SA Tail Is Wagging The SADC Dog

South Africa has persuaded the other members of the Southern African Development Community to align its protocol on investment with SA law, which gives foreign investors far less protection.

- Peter Fabricius

The South African government has “systematically undermined” efforts by other countries of the Southern African Development Community (SADC) to provide better protection for investors than South Africa does.

It persuaded them last year to bring the 2006 SADC Protocol on Finance and Investment into line with South Africa’s new Protection of Investment Act, which gives foreign investors far less protection.

Speaking at a recent seminar in Johannesburg South African investment lawyer Peter Leon described how the 2006 SADC protocol – which came into force in 2010 – provided about the same extensive protections for foreign investors as the original bilateral investment treaties (BITs) which SA had with 13 EU countries and Switzerland.

These included protection against expropriation or nationalisation of property without a public purpose, due process of law and prompt, market-value compensation; equal treatment of all foreign investors; facilitation of the repatriation of investments and returns; and recourse to international arbitration of disputes.