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Lincon, Samuel --- "A Feminist Critical Analysis of the Foreign Investment Regulatory Framework: A Focus on Australian Reform" [2020] UNSWLawJlStuS 13; (2020) UNSWLJ Student Series No 20-13


A FEMINIST CRITICAL ANALYSIS OF THE FOREIGN INVESTMENT REGULATORY FRAMEWORK: A FOCUS ON AUSTRALIAN REFORM

SAMUEL LINCON

I INTRODUCTION

The increasing liberalisation of foreign investment regulations throughout the world in the recent decades reflects a trend of growing trade liberalisation that is viewed by many international financial organisations as a crucial element of economic growth and strategic development. Most research on the effects of foreign investment regulations on development and growth have been generally blind to gender. This is notwithstanding the fact that foreign investment regulations may have significantly disparate effects on women compared to men. Indeed, foreign investment has been a crucial factor in Australia’s remarkable economic growth over the recent decades. However, gender segregation and the gendered wage gap is still structurally pervasive in Australia with foreign investment disproportionately flowing into industries where these gendered inequities are rife and thus potentially exacerbating these issues. Feminist legal theory, which is based on women’s values and societal experiences, provides a novel perspective and critical evaluation of the existing hegemonic frameworks around foreign investment. Such an approach may potentially reveal areas of regulatory reform that could transform Australia’s foreign investment framework into one that promotes and better incorporates feminist values and gender equity.

This paper reviews Australia’s regulatory framework of foreign investment through the perspective of feminist legal theory with the goal of providing suggestions of feminist reform to help better achieve the substantive goals of feminist theory. Section II begins this paper with an overview of the relevant themes of feminist legal theory and their relationship with the foreign investment regulatory framework. Section III provides a summary and overview of Australia’s foreign investment regulatory framework, which includes the Foreign Investment Review Board process, international investment agreements, and other relevant regulations. The subsequent section critically evaluates Australia’s foreign investment framework through the perspective of feminist legal theory. Here, it is argued that there are significant areas of Australia’s foreign investment framework that are detrimental from a feminist perspective. Section V sets out the recommended areas of feminist reform in Australia’s foreign investment framework and provides suggestions on how the framework can be reformed to better achieve feminist goals. This section advocates for specific reforms that improve gender equity, reforms to the Foreign Investment Review Board process to improve clarity and better focus on feminist goals and reforms to the broader regulatory framework around foreign investments. Indeed, regardless of whether foreign investment regulations are directly the root cause of these issues, feminist improvements to the broader framework around foreign investment may be a useful part of the holistic solution to bring about positive change.

II AN OVERVIEW OF THE THEMES OF FEMINIST LEGAL THEORY

Feminist legal theory involves a diverse and deconstructive perspective of legal systems that incorporates a rich tapestry of various themes and theoretical strands that both interconnect and diverge in different ways.[1] Feminist legal theory is critical of the entrenchment of traditional masculine legal values such as individualism, assertiveness, adversarialism, aggressiveness and competition in existing legal frameworks.[2] Feminist theory instead advocates for more feminine values and themes including connectedness, contextuality and nurturing.[3] The female experiences and values, whether biologically, culturally or environmentally based, are the underlying foundation of these themes.[4] These values are used to critically evaluate existing regulatory power structures with the aim of achieving substantive equality and the flourishing of human society.[5]

A common understanding of feminism is that men and women should have equal rights. This is a foundational feminist tenet derived from liberal feminism which is one of the earliest and most fundamental types of feminism.[6] However, modern feminism has evolved into more nuanced types of feminism that have diverged from this foundational principle to better deconstruct patriarchal systems and achieve substantive feminist goals. Radical and relational feminist theory understands that laws which are gender blind or ostensibly neutral may still entrench the patriarchy and contribute to the oppression of women.[7] It is asserted that men and women having the same legal rights may not result in equitable or just outcomes.

For example, a law that allows parties to settle debts through hand to hand combat is prime facie neutral as it does not expressly discriminate between men and women. However, it does not take into account the substantive contextual differences between men and women, as men are generally physically stronger, and this law would therefore be oppressive to women. Similarly, laws that reflect and encourage masculine values of individualism and competition compared to the more feminine values of communitarianism and cooperation, even if they are ostensibly neutral or gender blind, may contribute to the entrenchment of patriarchal systems and the oppression of women. Such a view is also highly relevant to feminist international security studies which eschews the masculine conception of international security that emphasises aggression and militarisation and instead looks to promote peace through international cooperation instead.

A Conceptual Feminist Themes

There are three significant feminist themes which are important in analysing foreign investment through the perspective of feminist legal theory: context, connectedness and nurturing.

The feminist theme of context recognises that actors exist within a social context and that the very meaning of human existence is closely connected with their contextual ties with others.[8] Feminist theory argues that the existing legal system is too focused on notions of objective, abstract and universal goals at the expense of taking into account contextual human relationships.[9] Thus, rather than focusing on universal abstract principles, laws should take into account the substantive social context with the aim of achieving real and substantive social change.

The feminist theme of connectedness emphasises how actors are connected to each other and are defined by this connection. The masculine notion of self-interested individualistic competition is eschewed. Rather, feminist legal theory places significant importance on the development of relationships as a whole and the overall benefit to the relationship and its actors.[10] Therefore, laws should take into account their connectedness with human and social relationships, and their intersection with other disciplines as a whole.

