South Africa’s protracted struggle in global spaces
South Africa’s protracted struggle in global spaces
As South Africa’s political honeymoon at the global level slowly fades away, it is becoming increasingly apparent that it is engaged in a protracted struggle with the obligations imposed by international law.
The country’s adherence to international legal norms has become a significant battle, giving rise to interesting questions about its ability to balance domestic imperatives with international obligations.
Additionally, SA’s approach to international law has been influenced by its foreign policy priorities and political considerations.
This article considers three examples where these tensions are particularly evident: the recent proposition to review the international treaty governing refugee protection, the decision to terminate bilateral investment treaties (BITs) and the enduring indecision concerning the International Criminal Court (ICC).
The Department of Home Affairs proposes to review the international refugee protection treaty, acknowledging the “error” in extending socioeconomic rights to asylum seekers. Unveiling a White Paper on Citizenship, Immigration and Refugee Protection, Home Affairs Minister Aaron Motsoaledi proposed to reshape SA’s migration system. The Cabinet approved the White Paper on November1, 2023, and is now open for public consultation following its gazetting.
Among others, the White Paper suggests that SA should consider reviewing and/or withdrawing from the 1951 United Nations Refugees Convention (1951 Convention) and the 1967 Protocol relating to the Status of Refugees (1967 Protocol). The aim is to accede to these conventions with reservations, mirroring the practices of other countries. Aistė Augustauskaitė-Keršienė suggests these reservations are meant to reduce the obligations of the reserving state.
Minister Motsoaledi underscores the need for refugee protection and immigration legislation to include provisions for reservations and exceptions, drawing inspiration from the 1951 Convention and the 1969 Organisation of African Unity (now AU) Convention. This is particularly critical as SA lacks the resources to fulfil the socioeconomic rights outlined in the 1951 Convention. These include the rights that must be afforded to refugees, including the right to work, social security, public health and housing.
Thus, the proposed overhaul of SA’s immigration system signals a significant shift, driven by the argument that the government can no longer sustain the financial burden of hosting refugees. The Department contends that the fiscal strain is compounded by the growing number of foreign nationals entering SA illegally, with the undocumented migrant population remaining unaccounted for.
Concerning, the department is uncertain about the precise number of illegal immigrants in the country.
Nonetheless, Immigration Services deports between 15 000 to 20 000 illegal foreigners annually at substantial costs. This deportation figure is on the rise, reflecting the escalating challenge.
The second issue concerns the intersection between the promotion of human rights and the safeguarding of foreign direct investment (FDI), which has gained heightened relevance in recent years, sparking debates within the realms of international relations and law. International investment law, or investment protection law, that governs FDI is quite complex and comprises a multitude of legal instruments at the international, national and contractual levels. The significance of FDI in promoting economic growth was explicitly recognised in the Growth, Employment and Redistribution (GEAR) strategy in 1996, and this recognition has been consistently echoed in subsequent official statements.
Nevertheless, SA has grappled with a conflict over the use of alternative dispute resolution (ADR) mechanisms in investment disputes involving the government and foreign companies. Around 2012 the country notably shifted its strategy in addressing investment disputes. Historically, foreign companies have often turned to ADR mechanisms, like investor-state arbitration (ISA), to contest government decisions, seeking broader remedies than those typically available through domestic courts.
The New York Convention and the Washington Convention regulate the enforcement of international arbitral awards in foreign jurisdictions. Though SA ratified the New York Convention, it has never been an ICSID member. As of January 2023, 172 states had ratified the convention, including 169 of the 193 member states of the UN as well as the Cook Islands, the Holy See and the State of Palestine.
BITs commonly prescribe international arbitration as the preferred method for dispute settlement, specifying institutions such as ICSID or other private arbitration tribunals, along with designated arbitration rules like those of the International Chamber of Commerce or the United Nations Commission on International Trade Law (UNCITRAL).
To date, there are more than 3,000 BITs and international investment agreements (IIAs) in force across the world.
.Despite initial hesitations, the 1990s saw increased BIT signings, leading to frequent arbitrations. The reason for this was the collapse of the Soviet Union and the strengthening of the neoliberal economic order, which drove the expansion of FDI more than ever before. Noteworthy, only member states of the World Trade Organisation (WTO) have legal standing to initiate actions, and companies do not.
