Billionaire Australian mining magnate and political maverick Clive Palmer has shifted his empire's legal incorporation to New Zealand in preparation for a possible bid to sue the West Australian government for A$45 billion ($47.8b) for alleged expropriation of mining rights.
Palmer told The Australian newspaper his plan was to use the investment treaty between Australia and New Zealand, signed in 2010 to extend the Closer Economic Relations free trade agreement, to mount an action against the state government if it went ahead with plans to cut his company out of the process for approving a proposed mine expansion by Chinese company CITIC.
However, Chapman Tripp partner and international trade agreements expert Daniel Kalderimis believes Palmer, who is also setting aside A$50 million to fund his own political party to 'Make Australia Great' "doesn't appear to fully understand the regime he appears to be invoking".
It was true that the CER investment protocol included clauses guaranteeing freedom from expropriation, so Palmer was "not off the planet" in principle, but the protocol "deliberately does not include an investor-state dispute settlement (ISDS) regime", meaning there was no way for a corporation to sue the Australian federal government, let alone a state government.
While the New Zealand government could choose to take up a New Zealand-based investor's cause in the case of a claimed expropriation by the Australian government, that would be a political and diplomatic decision, in which national interest issues would be the most likely determining factors.