Author: Luke Nottage

Prof Luke Nottage (BCA, LLB, PhD VUW, LLM LLD Kyoto) is founding co-director of the Australian Network for Japanese Law (ANJeL), Associate Director (Japan) of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS), and Professor of Comparative and Transnational Business Law at Sydney Law School. He specialises in international dispute resolution, foreign investment law, contract and consumer (product safety) law.

Book Review – Celeste Arrington “Accidental Activists: Victim Movements and Government Accountability in Japan and South Korea” (Cornell University Press, 2016)

This extensively researched and succinctly written book effectively compares the processes and outcomes of several major movements for victims’ redress from governments in Japan and Korea. The focus is on campaigns that developed especially from the 1990s, an era of perceived “judicialization of politics, enabled by democratization in Korea in 1987 and more competitive electoral politics in Japan since 1993” (p. 203), when victims sought redress for poor decisions regarding Hansen’s disease (leprosy, as discussed in ch. 3), blood tainted with Hepatitis C (ch. 4) and abductions by North Korean authorities (ch. 5).
Arrington examines not just the respective victims’ contestations with the state, but also the nature and timing of their interactions with key mediating institutions (ch. 2): the legal profession (to pursue litigation), the media (providing publicity for their causes), and activist groups (for lobbying). In particular, she emphases how too much early engagement with politicians – even “elite allies” – aimed at achieving legislative or bureaucratic intervention, as occurs more in Korea’s more open-textured democratic process, may lead perversely to poorer redress outcomes as the issue becomes more polarised politically.

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Adding a “General Safety Provision” to consumer law in Australia (and Japan)?

Japan enacted in 2006 a more expansive version of mandatory accident reporting compared to the Australian Consumer Law regime implemented from 2011, and currently under review. For example, Japan’s system extends to certain specified risks of harm (currently: carbon monoxide emissions or fires) and allows the regulators to make publically available the incident reports received from suppliers.
However, neither country presently has a General Safety Provision (GSP) requiring all consumer goods placed on the market to be reasonably safe. Given persistent problems with product safety failures in both countries, especially in Australia in recent years, perhaps the time has come. The possible enactment of a GSP has been on the agenda in the first five-yearly “ACL Review”, with last month’s Interim Report picking up several arguments related to product safety regulation made in my initial Submission for the Issues Paper earlier this year from Consumer Affairs Australia and New Zealand. Below is an extract from my second Submission (dated 22 November) also available online.

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Guest Blog – “The implications of Trump’s denunciation of the TPP”

[Below is a reaction to this news from the US on 22 November, from ARC discovery project co-researcher and Prof Leon Trakman, reproduced with permission from the forthcoming Newsletter of the International Law Association’s Australian branch. The Newsletter will also include my related but broader AFIA Blog posting with JNU A/Prof Jaivir Singh, “Does ISDS Promote FDI? Asia-Pacific Insights from and for Australia and India”.]

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Are US Investors Exceptionally Litigious with ISDS Claims?

[A version of this posting appears on Kluwer Arbitration Blog on 14 November 2016.]
Critics of the Trans-Pacific Partnership (TPP) free trade agreement, and investor-state dispute settlement (ISDS) protections more generally, have often argued that a particular concern is that the US is not only a large source of FDI, but that it is ‘the nation whose corporations use ISDS the most’ (referring to ANU’s Professor Thomas Faunce). A recent paper by ANU’s Dr Kyla Tienhaara for the ‘GetUp’ campaign in Australia, in the context of ongoing parliamentary inquiries into ratifying the TPP, contends that Australia is at risk because US investors have brought multiple claims against Canada. (By contrast, Charles-Emmanuel Cote points out that ‘damages effectively awarded or agreed to in settlement so far [amount to] US$147.5 million, or a mere 0.05 percent of all US investment’ into Canada.) More generally, Tienhaara argues :

The biggest users of ISDS are US multinational corporations. This means that entering into a trade deal with the US that includes ISDS provisions – such as the TPP – places a country at high risk of ISDS suits.

The inference is that Americans are particularly ‘litigious’ in the field of investment treaty claims – perhaps like they are purported to be in civil litigation in their home courts. In fact, empirical research into comparative civil dispute resolution patterns had long pointed out that a representative state within the US (in terms of urban/rural population mix, such as Arizona) has fewer filings per capita than countries such as Israel and Germany [Nottage & Wollschlaeger ‘What Do Courts Do?’ [1996] NZLJ 369].
Table A and Figure A-1 in the attached version of this posting confirm that investors from the US had indeed lodged the most ISDS claims by end-2015 (138). Yet, on a per capita basis (per 100,000 people in the home state), US investors are historically less litigious compared to investors from eleven other countries whose investors have filed considerable numbers of ISDS claims. Those states are all in the EU (including Belgium and Luxembourg, which generally conclude investment treaties collectively and whose investors have filed the most claims per capita), except for Switzerland (whose investors become the fourth most litigious) and Canada (the fifth most litigious home state). As further indicated in Table A and Figure A-2, if we group together most of these EU states their investors’ per capita ISDS claim rate is also higher than that for US investors.

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Guest Blog – ““Democracy, Pacificism & Constitutional Change in Japan: Amending Art. 9?”

