This is from Article 22.1 (general exceptions) of the just released Australia-Korea FTA:
3. For the purposes of Chapter 11 (Investment), subject to the requirement that such measures are not applied in a manner which would constitute arbitrary or unjustifiable discrimination between investments or between investors, or a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Party from adopting or enforcing measures:
(a) necessary to protect human, animal or plant life or health;
(b) necessary to ensure compliance with laws and regulations that are not inconsistent with this Agreement;
(c) imposed for the protection of national treasures of artistic, historic or archaeological value; or
(d) relating to the conservation of living or non-living exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.
The Parties understand that the measures referred to subparagraph (a) include environmental measures to protect human, animal or plant life or health, and that the measures referred to in subparagraph (d) include environmental measures relating to the conservation of living and non-living exhaustible natural resources.
Let me start off with this question: Have any previous investment treaties/chapters had an exception along these lines? As I often point out, I haven't read all of the thousands of investment treaties/chapters that are out there, so I may have missed something. But I am not aware of one.
Then there's this question: How would such an exception apply in the investment context? Generally speaking, with investment law you don't have to withdraw a measure that violates. You just have to pay compensation. So let's say a government measure/action violates the rules, and the government has to pay compensation. Would that "prevent" a party from adopting or enforcing measures? Presumably the answer is yes, or else the provision would have no meaning, right?
So let's say this is a real, GATT Article XX-like exception. How will this be applied to situations involving fair and equitable treatment/expropriation? That should be interesting to watch.
Other questions: Are there additional policy reasons that might eventually be included in such an exception, beyond the four sub-paragraphs listed here?
Also, will the U.S. consent to such an exception in its own agreements?
ADDED: A couple web searches on this issue made clear that such a provision is not unique, although it is rare. See pages 358-360 of this book.
