SA’s foreign policy position roiled the market on Tuesday, sending the rand to a fresh record low after the International Criminal Court (ICC) confirmed Pretoria has to arrest Russian President Vladimir Putin if he shows up for the Brics summit in August.
Already the worst performing emerging market currency this month, the rand weakened as much as 1% to R19.86 to the dollar after the government laid down a plan to host Putin. The Russian leader has a warrant of arrest over his head for his alleged role in the kidnapping of children in the war on Ukraine.
“The risks around dealing with SA, a greylisted country that is not maintaining neutrality on the Russia-Ukraine war, has placed the rand under additional pressure,” said Bianca Botes, director of foreign exchange at Citadel Global.
International relations & co-operation minister Naledi Pandor invoked a measure on Monday that exempts diplomats or foreign officials from certain laws and taxes in the country where they are working, triggering speculation that SA may refrain from detaining Putin.
But the ICC said it expected SA to comply with the Rome Statute and arrest Putin because SA is a signatory to the statute which established the court.
“All states which are party to the Rome Statute have an obligation to co-operate with the ICC within the framework of part 9 of this statute,” ICC spokesperson Fadi el Abdallah told Business Day on Tuesday.
According to part 9 of the Rome Statute, the signatories must help the ICC to find and try those who committed crimes.
Russia is not a signatory to the statute.
The comments by the ICC add to SA’s conundrum about what do if Putin lands on SA shores for the annual summit of the emerging markets bloc of Brazil, Russia, India, China and SA (Brics) in August.
SA has not confirmed whether it will arrest Putin should he arrive here, but it has set up an interministerial task team, headed by deputy president Paul Mashatile, to consider the technicalities of a visit by Putin.
But Clayson Monyela, the department’s spokesperson, said invoking the law that exempted participants of the summit from certain laws and taxes in the country did not override any warrant that might have been issued by any international tribunal against any attendee of the conference.
“The immunities are for the conference and not for specific individuals. They are meant to protect the conference and its attendees from the jurisdiction of the host country for the duration of the conference,” Monyela said.
The government said in April it planned to change legislation to fully align with the Rome Statute. This would include amending article 98, which allows the ICC to waive the immunity of suspects from countries that are not party to the treaty, unless the UN Security Council refers the case.
Taking this approach showed that SA did not see the possible process as a straightforward case, international relations analyst Siphamandla Zondi said.
“As August approaches, SA has two main options: to effect the warrant or to ignore it as it did the warrant against Omar al-Bashir, but this time by formally offering Putin diplomatic immunity for the duration of the summit. Both options are difficult because they cause a lot of ripple effects from society,” Zondi said.
The ICC and Pretoria have clashed before over former Sudanese president Bashir. He visited SA in 2015 for a meeting of African heads of state, but the government did not arrest him despite an ICC warrant. The high court in Johannesburg later ruled that this was unconstitutional and had breached the ICC treaty.
Though SA has officially pledged neutrality in Russia’s invasion of Ukraine, Pretoria’s close ties with Moscow have led to perceptions that it is drifting into what business leaders have called the dangerous orbit. SA has already faced accusations from Washington of supplying weapons to Russia when the ship the Lady R docked in Simon’s Town in December — a claim it denies. But if true, this would expose SA to further sanctions from the West, which could cripple its economy and financial system.
The rand broke above the R19/$ level almost two weeks ago when the accusations were levelled by US ambassador to SA Reuben Brigety.
Later on Tuesday the rand managed to pare some of its earlier losses as global sentiment improved on positive international developments, particularly progress around the US debt ceiling deal — which led to the dollar easing from recent highs, boosting riskier assets such as the rand.
“The wild swing in the currency market was caused by SA invoking ‘routine’ diplomatic immunity to all attendees of the upcoming Brics [foreign ministers’] meeting, which will be attended by the foreign minister of Russia,” MyWealth CEO Annatjie van Rooyen said.
“The rand remains vulnerable in the short term with a trading range of R19.30-R20.20 expected,” Van Rooyen said.
At midnight on Tuesday, the rand was 0.13% weaker at R19.68/$.
With Andries Mahlangu
Update: May 30 2023
This article has been updated with new comment and information.
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