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Corporate rights in South Africa.

South Africa's constitution will explicitly guarantee corporations the same core rights provided to humans.

That was assured after the country's constitutional court rejected in September a challenge to little-noticed section 8(4) of the constitution, which states that "Juristic persons are entitled to the rights in the Bill of Rights to the extent required by the nature of the rights and of the juristic persons." "Juristic persons" refers to corporations and other organizations.

Patrick Bond, an economist with the National Institute for Economic Policy and a contributing writer to Multinational Monitor, Darlene Miller of the Institute for African Alternatives and Langa Zita of the South African Communist Party challenged the constitutional provision as inconsistent with constitutional principles agreed upon in 1993. Their challenge was endorsed by two dozen prominent individuals, as well as environmental groups, trade unions and other civic groups including the National Union of Metalworkers of South Africa, several branches of Earthlife Africa and the Environmental Justice Networking Forum, the International Labor Rights Information Group and Workers Organization for Socialist Action.

As the white Nationalist Party negotiated a transition from apartheid to democracy with Nelson Mandela's African National Congress in the early 1990s, it insisted that the final constitution be consistent with a set of 34 constitutional principles. After the South African Constitutional Assembly adopted a final constitution in May 1996, individuals and organizations were given approximately two months to challenge elements of the final constitution as inconsistent with those constitutional principles.

The Constitutional Court ultimately heard approximately three dozen challenges to the constitution. It ruled in favor of the challengers in a couple important areas, directing the Constitutional Assembly to reconsider provisions including those concerning labor union rights and the power allocated to regional governments.

The challenge to section 8(4) emphasized the ways in which the grant of Bill of Rights rights to corporations would undermine citizens' comparable rights. "The extension of fundamental rights to juristic persons frequently entails simultaneous weakening of, and prejudice to, and even derogation from the fundamental rights of natural persons," contended the brief submitted by attorney Derek Spitz on behalf of the challengers.

The brief emphasized how granting basic constitutional rights to corporations had diminished citizen rights in other countries, particularly the United States. Citing U.S. Supreme Court decisions, the brief stated, "The extension to corporations of freedom of political expression, negative free speech rights and rights of privacy has undermined the constitutional rights of natural persons to freedom of expression, freedom of association in organs of civil society, access to information, the rights to life, security of person and a safe environment." The South African constitutional principles, and the new constitution, include explicit guarantees of rights to information, life, security of person and a safe environment, as well as rights of expression and association comparable to those found in the U.S. constitution.

Among the U.S. cases cited by the brief was First National Bank of Boston v. Bellotti, which held that corporations have a First Amendment right to spend money to influence referenda. Unlimited corporate spending on referenda in the United States often dwarfs the sums contributed by citizens, and indisputably shapes the outcome in numerous contests - often to the detriment of principles privileged by the South African constitution, such as a safe environment.

The challengers emphasized the particular dangers of providing Bill of Rights rights to corporations in the context of the dramatically concentrated South African economy. An annex to their brief reported that a handful of corporations - Anglo American and De Beers, the Rembrandt Group, Old Mutual, Sanlam and Liberty Life - control 80 percent of the assets listed on the Johannesburg Stock Exchange.

To ensure that real persons' rights not be trampled by corporations exercising similar rights, the petitioners contended not that corporations should never enjoy constitutional rights, but that corporate rights should be explicitly subordinated to the rights of citizens. "What is required, and what the final constitution does not adequately provide, is express recognition of the principle that where the constitutional rights of juristic persons conflict with the constitutional rights of natural persons, the rights of the latter will prevail," their brief argued.

The Constitutional Court rejected the challengers' claim primarily on the basis that "many 'universally accepted fundamental rights' will be fully recognized only if afforded to juristic persons as well as natural persons." To illustrate the point, the Court used the example of freedom of speech; "to be given proper effect," the Court asserted, free speech "must be afforded to the media, which are often owned or controlled by juristic persons."

The Court did not directly answer, however, the challengers' argument that corporate rights should not be denied altogether, but subordinated to those of real persons.

Although characterizing the Court decision as a loss, Patrick Bond says the case constituted a victory in that "we got to the stage of appearing before the Court, and generated very good publicity."

And from a legalistic point of view, the decision may not have been a total loss. The Court stated that section 8(4) "recognizes that the nature of a juristic person may be taken into account in determining whether a particular right is available to such a person or not," which means there is room for challengers to argue in the future, in the context of specific disputes, that particular corporate rights should be subordinated to real persons' rights.
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Author:Weissman, Robert
Publication:Multinational Monitor
Date:Nov 1, 1996
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