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ISDS Provisions – Just Say No Australia!

On 04.02.2014 by Tracey Tipping

Australian ISDS Provisions

Its not all that often that shifts in Australia's Trade policy keep me up at night, but while flicking through my Facebook newsfeed late one night last September (as you do!) I stumbled across a shocking article that had been posted by The Australia Institute - "Abbott: Open for Business - And Multinational Lawsuits" by Mike Seccombe.

The article was a total eye opener for me, as it basically said that the new Abbott Government had decided to reverse Australia’s blanket ban on "Investor State Dispute settlement" (ISDS) provisions and put them back on the negotiating table in our upcoming trade negotiations (including in the Trans Pacific Partnership (TPP)).

Of course, I had never heard of ISDS provisions before (or the TPP for that matter!), but the more I read the more my blood started to boil...

So, What the Heck are ISDS Provisions, & Why Should We Care?

ISDS provisions are written into International Trade Agreements between countries and basically give foreign corporations the right to sue national governments (at all levels - Federal, state & local) if they think a Government's policy is going to harm their commercial interests.

YEP, you read that right! Here it comes again - ISDS provisions give foreign corporations the right to sue our Governments if they don't like our policies.

As the implications of ISDS provisions started to sink in for me, the internal arguments in my head began - how could any Government in Australia ever contemplate selling our sovereign, democratic rights as Australians to foreign corporations??? Its not even their rights to sell, they are ours to sell or not sell to whoever we choose!

Come on, are ISDS Provisions Really That Bad?

In a nutshell - YES!

But let me be more specific - if Australia decides to sign up to Trade Agreements containing ISDS provisions (like the  current Australia-Korea Free Trade Agreement awaiting Cabinet Approval and the TPP still being negotiated) we will be opening ourselves up to a world of potential heartache as it would mean:

* biotechnology corporations, like Monsanto, could sue Tasmania and South Australia over their respective moratoriums / bans on Genetically Engineered (GE) crops as these policies damage their corporate interests;

* coal seam gas (CSG) companies could sue the NSW government over their environmental standards on CSG if they felt it was damaging their corporate interests;

* local councils choosing to enact a moratorium on CSG could face similar legal action by foreign CSG companies;

* any tougher environmental standards instituted by all levels of Government in Australia could be up for legal action, so for example, if we wanted to ban a particularly harmful pesticide we could be sued by the pesticide company as this ban would harm their corporate interests;

* Governments could be sued over tougher food labeling laws whether it is over sugar content, GE / GMO content, fat content etc. If this labeling is viewed to be damaging in any way to a foreign corporations commercial interests they can sue us;

* Australia's food quarantine laws might be up for legal challenge as it may prevent foreign corporations from being able to bring their food & plant products into Australia;

* foreign financial corporations could bring lawsuits against the Australian Government if they feel our prudential regulations are damaging to their corporate interests;

* tobacco companies could sue Australia over any policies to curb tobacco consumption; and

* pharmaceutical companies could sue Australia if they don't like our Pharmaceutical Benefit Scheme (PBS).

And the list just goes on and on and on...

That's Totally Ridiculous, Surely that Couldn't Happen in Australia?

I know, this all sounds really far fetched. But sadly, Canada is a great example of what happens when ISDS provisions in Trade Agreements take hold (and not in a good way!):

* Quebec province in Canada decided to call a moratorium on shale gas extraction (fracking) while they assessed the potential environmental impacts of fracking on their water supply. They were hit with a US$250 million lawsuit under ISDS provisions in their North America Free Trade Agreement (NAFTA).

* Pharmaceutical company Eli Lilly filed a US$500 million case against the Canadian Government under ISDS provisions in NAFTA over patent decisions made by the Canadian Federal Courts.

* Dow AgroSciences LLC sued Quebec Province in Canada for losses allegedly caused by a ban imposed by Quebec on the sale and certain uses of lawn pesticides containing the active ingredient 2,4-D (which is the active ingredient used in Agent Orange). In the end, the Quebec Government agreed to remove all reference to potential negative health implications in their legislation in exchange for Dow dropping their case against them.

In fact, Australia is currently being sued under an ISDS!

Here in Australia, even though tobacco companies lost their case on our plain packaging laws in the Australian High Court, one tobacco company – Philip Morris – is now suing Australia in an international tribunal using an ISDS provision that Australia signed with Hong Kong back in the 1990s.

Australia's Track Record on ISDS

Previous Australian Governments (including under John Howard and Julia Gillard) have been extremely resistant to signing new Trade Agreements including ISDS provisions.

In fact, the Howard Government refused to have ISDS provisions in our 2004 trade agreement with the United States, making Australia the only country to have successfully concluded a trade deal with the United States without ISDS provisions.

In 2010, a review published by the Australian Productivity Commission found few benefits and “considerable policy and financial risks arising from ISDS provisions”.

Shortly thereafter, the previous Labour Government decided to enact a prohibition on ISDS provisions altogether.

Unfortunately, the Coalition decided to change its policy on ISDS provisions on the eve of the election and the Free Trade Agreement with South Korea (announced in December 2013 and awaiting Cabinet approval) contains ISDS provisions :-(

Furthermore, leaked text of the TPP (kinda scary that all we actually know about the TPP is from documents leaked by Wikileaks!) suggests that ISDS provisions are in that Agreement too.

The Bit That Really Hurts: Its the End of Australia's Sovereignty!

While it’s bad enough that this change of policy by Prime Minister Abbott will potentially transfer millions (or possibly even billions!) of taxpayer dollars to foreign corporations through preposterous lawsuits, this is nothing compared to the total and irreversible loss of national sovereignty this policy would bring to Australia.

I think that Ilana Solomon (Director of the Sierra Club's Trade Program in Washington, D.C.) summed it up perfectly in the following quote:

"If a government is not even allowed to take a time out to study the impact without having to compensate a corporation, it puts a tremendous chill on a governments' ability to regulate in the public interest.” 

And that's the bit that really got to me - if we sign up to ISDS provisions in our new Trade Agreements (and in particular in any Trade Agreement involving the United States (like the TPP)) then our political parties will be extremely reluctant to enact policies that may open Australia up to costly lawsuits. Even if they are widely accepted to be in the public interest.

I believe that we as Australians should get to choose our own policies and have our basic democratic rights honoured and protected, without fear of legal retribution by foreign corporations.

So, What to Do?

As you have probably gathered, this issue got me really fired up so after much internal debate and weeks of waking up in the middle of the night winging about the injustice of it all to my hubby I decided it was time for me to write my first ever community petition!

In a nutshell it asks the Prime Minister and Trade Minister to urgently reinstate a ban on ISDS provisions in all of our upcoming Trade Agreements.

The response to the petition has been nothing short of amazing.

In a few short months we have hit 8,777 signatures and growing every day :-)

So, if this issue strikes a chord with you the way it did with me then please consider signing and sharing it among your friends and family because every signature is going to make an enormous difference!


Petition link:

Facebook page: Facebook page - Ban ISDS Provisions in Australia


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