Activist: Many govts clueless about economic treaties signed

Source : Free Malaysia Today

PETALING JAYA: A senior policy officer with a global sustainability advocacy group says many governments are clueless about the economic treaties they have signed, leaving them open to be sued by foreign investors for “unfulfilled expectations”.

Burghard Ilge of Both ENDS, headquartered in Amsterdam, said the terms of treaties like the planned Trans-Pacific Partnership Agreement (TPPA) were usually influenced by powerful investors who wanted the ability to take action on countries that did not meet expected “promises”.


He said the treaties had already led to cases where claims of between US$100 million (RM415 million) and US$50 billion (RM208 billion) were awarded to investors.

“These amounts can have huge impacts on smaller countries and eat into their GDPs,” he said.

He claimed many governments agreed to these treaties “because they do not actually know what is written in them” and are not aware of certain technicalities.

“Most governments do not actually know what they have signed,” he told a forum titled ‘Free Trade Agreement: Investor to State Dispute Settlement and its Impact on Human Rights’ held at Gerakbudaya here today.

He said a recent study indicated that many government leaders signed the treaties for “photo opportunities” to show that they were bringing in investors.

Ilge said there was a case in an Asian country where a German company building a highway was displeased when the state repaired other roads, which led to a dispute between them.

He said the company’s expectation was that the people would use its highway and not the other roads.

He said Malaysia should accordingly lay down to investors that the country’s own local laws should be used as the first avenue in dealing with issues related to their investments.

“Malaysia should make it clear that a dispute should be settled in its local courts, and only if the investor does not have access to justice should it be referred to international courts,” he said.

Also speaking at the forum were Third World Network legal consultant Karina Yong, Klang MP Charles Santiago and Kavaljit Singh, director of Madhyam, a New Delhi-based policy research institute.