The Japan News | 22 October 2015
TPP sets limit on corporate suits
The Trans-Pacific Partnership free trade pact limits the period for foreign companies to file damages lawsuits against host states over sudden regulatory changes to 3½ years, Jiji Press learned Wednesday.
The limit, included in a TPP provision on investor-state dispute settlement, is designed to prevent abuse of litigation by multinational businesses.
ISDS gives the legal basis for foreign businesses to challenge sudden changes in host country regulations.
Japan and the United States had pushed for the introduction of ISDS in an effort to help their companies go overseas. They successfully persuaded Australia and other reluctant countries by proposing the limit.
The ISDS provision allows member governments to introduce regulations about medical care and the environment at their own discretion.
The provision also states that member governments will not be forced to change regulations even if they lose lawsuits from foreign businesses.
Japan, the United States and 10 other countries reached a broad agreement on the TPP on Oct. 5.