Protection of Investment Bill will only repel investment

17 November 2015

The following speech was delivered in Parliament today by the DA’s Shadow Minister of Trade and Industry, Geordin Hill-Lewis MP, during the Second Reading Debate of the Protection of Investment Bill .

Chairperson, 

Sometimes debates in this House call for us to rise above politicking, and speak to one another as South Africans. The debate on this Bill is such a time. 

Our economy is in serious trouble. Confidence in South Africa is at a low ebb. 

South Africans feel unsure of the future, not knowing if their job will be there tomorrow. 

Investors around the world are holding back on new commitments, waiting to see if we still honour the commitments we made in our Constitution, or whether we begin to unstitch the 1994 tapestry. 

What South Africa needs, what we urgently need, is to send a decisive and unambiguous message to the rest of the world that we are still the same South Africa, that we still believe in the Constitution, and that we want them to be a part of our shared prosperity story. 

We need to stand on the proverbial hilltop and shout that we want their business, that we welcome their investment; that we want their factories here, and their jobs here. 

That is what this Bill could have been, and that is why it gives me absolutely no satisfaction to see this Bill before the House today. 

For this is no welcoming invitation to the world. This is a big neon sign on the shopfront window that screams “closed”. 

Honourable Members, all of us know that this is a bad Bill. How do we know? Because foreign investors told us. Every foreign investor that came to our Committee told us in unambiguous terms that if this Bill passes, they will be less likely to invest in South Africa. More than 80% of all foreign investors in South Africa, representing an enormous R2 trillion in investment over the past 20 years, told us that this is a bad Bill. 

Mr Stefan Sakoschek, the chairman of the EU Chamber of Commerce, says that this Bill makes EU investors feel like they “are being spat at in the face” by the government. Ms Carol O’Brien, the Executive Director of the American Chamber of Commerce, described this Bill as another “nail in the coffin of the SA economy”. 

It is reported that in her meeting with President Zuma last week, German Chancellor Merkel specifically raised this Bill as a concern for German investors. Germany is our single biggest source of foreign investment. 

This is not me saying it, this is not the DA saying it. These are the words of the investment partners that we desperately need to attract. Why are you not listening? 

It is a bad Bill because it does not allay the concerns of investors, in fact, it adds to them. And it gives absolutely no protection to foreign investors beyond that which is already available under general South African law. I ask any Member to point to the clause in the Bill, just one clause, that gives any additional protection to investments. There is not one single clause. 

Let’s be clear what is at stake here. One in every four jobs in South Africa relies on foreign investment. That is 25% of all jobs in this country rely on foreign investors. What foolishness is it, that we are happy to alienate the partners we need to make South Africa prosper? What foolishness. 

That is why the DA wanted so badly for this to be a good Bill. That is why we worked with the Department and the ANC in committee to propose some entirely reasonable, common sense amendments. Our amendments would have offered a real, tangible commitment to investors that we are serious about attracting them. 

But every one of them was voted down by the ANC. 

I want the House to hear exactly what we proposed, and to ask yourself honestly, why the ANC opposed this: “The government shall not impair by unreasonable, arbitrary or unfair measures, the management, maintenance, use, enjoyment or disposal of lawful investments made by foreign investors in the Republic.” 

This Bill is bad because it is in contravention of our SADC commitments on finance and investment. We have been assured that the SADC protocol will be amended, but this is at least a year off. How can this House pass a Bill which the Department agrees contradicts our international commitments? 

This Bill is bad because it is hypocritical, and introduces second class investors. We have cancelled our investment treaties with most EU countries, but signed new BITs with others, like China. So while some countries are good enough for a full BIT, our biggest investment partners are not. 

There are many questions, much that is truly inexplicable. But none more pressing than this: Why is the ANC prepared to take an action that we know beyond a shadow of doubt will definitely harm the economy? 

That is the question the ANC must answer. 

But we are clear on what is needed. We want a great Bill, that protects investments and sends the clear message to the world that South Africa is the place to invest. 

I ask every member in this House to vote against this Bill. But if you insist on passing it, then let me offer this guarantee: A DA government will repeal this bad law, and we will replace it with a Bill that restores our place among the top investment destinations of the world. 

Thank you.

Issued by Geordin Hill-Lewis, DA Shadow Minister of Trade and Industry, 17 November 2015