Every so often someone does something so totally unfathomable, something so seemingly devoid of common sense that one is left scratching one’s head asking, “Why would anyone do that? What could they possibly hope to gain?”
While there are, to my mind, large swathes of government policy that fall into that category, few things have left me quite as perplexed as the possible inclusion of the so called ISDR provisions in any future Australian free trade agreements.
For those of you that haven’t been following this, ISDR is an acronym for “Investor State Dispute Resolution”, and in a nut shell what that would mean is that any foreign corporation (operating under an ISDR provision), that finds that our laws interfere with their business has the right to sue our governments for damages. Outrageous, right?
Want to ban GMOs? Well stuff you SA and TAS, here comes Monsanto with it’s bully boy lawyers and war chest bigger than your state budget. Hey NSW, want to legislate environmental protections to stop coal seam gas destroying the water table on your precious farm land? Not unless you’re prepared to pay out hundreds of millions in compensation, you don’t!
Since deregulation and FTAs (free trade agreements) came into play in the 80s successive Australian governments – from both sides of the house – have viewed ISDRs as categorically not in Australia’s best interests, and had the good sense to rule them out point blank.
So why has Tony put ISDRs back on the negotiating table? Especially when the US has already accepted our refusal to include them. Given that we currently have a free trade agreement with the US that appears to be working quite well without them, Abbott’s move to include them in the ongoing TPP (Trans Pacific Partnership) negotiations seems like total lunacy. I mean really, it’s basic negotiation 101, you never freely offer up something (that will cost you dearly), that the other party is prepared to forgo.
This has been troubling me for weeks now. Why would Abbott do this? ISDR provisions are such a profound threat to our national sovereignty. For Tony to put them back on the table seems to defy all logic.
By all accounts Abbott is not a stupid man, so what it he up to? What is his end game for such a seemingly unfathomable act?
But then it occurred to me, Abbott is a man with an agenda, a largely corporate agenda. After all, it’s no secret where he sits politically. He has found a comfy chair to the right of Turnbull, Howard, Hewson and Fraser, and firmly planted himself at the ultra right table with his corporate buddies Rinehart, Murdoch et al (and with friends like that there can be no doubt he is headed for a VERY lucrative payday after his stint in the lodge).
Abbott has long been known for his antipathy towards any measures that “interfere” with corporate profits, whether it be a fair level of tax on mining companies, legislated environmental protection or plain packaging for cigarettes (a move he was eventually forced to support after a backbench and voter backlash). We all know there is nothing Abbott isn’t prepared to throw under the bus in the name of corporate profits . . . unless, of course, it is politically costly to him!
And this is where ISDR clauses could come in handy for him. Just when we are snuggly tucked up in our beds, feeling confident we are in safe fiscal hands, these ISDRs will crawl out from deep within the belly of our shiny new FTAs, paving the way for legions of corporate lawyers to descend on our states and territories with multi million dollar lawsuits against our public purse . . . That is of course unless the government obligingly removes the offending legislations.
Oh, now I get it! And I think it goes something like this, “the government doesn’t WANT to allow oil wells in the middle of the great barrier reef, but if we don’t do it this big bad international corp will sue us all the way to the poor house, which means cutting services, health and education etc . . . better to just amend the laws and let them put the wells in, and then we can all profit from it”.
While I realise that such a hypothetical scenario may sound a bit extreme, under an ISDR it’s not wholly impossible and it’s the only explanation I can think of that actually makes any sense?. Hmmm . . . Am I being too cynical? Lori Wallach, director of Public Citizen’s Global Trade Watch, doesn’t think so. She was quoted in Huffington Post talking on the EU-US FTA negotiations:
The dirty little secret about ISDR’s is that they are not mainly about trade, but rather target for elimination the strongest consumer, health, safety, privacy, environmental and other public interest policies. The investor-state system empowers individual corporations and investors to skirt domestic courts and laws and drag signatory governments to foreign tribunals.
Let’s face it, no government, left or right, would win the support of the people in actively advocating for the wholesale destruction of our environment in the name of corporate profit; but if our governments were faced with paying billions in damages, many of us might just be tempted to change our minds. After all, the government can’t be expected to pay out all those damages and still afford to keep all those expensive social services going, can they? They would be faced with some tough choices!
Maybe I am being a little dramatic, but a quick look at Canada’s experience with the ISDR is a quite sobering and it should be setting off alarm bells loud enough for us to hear all the way from Ottawa.
For example, Canada recently denied a patent application for a drug that failed to meet the conditions for patent under Canadian law, and this led a US pharma company to demand $100 million in compensation. Whether their claim will be upheld in court is yet to be seen, but one thing is certain, even if the Canadian Government prevails defending the case won’t come cheap.
And this is just one of many law suits Canada has had to contend with. Here are some others:
Dow AgroSciences, a U.S. corporation, served a claim for losses allegedly caused by Quebec’s ban on the sale and certain uses of lawn pesticides containing 2,4-D.
Chemtura Corporation, a US pesticide manufacturer, has alleged that through its Pest Management Regulatory Agency (PMRA), Canada wrongfully terminated its pesticide business and issued a claim.
Lone Pine Resources is currently suing Canada for over $250 million in response to Quebec’s moratorium on coal seam gas fracking.
The list goes on an on. In 2012 over 500 multi million dollar law suits where lodged globally under ISDR provisions. In fact Ecuador had to pay out $1.77 billion in a single settlement to Occidental Petroleum, as a result of having ISDR clauses in their FTA.
Be very afraid, as this article, Investor-State Dispute Resolution: The Monster Lurking Inside Free Trade Agreements warns.
And where is the media on this issue? Once again, like the faithful old dog they are, they appear to be napping at the feet of their corporate masters. Have none of them even read the Coalition’s Trade Policy? It’s all there in black and white. Quote:“The Coalition will take a pragmatic approach to trade negotiations and will consult widely with industry bodies and associations to ensure that stakeholder priorities are taken into account. This includes remaining open to utilising investor-state dispute settlement (ISDS) clauses as part of Australia’s negotiating position”.
The policy also promises to “fast track the conclusion of free trade agreements with China, South Korea, Japan, India, the Gulf Cooperation Council and Indonesia”, and to “explore the feasibility of free trade agreements with other trading partners including the European Union, Brazil, Hong Kong, Papua New Guinea, South Africa and Taiwan”.
While it’s possible that ISDS clauses won’t wind up in all of those agreement, they will, as the policy states, form part of Australia’s negotiating position.
So why are the Coalition in such a rush to sign off all these new FTA’s? (Especially the TPP, which could easily usher in the ISDR clauses that are currently excluded in our Australian-US FTA). And why are the Coalition so hell bent on keeping the terms of these negotiations secret?
The Coalition is looking to present this new round FTAs as a shining example of their “getting down to business” and delivering good outcomes for Australia, but we need to seriously ask ourselves, do we really want Tony opening our door to ISDR clauses?
We’ll only get make this mistake once, and we may be stuck with the some very expensive consequences, forever! This is a very dangerous course for Australia to be taking. We need to keep a firm eye on this Trojan horse and slam the door hard in it’s face.
But how?
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