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By Veritas
The Private Voluntary Organisations Amendment Bill [link] was published in November last year and aroused a storm of protest from civil society. Veritas analysed it in Bill Watches 72/2021 of the 11th November 2021 [link] and 74/2021 of the 15th November 2021 [link], and found the Bill to be unconstitutional, inimical to freedom of association, ill-conceived and badly drafted.
Nevertheless the Bill received its first reading in the National Assembly and was passed as constitutional by the Parliamentary Legal Committee. It is currently undergoing its Second Reading in the Assembly. A week ago, on the 8th of June, the Minister of Public Service, Labour and Social Welfare published a long list of amendments he proposes to put forward during the Bill’s Committee Stage. The amendments can be accessed on the Veritas website [link] and so can the Bill with the amendments incorporated into it [link].
In this bulletin we shall examine the Minister’s proposals to see if they make the Bill any more acceptable.
What the Amendments Will Do
Increase Government’s power over trusts
The amendments will delete provisions in the Bill which would have allowed the Registrar of PVOs to require trustees of any trust either to forswear their right to collect funds for charitable purposes or to register their trust as a PVO. In place of these provisions, however, the amendments will insert a new section 6 in the PVO Act [“the Act”] which will:
· require any trust that collects funds for charitable purposes to register under the Act,
· prohibit anyone from collecting funds from the public except in accordance with the Act – which means that only registered PVOs will be allowed to do so,
· debar unregistered PVOs from receiving funds from the State, and
· permit the Registrar to require any trust to get itself registered as a PVO, and
· make trustees and their trusts jointly liable to criminal penalties for failure to comply with the new section.
Comment: The new provisions are clearer than the ones they replace and will give the Registrar – i.e. the Government – greater power to control trusts.
Are the provisions constitutional? No, because they limit freedom of association and, as we explained in our Bill Watch 72/2021, any limitations on that freedom must not only be fair, reasonable and justifiable, they must also be necessary in a democratic society and, in addition, they must meet two further tests:
· they must not impose greater restrictions on freedom of association than are necessary to achieve their purpose, and
· there must be no other less restrictive means of achieving the purpose of the limitations.
The new provisions cannot be said to meet these tests.
Abolish the PVO Board and increase the Registrar’s powers
The amendments will abolish the PVO Board, a body with some PVO representatives which is responsible for approving the registration and de-registration of PVOs and advising the Minister. The Board’s functions will be transferred to the Registrar, a civil servant in the Minister’s Ministry. The Registrar will be largely under the Minister’s control: he or she will have to comply with general policy directives the Minister may give in terms of a new section 22D.
Comment: Abolition of the PVO Board, which provided some representation for PVOs, is undemocratic and regrettable.
Annual PVO forums
The amendments will insert a new Part IIA into the Act requiring the Registrar to convene annual forums bringing together representatives of PVOs to discuss issues of mutual interest. A pre-forum committee appointed by the Registrar will propose a list of participants to attend a forum and an agenda of matters to be discussed at the forum, but the final decision on those matters will rest with the Registrar.
Comment: The PVO forums seem to be an expensive way of ensuring that PVOs all sing from the same songbook – a songbook written by the Government.
Registration of PVOs
The amendments will insert a new provision in section 9 of the Act requiring anyone applying for the registration of a PVO to provide the Registrar with particulars of any beneficial ownership and of the persons who control the organisation.
Comment: Although inelegantly worded, the provision will help to ensure transparency, which is needed if PVOs are to avoid suspicion that they are being used for money laundering or terrorist financing.
Appeals
Appeals against the Registrar’s refusal to register PVOs or a decision to cancel the registration of a PVO will be made to the Minister under a new section 14. The Minister’s powers under the new section will be very limited. Unlike the existing section, which allows the Minister to confirm the decision appealed against or to give such other decision as he or she considers should have been given, the new provision will restrict the Minister to exercising review powers: he or she will be allowed to set aside a decision only on procedural grounds: for example, if the Registrar showed bias or malice, or failed to take relevant factors into account, or if the decision was grossly unreasonable.