[Report of a Conference hosted at the University of New South Wales, 12 August 2016:
Written by Profs Rosalind Dixon, University of New South Wales, and Juliano Zaiden Benvindo, University of Brasília
Reproduced with permission from: http://www.iconnectblog.com/2016/08/conference-report-democracy-pacificism-constitutional-change-in-japan-amending-art-9-university-of-new-south-wales/]
On August 12, 2016, the Gilbert + Tobin Centre of Public Law at the University of New South Wales (UNSW) in Sydney, Australia, and the Australian Network for Japanese Law (ANJel) hosted the symposium “Democracy, Pacifism & Constitutional Change in Japan: Amending Art. 9?”. The symposium was convened by Rosalind Dixon and Luke Nottage with the purpose of providing a rich discussion of the new developments on Japanese constitutionalism, especially focusing on its pacifist clause (Art. 9). Scholars from distinct parts of the world sought to stress how informal and formal change intertwine with each other in the current context of the Japanese government’s political actions aimed at a revision of the scope and limits of that clause.

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TPP and Foreign Investment: Does ISDS Promote FDI?

The Trans-Pacific Partnership free trade agreement, signed on 4 February 2016 among 12 Asia-Pacific economies, faces a rocky road to ratification. In the run-up to the US presidential election in November, both Donald Trump and (for now) Hillary Clinton say they are opposed.
Yet Australian Prime Minister Turnbull urged President Obama to put the FTA to a vote in Congress during the ‘lame duck’ session before inauguration the new President is inaugurated, to counter the spectre of protectionism but also for broader geopolitical reasons. The Abe Government, fortified by its mid-year Upper House election victory, would surely then ensure ratification by Japan, thus bringing the TPP into force within the two-year window from its signature. (Beyond that, it can still come into force but only if all 12 countries complete ratification.)
However, back home in Australia, the Turnbull Coalition Government faces its own challenges in enacting tariff reduction legislation needed before it too can ratify. After the 7 July general election, although the Government was returned with a razor-thin majority in the lower House of Representatives, it has a reduced minority in the upper house (30 out of 76 Senators). It would therefore need votes from at least nine other Senators, yet the (nine) Greens Senators will never vote with the Government given their Party’s implacable opposition to FTAs. Of the 11 other cross-bench Senators, Pauline Hanson’s ‘One Nation’ (four) Senators are notoriously xenophobic, while the Nick Xenophon Team (three) Senators favour more support for local manufacturing.
Accordingly, the Government will more likely have to court votes from the Labor Opposition. Yet the latter has generally not been cooperative in Parliament, perhaps hoping something will happen in the lower House to trigger a new election. And in June, Labor had reiterated that if elected, it would not countenance ‘new’ FTAs that added the option of investor-state dispute settlement (ISDS) – in addition to inter-state arbitration provisions – to better enforce substantive commitments aimed at encouraging more foreign direct investment (FDI). The TPP provides for ISDS, like almost all FTAs nowadays, and this continues to generate broader public debate – as does FDI more generally. My recent co-authored econometric study outlined below examines more generally the links between ISDS-backed treaty commitments and FDI, which can inform ongoing policy debates in Australia and further afield.

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The Futures of Legal Education in Japan

Articles by Andrew Watson and Stacey Steele in the latest issue (41, 2016) of the Journal of Japanese Law review recent developments in Japanese legal education. They helpfully add to an already surprisingly voluminous literature in Western languages on the topic. This short Comment summarises some background before sketching some innovative ways forward. [A fully-footnoted version is forthcoming in the next issue of the Journal.]

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“International Investment Arbitration Across Asia”: USydney, 16 February 2017

Treaty-based investor-state arbitration (or ISDS more generally) is an increasingly topical issue, as FDI flows continue to grow, especially across Southeast Asia and the rest of the Asian region, and host states have begun to experience some claims brought by disgruntled foreign investors.
This conference organised for Thursday 16 February 2017 by the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS) and the Sydney Centre for International Law (SCIL), with sponsorship from Herbert Smith Freehills, builds on the lively and timely conference funded by Chulalongkorn University’s ASEAN Studies Centre in Bangkok on 18 July 2016, which compared the experiences and policy debates in each of the ten ASEAN member states. Those country reports are now being revised for review and eventual publication in a leading journal, with versions then being combined with papers on pan-Asian investment treaties and arbitration to be presented on 16 February 2017, for a co-edited book published by the same legal publisher.
This upcoming conference will bring together leading experts from Southeast Asia, North Asia, India and Oceania, including several from institutional partners of USydney. It will help round off a major cross-institutional and interdisciplinary research project into international investment dispute management more generally, funded by the Australian Research Council since 2014. The annual SCIL “International Law – Year in Review” symposium will also take place the next day, on Friday 17 February 2017.

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Independent Directors in Asia – and Industry Superannuation Funds in Australia?

The manuscript is in press for “Independent Directors in Asia”, co-edited for Cambridge University Press with ANJeL stalwarts Profs Harald Baum (MPI Hamburg), Souichirou Kozuka (Gakushuin, Tokyo) and Dan Puchniak (NUS). As previously mentioned on this Blog, contributions have been extensively workshopped at major conferences in Berlin and then Singapore, as well as by individual authors in other forums.
A longer version of the chapter comparing Australia, which I co-authored with Fady Aoun, has also been published in June 2016 by the University of Miami International and Comparative Law Review. Our summary of some trends revealed by the broader comparative analysis in the CUP book is forthcoming by November from the Company and Securities Law Journal. As we conclude briefly in that Note, a comparative perspective on the complex diffusion of independent director requirements across Asia makes us wary about simply extending the requirements for listed companies to industry-based superannuation funds in Australia, as proposed in a failed Bill last year but still being developed through self-regulation.

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