Reconsidering the Protection of Investment Act 22 of 2015: A Case of International Investment Protection and the Right of a State to Regulate (original) (raw)
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South African Journal of International Affairs, 2018
Following 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.
Concerns about the restrictions imposed by Bilateral Investment Treaties (BITs) on states ability to regulate for public interest have given way to moderate reform. Now some BITs recognize the right to regulate, specifically in the areas of environment, health and safety. However, these changes don’t address the main interests of developing countries, including core values concerning economic justice or industrial policy objectives. The cases of South Africa and Brazil suggest there are alternative paths. South Africa enthusiastically embraced BITs as a way to attract investment but soon realized the constraints they imposed on the state’s ability to further economic justice according to its post-apartheid Constitution. It decided to terminate its BITs, adopt a new investment protection act limiting the protection of foreign investors, and decided to use domestic courts to solve disputes. Brazil decided not to enter BITs and instead pursued Agreements on Investment Cooperation and Facilitation (ACFIs) that delimited the rights of foreign investors. These examples show that developing countries have options outside the BITs. Conversely, they suggest that to truly accommodate the interests of developing countries, the right to regulate under BITs has to be expanded considerably to include distributive justice concerns and industrial policy goals. Otherwise, the investment regime will reinforce global inequalities and likely force countries to exit the system.
From the perspective of countries in the Global South, an honest reform in order to promote greater policy space should be able to accommodate development concerns, providing room for policy experimentation in a variety of areas. In this paper, I propose to enlarge the notion of RTR in investment agreements to include a development dimension, largely overlooked in the processes of reforming investment agreements and accompanying literature. A RTR approach to take account of development needs should allow countries to incorporate policy areas as diverse as redistributive justice and industrial policies. I develop my idea by focusing on recent experiences concerning investment regulation in South Africa and Brazil and noting that the success of a development-based approach to RTR depends on external as well as internal factors. I conclude with a word of caution: if a development dimension of RTR is not acknowledged and addressed by the mainstream investment regime, investment treaties and tribunals will only serve to perpetuate global inequalities under the rule of law.
The Draft Pan-African Investment Code: Toward a New Legal Model for Investment and Development
The Draft Pan-African Investment Code: Toward a New Legal Model for Investment and Development, 2023
The purpose of this article is to explore the draft Pan-African investment code as an innovative legal instrument that will serve African States in the negotiation and the development of a « new generation » of international investment agreements. The motivation for this research lies in the fact that elaborating a continental legal framework for investments has a profound impact on overcoming issues with the fragmentation of the investment regime in Africa. As such, after introducing the draft Pan-African investment code, we will examine some of its most innovative features, as well as its different frailties.
De Jure, 2019
In late 2015, the South African government terminated all bilateral investment treaties it had signed with European countries and promulgated the Protection of Investment Act. Among the changes to the country's foreign investment regime introduced by the new Act is the removal of international investment arbitration at the International Centre for the Settlement of Investment Disputes (ICSID). An overview of recent developing-world trends points to an eagerness to facilitate a better balance between foreign investors' interests and those of the host state. In most instances, this is done by introducing domestic courts and tribunals as both first and last resort for foreign investment disputes. Against this backdrop, South Africa's move away from investor-state dispute settlement was not completely unexpected. Questions can however be raised as to whether this is an outright rejection of investor-state dispute settlement, without first establishing some sort of alternative capacity-wise. The article concludes that, in resource-constrained times, it might have been more prudent to safeguard valuable inflows of investment and resist scrapping investor-state dispute settlement in its entirety, at least until workable alternatives-such as the creation of a regional, custom-made investment arbitration system-have been secured. How to cite: Qumba 'South Africa's move away from international investor-state dispute: a breakthrough or bad omen for investment in the developing world?' 2019
Reforming the Legal Framework of the Organization for the Harmonization of Business Law in Africa (OHADA) to Protect Foreign Direct Investment in Africa., 2017
