Investment bill adds uncertainty - DA

Cape Town – The promotion and protection of the investment bill tabled on Tuesday "says nothing new and adds uncertainty", according to the DA.

DA shadow minister of trade and industry, Geordin Hill-Lewis, criticised the bill which, in his view, is broad and generic and leaves important issues open to interpretation.

“The bill also gives the minister wide discretion over important areas of legal protection, like investor/State disputes. There are many crucial legal issues left out completely,” Hill-Lewis said in a statement, adding that the bill is silent on intellectual property.
 
“This bill simply will not assuage the many valid concerns that international investors have about the direction of Government policy in South Africa. It is poorly drafted and ambiguous, and it needs to be extensively ‘beefed up’ in the parliamentary process,” he said.
 
Hill-Lewis lauded the removal of a "custodianship" clause that was in the first version, and also the constitutional guarantee for the security of property.

The bill was tabled in Parliament by Minister of Trade and Industry Rob Davies following a public consultation process.

"Provides clarity"

According to Davies the bill seeks to promote investments and clarify the level of protection that an investor may expect in South Africa and 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,” Davies said in a statement.

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

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.

Hill-Lewis raised the concern that the bill introduces a limited form of international arbitration which is “only possible after the investor has ‘exhausted’ all other means of dispute resolution. This is not defined or specified”.

“International arbitration is only at a State-to-State level, which means the investor itself is not able to be involved in the dispute resolution. This is very unlikely to be adequate security for investors,” according to Hill-Lewis.

The parliamentary committee will conduct a public process during which interested stakeholders may submit comments on the promotion and protection of investment bill.