Corrs Global Network



The increase in intra-regional trade, easing of monetary and fiscal policy, and higher demand for commodities have all brought a healthy economic outlook for both well-established and rapid growth markets across the Asia Pacific region, particularly when compared to the tough trading conditions that continue to affect economies in other regions. Corrs has a track record for strength as an adviser on bilateral trade between the Asian economies and in representing global investors with significant interests across the region.

In addition to our extensive work involving China, India and Japan, Corrs is deeply committed to supporting clients across the wider region as their businesses develop through the Asian Century. Our strong understanding of doing business across Asia extends to all levels of the firm. We offer clients access to highly experienced lawyers who have made a substantial contribution to the development of trade across the region over the years. Chairman of Corrs' International Advisory Council, John W.H. Denton AO, is one of three Australian Prime Ministerial representatives on the Asia Pacific Economic Cooperation Business Advisory Council, Chair of the Business Counsel of Australia’s Global Engagement Taskforce, Chairman (Emeritus) of the Experts Group on Trade and Investment in Indonesia and a founding member of the Australia China CEO Roundtable meetings. Corrs is also a member of the Advisory Panel to APEC for its PPP initiative to help meet the infrastructure challenge of the Asia Pacific region. The initiative is a proposal to develop an institutional framework to promote PPPs in infrastructure in the Asia Pacific region.

As part of our commitment to ensuring strong understanding across Asia, we have an extensive program of secondments for Corrs lawyers with a large number of leading law firms across the region. Our lawyers are working on secondment in a range of Asian jurisdictions including China (Jia Yuan), India (AZB & Partners), Japan (AMT and Nishimura & Asahi), Jakarta (Soemadipradja & Taher) and Singapore (Allen & Gledhill).

Recent work in Asia includes advising Japanese project operator and 76 per cent interest holder, Inpex Browse, in relation to what has been described as Australia’s biggest resources project, the AU$24 billion Ichthys gas field development. We are advising Korea Gas Corporation, (KOGAS) South Korea’s public natural gas company, in its acquisition of an interest in the world’s first LNG project developed by Shell, working with Kam Kiu, in Federal Court proceedings challenging the decision to impose anti-dumping and countervailing measures on aluminium extrusions exported from the PRC and representing CHS and WISCO in an investigation into the alleged export of galvanised steel from the People’s Republic of China, South Korea and Taiwan. 

Contact our team to learn more about the firms we work with across the region and how we can assist.

Our Thinking

Farewell Indonesia’s BITs: Economic nationalism or sensible reform?

How will Indonesia's termination of its bilateral investment treaties impact foreign investors and their investments?

Indonesia is terminating (or not renewing) all of its bilateral investment treaties (BITs). Accordingly, the BIT between Indonesia and its fifth largest foreign investor, the Netherlands, was terminated on 1 July 2015. The termination of BITs is a significant change to Indonesia’s foreign investment framework. It may impact the level of protection afforded to foreign investors and their investments.


BITs are agreements between two states with respect to the rights of persons from either state investing in the other. BITs commonly contain foreign investment protection such as:

  • National treatment: Foreign investors will be treated no less favourably by a state than its domestic investors.
  • Most-favoured nation treatment: Foreign investors will be treated no less favourably by a state than investors from other states.
  • Expropriation compensation: Foreign investors’ assets will only be expropriated for a public purpose, on a non-discriminatory basis and with fair compensation.
  • Investor-state dispute settlement (ISDS): Foreign investors will be able to pursue dispute settlement through international arbitration against a breaching state before an independent tribunal, such as the International Centre for Settlement of Investment Disputes (ICSID).
  • Termination with notice: BITs can only be terminated with extensive notice prior to the end of any initial or renewal period.
  • Grandfathering: If a BIT is terminated, prior investments will continue to benefit from the BIT for a further period (for example, the Indonesia-Netherlands BIT will still apply to pre-termination investments until 1 July 2030).


There are several thousand BITs in force globally. Other states have already moved to terminate some or all of their BITs, often due to their ISDS provisions.

Originally, ISDS provisions were designed to encourage foreign investment in developing economies, especially where dispute settlement through the local courts was perceived to be unpredictable or unfair.

