Newly elected Prime Minister Jacinda Ardern called investor-state dispute settlement (ISDS) in international trade and investment agreements ‘a dog’, and promised no ISDS in future agreements.
The government soon broke that promise with the Trans-Pacific Partnership Agreement, pretending that side-letters with a handful of the parties had an equivalent effect.
That allows foreign investors from countries like Japan, Singapore or Canada to challenge a domestic policy or law because it negatively impacts on the value or future profits of its investment, and enforce those pro-investor rules before controversial offshore arbitral tribunals that have no appeal and are accountable to no one.
One ISDS tribunal recently awarded USD5.8 billion against Pakistan for cancelling a mining permit allegedly because of corruption – almost exactly the amount of the IMF bailout intended to rescue the impoverished country.
The next cab off the rank is the Regional Comprehensive Economic Partnership (RCEP), due to be concluded this year. That includes countries like China, Japan, South Korea, India and Singapore, whose investors will gain even more rights to challenge New Zealand’s sovereign rights to decide our own laws.
I was at the negotiating round in Melbourne in early July. Officials met again in China this week for intensive negotiations on the investment chapter.
RCEP trade ministers are due to meet in Shanghai on Friday to decide on matters still outstanding in this secretive negotiation, including the investment rules.
There is a high risk that New Zealand will capitulate again and accept, at best, a footnote that allows it to object, but would still allow the investor to sue New Zealand in this expensive and discredited system of international investment arbitration.
I call on David Parker to “assure New Zealanders that he won’t sell us out again by accepting ISDS and giving foreign investors even more power to intimidate governments from acting in the national interest.”