Fin24

Davies: SA to stay away from treaties

2012-07-26 17:44

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 economic development.

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."

Comments
  • denny.cray - 2012-07-26 18:13

    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 ... as evidenced by the quality and the quantity of the bribes.

      lerato.kay.3 - 2012-07-26 18:49

      Come on now, can you be objective for a change!

  • ivan.shamley - 2012-07-27 08:37

    SA urgently needs massive Foreign Direct Investment to help grow our economy! What Davies is implying here, FDI is not welcome! An example was the Telkom and Walmart debacles. This is indeed bad news for SA. Why is the ANC insisting in digging us into a deeper hole?

      gordon.trevat - 2012-07-27 09:51

      My guess as to what they are trying to achieve is a more balanced or favourable position for SA. For example, in China and large parts of middle east, you cannot just go and buy land, run retail businesses, etc as a foreigner. You have to partner locally which means skills transfer, local development, etc. I assume they are trying to switch to a new model whereby the states resources are more protected, or will at least provide better value for the state and its citizens. Will this really chase away FDI? Is this a bad thing for SA? At this point, I don't think so.

  • ramona.fredericks - 2012-07-27 13:22

    get rid of Chinese imports that would improve things alot!!!!!

  • pages:
  • 1