Subsequently, however, concern has developed as to the ability of BITs to potentially render states liable to compensate private companies for public policy decisions. Such concern is not confined to developing economies.

Recently, Philip Morris Asia (PMA) instituted arbitral proceedings against Australia under the Australia-Hong Kong BIT of 1993. PMA claims that the Australian tobacco plain packaging law constituted an expropriation (without fair compensation) of its Australian investments.

Similarly, Vattenfall (a Swedish company with nuclear power investments across Europe) initiated arbitral proceedings against Germany after it shut down its nuclear power industry in response to the 2011 Fukushima disaster.

The public discourse around the Trans-Pacific Partnership (TPP) has also touched on potential ISDS concerns.

Indonesia’s BITs

Indonesia has 67 BITs, including with China, France, Singapore and the UK. In early 2014, Indonesia notified the Netherlands that it would terminate the BIT between the two states and that it intended to terminate all other BITs. Since then, Indonesia has clarified that it will terminate those BITs which would otherwise be automatically renewed, while the remainder will be allowed to expire.

Indonesia may have decided to do so in response to proceedings initiated by foreign investors against Indonesia under ISDS provisions. In 2012, Churchill Mining brought arbitral proceedings against Indonesia in ICSID (based on its BITs with the UK and Australia) claiming over US$1.3 billion. Indonesia was unsuccessful in its jurisdictional challenge, with the arbitral tribunal determining that a standard paragraph in the Investment Licence issued by Indonesia’s Investment Coordinating Board (BKPM) to Churchill Mining constituted consent to ICSID’s jurisdiction. While Churchill Mining’s substantive claim remains to be determined, since 2013 the standard paragraph has been removed from new Investment Licences and the termination of all BITs may be another consequence.

Australia-Indonesia BIT

Australia entered into a BIT with Indonesia in 1993. After its initial 15 year term, it was automatically renewed in 2008 for a further 15 years and will be renewed again in 2023, unless terminated in 2022. If it is terminated then, the BIT will still apply to any pre-termination investments until 2037.

Accordingly, Australian businesses with investments in Indonesia should have access to the BIT protections for some time. If, however, such investments are structured to benefit from BITs that are closer to termination (for example, if an Australian company has a Dutch subsidiary with investments in Indonesia), careful consideration may be required as to which treaty protections to invoke.

Next steps

Indonesia may seek to replace the BITs with new and more favourable bilateral economic partnership and/or free trade agreements. The prospect that all BITs may be terminated might be used as leverage in negotiating deals on more favourable terms.

BKPM has stated Indonesia should negotiate fundamentally different agreements, which would:

  • not permit ISDS, with any foreign investment disputes resolved only through local courts, whose decisions would be final;
  • last for only 10 years (without automatic renewal), but be subject to termination at any time; and
  • provide for limited grandfathering.

At present, any such agreement is likely to offer foreign investors limited comfort.

It seems that Indonesia’s Ministry of Foreign Affairs prefers to emphasise the importance of “regionalism” in its approach to foreign investment. Indonesia is part of the emerging ASEAN Economic Community and the ASEAN Comprehensive Investment Agreement (which provides BIT protections, including ISDS provisions).

While Indonesia has expressed limited interest in the TPP, it has joined in the negotiations for ASEAN’s Regional Comprehensive Economic Partnership (RCEP). It is unclear what ISDS provisions might ultimately be incorporated into any RCEP.


As previously discussed, BITs are an important part of Indonesia’s foreign investment architecture. The termination of all of its BITs and the lack of certainty around replacement protections, complicates the availability of treaty protections to foreign investors. Given the timelines for termination, as well as grandfathering, there appears to be enough time for the Indonesian government to articulate its new approach to foreign investment protection.

Jared Heath is a Special Counsel who was previously seconded to one of Indonesia’s leading law firms, Soemadipradja & Taher (S&T). Cameron Grant is a lawyer currently seconded to S&T.

S&T is recognised as a market-leading provider of legal services to foreign companies investing in Indonesia. More information on S&T is available from its website.

Corrs is not licenced to practice law in Indonesia and this should not be construed as providing Indonesian legal advice. If you would like further advice, please contact S&T.

