Concerns about the TPP’s Investor-State Dispute Settlement provision

I asked the Minister for Trade and Industry this parliamentary question on 4 August 2014. There are concerns about the Investor-State Dispute Settlement (ISDS) provision in the Trans-Pacific Partnership (TPP) free trade agreement (FTA), which could grant foreign investors (usually MNCs) the right to sue national governments in an international tribunal if they believe TPP commitments have been breached.

TPP

I asked the Minister for Trade and Industry this parliamentary question on 4 August 2014. There are concerns about the Investor-State Dispute Settlement (ISDS) provision in the Trans-Pacific Partnership (TPP) free trade agreement (FTA), which could grant foreign investors (usually MNCs) the right to sue national governments in an international tribunal if they believe TPP commitments have been breached.

Australia is currently engaged in legal battle with tobacco giant Philip Morris over the country’s plain packaging requirements on cigarette packs to reduce smoking rates. Philip Morris challenged this in Australian courts and lost. So they took the legal challenge to Hong Kong under the Hong Kong-Australia Bilateral Investment Treaty. While not part of the TPP, this is an example of how some multinationals may attempt to use international courts to overcome adverse rulings against themselves in domestic courts.

I would not want to see similar legal challenges against Singapore, especially against regulations that are meant to protect the public health of Singaporeans and our environment. Any FTAs that we sign should also not constrain us from enacting such regulations for fear of attracting legal challenges by MNCs at international tribunals.

The TPP is a proposed regional free trade agreement that is currently being negotiated by twelve countries throughout the Asia-Pacific region, including Singapore, Australia, Japan, the United States and Canada. While it is important that Singapore is included in the TPP, it is equally important that our trade negotiators ensure that the interests of SMEs and ordinary Singaporeans — and not just large MNCs — are promoted under the TPP.

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Mr Gerald Giam Yean Song asked the Minister for Trade and Industry (a) what mechanisms and processes are in place to allow Singapore to implement legislation in areas such as public health and the environment given the Investor-State Dispute Settlement (ISDS) provision in the Trans-Pacific Partnership (TPP) which grants foreign investors the right to sue the Singapore Government in an international tribunal if they believe TPP commitments have been breached; and (b) how many ISDS challenges by multinational companies have been brought or have been threatened to be brought against Singapore in the past.

Mr Lim Hng Kiang (Minister for Trade and Industry): The TPP commits Singapore to ensuring a stable and fair regime for foreign investors. In return, Singaporean investors in TPP countries are also ensured the same stability and fairness. The ISDS mechanism gives foreign investors the right to initiate dispute settlement proceedings against host countries to enforce this commitment. At the same time, to prevent misuse of ISDS, there are also provisions within the TPP which discourage and allow the dismissal of frivolous suits, and allow TPP governments to direct the arbitral tribunals in certain situations.

Our FTAs, including the TPP, do not restrict Singapore from adopting measures for legitimate public policy reasons, including the protection of public health and the environment.

To date, no multinational company has challenged or threatened to challenge Singapore.

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Source: Singapore Parliament Reports (Hansard)
Image: Canada Department of Foreign Affairs, Trade and Development

Author: Gerald Giam

Gerald Giam is the Member of Parliament for Aljunied GRC. He is a member of the Workers' Party of Singapore. The opinions expressed on this page are his alone.