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News / 31 October 2013

BIT-treaty between the Netherlands and South-Africa cancelled

November the 1st is the deadline for the amendment or withdrawal of the Bilateral Investment Treaty (BIT) between the Netherlands and South Africa. The intention of the treaty was to expand and strengthen the economic relationship between the two countries, to promote the exchange of capital and technology and to strengthen the economic growth. The question is what will happen next;  Burghard Ilge of Both ENDS explains.


Why would the countries withdraw from the BIT?

"BITs are controversial nowadays. It's actually quite surprising that foreign investors have the privilege to complain to arbitration institutions which are not even very well-known. They can ask for compensation if they feel that their interests are being harmed by decisions of the government. These institutions have a questionable reputation and an aggressive way of claiming. This is an obstacle for governments to make decisions for the public interest. Let’s see what happens on the 1st of November!  

 

What is Both ENDS’ position?

"Both ENDS sees that some companies have an undesirable dominant position in countries they invest in. Especially in developing countries this has very negative consequences. Companies can submit high claims when their profit is supposedly affected by policy changes in these countries, while these policy changes often mean to accomplish social improvements for the local people. Some countries don’t even bother to implement certain legislation because of this fear for claims. This is worrisome, because investments in other countries should never block social and economic development for the local people. The Netherlands is an important country when it comes to this kind of treaties, because of the large number of BITs. Therefore Both ENDS is hoping that the Netherlands and South Africa will make the right decision tomorrow and withdraw the BIT. "

 

Read the full artlicle here

 

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