Monday, March 16, 2015

TPPA and ISDS must be a concern for caring Malaysians - Right to know before it is signed?

TPPA and the Investor State Dispute Settlement(ISDS) is something that all Malaysians need to be worried about - read the Motion that I submitted below

When this TPPA Motion came up, it was already 6.30pm at the Malaysian Bar AGM which started at 10.30am(14/3/2015), and had proceeded without breaks. After the AGM, there was to be the Bar Council meeting which will elect the new President and office bearers, and I believe the Annual Dinner was also that night. In short, people were tired and this was a motion that required some explanation being about a subject matter which many may not really be familiar with.

I was asked to withdraw the Motion, and I did so after getting the assurance that objects, concerns and principles contained in this motion will be considered by the Bar Council and will be reflected in its actions/responses concerning the TPPA, ISDS and matters related. Wish we had more time to have a real debate and discussion, which was been followed by a vote - which I am confident would result in this motion being adopted. 

When the next AGM comes up in March 2016, it may be too late... and Malaysia may have already signed this agreement - and if there is the ISDS provision, it will have serious implication for all in Malaysia - Malaysia may no more increase minimum wages for fear of being 'sued' by some foreign investor for millions...

The said motion that I submitted on 4/3/2015 is as follows, and will hopefully now help us all get a better understanding of the TPPA and the ISDS

See also:-

Resolution for Provision of Legal Aid for Workers adopted in Malaysian Bar AGM

Motion On TPPA And 'Investor-State Dispute Settlement'(ISDS) Provisions


1)    It is disturbing that Malaysia may be signing Trans-Pacific Partnership Agreement (TPPA), whereby the contents of the said Agreement have been kept secret from Malaysians, and even Parliament. In a democracy, transparency is fundamental, and the current government should not be signing any such agreements like the TPPA, Bilateral Investment Treaties (BITs) or other trade agreements without first fully disclosing the contents to all Malaysians, for the purpose of getting public feedback, inputs and even objections. It is unconscionable for current governments to sign ‘secret’ agreements that will in effect bind future governments and the people of Malaysia for many years to come.

2)    It has been revealed that the TPPA does have a section or chapter, commonly known as 'investor-state dispute settlement'(ISDS) which empowers the foreign investor, which includes the shareholder, to sue or commence legal action against Malaysia, and disturbingly the dispute will not be before Malaysian courts, but some foreign court or tribunal.   

3)    The ISDS clauses will open up a government to legal action by the foreign investor if the government introduces or changes a law or policy that will result in businesses having to expend more monies, or has the effect of decreasing profits. 

4)    This will have the effect of deterring governments in putting in place laws that may be necessary for improving the welfare and wellbeing of persons in Malaysia. This would  include laws or policies that may require businesses to expend monies or adhere to certain requirements to improve, amongst others, environmental protection, improve occupational safety and health standards, better rights for workers, and even matters concerning public health and safety. Potential investors' suits and a potential award may cause governments to abandon necessary public measures for improving life in Malaysia.

5)    The above concerns are very real, as seen by actions that have already been undertaken in reliance of such ISDS provisions:- 

a)      Veolia group, a French multinational, is suing the Egyptian government because of a rise in the monthly minimum wage. The company is using the ISDS provisions in an investment treaty between France and Egypt.

b)      The Canadian government banned a gasoline additive on environmental and public health grounds. Ethyl Corporation took action against it, and after the ISDS tribunal decided that it had jurisdiction over the claim, Canada settled and agreed to remove the ban, declare publicly that the gasoline additive was not an environmental or a health risk, and pay $19 million in compensation to the US firm.

c)      The tobacco company Philip Morris did sue Uruguay for  requiring cigarette packs to display graphic health warnings, and also Australia for requiring plain packaging for its cigarettes. 

d)      Indonesian government was sued for $2 billion by a London-based mining company Churchill, which claims its right to mine in Busang (East Kalimantan) was violated when the local government revoked the concession rights held by a local company in which it had invested.

6)    The ISDS is also be discriminatory – as it is a remedy only available to foreign investors coming from certain nations, and not all. The local investor in Malaysian companies will not have this right. The ISDS provisions may also be abused by foreign investors investing just at the point before some new law or policy is being formulated or comes into effect.

7)    The Trans-Pacific Partnership Agreement (TPPA) will make medicine more expensive in signatory nations including Malaysia, according to a study by the University of New South Wales.

8)    TPPA will also impact on the exercise of freedom of expression and opinions especially internet freedom by requiring Internet service providers to police our online activities.

9)    Signing such agreements with such provisions is also a vote of no confidence on our judiciary and the administration of justice in Malaysia, and will be to the detriment of people in Malaysia generally.

10)  Cost Benefit Analysis(CBA) done by certain entities, without the full disclosure and participation of Malaysians, including people’s elected representatives in Parliament, is meaningless and results of such CBAs is questionable.
 We hereby resolve:

(1)               That Malaysia immediately suspend the signing of the  Trans-Pacific Partnership Agreement (TPPA), Bilateral Investment Treaties (BITs) or other trade agreements until the said contents are disclosed to all Malaysians for the purposes of getting feedback, discussions and approval. At the very least in a parliamentary democracy, approval must be sought and obtained in Parliament before the government signs any agreements that will bind and impact future governments and the people of Malaysia for many years to come.

(2)               That Malaysia do not sign any agreements which have 'investor-state dispute settlement'(ISDS) clauses and provisions, which amongst others, may open the door to the possibility of vesting foreign investors with rights to take our government to court in some foreign arbitration tribunals, when our government imposes new laws for improving the wellbeing and welfare for the people in Malaysia, for public health reasons, for safeguarding our environment, for improving occupational health and safety standards at the workplace, for according workers better rights including higher rates of minimum wages.

(3)               That Malaysia do not sacrifice its sovereignty, by signing agreements that will allow foreign investors and businesses to take legal action against Malaysia in any foreign court or tribunal. Any such actions, that can be taken against Malaysia must be in Malaysian courts.

(4)               That Malaysia do not sign inter-State agreements like the TPPA that, amongst others, will cause an increase of the cost of medicines and healthcare, impact on the freedom of expression and information, and privacy of Malaysians, that are discriminatory in nature, or will impact the cost of living.

(5)               That the Malaysian Bar do the needful to educate the Malaysian public of the possible dangers and risk of the TPPA and such agreements, and the need for transparency and accountability before any government binds Malaysia, its peoples and future governments to such agreements.

(6)               That the Malaysian Bar do the needful to actively put into effect the essence and principles as stated in this Resolution for the wellbeing and welfare of people in Malaysia.

Charles Hector Fernandez
4th March 2015

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