‘We haven’t seen a text since 2012’, said Auckland University law professor Jane Kelsey. ‘Today’s leaked text confirms all our worst fears.’
‘As anticipated, the deal gives foreign investors from the TPPA countries special rights, and the power to sue the government in private offshore tribunals for massive damages if new laws, or even court decisions, significantly affected their bottom line’.
‘Prime Minister John Key once described the idea of investor-state dispute settlement (ISDS) as “far-fetched”.’
‘After he was briefed about the TPPA he changed tack, promising there would be effective safeguards. But the leaked text shows very little has not been agreed. That means the New Zealand government has accepted virtually everything the US has proposed with absolutely no effective safeguards.’
Professor Kelsey recalls how ‘we were assured the flaws that have made these investment agreements so toxic internationally would be sorted and new rules would prevent the investment tribunals going rogue.’
‘The leaked text shows nothing has been done to rein them in. There is no code of conduct, no appeals, no accountability of the private individuals who pass judgement on crucial matters of public policy, and no effective exceptions to protect the right of the government to regulate in the national interest’.
There are high risks for local governments as well.
‘Just last week, as protestors rallied against an extension of the port into the Auckland harbour, an investment tribunal upheld a case against Canada because an environment review panel refused to grant a US firm a permit for a quarry and marine terminal, saying it violated community values and there was inadequate consultation. The investor wants $300 million compensation. The local council is likely to be made to pay the bill.’
The dissenting judge, who was the Canadian government’s appointee on the tribunal, warned this meant the validity of local decisions would end being decided by foreign private arbitrators. The finding would also chill environmental review panels from rejecting proposals in the future.
Kelsey said the virtually concluded text shows the TPPA parties have completely ignored the tide of international sentiment that is rejecting these special rights for foreign investors.
The French and German governments have said they won’t accept ISDS in the parallel deal being negotiated between the US and EU.
Last year the chief justices of Australia and New Zealand expressed concerns about the potential of these investment tribunals to bypass or override decisions of our domestic courts.
Even Business New Zealand told the OECD during a consultation that they don't see the need for such powers where countries have quality judicial systems.
‘We need to ask why the government is opening us further to these risks, especially when US investors are responsible for more ISDS cases than any other country.’
‘The leak also shows the futility of the few positive changes secured in the investment chapters of the latest Korea agreement. Anything better in the TPPA would be available to Korea’s investors under the most-favoured nation rule. It beggars belief that New Zealand’s negotiators weren’t aware of that reality. Maybe they are just hoping the TPPA well never come into being?’
Jane Kelsey media release