The ad hoc committee on legislation amending Section 25 of the Constitution was on Wednesday briefed by the department of trade and industry's deputy director-general of international trade and economic development, Ambassador Xavier Carrim.

The dti presented to Parliament their inputs on the possible impact on SA's international treaties in respect of land reform without compensation. Carrim said that the inputs are not legal opinions, but based on the department's experience with bilateral investment treaties to which SA is a signatory.

"If land of a foreign investor were expropriated and that investor is from a country that has a bilateral investment treaty with South Africa, including if the survival clause [of a terminated treaty] is in effect, the investor could invoke a legal challenge under the bilateral investment treaty against the government, if the investor is not satisfied with the amount of compensation," Carrim said.

International arbitrators will then make a decision on the matter, and will take into account the national law and constitution, Carrim said.

However, experience has shown that the standard is for the government to compensate the investor ofthe market value of the investment immediately before expropriation takes place.

Carrim explained that between 2008 and 2010, the dti had been a process of reviewing bilateral investment treaties and has even terminated some since then.

While bilateral investment treaties do not make specific reference to land, they do extend protection to investors' assets, he said. These international treaties trump the law of the land. In other words, government can't invoke internal law as justification for not meeting international treaty obligations, he said.

Fin24