EU-Australia trade talks quietly dump foreign investor rights to sue governments

Media Release, May 23, 2018: “ We welcome the fact that the EU mandate for the EU Australia FTA talks has dumped the controversial  rights for foreign investors to  sue governments in international tribunals, known as ISDS, because European courts have found that  ISDS cases have undermined democratic regulation. ISDS is so unpopular that the EU fears that its inclusion may lead to rejection of trade agreements by EU national parliaments,” AFTINET Convener Dr Patricia Ranald said today.

“But both governments have failed to mention this in the publicity about the agreement. The Turnbull government is still ignoring the evidence against ISDS and supporting it in the TPP-11 and other agreements. They do not want Australians to know that other trading partners are rejecting ISDS,” she added.

Dr Ranald explained that Investor-State Dispute Settlement or ISDS gives increased legal rights to foreign investors enabling them to bypass national courts and sue governments for millions of dollars in unfair international tribunals over changes in national law or policy, even if they are in the public interest. There are now over 850 known cases,  with increasing numbers against health, environment and even indigenous land rights law and policy.

“ISDS cases against EU governments, like the Swedish energy company Vattenfall suing the German government over its phase-out of nuclear energy, led to fierce European public opposition to ISDS, and to two recent court cases in which national governments challenged the legality of ISDS under EU law, “ said Dr Ranald.

“The European Court of Justice determined in 2017 that ISDS provisions impinged on national sovereignty and that EU member parliaments had to vote separately on ISDS provisions in trade agreements. In March 2018, the same court found that damages awarded to a Dutch private health insurance company against Slovakia by an ISDS tribunal also breached EU law.

In response, the European Commission President has now proposed a “fast track” process for agreements without ISDS, which would enable them to be approved by the European Commission alone, without seeking approval from national parliaments. This is the process proposed for the EU Australia FTA,” said Dr Ranald.

“The Turnbull government does not want public scrutiny of the fact that it is dumping ISDS in the EU FTA but continues to support it in the TPP-11,” said Dr Ranald.

“The TPP-11 implementing legislation is currently under review by both the Joint Standing Committee on Treaties, dominated by the government, and by a Senate inquiry on which the government is a minority. Labor, the Greens and the Centre Alliance all have strong policies against ISDS. We are calling for them to implement those policies and reject ISDS in the TPP-11.”

Contact Dr Patricia Ranald 0419 695 841