Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

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


SA quits investment treaties, NZ wants to sign more...

7 November 2013

For immediate release

South Africa quits investment treaties, NZ wants to sign more … lucky Chorus?

Chorus’s US shareholders could easily use the investment rules proposed under the Trans-Pacific Partnership Agreement (TPPA) to sue the government for hundreds of millions of dollars if the Commerce Commission’s ruling on broadband pricing stands and the agreement is in place by then, says Professor Jane Kelsey of The Auckland University Law Faculty.

JP Morgan Chase holds 32 million or 8% of the shares. Entities related to Citibank and Citicorp control around 13 million shares. 

‘The mere threat of such a case would give the company huge leverage - and it would give National the excuse to back down on the Commerce Commission’s action or hand out further funds to Chorus’, Professor Kelsey said.

‘Even worse, it would undermine the credibility of Commerce Commission and similar regulatory actions against other firms with significant overseas shareholdings.’

Professor Kelsey accused the TPPA’s cheerleaders who are pushing for a deal in December of ‘playing Russian roulette with our regulatory sovereignty and taxpayers’ money’.

‘Phil Goff assured the Labour Party conference that the answers from Trade Minister Tim Groser to a list of parliamentary questions satisfied him that the TPPA’s investment chapter would not undermine New Zealand’s right to regulate in the national interest.’

‘Groser’s answers were carefully constructed to appear to give assurances while avoiding the crucial issues. As a former minister, Goff must know that’, says Professor Kelsey.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

While New Zealand politicians portray these investment rules as benign, other countries are trying to extricate themselves from them.

South Africa is leading the way after a foreign mining company sued the government over post-apartheid laws that are designed to bring more equality to the lucrative industry, using very similar investment provisions to the ones proposed for the TPPA.

A review of South Africa’s investment agreements decided they are outdated and pose growing risks to policymaking in the public interest. The government has recently moved to terminate many of them.

Nobel prize winning economist Joseph Stiglitz this week applauded South Africa’s stand, describing the agreements as the most serious threat to democratic decision-making.

South Africa is not alone. India says it will sign an investment agreement with the US only if the dispute-resolution mechanism is changed. Latin American countries are systematically reviewing their agreements. Brazil has deliberately never signed one.

Professor Kelsey said the complacency of Groser and Goff about similar provisions in existing agreements, such as with China, could also prove short-lived.

Late last year the first known investment dispute taken by a company from mainland China was lodged against Belgium. China’s second largest insurer Ping An held 5% of the shares in Dutch-Belgium bank Fortis, which faced critical problems in late 2008 and was nationalised, and then broken up. Ping An wants US$2.3 billion to match the indemnity payments for losses that Belgium paid to the European Union shareholders.

Labour thinks it protected New Zealand from similar challenges in the New Zealand-China FTA. Those protections were never robust, and the main one has gone. China’s investors now receive the more favourable treatment given to Taiwan’s investors in the new free trade and investment treaty with Taiwan. Both countries’ investors would be entitled to the more favourable rules in the TPPA once it was ratified.

Jane Kelsey called it ‘naïve and reckless’ to say New Zealand would not face such challenges. ‘We should follow South Africa’s example and revisit our existing agreements, and say no to the investment chapter in the TPPA,’ she advised.


© Scoop Media

Advertisement - scroll to continue reading
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Perils Of Joining AUKUS Pillar Two

The lure for New Zealand to join the AUKUS military alliance is that membership of only its “second pillar” will still (supposedly) give us access to state of the art military technologies. As top US official Kurt Campbell said during his visit to Wellington a year ago:
...We've been gratified by how many countries want to join with us to work with cutting-edge technologies like in the cyber arena, hypersonics, you can go down a long list and it's great to hear that New Zealand is interested...


Government: Backs Police To Crackdown On Gangs
The coalition Government is restoring law and order by providing police new tools to crack down on criminal gangs, says Justice Minister Paul Goldsmith and Police Minister Mark Mitchell. “Over the last five years gangs have recruited more than 3000 members, a 51 per cent increase... More

Government: Retiring Chief Of Navy Thanked For His Service

Defence Minister Judith Collins has thanked the Chief of Navy, Rear Admiral David Proctor, for his service as he retires from the Royal New Zealand Navy after 37 years. Rear Admiral Proctor will retire on 16 May to take up an employment opportunity in Australia... More

Government: Humanitarian Support For Gaza & West Bank

Winston Peters has announced NZ is providing a further $5M to respond to the extreme humanitarian need in Gaza and the West Bank. “The impact of the Israel-Hamas conflict on civilians is absolutely appalling," he said... More

Government: New High Court Judge Appointed

Judith Collins has announced the appointment of Wellington Barrister Jason Scott McHerron as a High Court Judge. Justice McHerron graduated from the University of Otago with a BA in English Literature in 1994 and an LLB in 1996... More




InfoPages News Channels


Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.