Rethinking the promotion and protection of foreign investments: South Africa’s Protection of Investment Act 22 of 2015

The disaffection of States towards investment treaties has grown considerably in the last few years and triggered the revision of treaty models (i.e. India and Indonesia) or the conclusion of much less ambitious facilitation agreements (i.e. Brazil-Mozambique). South Africa has opted instead for the termination of several investment treaties and adoption of a piece of domestic legislation. The South African Protection of Investment Act (2015) is largely pegged to the Constitution and based on the extension to foreign investors of the protection granted to nationals, including the provisions on expropriation and regulatory powers. This chapter attempts to discuss and compare the protection foreign investors may expect to enjoy under the Act. It argues that from both substantive and procedural standpoints, the Act offers a level of protection definitely lower of that normally provided by international investment treaties. It remains to be seen whether such rather drastic departure from treaty standards is appropriate and what the consequences of the replacement of investment treaties with the Act may be on the flow of foreign investment to South Africa.