Thursday, June 27, 2013

TPPA - it is MALAYSIA that would get sued, and government cannot justify saying Malaysian companies also have the right to sue other countries.

In Parliament, when discussing the Trans-Pacific Partnership Agreement (TPPA), in particular the Investor protection clause/section/chapter which empowers investors, i.e. companies including also shareholders to sue nation States, like Malaysia.
 “investor-state dispute settlement” (ISDS) demands becomes exposed to international arbitration at a tribunal such as the International Centre for the Settlement of Investment Disputes (ICSID). This means that the investor sues the government of that country
The government's response, is that it also allows Malaysian companies (and investors) to similarly sue other countries.

Investors, companies and shareholders sue and they sue countries. If it is companies being sued, Malaysians need not be worried BUT here it is Malaysia that gets sued - so why should Malaysia, i.e. the people of Malaysia, bear the RISK and the cost of millions and maybe even billions of Ringgit. 


The International Centre for the Settlement of Investment Disputes (ICSID) is in USA - and how many Malaysian companies really be able to afford to commence an action in the US. There are only certain lawyers, most in the US, and they charge a lot. Cost of travel and board in the US for the claimant/defendant and witnesses - maybe not just one trip but several trips - and this is why cost is very high.

If the International Centre for the Settlement of Investment Disputes (ICSID) was in Malaysia,  and proceedings are in the country being sued, then it would be much cheaper - but it is NOT. I acted for a Malaysian company that commenced action against a multinational company, but the agreement provided for arbitration in Switzerland, but the medium sized Malaysian company just could not afford to go fight for its rights in Switzerland - the cost of travel, board and getting witnesses there. There is also the factor of time and 'convenience' when it comes to witnesses.

AUSTRALIA is an example of a country that has said NO to these Investor protection clause/section/chapter in the TPPA - they are smart, but Malaysia is not following suit.

Australian Parliamentary Commission’s stance is that no new Bilateral Investment Treaties (hereinafter referred to as ‘BIT’s) entered into by Australia will contain an alternative dispute resolution (ADR) clause normally calling for international arbitration.  
 “Australia’s refusal to consent to ISDS in the TPPA is a significant step towards limiting the encroachment of international trade agreements into our national health policy space and retaining our sovereign right to regulate significant areas of public health policy.” - Gleeson, Tienhaara and Faunce in their 2012 article in the Medical Journal of Australia.
In what possible situation would these foreign investors be able to take  Malaysia to the International Centre for the Settlement of Investment Disputes (ICSID)? 

* If Malaysia changes its employment policy like:-

a) Abolition of the 'Contractor for Labour System' requiring all companies/businesses to directly employ workers - making everyone that works in a factory the employees of the factory. If this results in additional expenses for the factory that affects the income - the company or it shareholders would be able take action.

b)  Abolition of short-term employment contracts for workers insisting that all workers must be employed as regular wmployees until retirement age.

c)   Creates a law requiring all companies to pay their workers Cost of Living Allowances (COLA) at a certain rate, 

d)   Sets the Minimum Wage, i.e. the basic salary entitlement of workers in Malaysia to RM1,500-00

Health Policy

a)   Sets a higher standard on employment impact assessment, or require mandatory environmental and/or health impact assessment of companies. 

b)    In a bid to control cigarette smoking, creates a new law limiting the sale of cigarettes to only a limited specified outlets. as is already happening in Europe.

c)     Require all cigarette packets to be made less attractive - say change the colour of the packet, take up more space in the packet for health risk warnings, or even ban the smoking of cigarretes in cities and towns (Remember Philip Morris took action against Uruguay for requiring 80 per cent of their cigarette packs covered with health warnings and also for only allowing one variant of cigarette per brand, and they took action against Australia  due to Australia’s law to introduce plain packaging of cigarettes in the year 2012 under similar investor protection clauses in Free Trade Agreements.) see earlier post - By signing FTAs with Investor Protection Clauses, Malaysia has failed Malaysians

...the List goes on and on.

For the investor, if Malaysia does anything that will cost them monies, affect their market and/or reduce their income/profits, they would more likely than not take Malaysia to  the International Centre for the Settlement of Investment Disputes (ICSID), and it would be rakyat's money that would be spend fighting this case, and paying the compensation ordered - which would be millions, even possibly billions of Malaysia Ringgit.

So what, if Malaysian companies can sue - for even when they win and get millions, it will not come back to us, the rakyat or the Malaysian government.


