http://www.theglobalmail.org/feature/abbott-open-for-business-and-multinational-lawsuits/700/
If this is true that Abbott wants to have open slather on Investor-State Dispute Settlement, or ISDS for new FTAs (A.K.A managed trade deals where Australia generally comes off second best) we're in for a lot of trouble.
For those that don't want to read the whole article:
What this arcane phrase refers to is the right of foreign companies to sue national governments of the signatory countries, not in domestic courts, but in opaque international forums, if they think some element of that government’s policy is harming their interests.
If a mining company, for example, is unhappy with environmental safeguards which inhibit its operations, if a pharmaceutical company is unhappy with the prices it gets for its drugs, if a chemical company is upset with the banning of an agricultural pesticide, if a tobacco company does not like laws restricting cigarette sales, ISDS provisions in trade agreements give them the means to challenge government policy and to seek compensation.
And they do this increasingly often, sometimes claiming enormous amounts of money. According to a report in May 2013 by the United Nations Conference on Trade and Development, which monitors these things, a record 58 ISDS cases were begun in 2012. In the same year, decisions were made on 42 cases by an assortment of more or less credible international arbiters. Only 31 of these were publicly disclosed, but of those, 70 per cent went in favour of the corporations, at least in part; and nine resulted in significant awards for damages, including one – to an oil company which sued Ecuador – for a record US$1.77 billion.
On the eve of the election, the Coalition released its trade policy, which includes a commitment to “remaining open to utilising investor-state dispute settlement (ISDS) clauses as part of Australia’s negotiating position” in future trade deals.
In truth, it appears gung-ho to wrap up as many free-trade agreements as possible, as fast as possible, and to strongly favour inclusion of ISDS provisions. The document cites, for example, the need to quickly complete a deal with South Korea, and blames the current impasse in negotiations on “Labor’s refusal to consider a proposal for an investor-state dispute settlement clause”.
The policy also promises to “fast track the conclusion of free trade agreements with China, South Korea, Japan, India, the Gulf Cooperation Council and Indonesia”, and to “explore the feasibility of free trade agreements with other trading partners including the European Union, Brazil, Hong Kong, Papua New Guinea, South Africa and Taiwan”.
And then there’s the big one, the US-driven Trans-Pacific Partnership Agreement (TPP), now being negotiated between the US, Australia, Canada, New Zealand, Mexico, Peru, Chile, Singapore, Brunei, Malaysia, Japan and Vietnam; countries with a combined population of nearly 800 million people and a combined GDP of almost US$28 trillion.
The irony is that if Australia does sign up, it does not gain any trade benefits with America over and above those already included in the AUSFTA deal.
The Howard government’s position was not, however, one of blanket opposition to ISDS provisions in trade deals. It maintained the previous, bipartisan position that ISDS provisions should be considered on a case-by-case basis.
This attitude changed, though, under the next, Labor government, following a 2010 inquiry by the Productivity Commission, which found few benefits and “considerable policy and financial risks arising from ISDS provisions”.
In 2011, the Australian government declared it would not agree to ISDS provisions under any circumstances. The wording of a statement from the Department of Foreign Affairs and Trade was unequivocal.
Emerson cites an example from Canada where, in 2011, the province of Quebec called a moratorium on the controversial gas extraction method called fracking (hydraulic fracturing) while it undertook an evaluation of the possible resulting environmental damage.
Well, a United States company, Lone Pine Resources, which operates out of Calgary but is incorporated in the US tax-haven state of Delaware, decided to take action under the ISDS provisions of the North American Free Trade Agreement, (NAFTA), to which Canada, the US and Mexico, are signatories. It sued for C$250 million.
Emerson could equally have pointed to a large number of other actions taken by US corporations against countries with which it has trade pacts involving ISDS. Consider a couple of Canadian cases, for example. There was a C$500 million suit by the giant drug maker Eli Lily in response to a Canadian-court-ordered invalidation of the patents of two of its drugs, Strattera and Zyprexa.
And another action by Dow AgroSciences LLC, for losses allegedly caused by a ban imposed by Quebec on the sale and certain uses of lawn pesticides containing the active ingredient 2,4-D.
Emerson points also to the problems caused by trade deals that Australia has already entered into, such as the action now being pursued by the tobacco company Philip Morris over Australia’s plain-packaging laws for cigarettes, as good reason to eschew such provisions in future.
Less publicised is the fact that having failed in the High Court, the company now is pursuing the matter via a bilateral trade agreement signed between Australia and Hong Kong in the early 1990s, which includes ISDS provisions.
In short, just about every aspect of the system was declared deficient by UNCTAD. Its report canvassing the problems and possible reform measures makes for troubling reading.
Among other things, it notes: “In many cases foreign investors have used ISDS claims to challenge measures adopted by States in the public interest (for example, policies to promote social equity, foster environmental protection or protect public health).”
“A very topical example at the moment is coal seam gas,” the Institute says. “As new information is collected and disseminated governments may want to act to control that activity. Governments would be loath to act if they were liable for massive payouts to foreign companies.