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Norilsk Nickel Group sues Gov’t for P2.8 billion

Norilsk Nickel Group is suing Botswana’s government in efforts to recover close to P3 billion after a deal gone sour. The Russian miner, in a loaded statement released on Friday, says the lawsuit is the last resort after it failed to find an amicable solution, laying blame on the lack of commitment from the government of Botswana.


“MMC Norilsk Nickel Group (hereinafter “Norilsk Nickel”) has served notice that it intends to commence legal proceedings in Botswana against the Government of Botswana in respect of its involvement in the reckless trading of BCL Limited and BCL Investments Proprietary Limited (together “BCL”), with a view of recovering the USD 271 million plus damages and other costs that are owed to Norilsk Nickel in relation to the sale of a 50% interest in the Nkomati mine in South Africa (“the Nkomati deal”) and the USD 6.4 million that are owed to Norilsk Nickel in relation to the sale of the Tati mine in Botswana,” the company said in a press release statement.


Norilsk says it is suing the Botswana’s government since it is the ultimate shareholder of BCL through its corporate vehicle MDCB, adding also that the notice to sue was served under section 4 of the State Proceedings (Civil Actions by or against Government or Public Officers) Act and was served on the Attorney General of Botswana, the Minister of Mineral Resources, Green Technology and Energy Security, and the Minister of Finance.


This is the second attempt by the Russian miner to sue the government for breach of contract. The first law suit was filed last December but later withdrawn after negotiations with the government, with Norilsk agreeing to become the creditor on the ongoing liquidation of BCL group. In the centre of the lawsuit is a deal gone wrong that began when Norilsk agreed in October 2014 to sell their operations in Africa to BCL for a total price of $337 million (P3.5 billion), though that amount was later reduced when Norilsk agreed to price concessions requested by BCL and the Government. The concessions by Norilsk were in light of falling commodity prices.


The Russian miner’s main line of arguments are that the Nkomati deal, which was announced by BCL as a strategic priority as part of its high-profile “Polaris II” diversification and investment strategy, was designed to guarantee the long-term future of BCL’s operations by securing the supply of concentrate to its smelter in Selebi Phikwe, Botswana. This line of argument by Norilsk is intended to highlight the overarching role of the government of Botswana in the deal.


“The Government was involved in or approved all material decisions relating to this transaction. It is well known that BCL had always historically relied on financial support from the Government to survive and, in view of BCL’s financial position, it was clear that most if not all of the funding for the Nkomati deal would have to come from or be guaranteed by the Government,” the company explained in the press statement.


The trouble began to emerge when the government started developing cold feet. According to the press statement, BCL became obliged to buy Nkomati on 13 September 2016. However, BCL and the government have made no attempts to complete the deal, in clear breach of the agreement with Norilsk.


In a shock twist, Norilsk says in October 2016, it learned through the media that BCL had been placed into provisional liquidation by the government in an apparent attempt to avoid its obligations to Norilsk. At that point, the Russian miner says it has tried on numerous occasions, and through numerous channels, to reach a satisfactory and amicable resolution, but none has been forthcoming.


“Norilsk has therefore been left with little option but to pursue a resolution through legal channels.  In its claim against the Government, Norilsk asserts that the business of BCL has been carried on recklessly and that the Government was party to that recklessness through the actions of individual Government Ministers, MDCB and the Government-appointed directors on BCL’s board,” read part of the statement.


The statement goes on to explain how the Botswana government cannot just simply walk away from the deal since it was the government that was instrumental and gave surety that it will come to the BCL rescue should BCL find itself in a financial mess. “In addition to the Government taking and being involved in material decisions in relation to the management of BCL, it was also aware of BCL’s financial situation throughout, and knew or ought to have known that there was no reasonable prospect of it being able to pay the amounts due to Norilsk without support from the Government.

 

Norilsk was also provided with assurances throughout the negotiations for the deal that the Government was fully supportive of the Nkomati transaction, and that BCL would perform its obligations in full.  Yet, when the time for completion of the deal came, it became apparent that the Government had had no intention of supporting BCL and had in fact taken steps which meant that BCL would not be able to perform its obligations.”


