INDUSTRIAL SABOTAGE

Thu, 31 Aug 2017 10:17:45 +0000

PRESIDENT Edgar Lungu’s decisive intervention in the two-week long power supply tariff dispute between the Copperbelt Energy Corporation (CEC) and Mopani Copper Mines (MCM) cut through verbiage to the core.

He ensured that full power was restored to Mopani while disputed issues were being discussed and resolved over a roundtable.

The President did not pander to the oversimplification of issues but recognised the need for a logical, functional and more importantly practical solution that served the best interests of the nation.

Clearly, switching off or restricting power to Mopani was not an option.

Instead, the full 250 megawatts of power have been restored to Mopani and the two parties have been given six weeks in which to resolve outstanding issues.

The seriousness of the matter was clearly manifested by the statement from State House which alluded to other outstanding matters, including Value Added Tax (VAT) refunds and transfer pricing refunds disputes.

The issues were thus deeper than the public was made to believe and hence the decisive intervention of the President.

In our view, and as we have reiterated before, it was a big mistake and a betrayal of national issues for power to be restricted on account of issues that would have been resolved around a conference table without putting the mines into peril and with it putting thousands of jobs on the line.

Power disruption should have only arisen after arbitration through courts of law as provided for in the Power Purchase Agreement that was legally binding and therefore obliged both parties to honour in observance and not in breach.

There are many lessons to be learnt from this very unfortunate occurrence, the first being that Government must have reliable people in critical positons of governance, industry and commerce who will put the interest of the nation first before putting their profit or bottom line in the fore.

This situation would not have arisen if Government representatives on CEC had taken measures long before power was interrupted to either seek a resolution of the dispute through the courts or indeed seek Government’s intervention in resolving disputes that were bound to bring about a breach of public policy, namely the decision to remove subsidies on power and therefore ensure cost reflective tariffs.

Cost recovery is a fundamental policy which neither Mopani nor any other institution had latitude or discretion to disregard.  If anything, they would do so at their own peril because Government has options to ensure compliance, and governments all over the world have often resorted to drastic measures to enforce such public policy.

Zambia has just emerged from the one-party state where the mines were nationalised in the name of national interest when foreign owners appeared to put profits before national interests.

Indeed, it is not the duty of the government to meddle in corporate governance.  That is why such institutions as ZCCM-IH and golden shares are acquired in privatised mining companies and indeed on CEC to protect the best interest of the nation and ensure residual influence.

The recent fiasco at Mopani and what indeed transpired against other mines, including FQM, must awaken Government to the fragility of the present structure where power is reposed in an institution that will wily nilly imperil national interests.

This is not time for political naivety.  Strong forces are ranged against this regime.  These are forces seeking to reassert themselves through local proxies masquerading as political saviours.

As the political atmosphere in the country heats up in the run up to the 2021 elections, these aberrations will manifest themselves in many forms to embarrass and undermine this regime.

Serious thought must be given to re-alignments and restructuring to put the right people in the right places and ensure that appropriate institutions with the correct ethos are put in critical positions of influence and power.

Failure to do so will have ruinous results.