Foreign investors could sue the Government under the controversial Trans Pacific Partnership to be signed in New Zealand in two weeks, the Sustainability Council says.
The Government has been clear on whether the TPP trade deal opens the way to corporate lawsuits.
"It is almost inconceivable, given the safeguards that our international lawyers have negotiated, that anyone will take a case against New Zealand in the next X years," Tim Groser, former trade minister, told TVNZ's Q+A programme in October.
But a researcher, Simon Terry of the Sustainability Council of New Zealand has unearthed small print that confirms foreign investors can take legal action if they believe environmental protection policies will hurt their future profits.
"You could see foreign investors challenging the Government for example if they changed the ETS (Emissions Trading Scheme) to raise charges on greenhouse gas emissions or if they made stricter conditions under mining permits," he said.
That's what's happening with power company TransCanada which is suing the US Government for $15 billion because President Obama said "no" to a cross-border oil pipeline.
Minerals industry body Straterra told ONE News today that it would be unlikely a foreign oil or mining company would sue.
However Mr Terry says even the mere threat of a lawsuit would discourage governments from pursuing radical environmental reforms.
"What that has is a very chilling effect on a government's willingness to think about things that would cause foreign investors pain. And it's that full equation that you need to understand."
We have had these free trade agreements for over 20 years and have never been taken to arbitration"
Trade Minister Todd McClay
So, ONE News political reporter Andrea Vance says, expect more protests when the TPP is signed at Sky City in Auckland on February 4, even though Trade Minister Todd McClay says the TPP will not stop the Government from regulating to protect the environment.
Mr McClay said in an email: "We have had these free trade agreements for over 20 years and have never been taken to arbitration by an international investor."
But Mr Terry says the TPP is different to any other deal.
"We have very few agreements that have this kind of investor state dispute mechanism in them," he said.
Andrea Vance says we also have few agreements that raise the sort of disputes this one is raising in New Zealand.
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