The theme of nurturing is also very significant in feminist legal theory. In contrast to masculine value systems, the feminist theme of nurturing is rooted in the collective experience of females as nurturers and caretakers.[11] Thus, in addition to advocating for equality between genders, feminist legal theory is critical of existing legal frameworks that prioritise masculine values of competition and individualism at the expense of nurturing relationships and the cultivation of society. Indeed, feminist legal theory is intrinsically linked with the principles of social justice and responsibility.[12]

On a conceptual and theoretical level, the hegemonic framework around foreign investments can be critically analysed through these feminist themes of connectedness, context and nurturing. Feminist theory is critical of the perspective of foreign investment as a system that largely views foreign investment as a way for privately owned corporations to invest in other countries with the view of extracting profits and resources. This is opposed to the feminist legal values of contextuality which places substantial importance in looking at the social context of foreign investment. While private profits are an important aspect of this framework, there are also other factors that foreign investment policies should consider. These include social and environmental factors and goals such as equality and diversity.

Moreover, the feminist theme of connectedness is also highly relevant to the feminist theoretical analysis of foreign investment regulations. To a certain extent, foreign investment frameworks are inherently connective in that it facilitates the connectedness of various countries through investment. However, they may be generally limited in how the extent of the connection is viewed. For example, international investment agreements generally contain provisions that protect private investors and have dispute resolution provisions that involve the states and the investors. However, there is usually little express consideration of other stakeholders that are affected by foreign investment. These stakeholders, who are also substantively connected to the effects of foreign investment, include customers, employees, creditors, and members of broader society. Whilst a significant part of the foreign investment framework is concerned with protecting the profits and capital of private investors, this framework is somewhat disconnected from these other stakeholders. Moreover, the hegemony of corporations law and structuring, through limited shareholder liability, also serves to exacerbate this. Indeed, the artificial nature of the corporate veil has been heavily criticised by feminist legal scholars as serving to disconnect the private investor from the public consequences of their actions.[13] Thus, feminist legal theory advocates for the framework of foreign investment to take into greater account the substantive interests of the broader set of stakeholders that are also connected.

A key goal of feminist legal theory is the promotion of the nurturing and flourishing of society.[14] Foreign investment frameworks are also generally blind to this and are largely seen through the lens of being driven by private actors with the intention of making profits. Feminist legal theory is critical of how private competition and profit adversely affects the values of equality, nurturing and societal flourishing as an excessive focus on private profit may be exploitative and cause societal damage. Indeed, feminist scholars are critical of how foreign investors are largely absolved of responsibility or accountability to many consequences of their actions, which include environmental, social and economic damage.[15] Indeed, ecological feminist scholars have criticised the liberalisation of foreign investment frameworks for ignoring environmental damage and thereby causing the ‘concentration of capitalist patriarchy and its violence against nature and women’.[16] Feminist legal theory also criticizes how the liberalisation of foreign investment frameworks shift the focus of states away from the protection of citizens to the protection of foreign investment and multinational corporations.[17] The criticism of how legal frameworks can serve to put private profits ahead of the social good is a key tenet of socialist feminism. Indeed, socialist feminism asserts that the alienation of local workers from their labour in favour of the profits of multinational corporations is not only adverse to the nurturing and flourishing of society, but also is disproportionately detrimental to female workers.[18]

B Feminist International Security Studies

Feminist theory understands that the foreign investment legal framework is also becoming more relevant and connected to the feminist conception of international security law. The feminist conception of national security is largely opposed to the traditional stereotypical masculine conception which focuses heavily on aggression, militarisation and war.[19] Feminist legal scholars have hailed the global shift of perspectives of national security away from the historical masculine norms of war and military conflict to a softer and more feminist conception of international cooperation that has largely been driven by the global liberalisation of free trade and investment regulations.[20]

Research has shown that the liberalisation of foreign investment and trade policies may help promote peace through the facilitation of economic interdependence, the improvement of living standards and also by allowing states to engage in nonviolent economic bargaining and competition.[21] Thus, to a certain extent, reforms to foreign investment regulations may be relevant to the promotion of peace and national security, which is a clear goal of feminist legal theory and feminist international security studies. Indeed, the reform of foreign investment laws may serve as an alternate, more feminist and nurturing forum to improve national security as opposed to the more traditional and masculine policies of increased militarisation.

C Gender Equity

Feminist legal theory also places significant importance on gender equity and advocates for a strong consideration of how foreign investment frameworks may disproportionately affect women. This includes the substantive effects of foreign investment frameworks on the gendered wage gap, female workforce participation and the lived experiences of women.

Feminist theory understands that foreign investment frameworks may have multidimensional and differing effects on feminist gender equity goals. For example, the liberalisation of foreign investment may cause significant impacts on the gendered wage gap. Econometric studies in China have shown that the liberalisation of foreign investment regulations in China in the recent decades have had significant impacts on substantive feminist goals such as the gendered wage gap.[22] China’s liberalisation of foreign investment policies have had different effects on women and these effects have varied depending on the composition of industries and also across time. In 1995, the increase in foreign investment in China was correlated with a relatively higher increase of women’s wages compared to the wages of men, thereby reducing the wage gap. However, in 2002, as China’s foreign investment regulatory framework continued to develop, the increase in foreign investment was correlated with significantly higher increases in wages of men compared to women, thus worsening the wage gap.[23]

Feminist legal theory understands that foreign investment regulations do not exist in a vacuum and are in fact closely connected with other policies, and the substantive and contextual environment. Here, the differing outcomes on the gendered wage gap were found to be due to the change in the industrial composition and foreign investment trends in China. Women tend to be employed more in lower skilled export industries compared to men who are more likely to be employed in higher productivity domestically oriented industries. Thus, as foreign owned companies have shifted their investment to these domestically targeted higher productivity industries, the relative wages of men have increased compared to women.[24] Notwithstanding this, the liberalisation of China’s foreign investment regulations has been linked to an absolute increase in the wages of both men and women who are employed in both foreign invested enterprises and other domestically owned enterprises.[25] Therefore, feminist legal theory advocates that foreign investment regulations should take these contextual and environmental factors into account so that the liberalisation of foreign investment can be harnessed to work to achieve feminist goals.

Foreign investment frameworks may also improve the substantive feminist gender equity goal of female workforce participation. One of the key goals of liberal feminism is an increase in the participation of women throughout various economic structures.[26] The liberalisation of trade and investment may also serve to increase the participation of women in the workforce. Indeed, concerns around how foreign investment framework could affect the gendered wage gap may be tempered by the benefits of increased employment amongst women. Research indicates that women receive significant benefits through employment by foreign owned corporations. Studies in China have indicated that although women who were employed by foreign firms mostly worked in low skilled occupations with low wages and poor working conditions, these women were likely to be better off, as what they earned in a month was greater than what a man earned in a month in their villages at home.[27] Similarly, poorer women in Bangladesh who were employed through foreign owned firms transformed from being economically dependent on their male family members to being economic breadwinners and this greatly increased their self-worth, even though their wages and working conditions were relatively low.[28]

Research in developing countries has also indicated that although foreign investment may exacerbate the wage gap in the short term, the wage gap is actually correlated with economic growth, and foreign direct investment is correlated with better female educational attainment in the long term. This is likely because the gendered wage inequality improves the competitiveness of the country’s labour markets and leads to increased workforce participation amongst women and better female education in the long term.[29]

Thus, a nuanced view of feminist legal theory in relation to its critique of foreign investment frameworks should involve a balance between their positive feminist aspects and the potential drawbacks from a feminist point of view. The goal of feminist legal theory in the field of foreign investment would involve proposing meaningful regulatory changes that further enhance the role of foreign investment in the achievement of substantive feminist goals.

III AN OVERVIEW OF AUSTRALIA’S FOREIGN INVESTMENT REGULATORY FRAMEWORK

Australia’s regulatory framework of foreign investment primarily consists of inbound investment regulations. In particular, this involves the legal frameworks under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (‘FATA’), the Foreign Acquisitions and Fees Imposition Act 2015 (Cth) and the relevant regulations under these acts including the Foreign Acquisitions and Takeovers Regulation 2015 (Cth) (‘FATR’). Australia’s Foreign Investment Policy (‘AFIP’), a document issued by the Treasurer, also delineates how the Australian government approaches the administration of their foreign investment framework and provides an overview of this framework.[30] Finally, the Guidance Notes provide more specific guidance on the application of the framework to different investments.

Foreign investors are required to submit foreign investment applications to the Treasurer for prior approval for certain investments. Whether or not approval is required depends on the type of investment, investor, sector and value of the investment which are subject to various criteria and threshold amounts as stipulated under FATA and FATR. FATA allows the Treasurer to reject foreign investment applications that are deemed to be against Australia’s national interest. The Treasurer may also impose conditions on the investment to help ensure that the investment is not contrary to the national interest.[31] These criteria may also be modified based on Australia’s trade agreements with various countries. Foreign investors who fail to comply with this framework may be subject to significant civil and criminal penalties, and their transactions may be divested or unwound by the Treasurer.[32]

Whilst the Treasurer is responsible for making the decisions, the Foreign Investment Review Board (‘FIRB’) advises the Treasurer by evaluating the applications and advising on the implications of the investment on the national interest.[33]

The Treasurer is empowered to reject foreign investment applications that are determined to be contrary to the national interest. The national interest test is not explicitly defined under FATA. This allows the Treasurer to retain a high level of discretion and power to decide on foreign investment applications. However, the government typically considers factors including national security, competition, other government policies, the impact on the economy and the community, and the character of the investor.[34]

If a foreign government investor is involved in a proposal then it is subject to additional considerations including the commercial nature of the investment and whether their broader strategic or political objectives may be against the national interests of Australia.[35] This would include an assessment on the investor’s governance arrangements as to whether they could facilitate control by a foreign government.[36] Other considerations include the composition, nature, size and rights of any non-government interests and whether or not their operations have a commercial basis.[37]

Australia’s foreign investment framework also includes free trade agreements and bilateral investment treaties. Australia currently has free trade agreements in force with 11 countries (or groups of countries)[38] and has bilateral investment treaties in force with 18 countries.[39]

These investment agreements generally include key provisions on national treatment, where the parties agree to treat investors from the other party no less favourably than domestic investors. These agreements also generally include most favoured nation treatment provisions, where parties agree to treat investors from the other party no less favourably than investors from other non-parties. For example, these provisions are expressly stated on Article 9.3 and Article 9.4 of the China-Australia Free Trade Agreement.[40]

