A new report on how the legal industry is exploiting investment state disputes clauses in trade agreements shows why New Zealand must refuse to sign any trade agreement that includes these provisions, Green Party Co-Leader Metiria Turei said today.
Mrs Turei today launched Profiting From Injustice*, a report showing how law firms, arbitrators, and financiers are fuelling an investment arbitration boom.
The Trans-Pacific partnership agreement (TPP) being negotiated in Auckland next week would open up New Zealand Governments now and in the future to litigation from major offshore corporations through the use of investment state dispute mechanisms.
"A leaked draft of the Trans-Pacific Partnership Agreement shows that New Zealand is happy with investment state disputes clauses," said Mrs Turei.
"These clauses mean that corporate lawyers and arbitrators can make decisions affecting New Zealand's ability to make laws protecting public health and the environment.
"Investment state disputes clauses are inherently anti-democratic.
"Profiting From Injustice's report shows that big international law firms are exploiting these investment state disputes clauses on behalf of corporations.
"Governments around the world are paying out huge sums after losing decisions decided by unelected officials behind closed doors.
"The Australian Government has realised the dangers of these clauses and is currently refusing to sign up to the investor state disputes in the current TPP negotiations.
"New Zealand needs to support Australia in pushing back against the provision of investment state dispute settlement provisions in the current Trans-Pacific Partnership Agreement," Mrs Turei said.
"New Zealand should also take note that some of the biggest legal firms profiting from these disputes are based in the United States one of the countries involved in the TPP negotiations.
* 'Profiting from Injustice' is published by corporate watchdogs the Transnational Institute and Corporate Europe Observatory.
Profiting from Injustices key findings:
- The number of investment arbitration cases, as well as the sums of money involved, has surged in the last two decades.
- The boom in arbitration has created bonanza profits for investment lawyers paid for by taxpayers.
- Arbitrators tend to defend private investor rights above public interest, revealing an inherent bias.