Author: Gary Moore

Date: 21 May 2018

Introduction

This memorandum investigates whether an amendment of the Constitution to authorise expropriation without compensation would violate South Africa’s obligations under bilateral and multilateral international treaties, and, if so, to what extent.

This paper also deals with the extent to which such an amendment might violate South Africa’s obligations under other aspects of international law, and generally what might be at stake internationally.

In addition, the memorandum touches on the potential for other countries to take unilateral action against South Africa in the event of such a constitutional amendment.

Summary

Introductory

The Constitution states that property may be expropriated subject to just and equitable compensation in an amount reflecting an equitable balance between the public interest and interests of those affected having regard to relevant circumstances. The National Assembly has resolved to amend this to introduce land expropriations without compensation.

Treaties are written agreements whereby two or more states create among themselves an obligation operating in the sphere of international law. Only treaties which has been incorporated into South African internal law by statute creates rights and obligations which can be enforced within the country by its national courts.

Bilateral investment treaties

Bilateral investment treaties (BITs) govern state treatment of investments in the one country by nationals of the other, and typically require compensation for expropriations.

Many countries have BITs that were entered into in the 1990s.

South Africa entered into some 49 BITs.

BITs are criticised for focusing on commercial interests at the cost of human rights. Both developed and developing countries have been reviewing and terminating their BITs.

South Africa’s BITs require compensation for expropriation.

Different South African BITs refer to the measure of compensation in different terms, usually interpreted as requiring payment of market value.

In 2010 the government said BITs limited transformation, and should be reviewed if they had reached their termination date and terminated and possibly renegotiated. South Africa’s BITs provide that they will be in force for usually ten or twenty years and remain in force unless either party gives the other a year’s notice of termination.

Starting in 2013, South Africa has terminated ten BITs. Another 27 BITs never came into force. Twelve remain in force, and steps have been taken for two of them to terminate.

Multilateral treaties

There are multilateral treaties governing trade, but not investment.

The International Covenant on Civil and Political Rights, 1966 states that laws must guarantee equal protection against discrimination. To deny compensation for land-reform expropriations yet pay compensation for other expropriations would violate this equality requirement. And expropriations without compensation would operate unequally: Owners who had paid their mortgage or paid the full purchase price would suffer more prejudice from expropriation without compensation than owners who had paid only part.

The Convention establishing the Multilateral Investment Guarantee Agency, 1985 established the Agency to encourage investment in developing member countries, by issuing reinsurance and guarantees against loss from expropriation in one country to investments which flow from other countries. South Africa is listed as a developing country.

Customary international law

Customary international law recognizes states’ right to expropriate alien property subject to compensation. The Permanent Court of International Justice observed that, apart from any treaty, the amount should be the property value. The compensation amount has been controversial since developing countries started participating in world affairs, but they acknowledge that property owners are entitled to compensation.

The Universal Declaration of Human Rights is declaratory of customary international law. It stipulates that all are entitled, without discrimination, to equal protection of the law. To repeat, denying compensation for land reform but paying it for other expropriations would violate this. Expropriations without compensation would operate unequally on landowners who had paid their mortgage or full purchase price, vis-à-vis owners who had paid only part.

The Charter of Economic Rights and Duties of States adopted in 1974 declares that states have the right to expropriate foreign property, but appropriate compensation should be paid taking into account the state’s relevant laws and all circumstances it considers pertinent.

This is akin to the measure in the South African Constitution.

Regional instruments

The African Charter on Human and Peoples Rights, 1981 (“the Banjul Charter”) adopted by the then Organisation of African Unity does not mention compensation in its property clause, and leaves the question of compensation to each State.

The Treaty of the Southern African Development Community does not expressly refer to either expropriation of property or to compensation for it, but the SADC Tribunal has interpreted the Treaty’s stipulation that member states should adhere to the Rule of Law as meaning that property should not be expropriated without compensation. The Treaty has been subject to amendment and ongoing litigation.

The 2016 draft Pan-African Investment Code states that investments in member states must not be expropriated except against adequate compensation, which would normally be market value, but where appropriate must be based on an equitable balance between the interests of the public and the investor having regard to relevant circumstances. This equitable-balance measure of compensation appears to be derived from the South African Constitution’s. The Code is intended as a guide not a binding instrument.

National laws

The Protection of Investment Act, 2015 (South Africa) states that it protects investments. The Bill’s explanatory memorandum stated that in limited instances differentiating between foreign and domestic investors may be unavoidable but would not violate the principle of equal treatment. The Act states that investors have a right to property under the Constitution. This adds nothing. The Act is not yet in operation.

The South African Constitution states that an international agreement is law within South Africa only if enacted into law by national legislation. Customary international law is law within South Africa, unless it is inconsistent with the Constitution or an Act of Parliament.

The African Growth and Opportunity Act 2000 (United States) and U.S. Code of federal laws introduced a Generalised System of Preferences. The measures declare that trade and investment work best if trading partners eliminate barriers to trade, and that offering sub-Saharan African countries enhanced trade preferences will encourage more trade and investment. The President may designate such a country eligible for trade preferences if he determines that it has (or is making continual progress to having) an economy that protects private property and minimises government ownership of economic assets; the rule of law and equal protection under the law; and the elimination of barriers to U.S. trade and investment, including by provision of national treatment and an environment conducive to foreign investment. Countries so designated becomes eligible for duty-free treatment of thousands of eligible articles. As to developing countries’ obligations under international law to pay compensation when expropriating property, the President must not designate a country as a beneficiary country entitled to duty-free treatment if it has expropriated U.S. citizens’ property unless he determines that prompt, adequate and effective compensation is being made, or that negotiations to provide such compensation under “applicable provisions of international law” are in progress, or the country is otherwise taking steps to discharge its obligations “under international law”. The President must withdraw or suspend a developing country’s designation if he determines that it expropriates property of U.S. citizens without compensation. President Obama in 2009 terminated the designations of Guinea, Madagascar and Niger as beneficiary countries. In January 2016 he suspended the duty-free treatment of South African agricultural products, because he determined that South Africa was failing to eliminate barriers to U.S. trade. (South Africa had imposed an anti-dumping duty on imports on bone-in chicken meat from the United States. In June 2015 the two countries agreed that South Africa would allow an annual quota of imports of 65 000 tons of U.S. bone-in chicken pieces duty-free. South Africa did not take all steps to permit this, so Obama suspended the duty-free treatment of agricultural products. South Africa remedied the situation in February 2016. Obama then lifted the suspension.)

(End of summary)

Overview

Compensation for expropriation in South Africa currently

The Expropriation Act[1] states that the Minister[2] may expropriate property subject to payment of compensation,[3] the amount of which must “not exceed” the amount which the property would have realised if sold[4] in the open market by a willing seller to a willing buyer.[5]

Though the Act states that compensation must “not exceed” market value, this was held to mean that an owner was entitled to the property’s fair market value.[6] A change in value due to the purpose for which the property is expropriated must not be taken into account.[7] A solatium[8] is added to the total.[9] Interest may also be payable.[10]

The Constitution[11] in its property clause[12] states that property may be expropriated subject to compensation,[13] the amount[14] of which must be “just and equitable” reflecting an equitable balance between the public interest and interests of those affected having regard to all relevant circumstances (including the property’s current use, the history of its acquisition and use, its market value, the extent of direct state investment and subsidy in the acquisition and capital improvement of the property, and the purpose of the expropriation).[15]

The clause was carefully formulated to ensure that constitutional protection of property, while important, should not impede the important social and political purpose of land reform.[16]

The Constitutional Court has held that,[17] though the Expropriation Act had been the primary tool for expropriation, compensation paid must now comply with the Constitution[18] and its property clause,[19] and be determined in two stages: A court must first fix the amount due under the Act,[20] then decide if it is just and equitable under the Constitution,[21] and make any necessary adjustment.[22]

The Speakers’ Forum[23] in 2015 established an independent High Level Panel chaired by former President Motlanthe to assess the effectiveness of statutes passed since 1994.[24] The Panel[25] in November 2017[26] reported, regarding land reform and redistribution, that, rather than recommend that the Constitution be changed to allow for expropriation without compensation, government should rely on its existing provisions that allow compensation to be below market value in particular circumstances.[27]

Despite that Report, in February 2018 the National Assembly passed a motion to have the Constitution’s property clause amended in order to intensify land redistribution though the introduction of expropriation of land without compensation.[28]

Treaties

A treaty is a written agreement[29] whereby two or more states[30] create among themselves an obligation[31] operating within the sphere of international law.[32]

A distinction must be drawn[33] between when a treaty binds South Africa on the international plane,[34] and when it is enforceable within the country:[35] Only a treaty which has been incorporated by statute into South African internal law creates rights and obligations which can be applied within the country by the courts,[36] as a rule.[37]

(In contrast to treaties, customary international law is law within South Africa[38] by its mere existence and without specific national action to incorporate it into internal law. This document will focus the country’s treaty obligations on the international plane, but will also touch on customary international law.)

Bilateral investment treaties

Bilateral investment treaty defined

A bilateral investment treaty (BIT) is an agreement between two countries governing the treatment of investments by individuals and companies from one country in the other.[39]

BITs encourage and protect investments in each other’s territories. They typically cover national treatment, most-favoured-nation treatment, fair and equitable treatment, compensation in the event of expropriation of the investment, guarantees of free transfers of funds, and dispute settlement mechanisms both state-state and investor-state.[40]

Proliferation of BITs

Many countries accumulated a stock of bilateral treaties that were entered into in the 1990s, before the rise of investor-State dispute cases.[41]

According to an analysis, by mid-2013 there were over 2,860 BITs. By the end of 2013 more than 1,300 would be at the stage where they could be terminated or renegotiated at any time. Between 2014 and 2018 another 350 would reach the end of their initial duration.[42]

Criticism of BITs

Criticism of BITs (and bilateral trade agreements) is said to have been widespread, given governments’ focus in having negotiated the agreements on commercial interests without regard to their obligations to address human rights and development, and studies are said to show that pressure to create a business-friendly environment for foreign direct investment often contributed to undermining human rights.[43]

Reportedly Australia,[44] the United States and Canada[45] have revised their BIT templates to narrow investor protections.

Among developing countries, Ecuador established a commission in 2008 which concluded that BITs undermined development objectives.[46] Ecuador and Venezuela in 2008 started to terminate their BITs with other countries, Bolivia in 2012 terminated its BIT with the US, and it is said that Indonesia and India are exploring their options.[47]

South Africa’s BITs

South Africa after 1994 entered into a number of BITs with developed, principally European, countries who were keen to encourage foreign investment in the new South Africa.[48] South Africa has since also entered into BITs with developing countries.

The Office of the Chief State Law Advisor in the Treaty Section of the Dept of International Relations and Cooperation is the custodian of all international agreements to which South Africa is party.[49] The South African Treaty Register maintained by the Office[50] indicates[51] that South Africa may have entered into some 49 BITs.[52]

Expropriation provisions in South Africa’s BITs

South Africa’s BITs commonly provide[53] that investments by an investor of a contracting state must not be expropriated except for public purposes or in the public interest and on a nondiscriminatory basis.[54]

The BITs require compensation in the event of expropriation of the investment.

Compensation provisions in South Africa’s BITs

South Africa’s BITs guarantee, for the other contracting country’s investors in the event of expropriation of their investments, compensation which is described differently in different BITs.[55]

For example, provision is made in some South African BITs[56] for compensation that is prompt, “prompt, adequate and effective”.[57]

It is debatable whether “adequate and effective” compensation means “full” compensation or whether it means merely “equitable” compensation[58] (consistent with South Africa’s current rule that compensation should be “just and equitable” reflecting an equitable balance between the public interest and interests of those affected having regard to all relevant circumstances, of which market value is but one[59]).

In contrast, some South African BITs stipulated, more clearly, that compensation should amount to the “value”, “market value” or “fair market value” of the investment expropriated immediately before the expropriation or before the impending expropriation became public knowledge, whichever is the earlier.[60]

Other South African BITs refer to “actual”, “real” or “genuine” value. These criteria are said[61] to import a compensation measure akin to market value.

South Africa’s decision to terminate BITs

In 2010 the trade and industry minister said that a recent South African three-year BITs review had concluded that the relationship between BITs and foreign direct investment (FDI) was ambiguous, and that BITs posed risks and limitations on the government’s ability to pursue its Constitution-based transformation agenda.

The minister said that the Cabinet accepted this in April 2010, and determined that all “first generation” BITs which South Africa had signed shortly after in 1994, many of which had now reached their termination date, should be reviewed with a view to termination, and possible renegotiation on the basis of a new Model BIT to be developed.[62]

South Africa’s BITs provide that they would be in force for an initial period usually of ten years[63] (but in some instances for a longer initial period of for example twenty years[64]) and would remain in force thereafter unless either of the contracting states gives the other contracting state one year’s written notice of termination.

Terminations of South Africa’s BITs

In 2013 South Africa started terminating its BITs with European countries.[65] The trade and industry minister said BITs had served their purpose. The European Union’s trade commissioner disagreed, saying the decision would affect EU investments in South Africa.[66]

Of South Africa’s estimated 49 BITs, it has so far terminated ten:[67] One terminated in March 2013 and another in December that year, one in April 2014 and six in August that year, and one in March 2017.

Of South Africa’s other 39 BITs, 27 are not in force and there is “no intention to ratify” them.[68] (Ratification is the international act where a State establishes on the international plane its consent to be bound by a treaty;[69] it brings a treaty into force by formal international exchange or deposit of instruments of ratification.[70]

(Ratification of bilateral treaties is usually by exchange of ratifications; in the case of multilateral treaties a depositary usually collect’s parties’ ratifications. A period to ratify a treaty gives a contracting state a period of time to get domestic approval for the treaty and enact any legislation to give domestic effect to it.[71])

Only twelve of South Africa’s BITs remain in force.[72] It appears that steps have already been taken for two of these to terminate,[73] the one in March 2019[74] and the other in September 2021.

Multilateral treaties

There is multilateralism in trade, but not in investment

There are multilateral agreements regarding international trade (the WTO/GATT[75]).

