Pretoria - South Africa has been commended for being a leader in investment reform by the Secretary General of the United Nations Conference on Trade and Development (UNCTAD).
Speaking at the Africa Trade Week 2016 currently underway in Addis Ababa, Ethiopia, Secretary General, Dr Mukhisa Kutiyi, praised South Africa for leading the global debate on Investment Policy Reforms.
Trade and Industry Minister Rod Davies is among those attending the trade week which is a new Pan-African platform for advancing intra-Africa trade dialogue among mutli-stakeholders.
Dr Kituyi applauded the South African government’s decision to announce a sunset clause to its old stock of investment agreements.
“Everybody in the developing community knows that the stock of investment agreements that were signed particularly in the era of structural adjustment were too unbalanced, promising the investor everything without obligations and tax payers carrying all the burdens,” he said on Monday.
“This has required renegotiation/rearrangement and for a long time there have been a lot of foot dragging. So the decision of South Africa to announce a sunset clause to the old stock of investment agreements may have sound radical and even very risky, but to the developing community it was an act of leadership which has open doors that now even the majors are agreed that we must start embracing a new framework for investment agreements,” he said.
Dr Kituyi stated that South Africa helped to create the movement towards the right direction for global investment policy making.
“I don’t think the momentum that has now spread even to the developed countries including the recent adoption of a new framework for investment agreement making at the G20 Summit in China would have been possible without the first steps taken by South Africa.”
South Africa was one of the first countries to initiate investment policy reforms that led to a decision to not renew the first generation/old style bilateral investment treaties that were unbalanced.
This, as it provided absolute protection to investors while placing no obligations on them.
These bilateral investment treaties were also not clear on the right of governments to regulate in the public interest.
South Africa has since developed domestic legislation that provides protection to both local and foreign investors while reaffirming the right to regulate in the public interest. – SAnews.gov.za
