Trade unions and anti-poverty campaigners have expressed alarm over a secret courts scheme being discussed as part of the UK-Australia trade deal.
Trade minister Greg Hands said UK negotiators were discussing proposals to include a scheme that will arbitrate on disputes behind closed doors, The Guardian has reported.
It is understood that the UK plans to announce the framework for a trade deal with Australia before the G7 summit begins on 11 June.
Trade secretary Liz Truss said last week that a deal would be in the best interests of the UK economy and its exporters would benefit from unfettered access to Australian markets.
Another highly controversial move as part of the upcoming trade deal with Australia has been a plan to scrap tariffs and quotas on Australian agricultural products, including sheep and beef coming into the UK. It has been claimed this would put British farmers at disadvantage.
So what is this new scheme?
The new investor-state dispute settlement (ISDS) scheme would allow firms to sue governments when they believe policies have left them out of pocket.
ISDS is a system of private courts allowing firms to bypass domestic civil courts. They were originally conceived by western multinationals to protect them against the seizure of their assets in the aftermath of a coup or by rogue states. For instance, the system would apply to a mine being nationalised without reasonable compensation.
They have evolved to include indirect expropriation, by which any government measure that affects the actual or expected profits of a business can be challenged.
The controversial move is being discussed as Johnson said a new national flagship will reflect the UK’s “burgeoning status as a great, independent maritime trading nation”.
“It is a live negotiation,” Greg Hands said about the topic. He added: „There will be a chapter on investment. We are huge investors in each other’s markets. I would remind the House that the UK has never lost an ISDS case.”
Shadow trade minister Emily Thornberry said: “It would be deeply worrying if the government is using the very first post-Brexit trade agreement written from scratch to hand major corporations power to challenge regulations that affect their profits, restricting our ability as a country to introduce new laws to protect the environment, public health, and the rights of workers and consumers.
“It is yet another reason why this proposed trade deal needs proper scrutiny and debate, rather than being rushed through in secret for a signing ceremony at the G7.”
Nick Dearden, the director of Global Justice Now, said: “Greg Hands confirmed our worst fears – that, just as most countries are moving away from the toxic corporate court system, the British government wants to turbocharge it.
“These courts would allow Australian companies to extract eye-watering payouts from the government for taking action on anything from climate change to workers’ rights, tying the hands of governments for a generation or more.”
Nick Crook, head of international relations at Unison, said: “Australia already knows what ISDS means. Tobacco giant Philip Morris tried to sue Australia after it sought to pass plain packaging legislation to protect public health. Although Australia eventually won it cost the Australian tax payer A$24m fighting the case in private investment tribunals.”