Zim to engage Germany, Netherlands over land compensation

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Bernard Mpofu

Zimbabwe will soon engage in high level negotiations with Germany and the Netherlands on the compensation of evicted former white commercial farmers who lost their land during the land reform exercise, Business Times can report.

The upcoming high-level negotiations come as the former commercial farmers have tabled an over $4 billion compensation claim, and after the government set up a committee to compensate farmers who lost large tracts of land as pressure mounts on Zimbabwe to normalise relations with the West.

Sources told this paper that the mapping and valuation of improvements on farms acquired under the Land Reform Programme is almost complete, paving way for talks between affected countries and Harare.

“The evaluation process in 9 of the country’s 10 provinces has been completed,” the source said. “The evicted farmers have completed their process of evaluation and they have pegged the compensation cost at around $4 billion.

“There is an inter-ministerial committee which works with Vice President Constantino Chiwenga on this issue and once this process is completed, the parties involved will meet and agree on the final figure and map out payment modalities.”

Agriculture Minister Perrance Shiri and Finance Minister Mthuli Ncube confirmed in a statement that the valuation is expected to be completed soon.

“In this regard, the Ad Hoc Working Group, comprising government officials and representatives of former farm owners, is currently working towards the computation and the establishment of the compensation quantum figure for farm improvements based on an agreed method of valuation,” the two ministers said in a statement. “It is anticipated that the comprehensive farm improvements valuation exercise will be completed by the end of May 2019.”

Thousands of white farmers from the United Kingdom, Australia, Belgium, Germany and the Netherlands lost vast tracts of land when the government embarked on an agrarian reform to address the colonial legacy of stolen land from the indigenous people.

The programme, which saw some Bilateral Investment Promotion and Protection Agreements being violated, triggered the European Union to slap sanctions on Zimbabwe which paralysed the economy, including agriculture output. The sector is now on a recovery path.

So emotive has been the land issue that some Western governments continue to place the issue at the top of the re-engagement agenda.

Last November, government’s efforts to resolve long-standing disputes around the land reform exercise suffered a setback after a World Bank affiliated international appeals court dismissed Zimbabwe’s application to annul an award granted to a former white commercial
farmer by the court.

In July 2015, an International Centre for Settlement of Investment Disputes (ICSID) tribunal awarded the von Pezold family the return of property and damages (alternatively $195m in damages), plus their full legal costs and interest.

The damages were among the highest ever awarded by an ICSID tribunal and represented about 80% of the damages claimed, which is a very high ratio for ICSID arbitrations.

In its award, the tribunal found that Zimbabwe had breached the bilateral investment treaties that it had with Germany and Switzerland when it expropriated the von Pezolds’ property in 2005, and also treated the von Pezolds unfairly and inequitably in regard to their foreign exchange earnings.

This year, Mthuli Ncube said the Treasury had budgeted $53m to compensate evicted farmers, adding that government was seeking more financial support to resolve the issue.

“While work on the extent of government obligations is still to be finalised, the resources required to compensate and put closure to this important issue is obviously beyond the capacity of the Budget to finance,” Ncube said during his 2019 National Budget presentation.

“In this regard,” he went on, “the government is engaging international financial institutions and other stakeholders in exploring various sustainable options for mobilising the requisite compensation resources. Given the limited fiscal space, the 2019 Budget makes provision of US$53m for payment of compensation to former farmers, to show commitment to this obligation.”