Reti Shane: Fighting Foreign Corporate Control Bill — First ReadingText is incorporated into the Bound VolumeReti Shane: Fighting Foreign Corporate Control Bill — First Reading[Sitting date: 22 July 2015. Volume:707;Page:5257. Text is incorporated into the Bound Volume.]Dr SHANE RETI (National—Whangarei): It is a pleasure to rise to talk to this bill. Clearly our discussion is around investor-State dispute settlement provisions. Investor-State dispute settlement provisions set ground rules that allow countries to do trade with each other. It is a procedural mechanism provided for international agreements on investments. Investor-State dispute settlement provisions are really about making sure Governments give fair equitable and non-discriminatory treatment to investors. We include investor-State dispute settlement provisions in free-trade agreements as fair and good citizens of the trading world in the knowledge that New Zealand exporters also have the same courtesies and protections in foreign countries. We often forget that our offshore investments have the same protection. It is a balance.What is unbalanced is to take all of the economic benefits of a free-trade agreement such as those we are going to get with Korea—and that has been the topic of discussion tonight by way of example; the Korean free-trade agreement—and then not take the responsibilities of being a fair and reasonable trader. That is what this bill would do and that is the message that it would send.By way of example with the Korean free-trade agreement New Zealand First would rather that we turn away $60 million of duties relief in the first year. New Zealand First would have us turn away benefits to kiwifruit growers beef lamb and dairy producers. Our kiwifruit is competing against Chile which at the moment has zero tariffs. Mr Tabuteau talked about wanting a level playing field. Well there is a level playing field right there: give us equality with Chile on its zero tariffs and we have exactly that level playing field that you are looking for. What is broken is that this bill would not apply to any currently ratified agreements already in place and that would create an inconsistency across our trading partners and this Government. Good Government is about stability not instability.Let us look a little bit further at some of the myths that Mr Tabuteau raised around investor-State dispute settlements which actually have many procedural safeguards in place. The allegation was made that maybe Government sovereignty and policy making—and Mr Tabuteau raised the question of health and others have as well—could be compromised under investor-State dispute settlement agreements. Again let us look at the Korean free-trade agreement with its investor-State dispute settlement provisions and how health might be protected. For example public health in the Korean free-trade agreement is held out in the first instance as it comes under the category of “services supplied in the exercise of governmental authority”. There is our sovereignty right there. We have already cut it out and said that it does not apply. Furthermore further policy space is preserved as reservations in the schedule of non-conforming measures. That is where health is protected as a social service for a public purpose.The third thing is that some of these reservations however cannot be put aside under the terms of what is called “fair and equitable treatment”. We should not be afraid of fair and equitable treatment. We are good international traders and when we look at some of the definitions of fair and equitable treatment—because people raised this as a barrier to us that that is what is taken to court the claims around fair and equitable treatment.Well let us look at a couple of international case studies. Cargill v Mexico: what is not fair and equitable and would bring a claim was “grossly unfair unjust or idiosyncratic treatment; arbitrary beyond a merely inconsistent or questionable application … to grossly subvert a domestic law or policy for an ulterior motive.” Bilcon v Canada: “conduct … that is arbitrary grossly unfair unjust or idiosyncratic is discriminatory and exposes the claimant to sectional or racial prejudice or involves a lack of due process”.New Zealand’s approach to fair and equitable treatment is as such: “The treatment … should amount to an outrage to bad faith to wilful neglect of duty or to an insufficiency of governmental action so far short of international standards that every reasonable and impartial man would readily recognise its insufficiency.” We should have some surety in that.Mr Tabuteau presented one configuration of what an investor-State dispute settlement tribunal might look like. Can I just add some clarity to that? There are three appointed adjudicators: you get to choose one and they get to choose one and then you agree on the third. It is not quite the configuration that Mr Tabuteau would have you believe where he confabulated some concept out of his mind as to who might sit on that tribunal. Go back and have a look at what the Korean free-trade agreement has. Look at its tribunal. I have it right here. There are a number of safeguards. It is not in secret. It actually comes out has to be reported and has to have consultation beforehand. It is a robust framework not at all how Mr Tabuteau presented it. I think we should oppose this bill. Thank you.