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Foreign Affairs, Defence and Trade References Committee - 05/05/2015 - Commonwealth's treaty-making process

SAHUKAR, Mr Nariman Aspi, Senior Policy and Law Reform Solicitor, EDO NSW, Australian Network of Environmental Defenders Offices

WALMSLEY, Ms Rachel Louise, Policy and Law Reform Director, EDO NSW, Australian Network of Environmental Defenders Offices

[11: 52 ]

Evidence was taken via teleconference—

CHAIR: Welcome. Would you like to make a brief opening statement before we go to questions?

Mr Sahukar : Thank you for inviting us to make a submission and to appear by teleconference at the hearing. Since writing the submission, just so you are aware, we are now known as EDOs of Australia. We are a network of community legal centres located across Australia. Each EDO specialises in public interest environmental law. So for the past 30 years we have advised Australian communities on how to protect the environment using the law. This includes community advice lines, written advice on public interest matters, casework, legal education and law reform. Our law reform work mainly relates to two areas: improving environmental protection and improving community participation in decision making that affects the environment. We are not trade law specialists or international law exports. However, we do seek to identify relationships between environmental laws and other public policy entities. The terms of reference to this inquiry are an example of this.

In summary, NEDO believes there is a strong case for strengthening environmental assessment and review of treaties and other international agreements. We support a framework to ensure that treaty making processes properly consider the public interest in environmental protection and its increasing linkage with economic and social factors, reflect Australia's commitments to ecologically sustainable developments or ESD principles and require best practice transparency and community participation. To achieve these aims, our submission outlines ways to improve environmental review in Australia's treaty making processes. In particular, it proposes four complementary measures. Firstly, treaties and related action should be accompanied by environmental impact statements. An environmental impact assessment, for your background, is a well-established tool for estimating, avoiding and minimising the harmful environmental consequences of a policy program or activity. The results of an EIA are set out in an environmental impact statement or EIS. A formal EIS procedure would better informed decision makers, parliament and the public. It would also provide a point of reference for post-implementation reviews. To be effective, as we noted in our submission, the EIS procedure would need to occur early enough in the process to influence negotiations, be iterative to evaluate media and longer term implications, consider compatibility with Australia's domestic and international environmental obligations, include consultation between departments, governments and the public on impact and alternatives and should have a process to exclude treaty actions where they will clearly have no environmental effects. This could include a preliminary view that it made public early in the process.

Our submission points to two existing frameworks that could be adapted to assess Australia's treaty making. These are not off-the-shelf models, but they demonstrate that the expertise, capacity and feasibility are there. For example, Australia's national environmental law, the EPBC Act, triggers federal environmental assessment and approval in certain limited circumstances; however, the EPBC Act does not have a specific role in scrutinising treaty making. We understand that in the US executive audits require environmental reviews of international agreements, such as trade agreements. These reviews include expert advisory groups, reports to Congress and public consultation. We cannot comment on the rigour of individual US assessments or reports, but the processes outlined in the US framework provide one example that could be adapted to Australia's circumstances, and there are others. In Australia, we understand that the national impact analysis, or NIA, aims to consider the foreseeable social, economic and environmental consequences of treaty actions; however, references to environmental impacts in NIAs appear very general and, in some cases, barely cursory. We are not aware of specific assessment processes that underpin and inform those NIAs.

I now turn more briefly to our other three recommendations. As a logical progression of the EIS procedure, Australia's treaty-making processes could adopt a statement of environmental compatibility. This is analogous to existing compatibility statements on human rights. Statements on environmental compatibility would refer to how the treaty will be compatible with key environmental treaty obligations and principles of ecologically sustainable development. Accordingly, our second recommendation is that a statement of environmental compatibility should accompany treaty-making proposals laid before parliament.

Thirdly, we say that a national environment commissioner should provide advice on relevant treaties, and it is worth noting some context around this proposal. To be clear, this is not a proposal that relates solely to international treaty making. In 2009, the 10-year independent review of the EPBC Act recommended a national environment commission be established. The commission was to play a strategic, arms-length role that encompassed advice, review and oversight of decisions affecting Australia's environment. In 2013, the Senate environment and communications committee reiterated the call for this independent commission. Given the potential for independent treaties and agreements to have flow-on effects on the environment, we believe a national environment commission would be well-placed to advise the parliament on potential impacts of treaty making. For example, the commission could report directly to parliament on treaty-making processes that affect the environment, oversee national and international compliance and environmental performance, and conduct environmental performance audits and review outcomes.

