.

  • Written by Clinton Fernandes, Professor, International and Political Studies, UNSW
Most of Australia's biggest companies are majority-owned by US investors. www.shutterstock.com

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


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.


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 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, 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 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 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


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?

Clinton Fernandes received funding from the Australian Research Council.

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

Reality slippages and narcissistic stereotyping - watching Content, a TV show made for smart phones

Lucy spends much of her life living through her phone screen – what happens when we are let into this vantage point? Mia Forrest/ABCLucy (Charlotte Nicado) is a pink-haired millennial having a q...

Emma Maguire, Lecturer in English and Creative Writing, James Cook University - avatar Emma Maguire, Lecturer in English and Creative Writing, James Cook University

You can help track 4 billion bogong moths with your smartphone – and save pygmy possums from extinction

Healesville Sanctuary, Werribee Open Range ZooEach year, from September to mid-October, the tiny and very precious mountain pygmy-possums arise from their months of hibernation under the snow and beg...

Sally Sherwen, Director Wildlife Conservation and Science, Zoos Victoria, University of Melbourne - avatar Sally Sherwen, Director Wildlife Conservation and Science, Zoos Victoria, University of Melbourne

Is vigorous exercise safe during the third trimester of pregnancy?

Vigorous exercise is safe while pregnant, even in the final trimester. But if you don't feel up to it, lighter exercise is beneficial too. From shutterstock.comExpectant mothers receive an avalanche o...

Kassia Beetham, Exercise Physiology Lecturer, Australian Catholic University - avatar Kassia Beetham, Exercise Physiology Lecturer, Australian Catholic University

Climate change is the defining issue of our time – we're giving it the attention it deserves

The Conversation has joined more than 250 news outlets around the world to focus on climate change coverage. We provide 100% evidence-based coverage on climate change. Stay informed BY subscribing to...

Nicole Hasham, Section Editor: Energy + Environment - avatar Nicole Hasham, Section Editor: Energy + Environment

Australia to attend climate summit empty-handed despite UN pleas to ‘come with a plan'

The Port Kembla industrial area in NSW. Industry emissions can be cut by improving efficiency, shifting to electricity and closing old plants. Dean Lewins/AAPThis story is part of Covering Climate Now...

Frank Jotzo, Director, Centre for Climate and Energy Policy, Crawford School of Public Policy, Australian National University - avatar Frank Jotzo, Director, Centre for Climate and Energy Policy, Crawford School of Public Policy, Australian National University

'Climigration': when communities must move because of climate change

Flood damage in Bundaberg, Queensland, in 2013. Most communities are at some risk from extreme events, but repeated disasters raise the question of relocation. srv007/Flickr, CC BY-NCThis story is par...

Tony Matthews, Senior Lecturer in Urban and Environmental Planning, Griffith University - avatar Tony Matthews, Senior Lecturer in Urban and Environmental Planning, Griffith University

As Scott Morrison heads to Washington, the US-Australia alliance is unlikely to change

Wes Mountain/The Conversation, CC BY-NDPrime Minister Scott Morrison’s official visit to Washington this week carries some prestige. It is just the second “official visit” (includin...

David Smith, Senior Lecturer in American Politics and Foreign Policy, Academic Director of the US Studies Centre, University of Sydney - avatar David Smith, Senior Lecturer in American Politics and Foreign Policy, Academic Director of the US Studies Centre, University of Sydney

Apple's iPhone 11 Pro wants to take your laptop's job (and price tag)

What a week it has been in the Apple core. In recent days the tech giant has released a litany of products, including new phones, watches, tablets, and more. The big-ticket items are clearly the new ...

Andrew Maxwell, Senior Lecturer, University of Southern Queensland - avatar Andrew Maxwell, Senior Lecturer, University of Southern Queensland

A loaf of bread and a packet of pills: how supermarket pharmacies could change the way we shop

Supermarket pharmacies have been around in the US, UK and mainland Europe for years. But will Australia follow? from www.shutterstock.comOn the way home, you wander into the supermarket for a loaf of ...

Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of Technology - avatar Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of Technology

Bushwalking and bowls in schools: we need to teach kids activities they'll go on to enjoy

Schools could use bushwalking as an activity and link it to lessons in other subjects such as geography and science. Shutterstock/Monkey Business ImagesPhysical education is one of the most popular su...

Vaughan Cruickshank, Program Director – Health and Physical Education, Maths/Science, Faculty of Education, University of Tasmania - avatar Vaughan Cruickshank, Program Director – Health and Physical Education, Maths/Science, Faculty of Education, University of Tasmania

Picking The Right Crystal Yoni Egg: Tips And Instructions

When you are ready to pick your own crystal yoni egg, you need to decide what you will use it for, how big it should be, and how many you need. Some people who would like to use the egg because they...

