Promotion, Protection of Investment Bill tabled in Parly

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The bill, which was tabled following extensive public consultations, seeks to promote investment and clarify the level of protection that an investor may expect in South Africa. It also seeks to ensure that the country remains open to foreign investment.

"The bill also aims to confirm government's right to pursue constitutionally-driven national development objectives and recognises the right of governments to regulate in the public interest.

"In addition, it promotes a balance between the rights and obligations of investors, [and] ensures the equal treatment between foreign investors and domestic investors. It also provides clarity for the standards of protection applied to investment," said dti Minister Rob Davies.

The Minister added that South Africa offers extensive protection to investment, both domestic and foreign through the Constitution, and other pieces of legislation that affect investment.

Minister Davies stated that the bill builds on the already robust investor protection by clarifying - and bringing into alignment - standards of protection routinely found in international investment treaties with South Africa's legal framework.

According to Minister Davies, there is a growing global discussion on the approach to investment regulation.

"In the 2015 World Investment Report (WIR), the United Nations Conference on Trade and Development (UNCTAD) argues that the process of reform of international investment agreements needs to be synchronised at national, bilateral, regional and multilateral levels," said Minister Davies on Tuesday.

The 2015 WIR presents various policy options which include safeguarding the right to regulate in the public interest so that limits on state sovereignty imposed by international investments agreements do not constrain public policy making, as well as reforming investment dispute settlement to address the crisis in legitimacy of the current system.

Minister Davies also highlighted that the draft bill defines international investment law concepts such as national treatment, protection and security, and the transfer of funds in line with constitutional principles and applicable norms. It further confirms the right to property.

The provision on 'national treatment' ensures non-discrimination between domestic and foreign investors that are in 'like circumstances'. This further clarifies that government may undertake certain measures for inter alia, purposes of economic transformation and the advancement of certain categories of persons.

"Foreign investors can further expect a level of security as may be generally provided for to domestic investors under the provision on 'security of investment'. Investors further have their right to property reaffirmed in terms of section 25 of the Constitution. The Bill in no way interferes with the protection afforded to investors under the existing bilateral Investment treaties," explained the Minister.

Furthermore, the Bill outlines the policy perspectives and objectives through core substantive provisions that express South Africa's commitment to maintaining an open and transparent environment for foreign investors, while recognising the importance of ensuring sufficient scope for the government to regulate all investments, whether domestic or foreign, in order to fulfil legitimate national policy objectives.

Minister Davies emphasised that the rights of investors are entrenched in the bill.

"With regards to the 'dispute resolution', any government action that affects the rights of investors can be raised with the dti or any competent authority playing a facilitatory role in the resolution of the matter.

"All investors will be able to submit disputes before national courts or relevant authorities, and subject to the exhaustion of domestic remedies, the government may consent to international arbitration in respect of investments covered by this Act, once promulgated," said Minister Davies.