Eminent Jurists Say 'No' to Investor Right to Sue in TPPA
Online Publication Date: 09 May 2012
Eminent Jurists Say 'No' to Investor Right to Sue in TPP
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 (http://tpplegal.wordpress.com/open-letter) to the negotiators
calling for the right of investors to sue governments directly to be excluded
from the TPP.
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
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.
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
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
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 in 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 Bhagwati from Columbia
University and former Vice-Minister of Environment Jose de Echave from Peru
have done so.
Bryan Gould +647 3154943 or +64274 967345 Professor Jane
Kelsey +6421 765 055
 A background paper is available at
 Australia, Brunei, Chile, Malaysia, New Zealand, Peru,
Singapore, United States, Vietnam, plus Canada, Japan and Mexico