ANC rams anti-investment Bill through Committee

Today the so-called “Protection of Investment Bill” was rammed through the Portfolio Committee on Trade and Industry by the ANC, despite the objections of the Democratic Alliance (DA), other opposition parties, and the overwhelming majority of foreign investors in South Africa. We will oppose the Bill when it comes to the House, and we hope that the ANC will realise how damaging this Bill in its current form will be to our ability to attract foreign investment. 

South Africa needs to attract all of the foreign investment it can get. 

There are serious concerns about the government’s policy trajectory, and confidence in South Africa among investors is at a low point. In this context, what South Africa needs is a world-leading piece of investment protection legislation that sends the unambiguous message to the investment community that we are welcoming to their investments, and that those investments will be protected. 

This Bill fails to achieve that. In fact, it does quite the opposite. 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 already available to all local investors, and in many cases, it actually offers less protection. 

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. 

We proposed dozens of sensible amendments which would have gone a long way to alleviating the concerns of the investment community and put South Africa back on the top list of investment destinations. All of these were voted down by the ANC. 

We objected to the Bill for four key reasons: 

1) The Bill does not offer any additional protections beyond that which is already available, and actually diminishes the protections we offer to foreign investors. This will deter investment and deepen concerns about South Africa. 

2) The Committee, and specifically the ANC, completely ignored the views of foreign investors - precisely the people that the Bill is supposed to be aimed at. The vast majority of foreign investors in South Africa said that the Bill would deter investment, with the American Chamber of Commerce calling it “another nail in the coffin of the South African economy”. 

3) The Bill contradicts South Africa’s international commitments under the SADC Protocol on Finance and Investment, which stipulates that member states’ investment legislation should provide for far greater protection than this Bill provides. The Department has said that this Protocol is in the process of being amended, but this will take 2 years. In the meantime, the Bill is clearly in contravention of our SADC commitments. 

4) The Bill exposes the government’s hypocrisy on foreign investment. While the Bill is designed to replace all of the cancelled BITs with mainly European countries, the Department continues to sign new BITs with other countries - China, for example. So while it is still acceptable to offer far greater protection to some investors, the Department argued in committee that we should only be providing the lesser protection contained in the Bill. 

This Bill was an excellent opportunity for the government to restore economic confidence and secure more foreign investment for South Africa. But the ANC’s dogmatic opposition to the DA’s sensible amendments has resulted in a Bill that will only make things worse, not better. 

The DA will oppose the Bill. 

Issued by Geordin Hill-Lewis, DA Shadow Minister of Trade and Industry, 3 November 2015