• Self Government Anyone?

    Getting lawyers to agree on anything is notoriously difficult. So when one hundred retired judges, prominent legal academics, lawmakers and leading practitioners from New Zealand and overseas put their names to something, it’s time to sit up and take notice.

    What is it that raises the concern of so many eminent lawyers? It is the prospect that our government is about to trade away – in secret – an important part of our powers of self-government.

    The Trans-Pacific Partnership (the TPP) currently being negotiated is presented as a straightforward free trade agreement. But it is clear that the Americans will insist (as they have done with other similar agreements) that the agreement should allow foreign corporations to stop our government (or any future government) from changing New Zealand law in a way they think might undermine their value.

    Private companies from the other eight countries, even though not themselves parties to the agreement, would be able to sue our government, not in our own courts, but in private tribunals set up specifically for the purpose (and existing practice shows that the arbitrators in such tribunals can be judges one day, and lawyers for litigants the next).

    Under these arrangements, an American corporation, for example, would be given far more extensive rights against our government than any New Zealand company would ever have. It would mean that a future government, perhaps elected to change policy in an area like environmental protection or health and safety (smoking comes to mind), could be threatened with a crippling law suit unless it backed off.

    The rights protected by these provisions go far beyond real property rights and include financial instruments, mining concessions, intellectual property, public-private partnership contracts and even market share.

    Nor is it just the government that would be hog-tied. A particular worry for lawyers is that our courts, too, could be over-ruled. The foreign investment tribunals have decided that courts are part of a country’s government (riding roughshod over any doctrine of the separation of powers) and that they, too, must comply. Even if our courts had upheld the validity of a law properly passed by the New Zealand Parliament, that decision could be challenged by a foreign corporation alleging it breached their rights under the TPP. Even a jury decision in private litigation could be challenged and lead to the government paying millions in compensation.

    In a recent case brought by Chevron, for example, a tribunal ordered the Ecuador government, in defiance of their constitution, not to enforce a ruling by Ecuador’s Appeal Court that Chevron must pay $18 billion to clean up toxic waste in the Amazon Basin.

    The concerns expressed by the 100 signatories to the lawyers’ open letter released today do not arise from mere speculation. Provisions like those causing concern have a well-established track record. When there were only a few cases, no one took much notice. But as American and European companies investing and trading overseas have increasingly enforced the rights arising from these treaty provisions, concerns have grown.

    And with good reason. There has been an exponential increase in the numbers of such cases brought by (largely American) foreign corporations against governments which are parties to agreements similar to the proposed TPP. Over $675 million has been paid out in awards made by the special tribunals in cases involving US companies alone.

    What adds to the concern is that the negotiations on these arrangements are being conducted by our government in secret. We are not allowed to know what is being discussed, and by the time the TPP is presented to Parliament, the deal will have been done. There will be no meaningful debate or Select Committee scrutiny. We won’t even be allowed to see what trade-offs the government has made until four years after the text has been signed.

    Yet the concessions made in secret by today’s government would permanently lock New Zealand into a marketplace controlled and dominated by foreign corporations. Voters would be left without any possibility of redress.

    When the Prime Minister was asked about these issues when the negotiations began some months ago, he described fears of special legal rights for foreign investors as “far-fetched” and pooh-poohed any concerns. Yet the Australian government has been quite open in declaring that it will oppose any such provision, basing itself on the Australian Productivity Commission’s warning that it would have no economic justification and carry policy and fiscal costs.

    Our own government, by contrast, has demonstrated in its dealings with overseas corporations like Warner Brothers, Sky City and Shanghai Pengxin how far it is prepared to go to accommodate overseas business interests. We have good reason to fear that the TPP will continue that process.

    We have already sold off into foreign ownership a higher proportion of our national assets than any other developed country. The TPP could mean that control over what remains, now and into the future, would in effect be handed over to international corporations. This is a heavy price to pay for a trade deal in which our partners, at most, commit to buy what they want to buy anyway.

    Bryan Gould

    7 May 2012

    This article was published in the NZ Herald on 9 May.

  • Access to the Law Under Threat

    Back in the late 1960s in Britain, I became friendly with Tony Lynes, the activist who founded the Child Poverty Action Group. With his help, I set up a free legal advice service in Oxford, where I was then living and teaching.

    When I became the parliamentary candidate in Southampton, I opened a similar advice centre in that city – and I was delighted to be joined by another young Kiwi law teacher, Malcolm Grant, who is now the Provost of University College, London.

    I have ever since taken a supportive interest in the provision of free legal advice to those who couldn’t afford it. I was delighted to find – on my return to New Zealand – a well-established network of 27 community law centres, offering free legal advice (and, on occasion, legal representation) to people in need.

    Being denied legal advice might not spring to the top of many minds when it comes to forms of deprivation. Yet it can be one of the most severe disadvantages in a modern society. The rule of law is fundamental to our claim to live in a free society (it was the great Chief Justice Edward Coke who declared in the seventeenth century that everyone is equal before the law) but that is not much help to someone who cannot get the advice needed to make use of it.

    The denial of legal advice is of particular significance to those of few means and little power or influence. Unless they are helped to call the law in aid, they will have no defence against those who treat them wrongly.

    New Zealand’s 27 community law centres cover most of the country but focus especially on those areas of acknowledged greatest need. In the Eastern Bay of Plenty, where I live, the need is certainly acute, and is recognised in matters such as health care through the excellent work of the Eastern Bay Primary Health Alliance which I have the privilege to chair.

    No one would wish to see a high-needs community denied a proper standard of health care. Yet the possibility has now emerged that access to legal advice for the same deprived community might be in jeopardy.

    The funding provided for the community law centres has hitherto come from a special fund financed by the interest earned on monies held in solicitors’ trust funds, topped up when necessary by the government. The recession has meant that this source of funding has fallen sharply, so that the government needs to find more money to keep the service at its present level.

    The sums involved are, by government standards, pretty small; but finding more money runs directly counter to the government’s drive to offset the recession-induced decline in tax revenue by cutting public spending.

    It comes as no surprise, therefore, that the Community Law Centres of Aotearoa have been put on notice that a review is under way, with a view to cutting rather than increasing expenditure. The goal of the exercise is to make savings – to achieve “economies of scale” – which are likely to reduce the numbers of such centres and restrict the geographical coverage they provide.

    The review has some all too familiar features. The Ministry of Justice, in its drive to save money, is not averse to spending money on consultants to conduct the review. The intention is to rank the areas of the country which will need to be covered, with the implication that some areas – perhaps like the Eastern Bay of Plenty, with a small population – will be left out.

    Even in areas where the service is maintained, it will no longer be funded but will be “purchased” following a tendering process, so that existing providers might lose out to those who offer a lower price. As so often, it seems, the market model is the only one that is contemplated.

    Areas that are left out will be served by a centrally funded 0800 national call centre. The designers of the scheme seem unaware that those most in need of help are the least likely to get on the phone to explain their problems to a faceless stranger. My own experience over decades of offering help and advice is that those seeking help feel most comfortable when they can relax face-to-face with a real person who is there to help them.

    No one should resist the search for better ways of doing things. I entirely support the quest for more streamlined organisation, more shared services, better value for money.

    But the omens are not good. The chances are that, when the results of the review are announced later this year, there will be a reduced and less effective attempt to maintain in place one of the cardinal features of a civilised society.

    And it would be a pity if – in the course of what is proving to be so far a pretty ineffectual counter-recessionary strategy – a government that has spent billions on tax cuts for the rich should again look for penny-pinching but nevertheless painful sacrifices to be made by those who can least afford to make them.

    Bryan Gould

    28 April 2012