However, these investment agreements generally include exemptions for exceptions that involve national security or national interest considerations. For example, under the China-Australia Free Trade Agreement, the framework under FATA and its associated regulations are listed as part of the agreed non-conforming measures.[41]

In addition to the FATA framework, there are also various additional rules that are relevant to the regulation of foreign investment in Australia. Under the feminist themes of contextuality and connectedness, it is important for a feminist analysis of the foreign investment regulatory framework to take into account the broader context and implications of these additional regulations. This is because these regulations influence the decisions, incentives and outcomes around foreign investment through its connection with the substantive context of Australia’s foreign investment environment. Given that foreign investments predominantly involve corporations as a legal entity, the Corporations Act 2001 (Cth) is usually an important part of the broader regulatory framework. The Corporations Act regulates, inter alia, the procedures around the registration and administration of companies, capital raising, mergers and acquisitions, officer duties, capital raising and insolvency, which are generally important areas for foreign investors. The Consumer and Competition Act 2010 (Cth) also regulates anti-competitive behaviour and is relevant for acquisitions that may substantially reduce competition in the market. The ASX Listing Rules are also important for ASX listed foreign investments and stipulate continuous disclosure obligations, relevant transaction requirements and shareholder approvals. The Fair Work Act 2009 (Cth) also sets out the industrial relations system of Australia and the framework around employment obligations, which can be significantly different to that of the home countries of foreign investors. The Security of Critical Infrastructure Act 2018 (Cth) (‘SOCIA’), is also relevant for foreign investments that involve critical infrastructure and gives the Australian government wide discretion to identify critical infrastructure and to order the owner to do certain things in the interest of national security.

IV A CRITICAL ANALYSIS OF AUSTRALIA’S FOREIGN INVESTMENT REGULATORY FRAMEWORK

A critical analysis of Australia’s foreign investment regulatory framework reveals potential issues and areas of improvements from the perspective of feminist legal theory. Indeed, a key criticism of Australia’s foreign investment framework is that it largely does not take into adequate consideration the key themes of feminist legal theory. These include the feminist values of gender equity and the feminist themes of contextuality, connectedness and nurturing. Moreover, significant areas of improvement can be identified in relation to the achievement of the goals of feminist international security studies.

As previously discussed, the promotion of the nurturing and flourishing of society through an appreciation of connectedness and contextuality are key themes of feminist legal theory.[42] Australia’s foreign investment framework largely ignores these feminist themes and is viewed as being driven by commercial actors with the intention of making profits. Feminist legal theory is critical of how foreign investors, who are driven by profit, are largely disconnected from accountability for the adverse contextual consequences of their actions, including environmental, social and economic damage.[43] This profit focused view has been legitimised and entrenched through Australia’s framework around foreign investment. For example, under the FATA framework, the generation of private commercial profit is viewed as a positive factor in assessing the character of the investor in relation to whether or not foreign investments are in the national interest.[44]

Moreover, Australia’s foreign investment regulatory framework is very limited in terms of the importance it places on gender equity. It is telling that whilst the FATA framework involves a substantial listing of relevant factors under the national interest test, feminist goals such as gender equity are notably missing. Indeed, feminist theory argues that these feminist goals are significantly vital to the national interest and broader society and should not be disconnected from and ignored by the FATA framework. In addition, Australia’s free trade agreements largely do not place adequate consideration of gender equity goals. Indeed, most of Australia’s free trade agreements do not directly include gender related provisions at all. For example, this is evident in the China-Australia Free Trade Agreement which does not explicitly take into account gender equity. However, the addition of gender related provisions in free trade agreements is a growing trend amongst WTO members as the importance of gender equity becomes better recognised.[45] The Peru-Australia Free Trade Agreement includes an Article 22.4 titled ‘Women and Economic Growth’ that explicitly emphasises the importance of improving gender equity outcomes such as female workplace participation and the importance of measures to enhance the ability of women to benefit from the agreement.[46] These gender related provisions are a positive step in promoting gender equity and should be included in all future negotiations on Australia’s trade agreements.

Australia’s foreign investment framework is also somewhat flawed from the perspective of feminist international security studies. The various policy considerations under the national interest test as described in the AFIP likely causes significant uncertainty amongst investors and decision makers. The inclusion of national security as a policy consideration is a positive step from the viewpoint of feminist theory. However, it is unclear how all of these policy considerations are balanced and thus, this could cause significant misunderstanding and the amalgamation of so many factors may even detract from providing a full and proper consideration of the national security implications of foreign investments.

The proposed acquisition of OZ Minerals by China Minmetals Corporation is an illustrative case of this.[47] This investment proposal was initially rejected in March 2009 on the grounds of national security due to its proximity to a military testing zone in South Australia.[48] This was despite the acquirer being reportedly advised that the Australian Defence Department had no objections to the acquisition, the fact that companies operating in military zones are subject to military inspections at any time and also that the proposal demonstrated an intention to maintain the company’s Australian staff and management.[49] A modified proposal was subsequently approved in April 2009 with various conditions of which some related to national security but some of which had a clearly protectionist intention.[50] There was significant speculation around the motives of the rejection of the initial proposal and this speculation is indicative of the ambiguity and lack of clarity around the role and importance of national security in the FATA framework.[51]

The confusion with the national interest test especially in regards to the significance of national security is detrimental to feminist reforms of Australia’s foreign investment framework as it introduces confusion and inefficiency, and disincentivises investments. Moreover, such an ambiguous focus on national security in the national interest test is contrary to the significance of improving national security via non-military methods as espoused by feminist international security studies.

V REFORMS TO AUSTRALIA’S FOREIGN INVESTMENT REGULATORY FRAMEWORK

The feminist legal reform of Australia’s foreign investment regulatory framework should address the immediate feminist goals of gender equity, in both wages and workforce participation, and also broader themes of feminist legal theory, including contextuality, connectedness and societal nurturing.

As previously discussed, the liberalisation of China’s foreign investment regulations has been linked with the exacerbation of the gendered wage gap in 2002. This has led to calls for legal policies to help mitigate gender discrimination between high productivity and low skilled industries so as to encourage foreign investment inflows to benefit both men and women in a more equitable manner.[52] Similarly, feminist legal reform of foreign investment regulations in Australia should involve ways to take the substantive context into account in order to achieve feminist goals.

A Feminist Gender Equity Reforms

Recent research in Australia indicates that gender segregation is still rife and pervasive in Australian workplaces. Horizontal gender segregation, where there is an imbalance between women and men in various industries or occupations, is a significant issue and women are still overrepresented in poorly paid and lower skilled industries (including in lower paid roles in healthcare, social assistance, education and training).[53] Thus, to the extent that foreign investment inflows proportionately involve these lower skilled industries it is conceivable that Australia’s gendered wage gap may also potentially be exacerbated.

Vertical segregation, where there is an overrepresentation of men compared to women in higher paid roles, is also currently pervasive in Australia. Men generally dominate the higher levels of the workplace hierarchies throughout Australian industries.[54] Moreover, studies in Korea, Bolivia, Chile, Costa Rica and China have indicated that foreign direct investment is linked with increasing wage inequality as foreign firms pay disproportionately higher wages to higher skilled workers and those on higher levels of workplace hierarchies.[55] Thus, regardless of industry group, even if foreign investment results in the creation of Australian jobs, Australia’s gendered wage gap may be exacerbated if the existing gendered hierarchal wage trends remain unchanged.

In 2018, the top industries which attracted the highest amount of foreign direct investment in Australia were Mining & Quarrying, Manufacturing, and Financial & Insurance. These industries accounted for 37.8%, 11.1%, and 11.1% of foreign direct investment inflows to Australia respectively, which comprised of a majority of Australia’s foreign direct investment in total.[56] As of May 2018, women earned significantly less on average throughout these industries, and the average gender pay gap for Mining, Manufacturing, and Financial & Insurance industries was 16.9%, 11.3% and 26.6% respectively (with the overall average pay gap across all industries being 14.6%).[57] Thus, if the foreign investment and wage gap trends remain the same, then additional employment as a result of foreign investment could potentially exacerbate Australia’s average wage gap.

A reduction in the average gendered wage gap could potentially be achieved if more foreign investment were to be directed at and incentivised towards industries where the wage gap is smaller. For example, as of May 2018, the gender pay gap for the retail industry was only 6.3%. Thus, if additional foreign investment into the retail sector resulted in a proportionately higher level of employment in this sector, then the average overall pay gap across all industries could potentially be reduced.

Australia could potentially consider using gender equity requirements as a condition of market access. For example, foreign firms could be required to hire a certain proportion and number of women in higher skilled jobs or management related jobs for a certain period of time. Another condition could involve the provision of high skilled training for women that would allow the transfer of skills to other sectors. Foreign investors could also be required to maintain gender wage equity between men and women. In addition to becoming aware of the gendered context, such measures could also be tailored to the specific industry. For example, foreign firms investing in the financial industry (with a wage gap of 26.6% which is the highest amongst all industries) could be required to ensure that their employment practices result in a maximum wage gap of 10%. On the other hand, foreign firms investing in the retail industry (which has a wage gap of 6.3%) could be required to eliminate the wage gap altogether in their employment practices. These targeted wage gap thresholds could also be reduced over time with the goal of eventually eliminating the wage gap altogether. However, the implementation of these regulations could be problematic in that they may violate Australia’s international commitments. For example, these conditions may violate Australia’s national treatment commitments in their investment agreements with other countries. Moreover, such measures could also constitute impermissible performance requirements under WTO’s trade-related investment measures.[58] Thus, short of outright repudiation, an easing of Australia’s international commitments could be important for the successful implementation of these proposed regulations. Although, it is not very probable that this would be a likely outcome in the short term, the trend towards the use of gender related provisions, such as those seen in the Peru-Australia Free Trade Agreement, is an encouraging sign that nations are placing greater importance on gender equity in their trade agreements. Indeed, gender related provisions should be included through all future negotiations on trade agreements especially as more countries are starting to place more emphasis on the importance of gender equity in the context of international trade and investments.

Alternatively, Australia may consider offering incentives to encourage foreign investors to adopt the aforementioned measures to reduce the gendered wage gap. According to OECD, as of 2017, Australia’s effective marginal corporate tax rate was the third highest in the world.[59] Thus, rather than requiring foreign investors to comply with these wage gap reducing measures as a condition of market access or penalising those who do not comply, Australia could potentially offer tax incentives for foreign investors that implement these feminist measures. Again, these tax incentives can be tailored by industry with greater tax incentives offered to foreign investors who achieve gender pay equity in industries with higher average wage gaps. These incentives could work to attract more foreign investment while addressing the gendered wage gap and may also better avoid issues with violating national treatment commitments.

