In a fresh turn of events, the Minister of Environment, Natural Resources Conservation and Tourism, Tshekedi Khama has this week made shocking revelations that the Botswana consumers have been swindled of their hard earned money through the controversial plastic levy.
Weekend Post has established that while it is not yet law, manufactures have been charging consumers the plastic levy since 2007 as they have included the fee in the total amount for the plastics. In return the retailers also charge buyers separately, both amassing huge profits in millions from the transactions.
“To be honest, re jelwe (we have been defrauded or fleeced). The manufacturers and retailers have found a loophole on dodging to pay government in the rolling out of the plastic levy.” Khama blames both the manufacturers and retailers for entering into the deal in bad faith and in the process ripping off the consumers from the incomplete (as the funds were not collected) yet consequential deal. Khama also admitted that as government, they also erred precisely by not being able to put appropriate systems in place to collect the said levy on time.
Khama, in 2017, told a parliamentary committee, Public Accounts Committee (PAC) that due to government’s failure to regulate and collect the plastic levy, the initiative as such failed its purpose and retailers are taking advantage. “Batswana are being overcharged by paying for plastics at the same time having to pay for a commodity that is included in the price of packaging. The value of your shopping from a retailer is further increased by the cost of a retailer that they are selling the plastic for,” he was quoted conceding at PAC.
Ministry of Investment, Trade and Industry has since distanced themselves from the failed levy and could also not quantify the amount accumulated from the levy since its introduction in 2007 referring this publication to Ministry of Environment, Natural resources Conservation and Tourism. “The plastic levy falls under Tshekedi Khama’s Ministry. They are the ones responsible for collection of the levy,” Assistant Minister of Investment, Trade and Industry told this publication upon inquiries on the funds.
As far as he knows, he said, as government they have failed to collect the levy and that means as well that the general Botswana consumers are poorer as they have lost on the transaction. In this publication’s endeavor to put a figure on the amount accrued from the plastic levy business deal, both Ministry of Investment, Trade and Industry as well as Ministry of Environment, Natural resources Conservation and Tourism could not shed some light into the amount.
Tshekedi Khama could only state in a short message sender (sms) conversation with this reporter that “I don’t have the statistics on that, maybe Statistics Botswana could help or the Ministry of Trade.” However the Statistics Botswana officials insisted that they do not have such information as to how much was accrued from the levy. The National Strategy Office which is also fingered in the collection of the levy washed their hands maintaining that they “are not the right office for those figures” and referring this publication back to Tshekedi Khama’s Ministry.
Tshekedi Khama hurriedly introduced the levy under controversial circumstances which has now milked the customers millions of pula for far too long. The levy was initially intended to discourage buying of plastics as were seen as an environmental hazard. As government has failed to implement and collect funds accrued from the levy, the plastic industry has this week curiously denied the existence of the said plastic levy. A Marketing Executive at Choppies, Tshego Molosiwa told Weekend Post when contacted for a comment that the said plastic levy could not materialize.
“We have noted your enquiry with regards to the Plastic Levy. There is currently no levy that retailers pay to government as no measures have been put in place for such a transaction to materialize,” she said. Another retail official for a multi-corporation supermarket who preferred speaking on condition of anonymity pointed a finger at the manufactures accusing them of collecting the levy at the expense of government and at the detrimental of consumers.
It is understood that this leads to retailers in turn being forced to charge extra charge and that they will continue to charge consumers as and when they buy the plastics. “We buy at the plastic manufacturers whom include the cost of levy in their price. Already there is levy in manufactures plastic levy. The manufactures then have to transfer to government the said levy because it’s already included when the manufacturers sell to the retailers,” he pointed out.
He said as retailers they do not get in contact with such funds just like it is the case with the controversial much talked about National Petroleum Funds (NPF) as the filling stations too do not get in contact with the NPF funds. For plastic levy the retail official pulled government’s leg sarcastically to say that she (government) “failed to collect the levy and maybe she saved us from stealing the money as it happened with the NPF.” More than 250 million pula, and the figure keeps up shooting, has been stolen from the NPF and the matter is currently being handled before the courts.
The retail official also stated that “but to be honest the plastic industry in Botswana at one point went to government with the intention to give it the plastic levy, but nobody wanted to collect it. Tshekedi said he is not interested. Meanwhile millions of pula has been collected. The money is there at the manufacturers. Supermarkets have a record.” He added that, now the government has taken a decision to cancel the plastics, and that Tshekedi cancelled the levy and as retailers they will obey the law. He continued “we will use the biodegradables.”
On his part the Director of plastic manufacturers, MW Packages and Mushtaq Plastics, Nadeem Symeed told Weekend Post separately that there is no such thing as plastic levy. He said this against the backdrop of information that manufactures nonetheless have been charging for the levy in their sales. “There is nothing as plastic levy as it has not been implemented. There is even no law to that effect,” he highlighted to this reporter when quizzed.
Introduced in 2007 as a mechanism to fund environmentally pleasant practices, the plastic levy now appears like is a lost dream with chunks of unstated funds accumulated falling in the wrong hands and not assisting in the purpose in which it was intended to do for the environment.
Collecting the levy has demonstrated to be, for government, a burdensome undertaking for the Ministry of Environment, Natural Resources Conservation and Tourism, as the public’s hard earned cash remain uncollected, benefitting the business owners who are now, as it appears, disowning the levy funds.
Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.
Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.
She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”
Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.
On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.
“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.
One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.
The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”
The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.
Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.
Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.
The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.
The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.
Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.
This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.
He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.
Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”
He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.
Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.
“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.
In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”
In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.
He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.” Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.
Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.
He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”
Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.
“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.
“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said. Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.
Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.