Labor has committed to remove investor state dispute settlement (ISDS) clauses from existing trade agreements, including the Chinese and Korean free trade agreements (FTA) recently signed by the Abbott government.
The motion was supported by the opposition trade spokeswoman, Penny Wong.
The motion, moved by New South Wales MP Pat Conroy, would also mean a Labor government would work to reform ISDS tribunals to remove “perceived conflicts of interest” of judges determining disputes.
Conroy said: “When the Productivity Commission, the chief justice of the high court and a range of academics say ISDS must be reformed, it is time to fix this system that undermines our sovereignty.”
“Updating and renegotiating existing FTAs occurs regularly and this amendment is consistent with that.
“Many nations have expressed concern about the ISDS tribunal system and a future Labor government will have numerous international partners interested in reforming the ISDS system.”
Conroy’s motion states: “Labor in government will review ISDS provisions in existing trade and investment agreements and seek to work with Australia’s trading partners to remove these provisions.
“While this process is underway, Labor in government will work with the international community to reform ISDS tribunals so they remove perceived conflicts of interest by temporary appointed judges, adhere to precedents and include appeal mechanisms.”
Queensland MP Terri Butler said parliamentarians should not have to take into account the interests of multinational companies when determining legislation.
“We don’t want parliament having to take into account whether big tobacco might take them to court,” Butler said.
“Imagine if in introducing Medicare, Bob Hawke had to take into account a big medical company might find its profits were affected and take us to an international arbitration court.
“If that is not a sufficient example, I don’t know what is.”
ISDS clauses give foreign investors the right to sue governments if the company’s business interests are adversely affected by national policy. The Asian arm of the tobacco multinational Philip Morris is challenging the Australian government over plain packaging laws, despite the company already losing a case in the Australian courts.
John Howard refused to include an ISDS in the US–Australia free trade agreement.
The Coalition has agreed to an ISDS in the newly signed Korean free trade agreement, with carve-outs for public health and the environment, but refused one in the Japanese agreement.