The Treasurer is right to have pushed for Australia to join the Asian Infrastructure Investment Bank

There is a clear connection between infrastructure and trade opportunities for Australia.

Despite the absence of the United States and Japan, the Treasurer Joe Hockey is right to push for Australia to be intimately involved in the establishment of the Asian Infrastructure Investment Bank (AIIB).

We will join with some 57 other countries to be involved in building and rebuilding roads, railways, water treatment works, bridges, and harbours throughout our region.

As a founding member of the AIIB we have grasped the opportunity to influence the Bank's design. Indications are that Australia’s role has helped ensure the AIIB’s governance is based on best practice principles - all members will be directly involved in the Bank’s direction and decision making “in an open and transparent manner”.

It is planned that Australia will contribute around A$930 million to the AIIB over five years, making us the sixth largest shareholder. The AIIB will have paid-in capital of US$20 billion ($A25.2 billion) with total authorised capital of US$100 billion (A$126.2 billion).

We know from the Asian Century White Paper that the need for infrastructure investment in Asia's emerging economies is vast. Around US$8 trillion is needed to fund the region’s estimated infrastructure gap in just the current decade. 

The connection between infrastructure and trade is a critical one for Australia. Infrastructure is a key enabler for more efficient trade within our region. Australian companies are competing on a global scale for a slice of the Asian market – we must take every opportunity to help our businesses deliver goods and services faster and at lower costs.

We should not obsess, like some in Washington, about the AIIB reflecting a desire of China to strengthen its global standing or advance its commercial interests more directly. As we have written it is in China’s best interests to allocate its huge stockpile of savings to productive use on projects in the region that will bear fruit for it in the long term. (See Australia's infrastructure deficit and China's investment appetite - The perfect match).

President Xi’s vision for the overland and maritime “one belt one road” programme is clearly a literal and symbolic reference to this idea.

China can no doubt deliver infrastructure projects on a monumental scale – fast trains, dams, railways and roads to name a few. For Australia and our neighbours this could also mean better and more secure trade routes and new opportunities for trade. 

Throughout Asia people are becoming wealthier. Consumption patterns are changing. The proportion of income spent on basics such as everyday food items is declining, while spending on education, high quality foods, services and tourism is rising sharply.

Most developing countries in Asia are also undergoing massive demographic shift. A new generation of business and government leaders is emerging. Educated and tech-savvy they are looking for more efficient, and often cheaper, ways to do business. (See From Facebook friends to tomorrow’s leaders: Understanding the impact of demographic change in Asia).

Australia has much to offer Asia’s new consumers and businesses, and better infrastructure will help us capitalise on the opportunities opening to our north.

A seat at the AIIB table will ensure that Australia is not a bystander to the plethora of possibilities the AIIB presents. It will enable us to directly shape the institutional foundations of the AIIB and build connections which will be of use more broadly. Our presence in the AIIB will provide Australia an opportunity to build on the platforms it has already created, included extracting the synergies and opportunities from the AIIB for the G20 Infrastructure Hub. 

From Facebook friends to tomorrow’s leaders: Understanding the impact of demographic change in Asia

A new generation of Asian leaders is presenting opportunities to Australian businesses.

Generational change in Asian leadership, combined with demographic shifts and the growth in connectivity are presenting new opportunities to Australian businesses willing to build relationships that deepen understanding of regional differences.

Current Asian leaders, born in the 1950s and 60s, are beginning to hand over to a new generation schooled in the early years of internet advance.

Asia’s shifting demographics

There are profound demographic differences between countries in Asia. Sustained low birth rates in nations like Japan and China has seen the median age rise and populations become increasingly ‘grey’.

However, other countries like Indonesia are continuing to experience strong population growth and have a much younger age profile. For these countries, it will be their digitally savvy, young people who will drive economic growth.

In China, the demographic impact of its one-child policy, introduced in 1982, is now clearly playing out. Already one in five Shanghai residents, some three million people, is a senior. That ratio is forecast to rise to one in three by 2020.

Chinese pensioners will be the world’s second largest population after India by 2040, numbering around 400 million people[1]. This ‘greying’ of the population presents its own economic growth challenges as the proportion of working age people declines.