Foreign Direct Investment (FDI) plays a key role in the world economy. It further has a strong potential to contribute to the acceleration of economic growth and sustainable development. In other words, it is welcomed and, indeed, actively sought by all countries in the word. The way in which FDI can contribute to the economic development and integration in the global economy is especially recognized for African Countries. In fact, too often, potential investors discount the African countries as a location for investment because of a negative image of the region as a whole. However, such picture conceals the complex diversity of economic performance and that potential investment opportunities in individual countries indeed exist. So far, African countries have not fully realized the potential of the type of capital that FDI is. Thus, it is one of the reasons explaining why the Economic growth in Africa has been low over a long period of time. To solve such problem, many African countries have made efforts to create a more business-friendly environment and to promote not only local investment but also foreign investment such as Foreign Direct Investment (FDI). In this regard, seventeen African countries gather together so as to create the OHADA. The organization precisely aims to restore legal and judicial security in the region to create more investment and attract investors. Even though one of the OHADA objectives is to promote investment, the title of the founding treaty reveals that it not a dedicated instrument for investments. This can be observed with regard to other treaties upon which the regional organizations are based and which explicitly provide for investment in their title. For example, the Investments Protection and Promotion Agreements (IPPA), the Washington Convention creating the International Centre of Investment Disputes (ICSID) or also the Seoul Convention establishing the Multilateral Agency for Investment Guarantee (MIGA). However, no hasty conclusions should be drawn from this observation. Indeed, there are many international treaties not exclusively dedicated to investments but with chapters of very high practical importance on this matter. Such is the case of NAFTA (North American Free Trade Agreement) and his famous Chapter XI of the Treaty on the Energy Charter, or FTA’s (the Free Trade Agreements). They all are bilateral agreement built on the model of NAFTA Treaty which contains a chapter dedicated to investment. And we know the importance that plays such Chapter XI of the NAFTA in investment law. There are various legal sources on the issue of investment in the OHADA region at the national, regional and sub-regional level. They regulate the treatment of foreign investments such as the Economic Community of Central African States (ECCAS) and West African the Economic and Monetary Union (WAEMU) investment charters. Moreover, OHADA states sign Bilateral Investment Treaties (BITs) to protect foreign investments. The relationship between the different sub-regional laws on investment and OHADA is not yet clear, but case law suggests that CEMAC and UEMOA courts recognize the supremacy of OHADA law and their lack of competence to hear matters regulated under OHADA. This means that, even if OHADA treaty does not explicitly mention investment, but still contains relevant provisions which are able to foster the protection of investment. In order to understand what the OHADA law provides in term of investment, we must examine its contents and instruments. The plural as to the latter is appropriate because Articles 1 and 5 of the OHADA Treaty reveal that it is designed as a matrix within which common rules are to be developed and grouped in Uniform Acts. To date, nine (9) Uniform Acts have been adopted in diverse areas such as the Uniform Act relating to General Commercial Law, the Uniform Act relating to Commercial Companies and Economic Interest Group, the Uniform Act Organizing Securities, the Uniform Act Organizing Simplified Recovery Procedures and Measures of Execution, the Uniform Act Organizing Collective Proceedings for Wiping off Debts, the Uniform Act on Arbitration, the Uniform Act Organizing and Harmonizing Undertakings’ Accounting System, the Uniform Act relating to Contracts of Carriages of Goods by Road and the Uniform Act relating to Cooperatives Societies, and at least two other Uniform Acts are in preparation, one on Contract Law and the other on Labour Law. It must be noted however that none of these uniform acts and none of the OHADA Treaty chapters is expressly dedicated to investments. The real purpose of the present work is to determine what are the problems or drawbacks that OHADA laws contain and how to solve them in such way to protect investment in Africa. In order to give answers to this main research question, any contributions or links between the OHADA law and investment law must be sought within the body of rules that constitute the Treaty of OHADA, as well as the Uniform Acts adopted pursuant to it. The proposed approach to determine these potential contributions or links is to be found in the provisions in which the OHADA lawmakers mention investment and /or investor. Furthermore, it is not sufficient to restrict the work there. Even if these terms are not explicitly addressed, certain provisions can still be very useful for investments and investors. Thus, beyond appearances, it is about to examine, contributions or possible links between the OHADA law and investment law. As pointed out above, Africa still remains a region which is very often misunderstood by many foreign investors. Such conception impacts negatively as well on the OHADA region. This is the reason why we think it is important to conduct the present research; in order to provide clarity as to the legal framework for any future potential investor. After a general introduction into the research subject (chapter 1), I will firstly give a presentation of the investment environment and identify the different challenges related to investment existed in Africa (chapter 2) and secondly present the OHADA and its search of harmonization (chapter 3). This chapter will include the background of the organization and point out the present issues faced by the organization. I will dwell upon the need to reform the OHADA legal system by providing directions and suggestions (chapter 4) before concluding. In this view, and as long as OHADA space still attract foreign investors, it is important to analyze the different legal mechanisms put in place to protect foreign investment. Thus, the actual question that is sought in this research study is whether there are protection mechanisms related to investment stipulated into the OHADA law and if yes, whether the protections stipulated in are actually strong enough to protect foreign investors from all around the world and if not, what legal mechanisms and remedies can be put into place.
