Economic impact of SA court ruling
http://www.theindependent.co.zw/
September 28, 2012 in Opinion
THE Supreme Court of Appeal in South Africa last week ruled against Zimbabwe’s
appeal against North Gauteng’s High Court registration and enforcement of a
ruling by the Sadc Tribunal that Zimbabwe’s land reform laws and policies
were racist in nature, and that displaced farmers were entitled to full and
proper compensation for their expropriated farms.
Eric Bloch Column
The ruling confirmed the validity of attachment of property owned by the
Zimbabwean government in Cape Town, to be disposed of by public auction with
proceeds going to the three former Zimbabwean farmers deprived of their
farms and initiated the legal actions with the Sadc Tribunal, and
subsequently to the North Gauteng High Court.
In 2000, Zimbabwe embarked on land reform, pursuant to enabling legislation
promulgated almost a decade previously. In terms of the legislation, all
rural lands became state property in total disregard of prior ownership
rights and title deeds.
The state began eviction of non-Zimbabwean indigenous occupants of the farms
without any consideration of the consequential near-collapse of agricultural
production, converting Zimbabwe from being the regional bread-basket to
becoming heavily dependent on non-affordable imports.
Similarly, government failed to consider the resultant loss of employment
for over 300 000 farm workers, reducing them and their dependants to immense
poverty and deprivation. Almost two million Zimbabweans were reduced to
extreme hardships and endless struggles to survive, over and above those in
other economic sectors similarly jeopardised by downstream economic
prejudices triggered by the substantial collapse of agriculture.
With the state-enforced dispossession of thousands of productive,
non-indigenous farmers, many war veterans, politicians and those with strong
political links took advantage of the circumstances for self-enrichment.
They forced non-indigenous farmers off properties which they had for decades
operated productively, and reduced those properties to desolate barren
lands. In all too many instances the land invaders resorted to violence to
achieve their objectives, and having gained occupancy of the farms sought
temporary enrichment by selling equipment thereon, such as irrigation pumps
and pipelines. They thus deprived the farms of essentials necessary for
viable agricultural production.
Attempts by the displaced farmers to seek justice in Zimbabwe proved totally
fruitless, and eventually some sought recourse in to international courts.
Such actions included placing the issue before the Sadc Tribunal, with 77
affected farmers seeking justice through the court.
The court ruled in November 2008 that Zimbabwe’s land reform was racist, and
the affected farmers were entitled to full compensation. Government ignored
the court’s findings, resulting in the Tribunal issuing a contempt ruling
and awarding costs against it, but again the Tribunal’s ruling was ignored.
This resulted in three of the distressed farmers applying to the North
Gauteng High Court in South Africa for an execution order, which was
granted, enabling the attachment of property of the Zimbabwean government in
South Africa. This led to Zimbabwe’s appeal to South Africa’s Supreme Court
of Appeal, but the court of five judges unreservedly ruling against the
appeal.
The economic impact of the judgment will be pronounced. In the event that
government belatedly acknowledges the criminality of its actions, it will
now have to address payment of just and due compensation to all that were
deprived of that for which they had worked for most of their lives.
Inevitably, the payment of compensation would have to be phased over a
period of time, for by its own recurrent admission the Zimbabwean fiscus is
bankrupt.
Justice (frequently anathema to government), also dictates that the
compensation should include market-rate interest, calculated from dates of
farm expropriations to dates of payment of the compensation.
However, in order to fund the compensation and interest payments, government
will either have to curtail other expenditures (many of which are in any
event unnecessary), or increase taxes (many of which are already excessive).
Such increases would be beneficial as they will enable the state to
progressively settle its debt, but would be prejudicial to the beleaguered
economy.
Another option for government, which it would be reluctant to pursue, is to
dispose of various state assets including many of the parastatals, surplus
state-owned residences, and innumerable motor vehicles. Yet a further
option that government could pursue is to reduce the number of ministers,
the public service, and the international travel expenses it incurs.
Government must also anticipate that, unless it now acknowledges liability
to the thousands of displaced farmers, it will undoubtedly be confronted by
further litigation by displaced farmers, with concomitant attachment of
other external assets and those in Zimbabwe.
Such legal actions would not be confined exclusively to the South African
courts but in diverse international courts, which would indisputably have
regard to the determinations of the Sadc Tribunal and the South African
Supreme Court of Appeal.