SECTION27 has submitted its comments to the Department of Trade and Industry on the Promotion and Protection of Investment Bill, 2013. This submission has also been endorsed by the Treatment Action Campaign. This submission follows the one made to the DTI on the Draft National Policy on Intellectual Property, 2013. A PDF version of the submission and the draft policy are also attached.
SECTION27 submission on the Promotion and Protection of Investment Bill, 2013
31 January 2014
SECTION27 is a public interest law centre that uses the law to advance human rights. SECTION27 conducts research, advocacy and litigation to change socio-economic conditions that undermine access to fundamental rights including the right of access to health care services. As such, we have an interest in all legislation that has implications for the right of access to health care services and other inter-related rights.
We welcome the opportunity to comment on the Promotion and Protection of Investment Bill, 2013 (“Bill”) published for comment by the Minister of Trade and Industry (“Minister”) on 1 November 2013.
SECTION27 (jointly with Doctors without Borders and The Treatment Action Campaign) made submissions on the DTI’s Draft Intellectual Property Policy, in which we dealt with aspects of intellectual property that are also covered in this Bill. We will not repeat those submissions here but have attached the full submission and refer to specific pages that may be of assistance to the Minister in finalising this Bill.
We limit these brief comments to the Bill as it relates to the constitutional right of access to health care services. However, at the outset we would like to commend the Minister for highlighting the principles that underlie the Bill of Rights and the state’s obligations in respect of socio-economic rights. We support the inclusion of these statements throughout the Bill and in the clause relating to the sovereign right of the state to regulate the investment environment, having regard to the rights in the Bill of Rights.
The Right of Access to Health Care Services
Health care is of significant importance both to individuals and to the economy. Economic theory posits a direct link between health care outcomes and labour productivity as well as economic growth. Furthermore, healthcare is characterised as a merit good, as its benefits extend beyond the individual to the wider society. There is universal acceptance that health is a human right. It is enshrined in the Constitution of the Republic of South Africa, 1996 (“Constitution”), reaffirmed in international conventions such as the International Convention on Economic, Social and Cultural Rights, and implemented in our national laws.
Section 27 of the Constitution, which locates the right to health within a context of mutually supporting and intersecting rights, provides that:
‘Everyone has the right to have access to –
a. health care services, including reproductive health care;
b. sufficient food and water; and
c. social security, including, if they are unable to support themselves and their dependants, appropriate social assistance.
The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of each of these rights.
No one may be refused emergency medical treatment.’
Access to medicines is critical to the realisation of the right to health. The Constitutional Court made the following statement about section 27 in the context of access to medicines:
‘[this] section guarantees the right of access to health care services and enjoins the state to “take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of [this right].” The right to health care services includes the right of access to medicines that are affordable. The state has an obligation to promote access to medicines that are affordable.’
We support the restatement of the state’s human rights obligations in the context of the promotion and protection of investment in South Africa, in particular, the acknowledgement of the importance of socio-economic rights. This provides clarity in the international arena given that the laws of many countries do not contain justiciable socio-economic rights.
The Bill of Rights is a cornerstone of democracy and affirms the values of human dignity, equality and freedom that underpin it. The preamble sets out the foundational goals of the Constitution as including the establishment of ‘a society based on democratic values, social justice and fundamental human rights.’ The Bill of Rights binds all arms of government and all organs of state, which means that the DTI and other organs of state have specific obligations to ensure the realisation of the right to health.
The preamble to the Bill places the content of the Bill within its proper constitutional context, including “the need to protect and promote the rights enshrined in the Constitution and the Bill of Rights.” We welcome this and recommend that the full obligations as set out in section 7(2) of the Constitution are included in the preamble. Section 7(2) provides that ‘the state must respect, protect, promote and fulfil the rights in the Bill of Rights’ (emphasis added). These are separate obligations, for example, ‘respect’ requires that the state must not interfere with the enjoyment of the right and ‘fulfil’ requires the state to take positive steps such as putting in place institutions and allocating resources to enable the enjoyment of the right.
Given that section 7(2) of the Constitution encompasses important foundational values underlying the Constitution, and that the exclusion of two of these important obligations may lead to a narrow interpretation of the intention of the Bill, we recommend the inclusion of the obligations to respect and fulfil rights in the first line of the preamble to the Bill.
Interpretation of Act
Again, we welcome the explicit references to the Constitution and the international law principles and agreements under this heading.
According to section 39 of the Constitution, when a court interprets legislation, it must promote the spirit, purport and objects of the Bill of Rights and must consider international law.
In light of the injunction for consideration of South Africa’s international law obligations, it is useful to highlight that South Africa is a member of the World Trade Organisation and signatory to the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Accordingly, South Africa must ensure that its national patent legislation complies with TRIPS. However, compliance with international trade rules must be balanced with public interests, including the right to health and to access to medicines in particular. The TRIPS Agreement recognises the importance of public health and the need for a balance between the interests of rightholders, users, and the public at large in Articles 7 and 8.
In the wake of some opposition to the use of flexibilities under TRIPS that promote recognition of those values, the WTO has explicitly recognised “the gravity of the public health problems afflicting many developing and least developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics”. In 2001, members of the WTO agreed that TRIPS “does not and should not prevent members from taking measures to protect public health”. This was set out in the Doha Declaration on the TRIPS Agreement and Public Health, known as the Doha Declaration. The Doha Declaration sets out to strike a balance between patent protection and public health, and in particular, prioritises access to medicines.
Below we address selected substantive provisions of the Bill.
Definition of investment
While clauses 1(e) and (f) of the Bill define investments to include patents, the Bill (e.g. in clauses 4, 8 and 10) also acknowledges the need to treat this category of investment differently because it implicates the rights in the Bill of Rights. We support this approach and recommend that it remain throughout the final Act.
