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Cape Town – Amid criticism from opposition parties, the Promotion and Protection of Investments Bill was tabled in the National Assembly in Cape Town on Tuesday.
The bill that clarifies the protection an investor may expect in South Africa will not chase away foreign investors, said Trade and Industry Minister Rob Davies.
Briefing media in Parliament ahead of tabling the bill, Davies said critics of the bill have not shown him any sign of investors pulling investment as a result of this bill.
READ: DA says ‘Investment Bill’ a missed opportunity, will trigger capital flight
Davies said South Africa was an early mover in a global trend. “We have seen over a period of time that the established international investment protection system is in serious need of review and reform,” he said. “Nobody (in the world) thinks the current structure is fine.”
At issue is a company’s ability to sue a foreign government for vast amounts of money, he said. “(Each case) can cost governments between $10m and $120m in legal fees,” said Davies. “(The current international investment protection system) is becoming an increasingly litigious system.”
“There is heat for South Africa being an early mover,” he said. “We will not apologise for this.”
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He added there is no hidden agenda to seize properties from foreign investors. “We would have to change the Constitution (to do this),” said Davies.
Countries like Japan and the US do not have bilateral investment treaties with SA and Davies said the country won’t renew any of its current bilateral agreements when they come up for renewal. This bill, as well as the Constitution, should then be able to protect investments from any foreign investors.
“There is no correlation between having a bilateral investment treaties and the amount of investment,” he said.
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However, opposition parties pleaded for Davies to listen to their concerns over the bill.
Democratic Alliance MP and dti shadow minister Geordin Hill-Lewis said the DA would vote against the bill, because it adds to the feeling of uncertainty that many investors express about South Africa.
“It does not provide for any additional protection beyond that which is already available to all local investors, and in many cases, it actually offers less protection,” he said.
“It provides no guarantees that investors will not be deprived of their investments, and it does not guarantee fair and equitable treatment for all investors.
“The ANC refused to provide for dispute resolution mechanisms, and gave huge discretion to the Minister to regulate on almost anything related to investments.”
Davies’ reply to opposition criticism was that “everyone can jump up and scream and yell” about the bill denting SA’s investment attraction, but his test was whether companies were actually pulling their investment. “The opposite is happening,” he said, pointing to the rise in investment in the automotive and agricultural sector.
“Many (foreign) investors have looked at the environment in South Africa and can find opportunities that will drive growth,” he said, citing companies likes Unilever and BMW.