In its claim, Norilsk will ask for a court order making the government responsible for paying all of the liabilities due from BCL under its agreement with Norilsk and the costs of the intended court proceedings.  “The Government has displayed a complete disregard for the fair, frank and reasonable dealing with outsiders which BCL’s insolvent circumstances demanded.  It has failed to honour the obligations under the sale agreement concluded with Norilsk in October 2014,” said Michael Marriott, Norilsk Nickel Africa CEO.


“Throughout the process Norilsk has acted in good faith, and given the Government and BCL repeated opportunities and offers of assistance to complete the transaction, including concessions to significantly reduce the sale price,” he added. The lawsuit is expected to bring the spotlight on Botswana’s government which has been for many years known for its respect for the rule of law. Just recently, the country was ranked highly as the most attractive investment destination in Africa in an Africa Investment Index 2016 by Quantum Global’s independent research arm, Quantum Global Research Lab


“Botswana has a reputation as one of the safest and best places to invest in the whole of Africa and it has earned the strongest credit rating on the continent on that basis.  The way that the Government of Botswana has acted over BCL brings the validity of that reputation into question.  The negative ramifications could be felt across the economy of the whole country,” the CEO of Norilsk Africa said in a thinly veiled threat. The press statement concluded with a threat to block any sale of BCL assets to any interested investor if the Botswana government fails to recognise the rights of Norilsk and what is due to them.


“On a related issue, it would appear that the Government of Botswana is in negotiations with potential investors about a possible sale of BCL. Norilsk reiterates its rights in relation to the Nkomati and Tati transactions and will continue to seek the repayment of the outstanding debts by all legal means. In this regard, Norilsk expects its rights to be recognised by the Government in its negotiations and in any agreement ultimately reached in relation to BCL, failing which Norilsk reserves its rights, including to challenge any such agreement.”

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Bangwato regent speaks ‘respect for Dikgosi’

23rd May 2022
Bangwato

Presidential Commission of Inquiry into the Review of the Constitution held a meeting in Serowe this week. The meeting was to accord Bangwato, just like other tribes, a platform to give their opinions, contributions and what they think is the horse power and limitations of the current Constitution of Botswana.

Bangwato Regent, Kgosi Serogola Seretse said, he is of the understanding that the Commission has not come for anything apart from getting their opinions on how things could be made better. His contribution was that he solely knows of only two social positions in the world; Dikgosi and Pastors. He said other positions are just benedictions. He further urged that, Batswana should respect God’s ordained protocols such as Dikgosi and Pastors.

Seretse pointed out the importance of acknowledging and appreciating Dikgosi as nation builders. He cautioned and warned that, the Commission should ensure that their dealing with Dikgosi is harmonious. He called for an amendment to be made on the ‘National Order of Precedence’ noting that Dikgosi are put at number 11, but should at least be taken a little higher to number 7.

One resident, Tshepo Moloi while giving his contribution said there must be provisions of Social Justice that ensure equal distribution of resources to all citizens. He said this provision should entail an obligation that all citizen have equal opportunities to different Government Initiatives. Moloi substantiated that, all ‘Presidential Commissions’ be engraved on the Constitution

Alfred Thogolwane who is as well a resident of the biggest village in the Central District, pointed out the need for preservation of the country and resources thereof, saying “it must dawn onto all that, the calabash that fetches water for the family cannot fixed once its broken.”  Another resident, Keikantsemang Sebedi advocated for Polygamous marriage, saying that men should marry as many wives as they please. She said there is no need for any socioeconomic assessment done on men who wish to marry more than one wife.

She advised that, the country should benchmark from the Zezuru culture that does it, with no complexities. On the other hand, Sebedi said that, there must be considerations done on the Old Age Pension. She said people who earned P4000 should not receive the old Age Pension upon their fullness of age.  Forshia Koloi called for amendments on Section 77 and all the provisions that speaks to the subject of Bogosi and the powers infested in them. He said they should be made more detailed and avoid ambiguity in clauses.

Mr Tlhaodi said there must be Land Audits done in the country. Citing an example of the Tati Land as one that should be thoroughly audited. He further advised that, Election Day be put on the Calendar. He said, if it happens that the day be a Saturday, there should be some special dispensation for the 7th Day Adventist Church members to take part in voting without compromising on their day of worship. Tlhaodi added that there must be People’s Complaint Commission in the country.

Speakers emphasized the need for the country to review the exercise of ‘Political Party Funding’. They articulated that lack of funding political parties’ results in political parties resorting to finding funds for themselves. They reiterated that sometimes going to the extent of getting funds through illegal means. Bangwato agreed in one accord that they want the President be tried whilst in office if suspected of any criminal offences. This was revealed in their contributions. They pointed out that, the law should not to wait until the end of their tenure.

For his part, the Deputy Chairperson of the Commission Johnson Motshwarakgole expressed gratitude to the residents of Serowe. He applauded women for their kindness saying it is only them, who always take responsibility for doing things amicably in the society.

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Parliament unveils major shake-up plans & reforms

23rd May 2022
Parliament

Parliament has revealed that it plans to rollout a Community Score Card (CSC) exercise as part of sweeping reforms to its role and mandate among others.

The planed shakeup, along with the rollout of CSC will see creation of new Parliamentary Portfolio Committees on Health, HIV&AIDS, Education and Skills Development, Trade and Economic Development, Agriculture, Lands and Housing and Local Governance and Social Welfare.
Parliament informed government ministries and departments that the CSC is a participatory, community based monitoring and evaluation tool that enables citizens to assess the quality of public services and interact with services providers to express their concerns.

According to Parliament, the CSC will assist to inform community members about available services and their entitlements and to solicit their opinions about the accessibility and quality of certain services related to the portfolio committees mentioned.  It said the main objective is for Parliament through identified oversight committees is to conduct a participatory monitoring and evaluating process that puts ownership and responsibility for delivery of services in the hands of both the Government and the service recipients.

“Through scorecards developed around identified sectors and services, communities and implementing departments remain in touch with progress made through the programme delivery cycle and are able to respond timely to bottlenecks,” the National Assembly said.  Some of the measurements and expected outcomes for the rolling out of the CSC include among others, improved monitoring and economic evaluation, to determine the impact of spending, so as to be able to direct resources from where they having the least benefit to those projects and programmes where they will have a larger positive impact.

The National Assembly explained further that this could result in a willingness to close down ineffective programmes and institutions and not to implement projects that do not deliver adequate returns, improved productivity in the public services, especially given the substantial pay increases.

The National Assembly believes that the rolling out of CSC is also expected to result in efficiency savings: many public services and programmes could be delivered more effectively at lower costs, by improving management and accountability, and making use of e-services. “This would yield financial savings that could be used for development programmes or reducing the deficit,” the National Assembly said.

The exercise is also expected to result in “Careful scrutiny of subsidy schemes and termination of those that do not address market failure or assist truly needy Batswana.”  The National Assembly revealed that proposed Parliamentary Portfolio Committee on Health and Wellness has been established in accordance with the Standing of National Assembly of Botswana.  It explained that the mandate of the Committee is mainly to exercise Parliamentary oversight and scrutiny over Government Ministries, Departments and Agencies with portfolio responsibilities in respect of Health and HIV/AIDS.

“There is need to identify reasons for inefficiency and poor outcomes and ensure that health system reform improve productivity and value for money. Key areas of focus for scorecard, availability of drugs, staffing ratios, accessibility of health services, speciality care and services and sexual reproductively health,” the National Assembly said.

Another proposed Committee is on Local Governance and Social Welfare. The mandate of the Committee is mainly to exercise Parliamentary Oversight and Scrutiny over Government Ministries. Departments and Agencies with Portfolio responsibilities in respect of Local Governance and Social Welfare.

“Strategies under NDP 11 to improve outcomes of social uplifment include; diversification of rural economies, development and support of small businesses, provision of social safety nets, eradication of absolute poverty, provision of quality and equitable education and harmonisation of social protection programmes,” said the National Assembly.  It said social nets need to be improved so as to target these most in need (at present some social safety nets benefit many people who are not the most needy, but also miss out some of those who are needy).

“Some social development policies more broadly should also aim to reduce household vulnerability to shocks such as those arising from fluctuations in agriculture, climate change, incomes and employment and improve their ability to handle shocks, thereby building household resilience,” the National Assembly said.

Another Committee established is on Agriculture, Lands and Housing. The mandate of the Committee is mainly to exercise Parliamentary oversight and scrutiny over Government Institutions, Departments and Agencies with portfolio responsibilities in respect of Agriculture, Lands and Housing.

The National Assembly said the average growth rate of the agricultural sector since the beginning of National Development Plan 11 (NDP11) (i.e. during the 2017/2018 and 2018/19 financial years) was 2.5 percent, making it the slowest growing sector of the economy, in line with its historical performance.

“Over the same period, its share of GDP has been stagnant at around 2 percent. The sector also contributes job opportunities for about 80 000 adults. Food security has become paramount since the onset of the corona virus pandemic,” the National Assembly said.  The National Assembly said the Government realises the need to increase food production for products in which Botswana has a cooperative advantage such as beef, grains and other horticulture products.

The Committee on Finance, Trade and Economic Development has also been established. One of the mandates of Committee would be to exercise Parliamentary oversight and scrutiny over government ministries, departments and agencies with portfolio responsibilities in respect of Finance, Development, Trade and Industry.

“The sector is at the core of industrialisation aspirations and strategies for economic development in Botswana. Manufacturing in particular can be the driver of economic growth through technological improvements and innovation,” the National Assembly said. Hence, it said, the development of the sector could also foster export diversification and export led-growth in Botswana while benefitting from the African Continental Free Trade Area (AFCFTA).

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Salbany, Bareetsi threaten to sue DIS

23rd May 2022
Salbany Bareetsi

Two senior members of Directorate on Corruption and Economic Crime (DCEC) have threatened legal action against Directorate of Intelligence and Security (DIS), it has transpired. The threat is contained in an answering affidavit of Director General of DCEC, Tymon Katlholo in which he is seeking an interdiction from High Court to stop the DIS from accessing investigation files at his office.

After the DIS detained DCEC officials Joao Salbany and Tsholofelo Bareetsi on December 16, 2021, they filed an official complaint against DIS and some officials. They complained about abuse of office by DIS and five officers. Salbany and Bareetsi also complained about unlawful detention by DIS and unlawful dissemination of classified information contrary to Section 44 of Corruption and Economic Crime Act. “The DIS interviews were premised on information divulged during the course of official DCEC work product, that is the Monday media brief meeting,” they wrote.

They further requested leave to institute a civil suit against the DIS and its officers, and invariably the State for inhuman and degrading treatment they suffered and unlawful detention. They also pondered a declaratory seeking a sanction against the DIS and Botswana Police Service (BPS) and clarification of the role of BPS officers seconded to DIS.

“The envisaged suit against BPS and DIS officers and the DIS will inevitably centre on investigations done by the DCEC and the scope of the protection availed to DCEC officers for conduct done in the course and scope of DCEC official duties.” The duo said it was self-evident from the conduct of the DIS officers that there was nothing urgent about the information required by the DIS, justifying their detention at its Sebele facility from 08:30 hours on December 16, 2021 until 02:00 hours on December 17, 2021.

They reasoned that the information required by the DIS could have been obtained by a simple request to DCEC Director General. “What the DIS did was to seek to intimidate officers of the DCEC whom they knew were carrying out investigations against some of the DIS officers who were part of their investigation team. This turn of events has a chilling effect not only on the functioning of the DCEC but also on the official conduct of officers of the DCEC as to how they conduct their official duties.”

They concluded by stating that in the event the request is granted, they would further request to be advised as to the provision of legal representation as the unalwful detention and the degrading and inhuman treatment by the DIS was in relation to matters conducted by and on behalf of the DCEC.

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