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

Mana Māori: Kawenata Unites Kaupapa Māori Parties

The Māori Party and Mana Party have signed a historic agreement today to unite Māori politically.

Māori Party president Tukoroirangi Morgan said the kawenata or agreement was a huge step forward for Māori in the lead up to the general elections.

"Today is an important day for the Māori nation because today is when the country's only two kaupapa Māori political parties unite to work tactically together in the best interests of our people," says Mr Morgan. More>>

ALSO:

.

 
 

Immigration: Short Reprieve For Nine Indian Students

A temporary hold on deportations of nine Indian students is a step in the right direction but the Government urgently needs to implement safeguards to stop further injustices to more international students, the Green Party says. More>>

EARLIER:

Welfare: WINZ Breaching Privacy Laws With WINZ Vetting Rules

E tū, the union for security guards, says WINZ may be breaching privacy laws with its new screening process for people visiting WINZ offices. The vetting requires WINZ security guards to check photo ID and whether visitors to WINZ offices have an appointment.More>>

ALSO:

Turnbull Visit: Leaders’ Talks Cement Trade Relations, Science Agreement

Mr English met with Prime Minister Turnbull in Queenstown today to discuss common approaches to bilateral and international issues, including trade and science and innovation. Mr English also thanked Mr Turnbull for Australia’s offer of support for those fighting the fires on the Port Hills in Christchurch. More>>

ALSO:

Youth Guarantee: Upskilling Fund Used For Retraining

News that one in five of the people enrolling in Youth Guarantee already hold qualifications at the level they’re enrolling in highlights the failure of the scheme to reach the disengaged young people it was set up to assist, says Labour’s Education spokesperson Chris Hipkins. More>>

ALSO:

Port Hills Fire: Midday Update, Monday 20 February

• 9 homes destroyed
• 2 homes with partial damage. Damage includes things like cracked windows, heat damage.
• 3 properties with damage to other external structures e.g sheds or outbuildings More>>

ALSO:

Gordon Campbell: On What Trump May Mean For Us

So far not much effort has been put into tracing the possible implications for New Zealand of the stream of executive orders and tweets that have been pouring from the Oval Office. Unfortunately, we may not simply be drive-by rubberneckers at this car wreck for much longer. More>>

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news