Southeast Asia’s youth advantage

Travel across the region from China to Indonesia and the demographic differences are stark. Indonesia, with 250 million people today, is expected to add another 100 million by the end of this century. It’s a population dominated by adolescents and young people.

The Southeast Asian region more broadly has some strong demographic advantages. A median age of 27 means its people are young compared to China’s median age of 35. Australia’s median is almost a decade older: at 37. The average of Europeans is 42.

It’s easier to grow an economy quickly when its people are still young and mobile.  Southeast Asia, more than almost any other region, maintains this advantage.

The online generation shaping Asia’s future

Across our region, people are also increasingly connected.

The intersection of youth and lower technology costs has accelerated the connectivity trend, evident in the social networking craze gripping the region.

Facebook has literally become a way of life across Southeast Asia. Bangkok can already lay claim to having the highest penetration of Facebook users in the world.

In Indonesia, 63 million people will access Facebook in 2015 using their mobile phone, which, at around 90 percent, is the highest percentage of mobile logins of anywhere on earth.

Even in Myanmar, there is a huge market for new online experiences. Falling communication costs has made mobile internet technology available to tens of millions more people who, just a few years ago, couldn’t get their hands on an uncensored newspaper. And for this emergent generation, adapting to continual innovation is second nature.

Young people are leap-frogging earlier generations with their mastery of more efficient, and often cheaper, ways of doing business. There are game-changers in dating, in commerce and in education services.

WeChat, a mobile text and voice messaging communication service developed by Tencent in China, has 438 million active users; with 70 million outside of China. It is used as a replacement for many of the services traditionally provided by western banks. 

These kinds of changes show no signs of easing off, and will likely only gather momentum as the old guard retires and moves on.

It will be the new generation of leaders – the offspring of China’s ‘one-child’ policy, Bangladesh’s female empowerment, Thailand’s tech boom and Myanmar’s political liberalisation – who will be entrusted with ensuring that Asia is a secure and prosperous region that remains good for business.

Generational change brings new opportunities and Australia can make the most of it by developing the right knowledge and networks, and through leadership.

[1] See here.

Japan and Australia - Capitalising on the JAEPA

Australian companies will have unprecedented opportunity to take advantage of a level of access that Japan has not yet offered to any other trading partner.

The signing of this agreement is historic. The JAEPA presents great opportunity. Japan is Australia’s second largest trading partner and the world’s third biggest economy.

The signing of the EPA comes on top of the radical efforts by Prime Minister Abe to move Japan out of its deflationary and slow growth period, providing the setting for Australian companies to look at Japan with a fresh set of eyes in terms of trade and also as a source of foreign direct investment.

Japan's economic size, technological and financial strengths are sometimes underestimated by Australian companies. During the past 10 or 15 years, Japan's economic influence has extended beyond its border to other parts of the global economy, including South East Asia. Japanese banks, for example, dominate the project finance space regionally and have an increasing role in the Australian corporate sector. Importantly, the broader political and strategic relationship between Japan and Australia - which was already strong - has reached a new level of maturity and respect and an ideal basis for trade and investment.

Australian companies will have unprecedented opportunity to take advantage of a level of access that Japan has not yet offered to any other trading partner.

What remains to be seen is how well Japanese and Australian businesses capitalise on its potential.

What are the major outcomes of the JAEPA?

In addition to the traditional areas of agriculture and resources the JAEPA improves the basis for trade and investment in increasingly important areas such as financial services and education.


