Reject TPPA for Malaysia’s sake

January 13, 2016

Reject TPPA, say  Centre for Human Rights Research, CLJ and Young Professionals

The Centre for Human Rights Research and Advocacy (CENTHRA), Concerned Lawyers for Justice (CLJ) and Young Professionals (YP) follow with concern ongoing domestic developments with regard to the intended tabling of the Trans Pacific Partnership Agreement (TPPA) for debate before Parliament scheduled for the 26, 27 and 28 of this month.

MITI's Mustapha Mohamed

News reports have quoted our International Trade and Industry (MITI) Minister Dato’ Seri Mustapa Mohamed as stating that the TPPA is now better received now that “in-depth” discussions have been held with the rakyat and Opposition MPs.

Foreign Minister Dato’ Seri Anifah Aman chipped in quoting a PricewaterhouseCoopers (PwC) report, being a report prepared by a foreign and United States-based company, stating that participation of Malaysia in the TPPA negotiations was positive. Following Dato’ Seri Mustapa Mohamed’s statement, MITI has also released a booklet in Malay titled TPPA: Jawapan Kepada Kebimbangan, Salah Faham dan Tuduhan aiming to dispel so-called misconceptions on the TPPA arising ostensibly as a result of disinformation.

Alas, in our opinion, the said booklet has failed to achieve its supposed objectives, for far from dispelling concerns on the TPPA, it merely repeats bare and misleading assertions that the agreement will only be beneficial for Malaysia and in no way undermines our sovereignty.

This move, coupled with recent worrying actions on part of those in power especially in raising an objection to the application for leave for judicial review brought by three concerned non-governmental organisations (NGOs) casts serious doubt on the credibility and ability of MITI in particular, and the government in general, to keep the interests of the nation at heart when negotiating international agreements.

Since the government through their roadshows has confidently claimed that signing the TPPA will not infringe the Federal Constitution and would not affect the sovereignty of our nation, why then would they fear our courts hearing a challenge to the same on its merits? If indeed it is true as the government claims that signing the TPPA would not amount to bartering our independence for nothing, then they should not be afraid to let the court peruse and closely inspect the 6000 over pages TPPA to decide upon the constitutionality of the same on its merits — in pith and substance.

Certainly there are many aspects of the TPPA that concern us but for the purpose of this statement we would like to highlight in particular those relating to Chapter 28 on Dispute Settlement, known as ISDS.

According to the MITI-issued booklet, there is in place a transparent and predictable investment regime which allow recourse in the event of disputes and in these, there are clear provisions in the ISDS mechanism that ensures that the Government can control and avoid baseless proceedings made against it.


A careful scrutiny however, reveals otherwise. For one, the body that decides disputes arising under the TPPA are not the national courts and tribunals of the state parties to the TPPA, but a panel consisting of three privately appointed arbitrators (Article 28.9.1).

According to respected law academic, Alan B. Morrison, who is Lerner Family Associate Dean for Public Interest & Public Service at The George Washington University Law School in the United States in his letter to his congressional representative dated June 10, 2015, these arbitrators are generally private lawyers who specialise in international trade and investment who themselves rely on income generated by representing investors suing governments, an observation echoed by University of Malaya law professor Professor Gurdial S. Nijar speaking at the Malaysian Economic Association’s forum on the TPPA on 11 January 2016.

Currently access to international arbitration is widely available for any trade dispute so it is hard to fathom why there is a need for this mechanism under the TPPA.

Further, under the TPPA, when laws and regulations are challenged by an investor, the sole defendant would be the Federal Government even if the law or regulation challenged is a state law or by-law, including Shariah enactments by the states. For example, the law and administration of waqf land which is under the jurisdiction of the states according to Item 1 of the Ninth Schedule to the Constitution. Were a corporation desirous of a certain parcel of land for development or in order to establish a factory and waqf law prohibits its acquisition by the said corporation, the corporation may then sue the Federal Government under ISDS.

Professor Gurdial at the above mentioned forum also mentioned that this is true in respect of the bauxite mining activities which have created serious environmental damage in the state of Pahang. The corporation which has caused the damage can and most certainly will sue the Federal Government over the move by the Pahang state government to stop such detrimental activities were the TPPA in effect.

Although pursuant to Article 80(5) arrangements may be made between the Federal Government and the state government concerns in respect of any dispute, there may be important legal and public policy differences that could hinder such cooperation, particularly when both governments are controlled by different political parties.