Comment: The new provision effectively makes the Registrar’s decisions final, immune from appeal, except on narrow procedural grounds. It would be far better if the new section gave a genuine right of appeal to a court such as the Administrative Court.
Political activism
The Bill in its current form contains a provision that would allow the registration of a PVO to be cancelled if it engages in political activities. The nature of the activities that might trigger cancellation is not clearly stated in the Bill.
The Minister’s amendments will replace that provision with two new ones:
· a statement of principle in a new section 20A, that PVOs are not to conduct themselves in a politically partisan manner whether in the use of their resources or in selecting members. There is no express sanction for PVOs that breach this principle, but it could be regarded as a “failure to comply with the provisions of this Act” which would justify the Registrar refusing to register a PVO under the new section 9(5)(b).
· a new section 23(4) which will make it a criminal offence, punishable by a fine of level 12 (currently Z$200 000) or a year’s imprisonment or both, for a PVO to support or oppose a political party or candidate in an election, or – in the case of a foreign PVO – to donate funds to a Zimbabwean political party or candidate.
Comment: The new provisions are a bit clearer than the ones they will replace, but just as unconstitutional. What we said in Bill Watch 74/2021 [link] about the old provisions applies equally to the new ones: they contravene sections 58 and 67 of the Constitution.
There is one point we did not make in our earlier Bill Watch: war veterans’ associations formed to promote the welfare of war veterans will not be permitted under the new provisions to support any political party or candidates.
Co-operation and information sharing with foreign regulatory agencies
The amendments will insert two new sections 22B and 22C which will allow the Government to enter into agreements with foreign regulatory agencies for co-operation in the registration and administration of PVOs and the sharing of information about them. The agreements may be made so as to operate retrospectively.
Comment: In the interests of transparency it should be mandatory that any such agreements should be publicised. It is not clear why agreements should be made retrospectively or what the effect of retrospective agreements would be.
Civil penalties
Clause 11 of the Bill will insert a new Schedule providing for the imposition of civil penalties for certain contraventions of the Act. The Minister’s amendments will replace the Schedule with a new one that is substantially the same except in one respect: it will allow the Registrar to impose civil penalties on PVOs in two new circumstances:
“if there is well founded information available to the Registrar indicating that [the PVOs have] received any donation from an illegitimate or immoral source.”
and
“if there is well founded information available to the Registrar indicating that [the PVOs have] not used formal channels (that is to say registered banking institutions or other financial intermediaries regulated in Zimbabwe or in any other state) for the transmission of … funds at every point from source to destination.”
Comment: The first of these provisions is certainly unconstitutional because it is far too vague for a penal provision and offends against the rule of law which demands that laws, particularly penal ones, must be intelligible, clear and predictable. The rest of the Schedule is probably unconstitutional for the reasons given in our Bill Watch 74/2021 [link]:
· There is no provision for a court to confirm the imposition of a civil penalty and its amount, hence the penalty may be imposed arbitrarily and its amount fixed without proper regard to all the circumstances.
· No appeal is allowed against a civil penalty order, except to the official who imposed it and on very limited grounds, namely that the order was issued erroneously due to a material dispute of fact; or that the default was not wilful; or that the default was the result of circumstances beyond the defaulter’s control. No other grounds, such as error of law, are allowed.
· All the officers of a defaulting PVO can be liable to pay a civil penalty, regardless of their individual fault. They are also all criminally liable if the penalty is not paid.
Amendments to other Acts
The Minister’s amendments will add no fewer than 24 new clauses to the Bill to amend the Money Laundering and Proceeds of Crime Act and the Criminal Matters (Mutual Assistance) Act in order to provide for something called “proliferation financing”, which means funding the illegal proliferation of nuclear, chemical and biological weapons.
