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Tuesday, 10 August 2004
Page: 26052

Senator RIDGEWAY (6:47 PM) —I think the Greens' amendment is really about seeking to ensure that there is never ever an investor-state dispute resolution mechanism under the agreement. The Australian Democrats will be supporting the amendment, but I think that the minister probably needs to have a look at article 11.16.1, which provides a foot in the door for such a process to be triggered. The government needs to give some assurance, quite frankly, that we will not end up with the situation that currently exists under NAFTA where investors or corporations can sue foreign governments, as has been the case in Mexico and Canada, and there may be a change in circumstances affecting the settlement of disputes. An investor at the current time, as I understand the article, can request consultations with the other government to make a complaint and the other government is then obliged to promptly enter into consultations with a view towards allowing such a claim and establishing such procedures.

The interesting thing here is that even the explanation that has been offered by DFAT in its guide to the Australia-US free trade agreement provides little guidance as to the nature of the change in circumstances and what is required to trigger the operation of the clause. There is certainly ambiguity when you consider questions about the degree of change that is required: whether such a change must affect governance structures or simply one investor or whether it is necessary to show that such change has resulted in harm to an investor.

This seems to me to be a very important amendment. If I am correct in reading this part of the free trade agreement—with very little guidance from DFAT's guide to the free trade agreement itself—there is all the possibility that this provides an opportunity for the United States to put their foot in the door. There is all the opportunity for the investors to request consultations and, as a result, seek to change what the government thinks is currently there. It is not iron clad, and I think the government does need to consider this issue quite seriously. (Time expired)

Progress reported.