These raise four principal concerns: (1) the panel would be required to decide what are essentially matters of domestic Malaysian law which are reserved for our own courts; (2) the arbitrators are not officers of the Judicial and Legal Service established by our Constitution nor appointees by the Yang Di-Pertuan Agong to our superior courts but are essentially private citizens that can be of any nationality; (3) the consent of Malaysia is a general consent at federal level and where there is a challenge to a state or by-law, the state or locality never consents and must rely on the Federal Government to defend it, raising federalism concerns; (4) there is no judicial review by our own courts or even any international court or tribunal of the merits of what is decided by the arbitrators, especially whether the TPPA has been violated at all, as all other courts and tribunals are excluded (Article 28.4.2). A proper ISDS mechanism is meant to assure investors that in the event of disputes, they have recourse in addition to domestic courts and not to their exclusion. In this regard the ISDS chapter certainly infringes on the policy freedom of the government by going beyond merely outlining the process by which a dispute over the underlining substantive principles in the agreement will be arbitrated.

And in fact, such arbitration can be resorted to by all parties without the need for this mechanism of the TPPA.

Under the previous version of Article 121 of the Constitution prior to the coming into force of the Constitution (Amendment) Act 1988 on 10 June 1988, judicial powers were solely vested in our superior courts.

Although the current version of the Article states that courts shall only have such jurisdiction as conferred by federal law, it is internationally recognised, and remains a fundamental element of sovereignty, that judicial decision making, in particular in disputes concerning national laws and regulations, are the sole prerogative of the respective national courts and tribunals, in the case of Malaysian laws, for the Malaysian courts.

Any transfer of this decision making process to three private individuals as provided for in the ISDS chapter in the TPPA is utterly abhorrent to our sovereignty and is unconstitutional. CENTHRA, CLJ and YP strongly believe that this concern on dispute settlement alone is reason enough to reject the TPPA in its entirety and calls upon the Government to do so immediately.

For the reasons enumerated above we call on the Government to heed the concerns of the rakyat not to sign the TPPA and to immediately cease all activities geared towards that end, and for Parliament to exercise its wisdom in rejecting outright, in totality, the TPPA. If, as the MITI Minister says, the TPPA will be signed without Malaysia as a result, then so be it, and we at CENTHRA, CLJ and YP believe that such an outcome would indeed be the better one for the continued independence of our nation. — Reuters


10 thoughts on “Reject TPPA for Malaysia’s sake

  1. It’s typical of a village bully trying to get things done his way. That’s the epitome of the ruling party under Al Jubur. His arm has been twisted beyond recognition and with the 1MDB guilt hanging over his head agreeing to a one-sided deal becomes a matter of conjecture. Guys, we are screwed good and proper. Period.

  2. ‘Reject TPPA for Malaysia’s sake’ is the call by Centre for Human Rights Research, CLJ and Young Professionals.

    The call by the three to those in power to ‘Reject TPPA for Malaysia’s sake’ may have been made by them on their assumption and view that the TPPA is not for the benefit of Malaysia’s but they may not have realized that the TPPA may never have been for the benefit of those in power and not for Malaysians on whose behalf the TPPA is being justified.

    Worldwide political leaders and their corporate financiers and professional advisers work for self greed and benefit and interest but use the public to justify their actions. As an example tax laws benefit those in power and rich who live on others’ expense and get tax-exempt ‘income’ via ‘ESOS’ and ‘Perks’ while those including low income earners have to pay 25% rate of income tax on dividends which rate is only for those with income in millions.

    Rich must be subsidized to enable them to continue with their wasteful luxurious lifestyles at other’s expense whereas the poor are used to hardships including rising cost of living. The price of vegetables is more than double of what was over a year ago while the price of milk is also rising to companies doing food business show bumper profits and dividends. [To-days Price of Nestle-RM73.44,
    Dutch Lady-RM47.46 F&N-RM1856]. Vegetables and milk are basic needs but there is little control over them.

  3. I’m wondering why the 1PM-cum-1Finance Minister is so eager to sign on to
    TPP agreement. After all, the Doctor opposes it, and most of the
    Malay ultranationalists of UMNO Baru and rent-seekers of UMNO Baru-BN
    oppose it too.

    So too do experts such as Prof Jomo K.S. and most Malaysian academicians
    (except for the “market fundamentalist” economic free traders?)

    Opponents of TPP and similar agreements include Nobel Prize economist
    Joseph Stiglitz and former US Secretary of Labor Robert Reich.
    Stiglitz bluntly calls the TPP agreement “The Secret Corporate Takeover”.

  4. Is it possible for one our learned friends in this blog to explian briefly how TPPA will eliminate/reduce the sub-slave working conditions of the imported labour employed by the exploitive employers, like in the planations, manufacturing sector where the finished products are exported other member countries. Will the TPPA reduce human expolitation. Will the employers have to comply to a set of minmum working conditions. I know of one emplyer in Meru who employs 800 foreign workers in the production of rubber gloves for export and this employter runs a actual prison lock up sytem inside the compound. Once I had to get a police ASP and an Inspector to go and rescue a worker who was locked for 4 days for what should be industrial relations issue. The tycoon, making billions, uses the Malaysian Ausxilory police force to enforce his slave camp conditions.

