“Free trade deal”, what? Chinese sue Australia over Darwin Port

The Chinese owner of the Port of Darwin suing the Australian government shows why ‘free trade’ agreements should not include the right of investors to sue governments (ISDS). Patricia Ranald In the Landbridge case.

The Chinese owner of the Landbridge company, which has a 99-year lease at the Port of Darwin, filed a lawsuit. claim for compensation A lawsuit has been filed in an international court against the Australian government over its policy of terminating the lease on national security grounds.

Landbridge uses Investor-State Dispute Settlement (ISDS) rules in the China-Australia Free Trade Agreement (ChAFTA); These rules give foreign (but not domestic) investors the right to sue governments for billions of dollars if they convince an international court that a change in law or policy violates the terms of the agreement and will reduce future profits.

All trade agreements have interstate dispute resolution to address treaty violations. These controversial special rights for investors to sue governments are additional rights found in some, but not all, trade agreements.

Coalition sold Port, supported ISDS

The then LNP government agreed to include ISDS in ChAFTA when it was negotiated in 2015. defended He did not oppose the sale of ISDS and the lease by the CLP Northern Territory government. At the time NT Labor said: would keep control of the port. But the Opposition LNP backtracked and condemned the lease as a security risk ahead of the 2025 federal election, with both parties subsequently committed to to terminate the lease.

The Albanian government has since negotiation He decided to end his lease with the company and look for an Australian buyer, but the company refused.

The original value of the lease was reported as $506 million, but the ISDS lawsuit allows the company to claim for lost future profits.

This could reach billions.

The case could take years and cost additional millions to defend. While Australia could use national security exceptions in the trade agreement as a defence, there is no guarantee this will be successful as ISDS courts are not required to make consistent decisions. accepted requests Against governments that claim it is a security risk.

Putting corporations above governments

Whatever the merits of the national security argument, this once again shows that ISDS gives extra legal rights to international corporations that already have enormous market power, and reduces the right of governments to regulate in response to changing circumstances.

Labor experienced these fundamental flaws in the ISDS system when: Philip Morris tobacco company He sued the Rudd government over its tobacco plain packaging legislation in 2012, which sparked widespread public opposition and led to the development of Labor Party policy against ISDS.

Labor tries to scrap ISDS

The Albanian government is implementing policy ISDS is excluded from new trade agreements and reviewed in existing agreements, but this is a slow process.

ISDS’s reputation was further damaged when Australian billionaire Clive Palmer registered his mining company in Singapore and used ISDS in the ASEAN-Australia-New Zealand Free Trade agreement.He sued Australia for $420 billion in damages in four separate lawsuits.

Clive Palmer’s first claim was this: to 300 billion dollars

After losing a High Court appeal against the Western Australian government’s decision to refuse an iron ore mining licence. The last three claims, totaling $120 billion, stem from the Queensland Court dismissing the case. coal mining license and coal-fired power plant license for environmental reasonsincluding increased carbon emissions.

Clive Palmer and friends cost a motza

These last three situations continues in 2026 and join a growing group global list Proportion of fossil fuel companies using ISDS sue governments For taking action to find solutions to the climate crisis.

The Darwin Port claim landed with perfect timing as global momentum against ISDS accelerated. Australia and 57 other countries representing nearly a third of global GDP gathered in Santa Marta, Colombia, last week. we agreed Identifying ways to phase out fossil fuels and consider practical steps to do so at the first global diplomatic forum.

ISDS rules were identified as an obstacle to this process.

before the conference 346 non-governmental organizations from 50 countries and 220 economists and legal experts called on governments to withdraw from ISDS regulations. Darwin’s claim should encourage the Albanian government to take more coordinated action with other governments to accelerate this process.

Chinese Whispers. Broken promises to take back Darwin Port