Comment: The new clauses have nothing directly to do with PVOs and should not be part of the Bill. They certainly should not be added to the Bill at this late stage, after it has had public hearings and has been considered and reported on by the relevant parliamentary portfolio committee [link]. The public has had no opportunity to examine the new clauses and communicate their views about them to the portfolio committee. Arguably their late insertion in the Bill violates section 141 of the Constitution, which obliges Parliament to facilitate public involvement in legislation and to ensure that interested parties are consulted about Bills.
What the Amendments Will Not Do
The Minister’s amendments will leave many of the Bill’s worst provisions unchanged:
Minister’s power to require certain PVOs to register
Clause 2(b) of the Bill will insert a new provision into the Act allowing the Minister to make regulations permitting him or her to designate associations that he or she deems to be at high risk of misuse by terrorist organisations (but not, oddly, at risk of being used for money laundering or proliferation financing). Those designated organisations will have to register as PVOs under the Act and will have to comply with such other measures as the Minister may prescribe.
Comment: There are obvious problems with this provision:
· It will give the Minister of Public Service power to control associations of any kind – companies, partnerships, social clubs and trusts.
· There will be no appeal against the Minister’s designation of an organisation or against the measures he or she may prescribe.
Suspension of committees of PVOs
Clause 7 of the Bill will replace section 21 of the Act which empowers the Minister to suspend the executive committees of PVOs. The existing section was declared unconstitutional by the Supreme Court in 1997 on the ground that it does not afford PVOs an opportunity to be heard before the Minister suspends their committees.
Comment: As we said in our Bill Watch 74/2021, the new section rectifies that, at least in part, by requiring the Minister to get an order from the High Court before committee members can be suspended, but there are still problems with it:
· The new section is incoherent. Although it begins by requiring the Minister to apply to the High Court for an order suspending committee members, later on (in subsection (5)) it seems to imply that the Minister can suspend them before applying for an order.
· One of the grounds on which the Minister can apply to the High Court for the suspension of committee members, that “it is necessary or desirable … in the public interest”, is excessively wide. It means that members can be suspended even if they have not been guilty of maladministration and have not been involved in illegal activities.
· The Minister’s power to appoint a provisional trustee without affording the PVO concerned a hearing breaches the rules of due process enshrined in section 68 of the Constitution.
· The provision for a trustee to register a High Court order in a magistrates court for purposes of enforcement does not make sense, since a High Court order is enforceable by the High Court.
Assessment of risk for purposes of FATF standards
Clause 8 of the Bill will insert a new section 22 into the Act requiring the Minister, at least once every five years and with the co-operation of the Reserve Bank’s Financial Intelligence Unit, to assess the vulnerability of PVOs and other similar organisations to being used for terrorist financing – though not, it may be noted, for purposes of money laundering or proliferation financing.
Comment: There are problems with the new section, as we said in Bill Watch 74/2021, and they have not been rectified by the new amendments:
· PVOs and their representatives will have no say in the assessment of PVO vulnerability. This is contrary to what the Financial Action Task Force [FATF] says, that countries should work with PVOs and civil society organisations during the risk assessment process. It also infringes the rules of natural justice enshrined in section 68 of the Constitution, one of the most important of which is the right to have a voice in decisions that affect one’s interests.
· It is not clear how the Minister is to designate vulnerable organisations that are required to register as PVOs.
· The penalty for failing to register as a PVO when designated under the section is grossly excessive, completely disproportionate to the offence. Disproportionate sentence constitute cruel or degrading punishment for the purposes of section 53 of the Constitution.
· There will be no effective appeal against the Minister’s decisions.
Conclusion
The Minister’s amendments will not improve the Bill to any material extent. They will clarify some of its provisions, and clarification was sorely needed: BUT the Bill, as we have said before, is marred by vagueness and incoherence. The amendments will not do a complete job even in clarifying the Bill – for example, the definition of “material change” in clause 6 remains gibberish.
Even with the amendments, the Bill will remain what it was: a weapon to be used by the Government against civil society, free speech and freedom of association. It will not enhance Zimbabwe’s image in its efforts to reengage with the international community and in seeking foreign investment.