Land expropriation remains a hot topic here in South Africa, and back in July, the National Assembly revived plans to amend section 25 of the Constitution, dubbed the property clause.

Obviously, there is a long way to go before people in Constantia need to panic, and, for the time being at least, foreigners who own land can breathe a little easier, too.

Some Department of Trade & Industry officials have warned that expropriating land owned by foreign nationals could contravene existing bilateral investment treaties, which could result in South Africa being denied access to key overseas markets.

Business Day reports:

The country has 22 such bilateral agreements, but the cabinet decided in 2010 to terminate the arrangements following concerns that the treaties were unbalanced in favour of the  investors.

Some of the treaties were said to be inconsistent with SA’s constitution, including its transformation objectives.

While SA recently started terminating these treaties the pacts contain a “survival clause” that guarantees that investment protections continue for between 10 and 20 years.

Lawful expropriation of foreign investment should be for a public purpose, on a nondiscriminatory basis, under due process of the law, and based on the payment of prompt, adequate and effective compensation, department officials told MPs on Wednesday.

These discussions took place during a briefing of the ad hoc committee tasked with redrafting section 25 of the Constitution. Not only are some warning that expropriation without compensation could potentially lead to food shortages, but there’s also the worry of scaring away foreign investment.

Back to those potential legal impediments:

Legal experts have also warned that expropriation of foreign-owned property without compensation constitutes a violation of international law and several treaties to which the country is a party…

The department officials also warned of challenges if the new legislation was considered detrimental to the value of foreign owned land. Some of the jurisprudence on investment treaties has referenced a standard of “legitimate expectation” regarding return on investment.

In particular, article 10 of the 2015 Investment Act on legal protection of investment would be the stumbling block there, meaning that act would also need to be amended if section 25 was changed.

That could still happen, but it is another hurdle for the ad hoc committee as they look to move things along.

Exhale, foreigners who own land in Constantia and the Atlantic Seaboard.

[source:businessday]