Grace and the Nestle dispute

The local subsidiary of Nestle was forced in October 2009 to stop buying milk from Gushungo Dairy Estate because the farm was “controlled” by First Lady Grace Mugabe.

Although Zimbabwe was under an inclusive government there was pressure on multinational companies with subsidiaries in Zimbabwe to stop doing business with individuals or companies that were on European Union sanctions.

According to a cable released by Wikileaks, Gushungo Dairy was previously operated as Foyle Farm, “until the owner was forced to sell it for a fraction of its value in 2003” and was now managed by Russell Goreraza, Grace Mugabe's son from her first marriage.

 

Full cable:

 

Viewing cable 09HARARE809, ZIM NOTES 10-02-2009

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Reference ID

Created

Released

Classification

Origin

09HARARE809

2009-10-08 11:58

2011-08-30 01:44

UNCLASSIFIED

Embassy Harare

VZCZCXRO5338

RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN

DE RUEHSB #0809/01 2811158

ZNR UUUUU ZZH

R 081158Z OCT 09

FM AMEMBASSY HARARE

TO RUEHC/SECSTATE WASHDC 4992

INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

RUEHAR/AMEMBASSY ACCRA 3071

RUEHDS/AMEMBASSY ADDIS ABABA 3183

RUEHRL/AMEMBASSY BERLIN 1612

RUEHBY/AMEMBASSY CANBERRA 2446

RUEHDK/AMEMBASSY DAKAR 2815

RUEHKM/AMEMBASSY KAMPALA 3231

RUEHNR/AMEMBASSY NAIROBI 5678

RUEHGV/USMISSION GENEVA 2365

RUEAIIA/CIA WASHDC

RUEATRS/DEPT OF TREASURY WASHDC

RHEFDIA/DIA WASHDC

RHMFISS/EUCOM POLAD VAIHINGEN GE

RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK

RHEHAAA/NSC WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000809

 

AF/S FOR B. WALCH

ADDIS ABABA FOR USAU

ADDIS ABABA FOR ACSS

NSC FOR SENIOR AFRICA DIRECTOR

STATE PASS TO USAID FOR L.DOBBINS AND J. HARMON

COMMERCE FOR ROBERT TELCHIN

 

SIPDIS

 

E.O.12958: N/A

TAGS: PGOV PREL ASEC PHUM ECON ZI

 

SUBJECT: ZIM NOTES 10-02-2009

 

-----------

1. SUMMARY

-----------

 

Topics of the week:

 

- Supreme Court Rules in Human Rights Defender's Favor

- Shamu Fills Media Boards with ZANU-PF Sympathizers...

- Parliament Completes Electoral Commission Interviews...

- Brigadier General Ignores High Court Order...

- GOZ to Appeal Ruling on Diamond Fields...

- USAID Loan Guarantees for Agriculture...

- So That's Why the Lights Went Out...

- Banks Meet Capital Targets...

- Nestle's Dis-Grace...

 

---------------------------------

On the Political and Social Front

----------------------------------

 

2. Supreme Court Rules in Human Rights Defender's Favor... On

September 28 the Supreme Court granted Zimbabwe Peace Project

Director Jestina Mukoko a permanent stay of prosecution in the

terrorism case against her. The Court ruled that her constitutional

rights were violated when she was abducted, tortured, and illegally

detained in late 2008. Lawyers welcomed the ruling and on Thursday

called on Attorney General Johannes Tomana to accept responsibility

for his law officers' failure to protect the rights of Mukoko and

other abductees by resigning. Seven MDC activists abducted in late

2008 are still missing. See Harare 775.

 

3. Shamu Fills Media Boards with ZANU-PF Sympathizers... Webster

Shamu (ZANU-PF), the Media, Information and Publicity Minister,

announced on September 30 board appointments to the six

media-related parastatals including Zimpapers (the publisher of

State media), the Broadcast Authority of Zimbabwe (regulatory agency

for broadcasters), Zimbabwe Broadcasting Holdings (ZBC TV station),

Transmedia (transmission equipment provider), Kingstons

(bookseller), and New Ziana (news outlet). Media watchdog groups

Media Institute of Southern Africa and the Media Monitoring Project

of Zimbabwe criticized the appointments noting that each board

contained at least one military official and prominent opponents of

media freedom including new BAZ chairman Tafataona Mahoso. Mahoso

is notorious for having banned the Daily News, the Times, and the

Tribune while he was chair of the Media Information Commission. He

was also the lowest-ranked candidate during parliamentary interviews

for the new Media Commission.

