On 25 July 2015 President Mugabe set up a Commission of Inquiry to probe the process used to convert pensions and insurance benefits following the dollarization of the economy in 2009. This is a welcome development which was long overdue. This process is essential in terms of addressing the mayhem caused to Zimbabwean workers and pensioners during the inflationary Zimbabwe dollar period. Thousands of workers and their dependents lost the real value of their pensions and this lacuna needs government intervention at the least. It would seem the corporate world took advantage of a lax system and benefitted unfairly. This matter raises 3 issues 1) questions on the part of the government of Zimbabwe’s responsibility to give protection to its citizens from rogue private corporate entities; 2) corporate bodies and fair business conduct and 3) the right to remedies for pensioners shortchanged in the process of converting Zimbabwe dollar pensions to the US currency.
The first thing to note in this whole discussion is to admit that the Zimbabwe Government and statutory bodies charged with regulating the Life Insurance and Pensions fraternity failed to “protect” citizens by intervening at the time they were needed the most – when the insurance companies started making unilateral decisions on what rate of exchange and value they would place on pensioners’ contributions. This given, it is important that the government of Zimbabwe realizes henceforth that there is need to come up with a proper plan in the event that problems arise again. This discussion would warrant stricter measures set on institutional reform in the insurance and pensions industry to govern such in the event of an economic collapse, company closures etc.
Furthermore, it will be interesting to juxtapose this discussion on the conversion process and to see what rates will be used to determine the real value of the Pensions as at 2009 and the recently implemented rates used in the highly controversial (https://tchabvuta.wordpress.com/2015/06/30/what-exactly-is-this-animal-called-demonetization-in-zimbabwe/) demonetization process. There will have to be uniformity in purpose on the part of the government in terms of dealing with the lacuna of the wrongs of the past.
Secondly, this development will of course not go down well with business especially the insurance firms who have now been placed at the center of “inquiry”. For a long time after the dollarization process these companies in my view enjoyed undeserved profits from the unilateral conversions they made on pensioners’ contributions. In the event they are found wanting they might have to review their finances and pay out more and this will be contentious on the basis of what laws to follow, what rate to use and so on. However, I believe that this process calls for corporate social responsibility and moral accountability on the part of insurance companies to ensure that they “give to Caesar what belongs to Caesar”. I am not an economist or finance expert but it honestly does not make sense that one contributes funds into a pension fund which then invests in high rise buildings, stocks and so on and then one day you work up to be told that your contributions have been reduced to half or are not even worth following up because INFLATION devoured the money. It cannot be right!
Thirdly on the part of pensioners, this discussion centers more on the need for redress of the wrongs of the past. To what extent this becomes a matter for transitional justice debate I would not be sure, but I definitely think that there is some merit in placing this issue under the myriad of issues being pursued on transitional justice in Zimbabwe. The matter whilst economic, requires some form of justice in the form of compensation for any losses incurred; it requires restoration of peoples’ confidence in financial institutions and their investments (Institutional Reform) and the need for the truth to come out on what exactly happened during the conversion processes.
The work of the Commission
The work of the Commission is clearly cut out for them and it will be interesting to see how they handle this one on a number of aspects. The statutory instrument establishing makes it clear that the commissioners have jobs for a period of 9 months which can be extended for another 3 months. I find this overly long but well I guess these people know better what and who they have to investigate to get to the bottom of the matter.
Legal Questions: The next question is on a question of operation. To what extent will the findings of the Commission be implementable especially in the light that the insurance companies might be found wanting. The government has advisors and they should have discussed the legal consequences of such processes by now. It will also be interesting to see if the assurance companies can be retroactively held liable if found to be in breach and generally how this will define government’s relationship with corporate bodies in future.
Transparency: Another issue relates to the transparency of this process. Previous Commissions set up to deal with investigations on human rights violations, football stampedes etc. have been a disappointment to the public. The deliberate ploys by government to ignore civil society and offer half – hearted overtures such as the defunct Organ on National Healing and the still born National peace and Reconciliation Commission to handle past human rights violations are well noted. Government has not even considered investigating the high levels of corruption at institutions like the Reserve Bank when senior officials were “burning” money and buying US dollars, the rampant theft of gold, how NGOs and Embassies forex accounts were raided during the peak of the economic crisis etc.
Integrity of the Commissioners: It will be interesting to see what will come out of this body. People like Dr. Kanyenze would be reminded to ensure they maintain their professional and personal integrity and deliver a good job. The 9 member Commission would be well advised as well to ensure that they will be able to live with the realities they will encounter in their investigations and be able to stand up to the “regime” and make the report public. In the event or likelihood that this will not be possible, they are better advised to stand down. Knowing Zimbabwe and the tough times we are in, a good Commissioner’s allowance is not easy to fend off though, so let’s see.
Interrogating Government’s own policies: It will also be important to see and get information on how the government has dealt with own staff and pension funds. This is information that should be in the public domain and government could begin their transparency by giving out such information.
The bottom line is that while the Zimbabwe government can be lauded for coming up with such a process, it would be much more important to have a national dialogue first on these matters to collect views from the nation and all stakeholders. A more robust discussion on transitional justice needs to be held at a national level to discuss what happened during the economic crisis in the years between 1999 – 2008 and a whole host of other pertinent issues is really delayed and must be convened.
Tendai Chabvuta 