Investment Treaty Arbitration ‘Down Under’: Policy and Politics in Australia

Abstract

This paper succinctly summarises Australia’s evolving policy debate over Investor-State Dispute Settlement (ISDS). Part I sketches some regional and global context. Part II briefly revisits the Productivity Commission’s report of 2010, and longer-standing concerns from the political left, which coalesced in the 2011 Gillard Government Trade Policy Statement eschewing ISDS in all future investment treaties or Free Trade Agreements (FTAs). Part III focuses on the new Abbott Government’s policy since 2014, which reverts to a case-by-case assessment – resulting in ISDS being omitted from Australia’s FTA with Japan, but being included in its bilateral FTAs with Korea (KAFTA) and China. In Parliament, the main opposition Labor Party continues to voice concerns about ISDS, but voted with the Abbott Government on legislation implementing KAFTA, which was then ratified. Labor Party members of a Senate Committee also sided with ruling Coalition members in recommending against enactment of a broader “anti-ISDS Bill”, proposed by a Greens Party Senator to legislatively preclude ISDS provisions in future treaties, albeit primarily on the basis that this would excessively constrain the executive branch’s responsibility to negotiate international agreements. Part IV suggests that Australia’s major political parties now have an opportunity to develop a shared and sustainable policy stance on this vexed issue, underpinned by the recent parliamentary inquiries and media attention as well as ongoing empirical and theoretical research.

Keywords: international law, international arbitration, dispute resolution, investment treaties, Foreign Direct Investment (FDI), Commonwealth law, Asian law, legislative process

JEL Classification: K10, K30, K33