But a proposed multilateral agreement that would have governed international investments failed to come into being in 1950.[76]

The World Trade Organisation (WTO) is said to have been reluctant to liberalise international investment in a manner comparable to its liberalisation of trade, and in multilateral talks has opposed any comprehensive inclusion of foreign direct investment.[77]

Cross-border investment has been regulated bilaterally, by way of BITs,[78] as said.

International Covenant on Civil and Political Rights, 1966

The International Covenant on Civil and Political Rights, 1966[79] contains no express protection of property, [80] and hence does not refer to expropriation or compensation for it. The Covenant is more concerned with matters such as equality among persons:

The Covenant states that the law must guarantee to all persons “equal and effective protection against discrimination” on any ground including property.[81]

(However, to deny compensation for expropriations of property for redistribution in the interest of land reform, but to continue to pay compensation for expropriations for other purposes in the public interest and public purposes, would be contrary to this requirement of the Covenant, that the law must guarantee to all persons equal and effective protection against discrimination on any ground including property.

(Furthermore, expropriations without compensation would operate unequally: Owners who had completely paid off a mortgage over their land, or who paid the full purchase price for the land, would lose their entire equity in the property. They would suffer more prejudice from an expropriation without compensation than would owners who had paid only a small part of the mortgage or had paid only a deposit on the purchase price for the land.)

Convention establishing the Multilateral Investment Guarantee Agency, 1985

The Convention established the Multilateral Investment Guarantee Agency to encourage the flow of investments among member countries, and particularly to developing member countries, by issuing coinsurance, reinsurance and other guarantees against non-commercial risks in a member country to investments which flow from other member countries.[82] The Convention went into effect in 1988.[83]

Most countries were founding members of the Agency and are listed in the Convention as either a developed or developing country.[84] (South Africa was first listed as a developed country, but since an amendment[85] is now listed as a developing country.[86])

The Agency may guarantee investments against loss from expropriation (legislative or administrative action by the government of the country where the investment is located, which deprives the holder of a guarantee of ownership or control of his investment).[87]

Excepted are nondiscriminatory measures of general application which governments “normally take for the purpose of regulating economic activity”.[88]

Customary international law

Customary international law in general

Customary international law recognizes the right of states to expropriate alien property, subject to compensation.[89]

The Permanent Court of International Justice[90] in 1928 observed that, generally (and apart from any treaty regulating expropriations), any lawful expropriation of alien property requires “fair” compensation, being the value of the property at the time of dispossession.[91]

However, though it is acknowledged that alien property holders have a right to compensation, there is currently controversy over the amount thereof, due in part to Asian, African, and Middle Eastern countries’ participation in world affairs:[92]

Modern international law originated in the 16th century among European states. Other countries, having not participated in the development of international law, refuse to submit to parts of it—including rules of compensation—as unsuitable to their economic growth.[93]

Universal Declaration of Human Rights, 1948

The Universal Declaration of Human Rights is not a treaty; it is generally accepted as being declaratory of customary international law.[94]

The U.N. General Assembly adopted the Declaration[95] by resolution (of the U.N.’s then 58 members, 48 voted in favour, none against, eight abstained[96] and two did not vote).

The Declaration stipulates that all are entitled, without discrimination, to “equal protection” of the law.[97]

(To deny compensation for expropriations for land-reform redistribution, but pay compensation for expropriations for other purposes, would be contrary to this requirement of the Declaration, that all are entitled without discrimination to equal protection of the law.

(Expropriation without compensation would operate unequally: Owners who had paid off a mortgage or paid the full purchase price for land would lose their entire equity in the property, and suffer more prejudice from expropriation without compensation, than owners who had paid only part of a mortgage or just a deposit on the purchase price for the land.)

Charter of Economic Rights and Duties of States, 1974

In 1974 the U.N. General Assembly adopted by resolution (by 115 votes to six, with ten abstentions) a so-called “Charter of Economic Rights and Duties of States”, which states:[98]

Each State has the right:

[…]

To nationalize, expropriate or transfer ownership of foreign property, in which case appropriate compensation should be paid by the State adopting such measures, taking into account its relevant laws and regulations and all circumstances that the State considers pertinent.

This measure of expropriation (“appropriate compensation…taking into account…all circumstances that the State considers pertinent”) is akin to the measure currently in the South African Constitution’s property clause[99] (that the amount of compensation must be just and equitable, reflecting an equitable balance between the public interest and interests of those affected having regard to all relevant circumstances, including specified matters).[100]

The Charter, while not unanimously adopted, may be part of international law: The Statute of the International Court of Justice[101] lists sources of international law (italics added):

Article 38

  1. The Court, whose function is to decide in accordance with international law such disputes as are submitted to it, shall apply:
  2. International conventions, whether general or particular, establishing rules expressly recognized by the contesting states;
  3. international custom, as evidence of a general practice accepted as law;
  4. the general principles of law recognized by civilized nations;
  5. […] judicial decisions and the teachings of the most highly qualified publicists of the various nations, as subsidiary means for the determination of rules of law.
  6. This provision shall not prejudice the power of the Court to decide a case ex aequo et bono, if the parties agree thereto.

Despite the fact that the resolution was not unanimous, it may well embody “general principles of law recognized by civilized nations” and thus be part of international law.[102]

Regional instruments

African Charter on Human and Peoples Rights, 1981 (Banjul Charter)

The African Charter on Human and Peoples Rights, 1981[103] (“the Banjul Charter”[104]) declares:[105]

Considering that the enjoyment of rights and freedoms also implies the performance of duties on the part of everyone; Convinced that it is henceforth essential to pay a particular attention to the right to development and that civil and political rights cannot be dissociated from economic, social and cultural rights in their conception as well as universality and that the satisfaction of economic, social and cultural rights is a guarantee for the enjoyment of civil and political rights; […]

The Charter’s property clause states:[106]

The right to property shall be guaranteed. It may only be encroached upon in the interest of public need or in the general interest of the community and in accordance with the provisions of appropriate laws.

The clause does not mention compensation, and leaves the question of compensation to each State.[107]

It is clear that there is no right to compensation for individuals.[108] This contrasts with[109] the Charter’s clause protecting rights of “peoples”,[110] which states:[111]

  1. All peoples shall freely dispose of their wealth and natural resources. This right shall be exercised in the exclusive interest of the people. In no case shall a people be deprived of it.
  2. In case of spoliation the dispossessed people shall have the right to the lawful recovery of its property as well as to an adequate compensation.

