JOHANNESBURG (Reuters) – South African Finance Minister Pravin Gordhan on Thursday defended a controversial investment law, saying investors had nothing to fear.
Pretoria let bilateral treaties agreed with European nations shortly before the end of apartheid lapse in 2013, triggering concern among foreign investors over whether the replacement law will offer the same protections.
President Jacob Zuma signed the Promotion and Protection of Investment Bill into law last month. The law would come into force on a date yet to proclaimed by Zuma.
Finance Minister Pravin Gordhan, reappointed last month after a bungled cabinet reshuffle, told 702 Talk Radio investors would be adequately protected.
“I don’t think it should be a deal-breaker because we provide world-class investment protection,” Gordhan is qouted as saying.
The law rolls over existing guarantees against state seizure of assets from a raft of individual, 20-year old treaties but removes the explicit possibility of recourse to international arbitration in the event of a dispute.
European nations affected by the lapse in bilateral treaties include Germany, Spain, Belgium and Switzerland.
Europe accounts for around three-quarters of all foreign direct investment in South Africa, although Pretoria has been pushing hard to attract capital from other big emerging markets such as China.
(Reporting by Tiisetso Motsoeneng; Editing by Kim Coghill)