13 Mar 2014

Trade Agreement Puts Environmental Wins In Jeopardy

By Isabel McIntosh

A new free trade agreement with South Korea could allow the Korean companies that own three coal mines in NSW to sue, if Australia enforces environmental protections, writes Isabel Mcintosh

Australia’s new free trade agreement (FTA) with South Korea, promoted as a win for Australian exports, includes a clause that could spell big trouble for Australia's environmental movement and sovereignty.

The FTA, agreed upon by both nations but yet to be ratified by parliament, includes an Investor-State Dispute Settlement (ISDS) provisions that allows overseas investors to challenge threats to their business interests in international courts.

For the environment movement fighting to protect land and water in NSW, this has enormous implications.

There are currently three South Korean mining companies in NSW with significant interests in huge and environmentally controversial coal projects. In the Bylong Valley the South Korean government-owned KEPCO has 100 per cent ownership of the Bylong Coal mine and plans to extract 420 million tonnes of thermal coal from the area.

Another South Korean government-owned enterprise KORES has recently received NSW government support to develop the $800 million Wallarah-2 coal project in the Central Coast water catchment area, a project previously turned down by the former NSW Labor government.

And then there is POSCO, the 100 per cent owner of what used to be Hume Coal in the Southern Highlands, who are facing significant local community action against its social licence including a seven-month blockade. At stake for POSCO is 446 million tonnes of coking coal.

What is particularly concerning about the new trade deal and its inclusion of an ISDS is the international precedent set in regards to these clauses.

Trade Minister Andrew Robb was quick to assure Australians that sufficient safeguards were in place. But such "safeguards" didn’t stop the Canadian-based Pacific Rim Mining Corporation suing the El Salvador government when it refused a mining license for environmental reasons. The same safeguards didn’t stop Renco, a US company, suing the Peru government after it was told to clean up its lead pollution.

Similar ISDS provisions in the North American Free Trade Agreement were also used by US energy company Lone Pine to sue the Quebec provincial government for $250 million after it suspended shale gas mining pending a study into its environmental impact.

The Australia Fairtrade and Investment Network (AFTINET) says Australia should be very concerned about ISDS provisions in the South Korea agreement and also the proposed Trans-Pacific Partnership agreement, which Prime Minister Tony Abbott is currently negotiating. Last year more than 70 groups signed Lock the Gate’s open letter to Minister Andrew Robb stating that “the inclusion of ISDS in more trade agreements … could cost taxpayers many millions of dollars, and would discourage governments from regulating in the public interest”.

Adding to the controversy surrounding the South Korean backed mines is the fact former Resources Minster Chris Hartcher is currently under ICAC investigation for (among other things) his relationship with Nick Di Girolamo, a former lobbyist for the South Korean conglomerate Kores.

It has recently been revealed that Hartcher dined with representatives of Kores at Di Girolamo’s house while Kores was trying to get the Wallarah-2 coal mine approved. At the end of 2012 when he was still Resources Minister, Hartcher also made an 8-day visit to South Korea and China to “assist in meeting the key results of the 2012-2015 Strategic Plan for NSW Trade & Investment.” He met with KEPCO, KORES and POSCO, including a site visit to KEPCO, his only scheduled event for that particular day.

Over the past three years environmental campaigners in NSW have achieved some significant wins against coal seam gas mining companies including in the Northern Rivers, at Fullerton Cove and in the Illawarra and Sydney.

The O’Farrell government has also introduced some legislation, such as the No Go Zones for Coal Seam Gas (CSG) mining in Sydney, and a moratorium on CSG in Sydney Drinking Water Catchments. The EPA has also fined, albeit extremely modestly, a number of mining companies for pollution breaches.

These hard fought wins are all in jeopardy if the foreign-owned companies can sue for loss of financial return.

As the fight to protect NSW continues, environmental campaigners have started to embrace the rhetoric of war, with references to “defending land and water from the invasion of mining”, “fighting to protect land and water” and an “attack on human rights”. Trade agreements like the South Korea FTA and the proposed TPP may be signed in peace time, but they sign away what wars are fought over: rights to land and water, business interests and culture.

Appeals in letters such as this one to the South Korean ambassador from the Southern Highlands Action Group against Coal are effectively rendered worthless, and it is the same for appeals to local MPs and other legitimate channels for community support within our democracy.

In the war over environmental protection and the right to protect Australia's land and water, Tony Abbott may have handed a powerful piece of ammunition to foreign corporations. If he signs the TPP in may — which includes major trading partners Japan and the US — it will be full surrender.

Log in or register to post comments

Discuss this article

To control your subscriptions to discussions you participate in go to your Account Settings preferences and click the Subscriptions tab.

Enter your comments here

calyptorhynchus
Posted Thursday, March 13, 2014 - 16:25

In the old days a government signing an agreement that gave away the nation's sovereignty would be desribed as 'treasonous'. I thought conservative governments were supposed to guard things like national soveriegnity jealously.

DrGideonPolya
Posted Thursday, March 13, 2014 - 17:08

It is one thing for the climate criminal, effective climate change denialist  Coalition to permit climate criminal Australian and foreign corporations to pollute the one common atmosphere and one common ocean of  all countries (see Gideon Polya, “Australia 's Huge Coal, Gas & Iron Ore Exports Threaten Planet”, Countercurrents, 15 May 2012: http://www.countercurrents.org/polya150512.htm ) , but another thing entirely to permit foreign climate criminals to block environmental and other democratically-emplaced protections within Australia.

Climate treason indeed.

Decent Australians with a prime allegiance to Australia and a love of Australia - its ecosystems, flora, fauna, landscapes and people -  will vote 1 Green and put the Coalition last.

VETDEN
Posted Thursday, March 13, 2014 - 17:40

While STOP THE BOATS was front and centre of the Tory rant, SELL THE FARM was kept in the bottom drawer. Fascinating to see today Shorten wants to 'get cuddly' with the mining industry. Why? He knows the Tories are a limb to the mining & energy industries and is hoping to become, maybe, a digit on that limb. The FTA is the back door to collapsing 'the motherfracker' opposition in Australia. The Torie will be able to sell the arguement down the line when multi-billion dollar lawsuits start stacking up against State governments 'our hands are tied'. This is another play on what the state and federal governments achieved in the States. Keep front & centre in focus, 5% of drills fail at the outset, then 50% of drills go south leaving environmental damage (300,000 drills in Wichita!) Just wait 'til the Nationals wake up and realise how their LNP buddies have screwed them right royally environmentally when the crops won't grow, the livestock are worthless because of chemical contamination. Australia, Asia's foodbowl poisoned at the source - for the lie of lower local power bills!

This user is a New Matilda supporter. chrisdoonan
Posted Friday, March 14, 2014 - 01:18

Lets see what these Liberal criminals get personally out of these FTAs, they have no honour

wideEyedPupil
Posted Monday, March 17, 2014 - 11:53

It's easy Chris Doonan, they get an advancement of what Gore Vidal called crypto-fascism. The project that rewards all who sail in her midst. Money talks, money concentrates in ever greater amounts and in ever few hands, money protects money and everything else is bullshit. Until the ecosystems supporting life on earth collapse and it all goes to seed.