South Africa Commended for Being a Leader in Investment Reform
The Secretary General of United Nations Conference on Trade and Development (UNCTAD), Dr Kituyi has commended South Africa for leading the global debate on Investment Policy Reforms. He stated that South Africa was on the cutting edge of the investment policy reform globally. He was speaking at the Africa Trade Week 2016 in Addis Ababa, Ethiopia. The Africa Trade Week 2016 is a new Pan-African platform for advancing intra-Africa trade dialogue among mutli-stakeholders. The main objective of the Africa Trade Week is to provide a comprehensive, integrated and inclusive platform for policy dialogue between various trade-related constituencies.
Dr Kituyi applauded the South African government 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 unbalance, promising the investor everything without obligations and tax payers carrying all the burdens. 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.
He stated “I don’t think that 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,” added Kituyi.
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 since 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.