 

4. Parliament Completes Electoral Commission Interviews... A

bipartisan panel of MPs completed interviews of 25 candidates for

the new constitutionally-mandated Independent Zimbabwe Electoral

Commission (IZEC) on September 28. The panel identified the top 12

candidates whose names will be forwarded to President Mugabe who

will constitute the commission's body by selecting eight of them.

He will separately nominate a chairperson put forward by the

Judicial Services Commission. University of Zimbabwe law professor

Geoff Feltoe was the top-ranked candidate, but the white professor

believes he is unlikely to make the cut given his outspoken

criticism of ZANU-PF and his race.

 

5. Brigadier General Ignores High Court Order... White farmer

Q5. Brigadier General Ignores High Court Order... White farmer

Charles Lock secured a High Court order from Justice Baharat Patel

on September 24 granting him "unfettered access" to his farm and

crop. The judge ordered police to help him gain access to the

property. Despite the order, men working for Brigadier General

Justin Mujaji, who continues to occupy the farm, threatened to shoot

Lock when he attempted to move 150 tons of tobacco and 500 tons of

maize valued at US$700,000 this week.

 

 

HARARE 00000809 002 OF 003

 

 

6. GOZ to Appeal Ruling on Diamond Fields... Minister of Mines

Obert Mpofu (ZANU-PF) informed the press on October 1 that the State

planned on appealing last week's Supreme Court ruling upholding

private mining firm African Consolidated Resources' (ACR) claim to

the Chiadzwa diamond fields.   In a statement following its court

victory last week, ACR said it was committed to "dialogue with the

Zimbabwe government." The comment may indicate ACR's willingness to

partner with the government.

 

-----------------------------------

On the Economic and Business Front

----------------------------------

 

7. USAID Loan Guarantees for Agriculture... On September 30, USAID

Zimbabwe signed an agreement with Standard Chartered Bank for loan

guarantees to back agricultural lending of up to US$20 million over

five years. The program is supported by USAID's Development Credit

Authority. It allows Standard Chartered to make loans to farmers

and agricultural enterprises that will supply inputs and technical

assistance to smallholders. Read the press release at

http://harare.usembassy.gov

/agric_support.html. Surprisingly, the government mouthpiece The

Herald covered the story and included a photo of the Charg and

USAID Director at the signing ceremony.

 

8. So That's Why the Lights Went Out... The Hwange Colliery

Company, which supplies the Hwange Power Station (HPS), recorded a

53 percent year-on-year decline in coal sales and a 79 percent fall

in coke sales during the first six months of the year. The main

reason was the constant breakdown of antiquated equipment. At the

same time HPS suffered interruptions of gas supplies because of a

major breakdown of a gas pipeline. With a capacity of 1200 MW, HPS

is Zimbabwe's largest power station. Hwange Colliery will require

substantial investment to meet an anticipated increase in demand for

coal driven by projected regional power shortages in the coming

years.

 

9. Banks Meet Capital Targets... All of Zimbabwe's commercial

banks met the September 30 deadline for satisfying new minimum

capital requirements set by the Reserve Bank of Zimbabwe (RBZ). But

the RBZ had set the bar low by allowing banks to include fixed

assets in their reserve numbers. When the air goes out of Harare's

recently effervescent property market, some banks will need to raise

more capital. Minimum capital requirements are set to rise again in

March, and that may increase pressure on the weaker banks.

According to the President of the Bankers' Association of Zimbabwe,

some banks had already met that higher standard. But it is clear

that many institutions will need much more time to recover from the

ravages of hyperinflation.

 

10. Nestle's Dis-Grace... Following news reports that Nestle's

local subsidiary had been doing business with a dairy farm

controlled by Grace Mugabe, the company announced that it would no

longer buy milk from Gushongo Dairy Estate near Mazowe. Gushongo

Qlonger buy milk from Gushongo Dairy Estate near Mazowe. Gushongo

had previously been operated as Foyle Farm, until the owner was

forced to sell it for a fraction of its value in 2003. The

2,400-acre farm is now managed by Russell Goreraza, Grace Mugabe's

son from her first marriage. Since February the Nestle factory on

the outskirts of Harare had reportedly been receiving milk from

Gushongo three times a week in "an unmarked tanker."

 

 

-----------------

Quote of the Week

-----------------

 

11. "We have always respected property rights. Except on land..."

-- Minister of Economic Planning Elton Mangoma (MDC-T), quoted in

The Independent on October 2.

 

HARARE 00000809 003 OF 003

 

 

 

 

PETTERSON

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