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A new Expropriation Bill by another name

Media coverage of the Promotion and Protection of In- vestment Bill of 2013 (the Investment Bill) has focused on its role in replacing South Africa's bilateral investment treaties with various European states. Representatives of these countries have broken their usual diplomatic silence to warn against the reduced protection it gives investors from their states. However, the true significance of the Bill goes very much beyond this.

The Investment Bill is, in fact, a new expropriation measure that will apply to all property owners in South Africa, both local and foreign. It is also likely to result in many people receiving zero compensation on the loss of their property, provided the State takes this, not as owner, but rather as ‘custodian' for the disadvantaged. In combination with the Restitution of Land Rights Amendment Bill of 2013, it could see property of many kinds taken by the State as ‘custodian' for land claim- ants and without any compensation to its former owners. Yet most commentary on the Investment Bill has overlooked this risk, helping to lull all property owners into a false sense of security.

The Bill's reference to ‘investors' is also misleading, for it suggests that the new law will apply solely to companies and other commercial enterprises. In fact, the Investment Bill will apply to everyone, including ‘natural persons' and ‘regardless of nationality'.

Any black or white South African who owns a home, a car, or unit trusts is vulnerable to the Investment Bill's provisions. So, too, are enterprises of every size and in every sector of the economy, from mining to agriculture, banking, manufacturing, and services.

Once the Investment Bill is in place, the current Expropriation Act is likely to be overtaken or repealed. The Government, which has encountered stiff resistance to its draft expropriation bills of 2008 and 2013, will also have no further need to try and push a replacement expropriation law through Parliament.

Instead, all South Africans will find that their rights on expropriation are already governed by the rules laid down in the Investment Bill. And this, of course, will give the State the power to take measures to acquire property of virtually any kind as ‘custodian' for the poor - and without the need to pay any compensation.