Treaty of the Southern African Development Community (“SADC”)

The Treaty of the Southern African Development Community, 1992[112] does not expressly mention expropriation or compensation. It stipulates that member states shall act i.a.w. the principles of[113] human rights, democracy and “the rule of law”,[114] refrain from taking any measure likely to jeopardise the sustenance of its principles,[115] and “not discriminate against any person” on grounds of[116] “race [or] ethnic origin”.[117]

The SADC Summit of heads of government in 2000[118] adopted a Protocol[119] stating that the Tribunal had jurisdiction in disputes between States, and also between natural or legal persons and States.[120]

Zimbabwe in 2005 amended its Constitution[121] to provide for compulsory acquisition by the State of agricultural land. Compensation would not be payable for the land, but only for improvements. Persons with a right or interest in the expropriated land were barred from approaching the courts to challenge the acquisition.[122]

Certain white farmers who were dispossessed of their lands approached the SADC Tribunal for relief. In 2011 the Tribunal[123] held that: The Tribunal had jurisdiction because the dispute concerned human rights and the Rule of Law; Zimbabwe had violated the Treaty by denying access to the courts and because its actions constituted de facto discrimination in that implementation of the constitutional amendment affected white farmers only; and the farmers were entitled to compensation for expropriated farms.[124]

The farmers again approached the Tribunal, which in 2009 found that Zimbabwe had failed to comply with its judgment, and granted costs against Zimbabwe.[125] The costs order was also not complied with.[126]

The farmers applied to the South African courts to enforce in South Africa the SADC Tribunal’s costs order in their favour. The Constitutional Court held that Zimbabwe’s agreement to be bound by the Tribunal Protocol, including its provision that States must take all measures necessary to ensure execution of decisions of the Tribunal,[127] was a waiver by Zimbabwe of its right to rely on its sovereign immunity from the jurisdiction of South African courts to enforce decisions of the Tribunal made against it.[128] The Court held that the SADC Tribunal’s costs order was enforceable in South Africa.

When the SADC Tribunal in 2009 found that Zimbabwe had not complied with its first judgment, it referred the matter to the SADC Summit for appropriate action.[129] Yet in 2011 the Summit announced that the Tribunal would hear no more cases until the Protocol had been reviewed, and that the Summit would not reappoint or replace Tribunal judges whose term of office ended, thus rendering the Tribunal inoperative and inquorate.[130]

In 2014 a new Protocol was adopted, restricting Tribunal jurisdiction to disputes between member states.[131] In 2015 the Law Society of South Africa applied to the Pretoria high court for an order setting aside the President’s decision to participate in the SADC Summit’s 2011 suspension of the Tribunal and his signing of the 2014 Tribunal Protocol, as being unlawful, irrational and unconstitutional. The court[132] on 1 March 2018 agreed, set aside the President’s actions, and referred its order to the Constitutional Court for confirmation.[133] The State on 23 March 2018 delivered notice of appeal against the judgment.

Pan-African Investment Code (draft, Dec 2016)

In 2008, African Union (AU) member states, through their ministers in charge of integration, decided to develop an Investment Code to foster pan-African cross-border investment flows.

Under the leadership of the AU Commission, the first draft of the Code was released in 2015. It has since then been subject to review and consultation meetings. The last consultation meeting gathered members’ experts in Nairobi in November 2016.[134]

The December 2016 draft of the Code[135] states that it will come into effect on adoption by the Union’s Assembly of Heads of State and Government.[136]

Commentators conclude that the specific objective of the Code is to elaborate a model which will serve as roadmap and strategy to guide AU member states in the negotiation and development of “new generation” international investment agreements.[137]

The draft Code states that investments in Member States must not be expropriated except against “adequate” compensation.[138]

Adequate compensation must “normally” be assessed in relation to the “fair market value” of the expropriated investment.[139]

But “where appropriate,” the assessment of adequate compensation must be based on an “equitable balance” between the public interest and interest of the investor affected, having regard to all relevant circumstances and taking into account the current and past use of the property, the history of its acquisition, the extent of previous profit made by the foreign investor through the investment, and the duration of the investment.[140]

(This “equitable balance” measure of compensation is similar to the South African Constitution’s current “just and equitable” measure of compensation.)

The Code is intended as a “guiding instrument” to member states and to investors with investments in member states’ territory.[141] (South Africa is a member of the Union.[142])

Observers have noted with disappointment the abandonment of the original ambition to have a binding instrument replacing the existing intra-African investment agreements in favour of a “guiding” text.[143]

National laws

Protection of Investment Act, 2015 (South Africa)

The Protection of Investment Act, 2015[144] states that it is an Act to provide for the protection of investors and their investments, and to achieve a balance of rights and obligations that apply to all investors.[145]

The explanatory memorandum[146] which accompanied the Bill[147] on its introduction in the National Assembly stated[148] that—

The Bill seeks to achieve a balance between the rights and obligations of all investors, provide adequate and equal protection to foreign and domestic investors, and to promote investment.

The Bill confirms the legal position that foreign and domestic investors and their investments are protected under the Constitution, and applicable domestic legislation.

The Bill seeks to treat foreign investors and their investment not less favourably that South African investors in like circumstances.

The Bill confirms that both foreign and domestic investors are protected under the Constitution.

In some instances it may be unavoidable to differentiate between foreign and domestic investors. But these instances are limited and do not violate the principle of equal treatment.

Government’s right to regulate is emphasised, since legitimate policy measures should be implemented in the public interest.

The Bill aims to strengthen the Republic’s investment regime by seeking to achieve[149] that—

The Republic remains open to foreign direct investment;

the Republic provides adequate protection to foreign direct investment; and

these objectives are balanced with the right of the government to regulate in the national and public interest.

The intention is to clarify provisions typically found in Bilateral Investment Treaties (BITs) by codifying them in the Bill and ensuring compliance with the Constitution.

The Bill therefore seeks to balance the rights and obligations of investors, to provide adequate protection to foreign investors, to ensure that South Africa’s constitutional obligations are upheld, and to ensure that government retains the policy space to regulate in the public interest.

The Bill draws on a review of international experience, and recent national experiences across a wide spectrum of developed and developing countries.

The Act’s stated purpose is[150] to protect investment “in accordance with and subject to the Constitution”, in a manner which balances the public interest and the rights[151] of investors.[152]

Foreign investors and their investments must not be treated less favourably than South African investors in like circumstances.[153]

As to legal protection of investments, that Act states that investors have the “right to property” in terms of the property clause of the Constitution.[154]

(In effect, the Act is merely declaratory of existing constitutional protections and adds nothing.)

The Act states that it will come into operation on a date to be determined by the President.[155] No date has yet been determined, so the Act is not yet in operation.

Constitution

To repeat, the Constitution’s property clause[156] states that property may be expropriated subject to compensation,[157] the amount[158] of which must be “just and equitable” reflecting an equitable balance between the public interest and interests of those affected having regard to all relevant circumstances.[159]

The National Assembly has resolved to have the property clause amended to introduce expropriation of land without compensation, to intensify redistribution.[160]

The Constitution states that international agreements are law in the Republic, only if enacted into law by national legislation.[161]

And, states the Constitution, customary international law is law within South Africa “unless it is inconsistent with the Constitution or an Act of Parliament”.[162]

Thus the internal application of international law within South Africa is subject to the Republic’s legislation.

Generalised System of Preferences (United States Code)

The federal Trade and Development Act of 2000 of the United States of America [163] stated that it was an Act to[164] authorise a new trade “and investment” policy for sub-Saharan Africa.

The Act contained a part[165] titled the “African Growth and Opportunity Act”, which also amended the Trade Act of 1974.

These measures, as amended,[166] are included in the United States Code.[167]

The United States Code[168] declares[169] that—

Trade and investment can represent powerful tools for economic development;

Increased trade and investment flows have the greatest impact in an economic environment in which trading partners eliminate barriers to trade and capital flows;

offering the countries of sub-Saharan Africa enhanced trade preferences will encourage both higher levels of trade and direct investment in support of the positive economic and political developments under way throughout the region.

