5 April 2016 - Today, the Centre for Human Rights (CHR) at the University of Pretoria and the International Corporate Accountability Roundtable (ICAR) are pleased to jointly release the  “Shadow” National Baseline Assessment (NBA) of Current Implementation of Business and Human Rights Frameworks in South Africa.

This document represent one of the most exhaustive studies of South African laws, policies, regulations, and standards that pertain to business and human rights at the national level.

CHR and ICAR hope all stakeholders, including South African civil society groups, academia, government representatives, business groups, and investors, will engage with this tool, add to it, and apply it in their efforts to address business-related human rights harms.

Download the “Shadow” NBA for South Africa
For more information, contact Josua Loots, CHR’s Program Manager for Business and Human Rights, at [email protected] or Sara Blackwell, ICAR’s Legal and Policy Coordinator for the Frameworks Program, at [email protected].

Executive Summary

South Africa’s legislative and regulatory framework around business and human rights is relatively well developed, especially in the context of an emerging economy. However, it appears that, in most cases, these laws and regulations are not interpreted as one would expect nor fully implemented and enforced. The country is also at an interesting point in time, where multi-stakeholder discussions and government activities are revolving around legal and policy reforms that impact business and human rights. Some examples include the renegotiation of bilateral investment treaties (BITs), development of a new investment bill, and talks around the development of a new public procurement bill.

At the international level, civil society and the global community at large commend South Africa for ratifying the International Covenant on Economic, Social, and Cultural Rights in 2015, albeit twenty-one years after signing the covenant. However, commitment to several other international and regional instruments is still lacking, including the Optional Protocol to the Convention against Torture and Other Cruel, Inhuman, or Degrading Treatment or Punishment.

At the same time, South Africa has been quiet on matters involving soft law, especially in the context of business and human rights. While many States have openly expressed support for the UN Guiding Principles on Business and Human Rights (UNGPs), the South African government is currently prioritizing the process around a treaty on business and human rights at the UN level. However, the South African Human Rights Commission (SAHRC) has led several capacity building initiatives that include a focus on the UNGPs. In addition, several multinational companies in South Africa have expressed interest and support for the UNGPs and are building internal capacity around them.

Under South Africa’s domestic legislative framework, several issues require attention in terms of business and human rights impacts:

• Concerns in the labor sphere revolve around job insecurity, inadequate wages, and poor working conditions, especially in the informal sector. South Africa has also seen a series of protests around outsourcing and the use of “labor brokers,” which is an issue that has been prioritized by the government for legal reform.
• Land reform remains a controversial topic in the country, due to the legacies of South Africa’s turbulent past and the historically discriminatory dispensation of land. Several laws and regulations that may have implications for human rights are silent on the issue, including, among others, the Companies Act in South Africa. There is thus an urgent need for policy reform that clarifies the human rights responsibilities and accountability of company executives and directors.
• South Africa is considered to have one of the best tax administrators in the region, and the government is involved in external capacity building initiatives through the South African Revenue Service. However, several concerns remain around the issue of illicit financial flows due to ongoing transfer pricing and other tax avoidance practices in the country.
• The public procurement system in South Africa is frequently under scrutiny, often facing allegations of corruption and cartel-related incidents. While South African laws provide various guidelines for public procurement practices, there are no prescribed procedures in the law or specific oversight mechanisms.
• Human rights due diligence requirements and measurements are still lacking across the business spectrum in South Africa, including among State-owned enterprises, which is a segment of the economy that is criticized by the South African media as being rife with corruption and misadministration.
• In 2013, the South African government unilaterally canceled several of its BITs, mainly with Western European countries. Soon after, discussions started around a new bill that would replace a number of BITs, including those that were cancelled and some that are coming up for renewal. The Protection of Investment Bill, which was passed by the South African Parliament towards the end of 2015, will regulate foreign direct investment going forward. While the human rights implications are still relatively unclear, the bill has been widely criticized for deterring foreign direct investment.
• South Africa’s business landscape is quite active in the field of corporate governance, perhaps most notably through the efforts put into the development of the King Report on Corporate Governance, which has a prominent focus on human rights.
• The remedy framework in South Africa consists of a combination of judicial, quasi-judicial, and non-judicial remedies. The court system consists of several levels, with the Constitutional Court at the apex. The SAHRC is one of a few national human rights institutions in the world to have a complaints mechanism and investigative powers. South Africa also houses an active Public Protector that has launched several business and human rights-related investigations around the abuse of public power, misadministration of public funds, and corruption in procurement practices.
• Barriers to access to remedies that victims of corporate human rights abuse face in South Africa include a number of issues that are not unique to the country. Apart from recurring barriers such as difficulties in piercing the corporate veil and issues around forum non conveniens, victims in South Africa face very high legal costs with relatively little financial aid, which is exacerbated by the “loser pays” principle. South Africa is also known to have a legal environment that is not very conducive to successful class-action lawsuits, which is often the most appropriate filing class in business and human rights-related cases.

During the compilation of this report, it became increasingly clear that there is a dire need for further research into several issues that are linked to business and human rights in South Africa, but have not been explored in-depth by civil society or academia before. Such issues include the link between business and human rights issues and the topics of corruption, public procurement, trade, and investment.

South Africa is home to a vibrant civil society, and the relationship between civil society and government has been relatively constructive, particularly in the field of business and human rights leading up to the treaty negotiations at the UN Human Rights Council. In this regard, we cannot emphasize enough the need for civil society, academia, practitioners, and government to take the information laid out in this document and to develop it further. Bearing in mind the pace at which legislative and regulatory frameworks are changed, it is very possible that some of the information contained in this report will become outdated. We rely on the business and human rights community in South Africa to take it upon themselves to ensure that information around respect for human rights in the conduct of business is well documented, updated, and shared with the public.

Josua Loots
Program Manager, Business and Human Rights Centre for Human Rights, Faculty of Law, University of Pretoria

Sara Blackwell
Legal and Policy Coordinator, Frameworks Program, International Corporate Accountability Roundtable (ICAR)