Parker David: Fighting Foreign Corporate Control Bill — First ReadingText is incorporated into the Bound VolumeParker David: Fighting Foreign Corporate Control Bill — First Reading[Sitting date: 22 July 2015. Volume:707;Page:5256. Text is incorporated into the Bound Volume.]Hon DAVID PARKER (Labour): I want to explain why the Labour Party thinks that this bill should go to select committee even though we think that the provisions in it are too broad in absolutely outlawing all investor-State dispute settlement clauses.The National Party should consider why it is that 6 years into its Government in respect of proposed trade agreements—including the last one that we have just negotiated with South Korea which is of substantial benefit to New Zealand—there are thousands of people marching in the streets against free-trade agreements. One of the reasons why there is marching in the street against free-trade agreements is that there is public suspicion around investor-State dispute settlement resolution clauses. There are some well-founded concerns about some investor-State dispute settlement clauses and there are also some incorrect concerns about investor-State dispute settlement clauses but we are not going to resolve this as a country by refusing to have the debate about the rights and wrongs of them.Investor-State dispute settlement clauses allow corporations to sue Governments for breaches of those corporations’ rights as set out in free-trade agreements. That is very important particularly when you are dealing with countries that have got corrupt judiciaries or judiciaries that might be too close to the Government or not independent of Government which might effectively confiscate the assets of a New Zealand investor investing into a third-party country. So that is why you have investor-State dispute settlement clauses.The negative side of them is that if they are not properly drafted corporations can be allowed to sue Governments for doing what Governments ought to be able to do without suit and that is to properly regulate for the benefit of their own country whether it be for public health reasons like plain packaging of cigarettes or alcohol control or if you want to introduce controls on how much sugar is in food for example. Those sorts of things are appropriate things for Governments to be able to do and they ought not to be able to be successfully sued by overseas corporations for doing so. You need to be able to properly regulate the environment including for example having a proper price on carbon or having improved standards of water quality which might somehow impinge on the cost of production in a way that the corporate may not like. Governments should be able to do that without being sued.When you get the New Zealand Medical Association turning up to make submissions to the select committee and saying that it is concerned about these things the Government should not just say “We’re right; we know what we’re doing.” and close down debate. That is why we are supporting this bill to select committee.I want to give another example arising out of the South Korean free-trade agreementof why this is important. The South Korean free-trade agreement allows the screening pre-investment of existing categories of investment—we do that for farmland at the moment—but it does not allow new categories of screening of foreign investment—i.e. into existing New Zealand homes. That is a mistake. Theoretically if a future Government was to introduce a ban on the sale of homes to overseas people South Korea could object and a corporation from South Korea that could not make an investment could say that it had suffered a loss and sue the Government. The cost of those processes is so high and the inability to prove loss—because the corporation could make an investment somewhere else and make a buck somewhere else—means that in all likelihood you will not get an investor-State dispute settlement claim on an inability to make a residential property purchase. But none the less the theoretical risk exists under the investor-State dispute settlement clauses in the South Korean agreement because of how the Government has negotiated.It is making the same mistake in the Trans-Pacific Partnership—the same mistake in the Trans-Pacific Partnership—and all of those mistakes flow through to the Chinese free-trade agreement because the most favoured nation provisions in that mean that later more permissive agreements flow to the benefit of China. That shows why you have to be careful with investor-State dispute settlement clauses and the clauses that relate to them and that is why we should have a debate about this in Parliament.The Labour Party is not saying that investor-State dispute settlement clauses are always bad particularly with Third World countries. We are saying in respect of First World countries that we would be willing to rely upon State-to-State resolution and to forgo investor-State dispute settlement clauses. We think this is a proper debate to have in New Zealand and that is why we are supporting this bill to select committee.