Charles Santiago

MP raises fears on EU-Malaysia FTA
FTA will make foreigners overly powerful
புக்கிட் ஜாலில் முன்னாள் தோட்ட தொழிலாளர்களின் பிரச்சனையை தீர்ப்பீர் – நாடாளுமன்றத்தில் சார்ல்ஸ்
Sumbangan kepada Fakir Miskin Sempena Sambutan Hari Deepavali மக்கள் நல நிகழ்வு – வசதியற்றவர்களுக்கு தீபாவளி அன்பளிப்பு

Posted: 19 Oct 2011 09:57 AM PDT

K. Pathmavathi

An opposition parliamentarian has cautioned the government against endorsing the free trade agreement (FTA) with the European Union (EU), saying the deal will make local companies vulnerable.

Charles Santiago (DAP-Klang) said the EU was forcing Malaysia to agree to a “state-investor dispute settlement mechanism”, that would ensure the interests of investors in the country are protected.

mtuc syabas pc 091007 charles santiago The EU-Malaysia FTA negotiations have been going on in Kuala Lumpur since yesterday to outline “specific terms” of the agreement.

“One of the most worrying 'specific terms’ is the investment chapter of the FTA that the EU wants Malaysia to adopt. Specifically, the investment chapter contains provisions that allow investors to sue governments directly,” Santiago said.

According to him, the investment protection chapter allows investors to circumvent domestic laws and get disputes referred to international arbitration.

“Most importantly, the state-investor dispute mechanism allows investors to sue governments before international arbitration panels.”

Governments put at mercy of arbitration panels

Santiago said many countries that signed such FTAs have fallen into the trap.

“More than 300 cases have been referred to international arbitration since the 1990s. Most of these cases have resulted in governments paying out millions to investors,” he said.

The tricky mechanism, he explained, puts governments at the mercy of international arbitration panels if it was perceived that state policies jeopardised the profits of investing companies.

“Here in Parliament, we are making laws in the best interests of the nation. But these laws can be overturned by an international arbitration panel if judged as detrimental to investors,” Santiago stressed.

tobacco cigarette warning label in australia 041206 Citing an example, he said in February last year tobacco giant Philip Morris filed a request to the International Centre for Settlement of Investment Disputes for arbitration in a dispute with Uruguay.

Philip Morris argued that recent tobacco regulations enacted by Uruguay violated several provisions of the Switzerland-Uruguay bilateral investment treaty.

The tobacco company was challenging new provisions under Uruguay’s tobacco regulations, the most prominent being a requirement that cigarette packets include “pictograms” of graphic images of the health consequences of smoking.

“Clearly, Philip Morris is critical of the health policy of the Uruguayan government as it will impact on its profits,” said Santiago.

Such investor protection would have an impact on the sovereignty of the country and “limit the
state’s ability to regulate and develop polices in the best interests of its citizens”, he said.

The MP added that Malaysia should take heed from countries such as Australia in opposing “greater rights for foreign companies”.

Australia, in its trade policy, specifies that the government will not grant or support greater legal rights for foreign businesses or agree to any provision that constrains the government’s ability to make laws on “social, environmental and economic matters”.

Santiago urged Malaysia to take a similar position “to protect our regulatory space and sovereignty” and reject any form of pressure from the EU.

FTA will make foreigners overly powerful

Posted: 19 Oct 2011 12:57 AM PDT

Source :- Free Malaysia Today

Patrick Lee October 19, 2011

Foreign investors can bypass local laws and punish the government if the latter stops them from making profits under a FTA, says DAP’s Charles Santiago.

KUALA LUMPUR: Local companies may be able to hold the government to ransom if Malaysia signs a Free Trade Agreement with the European Union (EU).

Klang MP (DAP) Charles Santiago said that the EU was forcing Malaysia to accept a "state-investor dispute mechanism", which he said would protect foreign investors' interests here.

Coming back as foreign investors, local companies, he warned, would be able to bypass local law and take the government to an international court if the former was challenged.

"Under the liberalisation of 17 sub-sectors, chances are Malaysian companies are going to go overseas and register in other countries, and come back as a foreign company," said Santiago.

He said that foreign companies would be even able to use foreign law to punish the Malaysian government.

"If a foreign company is unhappy with the Malaysian government on healthcare for example, they can bypass the Malaysian system and go to an international arbitration panel," he said.

Santiago then cited cigarette company, Philip Morris, as an example.

He said that on Feb 19, 2010, the Swiss-based Philip Morris filed an arbitration request against Uruguay with the International Centre for Settlement of Investment Disputes (ICSID).

Malaysia's sovereignity affected

At the time, the company allegedly argued that Uruguayan tobacco regulations violated several provisions of the Switzerland-Uruguay bilateral investment treaty (BIT).

These regulations included the placing of gruesome pictures over the consequences of smoking, and health warning labels on cigarette packs.

"They used the Swiss law to go after Uruguay," Santiago said, adding that more than 300 cases have been referred to international arbitration since the 1990s.

Governments in turn, he added, have had to pay millions to foreign investors as a result.

Malaysia's sovereignity, Santiago said, would be affected and that Parliament would have no power over the matter.

He said that the government should follow Australia's example and oppose greater rights for foreign companies, as well as the inclusion of the state-investor dispute mechanism.

Asked why the Malaysian government would agree to such an idea, Santiago said: "I don't know. You have to ask them."

He claimed that Malaysia was currently in its fifth round of FTA negotiations with the EU in KL today, but was unable to disclose the location of these talks.