Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Korea investor safeguards will not work

“Safeguards” for investor rights to sue governments in Korea FTA text will not work

“The Abbott Government has agreed to include Investor-State Dispute Settlement (ISDS) in the Korea Australia FTA text which was released today. ISDS enables foreign investors to sue national, state or local governments for hundreds of millions of dollars of damages if they can allege a domestic law or policy “harms” their investment. The disputes are heard in international tribunals without the legal protections of national legal systems: arbitrators can be practising advocates and there are no precedents or appeals,” Dr Patricia Ranald, Convenor of the Australian Fair Trade and Investment Network, said today.

“The Trade Minister claims that there are “safeguards” which will prevent foreign investors from suing governments over laws which deal with public welfare, health and the environment. But these same “safeguards” have been included in other recent trade agreements, including the Central American Free Trade Agreement and the Peru-US Free Trade Agreement. The key substantial safeguard clauses in the Korea FTA are the same as in these two agreements, and they have not worked to prevent governments being sued,” said Dr Ranald.

“These agreements seek to limit the definition of “indirect expropriation”, which enables foreign investors to sue governments over domestic laws. But the sentence to exempt public health, safety and the environment begins with the words "except in rare circumstances.” This leaves a huge loophole which recent cases have used to advantage. Another “safeguard” is a more limited definition of "fair and equitable treatment" for foreign investors. But tribunals have ignored these limitations and applied the previous higher standard,” explained Dr Ranald.

“These “safeguards” have not prevented cases against environmental regulation. The Government of El Salvador has been sued by Pacific Rim Mining Corporation under the Central American Free Trade agreement, over a ban on mining to protect the nation’s limited groundwater resources. The US Renco mining company is using ISDS in the Peru-US Agreement to contest a local court decision that it was responsible for pollution from its lead mine. Both cases are ongoing and may take several years,” said Dr Ranald.

“Even if governments win these cases, they will have taken years and cost millions of dollars in legal fees. There will be no guarantee that the “safeguards” will work in future cases, because the arbitrators do not have to base their decisions on previous precedents meaning that the outcomes of future cases are unpredictable,” said Dr Ranald.

“The inclusion of ISDS in any trade agreement, even with “safeguards” exposes Australia to being sued for hundreds of millions of dollars over health and environment legislation,” said Dr Ranald.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Dairy And Travel Still Our Largest Export Earners

New Zealand earned $2.3 billion more from exports than we spent on imports during the year ended June 2015... total exports of goods and services were $67.5 billion, while total imports were $65.1 billion. More>>

ALSO:

Approval: Air New Zealand And Air China Launch New Alliance Route

Air New Zealand and Air China have today launched joint sales for a new daily direct service between Auckland and Beijing after receiving approval from New Zealand Minister of Transport Hon Simon Bridges to form a strategic alliance. More>>

ALSO:

Money Trading: FX Trader Jin Yuan Finance Warned Over Lack Of Monitoring

Jin Yuan Finance, an Auckland-based foreign exchange trader, has been warned over its lack of anti-money laundering processes in place in the first public notification by the Department of Internal Affairs. More>>

ALSO:

Auckland Surge, Possible Peak: House Values Accelerate At Fastest Annual Pace In 8 Years

New Zealand residential property values rose at their fastest annual pace in eight years in August, pushed higher by overflowing demand in Auckland, which is showing signs speculators think it has reached its peak, according to Quotable Value. More>>

ALSO:

Cash Money: Reserve Bank Launches New $5 And $10 Banknotes

The $5 and $10 final banknotes were revealed at an event at the Bank in Wellington, and will start to be released from mid-October 2015. More>>

ALSO:

Truck Sales Booted: Commerce Commission Files Charges Against Mobile Trader

The Commerce Commission has filed charges against a mobile trader, or truck shop operator, claiming he obtained money from customers by deception and never intended to supply them with the goods they paid for. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news