Is NZ about to break its promise again by accepting investment disputes in RCEP?

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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.

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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.”

16 COMMENTS

  1. NZ sovereignty depend on the ability to regulate and control what is good for NZ. NZ law and parliament is not a puppet of multinational corporations and their greed.

    Keep up the protest Jane. We have had street demonstration os this issue in the past when the slime ball john key was ready to give NZ to to will of US corporates and their corrupt regimes.

  2. Labour have already sold us out on TPPA, and David Parker is the ‘Phil Goff ‘ of Rogernomics.

    At the end of the day NZ government seems happy to trade being under China’s thumb for a short term burst and donations while happy to ignore growing evidence that China are cannily getting countries into debt or (including stonewalling on issues like leaving goods on Chinese docks if they are displeased).

    Now other ways like ISDS are another way to control countries. This is particularly risky for a small country like NZ.

    “For 50 developing countries which have borrowed from China, that debt has increased on average from less than 1% of their GDP in 2015, to more than 15% in 2017, according to estimates by the study’s researchers.

    “Advanced and higher middle income countries tend to receive portfolio debt flows, via sovereign bond purchases of the People’s Bank of China, ” the report said. “As a result, many advanced countries have become highly indebted towards the Chinese government.”

    https://www.cnbc.com/2019/07/12/chinas-lending-to-other-countries-jumps-causing-hidden-debt.html

    • So whats your point here? That developing countries shouldn’t be allowed to borrow money? That they should always only be allowed to borrow from the IMF or World Bank or just that they shouldnt be allowed to borrow from China?
      A far more interesting report would be the reasons why these developing countries choose to borrow from China. Most likely its not because they get a worse deal than the IMF!!
      And the fact that it is increasing would tend to suggest that the terms are a lot better. I mean its unlikely that they are just masochists!

      • Trapping countries in debt and then making them vote in a certain way is wrong no matter what country they come from.

        That is why I believe NZ should have it’s own sovereignty and not be under any other countries thumb. We said no nukes to the US, and now time to say no thanks to China’s influence and reliance on their trade.

        • So no more possibility of borrowing to spread the load for infrastructure across generations. All infrastructure to be paid for up front in cash. So you would say that the borrowing agreement that the Greens and Labour made of 20% is actually far to high and should be set at 0% bevause all borrowing is bad? I think you will have trouble selling that one to anyone

  3. Look at the NZ government giving away the free water to Chinese companies and the much light justice given to Chinese passport holders in NZ when they break the law.

    Our councils cry broke but happy to give out 29 million in Chinese bailouts!
    https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12137606

    Even the universities are happy to give up protests if they think it would earn them an extra dollar.

    ISDS is there so that when NZ becomes unwilling to bow down to Chinese interests and sovereignty they will be made to.

    Even if NZ wins the costs are massive to go to ISDS court and you can also have to litigate in numbers other courts aka in this case after winning one case there are still separate challenges against plain packaging in the World Trade Organisation after Ukraine, Honduras, Indonesia, Dominican Republic and Cuba argued the measure breached Australia’s international obligations.. https://www.theguardian.com/australia-news/2015/dec/18/australia-wins-international-legal-battle-with-philip-morris-over-plain-packaging

    Do we want to have to go to court for years for anything as simple as putting a picture on a packet on a dangerous substance, that the tax payers pay the health cost for anyway.

  4. If we have a look at the remarkable situation where the parents of a child killed by what looks like judging from this link https://www.nbr.co.nz/article/waste-management-nz-ownership-juggles-between-mainland-china-and-hong-kong-b-190338 a Chinese/Hong Kong owned ‘NZ’ waste management company were exempt from blame, while the waste management driver appears to not be interviewed by worksafe because he refused, the driver not blamed in any way for the child’s death in spite of refusing to be interviewed by worksafe and the waste management apparently also it appears not to be blamed for the death and apparently no workspace fine is issued.

    Something does not smell right. Especially when for accidents not involving death worksafe tends to put out hundreds of thousands of dollars in fines.

    “The inquest heard from WorkSafe inspector Kim Severinsen, who had found no issues with the competence or training of the truck’s driver Sau Tulua Aliifaalogo and no issues with Waste Management.

    He said he had not been able to talk to Aliifaalogo or other drivers as they declined to be interviewed, and he had no power to compel them.”

    https://www.stuff.co.nz/national/112756791/coroner-issues-warnings-about-alleged-threats-made-to-counsel-in-childs-inquest

    So in spite of the death of a child who the driver did not see either due to incompetence or lack of truck safety is apparently is ok? Most modern vehicles these days have reversing cameras but apparently it is ok for waste management to have areas where they drive with no visibility because how else do you not see a child at a peak time when kids are coming home from school?

    Worksafe never criminally prosecuted anybody over the Pike River mine accident where 29 lives were lost.

    Again there seems to be a different standard of justice for certain companies operating in NZ, and it is only going to increase as Labour and NZ First sell NZ out with ISDS, just like it appears there are still unanswered questions over the death of this child and why the driver was not ever allowed to be interviewed by worksafe.

    Waste Management NZ ownership juggles between mainland China and Hong Kong
    https://www.nbr.co.nz/article/waste-management-nz-ownership-juggles-between-mainland-china-and-hong-kong-b-190338

    • It more and more seems like business in NZ can do whatever they like and nobody is held accountable!

      But still NZ government, officials, judges and regulators seem more obsessed with protecting overseas companies profits that safety which seems to be of a lower standard than other people are held to.

      “Mr Aliifaalogo, cross-examined by police lawyer Baden Hilton, conceded his training for hazards was mainly for those to the rear and overhead.

      Mr Hilton noted Mr Aliifaalogo, in test conditions after the incident, failed four times out of 11 to adequately complete a sequence of mirror checks. Once his foot slipped off the vehicle’s start-stop pedal, which is over-sized and prone to being activated accidentally.

      Worksafe lawyer DeAnne Brabant noted there were three mirrors to the left and three to the right for the driver to check. Mr Aliifaalogo conceded he didn’t always do those checks to rule.

      While he knew what a Traffic Management Plan (TMP) was, Mr Aliifaalogo was unable to describe to the inquest how one applied.

      He did not know the one held by the Gisborne District Council for the area that day had expired.

      Mr Aliifaalogo’s formal statement included a comment he knew of the blind spot at the right-hand side of the vehicle.

      But in two years of working for the company, Mr Aliifaalogo had never reported it, Mr Vanderkolk said.

      http://gisborneherald.co.nz/localnews/4098661-135/recycling-truck-tragedy

      “It also heard that the traffic management plan for the refuse operation held by Gisborne District Council had expired, and that the drivers of the trucks operated in an informal manner.

      In November last year the driver of the truck that killed Carla, Sau Tulua Aliifaalogo, was found not guilty of careless use causing death.

      Aliifaalogo was in the left-side standing position in the single-operator, dual-steered 10-tonne truck, and did not know he had run over Carla.”

      He put it to Aliifaalogo that he must have known about that blind spot for two years before Carla was killed.

      “There is a blind spot there… It’s always been there,” Aliifaalogo said.

      Vanderkalk also put it to him that if, as he stated, there were no set runs or plan for the drivers, “how did you get the job done?”

      Aliifaalogo chose not to answer several questions put to him.”

      https://www.stuff.co.nz/national/112696703/inquest-hears-that-sensor-may-have-saved-girl-killed-by-rubbish-truck

      This does not exactly seem like a safely run company with a driver who fails tests, has expired traffic plans and no set runs or plans for drivers and operate 10 ton trucks, single handedly with complete blind spots.

      Doesn’t exactly seem like Jacinda’s ‘kindness’ in action. Other motorists are warned to watch out for children, but apparently if you are a large company owned by overseas interests you can operate 10 ton trucks with one person presumably to save money, with expired plans, and known blind spots, with drivers making up their routes as they go, and when you kill a child nobody is held accountably for any wrong doing apart from the parents when she was on her own driveway at the time.

    • So whats your point here? That developing countries shouldn’t be allowed to borrow money? That they should always only be allowed to borrow from the IMF or World Bank or just that they shouldnt be allowed to borrow from China?
      A far more interesting report would be the reasons why these developing countries choose to borrow from China. Most likely its not because they get a worse deal than the IMF!!
      And the fact that it is increasing would tend to suggest that the terms are a lot better. I mean its unlikely that they are just masochists!

      • Or their governments are stupid and want the short term cash without a care of screwing over future generations with the loans which are often spent frivolously on luxury construction projects.

        I’m not seeing Chinese submarines helping stop all the drugs trade in the Pacific for example but overseas vessels there overcatching fish and wiping out fish stocks.

  5. Professor Kelsey,some interesting points are raised in this blog.
    Taking into account the side letters and the rest of the current arrangement,do you think there is anything in particular which

    a)prevents the Corporations of a non Signatory Country from creating a purpose built commercial entity within a Signatory Country,with the specific intention of participating in international trading under the TPP obligations and entitlements of said Jurisdiction,or

    b)prevents the same Corporations from attaining majority,controlling shares in a Company already registered and operating in a Signatory Country,again,with the specific intention of accessing the Commercial legal advantages offered by the TPP?

    The reason i ask is that German Multinational Baywa recently acquired a considerable shareholding in the formerly proudly NZ owned and operated Company Turners and Growers.

    With my knowledge of geopolitics and Zespri’s role in the Corporate takeover of this Country,i can say that Zespri was maintained using many millions of taxpayers dollars and has failed to properly serve the community in which it was granted permission to operate,on purpose.

    Zespri was born as a Monopoly…

    It was always intended that it would be given to the well known syndicate of foreign investors at a time of their choosing,once most of the Labour and Immigration restrictions have been lifted,or severely mitigated.

    It is probable that Baywa has brought into T&G to give it an option to take over Zespri and by default,the entire industry.

    Alternatively,it could/would use any ISDS clause to argue its case for expansion here,and not just in the Kiwifruit Industry either.

    With Baywa there is much more than simply a multi billion dollar Kiwifruit Industry involved,think instead the greater portion of NZ food production,and that’s just part of the intended portfolio of investments.

    With the option to aggressively intimidate and prosecute a Sovereign State for deciding to do its duty and act in the national interest of the People,not the State,entities such as Baywa would be confident to essentially bypass then outlaw the Overseas Investment Office,citing violation of the TPP,then have a shadowy group on the far side of the planet decide what is best for the People of this country,based on…

    purely Commercial concerns,with support letters from their fellow shareholders in the claiming Multinational Corporation(s).

    Multinationals like Baywa and Oceania Gold at Waihi,are the only ones who actually would benefit from this TPP,no surprises then that they are the ones who have paid to push this socially irresponsible,so called Trade Agreement.

    In reality,it is the Corporations of the world,via their regional political puppets,actually having the audacity to publicly mention that they are issuing us with their own,Commercial Declaration of Independence.

    That is unacceptable…

    Because as you all know,a Declaration of Independence has already been issued to cover NZ territories,it is no less important than Te Tiriti,which in the Te Reo version makes it clear that the Crown needs to consult and negotiate with Tangata Whenua in all major issues,which would naturally include the assignment of Sovereignty to foreign Corporations.

    In this modern age,the New Zealand Government,which is regional Agent to the Crown,must also consult and negotiate with the non Maori population despite the fact they are not specifically Signatories to the Declaration or Te Tiriti,because they have in many cases become de facto or bonifide Tangata Whenua themselves and are ultimately human beings,who need to be consulted on important matters affecting their futures.

    Obviously the definition of Corporation and State have become identical.

    But one is supposed to be for the benefit of the few,and the other,for the many…

    And what complicates matters is that the City of London has always regarded its New Zealand Colony as a Corporation,certainly not an Independent State.

    The Crown has played a delicate game with Aotearoa/NZ,it has only paid lip service to some basic human rights in order to buy it time to put the new global agreements in place,just as it used Te Tiriti in bad faith to buy it some time to get its Expeditionary Forces relocated from India and other theatres,and shipped out to NZ to commence the illegal Seizure/Invasion of the Waikato,for which we are all still paying the price today.

    Literally,we are paying pennies in the pound compensation to ourselves for land stolen by the British Crown.

    Can you see that all Treaty Settlements have been paid for by the victims of the original injustice,and also by that element of pakeha NZ that did not profit materially from the land theft and is today just as angry about the situation as those who had their homes stolen from them at gunpoint,by the British Crown,over a century ago.

