January 10, 2025: AFTINET Convener Dr Patricia Ranald reports in Pearls and Irritations that Australian billionaire Clive Palmer's has made a fourth foreign investor claim against the Australian government, bringing his total claims to $420 billion.
Palmer has registered his mining company, Zeph Investments, in Singapore and claims to be a Singaporean investor, using investor rights in two Australian trade agreements with Singapore. The first claim was for $300 billion after he lost a High Court appeal against a Western Australian government decision to refuse an iron ore mining license. The last three claims for a total of $120 billion are because a Queensland Court refused his coal mining license and a license for a coal-fired power plant for environmental reasons, including increased carbon emissions. These last three cases are a challenge to government action to reduce carbon emissions.
Palmer's cases use rules in some trade agreements called Investor-State Dispute Settlement or ISDS, which enable foreign investors to bypass national courts and seek billons for future lost profits from international tribunals.
The fourth case brings his total ISDS claims against the government to $A420 billion. All the Palmer cases are now before international tribunals, but the last three have been suspended while the tribunal decides the threshold issue in the first WA case of whether Palmer can legitimately claim to be a Singaporean investor. This is not as straightforward as it seems because it depends partly on the timing of the Singapore investment and whether he can convince the tribunal that he has genuine business interests there. The decision is expected sometime in the next few months.
ISDS cases are posing a global threat to the urgent government action required to combat the climate crisis. Palmer’s last three cases join a growing global list of ISDS cases from fossil fuel companies against government decisions to reduce carbon emissions. A recent United Nations Report concluded that ISDS is a “major obstacle” to government action on climate change. The OECD has acknowledged that ISDS is not aligned with the global climate transition. The European Union and the United Kingdom have decided to quit the Energy Charter Treaty because its ISDS provisions are being used to sue governments over climate change policies. The 27 EU countries’ coordinated withdrawal from the ECT could be a precedent for a coordinated multilateral withdrawal from ISDS arrangements.
Labor’s policy is to exclude ISDS from future trade agreements and review it in existing agreements. Labor has excluded ISDS from current negotiations but has been slower to move on removing ISDS from existing agreements, as Palmer has found to his advantage.
Labor should speed up its review of existing agreements, and should also to lead public discussion of the threat of ISDS to government climate action and support proposals for coordinated multilateral withdrawals from ISDS arrangements in trade agreements.
Read the full article here.