Abstracts

42 nominal GDP growth is based on expectations of a decrease in policy uncertainty (World Bank Group, 2020). If the draft Constitution Eighteenth Amendment Bill is passed, South Africa’s degree of policy uncertainties can only be expected to rise. South Africa’s high unemployment rate and the World Bank Group’s lukewarm GDP projections showcase the urgency of stimulating the economy via FDI. Despite cultural and spiritual advantages, the draft Constitution Eighteenth Amendment is deeply antithetical to maintaining the lifeblood of the South African economy: FDI. Given the current condition of the South African economy, a Constitutional amendment enabling EWC likely would have deleterious consequences going forward. As Kwarteng and Botchway (2019, p. 98) have argued, EWC will scare away FDI and make the national government susceptible to lawsuits in international investment tribunals, where there is a high likelihood that the Republic of South Africa will be held liable for violating international investment agreements (IIAs) or bilateral investment treaties (BITs). If a State is found to have violated an IIA or BIT, it likely will be liable to pay reparations to the damaged party. South Africa already has been involved in litigation in international courts for appropriating foreign property in violation of BITs (Musakwa & Odhiambo, 2019, p. 48). As a result of the obvious conflicts between BITs and constitutional obligations, South Africa predominantly has terminated BITs rather than renew them. In reaction to the issues resulting from this contradiction, Parliament passed the Protection of Investment Act, 2015, which sought to create a uniform structure for BITs that better aligned with constitutional promises (Musakwa & Odhiambo, 2019, p. 48). Section 9 of the Act states, “The Republic must accord foreign investors and their investments a level of physical security as may be generally provided to domestic investors in accordance with minimum standards of customary international law [emphasis added] and subject to available resources and capacity” (Republic…, 2015). Thus, an EWC amendment threatens widespread confusion about the physical security of FDI-backed property because it certainly does not satisfy the “ minimum standards of customary international law .” While there is no concrete definition of the international minimum standard of protection, a nation must be expropriating the foreign-owned property in a nondiscriminatory fashion, in legitimate pursuit of the public good, and provide prompt, adequate, and effective compensation (not necessarily fair market value). This precedent has been backed by the World Bank guidelines on treatment of foreign direct investment (Kwarteng & Botchway, 2019, p. 102). While EWC may be implemented in a legitimate pursuit of the public good, it is characteristically discriminatory. Moreover, nil compensation for valuable FDI-backed expropriated land cannot reasonably be considered as prompt, adequate, or effective compensation. EWC opens the floodgates for endless international investment litigation, which likely would result in the Republic of South Africa paying substantial damages. Further- more, if South Africa passes an EWC amendment, it would be well advised to explicitly prohibit the expropriation of FDI- backed property, in the EWC amendment itself, in a new Expropriation Act, or in the form of an amendment to the Protection of Investment Act, 2015. At a Goldman Sachs investment conference in May 2019, Ramaphosa stated that foreign investors have “nothing to fear” regarding an EWC Constitutional amendment and that South Africa was not going to seize property from foreign investors (Cronje, 2019). While Ramaphosa may not have any intention of expropriating FDI-backed land without compensation, a constitutional amendment has legal and economic implications that will far outlive Ramaphosa’s presidency. A pledge by Ramaphosa does not guarantee a similar pledge from his successor. The long-term implications of a constitutional amendment necessitate explicit language within the amendment that enables potential foreign direct investors to reasonably gauge the physical security of their property over the long term. Beyond FDI-related issues, EWC presents serious risks for the agro-industrial complex which would lead to increased food insecurity. In 2018, respected researchers from the