Josh Wilson (Fremantle, Australian Labor Party) Share this | Link to this | Hansard source

I've spoken in this place on numerous occasions about the risks to Australia posed by investor-state dispute settlement mechanisms. ISDS clauses in trade and investment agreements allow companies to sue governments through a mechanism that I've described as dodgy, and it is dodgy in the well-established Australian meaning of the term because it's inconsistent, it lacks transparency and in many instances it displays a range of other judicial shortcomings—as many expert commentators has found. Indeed, the UN, the EU and a significant number of individual nations have acknowledged some of these problems and concerns. It's one of the reasons the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration came into being in 2014, and it's why in 2018 the Court of Justice of the European Union held that ISDS provisions in investment treaties between EU member states are incompatible with EU law.

The Australian community has good reason to be wary of ISDS mechanisms, because they're unnecessary and they're dangerous. They allow multinational companies to challenge the legitimate laws and policies of sovereign nations. They essentially allow companies to reject laws that might protect the environment, public health or the rights of workers, and sometimes to receive hundreds of millions of dollars in compensation. Here in Australia, we've had direct experience of a tobacco company, Philip Morris, using an ISDS clause to attack our plain-packaging reforms, which of course were a key part of reducing the awful health impacts and the massive health costs of smoking. It has been estimated that fighting that case cost the Australian taxpayer $40 million and was only won on a jurisdictional issue. Otherwise, plain packaging may well have been effectively blocked by a tobacco company that wanted to maintain its sales and profits from a product that causes death when used as the manufacturer intends.

Right now, Australia is subject to another ISDS claim, this time courtesy of one of Clive Palmer's companies, with a claim upon the Australian taxpayer of $300 billion. When I spoke about that issue back in March, I was a bit surprised when United Australia Party's Senator Ralph Babet got up in the other place to express concern that I would have the temerity to describe ISDS mechanisms as being dodgy. I have to say that's an odd hypersensitivity from a fellow who, in his first speech, said:

For strength of self-determination and the love of country, we must not allow unelected, undemocratic and unaccountable international groups of organisations to exert undue influence over the future of Australia. We must be the masters of our own destiny.

In my view, that's an excellent argument against ISDS mechanisms right there.

But after the defence of ISDS from Senator Babet, whose party was formerly known as Clive Palmer's United Australia Party, I was even more surprised when I received a letter from Mr Palmer himself. In that letter Mr Palmer suggested I withdraw my comments and apologise, and he highly recommended that I make no further comment in future. Now whatever you think about Clive Palmer, most people wouldn't think of him as a bloke who generally favours keeping quiet or thinks people should keep their thoughts to themselves, especially when they're in a role as a parliamentary representative, as Clive Palmer himself once was. In any case, I can assure you I'm not going to be silent just because it suits Clive Palmer. Mr Palmer is free to pursue his interests and I'm free to express my views—indeed, I have a duty as a member of this place, as we all do, to speak up in the national interest.

In the past I've done that when Mr Palmer sought to undermine WA's nation-leading, and I dare say world-leading, management of the COVID-19 pandemic, and in WA we remember that Mr Palmer did that with the shameful assistance of the Morrison government. And I'll continue to speak up in relation to the risks posed by the unnecessary and dangerous ISDS system. Let me be clear: I have not made the argument about the ISDS system, which I have done on many occasions, by reflecting on any particular tribunal, its members or process. My criticism is of the system as a whole.

There's no reason for large multinational companies to be able to sue governments through an outside tribunal system when they can either make use of a country's judicial system in the normal way or make use of government-to-government dispute resolution processes that all trade and investment treaties include. As long as Australia is party to agreements that contain ISDS clauses, and as long as we don't act to exclude their operation, we will be at risk of the kind of enormously harmful outcome that was involved in the Philip Morris action all those years ago and is at risk from the action being taken by Mr Palmer's Singapore-based company now.