A more moderate approach could involve regulating for better transparency on feminist gender equity metrics in foreign owned firms. Australia does have limited reporting obligations of some feminist metrics. Under the Workplace Gender Equality Act 2012 (Cth), companies above a certain threshold of employees must report to the government with various gender metrics such as remuneration and must have formal strategies on achieving gender equality. This framework could be strengthened in line with recent UK reforms to the Equality Act 2010 (UK), which require firms to publicly publish their gender indicators online.[60] Thus, the imposition of similar regulations on foreign owned firms, or even all Australian firms (to avoid issues with national treatment), would better hold them publicly accountable and help indirectly shift their culture and practices to achieve the feminist goal of gender equality. Indeed, regardless of whether gender inequality may be caused by other more structural factors (which may include sociological factors) outside of the foreign investment framework, these suggested reforms may form an important part of the solution to help improve gender equity in Australia.

B Feminist Reforms to FATA Framework

From the perspective of feminist legal theory, Australia’s framework under FATA is to a certain extent a positive development. The framework does take into account the substantive context of Australia’s socioeconomic environment and the connectedness between foreign investment and the nurturing and development of the national interest. However, it appears to be gender blind and does not clearly take into account feminist issues involving gender equity and other feminist goals. Whilst the existing factors and considerations described in AFIP are important, further feminist reforms could be undertaken to improve this framework. For example, gender equity could be another factor for consideration in the national interest test. Foreign investment applications should be assessed on how the investment would affect Australia’s gendered wage gap, the skilled training of women and female workforce participation. This would likely lead to foreign investors actively considering how they can incorporate these measures into their business as part of their FIRB application. The Treasurer could then also impose gender equity conditions on foreign investments, which may include a minimum proportion of women in senior roles and a maximum average gendered wage gap.

Lastly, aside from fostering gender equality, the foreign investment framework can also be improved to serve broader feminist international relations goals. There have been recent trends worldwide since 2018 where foreign investment regulations are become more restrictive in response to national security concerns. Australia has recently strengthened regulations regarding foreign investment in the agricultural and electricity industries (in addition to the enactment of SOCIA), while other countries including Belgium, China, France, Germany, Hungary, UK, US, and the EU have further restricted foreign investment regulations for national security reasons.[61] Feminist legal reform should take this context into account and understand the connectedness between foreign investment regulation and national security policy. As previously discussed, the improvement of national security through foreign investment regulations reflects a softer and more feminist approach to international security relations compared to military measures, and thus represents an important area of the feminist reform of foreign investment. Indeed, a failure to address national security as part of the overall feminist reform of foreign investment regulations would be problematic and unrealistic, as it would fail to consider the international context and the growing importance of addressing national security goals in connection with foreign investment policies.

For example, the FATA framework can be further improved by providing a stronger focus on national security in additional to the feminist goals identified earlier. This framework has been criticised as being opaque, seemingly arbitrary, and not well-defined.[62] This is largely attributed to the numerous policy considerations under the national interest test as outlined in the AFIP, which greatly expands the Treasurer’s discretion and contributes to confusion and the opacity of Australia’s foreign investment regulatory framework. Indeed, leading scholars have criticised this framework for causing significant ambiguity and uncertainty.[63] Currently, the AFIP outlines 5 general national interest factors and it is unclear how these considerations are balanced and evaluated. The national interest test should therefore be narrowed to primarily focus on national security and gender equity. Clearer principles around the assessment of national interest and gender equity considerations should be developed. There have been calls to align Australia’s national security provisions and procedures with that of The Committee on Foreign Investment in the United States, which includes a legislative listing of relevant security issues and clearer publicly available processes around foreign investment screening.[64] Feminist goals can also be specified with reference to targeted gender equity metrics that are linked with existing wage gap information. Narrowing the national interest test factors to focus on the key goals of national security and gender equity could serve to improve the transparency of the framework, reduce investor uncertainty and better prioritise these key considerations. Australia should also aim to adopt these broader national security and feminist goals as part of their investment agreements with other countries. Other public policy considerations of foreign investment such as competition, tax and impacts on the community, which are also important to feminist legal theory and should not be disregarded, may be better handled through other domestic regulatory frameworks, which would also help avoid concerns with national treatment.

C Broader Feminist Reforms

Other laws that affect foreign investment, including those that influence the incentives and substantive outcomes around foreign investment, are also part of the broader contextual legal framework around foreign investment, and should be part of the scope for feminist reform. For example, given that foreign investments predominantly involve the legal entity of corporations in Australia, reforms to the Corporations Act could also be made in order to achieve feminist goals. As previously discussed, the foreign investment framework has been criticised under feminist themes of contextuality, connectedness and nurturing. Feminism is critical of existing frameworks that encourage individualistic competition and exploitative profiteering at the expense of the broader set of stakeholders and societal flourishing. Australian corporate law currently enshrines limited shareholder liability and regards corporate personhood as ‘essential to economic progress’ while dismissing any concerns that other societal stakeholders ‘would sometimes suffer’ as a fair and necessary tradeoff.[65] Moreover, shareholder primacy[66] is currently mandated by Australian law and directors are required to consider shareholder financial interests over the interests of other stakeholders or broader society.[67] These hegemonic concepts are viewed as anti-feminist[68] as they disconnect the corporate investors and directors from harms done to broader society and other stakeholders, and ignores the substantive context and the nurturing of society. Feminist legal theory, which is inherently linked to values of social justice and responsibility, advocates for a weakening of the limitations on shareholder liability, and a strengthening of director’s duties to other stakeholders and the broader society, in order to reduce corporate wrongdoing and improve societal flourishing.[69] These reforms would also help ensure that foreign investment can be directed to contribute to the achievement of feminist goals. If directors and shareholders are encouraged to consider societal interests through corporations law reforms, then both foreign investors and domestic businesses can be incentivised to help achieve the goals of feminist legal theory in a non-discriminatory manner.

