from SAID ABOUBAKER in Djibouti, Djibouti
DJIBOUTI – A COURT case in Hong Kong could have implications for South Africa’s land-reform program as Dubai seeks redress for the loss of a port in Djibouti.
DP World runs harbours on all six continents, including Maputo in Mozambique and a host of other docks around Africa.
In February, Djibouti president Ismaïl Guelleh signed a decree stripping the firm of its 30-year lease over the country’s main container port at Doraleh on a narrow strait of water linking the Indian Ocean to Europe via Suez.
A London court of arbitration ruled the contract as still in place, but Mr Guelleh ignored the judgement.
DP World will not relent and is now suing Hong Kong firm China Merchants which, it says, has obtained a stake in the docks at Doraleh. The judgement could set a precedent for cases elsewhere, including South Africa.
This is not the first time a state expropriation has gone wrong. In 2009, the Southern African Development Community (SADC) Tribunal in Windhoek ruled against the Zimbabwe government’s seizure of white owned farms.
The court ordered compensation for the farmers and, when this was not paid, the Zimbabwe consulate in Cape Town was attached for sale. Harare lost an appeal against the ruling.
The SADC member governments, instead of backing their court in Windhoek, decided to shut it down.
As the South African parliament prepares to pass a law that would allow expropriation of land without compensation, there are endless examples of plans run amok.
After the French Revolution in 1789, wine farms were nationalised by the new government, only to be re-sold or handed back to owners who had not lost their heads at the guillotine.
At the end of World War ll, Josef Stan occupied Lithuania, dissolving the government and incorporating the country by force into the Soviet Union. Private estates were broken into small or collective farms, but returned when Lithuania regained independence in 1990.
Almost 30 years after the Berlin Wall came down, there are still land claims across the former Russian empire.
In South Africa, much of the farmland is under bond to banks. Once taken by the state, farmers would be unlikely to pay back loans, putting the financial system in jeopardy.
And it is finance, according to DP World, that is at risk when the state moves on private property.
Hurt Africa as a whole
Speaking about Djibouti’s seizure of Doraleh, DP chairman Sultan Ahmed bin Sualyem said the ramifications had spread across the continent.
“The action actually has hurt Africa as a whole,” he told a London newspaper.
“Anyone who builds a port or an infrastructure project and goes to borrow money,” he said, would find that “banks will ask for more interest if they fear the possibility of takeover by government.”
DP World is investing more than $400m next to Djibouti, in Somaliland, rebuilding the once-famous port at Berbera that fell into neglect during wars along the Horn of Africa.
This has drawn criticism from Mr Guelleh, with claims the firm was not servicing Doraleh because it had interests elsewhere. DP World insists it not only fulfilled the terms of its lease but acted in the best interest of Djibouti.
In Mozambique there has been alarm at Chinese efforts to lease thousands of hectares for soya and other crops. Fears also spread to South Africa earlier this year with claims of a Chinese plan to farm rice near Bushbuckridge.
Djibouti is even more at risk, with the highest debt level of any African country, much of it to Beijing.
This has led to questions in the US Senate over whether the port at Doraleh could fall into Chinese hands.
Such a move would alter the balance of power along one of the world’s busiest shipping lanes. Most of Europe’s trade with Asia passes Djibouti en-route the Suez Canal.
In Zimbabwe, President Emerson Mnangagwa has talked of returning land to white farmers. Critics claim millions of hectares taken by his predecessor, Robert Mugabe, were largely parceled out to ministers and members of the ruling party.
And where the country once exported food to neighbours, it now relies on imports.
South Africa has held nationwide discussions on land reform, though finance minister Tito Mboweni has warned it could lead to disaster.
President Cyril Ramaphosa insists nothing will be done to damage the country’s food supply.
Greatest demand for land has emerged around cities, mostly for housing. Polling has shown that unemployment along with the cost of transport and urban accommodation remain the key concern of voters.
In Dubai, the DP World chairman has ruled out any surrender of Doraleh. “We will take every action to protect the rights of the shareholders,” he said
The government of Djibouti appears just as determined as the new case opens in Hong Kong. A ruling in favour of DP World would make it difficult for another operator to take the harbour.
Mr Guelleh insists his country is a sovereign state, but as the law of contracts becomes ever-more globalised, and countries rely on funding from beyond their borders, he may have to accept the reality that his decree on Doraleh is just another of history’s failed attempts at seizure.
– CA News