Despite the first BIT being signed in 1959 between West Germany and Pakistan, SA refrained from such bilateral international treaties during the apartheid period. However, post-apartheid, the new government embarked on an ambitious round of treaty-making. An Agreement for the Promotion and Protection of Investment was signed with the United Kingdom in 1994, marking the first of a series of investment agreements during the early mandate of the ANC. By June 2006, SA had signed at least 41 investment treaties, although not all had entered into force.
Yet, SA, akin to other developing countries, grew increasingly apprehensive about the potential misuse of these mechanisms. Recent years have witnessed high-profile cases where foreign companies utilised ISA to challenge government policies, resulting in substantial awards, even in cases deemed legitimate by the government. In 2007, for example, the government was sued by the Italian owners of two granite firms for €266 million in compensation.
The dispute arose from laws that mandated firms to sell shares to black investors, and it ultimately led to compulsory international arbitration through the ICSID after the government failed to provide adequate compensation. The dispute was discontinued in 2010, but only after South Africa agreed to grant the investors new licenses with significantly lower share divestment requirements. The government ostensibly agreed to this deal to avoid a wave of further claims against it.
Studies by the World Bank and UNCTAD, among others, have not found a clear link between BITs and increased FDI inflows. Drawing inspiration from Australia, Ecuador, Bolivia, Indonesia and India and supported by empirical evidence, South Africa annulled all BITs, particularly those involving European countries. Global companies and their home states tried to use their unparalleled power to dissuade South Africa but without success. Stephen R. Buzdugan refers to this wave of abrogations as a “backlash” against BITs that arose from the non-market strategies of companies.
BITs formed the legal basis for most ISA cases, including provisions protecting investors from expropriation, discrimination and unfair treatment. These provisions give investors a legal basis to sue the host government if they believe their investments have been harmed. Among others, Malebakeng Forere claims that BITs have been criticised for providing investors with excessive protection and for limiting governments to regulate their economies.
In 2005, Judge John Hlophe argued that arbitration undermined the pace of judicial transformation in South Africa. Other voices also maintained that BITs favour foreign companies and erode sovereignty.
Motivated by these concerns, the DTIC made the bold decision to terminate BITs, thereby signalling its disapproval of ADR mechanisms in investment disputes.
Nonetheless, South Africa sought to modernise its international arbitration laws while simultaneously promoting and protecting investments in a way that balanced the interests of all investors and reflected the public interest. Deputy Minister of Justice John Jeffery reasoned that the modernisation of the law sought to “provide South Africa with an effective, modern arbitration framework which compares favourably in many respects with equivalent legislation in other jurisdictions.”
Aligned with the UNCITRAL Model Law on International Commercial Arbitration, the SA Arbitration Act was then enacted in 2017 to replace BITs and establish a comprehensive framework for both domestic and international arbitration in the country. Thus, the country was “no longer bound to submit to investor-state international arbitration”. Despite this law being in place, the Gauteng High Court in August 2023 nonetheless reaffirmed SA’s obligations as a signatory to the New York Convention.
The final issue pertains to SA’s attempts to withdraw from the Rome Statutes establishing the International Criminal Court (ICC). In 2016, South Africa decided to leave the ICC after it failed to arrest Sudanese President Omar al-Bashir in the preceding year. Although the North Gauteng High Court determined that the country was obligated to apprehend Bashir, he managed to depart without facing arrest.
According to reports from the BBC, the government opposed executing ICC arrest warrants that could be construed as fostering “regime change”. In March 2023, the International Crimes Bill was rescinded. This Bill sought to withdraw SA from the Rome Statute and repeal the country’s ICC membership in favour of immunities for sitting heads of state.
Barely a few weeks later, SA found itself again in a diplomatic and legal predicament concerning its commitments as a signatory of the Rome Statute. The ANC had resolved to withdraw SA from the ICC, prompted by the issuance of an ICC arrest warrant against Russian President Vladimir Putin.
The warrant implied that Pretoria, set to host the BRICS summit, would have been obligated to detain Putin. SA later reversed its decision to exit the ICC, attributing the move to a communication “error”.
In the end, Putin did not travel to Johannesburg and saved SA from blushes.
In summary, this article detailed SA’s ongoing struggle to strike a balance between its domestic priorities and international legal obligations. The three examples clearly demonstrate the challenges the country faces in navigating the evolving landscape of international law and the impact of these decisions on issues ranging from refugee protection to foreign investment and international criminal justice.
Pretoria News