Australian mining companies suing developing countries for billions is shameful, say community groups
MEDIA RELEASE October 27, 2020
“There is a pattern emerging of Australian mining companies suing developing countries for billions of dollars in unfair international tribunals,” AFTINET Convener Dr Patricia Ranald said today in an article published on the Michael West website.
“Barrick PD Australia, owner of the Porgera goldmine in Papua New Guinea, despite a documented record of human rights and environmental abuses, is suing the PNG government in an international tribunal because its mining license has not been renewed,” said Dr Ranald. The company is a subsidiary of the giant Canadian Barrick Gold corporation.
“The Australian Kingsgate company is suing the Thai government after it closed the Chatree goldmine when increased levels of manganese and arsenic used in processing the gold were found in nearby residents,” said Dr Ranald.
“Australian mining company Tethyan Copper Company Ltd, also a subsidiary of Canadian company Barrick Gold, sued Pakistan over a licensing dispute and in 2019 won US$5.8 billion in compensation. The Pakistan award made headlines around the world because the compensation payout was more than 25 times the US$220 million the company had invested in the project and included an unknown payout for ‘lost future profits’. The amount is almost equivalent to the US$6 billion emergency loan from the International Monetary Fund (IMF) granted just before the award to deal with Pakistan’s economic crisis, and potentially cancels any benefit from the IMF loan,” said Dr Ranald.
Dr Ranald explained that the companies are using Investor-State Dispute Settlement (ISDS) processes in trade and investment agreements that Australia has with developing countries.
Barrick Gold is a Canadian company, and Canada does not have such agreements with PNG or Pakistan, so it has used Australian subsidiary companies to launch the claims.
ISDS enables foreign (but not local) investors to bypass national courts to sue governments for compensation in international tribunals if they can argue that a change in a domestic law or policy has harmed their investment, or that they were not consulted about the change. There are no obligations on those corporations to abide by human rights or environmental standards.
“Growing criticism of ISDS has triggered attempts at multilateral reform with reviews of ISDS by international bodies. The Australian Department of Foreign Affairs and Trade (DFAT) is also conducting a review. Submissions from community organisations have argued that the use of ISDS in Australian trade and investment treaties to obtain huge awards contradict Australia’s commitments to human rights, undermine its aid and development programs, and harm Australia’s reputation and relationships with developing countries,” said Dr Ranald.
“ISDS has been excluded from the Australia’s current trade negotiations with the European Union and from the giant Regional Comprehensive Economic Partnership negotiations with 14 Asia Pacific countries. ISDS should also be excluded from all Australia’s bilateral investment treaties and other trade agreements,” said Dr Ranald.