ISDS allows foreign investors to sue our Government

Investor-State Dispute Settlement

Investor-State Dispute Settlement (ISDS): corporate power vs the public interest

An unbalanced and unfair system

ISDS gives special rights to foreign investors (that are not available to local investors) to bypass national courts and sue governments for millions of dollars if they can claim that a change in law or policy will harm their investment. ISDS has been included in some trade and investment agreements. All such agreements have government-to-government dispute systems, but not all have ISDS. 

ISDS  is a fundamentally unbalanced system that gives additional legal rights to global corporations that already have enormous market power. Strong community opposition has kept it out of World Trade Organisation agreements, and of recent agreements like the Regional comprehensive Economic Partnership (RCEP), the Australia-UK Free Trade Agreement and the Australia-EU Free Trade Agreement. 

ISDS tribunals consist of investment lawyers who can continue to be practicing lawyers, with obvious conflicts of interest. Australia’s High Court Chief Justice and other legal experts have said that ISDS is not a fair legal system because it has no independent judges, no precedents and no appeals. There are  1190 known cases, many against health, environment, regulation of carbon emissions and other public interest laws.


Parliamentary debate on investor rights to sue governments (ISDS)

March 7, 2023: In November 2022, the Trade Minister confirmed Labor’s policy to exclude Investor-State Dispute Settlement (ISDS) in new agreements and to review it in existing agreements. The policy was first adopted under the Gillard government in 2011 in response to community campaigning by AFTINET and others when the Philip Morris tobacco company sued the Australian government over our plain packaging law.

AFTINET submission to the Review of ISDS in the Australia-NZ-ASEAN free trade agreement

February 6, 2022:This revision of the ASEAN agreement (AANZFTA) was begun under the Morrison coalition government and Labor Trade Minister Farrell announced on November 14 that in-principle agreement has been reached on most issues. The text will not be released until after it is finalised. The RCEP and CPTPP texts are being used as models. The provisions on corporate rights to sue governments (Investor-State Dispute Settlement or ISDS) arrangements are still being reviewed.

AFTINET submission to the India - Australia Comprehensive Economic Cooperation Agreement

January 25, 2023: The India-Australia Comprehensive Economic Cooperation Agreement (AI-CECA) negotiations are due to begin in late January 2023 and are expected to finish by June. The interim agreement, which was negotiated by the previous government, mainly dealt with trade in goods and services, and movement of temporary workers. The comprehensive negotiations will deal with issues like labour rights, environmental standards, digital trade, intellectual property and government procurement.

El Salvador government arrests key activists who defeated OceanaGold ISDS case

January 23, 2023: On January 20, 251 organisations including AFTINET, from 29 countries, called on the Salvadoran government to drop spurious murder charges against five leading Water Defenders arrested on January 11, 2023. The five arrested are Miguel Ángel Gámez, Alejandro Laínez García, Pedro Antonio Rivas Laínez, Antonio Pacheco, and Saúl Agustín Rivas Ortega, from the Santa Marta community in the north of the country. They now face six months of pre-trial detention.

AFTINET impacts Parliamentary Reports on the A-UK FTA and India agreement: legislation passed

November 22, 2022: Enabling legislation for the Australia-UK FTA (AUKFTA) and the Interim Australia-India Economic Cooperation and Trade Agreement (AIECTA) was tabled in parliament on October 27 and was passed on November 22. The Joint Standing Committee on Treaties (JSCOT) Report on the AUKFTA was tabled on November 17 and the Interim India JSCOT Report on November 18, leaving  little time for them to be considered by parliament. The government made statements urging the quick passage of the legislation. Both reports recommended in favour of the enabling legislation, but they reflected some of AFTINET’s concerns. See our JSCOT submissions here and here.

Our preference was for these issues to be addressed before the enabling legislation, but failing this we have asked the government to address these issues in the reviews of the AUKFTA which are scheduled in the next two years, and in the negotiations for a more comprehensive Economic and Trade Cooperation Agreement with India which is due to be negotiated next year.

Over 380 civil society organisations demand world governments quit ISDS as Australia pledges to do so

Sharm El-Sheikh, 16 November 2022 – More than 380 civil society organisations from over 60 countries across the world, including AFTINET, are calling on governments to put an end to a system of secretive tribunals which threaten global climate goals at the CCOP 27 Climate Change Conference.