Rachel Siewert (WA, Australian Greens) Share this | Hansard source

I rise to contribute to the debate on the Trade and Foreign Investment (Protecting the Public Interest) Bill 2014, avery sensible bill that Senator Whish-Wilson has introduced as a private senator's bill. The purpose of the bill is to prevent the Commonwealth entering into an agreement with one or more foreign countries if the agreement includes investor-state dispute settlement provisions.

The concern that I have just heard expressed by the Labor Party I think in part seeks to muddy the waters by saying the bill restricts the ability of governments to enter into treaties. Senator Whish-Wilson has had legal advice to suggest that it does not, but he has also indicated on occasion that if there are issues with some of the wording of it, to make it clear we could consider amendments. It is interesting too that, despite speaking strongly about the issues around investor-state dispute settlement provisions, Senator McEwen for the Labor Party did seem to think it was important that the Labor Party has just supported and voted with the government on the KAFTA, which sets a bad precedent for negotiations on the TPP. If they so strongly believed that these issues were of concern, they should have voted against it and forced a renegotiation. As I said, it does indicate a bad precedent for the TPP, which does include US corporations, who are very litigious.

We should be sending a message now that these forms of provisions are not acceptable. They may have been useful in the past, but the world has significantly changed, and our legislation needs to move on so that we ensure that investor-state dispute settlement provisions do not give foreign corporations excessive powers in this country. Free trade agreements are no longer simply concerned with the exchange of goods and services. The inclusion of foreign investment ensures a much more complex system, which does not necessarily make for a better one.

The Greens are very concerned about the government's proposals to include investor-state dispute settlement provisions in future free trade agreements, which could allow foreign companies to sue the government if they consider their business interests to be impinged on by policy or legislation decisions of the government. This is big business insinuating itself into the decision making of a state. It is crony capitalism at its extreme. The Australian Greens Trade and Foreign Investment (Protecting the Public Interest) Bill 2014 seeks to ban the inclusion of investor-state dispute settlement provisions in future trade agreements in order to protect the public interest. Sovereign risk is part of the consideration for companies who want to invest in foreign countries. Risk is part of doing business. Investor-state dispute settlement provisions allow foreign corporations to sue governments if they feel regulations and policies impact on profits. They give corporations a lot of power and there is no proof that increased investment flows. There is no right of appeal in the arbitration process and there is very little transparency with what goes on. Labor refused to sign up to ISDS when they were in government, but they still voted through the Korean-Australian deal, which had ISDS in it. We think they did not want to be seen to be blocking trade deals when this has significant implications for decision making in this country.

The government will not acknowledge or do not understand the risks, because what they want is to get the trade deals done. However, I must note that Mr Howard refused to allow ISDS clauses in the Australia-US FTA. If we get ISDS in the Trans-Pacific Partnership Agreement, US companies will have the right to sue the Australian government. US corporations are the biggest users of ISDSs, and we expect cases against the government would increase if we were to sign the TPP. ISDS applies to state and local governments as well and has significant implications across Australia.

We oppose ISDS provisions for a number of important reasons. Litigation using ISDS has proliferated in recent times and this is likely to increase in the future. You can expect that it will. If you put it in the agreement, you can expect that corporations, particularly US corporations, will use it. ISDS clauses have outlived their usefulness and are now under review in a number of countries and in a number of trade negotiations, including 10 countries in Latin America, in South Africa, in India, in Indonesia and in the European Union. After decades of public debate, it is time to rethink their inclusion in modern trade agreements, because circumstances have significantly changed from the times that Senator McEwen was talking about. It is no longer used for those purposes. The purposes these provisions are used for are to allow multinational corporations to take control, essentially, of key policy decisions or to oppose policy decisions that countries make. It is unacceptable.

There is no evidence that ISDS clauses have any economic benefits for trade or investment. However, the risks of using them are clear and supported by evidence and numerous case studies, a couple of which I will go into shortly. Trade deals are changing from historic market-access trade-driven considerations to facilitating and protecting foreign investment through limits placed on the ability of the government to develop domestic laws and policies in a wide range of areas, including public health, patents on medicine, the environment, food labelling, internet use and privacy, and local media content. This makes the inclusion of ISDS provisions more dangerous.

Although current ISDS litigation by the Philip Morris tobacco company against Australia's plain-packaging legislation is globally significant, we have only escaped the danger of more cases because previous Labor and Liberal governments have only included ISDS in trade agreements with developing countries, which do not have investments in Australia, and have not included them in the Australia-US Free Trade Agreement. US corporations are the most frequent users of ISDS. The current Trans-Pacific Partnership Agreement, the TPP, has proposals for ISDS in the ongoing negotiations, which would therefore expose Australia to a much higher risk of litigation. There was strong evidence presented to the inquiry that ISDS safeguard clauses can and have been reinterpreted and overturned through the arbitration process. Australia has no oversight of control over the inclusion of ISDS in trade negotiations, or other aspects for that matter, of the secretive trade talks. Legislation is the simplest way to remove the risk of their use into the future.

The Australian Greens trade and foreign investment bill seeks to ban the inclusion of ISDS in future trade agreements in order to protect the public interest. Why should we be beholden to foreign investors' vested interests to the detriment of our own citizens? It is a very, very real risk. I am particularly concerned about the impact of ISDS provisions on Australian agriculture and the health and wellbeing of Australians. I urge farmers to take a stronger interest in the inclusion of these provisions, because I think it will lead to adverse impacts on farmers in this country. I urge them and their representative organisations to pay attention to these provisions.

The inclusion of ISDS provisions is a potentially detrimental policy for Australian agriculture. There are already examples of Monsanto suing foreign governments for decisions they see as not being in Monsanto's best interests. We can look at the example of Monsanto and Guatemala. In a landmark decision on 4 September, following intense pressure by Indigenous people, trade unions, farmers' organisations and others, the Guatemalan judiciary ruled to suspend the controversial plant variety protection law, commonly referred to as Monsanto law, because of the multinational biotech company's involvement in it. If passed, the Monsanto law would have given exclusivity on patented seeds to transnational companies, but opponents claim that the new law violated the Guatemalan constitution and the people's rights to traditional cultivation of their land in their ancestral territories.

The law offers producers of transgenic seeds—often corporate companies like Monsanto—strict property rights in the event of possession or exchange of original or harvested seeds of protected varieties without the breeder's authorisation. A breeder's rights extend to varieties, essentially derived from the protected variety. Thus a hybrid of a protected or unprotected seed belongs to the protected seeds producers. What are the implications of this? For one, if a Guatemalan farmer who had been tending his or her land for generations violates the law, wittingly or unwittingly, he or she could face a prison term of one to four years and fines of US$130 to $US1,300, which is very hefty for farmers in that country, who are frequently living on the brink of poverty.

The new legislation would open up the market for genetically modified seeds, which would threaten or displace natural seeds and end their diversity. This is an extremely dangerous proposition, because it threatens food security by introducing a vicious cycle to Guatemalan farmers. With the introduction of modified seeds, it would be hard, if not impossible, to revert back to using Indigenous seeds, making Guatemalan farmers dependent upon foreign seeds—expensive foreign seeds. By law, once genetically modified seeds are invariably mixed with natural seeds, the end result would be legally owned by the property rights holder—that is, guess who? Monsanto.

A publication of the Rural Studies Collective warned about the consequences of this Monsanto law, describing how the law 'promotes privatisation and monopolies over seeds, endangering food sovereignty, especially that of indigenous peoples'; and that 'Guatemala’s biodiversity will fall under the control of domestic and foreign companies.' That is right—handing over that biodiversity to companies to own. Opponents claim that, if passed, Monsanto's law could make criminals of already repressed small farmers who are just trying to cultivate crops for their own consumption, which they have been doing for generations. The law would have prevented Guatemalans from growing and harvesting anything that originates from natural seeds, and farmers could be breaking the law if these seeds had been mixed with patented seeds from other crops as a result of pollination or winds, unless they had a licence for the patented seed from a transnational corporation like Monsanto.

In a statement issued in July, the National Alliance for Biodiversity explained:

According to this law, the rights of plant breeders are superior to the rights of peoples to freely use seeds. It’s a direct attack on the traditional knowledge, biodiversity, life, culture, rural economy and worldview of Peoples, and food sovereignty.