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Elizabeth Sheargold
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Hi Simon, MFAT seem to have moved the documents around on their website, but the drafters note on 'like circumstances' can now be found here
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Simon, I agree with you that the enforceability of the Australia - China BIT is unclear, at least in relation to ISDS. There is certainly no clear consent to investor-state arbitration for all disputes. However, there is allowance for arbitration of disputes relating to the amount of compensation payable for expropriation. From memory I believe that some arbitral tribunals have interpreted similar provisions as giving them jurisdiction also to determine whether or not an expropriation occurred (of course other tribunals have rejected that interpretation of similar provisions). In addition, there is a paragraph in Article XII of the BIT which states that if both China and Australia become parties to the ICSID Convention (which they have), "a dispute may be submitted to [ICSID] for resolution in accordance with the terms on which the [host state] is a party to the Convention." I certainly have doubts as to whether or not that provision could constitute consent to ICSID's jurisdiction, but I'd be very interested to hear an explanation of it's effect from someone who has considered this in more detail than I have. On the issue of whether or not future inclusion of provisions on FET or indirect expropriation would be subject to Parliamentary oversight, I agree with Richard that their inclusion would constitute an amendment of the FTA, which would be subject to the usual treaty making process. I don't think that Article 9.9 of the FTA (Future Work Program) could constitute sign off in advance to unknown future provisions, since the Parties are only obliged to conduct a review of the investment obligations, and then to "commence negotiations" that reflect the outcomes of the review. I don't think that language is strong enough to bind the parties to any particular outcome of those negotiations.
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Simon, I agree that the scope of the investment chapter included in this agreement is really interesting. I'm unsure, though, about whether it is a promising model for new agreements, because of how this FTA will relate to the existing Australia - China BIT (1988). Para (2) of Article 9.9 of the FTA reads to me like the BIT is meant to continue in force, in parallel with the new FTA - and that both agreements will be subject to review within the next few years. If that is the case, then the traditional FET and expropriation clauses from the BIT (among other provisions) would continue to apply between the parties, with an ISDS mechanism, but without any of the safeguards that are becoming typical in new agreements, like a general exceptions clause or a clarification of the scope of indirect expropriation. I also think this reading makes sense, as the earlier BIT doesn't contain NT or MFN provisions, so by including those in the new FTA, the parties are adding new obligations with regard to investment (but are not altering any of their previous obligations). (Of course I could be wrong about the relationship of this FTA to the earlier BIT, as I've only looked at the FTA quickly. And I would be very happy to be proven wrong!)
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Jun 17, 2015