CTU Media Release

14 June 2012

Government must clarify right to sue clause

CTU Economist Bill Rosenberg calls on the government to clarify its position on giving foreign investors the right to sue the government. Statements by the Minister of Trade Negotiations that the government will not compromise New Zealand’s right to regulate are disingenuous. The rapidly growing number of international cases giving investors the right to sue the government severely limits what governments can or will do.

Bill Rosenberg says “leaked documents from trade talks appear to show that New Zealand has agreed to allow foreign investors the right to sue the Government, in overseas courts, against policies which may cause the foreign investors financial losses.”

“If this is the case, on the face of it, it put us at odds with Australia who have taken a much stronger stance to protect their sovereign law making ability.”

“This kind of clause opens us up to risk of being sued over implementing things like environmental protection and safety regulations where they might impact on the asset values or profits of a foreign investor. These kinds of clauses have seriously impacted on the ability of other governments to make laws in the best interest of the country, even when they are laws reacting to financial crises, or about human health or environmental protection.”

“We are asking the government to clarify why, unlike Australia, they are prepared to open New Zealand up to being sued.”

“The leaked investment text also shows that we are being asked to compromise our ability to put conditions on investors to ensure New Zealand gets a better deal from them. It has no protection against labour rights being traded off to attract investment as they were in the Warner Brothers legislation,” said Bill Rosenberg.

ENDS

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