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Cablegate: 2007 Report On Investment Disputes and Expropriation

VZCZCXRO9627
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0543/01 1701501
ZNR UUUUU ZZH
R 191501Z JUN 07
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 1613
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHUJA/AMEMBASSY ABUJA 1632
RUEHAR/AMEMBASSY ACCRA 1499
RUEHDS/AMEMBASSY ADDIS ABABA 1636
RUEHBY/AMEMBASSY CANBERRA 0902
RUEHDK/AMEMBASSY DAKAR 1264
RUEHKM/AMEMBASSY KAMPALA 1692
RUEHNR/AMEMBASSY NAIROBI 4104
RUEHFR/AMEMBASSY PARIS 1461
RUEHRO/AMEMBASSY ROME 2122
RUEHGV/USMISSION GENEVA 0761
RHEHAAA/NSC WASHDC
RUCNDT/USMISSION USUN NEW YORK 1853
RHMFISS/JOINT STAFF WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHDC//DHO-7//
RUCPDOC/DEPT OF COMMERCE WASHDC
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK//DOOC/ECMO/CC/DAO/DOB/DOI//
RUEPGBA/CDR USEUCOM INTEL VAIHINGEN GE//ECJ23-CH/ECJ5M

UNCLAS SECTION 01 OF 03 HARARE 000543

SIPDIS

SIPDIS
AF/S FOR S. HILL
MSC FOR SENIOR AFRICA DIRECTOR B. PITTMAN
STATE PASS TO USAID FOR L. DOBBINS AND E. LOKEN
TREASURY FOR J RALYEA AND T. RAND
COMMERCE FOR BECKY ERKUL
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
EB/IFD/OIA FOR HEATHER GOETHERT
L/CID FOR SAN MCDONALD

E.O. 12958: N/A
TAGS: CASC EINV KIDE OPIC PGOV
SUBJECT: 2007 REPORT ON INVESTMENT DISPUTES AND EXPROPRIATION
CLAIMS - ZIMABAWE

REF: A) STATE 55422

B) 06HARARE0972

1. The US Government is aware of eight (8) claims of US persons
which may be outstanding against the Government of Zimbabwe (GOZ).
All eight claims arise out of the GOZ's Land Resettlement Program,
which commenced in 2000. The general pace of land seizure has
slowed, as very few non-indigenous commercial farmers are left on
their properties. Nevertheless threats of seizure by individuals
and government officials are unabated and disruptions to the
operation of the remaining non-indigenous commercial farmers are
frequent.

2. Under its continuing Land Resettlement Program, the GOZ has
targeted almost all farm or wildlife property owned by
non-indigenous landowners for compulsory acquisition. The GOZ has
consistently maintained that no compensation will be made for land
itself, but that compensation will be made for improvements to the
property. However, to date, the GOZ has not compensated any
American claimants for either acquired property or improvements to
property. Disruptions posed by land reform and the economy's
generally chaotic conditions complicate meaningful valuation of the
land or of any improvements made. However, the values of the eight
American citizen claimants properties at issue range from $100,000
to more than $2,000,000.

3. In 2005, Parliament amended the constitution to grant title to
the government of all agricultural land acquired in the past under
the land reform program and any agricultural land that may be
acquired in the future. The amendment removed the right of
landowners, whose land has been acquired, to challenge the
acquisition in court. There has been no progress either on the
ground or in the courts to resolve compensation issues for the
American-owned properties. Because of judicial and political chaos
during the land seizures, it is difficult to state precisely when
most of the eight landowners were legally dispossessed. Therefore,
the dates of expropriation offered below are approximations only.

4. All eight properties have received either Preliminary or Final
Notices of Acquisition from the GOZ. Most of the American citizens
affected have not asked the Embassy to intervene beyond raising the
issue of compensation with appropriate GOZ officials in our normal
course of meetings and through diplomatic notes.

5. a. Claimant A
b. 2002
c. Claimant A reported that his property had been invaded by
approximately eight war veterans, and that a prosperous and
connected Zimbabwean was grazing his cattle on the property.
Approximately 60 sables had been released from a grazing pen and had
subsequently disappeared - either escaped from the property or
poached. Post has not had contact with Claimant A in the past year.


6. a. Claimant B
b. 2002
c. Claimant B had an 85-hectare flower-exporting farm that was
listed for compulsory acquisition by the GOZ under an initial notice
of acquisition (Section 5 notice). In 2004 the Mashonaland East
Governor signed a "delisting" form, but the Local Government and
Land Ministries refused to assent. Claimant B then attempted to
sell his property to the nephew of the Chief Justice of Zimbabwe's

HARARE 00000543 002 OF 003


Supreme Court, but the sale fell through as the nephew reneged on
payment. Claimant B is off the farm, and the Commander of the
Zimbabwe Defence Forces, General Constantine Chiwenga, currently
farms the land. Post has not had contact with the claimant in the
past year.

