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

Parliament Today: State Opening Of Parliament

The House sits at 10.30am today before MPs are summoned to hear the Speech from the Throne in the Legislative Council Chamber.

The speech delivered by the Governor-General on the Government’s behalf outlines its priorities for this Parliament.

After this MPs will return to the House for the presentation of petitions and papers and the introduction of any bills.

The Government has five notices of motion on the Order Paper which can be debated. These relate to relating to the appointment of the Deputy Speaker, Assistant Speakers, the reinstatement of business in a carryover motion and one on “Entities to be deemed public organisations”. More>>

 

Housing, Iraq: PM Press Conference – 20 October 2014

Prime Minister John Key met with press today to discuss:
• Housing prices and redevelopment in Auckland
• Discussions with Tony Abbott on the governmental response to ISIS, and New Zealand’s election to the UN Security Council More>>

ALSO:

Labour: Review Team Named, Leadership Campaign Starts

Labour’s New Zealand Council has appointed Bryan Gould as Convenor of its post-General Election Review. He will be joined on the Review Team by Hon Margaret Wilson, Stacey Morrison and Brian Corban.

ALSO:


Roy Morgan Poll: National Slips, Labour Hits Lows

The first New Zealand Roy Morgan Poll since the NZ Election shows National 43.5% (down 3.54% since the September 20 Election). This isn’t unusual, National support has dropped after each of John Key’s Election victories... However, support for the main opposition Labour Party has crashed to 22.5% (down 2.63% and the lowest support for Labour since the 1914 NZ Election as United Labour). More>>

ALSO:

In On First Round: New Zealand Wins Security Council Seat

Prime Minister John Key has welcomed New Zealand securing a place on the United Nations Security Council for the 2015-16 term. More>>

ALSO:

TPP Leak: Intellectual Property Text Confirms Risk - Jane Kelsey

The US is continuing its assault on generic medicines through numerous proposed changes to patent laws. ‘These are bound to impact on Pharmac if they are accepted’, according to Professor Kelsey... Copyright is another area of ongoing sensitivity... More>>

ALSO:

RMA: Smith Plans Reform To Ease Urban Development

Newly appointed Environment Minister Nick Smith has announced Resource Management Act reform to foster urban development, where high land prices and expensive resource consents are blocking efforts to provide affordable housing. More>>>

ALSO:

Gordon Campbell: On New Zealand getting involved (again) in other people's wars

Apparently, the Key government is still pondering how New Zealand will contribute to the fight against Islamic State. Long may it ponder, given the lack of consensus among our allies as to how to fight IS, where to fight it (Syria, Iraq, or both?) and with whose ground troops, pray tell? More>>

ALSO:

Gordon Campbell: On child poverty, and David Shearer’s latest outburst

The politicisation of (a) the public service and (b) the operations of the Official Information Act have been highlighted by the policy advice package on child poverty that RNZ’s resolute political editor Brent Edwards has finally prised out of the Ministry of Social Development. More>>

ALSO:

Gordon Campbell: On the government’s review of security laws

So the Key government is about to launch a four week review of the ability of our existing legislation to deal with “suspected and returning foreign terrorist fighters, and other violent extremists.”

According to its terms of reference, the review will consider whether the SIS, GCSB and Police are sufficiently able right now to (a) investigate and monitor suspected and returning foreign terrorist fighters… More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news