent states. Most contracts
entered into by Government are with non-State organisations and private
entities. Such contracts include multi-million-dollar investment contracts in
areas like mining, energy, trade finance and infrastructure among others. These
contracts will be protected from public scrutiny by the Executive. The question
is why is Government seeking to keep these agreements secret? What is also curious about Clause 23 is that
the memorandum to the Constitutional Amendment in Clause 23 did not include a clear
explanation of the mischief Government wants to cure by amending Section 327 or
removing the words ‘’foreign organisations or entities’’.
rightly observed that Clause 23 emasculates Parliament’s role and power in
monitoring and overseeing expenditure by the State as enshrined in section 299
of the Constitution and its power to veto loan agreements which it may consider
as imposing a great burden on the country. The amendment also goes
against the spirit of section 119 of the Constitution which outlines
parliament’s role as being to promote democratic governance in Zimbabwe. Further, it runs contrary
to national objectives set in Section 9 of the Constitution on adoption and
implementation of legislation that develops accountability, transparency and
financial probity at all levels of government. All institutions and
agencies of the State and Government must be accountable to Parliament.
Essentially, the Clause goes against the doctrine of separation of powers that
stipulates that government consists of 3 branches that are assigned different
responsibilities and put together to form the national government. The role of Parliament is
to play an oversight role over executive functions and taking away agreements
with foreign organisations or entities beyond the scrutiny of Parliament
defeats the principle of separation of powers, public accountability and good
governance. This is unacceptable in a democracy.
Is the proposed amendment peculiar to Zimbabwe only?
proposed a similar amendment through Constitution of Zambia (Amendment) Bill No.
10 of 2019. It was noted that the Bill would result in agreements being
‘unavailable to public scrutiny, secret and confidential.’ The adverse effect in this
context would be that Zimbabweans as with the Zambian
case, would potentially be bound to foreign debt from foreign agreements as the
system would have been extensively weakened by a severe lack of checks and
balances. Parliamentary approval of agreements that impose fiscal
obligations on the state is one way of enhancing accountability through the
oversight function of Parliament.
How does Clause 23 directly affect the mining sector in
now a known fact that the Government of Zimbabwe accelerated the signing of
investment agreements by the executive under the ambit of the “Zimbabwe is Open
for Business Mantra”. This has been more evident in the mining, energy, oil,
gas and infrastructure development sector. A lot of deals were publicly
announced. Over the years, Zimbabwe has used its mineral wealth as collateral in
exchange for credit lines. An example is the line of credit that was secured
using gold exports as collateral in 2017 by the Afreximbank. This is not surprising
considering Zimbabwe has large deposits of mineral reserves which include
platinum, palladium and gold among others. Several loan agreements signed by
Government with foreign investors show that Zimbabwe has been virtually
mortgaging its mineral resources. Therefore, Clause 23 appears to be meant to put
beyond parliamentary scrutiny mining related financing agreements or loans
between Zimbabwe and foreign credit banks or other financial entities. This
trend is likely to continue given the squeeze the country is facing due to its
unstable economic and political environment. The Parliament of Zimbabwe needs
to analyse whether or not the ‘mega deals’ being negotiated will actually
translate into tangible benefits for the general populace. If this function is
removed, this can be envisaged as free reign of the executive. Without any parliamentary oversight and
approval of agreements that impose fiscal obligations on the country, Zimbabwe
might further fall into a debt trap drawn from secretive projects that may include
punitive repayment terms, certain immunities or exemptions to foreign companies.
The experience of Mozambique in this respect is instructive
where the Government failed to subject loan and government guarantees to
Parliamentary approval as prescribed by its constitution. The country ended up
contracting crippling debts from Credit Suisse and VTB.
cumulative effect of the proposed amendment is that loan agreements and
government guarantees in the mining sector will not be subjected to intensive
public scrutiny due to removal of parliamentary approval. It also deprives
civil society and citizens an opportunity to glean and monitor proceedings
related to agreements with foreign entities and organisations imposing fiscal obligations
on the state. Arguably, the other ripple effect of the proposed amendment is
that it will water down the role of parliament when it comes to state
borrowings and state guarantees in Section 300 as well as contract performance and
negotiation in Section 315(2) of the Constitution which respectively requires
Parliament to pass an Act of Parliament on setting limits to debts and
obligations and concessions of minerals to ensure transparency, honesty and
loan agreements or other agreements with fiscal obligations beyond Parliament
creates a shade of grey and opportunities for mining sector illicit financial
flows, contraction of illegitimate or criminal debts that involve corruption
and kickbacks to government officials or broadly odious debts. Clause 23 will be
out of sync with emerging international trends in the mining sector on
transparency and accountability such as the Extractive Industries Transparency
Initiative (EITI) and the Open Government Partnership (OGP) among others.
light of the above, we recommend that Parliament should reject Clause 23 of
Constitutional Amendment Bill No. 23 since it is taking away its powers of
approving agreements that impose fiscal obligations on the state. Parliament
has also set dates for public hearings for the Constitutional Amendment Bill
No.2. This offers an opportunity for citizens and
communities to participate and oppose the Bill in its current form and in
particular provisions aimed at undermining the powers of Parliament on approval
of agreements with foreign organisations and entities.
there are key questions to be raised in light of this proposed constitutional
amendment. Who is to benefit from the lack of transparency? Whose cause is to
be advanced in removing checks and balances by moving away from the doctrine of
separation of powers? As Veritas correctly noted, amending Section 327 so as to
remove or reduce Parliament’s powers will be utterly pernicious and will
encourage a return to reckless spending by the Government.
This blog was published under the Strengthening Extractive and Natural
Resources Sector Transparency and Accountability through Citizen Action and
Parliamentary Oversight in Zimbabwe ( STACAP). The project is being implemented
Constitution Watch 1/2020
Constitution Watch 1/2020
 Section 119
(1) and (3) of the Constitution of Zimbabwe
 Section 9(1).
 Arnold I.
Burns and Stephen J. Markman, Understanding Separation of Powers, 7 Pace L.
Rev. 575 (1987) Available at: http://digitalcommons.pace.edu/plr/vol7/iss3/2
International, The effect of the Constitution of Zambia (Amendment) Bill no. 10
of 2019 on Public Financial Management and Debt Management, December 2019, pg.
Ryan Ndlovu and Loni Prinsloo, ‘To Borrow $500 Million, Zimbabwe Pledges
Undeveloped Mine’ May 22, 2019, 3:29 PM GMT+2 Updated on May 23, 2019, 1:57 PM
 https://eiti.org/ and https://www.opengovpartnership.org/about/
 VERITAS, Constitution Watch 1/2020