VI CONCLUSION

Feminist legal theory provides a compelling approach to critically evaluating the broader foreign investment regulatory framework including that of Australia. The liberalisation of foreign investment regulations throughout the world has resulted in significant trade liberalisation. This has resulted in diverse impacts on feminist goals including the immediate aims of gender equity and female workforce participation, and also on the broader themes of feminist legal theory which include substantive contextuality, connectedness and societal nurturing. By focusing on these key goals and themes, feminist legal theory can help provide a broader perspective on the critical analysis of the foreign investment framework of Australia.

Relevant areas of legal reform from the perspective of feminist legal theory have also been proposed through the context of Australia’s regulatory framework around foreign investments. These reforms should address the immediate feminist gender equity goals of improving gender wage equity and the workforce participation of women in Australia. Although feminist issues such as gender equity may be attributable to complex factors and may not be directly caused by foreign investment regulations, improvements to the foreign investment framework may form an important part of the solution to these issues. Whilst directly restricting or conditioning foreign investment to achieve feminist goals is an option, the effect of these reforms on Australia’s international commitments, such as national treatment, should be carefully considered. Gender equity related provisions may also be included in Australia’s trade agreements with other nations. Tax incentives may be used to encourage foreign investors to consider feminist goals. Moreover, the FATA framework can be reformed to better focus on both gender equity and national security which would help reduce investor uncertainty and also place greater emphasis on these goals. Other important matters of public policies and feminist aims can be dealt with through more structural reforms to areas of the wider regulatory framework around foreign investment such as corporations law. These broader feminist legal reforms can serve to encourage and incentivise foreign investors to help successfully achieve the broader goals of feminist legal theory in a non-discriminatory manner.


[1] Kellye Testy, ‘Capitalism and Freedom — For Whom?: Feminist Legal Theory and Progressive Corporate Law’ (2004) 67 (Fall) Law and Contemporary Problems 87, 93; Ronnie Cohen, ‘Feminist Thought and Corporate Law: It's Time to Find Our Way Up From the Bottom (Line)’ (1993) 2(1) The American University Journal of Gender, Social Policy & the Law 1, 2-3.

[2] Jenny Morgan, ‘Feminist Theory as Legal Theory’ [1988] MelbULawRw 17; (1988) 16(4) Melbourne University Law Review 743, 758-759; Katherine Hall, ‘Theory, Gender and Corporate Law’ [1998] LegEdRev 2; (1998) 9(1) Legal Education Review 31, 43.

[3] Morgan (n 2) 758-759; Cohen (n 1) 11.

[4] Cohen (n 1) 6; Testy (n 1) 94.

[5] Testy (n 1) 94.

[6] Cohen (n 1) 3.

[7] Cohen (n 1) 4-5.

[8] Virginia Held, ‘Feminist Transformations of Moral Theory’ (1990) 50 Philosophy and Phenomenological Research 321, 337; Cohen (n 1) 23.

[9] Ann C Scales, ‘The Emergence of Feminist Jurisprudence: An Essay’ (1986) 95(7) Yale Law Journal 1373, 1383; Held (n 8) 337; Cohen (n 1) 23.

[10] Robin West, ‘Jurisprudence and Gender’ (1988) 55(1) The University of Chicago Law Review 1, 14; Held (n 8) 338-339; Cohen (n 1) 21.

[11] Carol Gilligan, In a Different Voice: Psychological Theory and Women’s Development (Harvard University Press, 1982) 25-37; Cohen (n 1) 4-5.

[12] Cohen (n 1) 2, 24;

[13] Testy (n 1) 105.

[14] Cohen (n 1) 4-5, 24.

[15] Vandana Shiva, ‘Economic Globalization, Ecological Feminism, and Sustainable Development’ (1997) 17(2) Canadian Woman Studies 22, 24; Testy (n 1) 105.

[16] Shiva (n 15) 24.

[17] Shiva (n 15) 25.

[18] Cohen (n 1) 3-4.

[19] Judith Ann Tickner, ‘Feminist Responses to International Security Studies’ (2004) 16(1) Peace Review 43, 43-44.

[20] Ibid 47.

[21] Eric Gartzke and Quan Li, ‘War, Peace, and the Invisible Hand: Positive Political Externalities of Economic Globalization’ (2003) 47 International Studies Quarterly 561, 562.

[22] Elissa Braunstein and Mark Brenner, ‘Foreign Direct Investment and Gendered Wages in Urban China’ (2007) 13(3-4) Feminist Economics 213, 231.

