Explanatory Memorandum
(Circulated by Authority of the Attorney-General, the Honourable Michael Duffy, MP)OUTLINE
This Bill, when enacted, will enable Australia to ratify the Convention on the Settlement of Investment Disputes between States and Nationals of Other States.
The Convention establishes the International Centre for settlement of Investment Disputes ("the ICSID") and provides facilities for arbitration or conciliation of investment disputes between States and nationals of other States under the auspices of the Centre. By providing this dispute-resolution machinery the ICSID aims to improve the international investment climate and stimulate a larger flow of private international investment.
The Bill will implement Chapters II-VII of the Convention by amendment to the International Arbitration Act 1974 by inserting a new Part IV and a new Schedule (containing the English text of the Convention) into that Act. It will also amend the International Organizations {Privileges and Immunities) Act 1963 to enable effect to be given to the privileges and immunities provisions of the Convention.
FINANCIAL IMPACT STATEMENT
The International Bank for Reconstruction and Development provides the Centre with accommodation and basic services in Washington DC, free of charge. Under the Convention, parties making use of the ICSID's facilities are required to bear the expenses incurred by the Centre in connection with conciliation and arbitration proceedings. Only in the event that the expenditure of the Centre cannot be met out of charges for the use of its facilities, or out of other receipts, will Contracting States be required to contribute towards any excess. It is accordingly anticipated that any impact on Commonwealth expenditure will be minimal.