The Environment a Significant Casualty Under TPPA

Close scrutiny of the final TPPA text reveals that its impact on the environment is even worse than had been expected from leaked drafts.

A new paper, prepared by Simon Terry as part of a series supported by a New Zealand Law Foundation grant, concludes that the environment is a significant casualty under the TPPA.

Analysis of the final text shows that the gains for the environment are few and small scale. By contrast, foreign investors can sue the Government for compensation if they believe new environmental protections will reduce their future profits, and this is a serious threat.

When challenged on the need for such Investor State Dispute Settlement (ISDS) rules, ministers have repeatedly said that there would be no restraint on the government’s ability to regulate in the public interest. However, the text fails to protect the Government from being sued when taking such action.

While there are provisions that protect governments from being sued for acting to reduce smoking, there are no similar protections against when it comes to the environment or climate change.

The risk that a government could be successfully sued means the ISDS provisions will have a ‘chilling effect’ on the government’s willingness to undertake progressive environmental reform. This favours retaining low standards when these need to rise markedly.

A particular concern is the impact it could have on action to cut New Zealand’s greenhouse gas emissions. Two weeks ago, a Canadian company announced that it will use very similar rules to sue the US government for US$15 billion after President Obama vetoed approval for a pipeline that would have carried oil made from tar sands to the US.

In this country, ISDS rules could be used to sue the government if it increased emissions charges under the ETS, or restricted the mining of fossil fuels.

The TPPA contains two paragraphs that refer to a low emissions economy but do not mention the words “climate change” or the relevant global treaty, the UNFCCC. The aspirations contained in the newly minted Paris agreement are entirely disconnected from what governments are willing to sign for in a treaty that carries trade sanctions as a penalty for non-performance.

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