Amid ongoing speculation about the prospects for the Trans Pacific Partnership Agreement (TPP), Wikileaks published another confidential chapter last week, this time on investment. And like almost everything we know about the secretive negotiations for the agreement, the leaked chapter provides plenty of cause for concern.
The leaked late-stage draft of the investment chapter contains information about the agreement’s investor-state dispute settlement (ISDS) clause. Clauses like this give investors direct access to international arbitration, where they can bring claims against a government over regulatory measures they think may damage their bottom line.
The chapter has a footnote saying Australia is exempt from ISDS, but that may change “subject to certain conditions”. The leaked draft doesn’t indicate the exact nature of these conditions, and the footnote remains in brackets, indicating the issue has not yet been settled.
The Minister for Trade and Investment, Andrew Robb, has repeatedly said the TPP will not adversely affect health policy. In a recent interview with ABC TV, he said the government had insisted on carveouts for health and environmental public policy decisions from investor-state dispute settlement clauses.
But the leaked draft shows these carveouts (which are still under negotiation) are limited to specific areas such as the Pharmaceutical Benefits Scheme, Medicare Benefits Scheme, Therapeutic Goods Administration and the Office of the Gene Technology Regulator.
ISDS health concerns
An independent health impact assessment of the TPP negotiations conducted by Australian academics and non-government organisations published in February 2015 found the ISDS clause presents a significant threat to health policy.
Part of the problem is that the TPP defines investments very broadly to include intangible assets and intellectual property, such as trademarks and patents. These kinds of assets are at the heart of current ISDS cases contesting Australia’s plain packaging laws and Canada’s decisions about what medicines can be patented.
Such claims can result in large-scale costs for taxpayers. Not only do the awards for investor-state cases often amount to hundreds of millions of dollars, according to the OECD the average cost of fighting a claim is US$8 million.
Another issue that has health advocates worried is the potential “chilling effect” of investor-state dispute settlement mechanisms; the prospect that governments may be deterred from implementing innovative health policies and laws that may be contested by corporations using ISDS clauses.
Director-General of the World Health Organization, Margaret Chan noted in 2012 that legal actions against Uruguay, Norway and Australia were “deliberately designed to instill fear” in countries trying to reduce smoking. Uruguay has publicly acknowledged that it would have had to drop its tobacco control law and settle with Philip Morris if it didn’t have financial support from a foundation set up by Michael Bloomberg.
Protecting health?
In addition to the carveouts for specific health programs, the TPP contains purported “safeguards” to protect health and the environment. But these safeguards have also drawn strong criticism, in particular, from eight health and community organisations who wrote to the trade minister last week to outline their concerns.