Written Answers. - Multilateral Agreement on Investment.
John Gormley
Question:
146
Mr. Gormley
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
the international treaties and agreements to which Ireland is a signatory which will have greater force than the Multilateral Agreement on Investment.
[9124/98]
Tony Gregory
Question:
158
Mr. Gregory
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
her views on the concerns raised in correspondence (details attached) regarding the Multilateral Treaty on Investment.
[9119/98]
John Gormley
Question:
160
Mr. Gormley
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
if the roll back provision of the Multilateral Agreement on Investment will require the Government to remove any non-conforming legislation or face fines; and the amount of fines, if any, which can be imposed in this regard.
[9121/98]
John Gormley
Question:
161
Mr. Gormley
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
if the Government will press to include, in the Multilateral Agreement on Investment, a binding set of environmental, labour and human rights standards for which companies can be sued.
[9122/98]
John Gormley
Question:
162
Mr. Gormley
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
if a law or regulation that prevents or limits the maximum profitable use of an asset can become the subject of a lawsuit.
[9123/98]
John Gormley
Question:
163
Mr. Gormley
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
if the Multilateral Agreement on Investment will give citizens or states the right to initiate legal actions against corporations.
[9126/98]
John Gormley
Question:
164
Mr. Gormley
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
whether the Multilateral Agreement on Investment will allow corporations to initiate legal actions against national or local government; and the financial penalties, if any, which can be awarded.
[9127/98]
John Gormley
Question:
165
Mr. Gormley
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
the way in which the adjudication tribunals of the Multilateral Agreement on Investment will be constituted; the person who will appoint members to the adjudication tribunals; if labour, environmental or consumer rights representatives will sit on these tribunals; and the appeal procedures, if any, which will be put in place.
[9128/98]
John Gormley
Question:
166
Mr. Gormley
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
if she has consulted with the Department of Foreign Affairs on whether ratification of the Multilateral Agreement on Investment will require a referendum of the Irish people.
[9129/98]
John Gormley
Question:
167
Mr. Gormley
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
the way in which the Multilateral Agreement on Investment standstill provision will prevent or impose financial costs on the Government if it wishes to unilaterally improve environmental standards or increase workers' rights or minimum wages.
[9130/98]
John Gormley
Question:
168
Mr. Gormley
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
if the Multilateral Agreement on Investment will force competition on State or semi-State industry.
[9131/98]
I propose to take Questions Nos. 146, 158 and 160 to 168 inclusive together.
The Multilateral Agreement on Investment, known as MAI, is being negotiated under the auspices of the Organisation for Economic Co-operation and Development — the OECD — in Paris. It is intended to be a free-standing international treaty open to all countries willing and able to meet its obligations. The deadline for completion of negotiations was April 1998. However it is certain that this deadline will not be met. OECD Ministers, who meet in Paris on 27-28 April, are expected to approve an extension of the time-period for negotiation. The Irish Government will be represented at this meeting by Minister of State, Deputy Tom Kitt.
The most recent consolidated negotiating text of the MAI, together with a detailed commentary on it, is available on the OECD's Internet site [http://www. oecd. org]. I am arranging to forward copies of this document to Deputies Gregory and Gormley. I am also arranging to have copies placed in the Library.
The information on the MAI in this reply is based on the draft negotiating text, which is subject to change.
Countries which become party to the MAI would commit themselves to treat foreign investors no less favourably than they treat their own investors. They would also agree not to discriminate among investors of different MAI Parties. In general, as long as a country does not discriminate against foreign investors, the agreement would not restrict the ability of a government to legislate.
Other important provisions would include the following:
Transparency of laws and regulations;
The right to transfer funds to and from the host country (although governments would be able to suspend this right temporarily in the event of a balance of payments or monetary crisis);
The right of the investor to bring key personnel to the host country — subject to general immigration laws;
The prohibition of certain performance requirements — such as minimum export targets — as a condition for allowing an investment to be set up;
The right of a foreign investor to adequate and effective compensation in the event of the expropriation of property;
All of these provisions would be underpinned by a dispute resolution system both between states and between the investor and the host state.
Where countries are willing and able to implement the main thrust of the MAI but have difficulties with specific obligations, they will have the opportunity to negotiate country-specific expections.
Based on the negotiations to date, the Government supports the conclusion of the MAI and expects that this country would, in due course, become a party to it. As a small country with a high dependence on trade and foreign investment, we tend to favour a multilateral approach to dealing with regulatory issues that involve governments. A rule-bound system, such as the World Trade Organisation (WTO) offers in the case of trade, is therefore something that we welcome. As the OECD is the only active forum for the negotiation of international investment rules, it is natural for us to support the MAI negotiations.
