MLC707 Commercial and Corporations Law Assessment

MLC707 Commercial and Corporations Law Assessment

MLC707 Commercial and Corporations Law Assessment

Who makes law in Australia and the democratic aspect of the law-making process in Australia?

Commonwealth constitution gives power to commonwealth Parliament of Australia in relation of making laws and amending the laws in certain areas.  There are various areas in which commonwealth have the authority to make laws and amended as according to the need of the time. It is the supreme law in Australia constitution. Under the constitution of Australia commonwealth of Australia operates the relationship of Australia states.  There are various documents which are included in the constitution and one of the most important documents is the commonwealth of Australia. The constitution of Commonwealth of Australian constitution 1900 becomes law on 9 July 1900 which was entered into force on 1 January 1901.  Rule relating to road, buying and selling of property law and criminal law etc are making by the state legislative power because these areas are not included in list of the commonwealth parliament. Commonwealth constitution is the only fundamental document which gives empowerment to the political and legal system of Australia.

MLC707 Commercial and Corporations Law Assessment

The two main sources of Australia are:

  1. Case law
  2. Legislation

Court made the case laws whereas parliament makes the legislation. But before 1850 there are various parliaments which are not able or active for making the laws.  Case decisions have been taken by the court of judges and these decisions are published in the law report which also includes the reason for the decision.  These decisions have been consulted by the judges in taking their own case decision. It is also known as the common law. From 19th century parliamentary laws was increased in numbers which is known as statutes or acts. They are overruled the common law when they are applying in same area.

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Federal parliament’s legislative powers

For making a new commonwealth law is made or amended the existing law or removed any existing law is under the federal parliament authority and it is in accordance with the act which is provided under the act.  Federal parliament can only make laws which are related to the following matters like:

  1. Currency
  2. Marriage and divorce
  3. Tax
  4. Banking
  5. Telecommunications
  6. Old age pensions

Australian States hold legislative power in various areas like local government, hospitals; schools etc. there are two house of parliament and are not equal. Matters which are relating to the collection of public money and expenditure of public money are tackled by both houses of government.

Bill

Bill is the document which includes the proposal for changing the laws or for making new laws. Bill has been become an act when it is passed by the both house of parliament and assent has been given by the Governor-General.  Cabinet is under a responsibility under which he is directly responsible for the policies of the government which is put forward by him to any government department which might suggest bill to the relevant minister who put forward this bill to the cabinet and the house.  Any parliament member can proposed any bill for making changes in existing law or making new laws which is known as Private Member’s bills.

Stages of a Bill of Parliament

Any parliament member who want to change the existing law and introduced new law can make a bill. It is the first step in which first reading is performed. In this bill title was read and make number of copies which is distributed among all the parliament members for the purpose of reading.

Second stage is known as the second reading in which member who want to introduce the new laws will read the bill and explain the purpose, reason etc. In this Member of Parliament can ask any question related to the bill and member who purposed the law will explain and give answer to him about the effect of the bills, cost and any other expenditure which is incurred in this process. At this stage many changes is made in the bill and amendments has been made. Members are voting the bill and then it will pass in third stage.

Third stage is that in which house is asked for voting on the bill. If bill is passed then it will forward in other house for consideration.

Progress of the bill in the other house

After the three stages bill will pass in the other house. If any bill which is introduced in lower house then it will forward in upper house. Any amendments can be made in the bill and it will be sent back for consideration in house of representative. If lower house is not agreed for making changes then it will be sent to the upper house for making amendments.

Assent

If both houses give their assent after make changes in the bill then it will presented to the state- Governor or the Governor General. Governor –General is under the duty that he has to pass the new law or gives assent for making new laws. Once the bill was sent to the Governor-General then it is kind of formality that it be approved. After giving assent by Governor-General will become specific clause and it will implemented on specific date. After it passing it will become and act or a statute.

Parliament is responsible for implementation of new laws, rules and regulations in organisation, society, institutions and various other areas.

International Arbitral Process

ISDS mentioned the provision which protect the trade and investment agreements and give protection to property and assets. With the development of ISDS investors are not protected not only from the nationalization but also from the various risks. In 1966 international arbitration for investors and states was recognized. Investor-state dispute settlement is granting right to the investor for settling their dispute under the investor-state Dispute settlement in which investor start his proceeding against foreign government. There are number of provisions of investor-state dispute settlement which contained various bilateral investment treaties in international treaties lie energy Charter Treaty etc. investor who investing his fund in one country to another country then both parties have to agreed with the provisions of the ISDS. If their rights of investor is violated under Public International Law then investor has right to take this matter in an arbitral tribunal. ISDS is the international arbitration system which settles the dispute of the foreign investor.  As it is mentioned at the United Nations conference that ISDS clause has takes his place because there are number of cases which has been increased. Australia high court and Egyptian Court held in one case in which both court gives the long term imprisonment to Al Jazeera Journalist and also includes Australian Peter Greste.  In many court the court decision is in the question which has been taken in also under investor-state dispute settlement processes. Private investors have the right to claims against the countries in which parties are engaged in Bilateral Investment Treaties or Free Trade Agreements. It resolves the problem of the parties. Arbitral tribunals which are set under the provisions of the ISDS are not court and they have no need to act like court.

