Back to the Future: Diplomatic Protection in South Africa’s FDI Protection Regime

The research paper discusses the tension between state-to-state arbitration and investor-state dispute settlement (ISDS) within South Africa's foreign direct investment (FDI) protection regime, specifically regarding the Promotion and Protection of Investment Bill (PPIB).

• South Africa intends to use the Promotion and Protection of Investment Bill (PPIB) to replace international investor-state arbitration—which was present in many bilateral investment treaties from the 1990s—with state-to-state dispute settlement.
• The author argues that removing investor-state dispute settlement (ISDS) is a lost opportunity, as it would have allowed South African courts to localize global investment regulatory norms and learn from international best practices.
• To encourage the use of local courts and address issues like court backlogs that drive investors to foreign tribunals, the author suggests South Africa establish specialized investment courts, noting the existing presence of specialized courts for land, tax, labour, competition, and commercial crimes.
• The document cites Indonesia's 'globalised localism' as a potential model, where international investment law is linked to domestic legislation by offering an investor-state dispute settlement system as an alternative to local courts.
• The paper highlights a historical failure of state-to-state arbitration in a dispute between South Africa and Zimbabwe; despite a Southern African Development Community tribunal ruling in favor of South African investors regarding expropriatory action, the Zimbabwean government claimed the tribunal lacked authority and withdrew from its jurisdiction.

APA

South African Institute of International Affairs (2015). Back to the Future: Diplomatic Protection in South Africa’s FDI Protection Regime. https://saiia.org.za/research/back-to-the-future-diplomatic-protection-in-south-africas-fdi-protection-regime/

Chicago

South African Institute of International Affairs. Back to the Future: Diplomatic Protection in South Africa’s FDI Protection Regime. 2015. https://saiia.org.za/research/back-to-the-future-diplomatic-protection-in-south-africas-fdi-protection-regime/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Back to the Future: Diplomatic Protection in South Africa’s FDI Protection Regime |date=6 October 2015 |url=https://saiia.org.za/research/back-to-the-future-diplomatic-protection-in-south-africas-fdi-protection-regime/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2015back, author = {{South African Institute of International Affairs}}, title = {{Back to the Future: Diplomatic Protection in South Africa’s FDI Protection Regime}}, institution = {South African Institute of International Affairs}, year = {2015}, month = oct, url = {https://saiia.org.za/research/back-to-the-future-diplomatic-protection-in-south-africas-fdi-protection-regime/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }