ZIM NOTES 9-25-09

UNCLAS SECTION 01 OF 03 HARARE 000771 SIPDIS AF/S FOR B. WALCH ADDIS ABABA FOR USAU ADDIS ABABA FOR ACSS NSC FOR SENIOR AFRICA DIRECTOR MICHELLE GAVIN TREASURY FOR D. PETERS STATE PASS TO USAID FOR LDOBBINS AND JHARMON COMMERCE FOR BECKY ERKUL E.O.12958: N/A TAGS: PGOV PREL ASEC PHUM ECON EFIN EAID ZI SUBJECT: ZIM NOTES 9-25-09 -------------- SUMMARY - Topics of the week -------------- - Political Parties Reconfigure Control of Constitutional Process - Mujuru Faction Wins Fierce Battle for Women's League - Partners Being Forced onto Wildlife Conservancies - High Court Upholds Private Diamond Claim in Chiadzwa - MDC Security Advisor Resigns - WOZA Demonstrates for Peace... - ... and Then Receives Human Rights Award - Noise but No News at Mining Conference - Court Blocks Kingdom Meikles General Meeting - Prime Minister Sends Delegation to London - RBZ Act on the Docket when Parliament Resumes - Quotes of the Week -------------- On the Political/Social Front -------------- ¶1. Political Parties Reconfigure Control of Constitutional Process... The three principals to the power-sharing agreement, President Mugabe, PM Tsvangirai, and DPM Mutambara, met last week and agreed to form three new entities to oversee the constitutional process - a Management Committee that appears to take the place of the Parliamentary Select Committee (PSC) as the overall controlling entity, a Steering Committee charged with implementation, and a Secretariat responsible for administration. The Management Committee consists of Constitutional Affairs Minister Eric Matinenga (MDC-T),a negotiator from each party -- Patrick Chinamasa (ZANU-PF),Tendai Biti (MDC-T),and Welshman Ncube (MDC-M) -- and the three existing co-chairs of the PSC. Matinenga has justified the changes on the basis that it will keep the process on track and improve efficiency, while opponents charge that the executive has effectively sidelined Parliament. ¶2. Mujuru Faction Wins Fierce Battle for Women's League... Olivia Muchena, the Joice Mujuru-backed candidate was declared the winner of a hotly-contested election to head the ZANU-PF Women's League. The election developed into a struggle between Vice President Mujuru and rival Oppah Muchinguri for control of the Women's League leading into December's ZANU-PF Congress. A secret ballot had to be held after violence erupted at the conference between Mujuru and Muchinguri supporters on September 15. Shuvai Mahofa, the losing candidate, now contends that vote rigging robbed her victory. ¶3. Partners Being Forced onto Wildlife Conservancies... Wildlife ranchers in southern Zimbabwe's Save Valley Conservancy report that ZANU-PF insiders are attempting to create forced partnerships with them. At a meeting last week attended by many of the ranchers and scores of ZANU-PF officials including Minister of Higher and Tertiary Education Stan Mudenge and Masvingo Governor Titus Maluleke, the ranchers were told that 25-year leases had been executed by Minister of Environment Frances Nhema which partnered ZANU-PF officials with individual ranchers. The ranchers include a handful of foreign investors who view this as an extension of land Qhandful of foreign investors who view this as an extension of land reform and a violation of bilateral investment protection treaties between Zimbabwe and their host nations. The forced partnerships are an obvious affront to the rule of law and will negatively affect what is already a poor investment climate. The ranchers are also concerned that their management of conservation areas will be impeded and could affect wildlife, including rare rhinos. ¶4. High Court Upholds Private Diamond Claim in Chiadzwa... A High Court judge has ruled that African Consolidated Resources (ACR) has legal title to the area constituting the Chiadzwa diamond fields. According to an ACR adviser, Judge Charles Hungwe refused to stay HARARE 00000771 002 OF 003 his judgment pending any appeal, theoretically paving the way for ACR to immediately occupy the fields and begin operations. Judge Hungwe also awarded compensation for diamonds heretofore mined by the government, stating that since the government had claimed it was complying with the Kimberley Process, there should be a record of diamonds extracted and sold. As a practical matter, ACR hopes that the court's ruling will force the government into negotiations to establish a partnership with ACR and lead the way to a controlled and transparent exploitation of Chiadzwa. ¶5. MDC Security Advisor Resigns... MDC security advisor Martin Rupiya resigned this week under pressure from ZANU-PF which objected to