Summarised by Centrist
Emeritus Professor of Law, Jane Kelsey, warns that the proposed Fast-track Approvals Bill in New Zealand could be moving too fast.
She warns that future governments may be exposed to costly trade disputes.
The bill is designed to speed up approval processes for projects with significant regional or national benefits. Yet, it could allow for compensation bonds to be offered to oil and gas companies if their drilling rights were extinguished by future administrations. This move comes despite recent efforts to close doors on investor-state dispute settlement (ISDS) mechanisms.
ISDS provisions are found in many trade and investment agreements and allow foreign investors to directly enforce guarantees against the host state in international tribunals. They could potentially result in billions of dollars in compensation (including compound interest) for lost future profits.
Kelsey cautions “Foreign investors wanting to protect their gains under the controversial new law could hold the country to ransom by threatening a dispute.
Editor’s note: Why would anyone, especially investors from abroad, engage in a long-term project if there are no safeguards against the next government abruptly changing course? The question is does NZ want foreign investment or not?
