Anne Ruston (SA, Liberal Party) Share this | Hansard source

I, too, rise to speak on the Trade and Foreign Investment (Protecting the Public Interest) Bill 2014 brought into this place by the Australian Greens. I understand the purpose of this bill is to prevent the Commonwealth from entering into an agreement with one or more foreign countries that includes investor-state dispute settlement provisions.

It is really quite interesting and refreshing, having listened to the contributions of a couple of those who have gone before me, to hear the Australian Greens finally acknowledge the concept of Australian sovereignty. I must say that many of the policies and legislative instruments that they have sought to introduce into this place were, in my opinion, completely contrary to protecting Australia's sovereignty. So I will just put on the record that it is very pleasing that, despite the probable ramifications of what they are trying to do here and their single-mindedness without due consideration for the other side of this particular argument and the debate, at last they realise that Australian sovereignty is important. It is also interesting that we have a situation where we have the Australian Greens arguing for less regulation and protection for Australian businesses, not more. That has certainly surprised me in listening to the debate so far.

In looking at the investor-state dispute settlement mechanism, my understanding of it in layman's terms is that this particular provision in international agreements gives the right to both parties to an agreement to have built into that agreement a mechanism by which disputes can be resolved. You would have to wonder why on earth we would be seeking not to put this protection in place for Australian investors? We have to remember very clearly that this is a two-way street. It is not as though we are suggesting with this mechanism that only international investors will be able to seek remedy for something that has occurred within Australia. We are also putting a provision into this particular mechanism to enable Australian investors in overseas markets to be able to seek remedy for wrongdoing in a particular marketplace.

The second very important component is that this is not about frivolous activity. This is not about frivolous litigation. There is no way in the world that any jurisdiction can bring a frivolous claim against either of the parties to an agreement. To suggest that we are going to have all these frivolous claims and that multinational companies are going to steal Australian sovereignty is an extreme view of what has been put in place as a protective mechanism for Australian investors. To suggest that Australian sovereignty will end up going out the window is somewhat of an overreach by those who are supporting this bill. Australia has had ISDS measures in place over a number of years. In fact, I believe there have been ISDS provisions in a number of the agreements that have been negotiated on behalf of Australian producers wanting to export overseas, and over that period of time, to my understanding, there has only been one case brought against Australia. That was brought by Philip Morris Asia in relation to plain packaging legislation under the 1993 agreement between the government of Australia and the government of Hong Kong for the promotion and protection of investments. As far as I am aware, that is the first investor-state dispute that has been brought against Australia.

When Australia went to plain packaging, Philip Morris was arguing that Australia's measures constituted an expropriation of Australia's investments in breach of article (6) of the Hong Kong agreement and that escalated the matter and triggered the dispute mechanism. Obviously, Australia has rejected the claims that have been made by Philip Morris Australia in relation to this matter and so far the constitutional challenges that have been taken against plain packaging have been refused. I would think that after the experience of 30 years and a multitude of trading arrangements, which Australia has entered into with people around the world, to have had only one challenge would suggest a fine track record for these arrangements and suggests there is no problem with these dispute mechanisms challenging Australia's sovereignty. Had there been several cases in which Australia had been found to be liable and had to pay remedy over 30 years, then you would have to look at this matter more seriously. But the fact that we have had these arrangements in place for 30 years and we have had one case brought against us, has not been found against us, does beg the question: why is it that we have this particular bill in the house at the moment?

It is also worthwhile mentioning in this space that, when negotiating FTAs or multi or bilateral agreements, it is very important to look at the circumstances that surround each and every one of these agreements. Australia does not have a blanket policy to include ISDS provisions in all of our agreements. In fact, we are very careful to make sure that the agreements that we enter into put specific provisions that are to the benefit of Australia in each and every one of them. Each time we make an agreement with a foreign nation, conditions are often very different and to come up with a blanket suggestion that we should allow Australia to enter into an agreement that leaves our investors exposed I think would be irresponsible. There are obviously situations where these particular provisions are considered not necessarily in Australia's best interests and so they are not included in the legislation. It really does worry me that we are debating this sort of legislation—it is scaremongering and all we are doing is scaring the horses—for what benefit?

An ISDS is not a new concept. So far 28 economies through four free trade agreements and 21 bilateral investment treaties over the past 25 years have had this provision, but modern ISDS provisions have very specific carveouts and safeguards to protect our ability to govern and regulate in our national interest. Those are the two words that we should underline when discussing anything about free trade or anything about international agreements—'national interest'. We need to ask: what is in our national interest? We operate in a world of risk—there is absolutely no doubt about that—and if we want to trade with international partners and promote our manufacturers, primary producers and service providers, who wish to operate in an international marketplace, then we have to realise there is a level of risk associated with that. It is very important that in going into these marketplaces that we have in place a number of provisions to protect our primary producers, service providers, manufacturers and anybody else who wishes to export.

One thing that we must never lose sight of is that Australia is an exporting nation. Australia cannot exist on its own markets; we have to export. That is the nature of Australia. We cannot support the population level we would need to sell to ourselves; we are never going to get rich selling to ourselves. First and foremost, any of our trade agreements and arrangements with oversea countries must be in the national interest and we have to ensure that our exporting organisations are given the maximum opportunity to succeed overseas.

I am quite happy to concede that there is always an element of risk when you go offshore due to the intricacies of foreign jurisdictions, but to end up in a situation where we seek to take away a very important protection for Australian investors overseas without considering the exposure—