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SA faces R80m claim for Zimbabwe farm loss

Business Day, South Africa

SA faces R80m claim for Zimbabwe farm loss

By John Kaninda

Zimbabwe talks ‘to resume soon’

A Free State farmer who had farms in Zimbabwe repossessed is taking SA’s government to court to try to force it to ratify a treaty designed to protect South African investments abroad.

A weekend newspaper reported that Crawford von Abo was asking the high cCourt to order the government to ratify a treaty whereby disputes could be referred to an international settlement body - or to pay him compensation of R80m.

Von Abo, who says he has been investing in farming in Zimbabwe since the 1950s, says the government’s failure to provide him with diplomatic protection - his constitutional right - translated into losses of R80m. These were incurred by the repossession of his farms by the Zimbabwean government five years ago. Now he wants to force Pretoria to legalise the International Centre for the Settlement of Investment Disputes (ICSID).

The ICSID is a mediation facility set up by the World Bank tasked with protecting foreign investments in member countries.

An expert on international law says the government would be reluctant to sign a treaty providing greater protection for South African investments abroad. Andre Thomashausen, a professor of comparative law at the University of SA , said Von Abo’s efforts had “slim” chances of success.

Thomashausen said it would be “very difficult for Von Abo to get help from the government” for something that happened at a time when a treaty had not been signed.

“Moreover, the government will not accept liability for deeds of the Zimbabwean government.”

Von Abo’s lawyer, Willy Herbst, was confident of a positive outcome.

“ I feel we have a good case.”

Herbst is seeking to finalise a court date.

Thomashausen ascribed SA’s reluctance to accept the ICSID to a local “culture of arrogance”, which considered institutions such as the ICSID as fitting “only for unstable countries, not stable countries such as SA”.

“It is like we think that there is no need for such a facility. But the ICSID is very effective mechanism ,” Thomashausen said.

“And it is quite paradoxical for SA to encourage its companies to expand abroad while at the same not providing adequate protection for their investments.”

SA’s neglect in providing better protection for its companies investing beyond its border was highlighted two weeks ago when Trade and Industry Minister Mandisi Mpahlwa acknowledged that SA “had not come round to signing” a bilateral promotion and protection agreement with Zimbabwe.

Negotiations for that agreement have been continuing for the past couple of years.

Thomashausen said South African companies willing to invest in other African countries would be advised to register subsidiaries in member countries of the ICSID. “That could be the only way currently available to them to receive protection,” said Thomashausen.