  • For beef (Australia’s largest export to Japan), the tariff on frozen beef will decrease from 38.5% to 30.5% and then gradually to 19.5 per cent over 18 years. The tariff for fresh beef will fall from 38.5% to 32.5% immediately and then to 23.5% over 15 years.
  • Elimination of the 15% tariff on bottled and sparkling wine over 7 years, with the tariff on wine in containers over 150 litres eliminated immediately and containers between two and 150 litres eliminated over ten years.
  • Duty free quotas for Australian cheese for processing and cheese for shredding.
  • Immediate and preferential duty free access for milk protein concentrates, lactose and casein, as well as preferential Australia-only quotas for ice cream and frozen yoghurt.
  • Tariff elimination on mangoes, dried grapes and a range of berries, asparagus, carrots, potatoes, truffles and other vegetables. Elimination of tariffs up to 10% for grapefruit, pears, apricots, peaches and plums over 5 years and elimination of the 17.5% tariff on apples over 10 years. Tariff elimination up to 6% on macadamia nuts, almonds, pecans and hazelnuts. 
  • Tariffs on lobsters, crustaceans and shellfish immediately eliminated and the tariff on Australia’s largest seafood export - tuna, and Atlantic salmon - phased out over 10 years.
  • Immediate duty free and quota free access for wheat for feed and barley for feed, as well as streamlined export arrangements for some Australian wheat varieties.
  • Immediate tariff elimination and reduced levies for high polarity (international standard) raw sugar.
  • Elimination of tariffs on various pet foods from entry into force up to 10 years.

Resources and Manufacturing

  • Elimination of tariffs for coke and semi coke of coal, non-crude petroleum oils, aluminium hydroxide, titanium dioxide, unwrought nickel and ferro-manganese.
  • Elimination of tariffs for key apparel, textiles, woollen blankets and carpets, pearl jewellery, wood products (such as medium density fibreboard, particle board and structured laminated timber). Elimination of tariffs up to 6.5% on a range of plastic products of 4% on sausage casings.
  • Duty free access will continue for pharmaceuticals and vitamins, medical instruments and apparatus, wood chips and paper products.


  • Raising the screening threshold, at which private Japanese investment in non-sensitive sectors is considered by the Foreign Investment Review Board, from $248 million to $1,078 million. Australia has reserved policy space to screen proposals for investment in agricultural land of over $15 million and agribusinesses of over $53 million.
  • Australia and Japan agreed not to include Investor-state Dispute Settlement (ISDS) mechanisms, and these are also expressly excluded from being imported by the most favoured nations treatment clause.


  • Australian financial services providers to be able to supply specific financial services on a cross-border basis, without needing to open a full commercial presence. This includes trade in wholesale securities and advice and portfolio management services for investment funds.
  • Guaranteed market access for Australian education providers to Japan’s higher education services market, including vocational and technical education.
  • Commitments for Australian telecommunications providers on non-discriminatory treatment, regulatory transparency, competitive safeguards and fair and reasonable access to telecommunications networks and services.
  • Australian professionals (including architects, engineers and accountants) to benefit from guaranteed existing market access and visa access arrangements, including for their spouse and dependants to enter and stay in Japan. 
  • Australian innovators and creative industries to enjoy high levels of intellectual property protection in Japan broadly equivalent to protections provided in Australia.

Electronic Commerce

  • Commitments to ensure that neither Australia nor Japan impose customs duties on electronic transmissions between the two countries as well as online personal data protection.


  • Australian tariffs on Japanese imports will be eliminated on full implementation, including the 5% tariff on Japanese cars, electronics and white goods.
  • For some of Australia’s sensitive sectors (our sensitive auto parts, steel, copper, plastics, chemicals and clothing, textiles and footwear) the 5% tariff will be phased out over periods of up to 8 years. The $12,000 specific tariff on Japanese used cars will be retained.

When does the JAEPA come into force?

Before the JAEPA comes into force, both Japan and Australia must complete their domestic treaty processes. For Australia, this includes approval of the agreement by parliament and amendments to relevant legislation. Both Australia and Japan aim to complete their processes by the end of 2014. Once this occurs, Diplomatic Notes will be exchanged and the JAEPA will enter into force 30 days thereafter.

The Road Ahead

For Australian companies, the JAEPA opens the door to Japan much wider than ever before. For many industries, particularly those described above, restrictions on business with and in Japan will be reduced and expect to see leading and innovative Australian companies capitalise with great reward.

Australian consumers and businesses will also benefit from lower prices and a greater choice of Japanese products.

Looking even further ahead, the JAEPA provides a good base for further opportunities to be realised in the negotiation of the Trans-Pacific Partnership and with any structural reforms that Mr Abe can introduce to the benefit of the Japanese economy.