Finally, ANEDO agrees with the general principle of open government—that is, a proactive culture of engagement, additional scrutiny and better public access to information will enhance the processes of government and improve the outcome sought. Australia's treaty-making processes, including the tabling period of 15 sitting days, could be made clearer and more certain if they were set out in legislation, as has recently occurred in the UK. Accordingly, our fourth and final recommendation is to improve the openness, accountability and consultation opportunities in treaty-making reservation and reviews. This could occur by fostering a proactive government culture of engagement earlier in the process, including on detailed treaty text; setting out scrutiny procedures in legislation; reviewing the adequacy of parliamentary review time frames; and setting clear time frames for government responses and engaging transparently with public concerns about trade treaties, such as investor state dispute settlement courses. Thank you.

Senator WHISH-WILSON: I am interested in your views on this: yesterday we heard from some witnesses that the WTO had ground to a halt and that is why we have seen a proliferation of bilateral trade deals and multilateral trade deals like the TPP. Do you think the inclusion of tougher environmental standards, as an example, is a fair thing for trade deals?

Mr Sahukar : Certainly the nexus between trade and the environment is a really critical issue, and the more agreements that we have and that are signed—whether at a multilateral level or are plurilateral regional agreements or bilateral agreements—the cumulative effect of those agreements prioritising and enforcing trade-related outcomes means that it is really important that those trade agreements also consider what are the potential environmental impacts of those agreements. When it comes to potential conflicts between environmental outcomes—including previous environmental obligations that Australia or other countries might have signed up to—and any new trade deals, there needs to be a clear process for working out those relationships and to try and make them pull in the same direction rather than the trade-related clauses being binding, enforceable and effective and the environmental treaties or environmental obligations and impacts either being ignored or being left behind and not really prioritised in the context of those trade agreements.

Senator WHISH-WILSON: Or perhaps it could be used as 'greenwash' as a way to sell the deal. Yesterday the Financial Review editorial talked about the need for an emissions trading scheme. It talked about the need to get our regional partners, and of course other countries around the world, involved in such a scheme for it to be effective in emissions reductions. Do you see something like the TPP, with 12 countries, as a good forum for negotiations on a binding agreement with our neighbours? Can trade be an opportunity, or is this a potentially missed opportunity?

Mr Sahukar : I do not know that we would have a particular view on the use of the TPP as that sort of forum, because we are not trade specialists and we are not across the details of the TPP and how that would bring in things like an ETS. I do think that there needs to be strong regional cooperation on environmental issues, and that Australia can play a capacity-building role in relation to domestic environmental regulation to assist our neighbours, drawing on our own expertise. And also to take some sort of leadership role in pressing an agenda of environmental protection. Ultimately it is not just about protecting the environment; it is about protecting our society, our way of life and about protecting our economy into the future. But I cannot express an opinion on whether the TPP is an appropriate forum for that.

Senator WHISH-WILSON: I have heard that there were discussions—and we have had a leaked text that talks about things such as deforestation and sustainable fisheries in the region. When you mention environmental standard, is there any particular area that you think these deals should be focused on?

Mr Sahukar : It depends on what the agreement is setting out to cover. One role of having an environmental impact assessment process is that you can cover off or look at what are the various aims and means of achieving those aims in the trade agreement, and what are the linkages that create potential impacts on the environment as a result of those changes. Obviously, there is a lot of effort invested into what are the trade advantages or disadvantages of entering into a trade agreement. But there is not as much focus and obviously not as much resources put into what are the potentially unforeseen consequences, what are the foreseeable consequences that we already know about and what is the procedure for working out how we can avoid and mitigate those changes. I understand that illegal logging, or at least unsustainable logging, can be an issue, and you have mentioned fisheries there as well. There is a range of potential negative impacts that could occur from any specific agreement, and we are saying that there needs to be a framework to assess what those impacts are, bearing in mind that there could be positive impacts in the sense of making green technology cheaper, or something along those lines. But you need to weigh up the benefits, risks and the costs from an environmental perspective, and you need to do that in reproducible form so that it can be customised to whatever particular agreement you are looking at, whatever its clauses say—whether it is the TPP or another type of agreement.

Ms Walmsley : In relation to whether the TPP is an appropriate agreement or forum for an ETS, we would have to say that while the environmental chapter is included but is not actually enforceable, while environmental standards are not enforceable then it is perhaps not the best mechanism to actually guarantee environmental outcomes. It might be trumped by other trade clauses.

Senator WHISH-WILSON: We heard from an expert witness yesterday that that was the expectation at the beginning of the TPP, which has been five or six years now, whereas we have seen leaked chapters that have shown that these things clearly are not enforceable. Our government has stated on record that they do not believe trade deals are appropriate forums for getting environmental outcomes. Can you clarify why you believe there should be environmental impact statements. Is it because these business activities have great externalities and environmental impacts? Why do the two go together?

