Saturday Quickie – Sovereign Borders, not so Sovereign Nation

According to Mike Seccombe, at the Global Mail, under the Abbott government, Australia will be open not just for business, but open to costly multi-national law-suits:

On the eve of the election, the Coalition released its trade policy, which includes a commitment to “remaining open to utilising investor-state dispute settlement (ISDS) clauses as part of Australia’s negotiating position” in future trade deals.

In saying it was “remaining open” to ISDS clauses, the Coalition was being cunningly understated, as was made clear elsewhere in the document.


Under ISDS, as Seccombe explains earlier in the article, corporations can bring law suits seeking damages form governments which harm their financial interests. This reverses a position taken by the ALP government in 2011 which rejected the use of ISDS in trade agreements because it was of no benefit to Australian business and could seriously compromise national sovereignty. More often than not, as Seccombe clearly lays out, litigation under ISDS is conducted in effective secrecy, so governments can potentially find themselves with large debts to multi-national corporations with the citizenry left completely in the dark about the issue.

Once again, so much for Abbott’s repeated promises to ‘govern for all Australians’, indeed any Australians or even merely govern. If Seccombe is right, this daft Liberal policy will leave Abbott – and his future successors – as little more than a figurehead Prime Minister leading a government rendered largely powerless to legislate for the public good.

Still, looking on the  bright side, we could always squeeze another public holiday out of the policy once it’s implemented. The date when the first trade deal with ISDS provisions comes into effect could be commemorated as ‘Pissed Away Our Legal Independence Day’.

About Paul Bamford (aka Gummo T)

Gummo Trotsky is the on-line persona of Paul Bamford. Paul recently placed his intellect at risk of finally becoming productive by enrolling in a Lemonade, Lime & Bitters degree via distance education. He also plays the piano but Keith Jarrett he ain't.
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10 years ago

Most of Australia’s bilateral trade agreements already contain ISDS clauses – the agreements with the US and NZ are the exceptions.

The previous Labor party’s position was effectively an acceptance of the Productivity Commission’s recommendation on ISDS from its 2010 report into Bilateral and Regional Trade Agreements, which recommended that the Australian Government:

“… seek to avoid the inclusion of investor-state dispute settlement provisions in BRTAs that grant foreign investors in Australia substantive or procedural rights greater than those enjoyed by Australian investors.” (PC 2010, p. XXXVIII, )

Underpinning this, the Commission found that ” … There does not appear to be an underlying economic problem that necessitates the inclusion of ISDS provisions within agreements. Available evidence does not suggest that ISDS provisions have a significant impact on investment flows … Experience in other countries demonstrates that there are considerable policy and financial risks arising from ISDS provisions. ”

The PC report had quite a lengthy section on ISDS, the way it effectively operates as a subsidy to Australian businesses by increasing the legal (and financial risk) to ordinary taxpayers, and how there were plenty of alternatives available to Australian businesses to protect their own interests overseas (and funded by their shareholders).

Bill Posters
Bill Posters
10 years ago

Also worth pointing out the ALP position hardened following the use by tobacco companies of a bilateral treaty with Hong Kong to attack plain packaging.