Safeguarding foreign direct investment in South Africa: Does the Protection of Investment Act live up to its name?

Abstract

ABSTRACTFollowing a multi-year review of its bilateral investment treaties (BITs), the South African government terminated all BITs it had signed with European countries, and instead promulgated the Protection of Investment Act 22 of 2015 (PIA). The purpose of the PIA is, among other things, to protect investment in line with the Constitution, in a manner that balances the public interest and investors’ rights and obligations. The termination of the BITs and the promulgation of the PIA, however, seem to have created a gap with regard to the protection afforded to investors; compared with some of the terminated BITs, the PIA has modified or completely removed several provisions. This raises critical questions about the implications of the provisions of the new act, and whether it lives up to its name and indeed provides sufficient protection to foreign investments. The article takes the form of a comparative and analytical study of the provisions of the PIA, other South African legislation, international instruments, national and international case law and other scholarly work to assess the adequacy of the protection afforded by the act.