Ramaphosa just activated a law that scares foreign investors

BBSA

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#1
President Cyril Ramaphosa on Friday activated a controversial Zuma-era law, the Protection of Investment Act, by publication of a notice in the Government Gazette.

The law had a rough ride through Parliament, with fierce opposition from the DA and intense lobbying by foreign governments and organisations such as the EU Chamber of Commerce and Industry in Southern Africa - which warned it "promotes discomfort leading to discouragement related to new investments".

It was quietly – and initially unnoticed – signed into law by then President Jacob Zuma in late 2015.

But it only came into force by the publication of Ramaphosa's commencement notice on Friday, even though he signed that notice exactly a month before.

The law in effect replaces bilateral investment treaties between SA and various countries, which often included special protections – including of property rights – for companies from those countries.


The new law instead specifically gives foreign investors only those rights and protections available to their South African peers.

In doing so it excludes foreign arbitration for dispute. Foreign investors are now required to exhaust all domestic possibilities first before there is an option of international arbitration, and then only if the South African government chooses to allow it.

https://www.businessinsider.co.za/p...-mediation-bee-section-25-constitution-2018-7
 

f2wohf

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#5
Can't see the point or benefit for SA of this law. Just doesn't make sense.
[MENTION=79361]DreamKing[/MENTION] ANC protector much?
 

Borrels

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#7
Sounds very sensible to me. Why would we give foreigners more rights than locals? Surely other countries don't
 

ɹǝuuᴉM

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#8
Sounds very sensible to me. Why would we give foreigners more rights than locals? Surely other countries don't
You are kidding right? Do you even understand what this is all about? I guess not. The ANC has just made itself judge and jury over foreign companies in South Africa. #LiveWithIt
 

Hamish McPanji

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#11
You are kidding right? Do you even understand what this is all about? I guess not. The ANC has just made itself judge and jury over foreign companies in South Africa. #LiveWithIt
Foreign companies that are operating in SA must be subject to the same regulations and hoops as local companies.

Or is this something else? Explain what the issue is exactly? Since you are so knowledgeable about this?
 

Gnome

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#12
This piece of legislation should be scary if its intent is to protect against "something that can happen" instead of something that is happening.

Else the only thing we are currently getting from this legislation is that it is going to cost this country desperately needed business, which is pointless.
 

ForceFate

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#13
You are kidding right? Do you even understand what this is all about? I guess not. The ANC has just made itself judge and jury over foreign companies in South Africa. #LiveWithIt
How is ANC judge and jury if mediators are appointed jointly by department and investor? Furthermore, under certain conditions, department can request judiciary to make the appointment jointly with the investor.
 

f2wohf

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#14
This piece of legislation should be scary if its intent is to protect against "something that can happen" instead of something that is happening.

Else the only thing we are currently getting from this legislation is that it is going to cost this country desperately needed business, which is pointless.
Even though I'm against this law, I'm actually wondering how many investors were aware of the provisions of the bilateral treaties.

It's probably incompetence from my part, but I never heard of it until now (and I work for a foreign investor).
 

ForceFate

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#15
Even though I'm against this law, I'm actually wondering how many investors were aware of the provisions of the bilateral treaties.

It's probably incompetence from my part, but I never heard of it until now (and I work for a foreign investor).
Sleeping on duty :D
 

Hamish McPanji

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#16
Even though I'm against this law, I'm actually wondering how many investors were aware of the provisions of the bilateral treaties.

It's probably incompetence from my part, but I never heard of it until now (and I work for a foreign investor).
When, and under what context were the bilateral treaties agreed upon?
 

f2wohf

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#17
When, and under what context were the bilateral treaties agreed upon?
It would be one treaty per country so it should span over decades.

Really too lazy to look for it and even more to read the content, it's usually one of the most boring type of agreement you can encounter.
 

Hamish McPanji

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#18
It would be one treaty per country so it should span over decades.

Really too lazy to look for it and even more to read the content, it's usually one of the most boring type of agreement you can encounter.
Hence it probably reflects agreements made when SA was a vassal state. Or under threat of sanctions. Doesn't necessarily reflect today when countries are negotiating on equal standing
 

crackersa

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#19
I can see the point of this law, but be careful when you need imports from another country since you don’t have much to export
 

Dave

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#20
[MENTION=83855]Hamish McPanji[/MENTION]

Foreign companies are less likely to make large investments if there's a chance of nationalisation or forced expropriation for the company, look what happened to Repsol in Argentina.

This is likely to make foreign companies think twice before investing.
 
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