  5. ISDS refers to a procedure by which private companies can sue foreign governments over discrimination, seizure of private property, or other wrongful acts. It allows for secret arbitration panels to effectively overrule national regulations by allowing foreign investors to sue governments over lost potential future profits in secret arbitration panels. In other words, overrule national regulations and consequent surrender of state sovereignty to corporations based on the noxious lost profits doctrine is what ISDS is all about. TPP is, in fact, a treaty that has been written behind closed doors by the corporate world. What scare me most is how many and what kinds of secret side deals they have made behind those closed doors. Once TPP is agreed to, it has no sunset date and could only be altered by a consensus of all of the countries that agreed to it.

  6. There are pros and cons of TPP. The people will receive consequences based on decision made to join or reject TPP, and therefore national debate is warranted.

    The core elements of national sovereignty are national defense and political system. Business interest and trade are typically negotiable without harming the core national sovereignty. For example, with intact national defense and political system, Malaysia can exit a trade pact at the moment she realizes she is in a wrong group. Of course, a better way is to avoid getting into the wrong group in order to avoid monetary cost in the first place if we have the foresight, which is hard to come by.

    A research cited by Wall Street Journal a few day ago shows Malaysia will gain the second most commercial benefits after Vietnam among all 12 TPP nations. That is one pros. Either MITI has done its job or we are just lucky (or the research has a flaw).

    Corporations and multinational companies are not people’s enemies, but are necessary entities to counter-act the political power that tends to centralize in countries such as Malaysia. Businesses are manned by people and they are only as benevolent as the people who mans them. Some regulations can help. I think allowing businesses to challenge government in court is moving us to less autocratic nation as long as we can retain the core national sovereignty in the form of national defense and political system. Government is likely to be shaped and tamed to a better one in the process.

    One thing we should not do is to mindlessly apt the western liberals in demonizing their business corporations because their problem is not equivalent to that of us. They have US$500 billions Apple and other giants, but we don’t. What we have is national sovereignty to modulate those commercial power as what Mr. LKY did in the 1960 when the rest of Singapore’s neighbors were blindly nationalistic and socialistic.

    For those of you who want to drag Mr. Najib to court for financial fraud and you cannot do it now, a small step toward that direction is to nurture an environment where it is a norm for businesses to challenge government in court. Over time, people will shed their feudal attitude toward government and future PM.

  7. I think that is the nub of the matter is the unwillingness to suffer short-term pain. Any FTA will entail pain to economies which are not open and are protected; economies that are not competitive.

    Any multi-lateral FTA is better than no FTA. With FTAs, countries are forced to dismantle all kinds of barriers and forced to be efficient. Thailand, Philippines and Indonesia (and many other economies outside TPPA) are unwilling to join now because of the pain. Although ASEAN Community came into being this month, several countries still have not fulfilled its requirements.

    Let me advocate the devil. Malaysia should join TPPA. It will force Malaysia to remove its barriers and all kinds of shenanigans that hobbles its economy. Yes, joining TPPA is very painful, more painful than removing the opium of NEP crutches. Better to bite the bullet now and be done with. Instead of forever falling further and further behind. The world does not owe Malaysia a living. Its oil will run out sooner rather than later. Then what? Impose the NEP on the world so that Malaysia can compete?

    As LaMoy said in the other thread: “TPP may turn out to be the worst trade agreement in decades.”

    But no FTA is even worse if most countries began to erect all kinds of tariffs and non-tariff barriers. Just as Winston Churchill said about democracy being the worst kind of government, except for all the others.

    My only beef with the TPPA is that it is used by the US to contain China.
    NEP will not be affected. So how can we remove this drag on our country? –Din Merican

  8. Shiou: Sovereignty is the central organizing principles of the system of states. However, it is also one of the most poorly understood concepts in international relations. To quote from Wikipedia: “Sovereignty is understood in jurisprudence as the full right and power of a governing body to govern itself without any interference from outside sources or bodies. . . .” I am a pharmaceutical scientist, not a political scientist, and definitely no expert in international relations. But your interpretation on sovereignty sounds to me very much like the old British colonial East India Company. Anyway, it is good to know a different perspective.

  9. /// NEP will not be affected. So how can we remove this drag on our country? –Din Merican ///

    That’s a tough one. Vote UMNO and those who are in favour of NEP out of office?

  10. The: I fully agree with you in essence FTA is good. But it is good only if it is fair and transparent. Many aspects of this TPP really bother me. I tend to suspect that this is a new form of colonization through economic prowess. When all the leading presidential candidates of Obama’s party weighed in against it, led me wonder why. In his final State of the Union Address, the only time Obama mentioned China was that “China is not going to write the trade rules,” and urged the congress to ractify TPP. Why? Well, what do I know. Like I told Shiou, I am a pharmaceutical scientist and not a political scientist. I only know how to research and develop drugs to save life. Say, I wonder if any one in Malaysia question if my drug is halal.

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