For now, the importance of the JAEPA and the opportunities it presents for Australia and Japan to do business with each other should not be underestimated.

Duncan Marckwald is a Senior Associate currently seconded to one of Japan’s leading law firms, Nishimura & Asahi (N&A) as a Foreign Attorney. More information on N&A is available here.

Dining on international arbitration in Japan - What are you eating?

Japan is a reliable place for international arbitration, but it pays to know what you’re biting into.

Japan is a suitable and reliable place for international arbitration. But just like ordering Fugu (Japanese poisonous puffer fish), it pays to know exactly what you’re biting into.

The Table is Set

The Japanese arbitration law is based on the UNCITRAL Model Law of 1985 and is generally compatible with the arbitration laws of modern arbitration jurisdictions, Australia included. You can be comfortable that procedural aspects of an arbitration will reflect current international arbitration practice. Recent amendments to the Japanese Commercial Arbitration Association’s arbitration rules have made arbitration in Japan even more palatable.

A Different Way of Eating

Keep in mind Japan is a civil law country. If the arbitration is in Japan and the agreement governed by Japanese law the arbitral tribunal could include Japanese (or other civil) lawyers, and what happened during negotiations before the contract is signed is likely to play a bigger role in the dispute than it otherwise would in Australia and other common law countries. Having civil lawyers on the arbitration panel will also affect strategy as to how the arbitration is run, including the level of detail of initial pleadings and how written arguments and evidence are presented.

If the tribunal is led by Japanese lawyers, the process of exchanging documents and its scope may be narrower and closer to Japanese civil procedure, where only specific documents or very limited categories of documents are swapped. This is in stark contrast to the United States and (to a lesser extent) Australian styles of disclosure.

The advantage is that a more limited document production process can make the arbitration faster and keep costs down. On the flip side, in arbitrations involving Japan many of the relevant documents are likely to be in Japanese. What to translate, and the time and cost of review and translation, must be planned for.

Also be aware that there are no laws providing for legal privilege in Japan. Nor is there “without prejudice” privilege. This doesn’t mean that in international arbitrations involving Japan, documents between lawyers and clients or “without prejudice” communications must be handed over. However, different considerations will apply in arguing for their protection compared to litigation in Australia or arbitrations that involve only countries that recognise legal privilege.

Judging the Meal

Japan’s Courts are traditionally supportive of arbitration, recognise valid arbitration agreements and are reluctant to intervene. This generally means a procedurally smooth arbitration. But, if a problem does arise that requires Court assistance, there is less case law than in other countries and no specialist arbitration judges.

Making Sure You Get Dessert

There are no express restrictions in Japan’s arbitration laws as to the types of relief that an arbitral tribunal can award. Where the substantive law of the arbitration allows what you are seeking – arbitrators are able to grant those remedies. The only exception is where those remedies are in violation of Japan’s public policy (punitive damages, for example).

Japanese courts are not known to be interventionist, and only in the rarest instance would set aside an arbitral award rendered in Japan.

Like the country itself, arbitration in Japan is modern, safe and reliable, but it does have a few quirks. Overall it is an appetising place for arbitration. When an agreement to arbitrate in Japan is put on the table for your next deal, knowing what is involved will make any potential dispute easier to digest.


Duncan Marckwald is a Senior Associate currently seconded to one of Japan’s leading law firms, Nishimura & Asahi (N&A) as a Foreign Attorney. More information on N&A is available here

Corrs is not licenced to practice law in Japan and this article should not be construed as providing Japanese legal advice. If you would like further advice, please contact Corrs or N&A.

The new Korea-Australia Free Trade Agreement is an open door for Korean investors, but not in agriculture

KAFTA is a clear signal Australia is open for business.

Australia’s new free trade agreement with Korea is a clear signal Australia is open for business for Korean investors. And, it could fuel a much needed investment surge in Australia’s resources and infrastructure sectors.

The final agreed version of the Korea-Australia FTA amounts to some 1000 pages.  It deals with several bilateral trade areas, seeking to eliminate tariffs, red-tape and impediments to mutual trade.

