September 16, 2013
Abbott may cave on foreign investor rights to sue Commonwealth and State governments as secret Trans-Pacific Trade talks continue in Washington
“Secret talks on the deadlocked investment chapter of the Trans-Pacific Partnership Agreement (TPPA) between the US, Australia and 10 other countries are being held this week in Washington, completely hidden away from civil society and the media,” Dr Patricia Ranald, Convenor of the Australian Fair Trade Investment Network, said today. “The US is exerting huge pressure on the Australian Government to agree to investor right to sue governments as they push to finish the deal this year.”
“The Abbott Coalition Government has a policy of negotiating and possibly agreeing to give foreign investors the right to sue governments for damages if a law or policy harms their investment, known as Investor-State Dispute Settlement or ISDS”, said Dr Ranald.
“This contrasts with both the Howard Coalition Government, which did not agree to ISDS in the Australia US Free Trade Agreement in 2004, and the Labor Government, which had a policy opposing it in all trade agreements,” added Dr Ranald.
“If the Abbott Government bows to US pressure, Australian governments at all levels could be sued by foreign investors in international tribunals for millions of dollars over health and environmental legislation. We already have the example of the Philip Morris tobacco company using ISDS provisions in an obscure 1993 Hong Kong Australia investment agreement to sue the Commonwealth Government over its tobacco plain packaging legislation, claiming hundreds of millions of dollars,” explained Dr Ranald.
“The Coalition voted for the plain packaging legislation, which had overwhelming public support. The tobacco companies tried and failed to claim damages in the Australian High Court, which found they were not entitled to damages for public health legislation under Australian law. But Philip Morris is using ISDS to undermine both democratic legislation and the decision of the Australian High Court, and to get a more favourable decision from an international tribunal. If the Coalition Government agrees to ISDS in the TPPA, it will be inviting more cases like the Philip Morris one from tobacco and other companies which object to Australia’s public health legislation” said Dr Ranald.
“Coalition state governments could also be in the firing line. A US mining company is using the ISDS provisions in the North American Free Trade Agreement to sue the Québec provincial government of Canada for $250 million because it dared to have an environmental review of shale gas mining. The New South Wales Coalition Government this year reviewed and then regulated coal seam gas mining after responding to concerns from farmers and rural communities. These communities, which are Coalition supporters, will be dismayed to learn that a Coalition Government may agree to provisions which could undermine environmental regulation of mining which they achieved,” said Dr Ranald.
“We call on the Government to support the right of Commonwealth and State governments to legislate for health and environmental purposes, and to reject proposals for foreign investors to be able to sue them for hundreds of millions of dollars. We also call for the release of the full text of the TPPA for public and Parliamentary debate before it is signed by Cabinet,” said Dr Ranald.