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South Africa- HOST country- regulatory frame work (Pls find attached file for more details & requirement) Essay Example

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Regulatory environment assessment

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16, 09, 2011

International Investment and Economic Development

Regulatory environment assessment




  • WTO General Agreement on Trade in Services (GATS)

  • International Bureau of Fiscal Documentation, Tax Treaties Database, 2004

  • World Trade Organisation (WTO)

  • International Bureau of Fiscal Documentation, Tax Treaties Database, 2004.

  • IMF Press Release No. 03/122 July 23, 2003.

  • WTO’s Government Procurement Agreement

  • IMF Article VIII status.

  • ISO (International Standards Organisation)

  • Codes of conduct, like those in the OECP


  • Patent Cooperation Treaty (PCT)

  • European Patent Convention(EPC)

  • OECD/NEPAD Investment Policy Roundtable to be held on 25-26 May 2005 in Entebbe,

  • OECD Secretariat on 11 African countries’ regulatory

  • International Convention for the Protection of Industrial Property.

  • Future regulation sources such as OECD/NEPAD Investment Policy Roundtable


  • Bilateral tax treaties List of DTTs signed as of January 1st 2003

  • OECD and non-OECD countries agreement.

  • (BTTs),bilateral tax treaties

  • (BIT) with a number of OECD member countriesbilateral investment treaties

  • Agreements between the ministry of industrialisation of South Africa and ministry of finance of Australia.

  • NEPAD/OECD Investment Initiative forums.


  • National Chamber of Commerce

  • South African legislation on trade

  • Trade and Investment South Africa web site, www.thedti.gov.za,

  • leasehold contracts

  • land rights

  • Publication of regulation; South Africa official web site, www.southafrica.info.

  • implementing regulations restricting domestic credit to non-residents,

  • tax legislationnational

Regulatory Sources


Enforcing Body


Area of effects


General developmental implications

Industry implications

WTO General Agreement on Trade in Services (GATS)

  • restriction on Land ownership for investors

  • debt-equity requirements

  • restriction on remittance

  • Technological

Transfer requirement.

  • Limitations on foreign purchase of shares.

  • Transfer of profits and the proceeds of liquidation.

  • Access to local finance.

  • Performance requirements.

  • South Africa encourages investments that enhance technological knowledge.

  • Employees in some sectors such as must be local.

  • regulatory policy

  • is: transparent,

  • objective, non-discriminatory.

  • Domestic companies’ taxation at a flat rate.

  • Foreign firms are allowed to bid for public procurements


Enforcing Body


Area of effects


General developmental implications

Industry implications

Government Departments

Government Regulations, Statutory Acts and local government bylaws.

Republic of South Africa

SABS develops new standards and

Revising existing standards.

Demonstrating compliance with

the regulation.

Inspecting and prosecuting offenders

Lack of knowledge of

the existence of regulations.

Regulations without presenting good regulatory practice.

System that is fragmentation

South Africa’s inability to meet WTO obligations on

  • Technical

  • Barriers to Trade.

  • Effectiveness

  • of technical

  • regulations in

  • legislation is

  • unknown.

Inefficiencies in the current system impacts on the consumer.

  • An Office for

  • Regulatory Reform

  • should be

  • established.

Government departments implementation on inspection and

  • Sanctions

  • provisions.

Creation of

  • Product certification marks.

The high profile of the SABS mark hinders regulatory mark,

  • Ownership of such a mark could be contentious

Main marketing implications revealed from the table

Production decision entails physical, chemical, packaging, and warranty among others.

Pricing decision covers price control, resale price maintenance, price freezes, value addition system and taxation. Distribution requires involvement contracts for agents, physical distribution and insurance cover. Promotion also plays a vital role and therefore some issues to consider are advertising codes of practice, product restriction and sales promotion. Lastly, we can ignore the role of market research in data collection, storage and transmission (Keegan 1989).