the fact that Rupiya had been a member of the Rhodesian Army Selous Scouts (Special Forces). Rupiya, who subsequently became a member of the Zimbabwean National Army, retired as a Lieutenant Colonel in 1989. He wrote a doctoral dissertation on the Rhodesian Army and before working for Tsvangirai was an academic affiliated with various think tanks. Sidney Sekeremayi, Minister of State for National Security in the President's office, reportedly told Tsvangirai that the National Security Council would refuse to meet if Rupiya was in attendance. ¶6. WOZA Demonstrates for Peace... Thousands of members of the activist group, Women of Zimbabwe Arise (WOZA),commemorated the United Nations International Day of Peace by demonstrating and protesting against the collapse of education, healthcare and the rule of law. The police did not interfere with the protests in Harare and allowed protestors to march to the UN offices where they presented a petition. In Bulawayo, riot police broke up the demonstration and beat up at least 25 members causing serious injuries to the protestors. ¶7. ... and Then Receives Human Rights Award... On September 15 WOZA co-founder Magodonga Mahlangu was awarded the 2009 Robert F. Kennedy Human Rights Award. Commenting on the award Mahlangu said, "Now I know I am not alone, the world is watching and one day Zimbabwe shall be a normal society again." -------------- Economic and Business News -------------- ¶8. Noise but No News at Mining Conference... At the GOZ-sponsored Mining Conference on September 17 and 18, President Mugabe, PM Tsvangirai, and a number of cabinet ministers tried to make the case that Zimbabwe was an attractive destination for new mining investment (see Quotes of the Week). But happy talk from the podium was not enough to distract miners from the acute uncertainties created by the "indigenization" law, ongoing farm invasions, and recent developments like the Kingdom Meikles saga (see below). Nor did the GOZ have any new policiesto promote. As for Zimbabwe's investment climate generally, the uncertainty that discourages major new commitments by mining companies will not be resolved until Qnew commitments by mining companies will not be resolved until sustained reforms establish a degree of policy credibility. ¶9. Court Blocks Kingdom Meikles General Meeting... The latest twist in the long-running saga of the troubled Kingdom Meikles conglomerate is a High Court injunction that blocked a September 24 extraordinary general meeting of shareholders. The purpose of the meeting was to approve reversal of the merger that had brought together Kingdom Financial Holdings and the Meikles business empire to form what was once Zimbabwe's largest locally-owned company. The court blocked the meeting at the request of Kingdom Meikles CEO Nigel Chanakira, who had collapsed and been hospitalized in South Africa. As part of the de-merger, Chanakira and his closest associates were to resign. Meanwhile, MDC-T co-Minister of Home Affairs Giles Mutsekwa has said he regrets signing the order that HARARE 00000771 003 OF 003 allowed the GOZ to seize Kingdom Meikles under the wide-ranging authority of an anti-corruption statute. ¶10. Prime Minister Sends Delegation to London... Following hard on the heels of two investment conferences, PM Tsvangirai dispatched a delegation to London on September 23 to appeal to Zimbabweans based in the UK to invest in Zimbabwe. The Minister of State in the Prime Minister's office, Gorden Moyo, is leading the delegation. The director of the Zimbabwe Investment Authority and the chief executive of the Zimbabwe Stock Exchange are expected to speak at the Diaspora Investment Conference on September 26. ¶11. RBZ Act on the Docket when Parliament Resumes... The Reserve Bank of Zimbabwe (RBZ) Act, a piece of legislation proposed by Minister of Finance Tendai Biti and designed to reform and curtail the authorities of the RBZ, has been publicly posted and is scheduled to be debated in Parliament when the House of Assembly comes back into session. Currently Parliament is scheduled to resume sitting on September 29 when Mugabe opens the new session, but precedent has been for the House to immediately adjourn for up to 10 days. ¶12. Quotes of the Week: "There has never been a better time than now for investors to gain access to good mineral resources in the country." -- Mining Minister Obert Mpofu, quoted in "The Herald" on September ¶16. "Until we see some certainty, there won't be any significant investment in mining." -- Rio Tinto executive Niels Kristensen, quoted by Reuters at the Mining Conference on September 17. PETTERSON