HomeBusiness DigestEric Bloch: Bippa Signing a Non-event

Eric Bloch: Bippa Signing a Non-event

LAST week, with intense governmental and state-media acclaim, and in the presence of many of Zimbabwe’s and South Africa’s business leaders, a long-awaited Bilateral Investment  Promotion and Protection Agreement (Bippa) was entered into between Zimbabwe and South Africa.

Spokesmen for both governments heralded the conclusion of the Bippa as a stupendous action which would reinforce the close ties between the two countries, would be a major catalyst for Zimbabwean economic recovery, and especially so as it would motivate very considerable South African investment into Zimbabwe.

It is indisputable that investment is a key element of a substantive recovery of Zimbabwe’s long distressed and greatly oppressed economy.

Sadly, however the governments of Zimbabwe and South Africa are deluding themselves, and are striving to delude others, by their contentions that the execution by them of last week’s Bippa will considerably facilitate investment into Zimbabwe.

The hard and tragic fact is that most potential investors from South Africa consider the Bippa to be a non-event, and that it will accord no protection to any investments they would make in Zimbabwe.

The potential investors are fully aware that, progressively over the nearly 30 years of Zimbabwean independence, many Bippas have been entered, in the main (but not exclusively) with numerous countries within the European Union.

But they are aware that those Bippas did absolutely nothing to protect the nationals of those countries from the expropriation of their farms in Zimbabwe in which they had extensively invested over many years.

Not only were they not given their lawful entitlement of Bippa protection, but they suffered the loss of their farms, their crops, their homes, their moveables, and many other assets, without any compensation from Zimbabwe, to which they were lawfully entitled.

Moreover, in many cases, the expropriation of their investments was effected with brutal force and violence, in contemptuous disregard for the fundamental principles of law and order, justice and international norms of human rights.

Zimbabwe has demonstrated such disdain for its Bippa obligations that the authorities have not only stood idly by whilst those obligations were being blatantly disregarded but, in innumerable instances, have been part and parcel to the violent theft of land and all the assets thereon.

Zimbabwe has sought to justify such theft by recurrent specious allegations that the actions were naught but reversal of prior theft of the land by evil, self-enriching colonialists, and by legislating state acquisition, redistribution and resettlement of the lands.

Even if there was substance to those governmental contentions and allegations, government apparently espouses the concept that “two wrongs make a right”. In trying to substantiate that philosophy, it steadfastly denies any compensatory obligations, categorically stating that any compensatory obligations are those of the former colonial power.

It does so without distinguishing between those lands which have been occupied and utilised in the pre-colonial era, and those that were wholly unoccupied and devoiAd of usage.

Zimbabwe’s government pursues its land policies with flagrant scorn not only for the Bippas entered into by it, but also with arrogant unconcern for determinations by regional and international courts.

Rulings by those courts that the lands be restored to those ousted from them, or that full and just compensation be paid, have been studiously ignored by the government, save for spurious statements dismissing the authority of the courts.

In the main, government has stubbornly even failed to acknowledge such court determinations but, when rarely commenting thereon, have challenged the validity of the rulings on grounds that the expropriation of the lands was merely a righting of a previous wrong, and was wholly in accord with prevailing law.

Concurrently, it has denied that the courts have any jurisdiction to hear the cases, let alone determine upon them, notwithstanding Zimbabwe’s obligations to recognise jurisdiction in terms of its United Nations and Sadc memberships.

Therefore, the general reaction of South Africa’s investor community is that the newly-executed Bippa will, in practice, yield no investment protection. Admittedly, South Africa’s Industry minister, Rob Davies, who attended the Bippa signing ceremony, contended otherwise, and highlighted imminent investment funding into Zimbabwe by the Industrial Development Corporation of South Africa, and by the Development Bank of Southern Africa (although, as South African governmentally influenced bodies, such investment is not reflective of private sector investor perceptions).

The reservations and concerns of potential South African investors are further intensified by the recurrent Zimbabwean government statements on intended indigenisation and economic empowerment policies. Whilst, almost without exception, foreign investors are supportive of the principles of indigenisation and economic empowerment, they are not prepared to be reduced to the roles of junior partners in investments funded and developed by them.

Recent statements that not less than 51% of all foreign-owned companies must be owned by indigenous Zimbabweans give no confidence to potential investors that Zimbabwe is a desirable investment destination. Nor do reported statements by Zimbabwe’s Economic Planning and Development minister, by its Finance minister, and by its Mines minister, of intended massive escalations in rates of mining royalties, encourage investment into Zimbabwe’s mining sector, despite its vast potential.

Similarly, the very one-sided Zimbabwean labour legislation, and the extreme confrontational nature of much of Zimbabwe’s trade unions and labour force, does not constitute an incentive to invest in Zimbabwe. Investment security is grievously in jeopardy when there is a massive divide between employers and labour, when there are recurrent threats of industrial action by labour, and when productivity is markedly jeopardised.

If the Zimbabwean government wishes to attract South African (and other) investment, which it should do if it has any real concern for the wellbeing of Zimbabwe and its people, it needs belatedly to honour all its Bippas.

It needs to comply with the rulings of regional and international courts, to make good on its innumerable Bippa defaults, and demonstrate its intent to fulfil any and all obligations that it has under the international agreements to which it is a party.

It needs to reform and modify its programmes of land acquisition, redistribution and resettlement to those as are just and equitable, and productive.  It needs to demonstrate, beyond any doubt whatsoever, compliance with, and enforcement of, law and order and respect for property and for human rights.

If it does so, South African investment into Zimbabwe will be very substantial, and will contribute greatly to Zimbabwean economic success. If it does not, then last week’s Bippa signing will prove to be an investment non-event, for investment inflows from South Africa, and elsewhere, will be minimal.


Eric Bloch

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