Foreign company rights to sue Australia are still in the trade pact mix

by | Jun 18, 2018 | Government

Multinationals suing governments when they don’t fancy a change in Australia’s laws? It’s not current Labor Party policy. It’s not Greens policy, or that of the cross-benchers either. The former ALP government eschewed it too. Even former PM John Howard spurned it when it came to signing the US Free Trade Agreement.

Then why does the Turnbull government still embrace so called ISDS clauses in the present negotiations for the Trans-Pacific Partnership deal (TPP-11)? ISDS stands for Investor-State Dispute Settlement. It is a mechanism for foreign companies to bypass sovereign courts and sue governments in international tribunals and there are some 850 known cases already: in  mining, health, environment, even indigenous land rights law and policy.

Long-term trade rights campaigner Dr Patricia Ranald, convener of the Australian Fair Trade and Investment Network (AFTINET), reports the Australian government is sticking with ISDS even though its European counterparts have quietly dropped it. 

“We welcome the fact that the EU mandate for the EU Australia FTA talks, which are being launched in Canberra today, has dumped the controversial rights for foreign investors to sue governments in international tribunals.

“The EU and the US are also withdrawing from ISDS. ISDS cases against EU governments, like the Swedish energy company Vattenfall suing the German government over its phase-out of nuclear energy, led to fierce European public opposition, and two recent court cases.”

While the Europeans have dropped it, both the EU and Australia appear to be displaying a curious timidity when it comes to their public positions on ISDS. Are they scared of multinationals?

“Both governments have failed to mention this in the publicity about the agreement,” she says. “The Turnbull government is still ignoring the evidence against ISDS and supporting it in the TPP-11 and other agreements. They do not want Australians to know that other trading partners are rejecting ISDS.”

TPP: ‘She’s a beauty, mate!’ Really?

“The European Court of Justice determined in 2017 that ISDS provisions impinged on national sovereignty and that EU member parliaments had to vote separately on ISDS provisions in trade agreements. In March 2018, the same court found that damages awarded to a Dutch private health insurance company against Slovakia by an ISDS tribunal also breached EU law.

In response, the European Commission President proposed a “fast track” process for agreements without ISDS, which would enable them to be approved by the European Commission alone, without seeking approval from national parliaments. This is the process proposed for the EU Australia FTA,” said Dr Ranald.

“The Turnbull government does not want public scrutiny of the fact that it is dumping ISDS in the EU FTA but continues to support it in the TPP-11,” said Dr Ranald.

“The TPP-11 implementing legislation is currently under review by both the Joint Standing Committee on Treaties, dominated by the government, and by a Senate inquiry on which the government is a minority. Labor, the Greens and the Centre Alliance all have strong policies against ISDS. We are calling for them to implement those policies and reject ISDS in the TPP-11.”

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Michael West established to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences.

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