Australian business leaders launch trade agreement campaign

13 August 2012

Australian business leaders launch trade agreement campaign

by Mary Swire, Tax-News.com, Hong Kong

Members of the Australian business community have launched a campaign for trade agreements to include provisions to allow private companies to sue foreign governments for breach of contract or property rights.

The campaign was kicked off with the delivery of a letter, signed by sixteen business organizations and legal experts, to the Prime Minister Julia Gillard. The aim is to see such provisions applicable on a case-by-case basis. These rights, known as Investor-State dispute settlement (ISDS) provisions, had previously been advocated by the government. However, support for the case-by-case approach was withdrawn in 2011.

The Australian Chamber of Commerce and Industry (ACCI) has since been lobbying the government to change its policy. It would like to see the restoration of a case-by-case approach to ISDS in trade agreements, including Trans Pacific Partnership and Indian Ocean Rim negotiations. The government’s failure to alter its stance led to those business organizations forming the ACCI’s General Council resolving last month to support a public campaign.

According to the letter, "the government’s refusal to consider inclusion of such provisions in current or future regional and bilateral free trade agreements is a flawed approach which reduces security for Australian firms seeking to invest internationally." The letter emphasizes that ISDS provisions support Australian businesses in their foreign investments, because they offer an efficient mechanism for companies to seek a direct solution in adverse situations.

Launching the campaign’s public phase, ACCI Chief Executive Peter Anderson said: "If Australian companies are to fully grasp opportunities of the Asian century and emerging markets of Africa and the Indian Ocean Rim, trade agreements must provide investor certainty for private companies, not just governments. Investors are put off if they don’t have a secure legal framework with enforceable rights by courts or commercial arbitration."

"Especially in developing countries where legal systems are ambiguous or suspect, Australian companies investing off-shore need confidence to take legal action and compel international arbitration against governments which infringe property and contractual rights. The recent focus on in-bound foreign investment must not overshadow the prosperity flowing from Australian companies successfully investing in emerging markets," Anderson stressed.

source: Tax News