DEON VAN ZYL: Last-minute vetoes by lone objectors subvert SA’s investment hopes

In the last two weeks, two significant investment messages were transmitted across SA and out to the world. The first was a Western Cape High Court judgment interdicting a R4.5bn investment that has been under construction for months. The second was the president’s fourth annual investment conference, bringing the target he set four years ago of R1.2-trillion in investment close to the mark, with 95% (R1.14-trillion) now pledged.

But what do these two have in common? Simply put, the Cape Town development is earmarked to house, as lease space for its African operations, one of the world’s largest IT and data businesses. These are the very types of buildings and infrastructure for which the president’s campaign is attracting investment. The “hot-off-the-bench” court ruling stops construction in its tracks until further notice, irrespective of the years of statutory applications by the developers and their professional teams, and the many associated public participation processes that have taken place.

The merits for or against the judgment is not the focus; certainly not for ourselves as the Western Cape Property Development Forum, an organisation that represents the full production line of property from developer to construction worker. What is front of mind for us, as it is to investors globally, is whether compliance with these complex statutory application processes associated with development will ever offer any guarantee that attacks from the sideline will not still scupper investments — often midstream. Can SA honestly hope to promote itself as a safe investment destination when such derailment can occur despite developments dotting all the i’s and crossing all the t’s in following the process?

Most investment commitments recently celebrated at the president’s investment summit require the very literal breaking of ground.

Many opportunities

Development does not take place in a statutory void. Large-scale, complex projects trigger every rule in the legislated rule book: water use licenses as well as environmental management, heritage, land use and building application processes. All these are underpinned by reams of expert reports, each dealing with a specific field of specialisation. Each application is also assessed by different departments across all spheres of government.

Each of these legislative processes activates multiple public participation opportunities and, in turn, appeal processes. Civil society therefore has many opportunities during which to raise objections, at no cost to the individual objector or appellant, and every decision taken can be subjected to legal review.

It’s embedded in our constitutional democracy; every objector has the right to be heard, even to the level of public participation fatigue. So many checks and balances are in place that it sometimes seems nothing short of miraculous when a project actually gets to break ground, never mind being completed on time and budget.

And these processes are not unique to private development. Public sector projects — whether energy security, education, health, public utility infrastructure or housing — go through the exact same process: years of applications and multiple opportunities for naysayers to veto the plans. For the good public servant tasked with project delivery, this holds the same frustration as for the private sector investor — long and cumbersome processes and no certainty of outcome. For those less interested in service delivery, it offers the perfect excuse for lack of service delivery and accountability.

Greater good

What do the thousands of construction workers who have been involved in a large-scale — or indeed any — project do when it is halted midstream and their fortnightly wages are no longer paid? How do we explain compliance, nonaligned legislated processes and the right of veto to a hungry child?

A level of national schizophrenia sets in when we demand that our elected leaders set vision and take strong delivery-orientated decisions, but then we run to the courts to protect our personal interests when we dislike the decision — the greater good be damned. In turn, our courts, always mindful of our country’s past of silencing individuals, rightly embrace social activism, but does this always need to lead to economic stagnation?

Perhaps some swinging of the pendulum is now required: while investment and job creation are crucial to SA’s survival, one cannot help but wonder if the reality of unemployment is understood across all of government. The president gets it: it’s about the economy. For the first time, at this year’s state of the nation address he acknowledged that governments don’t create jobs, the private sector does. The job of the government — parliament, its officials and the courts — is to create an enabling environment.

So, what is parliament doing to streamline the plethora of legislation and regulation to facilitate investment and job creation? What legitimacy does any single legislated statutory process have if it can be vetoed at any time? What messages are our courts sending if, irrespective of the miracle of statuary approval, aggrieved parties can still stop processes beyond the closure dates of public-private participation?

In 2007, former president Thabo Mbeki toyed with the idea of regulatory impact assessment. And some government departments do try to question the economic impact or hindrance of their respective rules and regulations. But “some” is not good enough — the challenge to parliament is to roll up its sleeves and identify all statutory and regulatory obstacles that undermine investment. The courts must start to question what the economic effect of their judgments will be, and whether these will remove food from, or put food on, the tables of the poorest in society.

If there is to be any hope of President Cyril Ramaphonsa’s investment summits bearing fruit that we can actually taste as a nation, we will have to recalibrate the way decisions are made— or risk investors exercising their right to veto the country into economic oblivion.

• Van Zyl chairs the Western Cape Property Development Forum.