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Tuesday, 26 November 2013

Rogue Investors or Whistle blowers?

Government recently revoked the work permit of Konkola Copper Mines (KCM)'s CEO Kishore Kumar over KCM’s plans job cuts. The move has been celebrated by some who see this as a strong stance by PF against foreign investors. What has been worrying is that no one has yet pointed out that GRZ's recent actions appear to be part of its addiction to cancelling "work permit" in dubious circumstances.

Of course PF is not the first to be obsessed with bundling foreigners out of the country. An historical glance suggests that the recent actions are merely a continuation of the selective shameful practices of the past, when any foreigner who did not toe the party line was unceremoniously bundled out of the country on flimsy grounds. Why shouldn’t a foreign CEO take decisions that safeguards the financial viability of his company? Why should they be victimised for merely doing their job?

My concern here is not the KCM situation per se. Rather it is the general behaviour of the Immigration Department which continues to be constantly used by politicians to fix foreigners for reasons usually that have nothing to do with their business competence. More worrying it seems under PF dubious deportations have become the order of the day. Many foreigners have been targeted for deportation either because they are perceived as whistle-blowers or have not cooperated in cutting deals with influential individuals in government.

To many neutral observers the Immigration Department, following instructions from politicians, continues to use its ‘powers’ to throw some foreigners out of the country by cancelling their visas, not renewing their self-employment permits or simply by declaring them prohibited immigrants. There are many such cases involving foreign investors contesting the Immigration Department’s decisions not to renew their self-employment permits.

For example in April Armcor Security MD Jan Paxton was allegedly deported back to South Africa without a deportation order issued and no proper procedures followed. Government claimed the deportation was over tax evasion by Armcor. And yet up to now we have not heard about the outcome of any investigation in the alleged "colossal sums in tax evasion" by Armcor. If these people are evading taxes why not try them and put them in jail?

Before that five other foreign business people from Nigeria, Italy and Egypt were deported. Egyptian Shafik Mohammed owned a hospital in Livingstone before he was deported in March. According to GRZ, Mohammed was arrested and convicted for unlawful possession of restricted drugs. He was deported under the Immigration Act. But other reports said he was deported as his wife would not join the ruling Patriotic Front. We will never know the truth except that due process appear not to have been followed!

Two Italian citizens — the operations director and the marketing director of Zambezi Portland — had their residence permits revoked and cancelled. GRZ said the work permits were not renewed, following reports of abuse of workers. The Home Affairs Ministry official position is that the business environment in Zambia remains supportive to law-abiding investors and those doing genuine business need not worry. Again if these people are engaged in illegal activities why not arrest them and put them on trial?

The truth is that there appears no legal basis for some of the actions in these cases. As we have seen over the last year some foreigners have been thrown out without following the due process of the law or the state has simply ignored decisions of the courts. And sometime even Zambians have been “deported” or dumped abroad because of a personal quarrel with some high ranking politician! Many of them being accused of being foreigners when they gave lived in Zambia all their lives. 

The KCM and other such cases serve as perfect illustration of how government’s poor administrative and regulatory capacity is often abused with a high-handed approach in the treatment of some foreigners. Instead of PF owning its policy mistakes it has resorted to using businesses as scapegoats for government’s policy failures. Bundling foreigners out of the country and cancelling visas arbitrary is not the way to restore the current dwindling confidence in Zambia as an investment destination.

Chola Mukanga | Economist
Copyright © Zambian Economist 2013

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