TPPA Facts

Investors' Rights

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.

The investment chapter highlights the intent to increase the power of global corporations by creating a supra-national court, or tribunal, where foreign firms can “sue” states and obtain taxpayer compensation for “expected future profits”.

For example, right now TransCanada are suing the Obama administration using a similar process through the trade agreement NAFTA. The lawsuit is for $15 billion to compensate for the US government's decision to halt the Keystone XL pipeline due to concerns about the impact it would have on climate change.

The process can be used for a dispute on an investment contract involving natural resources, various public services and infrastructure, and for a dispute over an authorisation to invest.

IF NEW ZEALAND IS FOUND TO BE IN BREACH OF THE TPPA THE TAXPAYER PAYS

Kiwi taxpayers would have to pay compensation to the investor for its lost investment and future profits, (compound) interest on that compensation, and costs. The award can be enforced offshore so the government can’t just refuse to pay.

Source: 'Expert Paper #2: Chapter 9 on Investment by Amokura Kawharu, University of Auckland'

big pharma

Did you know the US pharmaceutical market generates more income per year than the entire annual GDP of New Zealand?

Can we really afford to be sued by Big Pharma?