HOW THE NEW BILL CHANGED

CityPress - - Business -

The Pro­mo­tion and Pro­tec­tion of In­vest­ment Bill largely looks like the boil­er­plate bi­lat­eral in­vest­ment treaties it is re­plac­ing, but with im­por­tant pro­vi­sos.

For ex­am­ple, the def­i­ni­tion of what con­sti­tutes an “in­vest­ment” has been sig­nif­i­cantly trimmed.

In the old ver­sion, it ex­pressly in­cluded in­tel­lec­tual prop­erty, li­cences and con­tracts, but ex­pressly ex­cluded sale or credit agree­ments.

The new ver­sion re­volves around own­er­ship of any en­tity that has “com­mit­ted re­sources of eco­nomic value over a rea­son­able pe­riod of time, in an­tic­i­pa­tion of profit” – seem­ing to ex­clude old in­vest­ments or ones that in­volved du­bi­ous real in­flows of cap­i­tal.

Another sec­tion of the bill that was mean­ing­fully ex­panded is the list of caveats to the “na­tional treat­ment” clause.

This clause is in prac­ti­cally all in­vest­ment deals and says for­eign in­vestors will be treated “no less favourably” than lo­cal ones “in like cir­cum­stances”. In the new ver­sion, the dti can con­sider “ef­fects on third par­ties”, the ef­fect on em­ploy­ment and the en­vi­ron­ment when de­cid­ing whether for­eign and lo­cal in­vestors re­ally do face “like cir­cum­stances”.

The part of the orig­i­nal bill that re­ally spooked crit­ics – a lengthy sec­tion on what is, and is not, “ex­pro­pri­a­tion” – has been cut out al­to­gether. That has now been su­per­seded by the Ex­pro­pri­a­tion Bill, which was pub­lished in Fe­bru­ary this year.

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