The Code lists sub-Saharan African countries (including South Africa).[170] The Code then sets out eligibility requirements for sub-Saharan African countries: [171]

The President is authorized to designate a sub-Saharan African country as an eligible sub-Saharan African country if the President determines that the country—

has established, or is making continual progress toward establishing—

a market-based economy that protects private property and minimises government interference in the economy through measures such as government ownership of economic assets;

the rule of law and equal protection under the law;

the elimination of barriers to U.S. trade and investment, including by the provision of national treatment and measures to create an environment conducive to foreign investment; and

does not engage in gross violations of internationally recognised human rights and cooperates in international efforts to eliminate human rights violations.

The Code then provides that a sub-Saharan African country which has thus been designated as eligible may, in turn, be designated as a “beneficiary sub-Saharan African country”.

South Africa is currently a designated beneficiary country.[172]

A beneficiary sub-Saharan African country becomes eligible (under the so-called Generalised System of Preferences) for duty-free treatment for “eligible articles”. Eligible articles are articles which the President[173] has designated as eligible articles from beneficiary developing countries.[174] Some 3,500 tariff items are designated as eligible articles.[175] (Some reports say more than 7,000 products ranging from textiles to manufactured items are designated.[176] This preferential tariff scheme has been extended from time to time, most recently until the end of 2020.[177]

The Code states regarding the obligations under international law of developing countries to pay compensation when expropriating property[178] that (italics added)—

The President must not designate a country a beneficiary developing country if the country has expropriated property owned by a U.S. citizen or a corporation, partnership, or association which is 50 percent or more beneficially owned by U.S. citizens, unless the President determines that—

prompt, adequate, and effective compensation has been or is being made to the citizen or corporation etc.,

good faith negotiations to provide prompt, adequate, and effective compensation under the applicable provisions of international law are in progress, or the country is otherwise taking steps to discharge its obligations under international law w.r.t. such citizen, etc.; or

a dispute involving such citizen, etc., over compensation has been submitted to arbitration.

Regarding termination of a country’s designation as a beneficiary country entitled to duty-free treatment, the Code[179] states:

The President must withdraw or suspend the designation of any country as a beneficiary developing country if the President determines that, as the result of changed circumstances, the country would be ineligible for designation as a beneficiary developing country.

This means that a developing country will lose its designated status as a beneficiary country entitled to duty-free treatment, if it expropriates property owned by a U.S. citizen without compensation.

U.S. Presidents have withdrawn or suspended the designation of countries as beneficiary developing countries on a number of occasions:

For example, President Obama in December 2009 terminated the designations of Guinea, Madagascar and Niger as beneficiary sub-Saharan African countries because he determined that they were not making continual progress in meeting the requirements for designation.[180]

In January 2016 President Obama issued a proclamation to suspend the duty-free treatment of agricultural products from South Africa,[181] because he determined that South Africa was not making continual progress in meeting the requirements for designation as a beneficiary developing country,[182] by failing to eliminate barriers to U.S. trade.

(South Africa and the United States had in 1999 entered into a trade and investment “framework” agreement under which the parties would seek to expand trade in goods and take “appropriate measures” to “encourage and facilitate” the exchange of goods.[183]

(However, in 2000 the South African government imposed, as it was authorised to do under customs legislation,[184] an anti-dumping duty on imports on bone-in chicken meat[185] from the United States.[186] The South African government initially believed, incorrectly, that the duty lapsed automatically after five years.[187]

(In June 2015 at a meeting in Paris of the two countries’ industries and governments, agreement was reached on a duty-free import quota by South Africa of 65 000 tons of U.S. bone-in chicken pieces per annum with an annual growth factor.[188]

(Pursuant to that, in December 2015 South Africa issued “guidelines” for applications for permits for the quota rebate from the duty, but did not formally invite applications.[189]

(In consequence Obama suspended duty-free treatment of agricultural products from South Africa in January 2016, as mentioned.[190]

(South Africa took steps to remedy the situation in February, by inviting applications for import permits for the year commencing 1 April 2016.[191]

(President Obama accordingly then lifted the suspension of the duty-free treatment of South African agricultural products[192] before the suspension could take effect, satisfied that South Africa had taken steps to cure the situation.[193])

 

[1] Expropriation Act 63 of 1975.

An Expropriation Bill that would replace the Act was passed by Parliament. Expropriation Bill 4D of 2015.

It was presented to the President to sign, but he returned it because it might not pass constitutional muster due to inadequate public participation. Pres J Zuma, State of the Nation Address, 9 Feb 2017.

The Bill is again before Parliament. Proceedings on Bills: 2018, 5th session, Fifth Parliament (2 March 2018).

[2] The Minister of Public Works. Expropriation Act s 1 sv “Minister”.

[3] Expropriation Act s 2(1).

[4] On the date of the notice of expropriation.

[5] Expropriation Act s 12(1)(a)(i).

[6] Union Government v Gass [1959] 4 All SA 392 (A) 402 (on the (similarly worded) Water Act 54 of 1956 s 60(3)(a)(i)–(iv)); Law of South Africa vol 10(3) 2 ed “Expropriation” (A Gildenhuys, G L Grobler) par 85.

[7] Expropriation Act s 12(5)(f).

[8] Expropriation Act s 12(2)(a)(i) and (ii).

[9] Expropriation Act s 12(2)(a)–(d).

[10] Expropriation Act s 12(3) and (4).

[11] Constitution of the Republic of South Africa, 1996.

[12] Constitution s 25.

[13] Constitution s 25(2)(b).

[14] And the time and manner of payment.

[15] Constitution s 25(3)(a)–(e).

[16] Du Toit v Minister of Transport 2005 (11) BCLR 1053 (CC) pars [81] per Langa ACJ dissenting.

[17] Du Toit v Minister of Transport supra pars [2], [26].

[18] Including its spirit, purport and objects generally.

[19] Constitution s 25.

[20] Expropriation Act s 12.

[21] Constitution s 25.

[22] Du Toit v Minister of Transport supra pars [35] and [36]; City of Cape Town v Helderberg Park Development (Pty) Ltd 2007 (6) BCLR 628 (SCA) par [20].

[23] A body representative of the South African legislative sector.

[24] The Panel’s mandate was to identify gaps and propose steps with a view to identifying laws that required amending for purposes of the transformational agenda and pursuit of the developmental state.

Its work was divided into three areas: (i) poverty, unemployment and equitable distribution of wealth, (ii) land reform: restitution, redistribution and security of tenure; and (iii) social cohesion and nation-building.

[25] After holding public hearings in all provinces, commissioning reports from experts and senior researchers on select topics, and holding consultation round tables and workshops to delve deeper into certain issues.

[26] Report of the High Level Panel on the Assessment of Key Legislation and the Acceleration of Fundamental Change, Nov 2017.

