Government concealed failure to cancel the old, worse version of ISDS in new Indonesia trade deal
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Photo: REUTERS/Willy Kurniawan

AFTINET | 11 April 2019

Media Release: Government concealed failure to cancel the old, worse version of ISDS in new Indonesia trade deal

“Detailed scrutiny of the text of the recent Indonesia trade deal has revealed that there are no provisions to cancel the old 1993 Indonesia-Australia bilateral investment agreement, which will remain in force along side the new agreement. The government summary of the new deal is misleading, because it does not mention this fact, but claims credit for more public interest safeguards in the new agreement,” AFTINET Convener Dr Patricia Ranald said today.

“Investor-state Dispute settlement (ISDS) gives special legal rights to foreign investors, enabling them to bypass national courts and sue governments for millions of dollars of compensation in international tribunals if they can claim that a change in law or policy will harm their investment. The older versions of ISDS in bilateral investment agreements had no exceptions for public interest laws. That is why the Philip Morris tobacco company chose the 1993 Australia-Hong Kong investment agreement when it sued Australia over our 2011 plain packaging law,” explained Dr Ranald.

“In other recent trade deals, like the TPP-11 and the Hong Kong FTA, the government has cancelled these old investment agreements, claiming that the new deals have more safeguards and exclusions for specific public health regulation, including tobacco regulation. The claim is that cancelling the old agreements in favour of the new ones would make it more difficult for corporations to claim compensation for these laws,” said Dr Ranald.

“The new Indonesia agreement does contain a more recent version of ISDS which claims to have more safeguards and more transparent procedures. But it only specifically excludes some areas of health regulation. These are Medicare, the Pharmaceutical Benefits Scheme, the Therapeutic goods Authority and the Gene Technology Regulator. Tobacco regulation is not specifically excluded. Other more general safeguards will not prevent ISDS cases against changes in other public interest regulation, like environmental laws to address climate change or new industrial laws,” explained Dr Ranald.

“But the 1993 Indonesia agreement has no exclusions at all. This means that corporations will have a choice of using ISDS in the old agreement, which has no exclusions and less transparency, rather than ISDS in the new agreement, which has some exclusions. Obviously they are likely to choose to use the old agreement, which has less defences for government. This makes a nonsense of the exclusions the government is claiming credit for. The government should own up and cancel the old agreement,” said Dr Ranald.

“The new Indonesia deal will be reviewed by a parliamentary committee after the election. If there is a change of government, we call on Labor to implement its policy against ISDS by both cancelling the 1993 agreement and removing ISDS from the new agreement.”

Contact Dr Patricia Ranald on 0419 695 841

Fuente: AFTINET