Mainstream media silence on investor-state dispute settlements in the TPPA

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I am writing this in the midst of a strategy meeting of activists from over thirty countries to discuss how to build on the current momentum to put an end to the foreign investors’ ‘bill of rights’ in free trade and investment agreements, like the TPPA.

There are inspiring stories about successful resistance to investor rights to sue from South Africa, Bolivia, India, Europe and others. Equally, there are sobering stories of how corporate power is trying to use these shonky, biased tribunals to strangle the people’s revolutions in Latin America and the Arab spring.

In Aotearoa New Zealand investor-state dispute settlement (ISDS) has captured the imagination of Kiwis who care about smokefree policies (as in the select committee hearings at present), mining, health and safety, climate change, medicines, land ownership, privatisations, the Internet, and much more.

Outrage is growing. Last Monday more than 270 of our leading members of our health professional community sent an open letter to the Prime Minister voicing their concern that: ‘The TPPA threatens the future of health in NZ, by elevating “investor rights” of transnational corporations over the right of the New Zealand people to develop, adapt or improve domestic regulatory policies according to changing health needs.’

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They funded an advertisement in the DomPost, followed by an op ed from Mark Smith and Anne Maclennan, a specialist surgeon and a specialist in palliative care. They wrote:

‘We have an ethical obligation to speak up when we see health and lives under threat. That’s why we joined hundreds of doctors and others signing an open letter to the prime minister about a trade deal. We’ve just changed the law on legal highs because of health risks. But the law change for cigarette plain packaging because of health risks stalled because of a trade deal. Big Tobacco is using existing trade agreements against Australia because our neighbours have introduced plain packaging.’

New Zealand College of Public Health Medicine called for ‘openness and transparency in debating the potential health impacts  … particularly on critical areas such as pharmaceutical pricing mechanisms, climate change mitigation and other environmental policy, and public policy.’

OraTaiao: The New Zealand Climate and Health Council earned that ISDS ‘allows overseas companies, including fossil fuel companies, to sue our Government if any local law changes might substantially affect their value or profits.’

They highlight two investment disputes that Germany currently faces, being brought by Swedish firm Vattenfall, which helps to explain growing resistance in Germany to ISDS.

‘After the Stern report on climate change, Germany took measures to reduce the damaging effects of carbon dioxide emissions from a coal-fired power plant owned by Vattenfall, and this is being challenged. Then Germany closed a nuclear power plant following the Fukushima disaster, and this too is being challenged. These challenges do not claim that the power plants are safe, but that investors are losing out.’

The media has given almost no coverage to these statements – hence the focus in this blog.

We need to make much more noise about ISDS so the media sees it as a headline issue.

New Zealand has limited exposure to these risks at present because we have signed a limited number of investment treaties and investment chapters in free trade agreements. The FTA with China carries the greatest risks.

The TPPA would magnify them and expose future governments to threats and actual litigation in these discredited arbitral tribunals.

The negotiators are meeting again this week in Vietnam where they aim to knock off remaining issues in the investment chapter, among others. Ministers will then meet on 18-20 May in Singapore.

The time to take a stand in opposing ISDS is almost passed.  Let’s remember why this matters …

Every area of policy and activism is potentially under threat: climate change, forestry deaths, PPP hospitals, charter schools, stamping out property speculation, setting up a state-owned insurer, reversing the privatisations, capping electricity prices, destabilising banking practices, and more.

Many of Labour’s proposed policies could run into problems. So would Greens, Mana, New Zealand First. Maybe even the Nats!

We need a loud chorus of opposition to ISDS in the TPPA now in every forum you can find. Then we need to work out how we make sure that there are no more investment agreements and we start to work out how to wind the existing ones back. Hopefully I will come back from this meeting with lots more ideas.

65 COMMENTS

  1. Well said Prof.

    I have been wondering why there seems to be msm silence on this huge issue.

    Time to rattle the cages indeed.

    Once the TPPA is signed, we have lost our country’s freedom. We will be owned by various overseas investors, partuclarly the Chinese. It must be given a voice, and stopped before it’s too late.

    I really do not want to see any foreign owned nuclear power plants in my country.

    Opinion.

      • Once the TPPA is tied into the UN – which I believe it will be, then China will become involved,as they already are. It is the plan.

        I have seen a video of other governments (including Great Britain) sign up for this. The TPPA is the tool that brings in the missing countries – as in the TPPA countries!

        Opinion and belief.

        • a link would add credibility to your comment .

          TPPA is just the Pacific version of the “Transatlantic Trade and Investment Partnership” …it’s a Corporate coup ,the UN, really ?

          • I don’t know that there is a link for this information. It was on a documentary DVD 14 disc set, which I have since passed onto a friend who wanted to see it to believe it!
            The Vatican are all signed up now too – as part of the EU – with the UN. Think they just need the TPPA countries now – and we are a part of that!

            Once they are all signed up, then the new world order is established.

            There you go.

            Opinion and belief.

  2. If you don’t know what the Trans Pacific Partnership Agreement is all about, then you can learn all about it here:

    http://www.itsourfuture.org.nz/what-is-the-tppa/

    This ‘agreement’ has very serious implications for our future as a nation.

    I really do not want to see any foreign owned nuclear power plants in my country, or NZ being sued because we won’t let another country build one on their newly purchased chunk of NZ land.

    Opinion and belief.

  3. Perhaps the opponents of the TPP would get more mainstream media attention if they stopped running bullshit lines about “binding future governments”.

    Let’s be clear. Nothing can bind future Parliaments. Nothing at all. If New Zealand signs up to the TPP we can leave for any reason at any time.

      • Go back and take Laws 101. Ask Professor Kelsey or any other law professor. New Zealand’s Parliament is sovereign and owes no “obligation” to the TPP if we sign up. We can choose to leave the TPP any time for any reason. (We could also choose to leave the WTO, CER or the Commonwealth if we wanted)

        Yes their are trade offs if we choose to sign up. It will be for Parliament to decide if the benefits of the TPP out weigh the downsides.

        Bottom line. We can leave anytime for any reason.

        • and what happens when we reneg using our soverign power?

          whats the title of this post again?

          we DO have obligations if we sign – thats why its called an agreement – the parties agree to do or not do certain things – and if that is broken the method of resolution will be part of that agreement

          you can keep arguing technicalities till the cows come home if you want – but your utterly ignoring what will happen out in the real world

          yes we could leave if we wanted – but it will cost. So why even allow that situation to happen in the first place?

          • What happens if we remove ourselves from the agreement is that other parties will not have to uphold New Zealand companies rights under the TPP.

            I’m not arguing technicalities, I’m arguing fundamentals. Many of those opposed to the TPP are trying to perpetuate the myth that the TPP can somehow supersede out constitution. It can’t. Let’s be clear about the facts then have a debate of weather the benefits of the TPP outweigh the downsides.

            The TPP will not bind future parliaments, because NOTHING can bind future parliaments.

            • You don’t understand. Here’s what would happen. National pass the TPPA. NZ has a change of Government. We do EXACTLY as you suggest and immediately pull out. Corporations in other signed country’s who have interests in our market immediately lodge a complaint against NZ in the Investor State Disputes Court, that Court meets, demands to know why NZ has pulled out, then proceeds to tell us they don’t care we had a change of Government and in turn find for whatever made up billions in damages the Corporations trying too heavy us have manufactured.

              You could demand that we decide to be petulant and just not turn up to the Court. They find against us regardless and we either pay the billions in damages and then open our markets to them again, or it suddenly impacts our credit rating, which means all the debt we owe goes up in cost – see the fish hooks now? See how a technical point of Parliamentary Sovereignty doesn’t protect us from the realities of what happens if we sign it?

              We would also face the reality that we would be used as an example to the other members that you can’t just walk away, so a punishing global response would be enacted. When we say the TPPA binds us, it binds us, yes we have Parliamentary Sovereignty to just walk away, but we are still bound to this bloody thing because the costs would be financially crippling.

              • You’re making wild speculations about a agreement you haven’t seen. It’s not some super law designed to supersede constitutions. There won’t be billions of dollars of fines for simply withdrawing from the treaty. It’s contract between willing parties who can choose to leave if they so wish. It’s the same as any other international trade agreement, like NAFTA or CER.

                Get the fundamentals right, then we can have a serious debate about this issues.

                • “Get the fundamentals right, then we can have a serious debate about this issues.”
                  Tamati

                  You are a total idiot. Don’t you know that the main text is being kept secret?

                  And if it was all sunshine and roses as you claim, then why would that be?

                  And how indeed could we “have a serious debate” about the “fundamentals” when they are all smothered in secrecy?

                  In fact how can you or anyone else claim to know anything at all about this secret agreement? other than what has been uncovered through the good work of Jane Kelsey others investigating this agreement who have had some (and only some) of the documents leaked to them.

                  One of those documents revealed that the people of New Zealand and even parliament are still not allowed to see this document and that it will remain secret for some unspecified period even after it is signed.

                  Sinister?

                  Mightily. And while disgusting toadies like Phil Goff still support it sight unseen, the very fact of its secrecy is the basis of the Labour Party’s qualified opposition to the TPPA.

                  So again Tamati, how on earth could we have any kind of proper debate about the TPPA while this is the case?

                  I won’t be holding my breath while I wait for your reply.

                  • We call each other idiots or we can have a serious informed debate.

                    Did I know that the negotiations were conducted behind closed doors? Yes, all trade negotiations are conducted in secret. Do you always bid your highest price first on Trademe?

                    Secondly, the full text will be revealed, then Parliament will vote on it.

                    • “Do you always bid your highest price first on Trademe?”

                      im sorry – ive got to pull that one up – its an utter red herring. Its utterly foolish or dishonest to try and compare asking for details of agreed clauses to making competitive bids on trade me

                      no ones asking to hear the bidding positions. Were asking to hear whats been agreed so far

                      A better analogy is – dads trying to sell the house. Hes had some offers but thinks he should keep them secret from the rest of the family and only tell them once hes made a choice and signed the sale agreement.

                • Finally someone here with a little sense of perspective (other than IV and me of course :-)).

                  Interestingly we already have external based tribunals involving trade disputes. I believe there was a case of getting NZ apples in to Australia taken to one. I don’t remember Australia being forced to cough up billions.

              • I don’t see that Martyn. Appears speculative, (but I’m not nay-saying it )

                I would logically expect that once out of the agreement, unilaterally or not, ISDC will have no jurisdiction over specific trading aspects of the, from our perspective, now dead agreement. The court will deal with disputes between parties to the agreement, of which we will no longer be party.

                However, I expect there are penalty clauses in the agreement for cases of unilateral withdrawal.

                I’d like to know what they are.

            • your arguing about something that only you are saying

              no ones saying we cant pull out – what is being said is that there are very real and costly downsides to doing it

        • @TAMATI:

          “Yes their are trade offs if we choose to sign up. It will be for Parliament to decide if the benefits of the TPP out weigh the downsides.”

          Now this would be the really scary part with our current govt! Letting them decide on the tradeoffs.

          Sounds awfully dodgy to me, especially if they rush it before this election. Very dodgy!

          Opinion.

          • “It will be for Parliament to decide if the benefits of the TPP out weigh the downsides.”
            Tamati

            From what I understand it will not be parliament that get to decide, in fact it will not even be government, other than a few National Party Ministers inside the cabinet, who will then order the rest of the National Party MPs to vote for it sight unseen.

            When even the imposition of this agreement is completely undemocratic we can only shudder to imagine how the implementation of it will be.

              • Exactly. There would not be one law of the land that could be superceded by the TPPA unless Parliament gives it’s assent.

                • There is not one law in the land that can be superseded without Parliament’s assent. (Regardless of the TPP)

                  Parliament creates all laws in the first place.

        • First, you seem to be confusing the sovereignty of Parliament to make laws with the extra-territorial enforceability of international treaties. If Parliament acts in a way that makes NZ no longer compliant with its obligations in the TPPA, a state party or, where relevant, a TPPA investor could bring a dispute.

          Second, changing the TPPA to accommodate such changes would require the approval of all the other parties, which is extremely unlikely, and if the change is seen as withdrawing some concession to another party, compensatory concessions would be required.

          Third, withdrawing from the TPPA is not as simple as you suggest. At this stage we don’t know what the legal terms for doing that will be. But the political and economic realities mean this doesn’t happen. A government is unlikely to be prepared to do that over a single issue, such as the subject of an investment dispute. Even if they thought about it, the ramifications in terms of NZ’s standing as a reliable treaty partner, threats of investor strike and flight, credit rating downgrades, etc would be major deterrents.

          Fourth, it is not uncommon in investment agreements to provide for the investor’s rights to continue for lengthy periods, from 10-30 years, even after an agreement lapses. That is less common in FTAs that have investment chapters, but could be included in the TPPA. We don’t know.

          • Thanks for the response Jane.

            So the big question is what are the penalties in the text for an early withdrawal.

            If the penalties aren’t too large and a government and Parliament was willing, it wouldn’t be impossible for us to withdraw.

            • The text will not impose financial penalties. Any benefits, such as market access for agriculture (if any) or other new rules that business wants that are agreed to in the agreement, would no longer apply to NZ.

              Where these costs are not serious, the real penalties are the intangible ones I referred to earlier. Do not underestimate this pressure.

              At present, there are attempts by South Africa, Ecuador, Bolivia, Argentina, Indonesia to withdraw from or amend investment agreements of these kinds and they face enormous pressure and legal manouverings. Most of what they are dealing with are investment only agreements, that do not carry the other costs, and they often have termination dates written in.

              The TPPA (and FTAs) are different, because they are a broader package and do not have termination dates. I am not aware of any country that has withdrawn from such an agreement. It is much easier not to enter into them. If we lose that fight, then we need to think about how to open the space for exit. But do not underestimate what that involves.

              • Zimbabwe signed a number of Bilateral investment treaties with nations and then totally trashed them during the past 15 years. They didn’t suffer much in the way of penalties as a result. They have suffered a catastrophic fall in FDI over the period though. So much so that that the Zanu-PF government is positively begging the big bad nasty corportations you bemoan so much to come and invest there.

          • Thanks Professor Kelsey,

            In regard to withdrawal I’m still none the wiser.
            Too much could be and might be.

            Although no expert in international relations I believe a good argument can be made by any subsequent Govt for moral and justifiable withdrawal in the event that the signatory ignored a national debate on the agreement’s terms.

            We are certainly having no national discussion on the terms. We will be presented a simple take it or leave it deal by National Party Govt negotiators.

            I think it incumbent on the opposition to state quite clearly before we are presented with any deal that they will later withdraw from the agreement should they not find it to be in our national interest.

          • @JaneKelsey:

            Yes. We don’t know, and this is because it’s being kept such a big secret!

            And what happens next with the UN on this matter is being kept a big secret too.

            The secrecy is an very loud alarm bell to me.

            Opinion.

        • Tim Groser disagrees with your statement …you know the New Zealand Minister of Trade !
          ” When anti-trade groups or people say that TPP will ‘encroach on our sovereignty’ I have quite deliberately said that this is technically correct, but in itself a trivial point.”

          Have any of your family fought in wars to protect New Zealand sovereignty ?
          Would they be as keen to give it away as you seem ?

          http://www.scoop.co.nz/stories/PA1208/S00246/speech-groser-governance-and-multilateralism.htm

          • Every treaty removes sovereignty in some way. When New Zealand signed up to the UN ban on landmines we lost our sovereign right to use landmines.

              • No I’m not. Yes, all treaties remove sovereignty in some way. But treaties do not remove the right for Parliament to unilaterally leave a treaty.

                • Exactly. That doesn’t mean there won’t be a negative consequence if we do leave the Treaty. However the negative consequence is restricted to other nations dealings with us not our own internal process.

    • Tamati…with the introduction of the Trans Pacific Trade Agreement the Treaty of Waitangi becomes nothing…we lose everything…once in there is no out…you need to do a bit more research…this is bad all the way for kiwis and only someone like John Key would try to impose it on us…

  4. Thank you so much for your work Prof. Kelsey. Without your valuable insight and credible, lucid arguments the debate would be much diminished. Once again, thanks. People like you help stop the MSM from gaining full dominance of the narrative.

  5. Out of interest, might someone tell me if a future Govt is prevented from withdrawing from the agreement entirely if/when such adverse effects from a loss of sovereignty are felt.
    If there are consequences or penalties for withdrawal, what are they?

    • The consequences of New Zealand withdrawing from the TPP is that other nations will not be required to meet their obligations to New Zealand companies under the TPP.

      • I think you are underplaying what happens if a Nation pulls out without using one of the pre-agreed reasons for withdrawal. It would open NZ up to legal action by those corporations who would see us reneging on the agreement as a threat to their profits. I think you aren’t appreciating the scale of that.

        • What grounds would these foreign companies sue the New Zealand Government under?

          If we pull out of the TPP treaty we would obviously also repeal any legislation that enables foreign companies to sue the government under the TPP.

      • There are many fish hooks to prevent or make it very costly to withdraw.

        It is naive to think otherwise.

      • @TAMATI:

        Can you prove that?

        Example: If the Chinese buy land in Northland – like perhaps a kauri swamp, and then they decide to mine it for gold once it is wiped out of all the kauri, and then they decide to build a nuclear power plant on this new wasteland, and the govt of the day say no; then can you prove, that NZ will not be able to be sued by the land owner – that being China?

        Good to see healthy debate on this NZ debilitating treaty agreement.

        Opinion and belief.

            • Just as the Greens promise to do with the Sky City deal, Parliament could legislate to prevent the state being sued.