Key regulatory frameworks guiding investment and trade in South Africa

One of the bodies concerned is the Employment promotion programme, whose mandate is to understand the regulatory environment for small businesses in South Africa.

DRU on the other hand have programme managers at DFID funded projects that aims promotion to enable environment for environment opportunities in South Africa that in turn fulfils quest of the government to reduce unemployment (SBP 2005).

Some of the important key components are labour regulation and its impact to employment and investment, trade regulation, permits and licences for businesses, visa regulation, probability of regulatory application, and cost of regulation.

Labour market regulation plays a major role in regulation constraint to business and poses challenge of availability of skilled labour, criminal acts and macroeconomic instability. It is evident that these regulations hinders business growth especially the small business enterprises. Unskilled labours faces danger of elimination from workers due to these regulations (Rankin 2006).

Regulatory mark system placement in the Standards Act is a good idea but it has been dormant until the Minister of Trade and Industry’s approval on usage of the mark.

Cost incurred in the attempt to comply with these regulations such as tax regulations is a burden to small business compared to large firms.

Government of South Africa carries out regulations in many forms that include tax regulation, labour regulation and regulations imposed to imports and export goods (Sun 2002).

The key constraints on the recipient country and investing organisation

African countries that include also South Africa have failed in terms of implementing these regulations where they express less restrict compare to other countries. This is observable especially in the land ownerships sector where restrictions made time to time but remained a major restriction to foreign investors. Similarly, sectoral restrictions have been thorny issue in protest to protect small firms and artisan (The State of Queensland 2011).

Transparency of regulation is a concern to African investors who finds it unreliable since some countries use high level of administration and political discretion in regulatory process. Sovereign governments in attempt to exercise their right to regulate, they indulge into legislation without consultations with the parties involved (Smith 1990).

Implementation consistency is much wanting as far as investors are concerned concerning regulation. Some countries have taken blame of being inflexible in regulation and inconsistency. The major concern is corruption cases which slows administration process because investors are encouraged to look for alternatives in informal mechanism as documented by the World Bank’s Investment Climate Assessments (FAO corporate Document Repository 2008).

A review carried out on South African Standards, Quality Assurance, Accreditation and Metrology (SQAM) infrastructure revealed that key elements constituting a regulatory impact assessment within the Australian framework could have acted as starting point for the development of a South African. Some of these elements included framework identification of the problem or issues that give rise to the need for action, desired objectives, options, recommendations among others.

Failure of South Africa in adoption of the broader perspective of legal metrology may affect the negotiation mutual recognition agreements in regulated areas. Marks help to distinguish between regulatory requirements for health and safety and those for meeting voluntary industry standards for performance or other features.

The current Standards Act in South Africa offers potential use of regulatory compulsory specifications. As suggested, these marks are applicable through Ministerial determination after appropriate gazettal for the current group of 56 compulsory specifications.

Reference list

FAO corporate Document Repository 2008, Global agricultural marketing management, Agriculture and Consumer Protection available from:

< http://www.fao.org/documents> [16 September 2011]

Keegan, WJ 1989, Global Marketing Management, Prentice Hall International Edition, New Jersey.

Smith, P 1990, International Marketing, University of Hall MBA notes, Ohio State.

Rankin, N 2006, The Regulatory Environment and SMMEs: Evidence from

South African Firm Level Data, University of the Witwatersrand, Witwatersrand.

SBP 2005, Counting the Cost of Red Tape for business in South Africa. Johannesburg,

South Africa.

Sun, X 2002, ‘The Regulatory and Institutional Environment for Attracting FDI’, Capacity Development Workshops and Global Forum on Reinventing Government on Globalization, Role of the State and Enabling Environment,Foreign Investment Advisory Service. United Nations, Marrakech, Morocco, December 10-13, 2002, Pdf

The State of Queensland 2011, Statutory requirements Sources of regulatory requirements, Queensland Government. Available from:

<http://skills.business.qld.gov.au/default>[16 September 2011]