On April 15 2010 all companies in Zimbabwe are required, under the new Indigenisation and Economic Empowerment Act, to provide an indigenisation implementation plan to the government. Indigenisation means that 51% of shares in all companies with asset values over $500,000 must be owned by indigenous Zimbabweans. The law discriminates based on race. However, they function as an affirmative action plan which intends to advance the interests of people who were previously discriminated against. Much like the land reform programme this new scheme will compensate for years of discrimination under white rule in Zimbabwe.
The United States has decades of experience with affirmative action programmes for example the Civil Rights Act of 1964 prohibiting discrimination based on race in a program or activity that receives federal funding. Additionally, South Africa has implemented the Broad Based Black Economic Empowerment Act to remedy past discrimination there. All of these programmes have their critics. Often only specific groups or people benefit from them. Also, the dominant group that is now excluded from preferential treatment-feel s mistreated. Indeed, the State of California passed Proposition 209 in 1996. This initiative amended the California Constitution and prohibited public institutions from considering race, gender or ethnicity for public employment, education or contracting. In 2009, the US Supreme Court held that the city of New Haven Connecticut committed reverse discrimination by failing to promote white fire-fighters who performed well on an exam, in order to promote minority fire-fighters. See Ricci v. DeStefano, 557 US (2009).
All the Indigenisation law in Zimbabwe does is exactly what all the other affirmative action laws worldwide do. Is it possible however that the SADC tribunal ruling finding the land programme in Zimbabwe illegal and now registered in South Africa could set a legal precedent for companies seeking to defeat the Indigenisation law? A company, who felt discriminated against under the new Indigenisation law, would need to sue the government of Zimbabwe under a SADC tribunal and receive a favourable judgment. The question is how likely is the government of Zim going to participate in such a process? Not likely at all given previous results and Zim’s demonstrated defiance for unfavourable SADC policies. Also, it is possible that corporations do not have standing to claim discrimination.
In the US, a corporation may sue for racial discrimination. There are many cases in this area but I will focus on a recent case from the Ninth Circuit. The court held in Thinket Ink Information Resources, Inc. v. Sun Microsystems, Inc., No.02-16754 (9th Cir. May 17, 2004) that when a corporation has a racial identity it can then sue for discrimination. The corporation in question was a minority owned business. The case essentially holds that while a corporation has to protect its employee’s civil rights it can also sue for violation of the corporation’s civil rights. Of course, this right may not be available for companies under Zimbabwe law.
Perhaps Zim companies could sue in South Africa or maybe even in the US. The Alien Tort Claims Act (ATCA) is the new way to gain access to US courts. All you need to show is a violation of a norm of international law under the colour of state authority and you need to be an alien. See Kadic v. Karadzic Certainly freedom from racial discrimination, if that is what the Indigenisation law is, is a human right. The African Charter on Human Rights for Africa and the Convention on the Elimination of all forms of Racial Discrimination say so. The ATCA will be further defined by the decision in the Second Circuit Court of Appeals this year. The plaintiffs are the human rights organisation Khulumani Support Group who is suing multinational corporations operating in South Africa. If claimants are successful, there will be a new kind of corporate responsibility that multinational corporations will need to embrace and it will be distinctly political. Corporations will need to become more sensitive to government policies when they do business around the world. Just like affirmative action these new responsibilities will have benefits and burdens.
It just makes me wonder if some of this legal activity might develop precedents that are unexpected. If laws develop that ask corporations to act more like people in a global community then corporations might start asking for people rights as well.
Where does this leave the companies in Zimbabwe? While Americans are filing their tax forms before midnight on 15 April, companies in Zim will be filing some forms of their own. Discrimination is bad and bad things happen when there is a lack of equality. The Indigenisation law is here to stay and it might help to include a previously excluded population in the business of Zimbabwe. It might help train a new generation of skilled workers. Unfortunately, affirmative action programmes have never been that simple in the US, or elsewhere for that matter. In general, law, all law, often makes things much worse and lawsuits always do.
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