Senate debates

Thursday, 25 June 2015

Questions without Notice

Trans-Pacific Partnership Agreement

2:16 pm

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

My question is to the Minister representing the Minister for Trade, Senator Payne. The Productivity Commission released their annual trade and assistance review this week. In this review, the commission stated that investor-state dispute settlement protections are not needed to encourage investment flows between developed countries. They are risky and they are not necessary in well-functioning legal systems. They also stated that inclusion of an ISDS mechanism in the Trans-Pacific Partnership Agreement could similarly allow investors to bring claims for private arbitration directly against governments and could potentially undermine the role of domestic courts and the freedom of governments to regulate in the public interest. Can the minister advice the Senate whether the government is seeking the Productivity Commission's advice on the inclusion of ISDS clauses in the Trans-Pacific Partnership Agreement?

2:17 pm

Photo of Marise PayneMarise Payne (NSW, Liberal Party, Minister for Human Services) Share this | | Hansard source

I thank Senator Whish-Wilson for the question. I did see the reporting of the Productivity Commission's inquiry this week. The government is considering the inclusion of ISDS clauses in trade agreements on a case-by-case basis, and I think it is very important for us to remember that ISDS is not a new concept for Australia. In fact, we currently have ISDS clauses with 29 economies through five free trade agreements and 21 bilateral investment treaties. What investor-state dispute settlement does is provide protection for those who choose to pursue new opportunities for Australia by investing abroad. The government is of the view that there is little to fear from ISDS as long as government policy is non-discriminatory, developed consultatively and consistent with our national obligations. We have said that we are willing to consider the inclusion of ISDS provisions in the Trans-Pacific Partnership Agreement. In relation to Senator Whish-Wilson's specific question about seeking advice of the Productivity Commission, I am not aware of whether or not the minister has done so, and I will take that on notice.

2:18 pm

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

Mr President, I ask a supplementary question. I thank the senator for her answer. The Productivity Commission also concluded that investor-state dispute settlement clauses are a very high-risk strategy to achieve market access, given the potential size of compensation claims involved and the unfunded nature of those claims. Can the minister advise the Senate whether the government is assessing the financial risk to Australia of the inclusion of ISDS clauses in the Trans-Pacific Partnership Agreement?

2:19 pm

Photo of Marise PayneMarise Payne (NSW, Liberal Party, Minister for Human Services) Share this | | Hansard source

I thank the senator for his supplementary question. The government always takes into account the positives and potential negatives when making decisions such as this, and I think I said before that we are willing to consider the inclusion of ISDS provisions in the TPP if the balance of the package is in Australia's best interest and there are safeguards in ISDS for public welfare measures. It is important to note on the record that ISDS does not protect an investor from a mere loss of profits. An investor must establish that the government has breached an investment obligation. The ISDS does not prevent a government from changing its policies or from regulating in the public interest. It is not enough that an investor does not agree with the new policy or that a policy adversely affects its profits. What an investor must establish is that the government has breached an investment obligation.

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

Mr President, I ask a further supplementary question. I thank the senator for her second answer. The Chief Justice of the High Court, Robert French, has raised concern about the potential of ISDS and its impact on nation states. Justice French said that he was not aware of the judiciary having been consulted on Australia's use of ISDS clauses. Can the minister advise the Senate whether the government is seeking the judiciary's input on trading away our sovereignty by including ISDS clauses in the Trans-Pacific Partnership Agreement?

2:20 pm

Photo of Marise PayneMarise Payne (NSW, Liberal Party, Minister for Human Services) Share this | | Hansard source

I think I have advised the Senate before that there have been in the order of 1,000 consultations in the process towards the TPP. But, in relation to the implications for ISDS and domestic judicial matters, it is possible, I believe, that an ISDS tribunal could examine the same facts and circumstances as a domestic court. However, it does not mean that the ISDS tribunal is accepting or rejecting a domestic court's decision on a question of domestic law. What the tribunal is assessing is whether there has been a breach of an investment commitment made by the government. I do not have any further information—

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

I raise a point of order, Mr President. I simply asked the minister to advise the Senate whether the government is seeking the judiciary's input. Chief Justice French was specifically relating his comments towards Philip Morris suing our government for plain packaging of tobacco.

Photo of Stephen ParryStephen Parry (President) Share this | | Hansard source

Thank you, Senator Whish-Wilson. I will remind the minister of the question. Minister, you have 18 seconds in which to answer the question.

Photo of Marise PayneMarise Payne (NSW, Liberal Party, Minister for Human Services) Share this | | Hansard source

I believe that I was being directly relevant in relation to whether or not the decisions by domestic courts, which, of course, His Honour would have a significant interest in, were in any way influenced or impacted by the operation of an ISDS. But if it is appropriate, I will take the further question on notice. (Time expired)