The Eyes on Trade blog over at Public Citizen has linked to a leaked text on investment protection being negotiated as part of the Trans Pacific Partnership agreement. The leaked text has plenty of brackets, which indicate that the text is not yet agreed and suggests that the version posted online is the subject of negotiation. With the Philip Morris claims against Australia providing a backdrop for the negotiations there is plenty to analyze here in terms of the potential impact on domestic health regulation. Here are a few initial observations:
- The minimum standard of treatment in Article 12.6 is defined by reference to customary international law (as is the case in the US model BIT), but the clause only elaborates an inclusive definition of what that means i.e. the draft still fails to clarify what the applicable standard of treatment is.
- The clause governing expropriation and compensation in Article 12.12 does not apply to the issuance of compulsory licenses granted in relation to intellectual property rights in accordance with TRIPS. There is also some additional text in brackets suggesting that the provision would not apply to acts involving the issuance, revocation, limitation or creation of intellectual property rights so long as they are consistent with the chapter on intellectual property. (See the earlier post here on deficiencies in these clauses with respect to claims concerning investments associated with property rights.)
- There are two (presumably alternate) annexes on expropriation that seek to elaborate a clearer definition when it comes to indirect expropriation.
- In draft Article 12.15 concerning investment and environment, bracketed text governs health issues. The provision appears to create an exception for measures that a party considers appropriate to ensure that investment is undertaken in a manner sensitive to environmental, health, safety or labor concerns. It is not entirely clear whether this provision would govern only the establishment of investment, or also the treatment of investment post-establishment.
- Article 12.5 clarifies that the principle of most-favored nation treatment does not encompass dispute resolution procedures. For example, in Philip Morris v Uruguay, Philip Morris argues that it had no obligation to negotiate for 6 months with Uruguay before bringing a claim, as is required in the Switzerland – Uruguay bilateral investment treaty. The basis for this argument is that the Australia – Uruguay bilateral investment treaty does not include such an obligation. Hence, in the Philip Morris argument, enforcing the 6 month period would be treating Swiss investors less favorably than Australian investors in Uruguay.
- There are provisions governing the submission of amicus briefs (12.22) and transparency of proceedings, including a requirement that documents be made public (12.23).
- Australia is not listed in Annex 12-G, which governs the service of documents under Section B (investor state dispute settlement). Footnote 20 also indicates that Australia will not submit to investor state dispute settlement. Contact addresses have already been inserted into the draft for Chile, Malaysia, New Zealand and the United States. Brunei, Peru, Singapore and Vietnam are listed in the annex, but the address details are not yet listed. Does this suggest that Brunei, Peru, Singapore and Vietnam are not yet on board with the draft?
- The draft chapter does not appear to govern relations between the TPP and other international investment agreements already in place between the parties. This issue might be governed by a provision in another chapter, or the TPP might be silent on this question.
Although I still owe a number of posts on other issues, I hope to cover these issues in further detail over the coming days and to pick apart the legal implications of the draft text.
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