A judge in South Africa halted the construction of Amazon’s planned African headquarters in Cape Town, pending the conclusion of meaningful engagement and consultation with all affected First Nation Peoples. 

“The fact that the development has substantial economic, infrastructural and public benefits can never override the fundamental rights of First Nations people,” judge Patricia Goliath of the Western Cape High Court wrote in her ruling on March 18. 

“I am of the view that the fundamental right to culture and heritage of indigenous groups — more particularly the Koi and San First Nations people — are under threat in the absence of proper consultation, and the construction of the River Club Development should stop immediately.” 

Amazon sent a request for proposals to local property developers in 2018 to develop a new regional headquarters where it could consolidate its 3000-strong local workforce into one campus, with plans to increase the headcount to 7500 over seven years. The request also deemed as desirable that the developer sticks to existing regulations, and avoids an "associate public participation process".

The company eventually accepted a bid by local firm Liesbeek Leisure Property trust to develop the project on the River Club site, a plot of land located in a broader area known as Two Rivers Urban Park. Local authorities hailed the R4.6bn ($310m) project as a boon for local employment and issued environmental and land use authorisation in 2020. 

However, several local organisations appealed against these approvals, claiming that the area comprising the River Club project has meaningful cultural and historical value for local indigenous communities, which had only marginally been consulted.

“The whole process was flawed,” says Leslie London, the chairperson of the Observatory Civic Organisation, which was a joint applicant in the court case, highlighting the shortcomings of a consultation process that polarised the local indigenous communities. 

Judge Goliah eventually found in favour of the applicants, noting that the interdiction “must not be construed as a criticism against the development”, as the core consideration is the issue of proper and meaningful consultation with all affected First Nations peoples.

“All affected First Nation groups in the peninsula — most importantly the groups recognised as the historical custodians of the Two Rivers landscape, of which the River Club property only forms 5% — were provided with the opportunity to comment on the proposed redevelopment during the three-year development approval process and did,” Liesbeek rebutted in a statement on March 23, announcing its intention to appeal the decision. 

Amazon’s press office did not respond to requests for comment. 

Community engagement blues

This is not the first time the e-commerce giant’s community engagement practices have fallen short of expectations. Back in 2019, the company pulled out of its planned second US headquarters in Long Island, New York, because of the popular and political backlash against the nature of the project — mostly targeting white collar workers in a deprived urban area — and the incentives the company had secured for it. 

“Community engagement with sites being considered for site selection projects is critical to location success,” Mark Williams, president of Strategic Development Group, a site selection consultancy firm, tells fDi. “First and most important, it is essential that communities understand the nature of economic and other impacts of a proposed project location and verify early that they fully support or won’t support the project. In the event a project moves foreword, and political, financial and other support has not been verified, a project has a high probability of failure. In this case, the cost to the company proposing the location is high in terms of financial loss and timeline setbacks.”

Eventually, Amazon built its new headquarters, HQ2, in Arlington, Virginia, getting the local community onboard by contributing to a local affordable housing initiative. Following the decision, the company announced a $2bn equity fund to build housing in its biggest locations.