Australia’s Position on Investor–State Dispute Settlement: Fruit of a Poisonous Tree or a Few Rotten Apples?

Abstract

This article critically analyses the methodology and substantive basis of Australia’s initial rejection of, and subsequent ambivalence towards, investor–State dispute settlement (‘ISDS’) mechanisms contained in international investment agreements. The analysis focuses on the Australian Government Trade Policy Statement of 2011, as well as the 2010 and 2015 reports of the Australian Productivity Commission that largely informed the conclusions of the Trade Policy Statement. The article reveals that Australia’s analysis was incomplete and lacking meaningful discourse on the general concerns and benefits of ISDS in light of Australia’s regional relationships and the global political economy. Consequently, an adequate debate on the virtues of ISDS has yet to take place in Australia. In the absence of a clear and consistent investment policy, this article provides guidance for Australia’s future policy, such as threshold criteria for the inclusion of ISDS and a model investment treaty. With the European Union and United States expressing dissatisfaction with the present system of ISDS, this article is timely and has broad relevance.