The objectives of the investment chapter are to facilitate access for cross border investment between the TPPA countries and to protect investors from TPPA countries both in terms of the process of investing and their investments once made. This factsheet looks at the investment chapter.
WHAT GOVERNMENT SAYS WE GET:
➜ The investment chapter provides an overall greater level of protection for New Zealanders investing in TPPA countries.
WHAT EXPERTS SAY WE GIVE UP:
➜ Foreign investors and their investments get greater protection overall than in New Zealand’s existing trade and investment treaties.
➜ The threshold above which a TPPA investor needs approval to buy NZ business assets doubled to $200 million.
➜ NZ can’t limit speculative money flows as a precaution against a financial crisis or require foreign investors to keep profits in the country.
➜ Foreign investors can’t be required to ‘buy local’ and support local businesses and jobs as a condition of being allowed to invest.
➜ New policies, regulations or even court decisions can be challenged if an investor says it unfairly damages its value or profits.
➜ The commitments in the investment chapter are directly enforceable by TPPA investors through investor state arbitration which has no system of precedent and no appeal.
➜ A dispute on a mining exploration licence or a PPP water contract may also go to the offshore investment tribunals, even without claiming a breach of the TPPA rules.
➜ There is no requirement that investors to seek remedies in New Zealand courts before initiating a claim under the TPPA.
CAN WE REALLY BE SUED?
(The short answer is: Yes)
While New Zealand has had no ISDS (the mechanism that allows corporations to sue countries) cases taken against it, under TPPA we could face exposure to US companies - the most litigious in the world.