SA must act on Zim property rights

iAfrica.com

SA must act on Zim property rights

7 March 2006

The government should stop procrastinating over the implementation of an international agreement which would protect South African property rights in Zimbabwe - now that Harare planned to nationalise mines, says the official opposition.

The Democratic Alliance (DA) noted that Implats and Anglo American were among those companies which would be affected by the move.

Investors

DA chief whip Douglas Gibson said if South Africa did not act immediately, "it would send the most negative message to international investors we could possibly transmit".

It was reported last Friday that the Zimbabwean government - in terms of the proposed mining regime - would hold 51 percent of all shares in mines for energy minerals, platinum and diamonds, Gibson noted.

"The amendments will ensure that all existing mines will immediately have to cede 25 percent of their shares to the State as soon as the act becomes law and the remaining shares be transferred to the State over a five year period. The Zimbabwean government however will not pay for these shares."

Gibson noted that the proposed nationalisation would not only have a negative impact on investment in the Zimbabwean economy as a whole, it had particularly negative consequences for South African companies with substantial mining interests in Zimbabwe such as Implats - the world’s second biggest platinum producer - and Anglo American.

He pointed out that Implats had already warned that the government’s plans would violate existing agreements.

Unacceptable

Gibson argued that it was unacceptable that South Africa and Zimbabwe had yet to sign the Bilateral Investment Promotion and Protection Agreement (BIPPA).

At a media briefing in February this year Foreign Minister Nkosazana Dlamini-Zuma stated that as far as she knew an agreement had been concluded and that it was simply a matter of the respective trade and industry ministers signing this agreement.

"But this has been her refrain for years now. Given the serous threat to South African commercial interests in Zimbabwe, it is high time that the government fast tracked the signing of this agreement."

Gibson said Harare needed to be sent an unequivocal message that it cannot simply act with impunity when it comes to threatening South African interests.

"The reality is that if Zimbabwe embarks on wide scale nationalisation of the mining industry and South Africa does nothing to stop it, then this will send a message to the world that property rights are not taken seriously in our region - the consequences of which for investment will be devastating."

source: