Clive Palmer’s company, Zeph Investments which is registered in Singapore, has lodged a second Investor-State Dispute Settlement (ISDS) claim against the Australian government for $41.3 billion using the 2012 ASEAN-Australia New Zealand Free Trade Agreement. He is claiming compensation after coal exploration permits were refused for environmental reasons, including its contribution to carbon emissions.
This follows Palmer’s previous ISDS case launched in April 2023 claiming $300 billion after he lost his $27.8 billion High Court (non-ISDS) claim against the Western Australian government over a disputed iron ore mining please. ISDS is a legal provision in some trade agreements which enables foreign (but not local) investors to sue governments for millions and even billions of dollars of compensation if they can argue that a change in domestic law or policy has reduced the value of their investment. It enables foreign investors (or domestic investors with overseas assets) to ignore national court decisions and seek billions in compensation from investment tribunals without the usual legal safeguards of independent judges, precedents and appeals systems. The legal framework of investment tribunals is about compensating investors, not whether the law or policy is in the public interest.
This second case brings Palmer’s total ISDS claims against Australia to $341 billion. While the WA claim was over a technical contract dispute, the Queensland case joins a long list of ISDS cases in other countries by fossil fuel companies against environmental protection and policies to address climate change. Palmer has also foreshadowed a possible third ISDS case. Even if he loses these cases, the government will have to spend millions
The Phillip Morris tobacco company failed 2012 case against plain packaging cost Australia $12 million in legal fees, and took five years to resolve. AFTINET is a SEARCH Partner Labor’s policy is to exclude ISDS clauses from all new trade agreements and to review their inclusion in existing agreements.
To Labor’s credit, the government has implemented the first part of this policy and has excluded ISDS from recent agreements with the UK and from current negotiations with the EU and India. But there is so far no schedule for reviewing ISDS in existing agreements like the ANZ-ASEAN FTA, which Clive Palmer is using to claim hundreds of billions of dollars from the Australian government. We need speedy reviews of ISDS in these old agreements to prevent further cases, especially those against government action to protect the environment and reduce carbon emissions.
AFTINET is planning a campaign asking the government to speed up the review of ISDS in existing agreements, including a petition to the Trade Minister and other actions. For further information see www.aftinet.org.au