THE NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
1864. Mr G B D Mc Intosh (Cope) to ask the Minister of Trade and Industry:
(1) Whether he has terminated elements of trade agreements with (a)
Belgium, (b) Luxembourg and (c) Spain in the past twelve months;
if so, (i) when, (ii) why and (iii) on whose advice was this
action taken;
(2) whether he did this in consultation; if not, why not; if so,
what are the relevant details;
(3) whether there were any negotiations or discussions with these
governments before termination; if not, why not; if so, what was
the response of (a) these governments and (b) the European Union
to this termination? NW2217E
Response:
When South Africa undertook its democratic transition in 1994, there were
investors who were unsure about the future direction of economic policy in
the country. At that time, we signed bilateral investment treaties (BITs)
to give the comfort that their investment would be protected in South
Africa. Since then, South African has systematically strengthened it
national investment protection regime and this is guaranteed in our
Constitution. South Africa now ranks amongst the most open investment
jurisdictions in the world and we provide investment protection that is
consistent with the highest international standards. The BITs have played
their role and most have now reached their date for termination.
In terms of the legal provisions of the relevant BITs, the South Africa
Government notified the Embassy of the Kingdom of Belgium of its intention
to terminate the BIT between South Africa and the Belgo-Luxembourg Economic
Union on 7 September 2012. On 20 June 2013, the South African Government
notified the Embassy of Spain in South Africa of its intention to terminate
the BIT between South Africa and Spain. These formal notifications followed
the Cabinet Decision of July 2010 to terminate BITs once their dates for
termination were reached.
The Cabinet decision itself was the product of a three-year Review of BITs
that ended in April 2010, and it involved extensive national and
international consultations. It is widely recognised that the BITs entered
into by South Africa and many other countries in the mid-1990s are poorly
drafted and exhibit a range of serious flaws. It is also recognised that
BITs play little, if any, role in investorsâ decisions to invest or not in
any country.
In this light, many governments around the world are revisiting their
approach to investment treaties. With respect to the EU, changes in the
approach to investment treaty-making coincide with the entry into force of
the Lisbon Treaty in 2010 that has passed the authority to negotiate
investment treaties from individual EU Member States to the European
Commission. The governments of Belgium and Spain, along with other
countries with whom we have BITs, including other EU Members and the
Commission, were repeatedly made aware of the Cabinet decision as early as
in May, September and November 2011, and again over the course of 2012.
Notwithstanding any unfounded perceptions, the Government recognizes the
important role foreign investment can play in economic development in South
Africa. As such, South Africa has provided - and will continue to provide -
effective and robust protection to all investors that meets the highest
international standards. We are also certain that foreign investors will
continue increase their investment in South Africa to take advantage of the
opportunities for profitable investment that abound, in the knowledge that
their investments are fully secured, with or without bilateral investment
treaties.