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Tuesday, 10 August 2004
Page: 26031


Senator BROWN (4:47 PM) —This is extraordinary. We have an agreement between the Howard government and the Bush administration, made with all their firepower brought to bear on every phrase. We know that they worked for months on getting every phrase agreed to. We have an important clause in here, which worries the Greens and many others I am sure, which says that in rare circumstances a party—and that means a government, and that means a corporation working on a government—can claim that laws made in Australia that have public welfare objectives, such as the protection of health, safety and the environment, can constitute expropriations. Action clause: sue; result clause: taxpayers pay compensation to the aggrieved corporation—otherwise you would not have that clause there.

The minister, with the help of all the advisers who know the ins and outs of this agreement, cannot give us one example of where this escape hatch—it is really a back door, not to escape by but through which multinational corporations can get into the domain—can be levered open to make sure that the interests of these corporations override those of the Australian people and the Australian parliament of the day. I have here some very good notes from the Australian Conservation Foundation, which analyse this agreement. The foundation says:

The following are hypothetical examples that—while not giving rise to compensation under current Australian law—might require compensation to be paid to U.S. investors under the AUSFTA ...

I would like the government to consider five examples listed and respond as to whether there is a risk that compensation could be paid under the circumstances. The first is:

an amendment to a State planning scheme designed to protect sensitive coastal areas from development, which prohibits a U.S. property owner from developing a coastal property

I know of one such very large coastal property in Tasmania. Is that at risk of expropriation? Would that be a rare circumstance? Or is there some other avenue outside the clause we are talking about whereby recompense could flow to such an investor? The second example listed is:

an Australian law that bans the importation and use within Australia of certain harmful substances or goods, which affects a U.S. company engaged in the exporting of such substances or goods to Australia

We have talked about hazardous waste crossing borders being a matter of litigation under the North American Free Trade Agreement. The third example is:

new emissions standards on power generators that significantly interfere with the profits of U.S. companies which own Australian coal fire power generators

We know that there are such companies that do own such Australian assets. Will new emissions standards be potentially compensatable at the expense of Australian taxpayers? Another example is:

the declaration of new marine parks or other measures that deny U.S. oil companies the right to drill for oil in sensitive marine areas within their exploration lease ...

The companies are having a right expropriated, if you like, by the law. In Australia there would not be any trouble, because the Australian companies would have to put up with that, although, under the Constitution, if it were land, and this is not, they might have to be compensated. You very often find that the government will make some arrangement with them anyway. But what we are concerned about here is a foreign company with a right to drill for oil objecting to a marine park being declared in Australian waters. The final example given by the Australian Conservation Foundation is:

new anti-tree-clearing or water conservation laws which significantly interfere with the profits of U.S. agricultural companies operating in Australia.

Whether or not these are rare circumstances, I ask the minister: can she assure this committee that in none of those cases would there be the potential for an aggrieved US corporation to go to one of the secret arbitration entities, some of which have not yet been set up, to find whether there is some way in which, in all the loose, undefined, open for interpretation later clauses of the free trade agreement, compensation could be sought from the Australian government?