Most significant is the agreement’s chapter on foreign investment.  It affords Korean investors in non-sensitive sectors the same treatment as Australia currently provides to US and New Zealand investors.  This means the screening threshold for review of investments in non-sensitive sectors by Korean investors will be raised from $248 million to $1,078 million.[1]

Further, it covers all forms of investment including investments in companies and businesses and there is protection against expropriation or nationalisation of investments without prompt, adequate and effective compensation. 

Agribusiness and agriculture

However, as with all FTAs, there are restrictions.  Australia has reserved the right to screen foreign investment proposals of AU$15 million or more in Australian agricultural land and AU$53 million or more in Australian agribusinesses. 

Given these low monetary thresholds, it is clear Australia is treating agriculture as a “sensitive” industry where foreign investment will be scrutinised to determine whether it is in the national interest.  Criteria include:

  • the quality and availability of Australia’s agricultural resources, including water;
  • land access and use;
  • agricultural production and productivity;
  • Australia’s capacity to remain a reliable supplier of agricultural production, both to the Australian community and our trading partners;
  • biodiversity; and
  • employment and prosperity in Australia’s local and regional communities.

It is unclear how these criteria relate to what is in, and what is not in, the national interest. They are also different from those applied in the national interest test under the Foreign Investment Review Board rules – for example as seen recently in the Archer Daniels Midland approach to Graincorp.  

Putting agriculture aside, it is evident that the higher thresholds for scrutiny of Korean investment in Australia, effectively treating it as an equal to US and New Zealand, should encourage Korean companies and businesses to invest in Australia, particularly in the resources, energy and infrastructure sectors.

Investor state dispute provisions

The inclusion of an investor state dispute settlement (ISDS) provision in the KAFTA should give Korean investors additional confidence the Australian Government will not unduly interfere with their investments. 

The ISDS provision grants Korean investors, in certain circumstances, the right to appeal to an international arbitral tribunal if they believe actions of the Australian Government constitute an expropriation or nationalisation of their investments without prompt, adequate and effective compensation. 

In effect, it allows Korean companies to sue the Australian government directly for undue interference with their investments.

During KATFA negotiations it was reported the previous Labour Government’s reluctance to include an ISDS provision was a key sticking point for both parties and held up the agreement’s conclusion. 

Last year the newly elected Coalition Government announced it would put the ISDS provision back on the negotiating table provided there were ‘safeguards’ to protect the Government’s ability to make laws in respect of public interest matters.

The final KAFTA text reflects this position.  While the ISDS provision still grants Korean investors the ability to institute proceedings against the Australian Government, there are carve outs directed at public interest matters. For example:

  • except in rare circumstances, non discriminatory regulatory actions by the Australia Government for the purpose of protecting ‘public welfare objectives’ - such as public health, safety and the environment - will not constitute expropriation;
  • provided measures are not discriminatory or arbitrary, the adoption and maintenance of measures by the Australian Government in the following areas are exempt from the ISDS provision:
    • measures necessary to protect public morals, order or safety;
    • measures necessary to protect human, animal or plant life or health;
    • measures to ensure compliance with laws not inconsistent with the KAFTA;
    • measures to protect intellectual property;
    • measures for the protection of national treasures of artistic, historic or archaeological value;
    • measures relating to the conservation of living or nonliving exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption; and
    • measures relating to taxation; and
  • decisions by the Australian Government with respect to whether or not to refuse, or impose conditions on, an investment that is subject to Foreign Investment Review Board approval.

The effect of these carve outs is that in certain areas, Korean investors will not have recourse against the Australian Government. 


Korea’s total investment in Australia at the end of 2012 was around $12 billion. This could rise dramatically under the KAFTA with the resources and infrastructure industries being the most likely beneficiaries.

A word of caution though, research done by the Productivity Commission in 2010 shows that most of Australia’s previous FTAs have fallen far short of their promised economic benefits. Could the KAFTA be a turning point?

We will certainly keep a close watch on how Korean investments into Australia’s growing agribusiness sector are analysed under the national interest test and whether the ISDS provisions alter Government behaviour over time.

  [1] Sensitive sectors include media, telecommunications, transport, the supply of goods or certain services to the Australian Defence Force and the extraction of uranium or plutonium or operating a nuclear facility.

