Alarm at secret court scheme in UK-Australia trade deal

The Guardian

May 30: A free trade deal between the UK and Australia is on course to include a controversial system of secret courts that will allow businesses to seek compensation if their profits are hit by government policies.

In a move that has alarmed trade unions and anti-poverty campaigners, trade minister Greg Hands said UK negotiators were in talks with Australian officials over proposals to include a scheme that will arbitrate on disputes behind closed doors.

It is understood that the UK plans to announce the framework for a trade deal with Australia before the G7 summit begins on 11 June, after prime minister Boris Johnson invited his Australian counterpart, Scott Morrison, to the event in Cornwall.

Trade secretary Liz Truss said last week that a deal would be in the best interests of the UK economy and its exporters would benefit from unfettered access to Australian markets.

Until now the most controversial element of the proposed deal has been a plan to scrap tariffs and quotas on Australian agricultural products, including sheep and beef coming into the UK, undercutting British farmers.

The decision to include an investor-state dispute settlement (ISDS) scheme, which allows firms to sue governments when they believe policies have left them out of pocket, could spark even more protests.

ISDS is a system of private courts convened in camera and arbitrated by judges, allowing firms to bypass domestic civil courts. They were originally conceived by western multinationals to protect them against the seizure of their assets in the aftermath of a coup or by rogue states, for example a mine being nationalised without reasonable compensation.

In recent decades they have evolved to include indirect expropriation, by which any government measure that affects the actual or expected profits of a business can be challenged.

Recent ISDS cases brought against governments include Swedish energy firm Vattenfall suing Germany for policies that cut water pollution; US drugs giant Eli Lilly suing Canada for trying to reduce medicine prices; and French multinational Veolia suing Egypt for increasing its national minimum wage.

https://www.theguardian.com/politics/2021/may/30/alarm-at-secret-court-scheme-in-uk-australia-trade-deal