An opposition parliamentarian has cautioned a supervision opposite endorsing a free trade agreement (FTA) with a European Union (EU), saying a understanding will have local companies vulnerable.
Charles Santiago (DAP-Klang) pronounced a EU was forcing Malaysia to agree to a "state-investor dispute settlement mechanism", which would ensure a interests of investors in a nation are protected.
The EU-Malaysia FTA negotiations have been starting upon in Kuala Lumpur given yesterday to outline "specific terms" of a agreement.
"One of a many worrying 'specific terms' is a investment section of a FTA which a EU wants Malaysia to adopt. Specifically, a investment section contains supplies which concede investors to sue governments directly," Santiago said.
According to him, a investment insurance section allows investors to by-pass made during home laws as well as get disputes referred to general arbitration.
"Most importantly, a state-investor dispute resource allows investors to sue governments befo! re inter inhabitant settlement panels."
Governments put during mercy of settlement panels
Santiago pronounced many countries which signed such FTAs have depressed in to a trap.
"More than 300 cases have been referred to general settlement given a 1990s. Most of these cases have resulted in governments paying out millions to investors," he said.
The wily mechanism, he explained, puts governments during a mercy of general settlement panels if it was viewed which state policies jeopardised a increase of investing companies.
"Here in Parliament, we are making laws in a best interests of a nation. But these laws can be overturned by an general settlement panel if judged a! s detrim ental to investors," Santiago stressed.
Citing an example, he pronounced in February final year tobacco hulk Philip Morris filed a ask to a International Centre for Settlement of Investment Disputes for settlement in a dispute with Uruguay.
Philip Morris argued which brand new tobacco regulations enacted by Uruguay violated several supplies of a Switzerland-Uruguay bilateral investment treaty.
The tobacco company ! was chal lenging brand new supplies underneath Uruguay's tobacco regulations, a many distinguished being a order which cigarette packets include "pictograms" of striking images of a illness consequences of smoking.
"Clearly, Philip Morris is vicious of a illness process of a Uruguayan supervision as it will stroke upon a profits," pronounced Santiago.
Such financier insurance would have an stroke upon a sovereignty of a nation as well as "limit the
state's capability to regulate as well as develop polices in a best interests of a citizens", he said.
The MP combined which Malaysia should take mind from countries such as Australia in opposing "greater rights for unfamiliar companies".
Australia, in a trade policy, specifies which a supervision will not grant or await greater authorised rights for unfamiliar businesses or agree to any sustenance which constrains a government's capability to have laws upon "social, environmental as well as economic matters".
Santiago urged Malaysia to take a similar position "to protect our regulatory space as well as sovereignty" as well as reject any form of vigour from a EU.
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