Ger­many-SA at odds over treaty on in­vest­ment

The Star Early Edition - - BUSINESS REPORT - Peter Fabricius

THE GER­MAN and South African for­eign min­is­ters have dis­agreed sharply over South Africa’s re­cent can­cel­la­tion of an in­vest­ment pro­tec­tion treaty be­tween the two coun­tries.

Ger­man For­eign Min­is­ter Frank-Wal­ter Stein­meier made it very clear to his South African coun­ter­part Maite Nkoana-Masha­bane that Ger­man com­pa­nies were not sat­is­fied with Pre­to­ria’s re­as­sur­ances that their in­vest­ments would be safe with­out the treaty.

He raised the same con­cerns at a later meet­ing with Pres­i­dent Ja­cob Zuma.

Nkoana-Masha­bane even­tu­ally agreed to re­view the con­cerns of Ger­man in­vestors, to in­crease their con­fi­dence, though she in­sisted that “they have ab­so­lutely noth­ing to fear and we have noth­ing to hide” be­cause the con­sti­tu­tion and the courts would pro­tect their in­vest­ments.

The two min­is­ters cochaired the eighth Bi­na­tional Com­mis­sion be­tween the two coun­tries in Pre­to­ria on Fri­day, dis­cussing a wide range of co-op­er­a­tion in ar­eas such as trade and in­vest­ment, en­ergy, com­bat­ing cli­mate change, de­vel­op­ment and sci­ence and tech­nol­ogy.

Nko an a - Masha­bane thanked Ger­many for in­vest­ing another € 72.5 mil­lion (R1 bil­lion) to help im­ple­ment South Africa’s Na­tional De­vel­op­ment Plan (NDP).

She said this gave a “stamp of ap­proval” to the plan and would help to ad­dress the triple chal­lenge which the NDP was ad­dress­ing – poverty, un­em­ploy­ment and in­equal­ity.

She also thanked Ger­many for pledg­ing $1bn (R11bn) to the in­ter­na­tional Green Cli­mate Fund for com­bat­ing car­bon emis­sions which she saw as an en­dorse­ment of the Dur­ban Plat­form for fight­ing global warm­ing which had been agreed on at the COP 17 cli­mate con­fer­ence in 2011 in Dur­ban.

Ger­man of­fi­cials said that Ger­many would con­trib­ute € 2m to the in­ter­na­tional re­new­able en­ergy con­fer­ence in South African next year.

Both Nkoana-Masha­bane and Stein­meier applauded the fact that they were meet­ing in an aus­pi­cious year, the 20th an­niver­sary of democ­racy in South Africa and the 25th an­niver­sary of the fall­ing of the Berlin Wall.

But against this gen­eral con­cord, the is­sue of pro­tec­tion for Ger­man in­vestors in South Africa stood out clearly.

Ger­man of­fi­cials said that Ger­man com­pa­nies had about € 6bn al­ready in­vested in South Africa, but wanted guar­an­tees that their in­vest­ments would be pro­tected be­fore they ex­panded th­ese in­vest­ments.

They said the com­pa­nies had ex­pressed con­cerns that there re­mained a gap in in­vest­ment pro­tec­tion un­til March when the South African gov­ern­ment was due to in­tro­duce a sin­gle na­tional in­vest­ment pro­tec­tion law to re­place the bi­lat­eral in­vest­ment pro­tec­tion treaties with sev­eral in­di­vid­ual Euro­pean coun­tries which it had been can­celling over the last year.

Big in­ter­est in more in­vest­ment. But Ger­man business needs the right en­vi­ron­ment to invest.

But Nkoana-Masha­bane in­sisted after the meet­ing that South Africa’s con­sti­tu­tion – which was “among the best in the world” – would pro­vide ad­e­quate pro­tec­tion for Ger­man in­vestors, as it did so for do­mes­tic in­vestors.

Stein­meier said there was a huge in­ter­est from South Africa in more in­vest­ment from Ger­many. But Ger­man business peo­ple needed the right en­vi­ron­ment in South Africa to invest.

Ger­man of­fi­cials said Ger­man com­pa­nies were not sat­is­fied with Nkoana-Masha­bane’s as­sur­ances about pro­tec­tion from the con­sti­tu­tion.

They also com­plained about the new im­mi­gra­tion law which they said was mak­ing it much harder to get work per­mits to bring in skilled Ger­man work­ers and ex­pressed con­cerns about their abil­ity to com­ply with the new black em­pow­er­ment act.

PHOTO: BLOOMBERG

Ger­many’s Frank-Wal­ter Stein­meier.

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