Principles relating to expropriation of investment
Clause 8(1) of the Bill reiterates the scope and meaning of expropriation of property as set out in section 25 of the Constitution, which provides that:
‘(1) no one may be deprived of property except in terms of law of general application and no law may permit arbitrary deprivation of property.
(2) Property may be expropriated only in terms of law of general application –
(a) for a public purpose or in the public interest; and
(b) subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court.’
While section 25 of the Constitution does not accord intellectual property rights any special protection, it does provide that no one may be deprived of property except in terms of a law of general application, and that no law may permit arbitrary deprivation of property. The Constitutional Court considered intellectual property in the context of the property clause in the Certification of the Constitution Judgment and decided that a specific constitutional right to intellectual property should not be included in the final text of the Constitution. The court held as follows:
‘A further objection lodged was that the NT fails to recognise a right to intellectual property. Once again the objection was based on the proposition that the right advocated is a “universally accepted fundamental right, freedom and civil liberty”. Although it is true that many international conventions recognise a right to intellectual property, it is much more rarely recognised in regional conventions protecting human rightsand in the constitutions of acknowledged democracies. It is also true that some of the more recent constitutions, particularly in Eastern Europe,do contain express provisions protecting intellectual property, but this is probably due to the particular history of those countries and cannot be characterised as a trend which is universally accepted. In the circumstances, the objection cannot be sustained’
The Constitutional Court has since considered section 25 in a manner that supports the intention of the Bill. For example:
‘…the protection of property as an individual right is not absolute but subject to societal considerations’.
‘… it is trite that the Constitution and its attendant reform legislation must be interpreted purposively, courts should be cautious not to extend the meaning of expropriation to situations where the deprivation does not have the effect of the property being acquired by the state’.
‘The purpose of section 25 has to be seen both as protecting existing private property rights as well as serving the public interest, mainly in the sphere of land reform but not limited thereto, and also as striking a proportionate balance between these two functions’.
‘This brings to the fore the obligation imposed by section 25 not to over-emphasise private property rights at the expense of the state’s social responsibilities’.
In other words, the right to property must be balanced with the public interest and the transformation of the economy.
The exclusions set out in clause 8 of the Bill are in line with section 25 and section 27 of the Constitution and with the interrelated and mutually supporting nature of the rights in the Bill of Rights. In particular we note the importance of the following sub-clauses:
‘(b) a measure aimed at protecting or enhancing legitimate public welfare objectives, such as public health or safety, environmental protection or state security;
(c) the issuance of compulsory licences granted in relation to intellectual property rights, or to the revocation, limitation or creation of intellectual property rights, to the extent that such issuance, revocation, limitation or creation is consistent with applicable international agreements on intellectual property;’
Clause 8(2)(b) of the Bill would be significantly strengthened by replacing “enhancing legitimate public welfare objectives” with the phrase “fulfilling constitutional objectives”, thereby avoiding contention as to the meaning and the scope of legitimate public welfare objectives. It is also in keeping with the language used throughout the rest of the Bill. We recommend that the Bill is amended accordingly.
In relation to compulsory licences, we stated in our submission on the Draft IP Policy that Article 31 of TRIPS, entitled “Other Use Without Authorization of the Right Holder”, grants to WTO members the right to legislate “other use of the subject matter of a patent without the authorization of the right holder”. This use of a patent, without the patentee’s consent, may be “by the government or third parties authorized by the government”. In other words, the state may issue compulsory licences – either to third parties or to itself. If it does make provision for compulsory licensing in its laws, a WTO member is obliged to respect the provisions set out in Articles 31(a) to 31(l). See pages 41 to 47 of our joint submission on the Draft IP Policy for more on compulsory licences – most notably sections 4 and 56 of the Patents Act 1978. Compulsory licensing in clause 8(2)(c) should encompass both the government-use license (s 4 Patents Act) and the compulsory license (s 56 Patents Act). Noted in our joint submission, however, is that the s 56 license should include broader public health grounds. This would enhance the efficacy of clause 8(2)(c).
Summary of recommendations
- We recommend that the full obligations as set out in section 7(2) of the Constitution are included in the preamble.
- Clause 8(2)(b) of the Bill would be significantly strengthened by replacing “enhancing legitimate public welfare objectives” with the phrase “fulfilling constitutional objectives”.
In our view, the Bill strikes the appropriate balance between innovation, investment and human rights and urge the expeditious processing of this Bill. We recommend that the Draft IP Policy be finalised without undue delay and that the final IP Policy make specific reference to the Bill and is congruent with the Bill.
This submission is endorsed by the Treatment Action Campaign.
For further information please contact Umunyana Rugege at firstname.lastname@example.org, 011 356 4120 or 083 458 5677.
 Minister of Health v New Clicks 2006 (2) SA 311 at paragraph 514.
 section 7(1) of the Constitution.
 In re: Certification of the Constitution 1996 (4) SA 744 (CC) at paragraph 75.
 First National Bank of SA Limited t/a Wesbank v Commissioner for the South African Revenue Services and Another; First National Bank of SA Limited t/a Wesbank v Minister of Finance 2002 (4) SA 768 at paragraph 49.
 Agri South Africa v Minister for Minerals and Energy 2013 (4) SA 1 (CC) at paragraph 59.
 First National Bank (n 2) at paragraph 50.
 Agri South Africa (n 3) at paragraph 62.
 A compulsory licence issued by the state to itself, for public non-commercial use, is often referred to as a government-use license. In contrast to compulsory licenses, government-use licenses (as well as emergency and urgent need licenses) do not require prior notice or negotiation with the patent holder, though notification and payment of adequate compensation is required after the fact.
SECTION27 submission on investment bill