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

TV3 Videos: Key's Flip-Flop Over Whale Oil Texts | Slater
Reaction: Greens | More
Dim-Post Link: The Very Odd Slightly Left Of Centre

Gordon Campbell: On Government Arrogance

Right now, National is ramming anti-terrorism measures through Parliament. This legislation will grant the SIS the power to carry out 48 hour bouts of surveillance on anyone without a warrant, and will bestow on government the power to unilaterally revoke anyone’s passports and thus deny them the freedom to travel.

Ludicrously, the public has been given exactly one day to make submissions on these major infringements of their civil liberties. Despite Finlayson’s misleading signals on RNZ that these are only stopgaps until next year’s full review of our security laws, the measures in question will not, in fact, expire until 2018.

Why the insane rush? Good question. More>>

 
 

Parliament Today:

Key Texts With Whale Oil Released: PM Can’t Be Trusted Over Dirty Politics Defence - Greens

John Key’s answers to questions about dirty politics can’t be trusted, after he was forced to admit that he had misled journalists and Parliament about contact with attack blogger Cameron Slater, said the Green Party today.. More>>

ALSO:

Temporary Release Crackdown Continues: Corrections Review Of Phillip Smith Case

“The review by Corrections’ Chief Custodial Officer reveals that the plan for Smith’s series of temporary releases was overly ambitious and misinformed. He’s a highly manipulative and deceptive person who although technically eligible, should not have been considered for temporary release." More>>

ALSO:

White Ribbon Day: Govt Resumes Sexual Violence Trial Proceedings Work

Justice Minister Amy Adams has asked the Law Commission to resume work on proposals for better supporting victims of sexual violence through the criminal process. The Law Commission will revisit its previous work on alternative pre-trial and trial processes to identify options for improving complainants’ experience in court. More>>

ALSO:

"New Faces, Wise Heads": Andrew Little Announces New Labour Line Up

Labour Leader Andrew Little today announced a bold new caucus line up which brings forward new talent and draws on the party’s depth of experience. More>>

ALSO:

Gordon Campbell: On Rick Ellis As Te Papa’s New CEO

The recent appointment of former TVNZ boss Rick Ellis to head Te Papa has copped a fair bit of criticism. Much of it has been inspired by the suspicion that Ellis has been hired to pursue the same purely commercial goals as he did at TVNZ, while similarly neglecting the serious cultural side of his mandate. More>>

Passport Cancellation, Surveillance: Draft 'Foreign Fighters Legislation' Released

The final draft of the Countering Terrorist Fighters Legislation Bill contains proposals previously announced by Mr Key in a major national security speech earlier this month. More>>

ALSO:

Related

Joint Statement: Establishment Of NZ-China Strategic Partnership

At the invitation of Governor-General Lt Gen The Rt Hon Sir Jerry Mateparae and Prime Minister The Rt Hon John Key of New Zealand, President Xi Jinping of the People’s Republic of China made a state visit to New Zealand from 19 to 21 November 2014... More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news