Eminent Jurists Say 'No' to Investor Right to Sue in TPP
Wednesday 9 May 2012, 8:45AM
By Professor Jane Kelsey
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More than 100 jurists from New Zealand and other countries currently or potentially engaged in the Trans-Pacific Partnership negotiations, including some of their most eminent lawyers, have sent an open letter to the negotiators calling for the right of investors to sue governments directly to be excluded from the TPP (1).
To date, only the Australian government has taken that position, consistent with the approach it took in its free trade agreement with the United States in 2005. However, that would only exclude Australia from such powers.
The open letter is signed by senior retired judges, former officers of Parliament and international advisers and current legislators, along with legal academics, practitioners, from the countries that are currently or potentially involved in the TPP negotiations (2).
The principal signatories are eminent jurists who have held high public office. including retired judges, Sir Edmund Thomas from New Zealand and Justice Elizabeth Evatt from Australia, former Speaker of the Parliament Professor Margaret Wilson, Bruce Fein, the Associate Deputy Attorney General under the Reagan Administration, and leading investment law scholar Professor Sornarajah from Singapore.
The leader of the New Zealand First Winston Peters and Green Party co-leader Metiria Turei, as well as former Labour Party President and MP Andrew Little, have also signed.
‘This is a New Zealand-led initiative, as New Zealand is one of the few parties to the TPPA negotiations that is not already committed through a free trade agreement to an investor-state disputes process with the United States’, said Professor Jane Kelsey, from the University of Auckland, who helped organise the letter.
‘The implications of investor-state disputes are therefore far more significant for us than most of the other TPPA countries.’
“Within ten days over 100 jurists had endorsed these concerns. There has been especially rapid support from Canadian lawyers, based on their experience with the North American Free Trade Agreement (NAFTA)’, said Professor Kelsey.
The letter expresses concern that foreign investors are being granted greater rights than are provided to domestic firms and investors under the Constitutions, laws and court systems of host countries and increasingly use this mechanism to skirt domestic court systems.
Professor Wilson observes “that it is an essential element of any democracy that litigants have access to a competent non-corrupt court system to resolve disputes. It is fundamental to any understanding of the rule of law.”
“New Zealand has such a court system so why give away the right to access it? There is no need to submit to the Investor-State dispute settlement procedure, so why should we carelessly give away our autonomy in this instance. This is an instance in which we should follow Australia and take a stand for the right to make the decisions that affect us.”
Former Court of Appeal judge Sir Edmund Thomas reflects that "The investor-state dispute arbitration provisions may have initially been well-intentioned as a means of encouraging foreign investment, but in practice they have had an impact that could not have been foreseen.”
“In short, the provisions have been used to override the jurisdiction of domestic legal systems; have failed to meet accepted perceptions of the rule of law and the separation of powers; have undermined the basic principle of judicial independence; and have created a significant inequality or imbalance between foreign investors and domestic investors and producers. No sovereign, self-respecting state should accept the dispute arbitration provision in its present form."
Another signatory, Professor Bryan Gould, predicted “the TPPA seems likely to give foreign investors greater legal rights against our government than any New Zealand investor will enjoy.”
“Those rights could even allow a foreign investor to argue before a specially constituted international tribunal that a future New Zealand government, elected with a mandate to change the law, should pay massive compensation for doing so. The government might even be ordered to stop our courts from enforcing their own decisions.”
“In other words, it would mean a significant loss of the power of democratic self-government.”
The letter will be delivered to the lead negotiators of each country at the start of the round of TPP negotiations on Dallas today. It will remain open for other lawyers concerned about the incursions of these private foreign investment tribunals on domestic legal processes.
Non-lawyers will also be invited to sign the letter. Already, prominent trade economist Professor Jagdish Bhaghati from Columbia University and former Vice-Minister of Environment Jose de Echave from Peru have done so.