South Africa: Physical Property And Property Rights Of All Sorts!

Last Updated: 11 September 2018
Article by Andre van der Merwe

The link between fixed and tangible (or physical) property and its rights on the one hand, and intellectual property ("IP") and its rights on the other hand, is not always apparent. Hence there appears, somewhat incidentally, to be a gulf between these two species of property and their associated rights.

The reason for such an apparent gulf may be because of the considerable difference in nature between these two forms of property and the rights that protect these. Some forms of IP can be quite advanced scientifically and esoteric while physical property is generally understood.

A professional body such as the South African Institute for Intellectual Property Law ("SAIIPL"), founded in 1954, is focused on IP law and protection, and has thereby considered itself to be the guardian or custodian of IP law in South Africa. Since that time, its Fellows have been involved both in the drafting of new IP legislation and in amendments relating to existing IP laws.

SAIIPL does not generally concern itself with property law or rights in the broader sense, although it had submitted a formal proposal that IP and IP rights should be protected as a particular form of property rights in the Constitution, at the time that the Constitution was being drafted by CODESA during the 1990's.

The question of association of sorts therefore arises – does an organization or body exist (or possibly a mechanism or system) that keeps a watchful eye over both forms of property and their protection, whether on a national or international level? And does that organization or body report on and keep the world informed of changes in the levels of such protection?

The Property Rights Alliance ("PRA")

Fortunately, there is a body, namely the Property Rights Alliance ("PRA"), based in Washington DC, USA, which stands as an advocacy organization dedicated to the protection of physical and IP rights, both domestically and internationally.

PRA's efforts to protect property rights are all-encompassing and include issues such as US federal and state law, piracy and counterfeiting of intellectual property in domestic and international arenas, property law and land ownership in developing countries in order to foster economic growth and democracy, and strong intellectual and physical property safeguards. Property rights are of course a key indicator of economic success and political stability, in addition to being an essential component of prosperous and free societies.

On the international stage, PRA works closely with various property rights advocates and with over 100 think-tanks, NGO's and other organizations around the world.

The International Property Rights Index ('IPRI") of PRA

The flagship publication of PRA is its annual International Property Rights Index ("IPRI") and Report. The IPRI measures and scores, for each country, the underlining institutions of a strong property rights' regime, namely the strength of physical property rights, intellectual property rights, and the legal and political environment in which these operate.

The IPRI presents a valuable tool for policy-makers, business communities, and civic activists, and it highlights the essential role that property rights play in creating a prosperous economy and a just society. Most importantly, it is the world's only index dedicated entirely to the measurement of intellectual and physical property rights.

The twelfth edition of this Index, IPRI 2018, released on 8 August 2018 and available in full on PRA's website, covers 125 countries, 98% of the world's Gross Domestic Product and 93% of the world's population. It was produced by Prof Sary Levy-Carciente in partnership with PRA and 113 international organizations/think-tanks from 70 countries, including the Free Market Foundation in South Africa, and using inter alia data from the latest Global Competitiveness Index of the World Economic Forum. In addition, the 2018 Index examines the robust relationship between property rights and other economic and social indicators of well-being including gender equality, entrepreneurship, research and development, human development, civic activism and ecological performance.

What exactly does the IPRI 2018 Report show?

Internationally

Firstly, it shows that world-wide progress over the last year in strengthening property rights systems remained incremental, yet consistent. The world's IPRI average increased only 1.95% to 5.74.

Secondly, and quoting Dr Hernando De Soto, a noted economist and President of PRA, it shows that: "Finland traded places with New Zealand for top spot (with an index score of 8.69) by improving access to loans and patent protection. In fact, Finland's improvement also allowed it to displace the USA to become the world leader in protection of IP rights. The world's largest economy will no doubt recover from this slight setback. Citizens residing in the USA having a US$19 trillion economy are among the world's top 13% in their ability to enjoy a robust property rights ecosystem allowing them to own and use their land, their businesses and their inventions with relative ease compared to the rest of the world."

"The other 6 billion people are unable to enjoy the same advantages. Weak property rights systems not only blind economies from realizing the immense hidden capital of their entrepreneurs, but they withhold them from other benefits as evidenced through the powerful correlations in this year's Index: human freedom, economic liberty, perception of corruption, civic activism, and even the ability of being connected to the Internet, to name a few."

Three countries – Finland, New Zealand and Switzerland (a quarter of 1% of the world) have achieved, together with the USA, the highest levels of property rights protection.

IPRI 2018 is the first publication to use the recently updated Patents Rights Index developed by Professor Walter Park at American University.

IPRI 2018 includes correlations with 23 economic and social indicators, including nine that are specific to e-commerce, which displayed some of the strongest relationships the PIRI has ever produced, suggesting that rights play. an important role in addressing Internet access issues.

In some countries, property rights are restricted by gender. Poor property rights are bad in themselves but the Gender Equality component of the Index reveals that several countries in the Middle East, North Africa and Sub-Saharan Africa continue to limit property ownership based solely on gender.

South Africa

South Africa has received a favourable mention of its efforts to realize property rights from its indigenous communities based on their traditional knowledge and cultural expressions. However, South Africa's ratings declined in the variable Physical Property Rights protection (-1.18). The data for this variable is derived from the World Economic Forum's Executive Opinion Survey. This was prepared in April 2018, shortly after the ANC supported a motion submitted by the Economic Freedom Fighters party (EFF) to establish an ad-hoc parliamentary committee to review and amend section 25 of the Constitution. This pre-election campaign propaganda should be short-lived with a more sensible approach supporting economic growth and boosting investor confidence setting in after the election. The medium to longer term prospects for investment in South Africa are entrenched through a world class Constitution and jurisprudence.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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