Investors seek global recourse
THE Draft Promotion and Protection of Investment Bill, 2013 will have foreign investors thinking twice before looking at SA as a favourable investment destination as it deprives them of the opportunity to independently refer a dispute to an international arbitration forum without the consent of the South African government.
Foreign investors favour international forums as they remove disputes from the host nation’s political and legal systems and believe they offer the prospect of a neutral, and perhaps more favourable, hearing.
As the bill stands, foreign investors would only be able to directly refer disputes to mediation which would be facilitated by the Department of Trade and Industry or arbitrations in accordance with the Arbitration Act, No 42 of 1965.
The current state of the law governing arbitrations in SA provides even less comfort to foreign investors. There is no distinction between domestic and international arbitration, and it is not based on the United Nations Com- mission on International Trade Law (Uncitral model law).
The Law Commission made extensive recommendations for its reform, but to date government has made no progress in revising the arbitration legislation.
Recently the Department of Trade and Industry submitted that a draft bill governing domestic and international arbitration is to be presented to the cabinet (New Arbitration Bill). The Department of Trade and Industry’s director for International Trade and Investment, Mustaqeem de Gama, told BDlive that: “The bill will replace the current Arbitration Act which dates back to 1960. It will aim to expedite arbitration proceedings and ensure local and foreign investors have modern and efficient alternative dispute resolution mechanisms.”
Accordingly, the Arbitration Act will be updated and harmonised with international laws to provide investors with a firm dispute resolution mechanism that is recognised internationally.
We can hope that if the Arbitration Bill is eventually assented to, and the internationally recognised Uncitral model law is incorporated, it will increase the confidence of foreign investors.
THE labour law amendment process is rapidly drawing to a close. In the first of a wave of amendments, the amended Employment Equity Act was gazetted on July 25 with an implementation date of August 1. Yes, that’s correct — just a week from gazetting to publishing.
This is the first of a volley of transformation legislation aimed at further redressing the imbalances of our past. Coupled with the Employment Equity Act and its regulations, one has the broadbased black economic empowerment codes (whose implementation has been delayed) as well as the Women Empowerment and Gender Equality Bill l (which has been withdrawn for further debate after opposition from “both sides” of the social partners).
While some may say that we are on the right track with our transformative path and may question whether there is in fact a need for further and amended legislation, the Employment Equity Commission report indicates that there is a lack of transformation in the top management level of South African private companies. Unfortunately, there is generally little impetus shown to create successful succession plans to ensure that we do not sit with the same demographic problem in the future.
The act itself was gazetted on January 16 this year and, subsequent to that, debate has raged over the content of the employment equity regulations, which seemed to have flown in the face of the recent judgment in the Department of Correctional Services case, which had clearly indicated that a mix between regional and national demographics would need to be applied. The regulations had indicated, particularly at the higher occupational levels, that the national demographics would need to be applied.
This met with stiff opposition, as certain provinces have a substantially different demographic profile to the national one. Two provinces which are prime examples of this are the Western Cape (with a 51% Coloured demographic) and Limpopo (with a 95.8% African demographic). These statistics are substantially
The department has thrown down the gauntlet to business to ensure rapid compliance