Ms Walmsley : It can be argued that trade agreements are not necessarily the best vehicle for environmental outcomes, because they are for a different purpose. Our concern is that they have a potential for very significant environmental impacts. That is something that is a matter of public interest and it should be fully examined and scrutinised before the agreement-making processes are finalised. In our submission and the submissions of other witnesses a lot of the issues are around the fact that there may be some form of consultation, but that is either not on the full text, or is dependent on reading released versions, or the consultation meeting may actually be a tokenistic one that happens after certain clauses are already settled or negotiated. Our recommendations are about improving the transparency and accountability of these kinds of processes, because the environmental impacts are a matter of national interest, even though trade agreements are not necessarily explicitly about the environment.

Senator WHISH-WILSON: We have heard a weight of evidence that they are no longer about what people associate with being traditional trade. A new generation trade deal like the TPP is about deregulation and changing laws and regulations across countries on issues such as IP, local procurement and a whole range of things. Do you think that with these new deals it is substantially more important to incorporate them into trade deals? It is then incorporating environmental impacts into trade deals.

Mr Sahukar : Certainly to look at the flow-on consequences of the various provisions and the various issues that are canvassed in these broader agreements. As you said, they are expanding beyond traditional WTO measures to so-called WTO+ measures. There can be a range of externalities and a range of impacts that flow on from those. There is specific scrutiny and we do not feel like that is being elucidated or that those impacts are being considered in the detail that they should be. In terms of incorporating environmental standards into those agreements, I have not seen the text of the TPP chapter, for example. I guess we are starting from a position of significant information asymmetry here, where we cannot reliably see what the provisions are at any given time, because there is that lack of transparency. As lawyers we like to see the detail. We like to see what the wording suggests. If we look back at, say, the KAFTA, the Korea-Australia Free-Trade Agreement, the provisions in the environmental chapter are very general. They talk about endeavouring to do various things, but they do not really say how that environmental cooperation or those environmental standards will be carried forward. Also, they do not have any time frames or anything around how those things will be achieved. If ultimately a party does not comply with the environmental chapter there is nothing in the agreement to enable the enforcement of that chapter, unlike with other provisions in the agreement. For example, if you came up with a potential conflict under that agreement or under another agreement in similar circumstances—the conflict between the trade related aspects of the agreement and environmental standards—there would certainly be more incentive to comply with the trades standards, because they are binding and potentially enforceable and another party could take you to a dispute resolution settlement on that issue. Whereas, if there is no way to do that for the environmental chapter then it begs the question, what is the role and effectiveness of having that chapter there? I think it is good that it is there, but it does need to be on an even keel with the trade related aspects.

Senator WHISH-WILSON: We have also heard evidence that individual chapters are important but it is also how the chapters, particularly the investment chapter, relate to each other that is critical. Of course, the investment chapter is likely to include investor state dispute settlement clauses. Is the EDO aware of whether there have been any carve-outs for the environment? Minister Robb has talked about carve-outs for health, under ISDS, but are you aware of whether there have been any carve-outs for environmental safeguards and litigation from large corporations on environmental matters?

Mr Sahukar : We can only speak from what we have read in the media. We have not engaged the level of detail where we have been privy to the details of whether the environment would be excluded or not. We are relying on potential leaks and so on of chapters in order to comment on these issues, and that is not a level we have engaged in. Whether the environmental protections from something like ISDS—let us say that there have been statements that environmental policy would be excluded from ISDS. The wording on the chapter has not been settled and we do not know what that is conditional on and we do not know what the definitions are around what environmental protections are excluded. For example, what is an exempt environmental law, if there was an exemption for those under the ISDS clauses? Does it include planning laws at a state level? Does it include mining laws that may include environmental protections in them but are set up to facilitate the extraction of our resources? Or is the reference to environmental laws much narrower than that? Is it just talking about our biodiversity conservation laws, for example?

It is unclear whether those exclusions would apply just to Australian environmental law. If Australia is putting up its hand and saying, 'We do not want ISDS at all. We do not want ISDS in relation to health and environmental policy,' what does that mean for a developing country that is trying to strengthen its environmental laws? Could Australian or US corporations sue a developing country for doing that? To us, it is not an equitable situation that we should be demanding of our developing country neighbours, and it could also unpick other important work that the Department of Foreign Affairs and Trade, and many others, including ourselves, are doing in this area to enhance environmental laws in our Pacific neighbours and to build their capacity to protect their own environments.

CHAIR: There being no further questions, we thank you, very much, for your submission and for your appearance by teleconference today.