Labor must amend trade agreements that allow foreign companies to sue the government over energy and climate policies

August 10, 2022: Patricia Ranald's article in The Guardian argues that the Labor government should resist threats from international energy companies to use special legal rights in some trade agreements to sue for billions if they take action to safeguard energy supplies. or phase out fossil fuels. These rights  enable  companies sue the federal government if a change in law or policy reduces their profits, even if the change is in the public interest,  known as Investor-State Dispute Settlement (ISDS).

US tobacco company Philip Morris used ISDS  to sue the Australian government over plain packaging laws in 2012.. A recent study showed mining and energy companies are using ISDS to sue governments for billions in compensation over decisions that aim to phase out fossil fuels to combat climate change, and recommended ISDS be removed from trade agreements. The US-owned Westmorland coal company suing the Canadian government because the Alberta province is phasing out fossil fuels, and the German-owned energy companies RWE and Uniper suing the Dutch government over similar policies. European governments want to withdraw from the Energy Charter Treaty because it includes ISDS provisions that are being used against climate change policies.

Labor's  policy platform opposes ISDS in trade deals and promises to review existing trade agreements and “seek to work with Australia’s trading partners to remove these provisions”. Implementing this policy would  enable effective policies to combat climate change, without the threat of being sued by foreign-owned companies.

Read the full Guardian article here