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Foreign Affairs, Defence and Trade Legislation Committee: Trade and Foreign Investment (Protecting the Public Interest) Bill 2014

Estimates & Committees
Lee Rhiannon 6 Aug 2014

Dr Rimmer : My submission and a number of submissions from particular unions raised concerns about the role of investor-state dispute resolution in relation to matters of industrial relations. From an Australian perspective, it has been bubbling along for a few years. The ACTU raised concerns about investor-state dispute settlement a few years ago. There was a lot of interest in the case of Veolia Proprete v Arab Republic of Egypt, in which a French multinational company launched a claim against Egypt over labour wage stabilisation promises as well as a terminated waste contract. So there have been instances in which investor-state dispute settlement has been deployed in relation to questions about labour rights. There has been—

Senator RHIANNON: Is that on the basis that a country's labour laws—for example, Australia's labour laws—could in some way impede the ability of a foreign investor to make a return on their investment? Is that what the basic line is?

Dr Rimmer : The concern is that decisions in relation to labour rights have adversely affected the foreign investments of a company, and that then provides them with a basis for a complaint. Trade unions have been quite concerned about the general operation of investor-state dispute settlement in relation to labour rights, but there has also been a bit of debate about exceptions, defences and safeguards, particularly in relation to labour and safety. The European Trade Union Confederation has been very adamant that there is a need to reform the investor-state dispute settlement process, particularly to ensure that investors comply with relevant ILO core labour standards and other human rights. So, from that perspective, there is a concern about the interaction between investor-state dispute settlement and the international regime in relation to labour rights. In some ways, it echoes the battles over investor-state dispute settlement and international health law; there is a parallel, a similar concern, in that context.

In the United States, the Democrats are very upset with the Obama administration because the Bush administration needed Congress to do trade deals, and the Democrats, particularly led by Henry Waxman, were able to secure statements about the need to protect labour rights in some of the trade deals. Obama has not necessarily made any similar commitments, and that is a real tension point at the moment in the relationship between the Obama administration and the Democrats in the US Congress. A lot of the big unions in the United States have been heavily lobbying Congress not to accept the Trans-Pacific Partnership unless and until questions about labour rights are dealt with. But it is quite an interesting issue.

A number of the submissions to this committee also raised concerns about privatisation. I think the New South Wales Nurses and Midwives' Association were concerned about investor-state dispute settlement supporting the privatisation of health care. Some of the educational unions were concerned about investor-state dispute settlement being used to support privatisation of education. I think a lot of those organisations have been very concerned about how foreign investors might use investor-state dispute settlement as a Trojan horse of sorts for the deregulation of labour standards and rights. But there is always a big battle as to whether or not trade deals will adversely or positively affect jobs, employment, in a country.

Senator RHIANNON: All right. Thanks very much, Dr Rimmer.

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