7. a. Claimant C
b. 2003
c. Claimant C received a final notice of acquisition (Section 8
notice) in January 2003. Claimant C purchased the 7,618-hectare
property in 1985 with Zimbabwe Investment Center (ZIC) certificates
to run a hunting and photographic safari business. The property is
part of a 17-farm, 80,000 hectare private wildlife conservancy that
receives donor funding for the conservation of black rhinos.
However poaching in recent years has reduced the black rhino
population from 55 to 22 and jeopardized donor funding. The
conservancy owners are being harassed by some members of the local
population, who are demanding a revenue share in the conservancy.
Claimant C has stopped his safari business as he claimed invaders
had poached all of the game. Claimant C had been protesting the
acquisition through Zimbabwe's courts. After receiving permanent
residency in South Africa, Claimant C was laying the groundwork to
emigrate but, at last contact, was unable to secure the proper
documentation to move personal belongings out of Zimbabwe. Claimant
has not responded to inquiries from Post.

8. a. Claimant D
b. 2002
c. Claimant D's rural wildlife-based property, which was
transferred from a Zimbabwean spouse to a trust benefiting the
couple's two US citizen children, is located in the district of
Hwange. Claimant D used the 420-hectare property primarily for
hunting and photographic safari purposes. The property was
allocated to a Zimbabwean settler who has done nothing with the
land. Claimant D left the farm on October 1, 2002 and the settler
kicked off all of Claimant D's employees by March 2004. Claimant D
has asked the Embassy not to pursue this case through official
channels. In June 2007, the Claimant informed Post that there had
been no developments in the claim in the past year. The Claimant
believes that the settler who received the farm has vacated the
property and it is now uninhabited.

9. a. Claimant E
b. N/A
c. Claimant G has received a Section 5 notice but is still
in possession of the property in the district of Bikita in southern
Zimbabwe. This property is dedicated to a 26-farm wildlife
conservancy containing both black and white rhinos. The GOZ has
announced plans to implement a land tenure scheme whereby title of
conservancies reverts to the State, which then grants a 25-year
lease to each property owner. In return, the current owners would
agree to indigenize their businesses through shareholder equity.
The 25-year leases would be automatically renewable, but not
transferable. Ambassador Dell raised Claimant E's case with
Environment and Tourism Minister Francis Nhema, who indicated that
he would like to see Claimant E and the rest of the conservancy join
the Trans-Frontier Conservation Area (a park linking tracts in
Zimbabwe, Mozambique, and South Africa). Claimant E informed us in
June 2007 that he, along with other conservancy members, continues
to negotiate a solution with the GOZ.

10. a. Claimant F

HARARE 00000543 003 OF 003


b. 2004
c. Claimant F owns a 996-hectare farm in his American wife's
name after Claimant F's son ran the farm into bankruptcy. Claimant
F does not have a Zimbabwe Investment Certificate. Claimant F was
able to move much of his irrigation and farm equipment off the
property prior to losing control of the farm but lost 170 head of
cattle. Settlers first arrived on the farm in 2000 but Claimant F
maintained good relations with them and local police, and he
continued to have access to the farm until 2004. From May to July
2004, Claimant F received Section 5 and Section 8 notices of
acquisition and asked the Embassy to write a diplomatic note
protesting the intended acquisition. The Embassy did so and
received a pro forma response. Shortly thereafter, Claimant F was
no longer afforded access to the farm and was effectively
dispossessed of the land. There have been no further developments
on the ground and Claimant F decided not to use the courts as the
GOZ was not enforcing judgments adverse to its own interests. In
June 2007, Claimant F informed Post that there had been no change in
the status of the claim in the past year.

11. a. Claimant G
b. N/A
c. Registered in 1997, Claimant G is a subsidiary trust of a
California-registered Non-Profit Religious Organization that planned
to establish an environmental and life skills teaching center
operating near Kadoma. Claimant G purchased the 160-hectare parcel
in 1999 but has been unable to obtain a proper transfer of title.
Nonetheless, in addition to having exclusive use of the land since
1999, Claimant G has the Agreement of Sale as proof of purchase. In
November 2004, Claimant G received a Section 5 initial notice of
acquisition, to which it responded in court as well as by
correspondence to various Zimbabwean government entities. Claimant
G also received a Section 8 notice of immediate acquisition, which
it is was contesting in the courts. Post has had no contact with
Claimant G in the past year.

12. a. Claimant H
b. 2006
c. Claimant H informed the Embassy in April 2006 that he was
the owner, along with his non-American citizen parents, of a 33
hectare plot in Nyanga, Eastern Highlands. Claimant H resides in
Mozambique; his parents reside on the Nyanga site, where they grow
apples on part of the plot and sell them in the local market.
Although the plot is registered as a residential and not
agricultural property, it was gazetted (Section 5 notice of
acquisition) for takeover. In April 2007, the Claimant informed
Post that his parents had been forced off the land. It is becoming
increasingly clear, however, that the Amcit is a minority share
holder and his parents, who are not Amcits, are the majority
landowner.

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