The Government would have preferred if these negotiations could have been conducted in the WTO, with the active participation of developing countries who form the majority in that organisation. As developing countries are not at present willing to engage in multilateral investment negotiations, this option was not available. The Government fully respects the right of each developing country to choose what it considers best for itself in this area, through Ireland's own experience demonstrates how an open foreign investment regime can be a key factor in economic development. While any eventual negotiations in the WTO will undoubtedly be influenced by the MAI outcome, there is no automatic link between the two.
Ireland already operates a very open investment regime, geared to attracting foreign investment, which already complies in most respects with the principle of non-discrimination against foreign investment which underlies the MAI. Ratification of the MAI would enhance Ireland's attractiveness as a location for foreign investment. It would not have any significant impact on companies already established in Ireland.
It is likely that Ireland, like all other contracting parties, would submit a number of country-specific reservations if it decided to ratify the MAI. The details of these reservations cannot yet be finalised, pending the availability of the final text of the MAI and decisions on whether non-compatible provisions of Irish law should be dealt with by amending the law or lodging MAI reservations. Few such non-compatible provisions have been identified to date. None of them relates to our laws on the environment, labour standards or human rights.
The MAI would also be of value to our outward investors in that it would allow them to compete on a level playing field in the markets of those countries which choose to become party to the MAI. They would also benefit from the assurance that they can repatriate their profits here, employ Irish managers and specialised technicians, and have a right of fair and adequate compensation if their property in another MAI country were ever expropriated.
The approval of the Dáil would be required before Ireland agreed to be bound by the terms of the MAI. Before ratifying an international agreement such as the MAI, the Government ensures that its terms are not in conflict with the Irish Constitution or with other international obligations that Ireland may have assumed. In general, a referendum is only held in Ireland where an amendment to the Constitution is involved. It is not at present anticipated that ratification by Ireland of the MAI would require such a constitutional amendment.
The Irish negotiating position on the MAI has been developed inter-departmentally and has included consultation with the Department of the Environment and Local Government (the Department of Enterprise, Trade and Employment itself is responsible for industry, trade and labour issues). Business and other interested organisations have also been kept informed and consulted. This briefing/consultative process has more recently been extended to NGOs concerned with developmental and environmantal issues, following expressions of interest by them. Minister of State Deputy Tom Kitt addressed an NGO seminar on the MAI in January last. An official of my Department is participating in a debate on the MAI on 20 April organised by the NGO referred to in Deputy Gregory's question. NGOs have also had regular briefings by officials of my Department.
The Irish position on the major issues arising in the MAI is contained in a paper which is regularly updated. Copies of this paper have been provided to bodies interested in the subject, including NGOs, and is available on request from my Department. I am providing Deputies Gregory and Gormley with a copy of the position-paper and am also arranging to place copies in the Library.
Subject to the qualification about the current status of the MAI text, the following are the responses to the specific points raised in the questions from Deputies which are not already addressed above:
Non-Conforming Legislation/Dispute Settlement: Contracting parties are expected to bring their legislation into conformity with the obligations they subscribe to in the MAI. If a contracting party failed to do so, it would leave itself open to action being taken against it under the dispute settlement provisions of the MAI by another contracting party or by an individual investor. The dispute settlement provisions provide a variety of mechanisms for resolving disputes, with the emphasis being on negotiation and consultation rather than arbitration. Where arbitration has to be resorted to, the general rule is for a three-person tribunal appointed with the agreement of the parties to the dispute. The issue of an appeals procedure is still under discussion.
In a case of proven loss or damage to an investor, this could lead to an award by a tribunal of financial compensation against the contracting party. The amount of the award would be determined by the tribunal itself.
The draft MAI does not confer additional rights on citizens or states to initiate legal action against corporations. Neither does it interfere with the rights of either states or individual citizens to use the domestic courts of each contracting party to achieve enforcement of domestic law.
Environmental/Labour/Human Rights Clauses: Ireland has argued in favour of the inclusion of provisions in relation to environmental and labour standards, including a binding obligation on contracting parties not to lower such standards in order to attract or retain a particular investment. There is a growing consensus in the negotiations for the inclusions of such provisions. The right of contracting parties to take action against companies which fail to comply with non-discriminatory national laws in these areas is not affected by the provisions of the draft MAI. The draft MAI does not affect the rights of contracting parties to legislate, in a non-discriminatory manner, in the areas of environmental and labour law.
The general exception to the draft MAI relating to action taken in pursuance of a contracting party's obligations under the United Nations Charter is meant to cover,inter alia, compliance with UN-mandated sanctions which would otherwise be in conflict with the MAI rules.
