As noted in the last entry to this blog, revealing corruption in the process of negotiating mining companies' original contracts offers one potential source of pressure on the companies to accept a renegotiation. Still, proving corruption in the Zambian courts has historically proved an extremely drawn out process. So what other sources of pressure are there?
This blog has also previously proposed that research to demonstrate that companies are in breach of the commitments they made in the Development Agreements (DAs) could be another source of pressure.
A third course is proposed in a letter from Nkula Kaoma in The Post today. I will quote it at length since the argument is technical and complex. The letter argues that "Article 114 (3) of the Constitution provides that, “Parliament may make provision under which the President or the Vice President or a minister may by order provide that, on or after the publication of a Bill being a Bill approved by the President that it is proposed to introduce into the National Assembly and providing for the imposition or alteration of taxation, such provisions of the Bill as may be specified in the order shall have the force of law for such period and subject to such conditions as may be prescribed by Parliament:”
...These development agreements... altered the payment of royalties from 3 per cent to 0.6 per cent and that they were signed by the minister and the new mine owners.
Bearing in mind that royalties form part of taxation, were these development agreements presented in the National Assembly by the President, Vice President or Minister as “orders” seeking to alter taxation known as royalties as provided for by Article 114 (3) of the Constitution?
.... If these development agreements were not presented as “orders” in the National Assembly seeking to alter taxation, then they are in breach of the Constitution and any other law (section 9 (2) of the mines and minerals Act) which is inconsistent with the Constitution, that other law shall, to the extent of the inconsistency be void.
As such, these development agreements can be altered by government without any breach so as to impose meaningful taxation in the mining industry for the benefit of the country."
I don't have the legal knowledge to know what value this argument has. What do readers think?
2 comments:
I think it misses the contents of the rothschild report/ratio concerning the privatization of zccm! this secret report/ratio always held… what a scandal!
It would be great if these development agreements were declared unconstitutional.
Also, a pro-active government could bypass a long and drawn out court battle and waiting for it's result, by simply confiscating the mines, and let the companies complain in court. Or withholding part of their shipments as payment.
Personally, I would be much happier with a situation where the mines were 100% owned by the state, but operated by private companies.
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