Johannesburg - South Africa will avoid entering into bilateral
investment treaties (BITs) in future, except where there are compelling
economic and political circumstances, Trade and Industry Minister Rob
Davies said on Thursday.
He was speaking at the local launch of the UN
Conference on Trade and Development's investment policy framework for
sustainable development, at Wits University.
"Cabinet instructed that all first generation BITs
which South Africa signed shortly after the democratic transition in
1994... should be reviewed with a view to termination."
They could possibly be re-negotiated once a model for bilateral treaties had been developed.
Cabinet's decision followed a three-year review of
these treaties, which was concluded in 2010. An inter-ministerial
committee would oversee investment, international relations, and
While foreign direct investment could make a positive
contribution to sustainable development, the benefits to host countries
were not automatic.
Regulations needed to balance investors' economic
requirements with the host country's need to ensure positive
contributions to sustainable development.
Benefits such as technology transfer, skills
development, research, and local economic linkages had to be
purposefully built into the investment regime and not taken for granted.
South Africa would strengthen its domestic legislation
in respect of the protection offered to foreign investors by codifying
typical treaty provisions into law.
The new approach aimed to balance investors' rights and
protection, with constitutional obligations and government policy
space. This corresponded to global trends.
"A new generation of investment policies has emerged,
with governments pursuing a broader and more intricate development
policy agenda within a framework that seeks to maintain a favourable
investment climate," Davies said.
"New generation investment policies now place inclusive
growth and sustainable development at the centre of efforts to attract
and benefit from investment."