    It should be obvious that the only legitimate compensation will need to be wired direct,from the Bank of England.

    It cannot be taxed from the victim,then returned to the victim,that is not fair and it fails to provide any deterrence and denouncement to the Crown to prevent it from re offending.

    And so it is re offending again,because we as a people never denounced and deterred it properly and it now falsely believes that it owns all of us.

    It only owns the consenting…

    It doesn’t have my consent…

    While the TPP is a current issue,it seems to me to be more of an amplification of our pre existing,historical issues which,as Moana Jackson,Professor James Bellich and others have pointed out,and the Wai1040 claim proved,is caused by misunderstanding and murderous land theft on the part of the British Crown.

    Given the history,we would be very unwise to ever trust the Crown in NZ,or abroad.

    There just isn’t a nice way to put it.

    It is Global Sovereignty that is being negotiated away here.

    • Funny enough the Kiwifruit growers were wiped out when Psa entered New Zealand in 2009 in a 4.5kg shipment of pollen from China, and that MPS failed to follow its own protocols in its handling of an import permit for pollen from the Asian country.

      In a statement, Cameron highlighted that MPS is the only agency in the country with the mandate to manage biosecurity risks.

      Another example of a Chinese import that seems to get favourable treatment from our government, even allowing in a major biosecurity risk, to the detriment of our local farmers.

      https://www.freshfruitportal.com/news/2018/06/28/nz-kiwifruit-claim-wins-negligence-case-against-government/

      From allowing in known biosecurity risks from China to finding no fault with killing a child in a 10 ton waste management truck with known blind spots from a Chinese owned ‘NZ’ company, it seems our government is only too happy to sacrifice kids, livelihoods and our sovereignty, to grovel to China.

      And it has been happening ever since our government signed the disastrous trade deal with China – that was so poorly written on NZ side that Chinese were able to buy NZ property while NZ citizens are not allowed to buy Chinese property.

      Now we have a homeless and housing crisis, that China is ‘happy’ to help us with by lending NZ money for construction, that if it fails after 10 years the NZ ratepayers will be picking up a big part of the tab!

      • The Chinese free trade deal is absolutely streets ahead of any subsequent trade deals in that it is the last one to not have any invester state dispute clauses. The TPPA or whatever acronym we have ended up with is far inferior with far more giving up of sovereignty than anything else we have thanks to traitor Key. If these clauses appear in the next deal then we will know that it doesnt really matter who is in the govt but until then there is a chance to apply pressure for a no. The Greens will say no but we also need Labour to since the Nats will agree to anything since they already have their trousers round their ankles. As Jane says, Parker has dropped his trousers once. Will he do it again?
        The interesting point raised by Joshua is whether one deal with these clauses is enough to let anyone challenge our law making ability simply by buying up relevent stock or takeover of a strategic asset. I believe that the TPPA or whatever is st ill able to be exited with 6 months notice. Any chance a political party will sign up to that?

  6. Yes from our so called Socialist kind transparent government. Time to wake up and smell the globalist neo liberalism.

  7. Apparently our beef exports are going banana’s to China.

    It because of the lovely relationship and free trade agreement our government has with China?

    Nope trade war with US.

    NZ is too small to be any player in trade politics. Our government and industry is more like the hyena that dives in for a quick rush of the spoils between bigger players but they think they are the top of the food chain.

    NZ is better to keep out of politics and just supply those who need it. There are plenty of trade wars and feeding people should not be about politics.

    “Also Monday, China’s official Xinhua news agency reported that Chinese companies have stopped buying US farm products – a direct shot at Trump supporters in rural America.

    Together, the currency devaluation and suspension of farm purchases suggest that China has decided to stand tough, rather than cave in Trump’s threats.”

    https://www.stuff.co.nz/business/world/114784693/chinas-tit-for-tat-against-us-worries-world-markets

    NZ should use it’s small size more to it’s advantage, the trade deals are more like monopolies that help the more powerful, reduce and delay change when it is needed aka climate change, and sovereignty , the opposite of what free trade was supposed to be about.

    We also import more than we export, and profits to overseas companies is one of our biggest exports, so someone is clearly doing well out of NZ obsession with trade deals, but it ain’t the government coffers.

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