Germany-SA at odds over treaty on investment
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.