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Our Experts

Andrew Chew.jpg

Andrew Chew

Partner & South Korea Focus Group Co-chair Location Sydney Profile

Justin Fox

Partner & South East Asia Focus Group Chair Location Melbourne Profile

Peter Grey

Senior Adviser, International Business Engagement & Co-Chair, Japan Business Group Location Profile
CLARKE Robert Portrait 2018

Robert Clarke

Partner & South Korea Focus Group Co-chair Location Melbourne Profile
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Stephen Price

Partner & Japan Focus Group Co-chair Location Sydney Profile

Secondments in Asia

Corrs has secondment arrangements in place with leading independent firms in this market.

Recent News

Conclusion of Australia Japan Economic Partnership Agreement (EPA) will take relationship to new level

The announcement on Monday night by the Prime Minster of Australia, The Hon Tony Abbott MP, that Australia and Japan have successfully concluded negotiations on an Economic Partnership Agreement, is very welcome news which will take the already excellent relationship with Japan to a new level.

The Prime Minster and Minster of Trade along with their team of officials were warmly congratulated by law firm Corrs Chambers Westgarth on achieving this historic agreement. 

While full details are of course not yet available, it is already evident that there will be substantial and real benefits to the Australian economy, individual businesses including professional firms and for Australian consumers.

Corrs looks forward to closely examining the details of the Agreement once released and will ensure that a full analysis is made available to our clients at that time.

‘I was able to see first-hand the important changes underway in the Japanese economy during a visit to Japan in March this year. We held discussions with our key Japanese clients, as well as a range of influential business leaders and opinion makers’ said Corrs partner & CEO John W.H. Denton. ‘The extent of the changes being undertaken by Japan’s Prime Minister Shinzo Abe are quite profound and will have a significant influence on the future of the Japanese economy. Corrs has a long history of working with Japanese and Australian companies – and will continue to strengthen the firms commitment to Japan even further.’

John Denton noted that it was for this reason Corrs appointed last year past Austrade CEO and former Australian Ambassador to Japan, Peter Grey, as Co-Chair of the Corrs Japan Business Group. 

Peter’s appointment to Corrs has significantly strengthened the firms international ties and capabilities, and is central to providing strategic advice to Corrs’ clients doing business with or in Japan.

Corrs advises Elemental Minerals on cross border takeover offer

Corrs Chambers Westgarth is acting as the lead legal adviser to Elemental Minerals in respect of a takeover offer made by Dingyi Group Investment, a Hong Kong Stock Exchange listed investment company.

Elemental Minerals, an Australian company listed on both ASX and TSX owning potash assets located in the Republic of Congo, has announced a takeover bid made by Dingyi Group Investment for all of its outstanding shares. Dingyi is an investment company incorporated in Bermuda, listed on the Hong Kong Stock Exchange and controlled by Mr Li Kwong Yuk, a Chinese entrepreneur.

The takeover offer price of A$0.66 per share values Elemental Minerals at approximately A$190 million and was at a premium of 126% to the average share trading price prior to the first announcement of receipt of Dingyi’s proposal.

Christian Owen, Corrs’ lead partner on the transaction said, “We are pleased to continue our association with Elemental Minerals and assist its Board and management team in progressing this important transaction. Our key role has been to utilise our cross border M&A expertise to assist Elemental in managing the complexities that a multi-jurisdictional transaction of this nature inevitably brings. We are proud to have assisted Elemental in securing this attractive opportunity for its shareholders to consider in what is best described as trying market conditions.”

The transaction also involves an interim funding package to be provided by Dingyi (comprising a placement and convertible note facility) to ensure Elemental has access to necessary working capital during the offer period.

Corrs involvement in the transaction is further evidence of why it has a top tier ranking amongst global competitors in the cross border M&A market having recently been ranked one of Australasia’s top five deal-making law firms in 2013 by Thomson Reuters in the M&A League Tables.

The Corrs team advising on the deal was led by corporate partners Christian Owen and Russell Philip, banking and finance partner Phil Wilson and corporate advisory team members senior associate Nick Herbert and associate Oliver Carrick.

Corrs has partnered with Stikeman Elliott LLP and Deacons to deliver a seamless cross border legal service.