[23] Braunstein and Brenner (n 22).

[24] Ibid.

[25] Ibid.

[26] Shelley Wright, ‘Women and the Global Economic Order: A Feminist Perspective’ (1995) 10(2) American University International Law Review 861, 885.

[27] Elissa Braunstein, ‘Foreign Direct Investment, Development and Gender Equity: A Review of Research and Policy’ 2006 (12) United Nations Research Institute for Social Development 1, 16.

[28] Ibid 17.

[29] Braunstein (n 27) 18-20.

[30] Australian Government Department of the Treasury, Australia’s Foreign Investment Policy (‘AFIP’) (1 January 2019).

[31] AFIP (n 30).

[32] Ibid 14, 18-21.

[33] AFIP (n 30).

[34] AFIP (n 30) 9-12.

[35] Ibid.

[36] Ibid.

[37] Ibid.

[38] Australian Government Department of Foreign Affairs and Trade, ‘Australia’s Free Trade Agreements’ Australia’s Free Trade Agreements (Web Page, 2019) <https://dfat.gov.au/trade/agreements/pages/trade-agreements.aspx>.

[39] Australian Government Department of Foreign Affairs and Trade, ‘Australia’s Bilateral Investment Treaties’ Australia’s Bilateral Investment Treaties (Web Page, 2019) <https://dfat.gov.au/trade/investment/Pages/australias-bilateral-investment-treaties.aspx>.

[40] China–Australia Free Trade Agreement, Australia-China, signed 17 June 2015, (entered into force 20 December 2015).

[41] Ibid 87-88, 986-990.

[42] Cohen (n 1) 4-5, 24.

[43] Shiva (n 15) 24; Testy (n 1) 105.

[44] AFIP (n 30) 10.

[45] José-Antonio Monteiro, ‘Gender-related Provisions in Regional Trade Agreements’ (2018) World Trade Organization Economic Research and Statistics Division 1, 5.

[46] Peru–Australia Free Trade Agreement, Peru-China, signed 26 March 2018, (entered into force 11 February 2020).

[47] Huiqin Jiang and Weihuan Zhou, ‘China’s Investment in Australia: A Critical Analysis of Australia’s Foreign Investment Review Mechanism’ (2018) 10(2) Tsinghua China Law Review 187, 204-6.

[48] Stephen Kirchner and Jared Mondschein, ‘Deal-breakers? Regulating Foreign Direct Investment for National Security in Australia and the United States’ (2018) United States Studies Centre at the University of Sydney 1, 27.

[49] Ibid.

[50] Ibid.

[51] Kirchner and Mondschein (n 48) 27.

[52] Braunstein and Brenner, ‘Foreign Direct Investment and Gendered Wages in Urban China’ (n 22) 232.

[53] Senate Finance and Public Administration References Committee, Parliament of Australia, Gender Segregation in the Workplace and its Impact on Women’s Economic Equality (Report, June 2017) 3-12.

[54] Ibid.

[55] Braunstein, ‘Foreign Direct Investment, Development and Gender Equity: A Review of Research and Policy’ (n 27) 12.

[56] Australian Government Department of Foreign Affairs and Trade, ‘Australian Industries and Foreign Direct Investment’ Australian Industries and Foreign Direct Investment (Web Page, 2019) <https://dfat.gov.au/trade/resources/investment-statistics/Pages/australian-industries-and-foreign-investment.aspx>.

[57] Australian Government Workplace Gender Equality Agency, ‘Australia's Gender Pay Gap Statistics’ Australia's Gender Pay Gap Statistics (Web Page, 15 August 2019) <https://www.wgea.gov.au/data/fact-sheets/australias-gender-pay-gap-statistics>.

[58] Braunstein, ‘Foreign Direct Investment, Development and Gender Equity: A Review of Research and Policy’ (n 27) 26.

[59] Organisation for Economic Co-operation and Development, ‘Corporate Tax Statistics Database’ Corporate Tax Statistics Database (Web Page, 2019) <https://www.oecd.org/tax/tax-policy/corporate-tax-statistics-database.htm>.

[60] Equality Act 2010 (UK), s78.

[61] United Nations Conference on Trade and Development (UNCTAD), World Investment Report 2019, UN Doc UNCTAD/WIR/2019 (2019) 85-86.

[62] Kirchner and Mondschein (n 48) 12.

[63] Weihuan Zhou, ‘Chinese Investment in Australia: A Critical Analysis of the China-Australia Free Trade Agreement’ [2017] MelbJlIntLaw 18; (2017) 18(2) Melbourne Journal of International Law 407, 426; Jiang and Zhou, (n 47) 203.

[64] Kirchner and Mondschein (n 48) 12-13.

[65] Metal Manufacturers v Lewis (1988) 6 ACLC 725-8.

[66] Charlie Xiao-chuan Weng, ‘Inside or Outside the Corporate Law Box? Shareholder Primacy and Corporate Social Responsibility in China’ [2016] European Business Organization Law Review (forthcoming) 4-6.

[67] Hugh Alexander Grossman, ‘Redefining the Role of the Corporation: The Impact of Corporate Social Responsibility on Shareholder Primacy Theory’ [2005] DeakinLawRw 30; (2005) 10(2) Deakin Law Review 572, 577.

[68] Cohen (n 1) 24; Testy (n 1) 105.

[69] Cohen (n 1) 24.


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