Sunday World - - Front Page - MOIPONE MALEFANE

SUS­PENDED ANCYL leader Julius Malema suf­fered yet an­other po­lit­i­cal blow as an ANC com­mis­sioned re­port re­jects na­tion­al­i­sa­tion of mines, say­ing the move could lead to “eco­nomic dis­as­ter” for South Africa and its cit­i­zens.

The con­fi­den­tial draft re­port pre­pared for the ANC and seen ex­clu­sively by Sun­day World says, among other things, na­tion­al­i­sa­tion will be unaf ford­able” and can

“leave the South African gov­ern­ment bank­rupt.

It is un­der­stood that the re­port was dis­cussed at an ANC na­tional ex­ec­u­tive com­mit­tee meet­ing on Fri­day.

The re­port says na­tion­al­i­sa­tion with­out com­pen­sa­tion is un­con­sti­tu­tional and will re­quire con­sti­tu­tional change.

“Na­tion­al­i­sa­tion with­out com­pen­sa­tion would re­quire a con­sti­tu­tional change and would re­sult in a near col­lapse of for­eign in­vest­ment and ac­cess to fi­nance, as well as wide­spread lit­i­ga­tion by for­eign in­vestors domi­ciled in the states that we have trade and in­vest­ment agree­ment with, which would ul­ti­mately likely re­sult in the pay­ment of com­pen­sa­tion, all the same.

“This route would clearly be an un­mit­i­gated eco­nomic dis­as­ter for our coun­try and our peo­ple,” says the re­port, which also sug­gests that the ANC

“rather in­ves­ti­gate the de­sired out­comes of state con­trol ... and make tar­geted in­ter­ven­tions to achieve such out­comes.”

Ac­cord­ing to the fi­nan­cial es­ti­mates con­tained in the re­port, if gov­ern­ment took over 100% of all listed min­ing com­pa­nies, it would cost it well over R1trn, while the cost to ac­quire a 51% con­trol­ling share of listed com­pa­nies will be around R500bn.

“This ex­ceeds the en­tire gov­ern­ment bud­get, which is ex­pected to ex­ceed R1trn for the first time in 2012/13.

“Con­se­quently ei­ther com­plete na­tion­al­i­sa­tion or 51% would be to­tally un­af­ford­able and could put our coun­try into a sit­u­a­tion where we lose fis­cal sovereignty and have to fol­low the dic­tates of the Bret­ton Woods in­sti­tu­tion un­der a Struc­tural Ad­just­ment Pro­gramme which would be un­ten­able.”

The re­port says the con­sti­tu­tion al­lows for na­tion­al­i­sa­tion for a public pur­pose but re­quires com­pen­sa­tion for the ex­pro­pri­a­tion at the mar­ket value of such a prop­erty.

The ANC asked a team of spe­cial­ists con­sist­ing of Pro­fes­sor Pundy Pil­lay, a lec­turer at the Univer­sity of the Wit­wa­ter­srand, in­de­pen­dent re­searcher Paul Jor­daan and Mar­garet Chit­iga-mabugu of the Hu­man Sci­ences Re­search Coun­cil to look at how the state can in­ter­vene in the min­er­als sec­tor.

This was af­ter the ANC Youth League had made calls for na­tion­al­i­sa­tion of mines.

Malema had him­self – af­ter his sus­pen­sion from the ANC – wrote in this news­pa­per that “na­tion­al­i­sa­tion of mines and ex­pro­pri­a­tion of land with­out com­pen­sa­tion will be pol­icy out- comes of the ANC 53rd na­tional con­fer­ence.”

The team vis­ited sev­eral coun­tries, in­clud­ing Botswana, Australia, Chile, Namibia, Fin­land, Nor­way, China and Brazil, and hosted stake­holder work­shops and un­der­took its own re­search.

This fol­lowed a decision taken by the ANC at its na­tional gen­eral coun­cil in 2010 that the party un­der­takes re­search into the best method the party could ap­ply if it was to in­ter­vene in the coun­try’s min­eral wealth to achieve its goal of job cre­ation.

The re­port will be tabled at the ANC na­tional pol­icy con­fer­ence in June be­fore be­ing re­ferred to its De­cem­ber con­fer­ence for adop­tion.

The youth league was in­sist­ing on na­tion­al­i­sa­tion with­out com­pen­sa­tion, some­thing the re­port says would force mine own­ers to take gov­ern­ment to the Trade and Agree­ment Court.

This is an in­ter­na­tional court that has heard a num­ber of cases re­lat­ing to gov­ern­ment tak­ing over as­sets with­out com­pen­sa­tion.

In some in­stances it rules in favour of gov­ern­ments.

Picture by Kevin Suther­land

DEAD END: Sus­pended ANC Youth League pres­i­dent Julius Malema in Rock­lands, Bloem­fontein. Malema spoke at the me­mo­rial ser­vice of ANC mem­ber Te­boho Sik­isi, who died in a car crash in Novem­ber 2009. Malema ac­cused the ANC lead­er­ship of dou­ble stan­dards and not keep­ing to the party’s his­tory.

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