A week from today, in the U.S. District Court here, a class-action trial begins against companies that did business in South Africa during the apartheid years.

While the suit appears to champion a noble cause, it is only likely to devastate ordinary South Africans, the very people it purports to help.

The suit is the brainchild of Ed Fagan, a maverick trial lawyer known for the $1.25 billion settlement with Swiss banks to recoup Holocaust victims’ savings. He is pushing a similar $100-billion class-action suit on behalf of apartheid victims against international banks and corporations such as IBM, Credit Suisse and Citigroup.

Dan O’Flaherty, executive director of the U.S.-South Africa Business Council, says the law suits will “discourage” the companies he represents-including IBM-from doing business in South Africa in the future. “If a company can be held vicariously liable for the actions of a foreign government, they probably won’t want to do overseas business at all.” Although pulling out of South Africa now won’t provide companies with any legal defense in this case, the suit is likely to make investors wary about the security of current and future investments in South Africa.

At a time when the South African economy needs to attract and retain all the investment it can, the government of President Thabo Mbeki has no interest in seeing foreign investors harassed. In a cable to his superiors, Jim Nolan, the U.S. consul in Cape Town, warned that “this legal alternative runs counter to [the South African government’s] philosophy of improving the economic circumstances of its previously disadvantaged citizens.”

Indeed, the South African government seeks to retain investor confidence by distancing itself from the suit. “We have never supported this type of class action suit,” Nozipho January-Bardill, South Africa’s ambassador to Switzerland, told the Neue Zurcher Zeitung newspaper.

But despite the disapproval, Mr. Fagan has promised that future suits will include all companies and countries that propped up the apartheid state. If this litigation is carried out to its logical conclusion, claims against domestic South African businesses will be an eventual possibility.

The suit runs counter to the policy of the Clinton and Bush administrations, both of.which strove to create international investment in South Africa so that the post-apartheid regime would survive. But the U.S. government has yet to take an official position on the lawsuits.

The suit is also a slap in the face to Nelson Mandela. A proponent of reconciliation, Mr. Mandela understood the fragile nature of South Africa’s economy. For this reason, he insisted that there be no recrimination against foreign companies that had resisted the anti-apartheid movement’s pressure to divest.

The Mbeki administration takes a similar view. The post-apartheid governments have always insisted that South Africa’s past belongs to South Africans and it is they, not outsiders, who must deal with it as they see fit.

However, the present government now finds itself in a somewhat precarious position. While the pragmatic Mr. Mbeki understands the need for international investment in South Africa, he cannot win reelection if he’s seen to come out against victims of apartheid-the very people who put him, and keep him, in office. Hence his inability to publicly denounce the lawsuits.

Noting that the South African government is in a political bind when it comes to the suit, Sheila Sisulu, the South African ambassador to the U.S., hopes that investors don’t base their decisions to invest “on the actions of a handful of people acting outside the law of the country.” Instead, she says, “I hope investors make decisions based on our government’s impeccable record in securing their investments.”

The suit was filed under the Alien Tort Statute of 1789. For nearly 200 years, the statute went unused, until the Filartiga case in 1980, when the Second U.S. Circuit Court of Appeals admitted a suit brought by a Paraguayan doctor and his daughter against the head of the Paraguayan police for the torture and murder of the doctor’s son-in Paraguay. The court found that anyone alleging human-rights abuses, perpetrated in other countries by non-U.S. citizens or corporations, could file suit in U.S. courts under the 1789 law.

In the 20 years since, there, has been a scourge of litigation filed under the statute-from citizens of Ghana, Burma and South Korea, to name but a few. But whereas the early cases were brought against individuals, and thus could not be expected to result in substantial financial reimbursement, the extension of alien tort litigation to corporate defendants (such as the Swiss banks) in the 1990s has enticed trial lawyers who seek large cash payouts.

Clearly, in this instance, the American lawyers are meddling where they don’t belong. Not only does South Africa have its own reputable legal system to deal with such matters, but it has also come up with its own plan to compensate apartheid victims.

U.S. trial lawyers cause enough harm to domestic corporations. Why give them a hunting license for the whole world?

Ms. Tisch is an editorial page intern at the Journal.

Jessica Tisch, Wall Street Journal, August 2, 2002