The TPPA threatens our sovereignty and is unconstitutional

Media Statement by CENTHRA, Concerned Lawyers for Justice (CLJ) and Young Professionals (YP). Published in The Malaymail Online.

JANUARY 12 — The Centre for Human Rights Research and Advocacy (CENTHRA), Concerned Lawyers for Justice (CLJ) and Young Professionals (YP) follow with concern ongoing domestic developments with regard to the intended tabling of the Trans Pacific Partnership Agreement (TPPA) for debate before Parliament scheduled for the 26, 27 and 28 of this month.

News reports have quoted our International Trade and Industry (MITI) Minister Datuk Seri Mustapa Mohamed as stating that the TPPA is now better received now that “in-depth” discussions have been held with the rakyat and Opposition MPs.

Foreign Minister Datuk Anifah Aman chipped in quoting a PricewaterhouseCoopers (PwC) report, being a report prepared by a foreign and United States-based company, stating that participation of Malaysia in the TPPA negotiations was positive. Following Datuk Mustapa Mohamed’s statement, MITI has also released a booklet in Malay titled TPPA: Jawapan Kepada Kebimbangan, Salah Faham dan Tuduhan aiming to dispel so-called misconceptions on the TPPA arising ostensibly as a result of disinformation.

Alas, in our opinion, the said booklet has utterly failed to achieve its supposed objectives, for far from dispelling concerns on the TPPA, it merely repeats bare and misleading assertions that the agreement will only be beneficial for Malaysia and in no way undermines our sovereignty.

This move, coupled with recent worrying actions on part of those in power especially in raising an objection to the application for leave for judicial review brought by three concerned non-governmental organisations (NGOs) casts serious doubt on the credibility and ability of MITI in particular, and the government in general, to keep the interests of the nation at heart when negotiating international agreements.

Since the government through their roadshows has confidently claimed that signing the TPPA will not infringe the Federal Constitution and would not affect the sovereignty of our nation, why then would they fear our courts hearing a challenge to the same on its merits? If indeed it is true as the government claims that signing the TPPA would not amount to bartering our independence for nothing, then they should not be afraid to let the court peruse and closely inspect the 6000 over pages TPPA to decide upon the constitutionality of the same on its merits — in pith and substance.

Certainly there are many aspects of the TPPA that concern us but for the purpose of this statement we would like to highlight in particular those relating to Chapter 28 on Dispute Settlement, known as ISDS.

According to the MITI-issued booklet, there is in place a transparent and predictable investment regime which allow recourse in the event of disputes and in these, there are clear provisions in the ISDS mechanism that ensures that the Government can control and avoid baseless proceedings made against it.

A careful scrutiny however, reveals otherwise. For one, the body that decides disputes arising under the TPPA are not the national courts and tribunals of the state parties to the TPPA, but a panel consisting of three privately appointed arbitrators (Article 28.9.1).

According to respected law academic, Alan B. Morrison, who is Lerner Family Associate Dean for Public Interest & Public Service at the George Washington University Law School in the United States in his letter to his congressional representative dated June 10, 2015, these arbitrators are generally private lawyers who specialise in international trade and investment who themselves rely on income generated by representing investors suing governments, an observation echoed by University of Malaya law professor Professor Gurdial S. Nijar speaking at the Malaysian Economic Association’s forum on the TPPA on 11 January 2016.

Currently access to international arbitration is widely available for any trade dispute so it is hard to fathom why there is a need for this mechanism under the TPPA.

Further, under the TPPA, when laws and regulations are challenged by an investor, the sole defendant would be the Federal Government even if the law or regulation challenged is a state law or by-law, including Shariah enactments by the states. For example, the law and administration of waqf land which is under the jurisdiction of the states according to Item 1 of the Ninth Schedule to the Constitution. Were a corporation desirous of a certain parcel of land for development or in order to establish a factory and waqf law prohibits its acquisition by the said corporation, the corporation may then sue the Federal Government under ISDS.

Professor Gurdial at the abovementioned forum also mentioned that this is true in respect of the bauxite mining activities which have created serious environmental damage in the state of Pahang. The corporation which has caused the damage can and most certainly will sue the Federal Government over the move by the Pahang state government to stop such detrimental activities were the TPPA in effect.

Although pursuant to Article 80(5) arrangements may be made between the Federal Government and the state government concerns in respect of any dispute, there may be important legal and public policy differences that could hinder such cooperation, particularly when both governments are controlled by different political parties.

These raise four principal concerns: (1) the panel would be required to decide what are essentially matters of domestic Malaysian law which are reserved for our own courts; (2) the arbitrators are not officers of the Judicial and Legal Service established by our Constitution nor appointees by the Yang Di-Pertuan Agong to our superior courts but are essentially private citizens that can be of any nationality; (3) the consent of Malaysia is a general consent at federal level and where there is a challenge to a state or by-law, the state or locality never consents and must rely on the Federal Government to defend it, raising federalism concerns; (4) there is no judicial review by our own courts or even any international court or tribunal of the merits of what is decided by the arbitrators, especially whether the TPPA has been violated at all, as all other courts and tribunals are excluded (Article 28.4.2). A proper ISDS mechanism is meant to assure investors that in the event of disputes, they have recourse in addition to domestic courts and not to their exclusion. In this regard the ISDS chapter certainly infringes on the policy freedom of the government by going beyond merely outlining the process by which a dispute over the underlining substantive principles in the agreement will be arbitrated.

And in fact, such arbitration can be resorted to by all parties without the need for this mechanism of the TPPA.

Under the previous version of Article 121 of the Constitution prior to the coming into force of the Constitution (Amendment) Act 1988 on 10 June 1988, judicial powers were solely vested in our superior courts.

Although the current version of the Article states that courts shall only have such jurisdiction as conferred by federal law, it is internationally recognised, and remains a fundamental element of sovereignty, that judicial decision making, in particular in disputes concerning national laws and regulations, are the sole prerogative of the respective national courts and tribunals, in the case of Malaysian laws, for the Malaysian courts.

Any transfer of this decision making process to three private individuals as provided for in the ISDS chapter in the TPPA is utterly abhorrent to our sovereignty and is unconstitutional. CENTHRA, CLJ and YP strongly believe that this concern on dispute settlement alone is reason enough to reject the TPPA in its entirety and calls upon the Government to do so immediately.

For the reasons enumerated above we call on the Government to heed the concerns of the rakyat not to sign the TPPA and to immediately cease all activities geared towards that end, and for Parliament to exercise its wisdom in rejecting outright, in totality, the TPPA. If, as the MITI Minister says, the TPPA will be signed without Malaysia as a result, then so be it, and we at CENTHRA, CLJ and YP believe that such an outcome would indeed be the better one for the continued independence of our nation.

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