Australia And The UK Agree Not To Apply ISDS In Trans-Pacific Deal But Clive Palmer’s $300 Bn Claim Shows More Needed

Australia and the UK agree not to apply ISDS in Trans-Pacific deal but Clive Palmer’s $300 bn claim shows more needed to prevent cases against Australia

“We congratulate the Albanese Labor government on reaching agreement with the UK not to apply rules that enable foreign investors to sue governments when the UK joins the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),” Dr Patricia Ranald said today.

Investor-State Dispute Settlement (ISDS) enables foreign (but not local) investors to claim damages from governments if they can argue that a change in law or policy has reduced their future profits. Labor has a policy to exclude ISDS in new trade agreements and to review its inclusion in existing agreements.

“The UK government has published an explanatory document which confirms that “In light of the investment relationship the UK has with Australia and New Zealand, we have agreed to disapply the ISDS provisions in CPTPPbetween our countries,” said Dr Ranald.

“If ISDS had not been excluded, British companies would have been able to sue the Australian government over law or policy changes, including regulation of carbon emissions and other environmental standards. British oil and gas miner Rockhopper Explorations recently won about A$360 million in compensation for lost future profits over Italy’s 2015 ban on oil and gas drilling within its territorial seas,” explained Dr Ranald.

“But the Clive Palmer ISDS case shows Labor needs to do more to implement its policy against ISDS and to review its inclusion in existing agreements.”

Palmer is claiming $300 billion in an international tribunal to compensate for legislation passed by the Western Australian Parliament to nullify his claim for damages in a dispute over an iron ore project in the Pilbara. His claim has already failed in the High Court.

Palmer shifted company assets to Singapore and is using ISDS clauses in Australia’s 2010 free trade agreement with New Zealand and ten ASEAN countries.

“It is absurd when an essentially Australian company is able to bypass a High Court decision and launch a claim for $300 bn against the Australian government from Singapore,” said Dr Ranald.

“A review of the ANZ-ASEAN agreement is now underway but it is too late to prevent this case, which will cost the government millions to defend, like the Philip Morris case against tobacco regulation.

“The Palmer case shows the urgency of swift implementation of government policy against ISDS.”

See Dr Ranald’s analysis of the Palmer case in The Conversation

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