New Zealand signs side letters curbing investor-state dispute settlement

  • Hon David Parker
Trade and Export Growth

New Zealand has signed agreements to exclude compulsory investor-state dispute settlement (ISDS) between them with five countries in the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP).

Minister for Trade and Export Growth David Parker said the agreements are “side letters” with the same treaty-level status as the Agreement.

They were released alongside it this morning (NZ time) at a signing ceremony in Santiago, Chile.

New Zealand has signed additional side letters with Brunei Darussalam, Malaysia, Peru and Viet Nam. New Zealand has also signed a side letter to exclude ISDS with Australia, the source of 80% of investment from the CPTPP nations into New Zealand.

“I’m pleased we have been able to make so much progress in just a few months. We haven’t been able to get every country on board, but signing letters with this many CPTPP partners is a real achievement,” says Mr Parker.

A further two countries, Canada and Chile, have joined New Zealand in a declaration that they will use investor-state dispute settlement responsibly.

“This Joint Declaration is an acknowledgement of public concerns about ISDS. Along with Canada and Chile, we have pledged to work together to promote transparency.”

The side letters and declaration add to work that had already narrowed the scope for investors to make ISDS claims under the CPTPP. For example, private companies cannot make ISDS claims under the CPTPP relating to investment contracts they have entered into with governments.

“The investor-state dispute settlement mechanism had been one of our main concerns about the agreement,” says Mr Parker.

“We have tackled it from several different directions. We have also made it clear that we will oppose including ISDS in any future free trade agreements involving New Zealand.”

The terms of the side letters vary. Some exclude the use of ISDS between New Zealand and other countries entirely, while other side letters allow for arbitration to proceed only if the relevant Government agrees.

The side letters and joint declaration will be available on the MFAT website at: