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.


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.

Clive Palmer uses Singapore free trade agreement to revive ISDS claim against Australia

Monday, October 31, 2022: Australian mining magnate and political player Clive Palmer has used his Singapore company, Zeph Investments, to notify the Australian government on October 20, 2022, of its intention to seek compensation over a legal dispute with the WA government  about its proposed Balmoral South iron ore project in the Pilbara region of Western Australia.

Transform Trade reports expose British companies suing developing countries

Thursday October 13, 2022: The UK-based Transform Trade - People centred trade report and its associated legal research report – Foreign Investment, Human Rights and the Climate in the UK – Asymmetric Legal Protection – hit two powerful themes – people’s action is transforming international trade and can do much more; and British law enables British corporations to cruelly exploit ISDS in bilateral investment agreements for super profits.

Oil pipeline company proceeds with $15 billion ISDS claim against US government for environmental regulation

September 30, 2022an international arbitration panel appointed last week will hear the claim of TransCanada Corporation for $15 billion compensation against the US government because it revoked a permit for the Keystone XL pipeline, claiming it would cause environmental damage. The pipeline is opposed by indigenous, farmer and other local communities  because it aimed to transport to the U.S. Gulf Coast up to 830,000 barrels per day of highly corrosive crude oil extracted from tar sands in Alberta, Canada, across more than a thousand rivers, streams, lakes and wetlands across six U.S. states.