MIL OSI – Source: Professor Jane Kelsey – NZ First Bill throws down the gauntlet to National and Labour on foreign investors’ rights to sue in TPPA
The Fighting Foreign Corporate Control Bill in the name of New Zealand First’s trade spokesperson Fletcher Tabuteau was drawn from the ballot today.
The Bill would stop investor-state dispute settlement (ISDS) being included in any future New Zealand agreement, including the Trans-Pacific Partnership Agreement (TPPA).*
‘Labour now has to decide whether to support the Bill to select committee and beyond’, said Auckland University Professor Jane Kelsey.
‘Andrew Little has expressed concerns about ISDS, as have others in Labour’s caucus. There is strong opposition to ISDS in the party. If the parliamentary wing fails to take that on board there will be hell to pay.’
While Labour signed up to a version of it in the China deal, the tide has really turned against ISDS in New Zealand and internationally since then.
In recent weeks progressive Democrat Senator Elizabeth Warren and the libertarian Cato Institute have both launched swingeing attacks on ISDS. That builds on other recent critiques from Joseph Stiglitz and even The Economist.
‘This Bill could not be more timely’, said Professor Kelsey who has just returned from observing the latest round of officials’ talks on the TPPA where investment remains one of the most contentious issues.
‘Next week the New Zealand Korea free trade and investment agreement will be signed by Trade Minister Groser, with PM John Key watching. The treaty must then be tabled in the House and sent to the select committee for submissions. The hearings are cosmetic, as the committee can’t make any changes. But the government can expect a deluge of submissions opposing ISDS in that treaty and in the TPPA, and supporting the Tabuteau bill.’
When the Australian Senate examined a similar Bill the select committee received 141 submissions overwhelmingly supporting the Bill and over 11,000 emails opposing ISDS. Another version of the Bill has just been tabled in the US Senate.
‘The response to the New Zealand First bill and the Korea FTA will be a foretaste of the likely reaction if the government includes these special powers for foreign investors in the TPPA.’
This extraordinary power allows foreign investors to sue sovereign governments in private offshore tribunals for hundreds of millions if (in the investor’s eyes) their laws, policies or court decisions might seriously hurt the corporates’ bottom line and future profits. Often the foreign firms just threaten to bring these cases to harass governments and ‘chill’ them into backing off new measures the investors don’t like.
These international arbitration tribunals are so discredited for their conflicts of interest, lack of effective rules and appeal systems that major international organisations are debating whether they can be reformed and if so how.