Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


TPPA could bypass cap on liability for tighter gambling laws

13 May 2013

For immediate release

TPPA could bypass cap on liability to Sky City for tightening gambling laws

“In theory, the New Zealand Parliament has the power to make and unmake our gambling laws. In practice, the backroom contract between the National government and Sky City could stymie effective regulation of gaming for the next 35 years”, according to Professor Jane Kelsey from the University of Auckland.

Parliament would still have the power to change the law to terminate or review the casino’s license before 2048, cut the number of gaming machines or tables it is guaranteed, or impose more onerous ‘harm reduction’ obligations. But at a price.

Under the Heads of Agreement released today, the government would have to pay compensation to the company, although the amount is capped. The agreement is silent about the forum for disputes. Normally, cases for breach of contract would be pursued in New Zealand’s domestic courts according to domestic contract law, which has been developed with reference to norms and interests as they evolved over time, although the parties could go to domestic arbitration.

Professor Kelsey warned that foreign investors could also sue the government of the day for breaching New Zealand’s international investment obligations, if a new law significantly reduced the profitability of the casino or the value of its shares.

That case would be heard before a private offshore tribunal under an increasingly discredited arbitration system that is costly and notoriously pro-investor.

Worse, the cap on liability would not apply because the claim is for breach of the investor’s rights under the agreement, not under the contract.

Under almost all of New Zealand’s existing agreements these guarantees are subject to a general exception that allows the government some room to regulate for public morals, or essential interests in the case of the investment agreement with Hong Kong.

This exception would have to be argued as a defence if a foreign investor brought a claim before an international investment tribunal. A dispute at the World Trade Organization between the US and Antigua agreed that ‘measures to protect public morals’ includes the regulation of gambling. However, the arbitral tribunal is not bound to follow WTO interpretations.

The proposed Trans-Pacific Partnership Agreement (TPPA) would be a totally different matter. It is clear from past US practice and discussions with negotiators that the US is opposing the application of a similar exception to the investment chapter of the TPPA.

According to the leaked investment text, if the government violated an explicit undertaking in a legal document it is ‘particularly likely’ to be interpreted as an indirect expropriation, irrespective of the circumstances in which the undertaking was given and even if the Parliament has declined to enact it in legislation.

Foreign investors could also allege a breach of fair and equitable treatment because the rules were changed on them after the investment was made.

The New Zealand government would be open to such claims from investors of ten of the other eleven TPPA countries, including the US. Currently Australia has not agreed to adopt the investor-state dispute section of the investment chapter.

SKYCITY Auckland Limited, a wholly owned subsidiary of SKYCITY Entertainment Group and SKYCITY Casino Management Limited are both listed companies on the Australian and New Zealand stock exchanges. Shares in the parent company have reportedly risen from $4.55 when the proposed deal became public to $5.13 after it was announced today.

Among SKYCITY Entertainment’s ten largest shareholders are four US finance companies: US private equity and finance firms Black Rock Inc, with over 23 million shares, currently worth nearly NZ$120 million. State Street Corporation has nearly 20 million shares, Mondrian Investment Partners more than 17 million and a subsidiary of Lazard Asset Management owns nearly 16 million. Most of the remaining top ten shareholders are Australian firms.

Ownership could, of course, change at any time, including by existing shareholders manipulating ownership to bring them within the jurisdiction of investment chapters in agreements.

“While Opposition parties and ordinary Kiwis are right to be outraged about the National government’s convention centre-for-pokies deal, they need to ensure that the TPPA does not give foreign investors in the casino and similarly toxic activities more ammunition to protect their profits at our expense”, Professor Kelsey concluded.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Farcical Elevation Of David Seymour

With the election won, it’s time to find jobs for the boy. David Seymour is the Act Party’s latest scrounger to be rewarded by the National Party, and not only with a seat in Parliament. This time around, a couple of parliamentary Undersecretary posts in education and regulatory reform have been thrown in, plus an annual salary of $175,000 while he learns the ropes. Shouldn’t Seymour at least be put on a 90 day trial before he gets his hands on that sort of serious moolah?

It would be for his own good, really. At this rate, Act is never going to learn how to make its own way in the world More>>

 

As Key Mulls Joining ISIS Fighting: McCully Speech To UN Backs Security Council Bid

It is an honour to address you today on behalf of the Prime Minister and Government of New Zealand. Our General Election took place last week - our Prime Minister Rt Hon John Key is engaged in forming a government and that is why he is unable to be here in New York... More>>

ALSO:

Labour: Cunliffe Triggers Party Wide Leadership Contest

David Cunliffe has resigned as Labour Leader, but says he will seek re-election... If there is any contest the election will have to go through a process involving the party membership and union affiliates. More>>

ALSO:

Flyover Appeal: Progress And Certainty, Or Confusion And More Delays?

Lindsay Shelton: The Transport Agency, embarrassed by the rejection of its flyover alongside the Basin Reserve, says it’s appealing because the decision could “constrain progress.” Yet for most clear-sighted Wellingtonians a 300-metre-long concrete structure above Kent and Cambridge Terraces would in no way be seen as progress… More>>

ALSO:

Gordon Campbell: On Cunliffe’s Last Stand

Right now, embattled Labour leader David Cunliffe has three options. None of them are particularly attractive for him personally, or for the Labour Party... More>>

ALSO:

Key Seeking 'New Ideas': Look To Children’s Commissioner On Poverty - Greens

John Key should not reinvent the wheel when it comes to ideas for tackling child poverty, and instead look to the recommendations of the Children’s Commissioner’s Expert Group on Child Poverty, Green Party co-leader Metiria Turei says. More>>

ALSO:

'Safe To Re-Enter' - OIA Docs: Safety Is Absolute Priority At Pike River Mine

“We understand that the time it is taking to complete our evaluation of the risks is frustrating for the family members and we are trying to complete this work as quickly as we can,” Ms Dunphy says. “It is Solid Energy’s responsibility to make this decision and we will do so, once we have all the information required to make a fully-informed decision.” More>>

ALSO:

Images & Report: Mihi To Welcome Newly-Elected MPs To Parliament

The 29 newly elected MPs were welcomed into Parliament with a Mihi. Parliament’s current Speaker David Carter offered advice from his experience working in Parliament advising the MPs to work collaboratively. More>>

Gordon Campbell: On Labour’s Very Bad Year

While Labour leader David Cunliffe still appears to be in denial about the extent of Saturday night’s debacle, there was hardly a single redeeming feature about the election results for the centre-left... More>>

ALSO:

General Election NZ: National Win

Election Night: With almost all votes counted National and John Key have won a third term and are close to being able to govern alone if they so choose. Key has indicated he will still reach out to form a Government with ACT, United Future and Maori Party. More>>

ALSO:

Perfectly-Timed Anniversaries: Suffrage Day Is Last Chance To Enrol

“The last chance to enrol is Friday 19 September. You can’t enrol on election day.” More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
More RSS  RSS
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news