Govt proposes parastatals law

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THE State Enterprises and Parastatals ministry has proposed a legislative review of the law regulating State enterprises arguing that the current legislation is fragmented.

Own Correspondent

According to the proposal expected  to be submitted to Cabinet  this  year, the challenges besetting State enterprises include a fragmented approach to regulations, lack of independence of regulators, absence of regulators in some sectors, multiple regulations, mixing of ownership and regulatory functions.

“In Zimbabwe, regulation approach in the electronic communication sector, as an example, is fragmented,” part of the proposal reads.

“There seems to be no co-ordination of the various activities of the two regulators in this sector, the Broadcasting Authority of Zimbabwe (BAZ) and Post and Telecommunication Regulatory Authority of Zimbabwe (Potraz)”.

“For example, Potraz regulates electronic transmission of data and information. This same function is also carried out by BAZ and the two bodies report to two different authorities” the report added.
The ministry said the apparent duplication of roles does not only relate to internal operations, but also affects relations with international organisations such as the International Telecommunications Union (ITU).

The proposal also indicated that, in some cases, regulators with the responsibility to supervise both private and public players are supervised by the same authority with ownership function for public players.

According to the proposal, under such circumstances, the regulators’ independence and the requirement for a level playing field for both private and public sector service providers is compromised.
“Board appointment procedures also have an effect on the independence of regulators,” the proposal says.

“Procedures which do not provide for stakeholder consultation and involvement in board appointments compromise the independence of regulatory authorities,” the proposal added.

The ministry said the bottom line of such a scenario was the absence of a level playing field for both public and private sector players in the provision of services, and thereby compromising the consumers’ rights to fairly priced and quality services and products.

Some of the objectives of the report are to provide recommendations to improve efficiency in the regulatory environment and that all State Enterprises and Parastatals (SEPs) operate within a regulated environment, that there is a separation of regulatory functions from ownership functions; SEPs should not be both players and regulators in one; regulators should not duplicate the same functions and regulators operate independently from stakeholders, among other things.

The ministry said adherence to regulatory objectives will promote corporate governance principles of accountability, transparency, responsibility and fairness, promote competition in the market and create a generally level playing field for market players and prevent abuse of market power such as excessive pricing, among other things.