News Company - avatar News Company

View from The Hill: Morrison's right hand man dispenses with niceties in lecturing big business

The Morrison government appears to be seething with anger at big business. At least, that’s the impression you get from a lecturing, hectoring speech delivered this week by Ben Morton, who&rsquo...

Michelle Grattan, Professorial Fellow, University of Canberra - avatar Michelle Grattan, Professorial Fellow, University of Canberra

New musical has enough warmth, witty lines and catchy tunes to win its own fangirls

Sharon Millerchip, Ayesha Madon, James Majoos, Chika Ikogwe, and Kimberley Hodgson in Fangirls at the Brisbane Festival. Photo: Stephen HenryComedy often succeeds where tragedy fails. Fangirls, the...

Alastair Blanshard, Paul Eliadis Chair of Classics and Ancient History Deputy Head of School, The University of Queensland - avatar Alastair Blanshard, Paul Eliadis Chair of Classics and Ancient History Deputy Head of School, The University of Queensland

Polycystic kidney disease, the most common genetic kidney disorder you've probably never heard of

If one parent has ADPKD, their child has a one in two chance of getting it. From shutterstock.comAutosomal-dominant polycystic kidney disease (ADPKD) is the most common genetic kidney disorder, and th...

Karen Dwyer, Deputy Head, School of Medicine, Deakin University - avatar Karen Dwyer, Deputy Head, School of Medicine, Deakin University

VIDEO: Michelle Grattan on Gladys Liu and the government's plan to drug-test welfare recipients

Liberal MP Gladys Liu has beeb the centre of much heated debate in federal politics this week. AAP/Lukas CochMichelle Grattan speaks with University of Canberra Vice-Chancellor and President Professo...

Michelle Grattan, Professorial Fellow, University of Canberra - avatar Michelle Grattan, Professorial Fellow, University of Canberra

Bupa's nursing home scandal is more evidence of a deep crisis in regulation

Australia's Aged Care Quality and Safety Commission found 45 of Bupa's 72 nursing homes failed health and safety standards. In 22 homes the health and safety of residents was deemed at 'serious risk...

Benedict Sheehy, Associate professor, University of Canberra - avatar Benedict Sheehy, Associate professor, University of Canberra

Actually, it's OK to disagree. Here are 5 ways we can argue better

When we fail to consider the ethics of arguing, this makes it perilously easy to mistreat others. ShutterstockArgument is everywhere. From the kitchen table to the boardroom to the highest echelons of...

Hugh Breakey, Senior Research Fellow, Moral philosophy, Institute for Ethics, Governance & Law, Law Futures Centre, Griffith University - avatar Hugh Breakey, Senior Research Fellow, Moral philosophy, Institute for Ethics, Governance & Law, Law Futures Centre, Griffith University

Women may find it tougher to get an abortion if the religious discrimination bill becomes law

Women may need to shop around for a new doctor if the first one refuses to perform an abortion for religious reasons. from www.shutterstock.comIf the Religious Discrimination Bill passes into law, wom...

Elizabeth Shi, Lecturer, Graduate School of Business and Law, RMIT University - avatar Elizabeth Shi, Lecturer, Graduate School of Business and Law, RMIT University

Why declaring a national climate emergency would neither be realistic or effective

The Greens and independent MPs are pushing for Australia to declare a national 'climate emergency', in line with several other nations. Darren England/AAPPredictably, both major political parties are ...

David Holmes, Director, Climate Change Communication Research Hub, Monash University - avatar David Holmes, Director, Climate Change Communication Research Hub, Monash University

Sick and Tired of Your Dead End Job? Try Teaching!

Tired of the same old grind at the office? Want an opportunity to impact lives both in your community and around the world? Do you love to travel and have new experiences? Teaching English is the perfect job for you! All you need is a willingness to ...

News Company - avatar News Company

The Impact of an Aging Population in Australia

There’s an issue on the horizon that Australia needs to prepare for. The portion of elderly citizens that make up the country’s overall population is increasing, and we might not have the infrastructure in place to support this. Australians h...

News Company - avatar News Company

LifeStyle

Picking The Right Crystal Yoni Egg: Tips And Instructions

When you are ready to pick your own crystal yoni egg, you need to decide what you will use it for...

Top 5 Tips for Paddleboarding In Whitewater

Paddleboarding can be relaxing as well as intense. If you occasionally want to do something differen...

3 Most Promising Career Occupations for Graduates in 2019

Studying in college is a great adventure which opens up lots of career opportunities. Yet, at times...

SCARmed Silicone Gel

AUSTRALIA LEADS WAY WITH ALL-NEW RAPID-DRYING SILICONE GEL WORKING WONDERS IN SCAR REDUCTION   ...