Promotion and Protection of Investment Bill [B18-2015]

The Portfolio Committee on Trade and Industry invites you to submit written comments on the Promotion and Protection of Investment Bill.

The Bill seeks to:
• provide for the legislative protection of investors and the protection and promotion of investment;
• achieve a balance of rights and obligations that apply to all investors.

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Committee Chairperson Ms Joanmariae Fubbs said the Bill provides for the legislative protection of investors and the promotion of investment. It aims to achieve a balance of rights and obligations that apply to all investors, whether local or foreign.

The purpose of the Act is amongst others to promote and protect investment in accordance with and subject to the Constitution in a manner that balances the public interest and the rights and obligations of investors.

According to one of the provisions of the Bill, security of investment, the Republic must accord foreign investors and their investments a level of security as may be generally provided to domestic investors, subject to available resources and capacity. Investors will have the right to property in terms of the Constitution and a foreign investor may, in respect of an investment, transfer funds subject to taxation and other applicable legislation

The balance in the legislation makes it clear that the idea is not to just protect local investors at the expense of foreign investors.

An investor that has a dispute in respect of action taken by the government, which action affected an investment of such foreign investor, may with six months of becoming aware of the dispute, request the Department or any other competent authority to facilitate the resolution of such a dispute by appointing a mediator or other competent body.

Public hearings for oral submissions have been scheduled for 02, 04 and 09 September 2015 at Parliament.

Comments can be emailed to Mr A Hermans at [email protected] ; Mr T Madima at [email protected] and [email protected] by no later than Tuesday 25 August 2015

Enquiries can be directed to Mr A Hermans on tel (021) 403 3776, and Mr T Madima on tel (021) 403 3822.
 
Issued by the Chairperson of the Portfolio Committee on Trade and Industry, Ms Joanmariae Fubbs


Background
The Bill seeks to achieve a balance between the rights and obligations of all investors in South Africa, to provide adequate and equal protection to foreign investors and domestic investors, and to promote investment. The Bill confirms the legal position that foreign and domestic investors, their investments are protected under the Constitution of the Republic of South Africa, 1996 (‘‘Constitution’’), and applicable domestic legislation. The Bill seeks to treat foreign investors and their investment not less favourably that South African investors in like circumstances are treated. The Bill confirms a commitment by the Republic of South Africa (‘‘Republic’’) to protect all investments irrespective of their origin. The underlying philosophy of the Bill is to clarify the protection that an investor may expect in the Republic, and to promote all types of investments by creating a predictable business environment that is readily understandable to an investor. The Bill also confirms that both foreign and domestic investors are protected under the Constitution. In some instances it may be unavoidable to differentiate between foreign and domestic investors. However these instances are limited and do not violate the principle of equal treatment. Government’s right to regulate is emphasised since legitimate policy measures should be implemented in the public interest. In April 2010, the Department of Trade and Industry (‘‘Department’’), began drafting the Bill which aims to strengthen the Republic’s investment regime by seeking to achieve that: (a) the Republic remains open to foreign direct investment (‘‘FDI’’); (b) the Republic provides adequate protection to FDI; and (c) these objectives are balanced with the right of the government of the Republic (‘‘government’’) to regulate in the national and public interest. The intention of the Department is to clarify provisions typically found in Bilateral Investment Treaties (‘‘BITs’’), by codifying them in the Bill and ensuring compliance with the Constitution. The Bill therefore seeks to balance the rights and obligations of investors, to provide adequate protection to foreign investors, to ensure that South Africa’s constitutional obligations are upheld, and to ensure that government retains the policy space to regulate in the public interest. Furthermore, the Bill draws on a review of international experience as well as recent national experiences across a wide spectrum of both developed and developing countries. The following clauses, in turn, outline the policy perspectives and objectives of the core substantive provisions to be found in the Bill.