A much anticipated investment protection pact between Taiwan and China will provide new channels for settling disputes and assure Taiwanese investors’ personal safety when doing business in China, Mainland Affairs Council (MAC) head Lai Shin-yuan said Friday.
“The grapes are finally ripe,” Lai said, referring to the long-stalled pact that will be inked between Taiwan and China in Taipei on August 9.
Lai said the agreement will be a big help to Taiwanese businesspeople, who have been vulnerable in disputes with Chinese companies or government because they can only seek arbitration in line with China’s judicial procedures.
In the future, she said, the new mechanism will enable person-to-person disputes, between private Taiwanese and Chinese companies, for example, to seek arbitration in either Taiwan or a third country agreed upon at the time a contract is signed.
Though the inclusion of a person-to-person arbitration mechanism is not common in similar international investment agreements, it is significant for Taiwan because about 65 percent of business disputes between Taiwan and China fall into the category, according to the MAC.
The mechanism gets around one of the main stumbling blocks that was holding up the agreement, which was Beijing’s refusal to accept the use of an international arbitrator to settle disputes because that would tacitly acknowledge Taiwan’s sovereignty.
China claims the self-ruled island as part of its territory.
As for commercial disputes between private businesses and governments (P2G), the investment pact will outline multiple remedies with different levels of mediation, it said.
A government-to-government (G2G) settlement, meanwhile, will be dealt with based on the existing Economic Cooperation Framework Agreement (ECFA), council officials said.
Lai said the investment pact will also cover personal safety, another main concern of Taiwanese businesspeople operating across the Taiwan Strait.
Under the new plan, if Taiwanese investors are arrested in China, their family members are to be notified of their whereabouts within 24 hours of their arrest.
Some exceptions exist, however, as China’s newly amended criminal litigation law stipulates that authorities do not need to inform family members of arrests of suspects involved in national security and terrorist acts.
Despite the limitation, MAC officials said they would use the agreement on Joint Crime-Fighting and Judicial Mutual Assistance signed in 2009 to accelerate the speed of notification.
That pact stipulates that cross-strait authorities should inform each other “immediately” should any arrest on criminal charges occur.
The investment pact, along with a cross-strait customs cooperation agreement, will be signed during the eighth meeting between Straits Exchange Foundation (SEF) Chair Chiang Pin-kung and his Chinese counterpart, Chen Yunlin, president of the Beijing-based Association for Relations Across the Taiwan Straits.
Originally scheduled to take place in the first half of this year, the meeting was postponed as a consensus on the investment pact had not yet been reached.