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01 Nov 2013 13:27
Trade and Industry Minister Rob Davies. (Gallo)
The Swiss government said in a statement on Friday that it regretted the "unilateral step" taken by South Africa to terminate the bilateral investment treaty between the two countries.
The statement issued by the Swiss embassy in South Africa went on to say that it hoped South Africa would "swiftly introduce a reliable and equivalent national legal framework for the promotion and protection of investments in order to restore solid guarantees and predictability for Swiss companies investing in South Africa in the future".
"Switzerland remains committed to continuing discussions with South Africa on the future framework for the protection of foreign investments," it said.
The statement followed objections voiced earlier this week from the SA-German Chamber of Commerce over the South African government's decision not to renew its bilateral investment treaty with Germany.
Switzerland which is ranked seventh in its foreign direct investments in South Africa with a value of R27.4-billion said "Bilateral investment agreements remain an important pillar for the development of Swiss foreign investments in a large range of countries. Switzerland stresses the importance of a solid legal framework to protect foreign direct investments."
Swiss authorities were notified on October 2013 by South Africa of the termination of the Agreement on the Promotion and the Reciprocal Protection of Investments between the Swiss Federal Council and the South african government which entered into force on 29 November 1997.
Trade and Industry Minister Rob Davis indicated more than a year ago that investment treaties would be replaced by general legislation.
Cabinet last week approved the Promotion and Protection of Investment Bill that is expected to replace the former treaties, which the South African government believes is outdated and can contravene the constitution.
Termination of this Agreement by either side is legally possible giving twelve months' advanced notice and investments made prior to termination of the treaty will still be protected for the next 20 years.
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