In January 2014 European parliamentary Research Service examined and pointed various concerns which are raised by examiner which covers:

  1. Treaty provisions are not formulated in indefinite form which leaves a wide range of version which is open for the arbitrations.
  2. There is no transparency in relation to the arbitration processes.
  3. It indulging the high cost in ISDS arbitrations.
  4. There is no specific appeal processes.

There are number of agreements on ISDS is applied and settled dispute the parties.

Agreement landscape

In this agreement Australia is the 21 party in this agreement in the form of Investments protection and promotion Agreements in which it includes the provisions of ISDS. Australia is also becomes a party in seven FTAs. Australia signed the agreement with Korea in April 2014 and it also entered into agreement with the Japan in economic partnership agreement in July 2014. After the completion of the domestic process the above agreement came into force. In Korea-Australia Free- Trade agreement has ISDS provisions but Japan –Australia agreement has not.

Dispute Landscape

United Nation Conference on Trade and Associations (UNCTAD) which laid down the all the ISDS cases and published them into Annual review. In 2013 there are 57 new cases which were reduced by the year 2012. In 2012 there are 62 cases which are solved by ISDS.  There are various cases in which investors make claims against the states from developed countries. Investors are mainly from the European Union and United states. There is various numbers of challenges to arrange of governmental measure including:

  1. Strategies which is related to the renewable energy.
  2. Licenses and permits are revoked.
  3. Regulate the energy tariffs, decisions related to Land zoning etc.

Investor can claim if party breaches the provisions of the investment treaty of the state in which they became party.

Advantages of ISDS are:

  1. If any countries want to deal with the developing countries must deal with the treaty which is based upon ISDS.
  2. ISDS is become very important and it is accepted by majority of existing and potential treaty partners.
  3. Australia is engaged in system making the changes or improved in future treaties.
  4. The threat regulatory chill is minimized through ISDS in Australia.
Case study: Philip Morris v. Uruguay

On 1 December 2011 Tobacco plain packaging act 2011 is passed and becomes the statute in Australia which control the use of tobacco and there are various measures is stated in this act for reducing the investment in tobacco. In Australia smoking is the main causes which cause death and diseases in Australia. In 1993 Philip Morris challenged the plain tobacco packaging in 1993. It is the first dispute which is taken against Australia. He argued that tobacco plain packaging breached the clause 6 of Hong-Kong agreement and also breached the article (2) of Hong –Kong Agreement. He also imposed that tobacco plain packaging also includes the 

unreasonable and discriminatory measures and that Morris have been deprived the full protection and security which is stated in under article (2) of the Hong-kong agreement. He said that tobacco will not sold in plain packaging there should be warning on the packaging related to the health of the individual with the brand name and in proper sixe at the bottom of the packaging. He did not mention the compensation money but has stated that it is important for mentioning the warning. He has also shares in a company which is in Australia at the same time that the plain packaging policy was announced. Australian government argued that he used as a tool for launching the BIT claim against Australia. Court held that and makes order on this that tobacco plain packaging Act 2011 is not against the section 51 of the constitution. 

The effect on the power of the Australian Commonwealth Parliament of an ISDS clause in an FTA

Free trade agreement

On 1 January 2005 United States and Australia are entered into Free trade agreement. Both countries are trading of agricultural sector which is continuously developed and grow in 2009.

Australia's regional Free Trade Agreements

Investor-state dispute settlement clause is sometimes add in the free-trade agreement in which it allows companies that they are free to take any legal action against the decision which is taken by the government who is the member of agreement.  Investor-state dispute settlement clause in the ASEAN- Australia is applied on the parties which are in an agreement in which investor of another party claim that another party breached the obligation which gives damages or loss to the investor.  Complaint has been made by the person who suffers damages or loss. The problem which is cited by the detractors of ISDS clause is the “regulatory chill”.

Recent user of ISDS clause in Australia by the tobacco company takes legal action against the Australian government. This company file claim under free trade agreement provisions which is signed with Hong Kong in 1993.

Examples which indicates that ISDS provisions are not similar and it can changes according to the desirable circumstances in treaty or agreement. They can differ:

  1. In range of disputes covered
  2. Arbitral options
  3. Nature of the investments protected.

References

  1. Capling, A., (2004) All the Way with the USA: Australia, the US and Free Trade, UNSW Press, Sydney.
  2. Capling A. and Nossal, K., (2006) "Blowback: investor-state dispute mechanisms in international trade agreements," Governance Vol. 19.
  3. Christoph H. Schreuer (2009) The ICSID Convention: A Commentary Cambridge university press, 4th ed. 2009.
  4. Cheryl Saunders (2011) the constitution of Australia: A contextual Analysis, Hart publishing(2011)
  5. Australia Parliament, (2009), Commonwealth of Australia Constitution Bill: Reprint of the Debates in Parliament, the Official Corr, BiblioBazaar, 2009
  6. Australia. Parliament (2007) Commonwealth of Australia Constitution Bill: Reprint of the Debates in Parliament, the Official Correspondence with the Australian Delegates, and Other Papers, Wyman & sons Limited, 1900.
  7. MadelaineChiam (2004) That's Freedom: Australia and Free Trade Agreements, Federation Press, 2004

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