investor state dispute settlement clause

Kelvin Thomson's response to a question about how Multilateral Trade Agreements (such as the transpacific partnership agreements) might affect Australia's ability to control immigration numbers and to control the awarding of local jobs to local firms. He describes how this might be problematic and does not think we should sign any treaties containing an "Investor state dispute settlement clause." He explains why. He also discusses the process which sounds as if it has a distinct bias towards corporations and against citizens. What you can do: Contact your MP and ask them what they are doing and what they have done to stop any signing of treaties with these clauses. If they cannot show they have done anything to stop them, and do not undertake to do so, then let us know and we will publish this information and their photo. (Transcript and video inside.)

Transcript of Kelvin Thomson responds on Multilateral treaties

This question was asked after Kelvin's speech about Intergenerational Equity, where he mentioned multilateral trade treaties..
(Headings and emphases by Candobetter.net editor, for clarity.)

QUESTION: I noticed that you mentioned the multilateral trade agreements. I'm just wondering. I haven't had time to get into them myself and I'd really appreciate a speech in Parliament about their impact on our ability to control immigration and also to control the awarding of local jobs to local firms and things. And anything else you can think of. Can you speak on it off the cuff for a minute?

KELVIN THOMSON MP for WILLS: It is a very serious issue. In the past, the trade agreements were directed at tariffs and quotas - getting rid of tariffs and quotas - but they are pretty much gone. So if you enter into a trade agreement with another country now - with Korea or China or whoever - the issue is, what do they want? And the sorts of things that they want are freeing up of anything in the way of restriction between movement of people, freeing up of foreign ownership restrictions, and things of that nature. So, some of these agreements now have jumped into the area - I think - of diminishing our democratic capacity to determine our own future.

"Investor state dispute settlement clause"

And, in particular, there is a thing called the "Investor state dispute settlement clause", which is in a number of trade agreements. It's not in all of them. It is in the Korean one. It's not in the Japanese one. I assume it's in the China one, but they haven't released it yet - which is another matter of concern about these trade agreements. They get signed and we only get to see them some distance down the track.

But the Investor state dispute settlement clause allows corporations to sue governments if they believe that the decisions of governments impact adversely on their bottom line.

Health impacts

And the classic example of this is when the previous government introduced plain packaging on tobacco products that - and I think it's Phillip Morris - got themselves incorporated in Hong Kong expressly to take advantage of an investor state dispute settlement clause that we've had as part of a trade agreement with Hong Kong. And they are now suing Australia on the grounds that the plain packaging legislation disadvantages them. Now, that in itself is problematic from my point of view. I believe that governments need to be able to make democratic decisions - in this case in the health interests of the nation.

Environment impacts

It's equally problematic in relation to environmental issues. For example, there are foreign companies that wish to engage in coal-seam mining in New South Wales and Queensland and the like, and you have the prospect that if governments there knock them back, that they will be sued in relation to the Investor state dispute settlement clause.

Settlement of disputes lack normal legal standards

One feature of these clauses, which again is very unsatisfactory, is that it's not that you go to some international court which rules - you know, where you've got judges of the High Court, for example, sitting there. They are arbitration arrangements and the arbitrators come and go. They can be people who are acting for the company one day and sitting as an arbitrator the next, and then acting for a company on the day after that. So that the normal legal protection and rules concerning precedent and - you know - traditional independence and the like, are not present, in terms of these disputes.

We should not enter agreements with investor-state dispute settlement clauses in them

And my own view is that we should not enter into any trade agreements which have investor state dispute settlement clauses.

QUESTION: But do members of Parliament have any control over the signing of these things? Do they get to see the agreement?

KELVIN THOMSON: What happens, Sheila, is that the Executive has control over the treaty-making process and they enter into treaties. The treaties get layed on the floor of the Parliament and Parliament has a Treaties Committee which I chaired for quite a number of years and I'm now the Deputy Chair of - so I do have some experience with this. The Parliamentary committee takes evidence, takes submissions and so on. We can listen to people and make recommendations.

Abbot Liberal Government has majority on the Treaties Committee

There is a government majority on the Treaties Committee, as on Parliamentary Committees generally, and so you don't want to be sort of too carried away about the capacity of the Committee to do much once the treaty has been signed, but we make recommendations about whether the treaty should proceed to ratification and, from time to time Treaties Committee has made serious recommendations in relation to ratification and talked about provisions in particular treaties they regarded as unsatisfactory, but we don't have the capacity to look at treaties in the same way that United States members of the Congress do, for example. [Indistinct ?It's said that] they are able to scrutinise the text of treaties and know what is being negotiated. They're not supposed to tell people about it.

Double Standard: Corporations given privileged info; Civil Society kept in the dark

But this question about the negotiation of treaties and the process being followed is interesting because - so when the Treaties Committee talks to civil society, not government organisations and so on - they say, 'This is a highly secret process. No-one knows what's going on.' You know, the train goes into a tunnel and comes out the end of the tunnel and you've got this treaty. But when we talk to corporations, or agriculture groups and the like, they say, 'Oh, no, it's a good process. You know, they tell us what's going on and they keep us informed.' So, it's clear that there is a double standard at work. There are some people who are kept informed and know what's being discussed and negotiated, and a lot of people who don't.