If any foreign investor or company wants to sue Malaysia, they can very well do so in Malaysia, and Malaysian law shall apply.

The concern with 'investor protection clauses' is that it takes the situation in the country when it comes in for business - There would be a stagnation in the improvement and the quality of life of Malaysians, for any improvement that would affect businesses would put Malaysia at risk of being 'sued' for milllions...maybe even billions. Our better future would be lost?

The biggest problem with the TPPA is that we, Malaysians, have not been able to view it - and I certainly do not trust the government who has less than 50% support of its people signing such an agreement that will affect me and my fellow Malaysians for a very long time.

Recall that when Malaysia went ahead and earlier signed the World Trade Organization Agreements and those other Free Trade Agreements, Malaysians lost so much...

We lost the right to determine that there be a certain percentage of Malaysians in the upper management of these companies/businesses - lost the 'technology and skill transfer to Malaysians'

We lost the right to require foreign companies to use a certain percentage of Malaysian-made products and components - which was there before.

We were bound by Copyright laws, and whilst our government only highlighted CDs and VCDs - it had a serious impact on medicines - no more were we able to generic medicines as in the past - we were now forced to buy medicines at a higher cost - hence now Malaysians have to go repeatedly every month to get their medicines - no more like before when we got all medicines needed until the next doctor's appointments

The Malaysian government claims that it has had consultation with various persons and organisations - but alas it is not with the rakyat. For a proper consultation, we need to have access to the FULL Agreement.

Why don't Malaysian government just publish the Draft TPPA - and let us get the comments of the people. Use the Prime Minister's FB or some internet. Also make available the comments of the various persons - MP Charles Santiago, Third World Network, MTUC,...etc. Let people have sight of all comments and views. In fact the proposal of MP Charles Santiago today that the government sets up a Parliamentary Select Committee on this is not a bad idea -this Select Committee would then be mandated to get the views of Malaysians...

Malaysia, do not sign yet another agreement that would cause HARDSHIP and SUFFERING to Malaysians now and the future.

Remember, there really is no need for any FTAs or TPPA, because foreign investors would still come open their businesses and factories in Malaysia...


'We won't sign TPPA if price of medicine increases'
PARLIAMENT The Malaysian government is dead set against any extension of intellectual property rights involving medicine in the Trans-Pacific Partnership Agreement (TPPA), which may see the prices of generic medication skyrocket.

parliament pc jeyakumar and mustapha 171208 04"On patents involving the price of medication... we are adamant, we don't want the current regime to change; we will defend existing policies," International Trade and Industry Minister Mustapa Mohamed (right) told the Dewan Rakyat during question time this morning.

"If we don't agree, we can choose not to sign. We will protect our national interests. If we don't agree with some of the terms, we will not proceed," the minister pledged.

Mustapa said this in reply to a supplementary question from Anuar Musa (BN-Keterah), after answering the original question from Charles Santiago (DAP-Klang) on concerns about the impact of the TPPA on Malaysia's sovereignty.

On fears that the TPPA framework would allow foreign companies to question the  policy decisions of a sovereign government like Malaysia’s,  Mustapha gave his assurance that Malaysia's involvement in the agreement would not limit the government from protecting its sovereignty.

'Malaysians firms too can sue foreign governments'

Pointing oput that similar provisions in other free trade agreements were already in force and with no adverse effects, Mustapa argued that such an arrangement worked both ways and Malaysian firms too could sue foreign governments.

The minister also gave his guarantee that the interests of Malaysian small and medium enterprises would also be protected and not squandered in negotiations for the TPPA.

He said the government had met with all stakeholders to get their views and input and he also gave his assurance all that further consultations continue as negotiations for the agreement developed.

medicine health pills and tablets and capsulesHowever, Mustapa said it was not necessary to table the entire agreement to Parliament first as he believed past consultations and those planned in the future with stakeholders would provide enough input for the government to gauge and protect the nation’s interests.

However, he admitted that it would be impossible, in a democratic country, to get 100 percent agreement on anything that is done, though he was sure that the government had "majority support" for what it aimed to achieve in the TPPA.

He is appreciative of all criticism and suggestions on the trade pact sent to him as these have helped to strengthen their arguments and widen their scope of discussion.

"What is important is that the benefit are more than the costs involved. All actions have bad and good consequences. That we cannot deny, but the important thing is that it is more good than bad," Mustapa argued. - Malaysiakini, 27/6/2013, 'We won't sign TPPA if price of medicine increases'

Do surf the net, and read more about what others are saying about the TPPA. 



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