Investment protection bill tweaks name, not substance
THE Department of Trade and Industry has made a few concessions on the Promotion and Protection of Investment Bill so far but has not budged on the substantive question that foreign investors will be treated on the same basis as local investors. The department has conceded that little in the bill promotes investment and has agreed to remove “promotion” from the title and objectives of the bill.
CAPE TOWN — The Department of Trade and Industry has made a few concessions on the Promotion and Protection of Investment Bill so far, but has not budged on the substantive question over whether foreign investors will be treated on the same basis as local investors.
The department has conceded that little in the bill promotes investment and has agreed to remove “promotion” from the title and objectives of the bill, which is under discussion at the trade and industry portfolio committee.
Departmental adviser Mustaqeem De Gama said the bill would also make domestic mediation of disputes automatic. This means the minister will not have to promulgate regulations governing mediation as the department will stipulate the process upfront when the bill becomes law.
No changes have been proposed with regard to the provisions on international arbitration.
Democratic Alliance spokesman on trade and industry Geordin Hill-Lewis welcomed the concessions on the definition of disputes and on mediation. The existence of a dispute will not depend on the state agreeing that there is one, but on the facts.
However, Mr Hill-Lewis said the bill's provision that foreign
SA’s international obligations required it to treat local and foreign investors equally. The bill was in line with best practice
investors would get the same national treatment as other investors in like circumstances would provide little assurance to foreign investors that their investments would be secure should future legislation provide, say, for expropriation or indigenisation.
The bill needed to provide ironclad guarantees to foreign investors that their investments would be protected looking into the future, Mr Hill-Lewis said.
He could see no point for the bill to be promulgated if it offered no further protection than that foreign investors would be subject to the same laws as local investors since this was already the case.
In the global competition for foreign investment SA had to roll out the red carpet.
But Trade and Industry director-general Lionel October was emphatic that SA’s international obligations required it to give equal treatment to foreign and local investors. The provisions in the bill were in accordance with international best practice, he said.
In addition the constitution provided guarantees for the protection of property and no subordinate law could contradict this.
Mr October pointed out that SA attracted the most foreign investment in Africa and was already rolling out the red carpet.
The committee agreed that Mr Hill-Lewis would propose a written clause providing for more protection for consideration. The deliberations will continue today.