South African investors flocked to Harare this week to sign an investment protection agreement that Zimbabwe hopes will help to support its recovery. But criticism grew as the two governments ignored the protection of the country’s besieged farmers.
The Bilateral Investment Promotion and Protection Agreement (Bippa) will be signed in Harare on Friday.
Zimbabwe hopes the agreement will bring in about R2,7-billion worth of credit and restore some confidence among wary South African investors.
The agreement aims to protect South African investments from expropriation and nationalisation, but farmer groups say it does nothing to protect farmers from continuing attacks and evictions.
Lawyers representing farmers’ unions in Zimbabwe warned this week that South Africa could be in breach of its own and international law by signing the agreement in its current form.
A Southern African Development Community (SADC) tribunal ruled that Zimbabwe’s land reform is discriminatory, whereas a South African court last year rapped the South African government for failing to protect a citizen from being forced off a farm. Zimbabwe has ignored the tribunal’s ruling, even after the court found it in contempt.
The lawyers warned: ”In our view, if the South African government proceeds to conclude the Bippa and in terms thereof purports to immunise Zimbabwe from its international law liabilities, the South African government would act contrary to the principles of the SADC treaty and other international instruments, and in violation of the South African Constitution, and may in law be interdicted against doing so.”
The agreement should have been signed in April in Polokwane, but the two parties haggled over Article 11 of the agreement, which relates to the nature of investments to be protected under the deal.
The original draft of the agreement would have given blanket protection of all foreign investments, including farms, but Justice Minister Patrick Chinamasa and Attorney General Johannes Tomana objected to its protection of foreign farmers.
South Africa wanted an agreement covering land investments made before President Robert Mugabe’s government began seizing land in 2000. But in the agreement that led to the formation of the unity government Mugabe managed to secure a key clause stating there would be no reversal of takeovers.
Zimbabwe ensured the investment agreement applies ”to all investments whether made before or after the entry into force of this agreement, but shall not apply to any dispute which arose before entry into force of this agreement.”
Zimbabwean officials had said during negotiations that the original text was ”too general”. Allowing protection or compensation for farms would have been in violation of the country’s Constitution, which specifically states there would be no compensation for land, but only for ”improvements”, and also bars displaced farmers from challenging land seizures.
The controversy has not affected the appetite of South African businesses for opportunities in Zimbabwe. South African Trade Minister Rob Davies will lead more than 60 investors to Harare for the signing.
Zimbabwe’s economic planning secretary, Desire Sibanda, said the deal would restore confidence in investors ”who were sceptical about whether this is the right time to do business in Zimbabwe”
Negotiations have opened for US$50-million in new lines of credit from South African firms, while talks continue for the revival of a previous R2,7-billion facility.
Zimbabwe has committed to protecting South African investors. But such promises have counted for little in the past. South African farmer Louis Fick’s workers were attacked during a fight with deputy Reserve Bank governor Edward Mashiringwana for his farm north of Harare.
Unions say 70 Dutch farmers have lost their properties despite a 1996 protection agreement. Forest plantations in the east of the country have been taken over, despite agreements with Germany.
Cane growers in the Mkwasine and Hippo Valley Estates in the south of the country, many of them protected by an agreement with France, have also been grabbed.
Zimbabwe is desperate for foreign support for its ambitious recovery plan. According to a new economic recovery programme, the second under the unity government, the country needs $1-billion over an initial 10-month period to keep the slow recovery in factory output going.
The new plan recognises none of the ambitious targets of 15% annual growth will be met unless sanity is restored to the farms. Once this happened, it says, agriculture would grow 33,5% in 2009-2010, 20% in 2011 and 10% from 2012 to 2015. A land tax would be introduced to punish poor land use.
But apart from promising a land audit — an old pledge of the government — there is little in the new programme to suggest stronger action is planned to end new land seizures and violations of investment agreements.