Regulations for Foreign Investor Act weighted towards dispute settlement

The author argues that South Africa's new investment regulations, designed to replace terminated bilateral investment treaties, fail to adequately protect foreign investors. The regulations focus almost exclusively on section 13 of the Protection of Investment Act regarding dispute settlement, proposing a mediation process managed by the Department of Trade and Industry. The author identifies several risks, including potential conflicts of interest due to the department's custody of confidential documents, the lack of a requirement for mediators to be lawyers, and the absence of a link to arbitration or specialized investment courts. The text suggests that the reliance on mediation may be an attempt to follow World Bank advice that ignores the practical difficulties of using mediation for high-stakes investment disputes.

• The investment regulations published on December 30, 2016, are unusually narrow in scope, focusing almost entirely on section 13 of the Protection of Investment Act, which governs dispute settlement.
• The proposed mediation process creates a risk to confidentiality and a potential conflict of interest because the Department of Trade and Industry, rather than a court, will act as the custodian of confidential documents and privileged firm-level information.
• The regulations are criticized for not requiring mediators to be lawyers specializing in trade and investment, and for employing a consensual mediation process that the author deems unsuitable for complex investment disputes involving allegations of expropriation.
• The author contends that the regulations are flawed because they do not link mediation to other dispute-resolution mechanisms, specifically arbitration or specialized investment courts.
• The focus on domestic mediation likely stems from the influence of the World Bank’s investment climate facility, despite the fact that the World Bank's own International Centre for Settlement of Investment Disputes (Icsid) rarely utilizes mediation.

APA

South African Institute of International Affairs (2017). Regulations for Foreign Investor Act weighted towards dispute settlement. https://saiia.org.za/research/regulations-for-foreign-investor-act-weighted-towards-dispute-settlement/

Chicago

South African Institute of International Affairs. Regulations for Foreign Investor Act weighted towards dispute settlement. 2017. https://saiia.org.za/research/regulations-for-foreign-investor-act-weighted-towards-dispute-settlement/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Regulations for Foreign Investor Act weighted towards dispute settlement |date=12 January 2017 |url=https://saiia.org.za/research/regulations-for-foreign-investor-act-weighted-towards-dispute-settlement/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2017regulations, author = {{South African Institute of International Affairs}}, title = {{Regulations for Foreign Investor Act weighted towards dispute settlement}}, institution = {South African Institute of International Affairs}, year = {2017}, month = jan, url = {https://saiia.org.za/research/regulations-for-foreign-investor-act-weighted-towards-dispute-settlement/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }