Key’s TPPA Falsehoods – “We’ve never, ever been sued” ***up-date ***
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Previously blogged on 13 October;
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4 October 2015 – TVNZ Q+A:- @ 13.04 “There has never been a case taken against New Zealand…” @ 16.24 “We’ve never, ever been sued…”
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On 4 October, our esteemed Dear Leader assured New Zealanders that, under the various free trade agreements we are party to, “there has never been a case taken against New Zealand…” and “we’ve never, ever been sued…”.[…]
Key’s insistence that New Zealand is safe from lawsuits from foreign corporations indicates he was privy to the text of the finalised Trans Pacific Partnership Agreement (which is still a closely guarded secret by Trade Minister Groser) and that we, as a nation, are now fully exposed to litigation from Investor-State Dispute Settlement (ISDS) processes.
It seems that Dear Leader spoke too soon.
Not even a fortnight passed since he uttered those fateful words – an apparent challenge to the gods – and New Zealand is now being sued;
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In response to the lawsuit, our esteemed and much-loved Dear Leader stated;
“Quite frankly, you can get appeals both ways, so when Shanghai Pengxin was granted the right to buy the Crafar farms, there was also an appeal because that went through, and it was tested back in court – now it’s going the other way.
But look, in the end, if the courts determine that the Overseas Investment Office got it wrong, the Government will go and reflect on that and honour the law, we always do that.”
The only difference between scenarios envisaged under the TPPA and the Lochinver Station-Shanghai Pengxin-OIO case is that the latter is being tested under the jurisdiction of a New Zealand Court of law instead of an extra-judicial, and often-secret, corporate tribunal overseas.
This is cold comfort.
We now have a situation in our own country where, if we determine not to sell to an overseas investor, that decision can be over-turned. Our laws now allow foreign interests to be on an equal footing with New Zealand citizens.
You no longer have to be a tax-paying citizen (born or naturalised) to hold certain rights.
You can be a foreign corporation (or wealthy individual) with deep pockets and a small militia of flinty-eyed lawyers.
Money is now all it takes.
Mark 15 October 2015 in your diary as the day when our sovereignty was forfeit in the pursuit of global finance. If we dare say ‘No’, they have ways of changing our minds.
This will be the first, of many to come, “legal” challenges to our sovereignty.
And the worst aspect to where we have arrived, 31 years after David Lange’s government was elected and Roger Douglas began his so-called free-market “reforms”?
As a nation, Kiwis have allowed it to happen. We did this to ourselves.
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References
TV1 Q+A: PM on TPP – ‘We’ve never ever been sued’
Fairfax media: Shanghai Pengxin going to High Court over Lochinver decision
Additional
MFAT: New Zealand-China Free Trade Agreement
New Zealand China Free Trade Agreement (text)
Government could have faced lawsuit
Previous related blogposts
Three Questions to Key, Williamson, Coleman, et al
Another of John Key’s lies – sorry – “Dynamic Situations”
Time to bend over again, fellow Kiwis (part # Rua)
Doing ‘the business’ with John Key – Here’s How (Part # Rua)
Some thoughts on the Plain Packaging Bill
Public opposition grows against TPPA – Wellington
Public opposition grows against TPPA – Wellington
Even Tim Groser was in the dark?!
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This blogpost was first published on The Daily Blog on 17 October 2015.
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Frankly Speaking... 
It is a grave analytical mistake to equate a statement regarding Investor-State Dispute Settlement (ISDS) proceedings with judicial review of administrative decisions. Judicial review cannot result in monetary damages. Rather, the High Court’s inquiry is confined to whether the government stayed within the legislative parameters crafted by Parliament (just like Kelsey’s recent challenge of Groser’s misapplication of the Official Information Act 1982).
Moreover, Shanghai Pengxin has already been involved in an attempt by a third party to quash its successful application to purchase sensitive land in New Zealand (see Tiroa E and Te Hape B Trusts v Chief Executive of Land Information [2012] NZHC 147). Judicial review through the domestic courts is very much business as usual. The mechanism is an important check on government decisions which can be wielded by New Zealanders to challenge ministerial decisions in favour of foreign acquisitions. Indeed, the latest draft investment chapter of the TPPA specifically preserves our current way of doings things under Annex II-H: “A decision under New Zealand’s Overseas Investment Act 2005 to grant consent, or to decline to grant consent, to an overseas investment transaction that requires prior consent under that Act shall not be subject to the dispute settlement provisions under Section B (Investor-State Dispute Settlement) or Chapter BBB (Dispute Settlement) of this Agreement.”
Academic distinctions aside, I have spent eight months researching the constitutional implications of the TPPA and I am wholly unconvinced by the “we’ve never been sued” assurance. While the agreement does indeed carve open pathways for a swarm of litigious U.S.-based investors, the real effect of the TPPA is likely to be a conspicuous absence of state intervention rather than an increase in ISDS proceedings. The strong protection of property creates the threat of legal challenges which, coupled with the inter-jurisdictional mobility of capital, disciplines legislative innovation and steadily institutionalises neoliberal values within the core organs of government. Such threats need not be explicit. Vague investment protections and broad arbitral discretion creates sufficient uncertainty to suppress policy experiments. For my general observations, follow the link:
Even if that were true, Oliver, it can still result in a change in government policy, which almost always has far-reaching fiscal, economic, social, or environmental costs. Otherwise there would be no point.
In what way was Shanghai Pengxin directly involved in proceedings? If memory serves, that case involved a local consortium of New Zealand businesspeople suing LINZ over the Crafar Farm deal. Shanghai Pengxin were not parties to the legal action. So your example doesn’t fit.
“Even if that were true”? Judicial review of administrative decisions is confined to process. If the executive has made an error in the application of the relevant statutory framework (in this case, the Overseas Investment Act 2005), the High Court simply directs the decision maker to repeat the process by the appropriate standards.
I do not see how the arguments surrounding regulatory chill, which you seem to imply, can be triggered by domestic judicial review. Unlike compensation under ISDS, the applicant does not stand to gain any windfall at the expense of the taxpayer. There is no nexus between the High Court’s preservation of Parliament’s legislative intention and a change in government policy. The point of judicial review is often to try and get a second shot. If the government remains within the boundaries drawn by Parliament when its rejects applications, foreign investors cannot do anything about it. Which is not to say that there aren’t other avenues through which transnational capital can exert direct and structural influence over New Zealand’s policy engines.
You mentioned that “Our laws now allow foreign interests to be on an equal footing with New Zealand citizens.” That’s nothing new. Indeed, this is the preferred alternative (the Calvo doctrine) to the parallel legality of ISDS in which foreign investors are furnished with beefed-up property rights unavailable to New Zealand citizens. It is through ISDS, not our domestic procedures, that foreign investors may stimulate undesirable policy changes and “far-reaching fiscal, economic, social, or environmental costs.”
The reason I am drawing attention to these distinctions is to ensure that the concerns surrounding ISDS can be clearly articulated. Conflating ISDS with domestic judicial review offers ammunition to proponents of the TPPA who seek to deflate its serious implications (in the same way that the pseudo-constitutional “due authority” conspiracy detracted from very real constitutional reforms promised by the impending treaty, such as the introduction of a backdoor takings doctrine that Parliament and the courts have historically rejected). Lucid critique requires a sharpened target.
In relation to your second point, the proceedings involved Milk New Zealand Holdings Limited. This link should show Shanghai Pengxin’s indirect (yet intimate) involvement:
http://www.spcs.org.nz/milk-new-zealand-holding-ltd-its-new-hong-kong-shareholder-and-lochinver-sale/
Trust Me Im an ‘ExSpurt’ – a Postman must read.
Question why is Neo Liberalism Like the the Eagle of Fascism.
Answer Becuase it has two faces and has two wings a leftwing and a right wing.
This an open letter to the Frank Macskasy the author of the Blog Frankly speaking (Key’s TPPA Falsehoods – “We’ve never, ever been sued” ***up-date ***)
“”Academic distinctions aside, I have spent eight months researching the constitutional implications of the TPPA and I am wholly unconvinced by the “we’ve never been sued” assurance. While the agreement does indeed carve open pathways for a swarm of litigious U.S.-based investors, the real effect of the TPPA is likely to be a CONSPICOUS ABSENCE OF STATE INTERVENTION rather than an increase in ISDS proceedings. .. the reason I am drawing attention to these distinctions is to ensure that the concerns surrounding ISDS can be clearly articulated. Conflating ISDS with domestic judicial review offers ammunition to proponents of the TPPA who seek to deflate its serious implications (in the same way that the pseudo-constitutional “due authority” conspiracy detracted from very real constitutional reforms promised by the impending treaty, such as the introduction of a backdoor takings doctrine that Parliament and the courts have historically rejected). Lucid critique requires a sharpened target”..
As the author of the Due Authority “conspiracy” I would like to raise a couple of issues with the above statement.
1. Number one until I raised the issue no one in anti TPPA camp fact was even considering the constitutional implications before I came along And I mean NO ONE.
Read more…. https://www.facebook.com/postmaninvestigates/photos/pcb.1025998890792034/1025995790792344/?type=3&theater
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