Business group criticises Act

The Protection of Investment Act, signed into law by former president Jacob Zuma in 2015 and activated last week by his successor Cyril Ramaphosa, weakens protection for investors and will not attract much needed foreign capital into South Africa, business rights group AfriBusiness said yesterday.

The government has defended the law as necessary to ensure that foreign investors do not get preferential treatment over local investors.

“We are concerned about the evident intentions associated with the Protection of Investment Act, which appear to be the phasing out of bilateral investment treaties (BITs) between South Africa and other countries, among others,” said AfriBusiness CEO Piet le Roux.

“This is deemed to weaken the protection and guarantees that international investors enjoy.”

AfriBusiness said the government had already cancelled several treaties BITs and was considering scrapping even more, such as the investment treaty between Finland and South Africa.

“AfriBusiness regards international investment treaties as an important and special layer of additional protection and incentives that are afforded to foreign investors,” the business interest group said.

“This step is certainly not helping to attract much-needed foreign investment and international capital to South Africa.” – ANA