The controversial Promotion and Protection of Investment bill that received lots of criticism by investors is said to have been quietly and successfully signed into law by President Jacob Zuma.
Government Gazette had it that the president signed the bill on December 15 2015. His assent to the bill went unannounced by the Presidency – it took place just ahead of his decision to fire Finance Minister Nhlanhla Nene.
The bill which replaced bilateral investment treaties concluded in the late 1990s with mostly European countries, which are expiring and not being renewed; was hit by round criticisms both by the European and American Chambers of Commerce in South Africa before being passed by Parliament late last year amid heated debates.
The executive director of the American Chamber of Commerce in South Africa, Carol O’Brien, said that the Protection of Investment Act which was heavily defended by Trade and Industry Minister Rob Davies is expected to discourage foreign investors from further investing in the country.
To Davies, the bill would ensure that foreign investors don’t get preferential treatment over local investors, as the bill was meant to apply to all of them equally. “South Africa, through this bill, is indicating that we will provide and continue to provide strong and reasonable protection to investments in accordance with the Constitution,” he opined.
But in reaction, O’Brien said that South Africans need to bear in mind that “decisions of that nature are made five, eight years before the time, so we will really see the results of this in the years to come, not immediately.”
O’Brien believes that the impact of such act on the inflow of much-needed foreign investment will be felt soon.
“We think that the companies that are in South Africa don’t really have a problem, but we do think that new investment will certainly look twice at South Africa, especially if you twin it with the expropriation bill; those two bills together are ominous.”
“I think everybody is watching and waiting. The fact that BMW brought in investment recently, which was held up as an example that companies aren’t afraid to still invest in South Africa, one has to bear in mind that decisions like that are made five to eight years ahead of time.” he said.
The Act is expected to come into operation as soon as president Zuma proclaims a date. The president is currently in Davos, selling South Africa as a top investment destination.