Shifting Paradigms in International Investment Law, 2016
International investment law is in transition. Whereas the prevailing mindset has always been the protection of the economic interests of individual investors, new developments in international investment law have brought about a paradigm shift. There is now more than ever before an interest in a more inclusive, transparent, and public regime. Shifting Paradigms in International Investment Law, edited by Steffen Hindelang and Markus Krajewski, addresses these changes against the background of the UNCTAD framework to reform investment treaties. The book analyses how the investment treaty regime has changed and how it ought to be changing to reconcile private property interests and the state's duty to regulate in the public interest. In doing so, the volume tracks attempts in international investment law to recalibrate itself towards a more balanced, less isolated, and increasingly diversified regime. By bringing together a geographically and ideologically diverse team of academics and practitioners to engage with the issues, the individual chapters of this edited volume address the contents of investment agreements, the system of dispute settlement, the interrelation of investment agreements with other areas of public international law, constitutional questions, and new regional perspectives from South Africa, Europe, Latin America, and the Pacific Rim Region. Together they provide an invaluable resource for scholars, practitioners, and policymakers. Contents Steffen Hindelang and Markus Krajewski: Introductory Observations I: Giorgio Sacerdoti: Investment Protection and Sustainable Development: Key Issues II: Peter Muchlinski: Negotiating New Generation International Investment Agreements: New Sustainable Development Oriented Initiatives III: Roland Kläger: Revising Treatment Standards: Fair and Equitable Treatment in Light of Sustainable Development IV: Lukas Stifter and August Reinisch: Expropriation in the Light of the UNCTAD Investment Policy Framework for Sustainable Development V: Jonathan Ketcheson: Investor-State Dispute Settlement and Sustainable Development: Modest Reform VI: Gus Van Harten: The EC and UNCTAD Reform Agendas: Do They Ensure Independence, Openness, and Fairness in Investor-State Arbitration VII: J. Anthony VanDuzer: Sustainable Development Provisions in International Trade Treaties: What Lessons for International Investment Agreements? VIII: Katharina Berner: Reconciling Investment Protection and Sustainable Development: A Plea for an Interpretative U-Turn IX: Helmut Philipp Aust: Investment Protection and Sustainable Development: What Role for the Law of State Responsibility X: Karsten Nowrot: Termination and Renegotiation of International Investment Agreements XI: Sean Woolfrey: The Emergence of a New Approach to Investment Protection in South Africa XII: Maria Luque: Reliance on Alternative Methods for Investment Protection through National Laws, Investment Contracts, and Regional Institutions in Latin America XIII: Leon E. Trakman and Kunal Sharma: Jumping Back and Forth between Domestic Courts and ISDS: Mixed Signals from the Asia-Pacific Region XIV: Peter-Tobias Stoll and Till Holterhus: The 'Generalization' of International Investment Law in Constitutional Perspective XV: Frank Hoffmeister: The Contribution of EU Trade Agreements to the Development of International Investment Law Steffen Hindelang and Markus Krajewski: Concluding Remarks