Tag Archive | Geordin Hill-Davies

Protection of Investment Bill finally passed

Protection of Investment Bill goes for signature….

Sent to clients 20 Nov…… Trade and Industry Minister, Dr. Rob Davies, pushing through Parliament the proposed Protection of Investment Bill for signature by President Zuma, has discounted advice from rob davies 6the majority of submissions from business and industry and disagreed with all opposition members,

A majority of ANC Alliance members had out voted all opposition parties including the EFF in the National Assembly’s Portfolio Committee on Trade and Industry, with concurrence from the NCOP’s Select Committee on Trade and International relations.

The vote in the National Assembly following this was merely a formality with opposition parties voting against. Minister Davies held a media briefing beforehand claiming the removal of recourse for foreign investors to international arbitration was no big deal and in his opinion “the level of investment protection had very little, if any, impact on investment decisions.”

A sum up of the Bill

Shadow Minister  of  Trade and Industry, Geordin Hill-Lewis, said earlier in Parliament that the opposite was indeed the fact and “the new Bill, if it became law, would provide investors with no more protection than already provided in South African law.”

moneyIt had become apparent from earlier meetings that it was Minister Davies’ view that he disliked “litigious-minded investors taking advantage of obscure factors of international trade laws to reverse protection sought by his department” when Department and Trade and Industry (DTI) sought to protect local industry from unfair practices in disputes. He said DTI was not prepared to run and control over 180 bi-lateral trade agreements (BITs), which would now be terminated when they expire.

DTI, the Minister said, required “one harmonised law for investment” which, whilst taking South Africa into new investment territory at law at the same time, “joined South Africa with other leaders with a revised view towards foreign investment and trade.”

The “e” word

eThe primary area of concern during the debates conducted in Parliament recently surrounded an expressed fear of expropriation, a word not used lightly in the context of Africa as a whole. As pointed out by both Minister of Trade, Rob Davies, in terms of the Protection of Investment Bill now passed by Parliament, and Deputy Minister Cronin of Public Works, in terms of the Expropriation Bill being finalised by the Portfolio Committee on Public Works, South Africa’s Constitution guarantees against unfair and unjust expropriation. This, they maintain, is the protection that South African law gives at the highest possible level.

A debate recently occurred in the Portfolio Public Works Committee that the SA Constitution did not define exactly what was meant by the terms “property” or “the public interest” but it eventually transpired that at committee level that Constitutional issues could not be debated in a parliamentary forum. The issue has therefore been “ducked”, as it has, it appears, at Constitutional Court level.

None of our business

The fact that both Committees will not allow debate on the business of other committees in their debating time also precludes any debate on the Private Security Industry Bill, retained by President Zuma as unsigned and which demands 51% of foreign security company investments and was subject and voted on by the Portfolio Committee on Police.

Objectives

The original Cabinet statement issued when the Protection of Investment Bill, then with the deleted word “Promotion” still included when first tabled, stated that the Bill would:

• Provide adequate and equal protection for foreign and local investors alike.scan0004
• Place a stable business environment in place as part of efforts to attract investment.
• Provide adequate and equal protection for foreign and local investors alike.
• All investments will be protected irrespective of their origin.
Courtesy of Business Day
By default, therefore, all interests should be protected by SA law.

One concession

The original requirement that “government may consent to international arbitration with respect to investments after domestic remedies have been exhausted” was watered down, after debate, to allowing an independent tribunal to make further recommendations to the Minister before he or she exercised their rights in ultimate decision making which still remains the Minister’s prerogative.

With the passage of the Bill now for signature, all parliamentary procedure is now complete and a date for the Act to be promulgated announced – by which time DTI would have gazetted any regulations.
Other articles in this category or as background
Changes to Protection of Investment Bill – ParlyReportSA
Sept workshop: Protection of Investment Bill – ParlyReportSA
Promotion and Protection of Investment Bill opens up major row – ParlyReportSA

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