..



.

Business News

Worried about agents of foreign influence? Just look at who owns Australia's biggest companies

  • Written by Clinton Fernandes, Professor, International and Political Studies, UNSW

The attention being given to possible covert influence being exercised by China in Australia shouldn’t distract us from recognising that very overt foreign influence now occurs through investment.

Read more: Inside China's vast influence network – how it works, and the extent of its reach in Australia[1]

Right now US corporations eclipse everyone else in their ability to influence our politics, through their investments in Australian stocks.

Using company ownership data from Bloomberg, I analysed the ownership of Australia’s 20 biggest companies a few days after the 2019 federal election in May. Of those 20, 15 were majority-owned by US-based investors. Three more were at least 25% US-owned.

image https://datawrapper.dwcdn.net/x0ODc/2/ According to my analysis, all four of our big banks are majority-owned by American investors. The Commonwealth Bank of Australia, the nation’s biggest company, is more than 60% owned by American-based investors. So too are Woolworths and Rio Tinto. BHP, once known as “the Big Australian”, is 73% owned by American-based investors. In the 1980s BHP advertised itself as ‘The Big Australian’. Now that’s all history.The ASX’s top 20 companies make up close to half of the market capitalisation of the Australian Securities Exchange. Such a concentration of foreign ownership should be a concern regardless of how much we see the US as an ally committed to liberal-democratic values, and appreciate that US corporate interests are not necessarily monolithic or necessarily exercised in accordance with a government agenda. Nonetheless, under so-called investor-state dispute settlement (ISDS) clauses, which the US government has systematically pushed in its trade deals with other nations, US corporate investors are getting unprecedented rights in foreign markets. ISDS provisions mean a foreign investor can sue a government for compensation in an international tribunal if the government makes any change in law or policy[2] that “harms” an investment. This is something no Australian citizen can do. Philip Morris’ smoking gun Since I did my analysis, the composition of the ASX top 20 has changed. The bottom four companies – Unibail-Rodamco-Westfield, Fortescue Metals Group, ResMed and Newcrest Mining – have made way for Insurance Australia, Suncorp, Amcor and South32. This, however, has not signficantly altered the dominance of US investor interests. It should also be noted that US investment firms also manage the wealth of foreign clients. But data from CapGemini and Merrill Lynch suggest the majority of assets the firms manage are American-owned, even if the precise number cannot be determined. There are arguably good grounds to include ISDS clauses in free-trade agreements, but the potential downside is exemplified by the case of tobacco giant Philip Morris, which challenged Australia’s plain-packaging laws for cigarette packs. The US company did so by moving ownership of its Australian operations to Hong Kong and then using the ISDS clause embedded in an investment treaty between Australia and Hong Kong. It used the clause to argue the Australian government’s law amounted to unjust confiscation of trademarks and intellectual property. The ISDS clause gave Philip Morris privileges no Australian company or individual had. Even though it lost, having its case thrown out on the grounds it was an abuse of process[3], it only had to pay half of Australia’s costs, which added up to almost A$24 million. Jonathan Bonnitcha and his co-authors argue in their book The Political Economy of the Investment Treaty Regime[4] that when states take legal action against each other, they have an incentive not to advance legal arguments that may backfire on them down the track. They have defensive interests. Under ISDS clauses, though, private investors don’t have defensive interests. States cannot commence proceedings against them. They can attack with adventurous legal arguments, and not worry about defending themselves from those same arguments down the road. Unlike courts, ISDS arbitrations lack standardised rules of procedure. Predictability of outcomes is much lower. Proceedings are private, not public. Only the final outcome is routinely available, and only if the parties agree. Transparency matters Under foreign influence transparency laws[5] that came into effect in March, “foreign principals” must declare their role in influencing governmental and political decision-making. Foreign principals include governments, organisations, individuals and “entities”. A company falls within the definition of a “foreign government-related entity” if its directors are accustomed or under an obligation to being influenced by a foreign government or political organisation, or if these governments and organisations hold more than 15% of the company’s shares or voting power, or can appoint at least 20% of the company’s board of directors; or otherwise exercise substantial control. Read more: Agents of foreign influence: with China it's a blurry line between corporate and state interests[6] All well and good. Australian democracy benefits when foreign efforts to influence policies are conducted in an open and transparent manner. But should not there be equal accountability and transparency over who owns our most powerful companies, the privileges they have under ISDS provisions, and what happens in any dispute proceedings?

Authors: Clinton Fernandes, Professor, International and Political Studies, UNSW

Read more http://theconversation.com/worried-about-agents-of-foreign-influence-just-look-at-who-owns-australias-biggest-companies-123343

Digital Agency

Business Daily Media Business Development

Accor and Visa form global partnership

Accor, a world-leading hospitality group, and Visa (V: NYSE), the global leader in digital payments, yesterday (the 18th of February) announced a global partnership to bring new payment expe...

Media Release - avatar Media Release

Cruise Guru Celebrates CLIA Award Win with Offer for Australian Travellers

Leading Australian cruise agency, Cruise Guru, has been named ‘2019 Online Cruise Agency of the Year’ at the 19th Annual Cruise Industry Awards hosted by Cruise Lines International Associati...

Rhea D'souza - avatar Rhea D'souza

Exciting Things About Sydney

Sydney is one of Australia’s largest cities that boasts a population of over 4 million people. It is a city that is famous for its picturesque views, multicultural people, superb weather, ...

News Company - avatar News Company

Accor announces new partnership with Grab to help members Live Limitless

Accor has announced a new strategic partnership between its new lifestyle loyalty programme, ALL - Accor Live Limitless and South East Asia’s leading super app, Grab. The deal brings toget...

Accor Pacific - avatar Accor Pacific

Upgrading to Deep Pocket Sheets

So, you have this amazingly comfortable bed that has a built-in topper and you are struggling to find the right bedding. You need to look for a sheet called deep pocket sheets or mega fi...

News Company - avatar News Company

Food you need to try in Beijing

Beijing is a beautiful and interesting destination for any kind of traveler. However, foodies will find a new heaven and will be able to try out tasty, flavorful and sometimes very special...

News Company - avatar News Company

Business Daily Media Business Reports

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The bla...

Helen Hull - avatar Helen Hull

Eclipse Travel Expands Operations to New Zealand

Eclipse Travel, specialists in key adventure destinations such as Antarctica, the Arctic, Africa and Latin America, have announced today their expansion of operations to ...

Yvonne Kong - avatar Yvonne Kong

How medical professionals can benefit from an overall wealth management solution

As a health care professional, you have made it your life's work to focus on the care and health of the general public. While this kind of work can be extremely rewarding...

News Feature Team - avatar News Feature Team

Why Pinterest Should Be Part of Your Marketing Strategy

Pinterest is a growing social media platform that can deliver significant traffic to your website and new followers to your brand. With it’s steady growth and outrageous ...

Greg Nunan - avatar Greg Nunan

The top reasons why gyms fail

Steve Grant is a Business Coach and Founder of GymHub.com.au   Every month thousands of new trainers walk out of their 6-month course with the qualifications needed ...

Steve Grant - avatar Steve Grant

WHITE LABEL NOBA’s Winter 2016 season: Earth + Country

Taking cues from the warm winter colours of tobacco and caramel, and combining them with the strength of navy and the embracing lightness of whites and creams; and then...

Kath Rose - avatar Kath Rose

Former Etihad boss brings substantial event insight to PMY Group Board

Paul Sergeant PMY Group, the architects of the digital insurgency occurring at major venues across Australia and New Zealand, are delighted to welcome 35 year even...

Annie Konieczny - avatar Annie Konieczny

More training for coffee making than property sales: REINSW

Sydney 9 May 2016. An overhaul of education and training standards for the real estate profession must take place to help prevent illegal activities, according to the Rea...

Helen Hull - avatar Helen Hull