Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

This is a very important piece of legislation that is before the Senate. The Trade and Foreign Investment (Protecting the Public Interest) Bill 2014 is a bill about restricting power of corporations to sue and harass sovereign governments in how they go about enacting legislation on behalf of the Australian people or their nations around the world. It is about giving parliament and parliamentarians a say in our democracy and some influence over secret trade deals. It is about helping to take politics out of our secret trade deals. But mostly it is about protecting our democracy, our sovereignty as a nation, the environment and workers and about bringing much-needed balance back to the trade debate. It is about getting power back to communities. Lastly, and personally to me, who brought the bill to the Senate, it is making a statement about the kind of society that we want to live in.

Investor state dispute settlement clauses are one of two types of dispute resolution mechanisms in modern trade deals. There are state-to-state dispute mechanisms, where a country can take action against another government over a breach of a trade deal, and there are mechanisms where private investors can take their own, personal, action against governments through shady, secret arbitration panels. Essentially, what we have set up in modern trade deals is a parallel system of governance that gives corporations the right and ability to impinge directly upon our ability as parliamentarians to enact legislation in the public interest. Corporations do this if they feel that a government policy or a change in policy has directly affected their profitability or their investment.

It is not only the Greens who are trying to raise the profile of this issue in Australia. A number of other stakeholders in this country are trying to raise the profile of this issue. The Centre for Civil Society has been talking about this issue for a number of years. I see Senator Macdonald in the chamber. He would well remember a similar debate back in 2004 around the US-Australia free trade deal, when his government, under John Howard, refused to sign on to investor state dispute settlement clauses in that trade deal for a very good reason, which Senator Macdonald no doubt knows very well.

This is an issue not just for Australian society; it is an enormous issue all around the world. I was visited by the French consulate about this bill. They came to consult with me and find out more about why we are introducing this bill. They said that ISDS, investor state dispute settlement, clauses had made the front page of both French national newspapers for two days in a row. Two days in a row, on the back of riots in Europe on this issue! The appointment of a trade commissioner in Europe and her wanting to leave ISDS clauses out of free trade agreements negotiated with the US has led to a fracturing of politics in Europe. Whether these clauses are to be allowed in modern trade deals is a hugely contentious issue. In the US it is also an enormous political issue.

We put this bill to parliament—it was inquired into by the Senate Foreign Affairs, Defence and Trade Legislation Committee—because we wanted to raise the level of national debate about the inclusion of such clauses in modern trade deals. I was very grateful when High Court Chief Justice French wrote a paper partly on this bill and around this bill, saying that this country, especially the legal fraternity, needed to have a national debate on whether these clauses should be included in trade deals.

While I was away on holidays—I went on a surfing trip to Indonesia, so I was only able to take a couple of small books with me—I took with me a political essay by Laura Tingle, called 'Great Expectations'. The essay talked about the disconnect in this country between the Australian public and politicians and why politicians are held in such low esteem by the Australian public. It explored a lot of reasons why Australian voters and the Australian public felt that politicians and parliamentarians had lost control of various agendas, particularly in a world of globalisation. It talked about a growing sense of anxiety and alienation in our community and why people were feeling this sense of loss of power over their own lives. It was an excellent expose of some of the deeper underlying issues in our society.

I personally have never felt as acutely this perception and real feeling of loss of control that people in this country have as when I have been talking to people about the free trade debate. This is no secret. Free trade negotiations have been going on for decades and they have always attracted controversy, because the increased opening up of our economies and globalisation of our society have led to very significant changes across our laws, our institutions, our regulations and of course our communities. Now, as we get further and deeper into opening our economies, this issue is becoming more acute. What we have got left to trade is a lot more sensitive. It is a significant matter of public interest right around the world.

The Trans-Pacific Partnership Agreement is one example. It is the largest trade deal this country is negotiating, covering 40 per cent of GDP. On the weekend, Minister Robb dismissed the concerns of civil society and, may I say—having been through Senate inquiries on this—not just civil society; he dismissed concerns of the Productivity Commission and a number of very conservative commentators around the way trade deals are done, negotiated in secret, and about the inclusion of things such as investor-state dispute settlement clauses. He dismissed these too easily and too quickly. It seems that perhaps Laura Tingle is right that a number of politicians and parliamentarians are out of touch with the way the Australian public are feeling with respect to the decisions that we make in this House about things that directly impact the future.

What is it about free trade deals that cause anxiety, mistrust and frustration in the Australian community? I think people realise, from looking at the track record, that negotiations involve trade-offs. You have to give up something to get something. Yet it is only sold to them that somehow these deals are beneficial. There are always costs to trade deals. There have to be, by definition. Every textbook you pick up as a university student talks about this. But we only ever hear about the wins. We only ever hear about the increased agricultural access. But people can see over the years the changes to their communities and to society.

We have seen the collapse of the car industry. I believe one of the reasons the Korean free trade deal was not finalised by the previous Labor government was that they knew it would be the straw that broke the camel's back with the car industry. The Labor Party also knew that it would involve signing ISDS clauses. During hearings of the Joint Standing Committee on Treaties, we heard evidence from a number of stakeholders that the ISDS clause was what had prevented this deal from being signed, because Labor had taken a very strong view on including these undemocratic and dangerous provisions in trade deals. But, unfortunately, it looks like Labor will vote for the Korean free trade deal with ISDS. I will get to that in a minute.

In this debate about trade, who picks the winners? If we have trade-offs in negotiations, who actually picks the winners? How highly politicised is it from the minister and the executive, who control the trade deals and are the only ones who know what is going on behind closed doors? How politicised is this process in picking winners if the power always lies with the executive?

The secrecy is a very serious issue, not just for the Greens and for civil society; the Productivity Commission itself has consistently raised the lack of transparency around trade deals as being a serious issue. The Australian Chamber of Commerce and Industry said there is no need for the secrecy and lack of transparency and that we should be looking at totally redoing our trade negotiation process in this country. Parliament has no oversight in the decisions that are made behind these closed doors. When the final text has been signed and is in train by the government, when the media machines are working overtime to sell these so-called benefits of free trade deals, then we get to scrutinise it. But by that stage it is too late

You either vote against it because there are things you do not like about the trade deal, such as the inclusion of ISDS, or you vote for it. You cannot change it.

As I said yesterday, you take it lock, stock and barrel or get two smoking barrels straight in the face, standing in front of a speeding train. You are anti-Australian and anti-economy, when you have very serious and justified issues about these trade deals, their outcomes and the way they are negotiated—the influence of foreign countries and their agendas, the stakeholders behind trade deals. We think trade deals are all about governments negotiating in our names, but actually behind those government negotiators are special interests, mostly corporate interests. Let me tell you trade and free trade deals are about deregulation. That is what they are about. They are about deregulation and they are about business agendas.

Coming back to this feeling of anxiety that we have in our community about the role of government, many people see these trade deals as a corporate takeover of our country, our institutions and our government by stealth—by stealth because they are conducted in secrecy. We need to change the way we do trade deals in this country, but try and understand that trade deals themselves and the emphasis we put on trade have changed considerably over the decades that we have been opening our economy. Trade deals today are now less about putting things on ships—really tangible concepts that Australians understand: selling iron ore, beef and wine, importing cars—and more about services and promoting services. The future of trade deals, such as the trade in services agreement that is being negotiated, is about investment and protecting direct foreign investment in different countries.

Of course, these deals rely on synchronising laws and regulations between countries. That is what they are now. By default, they are about synchronising laws and regulations between countries—and in whose interest? In the interests of US multinationals? Twenty-three out of the 29 chapters in the transpacific partnership agreement do not relate to trade the way we traditionally understand it. They are all about changing laws and regulations between countries, synchronising and standardising laws and regulations. These are significant matters of public interest in a whole range of different areas—local content for media, the environment, the ability to have moratoriums and flexibility in environmental policy, labour and working standards, policy on pharmaceuticals and access to health care. All these things are being done in secret.

I want to debunk some of the arguments against this bill and against removing ISDS, that somehow these ISDS cases have been around for a long time and that we are very comfortable with them. Guess what—they are proliferating. Ten years ago there were only a dozen ISDS cases around the world. Now there are nearly 600, because the nature of trade deals is changing. They are about protecting direct foreign investment in different countries.

And it is not just First World countries that are having cases brought against them, such as the Australian government being sued by Philip Morris—an aggressive tobacco company trying to change our health policy in this country, trying to intimidate our government, sending a strategic message across the world: 'If you're a Third World country, don't you dare change packaging regulations that impact on our profits. We will sue you. We will spend whatever it takes to achieve that outcome.' This is what got Chief Justice French involved in this debate. And, by the way, Philip Morris is suing the government of Guatemala for doing the same thing, and there are a number of other cases against Australia through the WTO for trying to change our health regulation in this country. This is an example of aggressive corporations trying to sue governments.

These ISDS clauses have been around for 20 or 30 years. They were simply about expropriation of assets. But now there are significant shades of grey about what powers corporations have and their ability to bring cases against governments. We have so-called carve-outs and exceptions now written into these clauses. Do they work? Not according to nearly all the experts around the world. The evidence presented to the committee inquiring into this bill is that they do not work. They certainly do not stop litigation, like the Philip Morris litigation being brought against the government, which we know causes regulatory chilling. It is a very simple way for a corporation to put pressure on sovereign governments not to bring in legislation.

We do not even know how many threats there have been behind the scenes. There is an excellent expose by the ABC on Background Briefing, which goes for 45 minutes and comprehensively covers all the issues on ISDS. They interviewed an expert, Toby Landau, who had been consulting for the UK government. He talked in detail about all the cases he had worked for the UK government around the potential to be sued if they brought in the policy. He said that it is a very real risk that has to be taken into account now by our public servants and our politicians when they bring in policy. You need to consult on this stuff now, because it would give corporations a right to sue sovereign governments if they disagree with our policies.

We know from some of the outcomes from around the world that these legal suits can lead to tens of billions of dollars' worth of losses to taxpayers and citizens in those countries. El Salvador is being sued by OceanaGold, an Australian company based out of Melbourne, for US $300 million. They had a mining licence revoked because of issues around a corrupted process and environmental damage. They are not just suing for the money they have sunk into their exploration; they are suing for lost income—$300 million, which I understand is about half the education budget of El Salvador.

For anyone who says we can have these deals now and that we can safely include them in trade deals, I suggest you go and read a publication that the EU recently commissioned. It has hundreds of the best legal minds in the world saying, 'Do not include these carve-out and exception clauses in trade deals.' By the way, that is exactly what the Productivity Commission said here: 'Do not include these clauses in trade deals'. They bring no benefits; there is no evidence of any increased flows in direct foreign investment across borders or increased trade, but there is plenty of evidence that they significantly bring risks to any country that does have these deals. That is why John Howard did not sign up to it; that is why the Labor Party refused to sign up to deals that included ISDS. Now we will have the Korean free trade agreement legislation coming into the Senate shortly and it includes ISDS. Labor voted for it in the lower House; will they vote for it in the Senate? If they vote for KAFTA with the government—which has clearly changed its tune on this as well—then what do we do for the Transpacific Partnership Agreement? It is the biggest trade deal in this country's history and it has US companies involved and they are the most litigious—the statistics are simple—investors who use investor-state-dispute-settlement clauses.

It is not just Australia that I am worried about; I am worried about the impact on other countries in our region, which are poorer and do not have the money that first world countries have; their environmental and labour standard policies may be impacted by aggressive corporations that try to protect their profits and their shareholders. I would say to the Labor senators: if you want a good expert's say on this, print out Melissa Parke's article in The Guardian yesterday—it is an excellent article on why we should not have ISDS clauses in trade deals. It is a really good and well-written article—you should read it. She understands that including these clauses in trade deals will open a can of worms. I would say to the Liberal senators: have a look at the printout from the DFAT website 10 years ago when John Howard refused to include these in trade deals. It clearly says that we do not need these clauses; that we have strong political institutions in America and Australia; and that these things can be negotiated if they are needed. What has changed in 10 years? We are still doing a lot of business with the US, as we are with Korea. We do not have these in place now, and so why do we need them for the future? They are unnecessary and they present significant risks.

Let's make a strong, visible decision today to protect our government's ability to legislate in the public interest and protect our sovereignty, our communities, our workers and our environment. In other words, let's protect the public interest; let's send a message to the Australian people that we do have control and that we will stand up for them. Today I ask the Senate to vote for the bill. Let's wrestle back power and allow the Australian people to at least start wrestling back power and influence over their own future and the lives of the communities. Let's not weaken our democracy; let's take a very visible stand today and implement this bill and set an international standard.