What is the Trans-Pacific Partnership? - Mining.
Legal News & Analysis – Asia Pacific - International Trade
7 October, 2015
As a sector heavily reliant on regional and international trade, the mining sector is anticipated to be substantially impacted by the Trans-Pacific Partnership (TPP). The new trade dynamics between the participating states and the elimination of the majority of regional barriers to trade, such as tariffs and export controls, may present new opportunities for mining companies with operations or interests in the region, or else may complicate existing preferential bilateral trade arrangements. However, it is the harmonisation of regulation on a
number of issues of direct relevance to the mining sector that is of primary interest. In particular:
The TPP contains a chapter which seeks to regulate the conduct of large state-owned enterprises (SOEs) that are principally engaged in commercial activities. As a sector which is necessarily reliant on close interactions with governments across the region, and which frequently involves long-term partnerships with SOEs, this chapter has the potential to introduce important new dynamics into these relationships.
The new investment protection regime created by the TPP provides different paths for investors in the region to plan their investments and provides additional investor confidence in less familiar markets, by requiring non-discriminatory investment policies, basic rule of law protections and the basic investment protections found in other investment-related agreements, such as prohibitions on expropriation and free transfer of funds (subject to certain exceptions). The investor-state dispute settlement (ISDS) chapter of the TPP, contains similar protections to those found in many bilateral investment treaties, and has been one of the most high profile – and controversial – features of the agreement.
The chapters seeking to harmonise regulation on labour and environmental standards will be of substantial relevance to those involved in the complex operations of the mining sector. These chapters focus on the need to address environmental challenges such as pollution, deforestation and ozone layer depletion, as well as containing enforceable, harmonised labour standards to facilitate the regional movement of workers.
The chapter addressing government procurement regimes may provide greater opportunities for access to (and transparency around) lucrative government contracts across the region, both for the purchase of resources and for the services associated with the extraction and processing of minerals.
Chapters relating to cross-border service provision and visa regulations are likely to have an impact on the prospects for technical cooperation across the region.
While the full content of the agreement has not yet been released, the public summary of its 30 chapters allows considerable certainty that the TPP will be of great relevance to the mining sector.
For further information, please contact:
Donald Robertson, Partner, Herbert Smith Freehills