It is unlikely to achieve either of these purposes.

Its main reassurance to foreign investors is the undertaking that “subject to national legislation, foreign investors and their investments must not be treated less favourably than South African investors in like circumstances.”

Aye, there’s the rub: there is now a raft of legislation trundling through Parliament that threatens to dilute the property rights of South Africans and foreigners alike – so it is hardly reassuring to foreigners that they will not be treated less favourably than their South African counterparts. The legislation includes

In addition, the Bill makes it clear that foreign investment would be subject to “any law or other measure, the purpose of which is to promote the achievement of equality in South Africa or designed to protect or advance persons, or categories of persons, historically disadvantaged by unfair discrimination on the basis of race, gender or disability in the Republic.” In other words, foreign companies would be subject to South Africa’s racial laws, which will continue to ratchet up the percentage of investments that must be owned by black South Africans – and that will interfere with their ability to appoint key personnel on the basis of merit rather than race, and to buy goods and services from their preferred suppliers.

The latest Bill has attempted to meet the concerns of investors on two points:

The problem that underlies the Bill is the ideological approach that led to abrogation of the Bilateral Investment Treaties in the first place. It is the fact that the minister responsible for this legislation, Rob Davies, is a member of the Central Committee of the South African Communist Party. His party makes no secret of its belief that its primary enemy is what it calls ‘international monopoly capital’ – or of its wish to delink South Africa from its traditional partners in the free market economies. The SACP is also committed to “advancing, deepening, defending and taking responsibility for the National Democratic Revolution as a foundation for and the most direct route to building socialism (i.e. communism) in the concrete conditions of our country.”

The title of the Bill is truly Orwellian: its actual intention is neither to ‘promote’ nor to ‘protect’ investment. Its purpose is rather to placate foreign and local investors – while opening the way to the achievement of the NDR’s racial goals and the SACP’s progress toward ‘socialism’. The authors of this Bill might just as well erect large billboards at all our international airports proclaiming: “No Foreign Investments Wanted Here!”

By Dave Steward, Executive Director of the FW de Klerk Foundation