                • If you use google, you’ll find plenty on the Green’s policy to legislate away the right for Sky City to sue the government.

                  • That is not stating that other nations couldn’t grab assets owned by NZ inside their jurisdiction. However they can do that at the moment. Witness what the West does against countries like North Korea or Russia that step outside what they deem as acceptable norms.

    • If there are consequences or penalties for withdrawal, what are they?

      Richard Christie

      Who really knows?

      This is all part of what is being withheld and being kept totally top secret, a fact that pro-TPPA Tamati continually glosses over.

  6. Yes , but what could an off-shore corporate actually do to us if we just up and walked out of any or all TPPA deals ? I’m struggling to see what they might actually , really do ?
    Foreclose on NZ and evict us to Australia ? Make future trade difficult . Well , fuck them then . We don’t need them . Better without them . And when the corporates come whining to us because they’re hungry thanks to the pollution and global warming they caused we can pelt them with horse carrots . After the horse has shat them out .
    I hate/fear the entire TPP concept and I think Professor Jane Kelsey is superb here but I honestly and innocently can’t see where the actual , physical threat is to us . Is Pfizer going to drop boxes of Viagra on us ? Is Reebok going to throw shoes at us ? I actually can’t , as yet , take this seriously . I’m sure it IS serious , better minds than mine are on high alert that’s for sure .
    And if in fact those Corporates are just blowing off hot air and they’re just all puff and threats , how about once we give them the finger , we also kick out the banks and write off mortgage debt . Then watch the domestic economy flourish ? Remember , we aint poor old , fucked old Cuba . This is New Zealand ! We are New Zealanders . And we should just say … Fuck them all ! And if they really , really get uppety ? We’ll trade our debt for the entire National Party , ACT , The Conservatives and all . Put them on a boat . Sail them off . Sorted .

    I know . Absurd . Trite . My apologies .

    The TPP will do one thing and one thing only . It’ll make rich people richer and poorer people dead earlier .

    • I think there is a bit more about this yet to be publicly revealed.

      I believe all the TPPA’s will then be bound into the UN, and this is when the TPPA’s will be irretrievable.

      I believe the TPPA’s will be enacted by the UN, and all the other countries that belong to the UN.

      Scary stuff this!

      Opinion and belief.

    • totally – but i think the very real threat is that govt will be stuck in the middle of us and the overseas corporates and govts – who do you think they will go with?

  7. One thing I have trouble understanding is, why when most of the countries involved in the TPPA negotiations have world class legal systems that would allow any dispute to be heard in a court of law do we need to have a paralegal system set up by corporate lawyers ?

    Surely the legal system of the countries involved can give an unbiased judgment in any reasonable dispute .

    This paralegal system tactic is an obvious tool of transnational corporate design to circumvent our rights to self determination.
    Ask yourself if our Government should be the final say in laws effecting New Zealanders or if unelected corporations should control the issue of New Zealand law.

    • Ever tried suing someone in Vietnam or Peru?

      That’s why there is an alternative arbitration system.

      • Are you writing a Tui ad ?
        Are seriously suggesting that out of the goodness of their heart ,transnational corporations are putting in place paralegal systems to protect the poor judiciary of Vietnam or Peru ? yeah right !

        • No, have a think about it.

          The alternative disputes tribunal system will be set up to avoid using corrupt judicial systems, such as those in Vietnam and Peru.

          • but in regards to TPP – theres rumors (because no one actually knows yet) that this tribunal will be staffed with appointments made by multinationals and wont actually be a court (ie: no requirement for actual qualified judges)

            i admit its a rumor – but if true its a real problem

            • Given that multinationals aren’t signatories to the TPP, I’d highly doubt that they are able to appoint people to a tribunal.

              The adjudicators would probably be appointed by the countries that sign the TPP.

  8. Thanks Prof Kelsey / Bomber , re shedding light on the ‘thing’ for us .
    We must not sign up to the TPP . You are right .
    It might one day prove that it was simply stalling the inevitable but at least we can fight off the abusers from a stronger position .
    We must also only vote for those who work to strengthen us and unite us as a people from within for the coming days/years/generations when we will be attacked for our resources . ( I don’t mean with the use of military force . I mean by a cadre of lawyers and associate lice and crooks with Big Money to sway our feeble minded politicians . A bit like what’s happening already , only more so and with more , overt , enthusiasm . )
    I see on the ‘ news ‘ that the Mongrel Mob and Black Power are smoking the peace pipe . Why do I , as a white turnip , find that oddly comforting ???

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