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Protection agreement in murky waterThe much-talked about Bilateral Investment Promotion and Protection Agreement (Bippa) between South Africa and Zimbabwe, to create an enabling and protective environment for investments made by nationals of both countries, may have fallen flat even before it got off the ground. It almost immediately became embroiled in controversy.
Intended to provide security to South African investments in Zimbabwe in order to promote investment and open up credit lines, as it stands now it seems not worth much more than the paper it is written on.
Among the developments affecting the agreement, signed on Friday between the two countries, are:
• The property rights of dispossessed South African farmers in Zimbabwe being ignored in the agreement in favour of political expediency;
• A court bid in Pretoria to halt the signing of the agreement failed, but succeeded in getting the court to order the South African government to protect the land rights of its citizens in Zimbabwe, as well as to respect the rulings of the human rights tribunal of the Southern African Development Community (SADC) in this regard;
• The secrecy in which the agreement was finalised, caused Business Unity South African to boycott the signing ceremony; and
• The ongoing lack of any real guarantee of security for investors in Zimbabwe despite the signing of the agreement.
The high hopes that existed for the fail-safe protection of foreign investments, the restoration of property rights – and thus also productivity – in the devastated agricultural sector, as well as for a resulting new US$50-million credit line from South African business and for the revival of the previous R2.7-billion facility that would help place Zimbabwe on the road to recovery, now appear to be smudged in the ink used to sign the questionable agreement.
The agreement had fallen victim to political expediency when South African Trade and Industry Minister Rob Davies allowed the Zimbabweans to exclude the restoration of property rights of, or claims for compensation by South African farmers who lost their land in the much-condemned illegal land grab by President Robert Mugabe and his Zanu-PF party.
Negotiations over this point between South Africa and Zimbabwe caused considerable delay to the signing of the agreement, which was originally intended to have been signed in April.
In the end, political expediency won when Davies succumbed to Zimbabwean demands that no retrospective clause regarding the rights of farmers who lost land prior to the agreement being signed, be included. In effect, that would have meant that the South African government would have contravened its own laws as well as having been party to allowing Zimbabwe to flout a SADC ruling in this regard, despite both countries being signatories to the SADC treaty.
The ruling by a tribunal of the SADC was obtained last year by some 70 other farmers whose land had been seized. The SADC tribunal called Zimbabwe’s land grab illegal and ruled that seized land be restored to the former owners or compensation be paid to them. Zimbabwe, however, has ignored the ruling and says it does not recognise the tribunal.
When it became clear that the rights of farmers would not be protected in the BIPPA agreement, the South African rights group AfriForum went to court on behalf of Louis Fick, a South African farmer in Zimbabwe and vice president of that country’s Commercial Farmers’ Union, and some 244 other South African farmers. Fick had been one of the farmers who last year turned to the SADC tribunal.
The South African government forged ahead with the BIPPA, despite an ongoing struggle between Fick and Zimbabwean Reserve Bank Governor Edward Mashiringwani, who is trying to seize his farm in Zimbabwe. In the struggle, several of Fick’s farmworkers were recently shot, apparently by parties aligned with Mashiringwani.
The court order and out-of-court settlement reached between AfriForum and the Department of Trade and Industry in Pretoria last week, in effect forced the South African government to acknowledge that the Zimbabwean land grabs were illegal and that affected South Africans had a right to launch claims for compensation in terms of the SADC tribunal’s judgement.
The government gave assurances that it would respect and honour the SADC tribunal's rulings and to protect victims of the unlawful land grab campaign still continuing in Zimbabwe.
The government's legal representatives said in court papers that the text of the BIPPA, which at that point was still being kept secret, did not purport to grant immunity to Zimbabwe for any human rights violations.
In another Pretoria High Court ruling last year, a judge criticised the South African government for not protecting the rights of Free State farmer Crawford von Abo, whose farm in Zimbabwe had been seized. Von Abo won his bid to get compensation from the South African government for not acting on his behalf to protect his rights to his land in Zimbabwe.
The agreement also excluded other critically important parties from the negotiating process who, in turn, are withholding their support and without which it is likely to fail.
Business Unity South Africa (BUSA), which represents almost every business organisation or association in South Africa, objected to the secrecy in which the agreement was reached. The details of the agreement were only made known at Friday’s signing ceremony, which BUSA boycotted.
In a statement prior to the signing, BUSA said it was committed to making a positive contribution to the economic reconstruction and development of Zimbabwe, and remains broadly supportive of an agreement between the Governments of South Africa and Zimbabwe which promotes and protects bilateral investment.
It said, however, that it would not be possible for BUSA to participate in the signing ceremony, as there had been no formal consultation between the South African Government and organised business on the proposed agreement.
The reported content of the agreement has raised significant concerns for some BUSA members, the organisation said. BUSA said it did not have full information about the scope of the agreement and it was these uncertainties that were particularly worrisome for the business community.
BUSA said it hoped that there would be a transparent and robust debate around the issues as part of the Parliamentary processes before the agreement is ratified. But, BUSA added, the rights of those who have had land and other interests expropriated or nationalised in Zimbabwe to seek recourse cannot, however, be compromised in order to achieve the protection of future investments.
In the end, Minister Davies travelled to Harare for the signing ceremony with a smattering of some 60 South African businesspeople, a number being members of South Africa’s ruling politico-business establishment and others being officials of parastatals. According to Davies, South African development finance institutions such as the Industrial Development Corporation (IDC) are considering a number of infrastructure development projects in transport, energy, telecommunications and agribusiness.
But apart from known investments already made in Zimbabwe by South African mining companies and a few others, it is unclear how much interest the South African private sector finally showed in the signing of the BIPPA last week, given the secrecy and uncertainty that prevailed. Indications are that the response has been lukewarm.
However, of greater concern is the fact that, as reportedly pointed out by BUSA chief executive officer Jerry Vilakazi, the BIPPA will only have force once ratified by the Zimbabwean Parliament and no deadline has been set for this.
Some BUSA members, who in the past had been subjected to expropriation in Zimbabwe, apparently noted that they have no assurance that their investments will not be appropriated a day after the signing of this agreement.
And while Zimbabwe will be committed to protecting South African investors after ratifying the agreement, such promises have counted for little in the past. It is claimed a large number of Dutch farmers had their land seized despite a 1996 protection agreement, while German-owned forest plantations were also seized despite agreements with Germany.
Cane growers in the south of the country supposedly protected by an agreement with France also had their assets seized.
In a few other cases, however, it is said that Germany, France and Denmark had intervened successfully on behalf of their citizens who owned agricultural land in Zimbabwe. But the situation is fluid and no firm protection seems to exist despite ratified protective agreements.
The agreement between Zimbabwe and South Africa is the third that Zimbabwe has signed with SADC countries, while it also signed and ratified agreements with China, Denmark, Germany, Netherlands, the Swiss Federation and Yugoslavia. It has not yet ratified similar agreements it made with Egypt, France, Iran, Italy, Singapore, Sweden, the United Kingdom and the United States.
Meanwhile, these developments threatened South Africa's reputation as a law-abiding country. Had AfriForum not forced an agreement to the contrary out of the South African government, the BIPPA would effectively have given Zimbabwe immunity from any court actions against its illegal takeover of land.