[27] Report of the High Level Panel supra pp 50–51:

The Panel is reporting at a time when some are proposing that the Constitution be amended to allow for expropriation without compensation to address the slow and ineffective pace of land reform. This at a time when the budget for land reform is at an all-time low at less than 0.4% of the national budget, with less than 0.1% set aside for land redistribution. Moreover, those who do receive redistributed land are made tenants of the state, rather than owners of the land. Experts advise that the need to pay compensation has not been the most serious constraint on land reform in South Africa to date – other constraints, including increasing evidence of corruption by officials, the diversion of the land reform budget to elites, lack of political will, and lack of training and capacity, have proved more serious stumbling blocks to land reform.

The Panel is of the view that government has not used the powers it already has to expropriate land for land reform purposes effectively, nor used the provisions in the Constitution that allow compensation to be below market value in particular circumstances. Rather than recommend that the Constitution be changed, the Panel recommends that government should use its expropriation powers more boldly, in ways that test the meaning of the compensation provisions in Section 25(3), particularly in relation to land that is unutilised or underutilised.

[28] News24, 27 Feb 2018, “National Assembly adopts motion on land expropriation without compensation”.

[29] The negotiating and signing of international agreements is the responsibility of the national executive. Constitution s 231(1).

[30] Or international organisations.

[31] Or other relation.

[32] Lord McNair, The Law of Treaties, 1961, pp 5–6.

[33] Law of South Africa vol 11 2nd ed, “International law” (N J Botha) par 442.

[34] An international agreement binds the Republic only after it is approved by resolutions in the National Assembly and National Council of Provinces. Constitution s 231(2).

An agreement of a technical, administrative or executive nature, or which does not require ratification or accession, binds the Republic without such approval but must be tabled in both houses. Constitution s 231(3).

[35] Constitution s 231(4).

[36] McNair, supra Chap IV.

[37] A “self-executing” provision of an international treaty (that has been approved by Parliament as aforesaid) is, without the need for statutory implementation, law within the Republic (unless it is inconsistent with the Constitution or an Act of Parliament). Constitution s 231(4).

There is no definition of a self-executing treaty. Law of South Africa “International law” supra par 444 fn 2.

[38] Unless it is inconsistent with the Constitution or an Act of Parliament. Constitution s 232.

[39] Geo. Mason L. Rev. (2006), J Wong, “Umbrella clauses in Bilateral Investment Treaties: Of breaches of contract, treaty violations, and the divide between developing and developed countries in foreign investment disputes” pp 135–136.

[40] United Nations Conference on Trade and Development (UNCTAD), “What are BITs?” (17 Aug 2004).

[41] UNCTAD, 21 Jun 2013 (supra) “International Investment Policymaking in Transition: Challenges and Opportunities of Treaty Renewal”.

[42] United Nations Conference on Trade and Development, 21 Jun 2013, Issues note no. 4, “International Investment Policymaking in Transition: Challenges and Opportunities of Treaty Renewal”.

[43] United Nations Human Rights, Office of the High Commissioner. “Your human rights: Globalisation:

Human rights, trade and investment” http://www.ohchr.org/EN/Issues/Globalization/Pages/GlobalizationIndex.aspx (accessed 10 May 2018).

[44] Mossallam, M., Jan 2015, “Process matters: South Africa’s experience exiting its BITs,” Global Economic Governance Programme, Univ of Oxford, (GEG WP97) p 11.

[45] Bowman Gilfillan, 8 Nov 2013, supra.

[46] Chatham House (Royal Institute of International Affairs): International Law Programme: Meeting Summary: “Investment Treaties: A Debate over Sovereignty, Trade, Development and Human Rights” 11 Oct 2017.

[47] Mossallam, M., Jan 2015, “Process matters: South Africa’s experience exiting its BITs,” (see above) p 5.

[48] Bowman Gilfillan, 8 Nov 2013, supra.

[49] Dept of International Relations and Cooperation: Office of the Chief State Law Advisor: Treaty Section http://www.dirco.gov.za/chiefstatelawadvicer/treatysection.html .

[50] South African Treaty Register https://treaties.dirco.gov.za/dbtw-wpd/exec/dbtwpub.dll .

[51] Estimates vary.

[52] South African Treaty Register ibid.

See also Bowman Gilfillan, 8 Nov 2013, supra.

[53] The precise terms vary.

[54] See, e.g., Agreement between the Government of the Republic of South Africa and the Government of the Italian Republic on the Promotion and Protection of Investments (signed at Rome, 9 Jun 1997), art 5.2.

This BIT has been terminated (see below).

[55] I am indebted to Martin van Staden for extracting the text from current South African BITs.

[56] E.g., Agreement between the Republic of South Africa and the Kingdom of Sweden on the Promotion and Reciprocal Protection of Investments (sgd at Stockholm, 25 May 1998), art 4(1)(c).

[57] The wording of the so-called “Hull formulation” which was coined by U.S. secretary of state Cordell Hull in a letter to the Mexican government in 1938 demanding compensation for American landholders affected by Mexico’s expropriation of farmland as part of that country’s agrarian reform.

[58] Patrick J Smith, “Determining the Standard Compensation for the Expropriation of Nationalised Assets: Themes for the Future”, 1997 Monash Univ L Rev 159.

[59] See above.

[60] Agreement between Government of Republic of South Africa and Government of United Kingdom of Great Britain and Northern Ireland for Promotion and Protection of Investments (sgd 20 Sep 1994) art 5(1).

This BIT has been terminated (see below).

[61] Bowman Gilfillan, 8 Nov 2013, supra.

[62] Minister of Trade and Industry Dr Rob Davies, Speech delivered at the South African launch of the United Nations Conference on Trade and Development (UNCTAD) Investment Policy Framework for sustainable development, (26 Jul 2012) Univ of the Witwatersrand.

[63] E.g., Agreement between the Government of the Republic of South Africa and Government of the Republic of France on the Reciprocal Promotion and Protection of Investments (sgd at Paris, 11 Oct 1995), art 11.

This BIT has been terminated (see above).

[64] E.g., Agreement between South Africa and Sweden on Promotion and Protection of Investments (supra), art 10(2).

[65] ACTS Online News, 29 Oct 2013, “Cancellation of bi-lateral trade agreements sows confusion” (Ivo Vegter).

[66] IOL Business Report, 12 Nov 2013, “Gloves come off over EU treaties” (W Khuzwayo).

[67] The terminated BITs are agreements for the promotion and protection of investments (titles vary) with

Argentina, Austria, the Belgo-Luxemburg Economic Union, Denmark, France, Germany, the Netherlands, Spain, the Swiss Confederation and the United Kingdom. South African Treaty Register https://treaties.dirco.gov.za/dbtw-wpd/exec/dbtwpub.dll (accessed 14 May 2018).

[68] The BITs with Algeria Angola, Canada, Chile, the Czech Republic, Egypt, Equatorial Guinea, Ethiopia, Gabon, Ghana, Guinea, Guinea, Iran, Israel, Kuwait, Libya, Madagascar, Mozambique, Qatar, Rep. of Congo, Rwanda, Sudan, Tanzania, Tunisia, Turkey, Uganda and Yemen.

[69] Vienna Convention on the Law of Treaties, 1969, art 2(1)(b); see also arts 11, 14 and 16.

[70] McNair supra p 129.

[71] United Nations Treaty Collection: Overview: Glossary (sv “ratification”).

[72] The BITs with the People’s Republic of China, Cuba, Finland, Greece, Italy, South Korea, Mauritius, Nigeria, Russia, Senegal, Sweden and Zimbabwe.

[73] The BITs with Greece and Italy.

[74] See South African Treaty Register svv “19970509 Italy…To terminate on 15 March 2019” https://treaties.dirco.gov.za/dbtw-wpd/exec/dbtwpub.dll.

[75] General Agreement on Tariffs and Trade.

[76] Houde, M. and K. Yannaca-Small (2004), “Relationships between International Investment Agreements”, OECD Working Papers on International Investment, 2004/01, OECD Publishing.

[77] Leon Trakman, “Foreign Direct Investment: An Australian Perspective” (2010) 13 International Trade and Business Law Review 31 at 42.

[78] Bowman Gilfillan, 8 Nov 2013, “Bilateral Investment Treaties – a shield or a sword?” (J Lang).

[79] South Africa signed the Covenant on 3 Oct 1994 and ratified it on 10 Dec 1998. U. N. Treaty Collection, Chap IV–Human Rights: 4 International Covenant on Civil and Political Rights, New York 16 Dec 1966.

https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IV-4&chapter=4&lang=en#EndDec .

Its provisions became internationally binding on the Republic on 10 March 1999. (The Covenant enters into force for each State ratifying it, three months after the date of the deposit of its instrument of ratification. International Covenant on Civil and Political Rights art 49(2).)

[80] In re: Certification of Constitution of Republic of South Africa 1996: 1996 (10) BCLR 1253 (CC) par [71].

[81] International Covenant on Civil and Political Rights, 1966, art 26.

[82] Convention establishing the Multilateral Investment Guarantee Agency, 1985, art 2(a), read with art 3 (c).

[83] Multilateral Investment Guarantee Agency (“MIGA”) website https://www.miga.org/who-we-are/miga-convention/ .

[84] Convention establishing MIGA art 3(a) and (c) read with Sched A category 1 (developed countries) and category 2 (developing countries).

[85] Scheds A and B to the Convention may be amended by the Agency’s council by special majority. Convention establishing MIGA art 59(b).

[86] Multilateral Investment Guarantee Agency: Who we are: Member countries https://www.miga.org/who-we-are/member-countries/ .

[87] Convention establishing MIGA art 11(a)(ii).

[88] Convention establishing MIGA ibid.

[89] J.L. Brierly, The Law of Nations 284 (6th ed. 1963).

[90] The Permanent Court of International Justice, predecessor of the International Court of Justice, was provided for in the Covenant of the League of Nations. It held its inaugural sitting in 1922 and was dissolved in 1946.

[91] The Factory at Chorzow (Claim for Indemnity) (the Merits) (Germany v Poland),  PCIJ Reports [1928] ser. A no. 17, pp 46–47.

See also International Institute for Sustainable Development: Best Practices Series, Mar 2013, Suzy H Nikièma, “Compensation for Expropriation” pp 2, 3.

[92] Haliburton Fales, “A Comparison of Compensation for Nationalization of Alien Property with Standards of Compensation under United States Domestic Law,” 5 Northwestern Journal of International Law and Business 871 (1983-1984) p 873.

[93] Amir Rafat, “Compensation for Expropriated Property in Recent International Law”, Villanova Law Review vol 14 (1969) p 199.

[94] Law of South Africa vol 11 2 ed, “International law”, N J Botha, par 134.

[95] Resolution 217 III Paris 10 Dec 1948.

[96] Byelorussia, Czechoslovakia, Poland, Saudi Arabia, South Africa, Soviet Union, Ukraine and Yugoslavia.

[97] Universal Declaration of Human Rights, 1948, arts 7 and 17(1) and (2).

Customary international law is law in the Republic unless it is inconsistent with the Constitution or an Act of Parliament. Constitution s 232.

[98] General Assembly resolution 3281 (XXIX), New York, 12 Dec 1974, art 2.2.c. (italics added).

[99] Constitution s 25.

[100] Constitution s 25(3)(a)–(e).

[101] Statute of the International Court of Justice, art 38.

[102] See the discussion in Harris, D. J., Cases and Materials on International Law (1973) London pp. 56–57.

[103] CAB/LEG/67/3 rev. 5, 21 I.L.M. 58 (1982), entry into force 21 Oct 1986.

[104] The draft charter was approved by the then Organisation of African Unity at its 18th Assembly in Nairobi, Kenya on 27 Jun 1981.

It would come into force three months after reception by the Secretary General of instruments of ratification or adherence of a simple majority of member states. African Charter on Human and Peoples Rights, art 63(3).

The Charter came into force on 21 Oct 1986. Oversight and interpretation of the Charter is the task of the African Commission on Human and Peoples’ Rights, which was set up in 1987.

The Commission is now headquartered in Banjul, Gambia. African Commission on Human and Peoples’ Rights, http://www.achpr.org/instruments/achpr/ .

[105] Inter alia. Banjul Charter, Preamble. (Italics added.)

[106] Banjul Charter, art 14 (italics supplied).

[107] R Gittleman, “The African Charter on Human and Peoples’ Rights: A Legal Analysis”, Virginia Journal Of International Law, vol. 22:4 [1982] p 667 at 699.

[108] R M D’Sa,  “The African Charter on Human and Peoples’ Rights: Problems and Prospects for Regional Action”, Australian Year Book of International Law, vol 10 [1981] 101 at 113.

[109] Gittleman ibid; D’Sa ibid.

[110] Banjul Charter, art 21 (italics supplied).

[111] Inter alia.

[112] Treaty of the Southern African Development Community, adopted in 1992 and entered into force in 1993.

[113] Inter alia.

[114] SADC Treaty art 4(c).

[115] SADC Treaty art 6.1.

[116] Inter alia.

[117] SADC Treaty art 6.2.

[118] On 14 Aug 2001.

[119] Protocol on the Tribunal of the Southern African Development Community.

[120] Protocol on Tribunal of SADC art 15.1.

[121] Constitution of Zimbabwe 1979 (the “Lancaster House” Constitution) as amended.

(That constitution has been replaced, i.t.o. Constitution of Zimbabwe Amendment (No. 20) Act, 2013.)

[122] Constitution of Zimbabwe 1979 s 16B(2) and (3).

[123] Pillay P, and Mtambo, Mondlane, Kambovo and Tshosa JJ.

[124] Mike Campbell (Pvt) Ltd and 78 others v Republic of Zimbabwe (2/2007), [2008] SADCT 2.

[125] Campbell and Etheredge v Republic of Zimbabwe, SADC Tribunal, 5 Jun 2009.

[126] See Government of Zimbabwe v Fick and others 2013 (CC) supra par [15].

[127] Protocol on Tribunal of SADC art 32.2.

[128] Government of Zimbabwe v Fick and others 2013 (CC) supra par [35].

See Foreign States Immunities Act 87 of 1981 s 3(1).

[129] Campbell and Etheredge v Republic of Zimbabwe, SADC Tribunal, 5 Jun 2009.

[130] Tribunal judges wrote to the SADC secretary that the Summit’s decision effectively dissolved the court and was ultra vires, and the Summit could not prevent it hearing cases. “The Disbanding of the SADC Tribunal: A Cautionary Tale”, L Nathan, Human Rights Quarterly (J Hopkins Univ Press), vol 35 [Nov 2013] pp 870–892.

[131] The 2014 Protocol is considered to be inadequate to meet the needs of a regional organisation committed to economic development. G J Naldi, K D Magliveras, “The New SADC Tribunal: Or the Emasculation of an International Tribunal” Netherlands International Law Review Jul 2016 vol 63(2) pp 133–159.

[132] Mlambo JP and Mngqibisa-Thusi and Fabricius JJ.

[133] Law Society of South Africa and others v President, Minister of Justice, and Minister of International Relations and Cooperation [2018] 2 All SA 806 (GP), per (1 Mar 2018).

[134] Mouhamadou Madana Kane, “The Pan-African Investment Code: a good first step, but more is needed,” Columbia FDI Perspectives, No. 217, 15 Jan 2018.

[135] Economic Affairs Department, African Union Commission, Draft Pan-African Investment Code (Dec 2016).

[136] Draft Pan-African Investment Code art 51.1.

[137] Dr. Amr Hedar, “The legal nature of the draft pan-African investment code and its relationship with international investment agreements” South Centre, Investment Policy Brief No. 9, Jul 2017.

[138] Draft Pan-African Investment Code, art 11.1.c.

[139] Immediately before the date of expropriation, and must not reflect any change in value occurring because the intended expropriation had become known earlier. Draft Pan-African Investment Code, art 12.1.

[140] Draft Pan-African Investment Code, art 12.2.

[141] Draft Pan-African Investment Code, preamble and art 2.1.

[142] African Union: Member states: https://au.int/en/memberstates .

[143] M M Kane, “The Pan-African Investment Code: a good first step, but more is needed” (see above).

[144] Protection of Investment Act 22 of 2015.

[145] Protection of Investment Act, Long title.

[146] Memorandum on the objects of the Promotion and Protection of Investment Bill.

[147] Promotion and Protection of Investment Bill [B18—2015].

[148] Memorandum on the objects of the Promotion and Protection of Investment Bill, paras 1.1–1.7.

[149] Sic.

[150] Inter alia.

[151] And obligations.

[152] Protection of Investment Act s 4(a).

[153] Protection of Investment Act s 8(1) read with ss (2) and (3).

[154] Constitution s 25.

[155] By proclamation in the Gazette. Protection of Investment Act s 16.

[156] Constitution s 25.

[157] Constitution s 25(2)(b).

[158] And the time and manner of payment.

[159] Including the property’s current use, the history of its acquisition and use, its market value, the extent of direct state investment and subsidy in the acquisition and capital improvement of the property, and the purpose of the expropriation. Constitution s 25(3)(a)–(e).

[160] News24, 27 Feb 2018, “National Assembly adopts motion on land expropriation without compensation”.

[161] As a rule. Constitution s 231(4).

[162] Constitution s 232.

[163] Trade and Development Act of 2000 [Public Law 106–200, 106th Congress, 18 May 2000].

[164] Inter alia.

[165] Trade and Development Act of 2000 Title I (“African Growth and Opportunity Act”) (Extension of certain trade benefits to sub-Saharan Africa) s 101.

[166] See AGOA.info “About AGOA” https://agoa.info/about-agoa.html .

[167] The U.S. Code is a consolidation and codification by subject matter of the general and permanent laws of the United States. Office of the law revision counsel: United States Code. http://uscode.house.gov/ .

[168] Provisions of the Code are reproduced here in abbreviated form.

[169] 19 USC Title 19—Customs duties. Chap. 23: Extension of certain trade benefits to sub-Saharan Africa. subchap. I—Trade policy for sub-Saharan Africa: §3701 as amended.

[170] 19 USC §3701.

[171] 19 USC §3703(1)(A), (B), (C)(i) and (3).

[172] President Clinton designated South Africa a beneficiary sub-Saharan African country in Oct 2000: Proc 7350 of 2 Oct 2000.

See also Office of the United States Trade Representative: Preference Programs: Generalized System of Preferences (GSP): GSP Program Information: GSP-eligible beneficiaries (as of March 2018),  https://ustr.gov/sites/default/files/gsp/Beneficiary%20countries%20March%202018.pdf .

[173] After receiving advice from the International Trade Commission.

[174] 19 USC Title 19—Customs duties. Chap. 12: Trade Act of 1974. subchap. V— Generalized system of preferences: §2466a.(a)(1) read with §§2461, 2448(1) and 2463(a)(1)(A) and 2467(1) .

[175] Approximately another 1,500 articles are designated solely for “least developed” beneficiary developing countries. U.S. Dept of Homeland Security: Customs and Border Protection: Generalized system of preferences https://www.cbp.gov/trade/priority-issues/trade-agreements/special-trade-legislation/generalized-system-preferences .

[176] See, e.g., Tralac, 15 Mar 2016, “South Africa keeps U.S. duty-free access after trade dispute”.

[177] U.S. Dept of Homeland Security: Customs and Border Protection: Generalized system of preferences, https://www.cbp.gov/trade/priority-issues/trade-agreements/special-trade-legislation/generalized-system-preferences (as at 17 May 2018).

[178] 19 USC §2462(a)(1) and (b)(2)(D)(i)(I) and (ii)(I), (II) and (III).

[179] 19 USC §2462(d)(2) read with (b)(2)(D)(i)(I).

[180] Proc 8468 of 23 Dec 2009.

[181] With effect from 15 Mar 2016.

[182] Proc 9388 of 11 Jan 2016 by the President of the U.S.

[183] Trade and Investment Development Agreement between South Africa and the United States, 18 Feb 1999, art 1(1) and (2).

[184] Customs and Excise Act 91 of 1964 ss 55 and 56 read with sched 2.

[185] Customs and Excise Act sched 2 Pt 1 tariff subheading 0207.14.9.

[186] Customs and Excise Act 91 of 1964 sched 2 item introduced by Govt Notice R1427 of 27 Dec 2000.

[187] Association of Meat Importers & Exporters and others v International Trade Administration Commission and others [2013] 4 All SA 253 (SCA) pars [21], [40], [45], [83].

[188] Paris Agreement 5-6 Jun 2015. “The SA-US AGOA Negotiations: A Game of Chicken.” Presentation by Dr Faizel Ismail to TIPS Development Dialogue, Jan 2017.

[189] Govt Notice R1242 of 18 Dec 2015.

[190] With effect from 15 Mar 2016.

[191] Govt Notice 88 of 2 Feb 2016. Dept of Agriculture, Forestry & Fisheries. Invitation to submit applications for quota import permits for rebate of anti-dumping duty on frozen bone-in chicken pieces imported from United States of America.

[192] Proc 9406 of 14 Mar 2016 by the President of the U.S.

[193] Tralac, 15 Mar 2016, “South Africa keeps U.S. duty-free access after trade dispute”.

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Gary Moore

Gary Moore BA LL.B. (Witwatersrand) LL.M. (UC London) is a South African lawyer and Senior Researcher at the Free Market Foundation.

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