SOUTH AFRICA’S DRAFT PROMOTION AND PROTECTION OF INVESTMENT BILL

The South African Institute of International Affairs (SAIIA) provides a critical analysis of the 2013 Promotion and Protection of Investment Bill. The submission argues that while the Bill aims to balance developmental objectives with investment protection, several provisions deviate from customary international law, potentially creating uncertainty for foreign investors and risking challenges in international courts for denial of justice.

• The South African government decided to terminate or not renew bilateral investment treaties (BITs) because they believed these treaties gave foreign investors more rights than domestic investors and that international arbitration panels often favored corporate interests over host nation policy space.
• Foreign investors have expressed concerns that the revocation of BITs, combined with domestic debates over nationalisation and the government's intervention in Walmart's acquisition of Massmart, could be a precursor to widespread expropriation similar to the land reform process in Zimbabwe.
• The Investment Bill's preamble relies on the principle of 'public interest', which SAIIA argues is too elusive and lacks a statutory definition, potentially leading to arbitrary government actions.
• The Bill's screening process for investments is criticized for being overly broad and lacking procedural detail, such as which state institutions conduct the examination or the specific thresholds that trigger an investigation.
• The Bill's expropriation clause deviates from the 'prompt, adequate and effective' compensation standard of customary international law (the Hull formula), instead adopting a 'just and equitable' standard (the Calvo doctrine), which SAIIA describes as state-centric and subjective.
• SAIIA identifies a conflict in the Bill between the compensation standard (Calvo doctrine) and the valuation formula (Hull standard), which may create difficulties for tribunals to reconcile in practice.
• The Bill's dispute resolution section is noted for its use of the outdated Arbitration Act of 1965, which SAIIA suggests may indicate a shift toward international investment contracts with individual investors rather than broad BITs.
• The Bill's interpretation clause is viewed as problematic because it subjects customary international law to the South African Constitution, which could lead to a statute that does not apply international law principles and may be challenged for denial of justice.

APA

South African Institute of International Affairs (n.d.). SOUTH AFRICA’S DRAFT PROMOTION AND PROTECTION OF INVESTMENT BILL. https://saiia.org.za/wp-content/uploads/2015/05/SAIIA-Submission-Investment-protection-and-promotion-bill.pdf

Chicago

South African Institute of International Affairs. SOUTH AFRICA’S DRAFT PROMOTION AND PROTECTION OF INVESTMENT BILL. n.d. https://saiia.org.za/wp-content/uploads/2015/05/SAIIA-Submission-Investment-protection-and-promotion-bill.pdf.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=SOUTH AFRICA’S DRAFT PROMOTION AND PROTECTION OF INVESTMENT BILL |url=https://saiia.org.za/wp-content/uploads/2015/05/SAIIA-Submission-Investment-protection-and-promotion-bill.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairsndsouth, author = {{South African Institute of International Affairs}}, title = {{SOUTH AFRICA’S DRAFT PROMOTION AND PROTECTION OF INVESTMENT BILL}}, institution = {South African Institute of International Affairs}, url = {https://saiia.org.za/wp-content/uploads/2015/05/SAIIA-Submission-Investment-protection-and-promotion-bill.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }