The Relationship between the Dispute-Settlement Mechanisms of MEAs and those of the WTO

13  Download (0)

Full text




The Relationship between the Dispute-Settlement Mechanisms of MEAs and those of the WTO

GONZALEZ-CALATYUD, Alexandra, MARCEAU, Gabrielle Zoe

GONZALEZ-CALATYUD, Alexandra, MARCEAU, Gabrielle Zoe. The Relationship between the Dispute-Settlement Mechanisms of MEAs and those of the WTO. Review of European, comparative and international environmental law , 2002, vol. 11, no. 3, p. 275-286

Available at:

Disclaimer: layout of this document may differ from the published version.


REG/EL 11 (3) 2002. /SSN 0~$2 87~7

The Relationship between the

Dispute-SeUlement Mechanisms of MEAs and those of the WTO

Alexandra Gonzâ/ez-Ca/atayud and Gabrielle Marceau


The potential conflicts between the substantive provi- sions of multilateral environmental agreements (MEAs) and the ni!es governing the World Trade Organization (WTO) have been the subject of much debate \'lithin these institutions, and· among stakeholders and the academie world. Little has been said, however, about the averlap or conflicts that could arise due to their parallel dispute-seUlement mechanisms and the result- ing fot•mn shopping that could dismpt the certainty achieved by the regolation of intemational relations through dispute-seUlement mechanisms.

This al1icle identifies sorne of the issues that may have ta be addressed, as weil as sorne of the argoments and alternatives that may be suggested, ta prevent WTO members and non-member States from pursuing mul- tiple dispute-seUlement courses use]essly and to ensure th at the most approptiately equipped fora are respons- ible for seUiing disputes. Even if the dispute-settlement mechanism envisaged by fhe WTO's Understanding on Rules and Procedures for the SeUlement of Disputes (DSU)' seems more powetful and effective than many MEA dispute-seUlement mechanisms, other means do exist and are explored in this atticle, with a view that parallel dispute-seUlement mechanisms be used for the best interests of WTO members and stakeholders.


It bas been argoed that authentic trade measures required or explicitly permitted by a MEA should be considered compatible with the invocation of Atticle

1 Understanding on Ru\e.s and Procedur~ for the SeUlement of Dis- putes {DSU), General Agreement on Tartffs and Trade: Multilateral Trade Negotiations Final Act E:mbodying the Resu\ts of the Uruguay Round of Trade Negotiations (Marrakesh, 15 April 1994).

XX of the General Agreement an Tariffs and Trade 1994 (GATT), which, under cmtain conditions, author- izes WTO members to deviate from GATT mies, including its market access disciplines, to give priority to one ofits listed policy considerations.' This detives from the application of the general principle of inter- pretation, which provides fol' a presumption against conflicts between treaty provisions. WTO panels and the Appellate Body are obliged ta take into account this presumption pursuant to Atticle 3(2) of the DSU when interpreting and applying the WTO provisions, including Atticle XX of GATT.

WTO members are allowed to take measures that may resttict trade if such measures respect the presctip- tions of Al1icle XX. Al'ticle XX(g) refers to measures relating to the protection of natural resources and At1icle XX(b) refers to measures necessary for the protection ofhealth of persans, animais and plants. The fact th at an envimnmental problem is regolated and protected by the international community through a MEA lends weight to the claim that a measure, adopted pursuant to such negotiated MEA provisions, is based on authentic environ mental motivations and may therefore be con- sidered as re la ting ta the pmtection of naturalœsources or be necessruy for fhe pmtection ofhealth or the environ- ment This is especially true with fhe new 'necessity tesf developed by the Appellate Body, where it is established that assessments, if a measure qualifies for the put'POSe of Atticle XX(b ), in volve


pro cess of weighing and balancing a selies of factors, which include: (1) the impmtance of the common interests or values protected by the measure; (2) the efficacy of such measure in pursuing the poli ci es aimed at; and (3) the accompany- ing impact of the law or regolation on impotts or expotts (the 'resttictiveness' ctitetia)." The more vital or impott- ant the poli ci es to which a measure is aimedl the easier it is to accept it as a 'necessary' measure designed for that Plll'Pose. The very existence of a MEA may be

2 G. Marceau, 'A Cali for Coherence in International Law', 5:33 JWT (1999), 88; G. Marceau, 'Conflicts of Norms and Conflicts of Juris.

dic1ions', 35:6 JWT (2001), 1081.

3 See the Appellate Body Report in WTO AB 10 January 2.001, Korea - Various Measures on Bee(, WTIDS161JABIR and WTJ DS1691ABIR (AB-2000-8), at paras 537-540 and 562-564.

© Blackwell Publishers Ltd. 2002, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main street, Malden, MA 02148, USA.




argucd as evidence that the concerns covered hy the MEA are vital and important and, thus, 'necessary'.

That a measure is applied in accord ance '\vith the fmme- workset out in a MEA can also be of sorne relevancewhen assessing whether the measure was applied in compli- ance with the provisions of the chapeau of Article XX, thal is, not being a disguised restriction on interna- tional trade. Pat1icipation and compliance wilh MEAs could be ofrelevance to assessing the good faith ofWTO members invoking Al1icle XX.4 Importantly, Article XX pet·mits cet1ain unilateral actions to be taken to pt·omote environmental goals, even in the absence of a MEA on the subject matter! It would be illogical if a WTO member, acting in furthe.-ance of the goals of a relevant MEA (and pat1y to such a MEA), was to be placed in a worse position than if no such MEA existed.

So far, trade measures taken by WTO members pur- suant to MEAs or pm-suant to recommendations by MEA institutional bodies have not been challenged at the WTO. Fpr instance, in the context of the non- compliance mechanism uhder the Montreal Protocol, the Meeting of the Pat1ies, ptior to the recommenda- tion of the Protocol's Implementation Committee, decided to impose a combina tian of measures. consist- ing, inter alia, of restrictions on Russia's trade in con- trolled substances to facilitate Russia's compliance with ils obligations und et· the Protocol. 6 Un der the Con ven-

4 WTO AB 12 October 1998, United States - Impoli Prohlblflon of Certain Shrimp and Shrlmp Products, WT/0$58/ABIR (AB-19984) (US-Shrlmp/7ùrl/e), para. 158.

5ln the US- Shrimp/Turtie Case, ibid., the Appellate Body slated at para. 121 that Ïl]t appears to us ... that conditioning access to a Member's dome-stio market on \'t'hether exporting Members comp!y V1ith, or adopt, a policy or policies unilateraUy prescfibed by the importing Member may, to sorne degree, be a common aspect of measures falling within the scope of one or another of the excep- tions {a) to (j) of Article XX of GATT'. See also the Appellate Body statement in the US- Shrlmp/Turlle Case (relaUng to Article 21(5) of the DSU), at para. 124: 1Ciear1y, and "as far as possible", a multilateral approach is strongly preferred. Yet it is one thing to prefera mljtilateral approach in the application of a measure thal is provisionally justifie cl under one of the subparagraphs of Article XX of the GATT: it is another to require the conclusion of a multilateral agreement as a condition of avoiding "arbitrary or unjustifiable dis·

elimination~ under the chapeau of Article XX. We see, in this case, no such requirement'.

6 Reporl of the Seventh Meeting of the Parl/es to the MoniJ'eal Protocol (UNEPJOzl.Pro.?/12, 27 December 1995). The case concerning Russia's non·compliance with the Montreal Protocol is probably the one that most clear1y reflects the uncertainties surrounding -trade measures taken by MEAs and their potential challenge at the WTO. The recommeildation of the lmp!ementation Committee was adopted by the Meeting of the Parties thanks to an 'improVisee!' rule of procedure that allowed it to overr1de Russian opp%ition. Russia never challenge cl this, mostly due to other finan·

cial interests that were at stake. Russia coule! not challenge the trade restriction at the WTO either, he cause it is not a VVTO member.

For an in-depth analysis of this case, see J. Werksman, 'Compliance and Transition: Russia's Non-Compliance Tests the Ozone Regime', 56 Zellschrifî für auslâhdlsches 6ffentf/Ches Recht und V61kerrecht (1996), 751.

@ Blackwell Publisher~ Ltd. 2002.

RECIEL 11(3) 2002

tion on International Trade in Endangered Species of Wild Fauna and Flora (CITES), !rade suspensions !>ave been adopted against dozens of parties and non-parties and such measures have never been challenged under the WTO or GATT.'l Finally, there are recommenda- tions from the contracting patti es of the Intemational · Convention for the Conservation of Atlantic 'limas (ICCAT) to ban impot1s of cet1ain fish species and theil- products from otlter contracting parties in arder to prompt countries of otigin to comply with sustain- able fishing practices.•

In summaty, in situations where a



invokes a MEA to justify a defence based on At1icle XX ofGATI, it can be argued that Article XX should be applied in such a manner as to ensure (1) the avoidance of conflict with, and (2) the effectiveness of, the relevant MEA. Yet specifie issues relating to the overlap of the dispute-seUlement process of MEAs and the WTO may remain problematic.



Tite dispute-seUlement mechanism of the WTO is 'a central element in providing secmity and predictabil- ity to the multilateral trading system'' The system is an elaboration of the GATI !hat preceded it. However, the system under GATI had no fixed timetables, many cases dragged on for a long ti me inconclusively, rulings were easier to block, and implementation of reports as weil as retaliatoty actions were rarely regulated.

The DSU that now govems the settlement of disputes under ali WTO agreements listed ·in ils Appendix I (covered agreements) developed Alticles XXII and XXI!I

7 For instance, pursuant to CJTES, Resolution 5.2, 1mplementalion of the Convention in Solivia', Proceedings of the Afth Meeting of the Conference of the Parlies {22 April-3 May 19$5), it Was recom- mended thal 1all parties refuse to accept shipment.s of ClTES speci- mens' from Bolivia if INithîn 90. days Bolivia had not demonstrated 'to the Standing Committee that it [had] adoptee! ali necessary measures to adequately implement the Convention', Other cases invotved, Inter 8fla, Bolivia, Paraguay, Greece, ltaly and China.

8 For instance, see RecommendaUon 99-10, /CCAT- Regardtng Equatorial Gulnea pursuant to the 1996 Recommendatlon re9ardtng Compfiahœ for B!uefin and North Atlantic Swordfish Asheries (October 1999).

'DSU, Arlide 3(2).



of GATT in introducing a more structured proccss.

The WTO dispute-seUlement mechanism functions according to a pdnciple of reversed consensus (also called negative consensus). According to this prin- ciple, many steps and procedural stages happen auto- matically, within pre-determined time limits, unless, by consensus, WTO members agree othetwise. Panels and Appellate Body reports must now be adopted by all members sitting in the Dispute-SeUlement Body (DSB), unless there is consensus ta the contrary (the reversed or negative consensus): this is what is called the 'quasi-automaticity' of the new dispute-seUlement mechanism of the WTO.

Only governments of WTO members are entitled ta initiate dispute-seUlement proceedings. '0 Proceedings may commence when a WTO member considers that any benefits accruing directly or indirectly under any agreements are being impaired by measm·es taken by another member.u There is no need for any specifie economie or legal interest to initiate the DSU process and the challenging member does not need ta prove the trade impact of the challenged measure.'2

The main dispute-seUlement procedmes of the WTO are those of the panel, appellate review, and the sur- veillance and implementation processes (including the possibilities of arbitration for specifie procedural issues during the implementation stage). Atticle 25 of the DSU also authorizes WTO members ta use arbitra- tian rules as an alternative means of seUJing their disputes."

The WTO dispute-settlement mechanism is divided into four stages: consultations, panel process, appellate

10 See US- Shrtmp/Turlle, n. 4 abo'le, para. 101. ln addition, only WTO members that have a substantial interest in the matter' can reserve lhird party rights. See OS LI, Article 10.

11 DSU, Article 3(3). Concerning the submission of am!cus Gùrlae briefs, it has been established that panels and the Appellate Body may acœpt them, even unsolicited oi')P-...S, but are under no obligation to consider them. See US-Shrlmp/Turlie, n. 4 above, para. 108.

ln any case, the panel and the Appellate Body are not obliged to rely in their decisions on any such submissions received from any source. See 'NTO AB 16 January 1998, European Commuh!IJes - Measures Concerning Meat and Meat Products (Honnones), WT/

DS481ABIR and WTJOS261ABIR (AB-1997-4), para. 156.

12ln WTO AB 25 September 1997, European Communitles - Regime for the Importation, Sale and DJsirlbuUon of Bananas, WT/DS27/AB/R {AB-1997·3), the Appellate Body stated that 'a Member has broad discretion in deciding whether to brlng a case against another Member under the DSU. The language of .Atticle XXlll(1) of the GATT and of Article 3(7) of the DSU suggests, furthermore, that a Member is expected to be largely self-regulating in deciding Whether any such action would be ~frultfu!"'. See ibid., at para. 135.

13 Parties may use any agreed rules of arbitration. The r%ults from the chosen process must not be the object of an appeal, but must romain subject to the implementation, surveillance and sanction ru\ es of the DSU. However, Article 25 has not been used to date. ln this article, the focus Will concentrate on the main processes of the DSU. See US- section 110(5) Copyright Act WTJOS 1601!\RB 2511.

© Blackvtell Publishers Ud. 2002.

process and implementation. Atticle 4(2) ofthe DSU requires that countries in dispute enter into consulta- tions - generally for at !east 60 days - prior ta bringing a request fat· the establishment of a panel ta adjudicate over the matter. If consultations fail, the complaining patty may request the DSB ta establish a panel." The DSB is composed of ali WTO mernbers and is respons- ible for administering the DSU and overseeing the operation of the dispute-seUlement system. The panel will be established, at the latest, by the second DSB meeting after it is requested. <S

Panels are composed of tlll"ee well-qualified indi- viduals, proposed by the WTO Secretariat, wh ose pro- posais may only be rejected by the parties of the dispute for compelling reasons.'6 In practice, disputing mem- bers exercise stl'Ong political control over the selection of panelists. After 21 days, absent any agreement on the selection of panelists, any pal1y can request the Director-General of the WTO to nominate panelists.

The main stages of the panel procedure include the submission in writing by each patty of their case, a first meeting between the parties and the panel, foi- Jowed hy written rebuttals and a second meeting (as weil as the hearing of expel1s" in cases involving sci- entific or technical matters). After an interim repmt is released, the panel's final repol1 is generally given to the padies of the dispute within 9 months and circulated to ali WTO members within 2 months thereafter.18 The panel repmt must be adopted by the DSB within 60 days ofits circulation (ùnless it is appealed)."

Pat·ties to a dispute can appeal any panel's findings on points of law, but the Appellate Body cannat re- examine existing evidence or examine new evidence.zo TI1ree members of a standing seven-membet· Appellate Body, set up by the DSB and broadly representing the WTO memhership, hear each appeal. The Appellate Body can uphold, modify or reverse a panel's legal findings and conclusions.''. Normally appeals should not last more than 60 days, with an absolute maximum dura ti on of 90 days" (but some processes have lasted

14 DSU, Article 4(7).

15 Ibid., Article 6(1).

~ Ibid., Article 8 and, specifically, Article 8(6).

17lbid., Article 12.

'1S Ibid., Article 12{8).

19lbict, Article 16(4). lt is possible, in theory, for WTO members to refuse ~ by a consensus decision - the adoption of the panel report Article 16(4) of the DSU states: Wilhin 60 days after the date of circulation of a panel report to the Members, the report .shall be adopted at a DSB meeting unless a party to the dispute formally notifies the DSB of its decision to appeal or the DSB decides by conBensus not to adopt the report. If a party has notified its decision to appeal, the report by the panel shall not be considered (or adoption by the DSB ur'ltil after completion of the

appeal'. ·

20 lbid., Article 17(6).

21 Ibid., Article 17{13).

22lbid., Article 17(5). ·



up to 140 days). 23 The DSB must adopt bath the Appel- Jale Body's report and the panel report (as reversed, amended or upheld) \'lÎlhin 30 days of the circula- tion of the Appellate Body's report. Reports of the panel and the Appellate Body must be made public."

· The final phase of the WTO dispute pro cess is the surveillance of implementation of the DSB's recom- mendations (i.e. the conclusions of the panel or Appel- Jale Body) and the regulation of counter-measures in case of non-compliance, as provided for in Atticles 21 and 22 of the DSU. The DSU generally prohibits the unilateral determination of any WTO violations dming and outside the DSU process.25 'I11e DSB monitors how adopted recommendations are implemented, and un til the winning member is satisfied, the case remains on the DSB agenda until the issue is resolved. Panel and Appellate Body repotts usually identify specifie WTO violations (pursuant to the claims alleged by the com- plaining parties), but leave to sovereign


mem- bers the flexibility (over a reasonable petiod of lime) ta correct the challenged measures in a mann er thal is compatible with



In case the offending member fails ta comply with the DSB recommendations witllin the ti me frame agreed or arbitrated for implementation (which vaties between 8 and 15 months) or if parties cannot agree on mutu- ally acceptable compensation within 20 da ys, 26 a patty may ask the m1ginal panel (and the Appellate Body thereafter) to review the implementing measure.27 In situations where the implementing measures are found to be incompatible .with the WTO's rnles, the successful member may ask the DSB for permission to impose tt·ade sanctions" corresponding to the leve!

of tt·ade nullified and impaiœd by the incompatible measure. The DSB may authorize requested sanctions, but arbitration petformed by the original panel - from which there is no appeal - on the actual leve! of snch nullification and impairment of benefits is possible.

Sanctions are supposed to be imposed on the same sector(s) as !hase covered by the violations, but cross- retaliation in other sectors and other agreements are also possible.

A fundamental provision of the DSU, in the context of its relationship with other dispute-seUlement mechan- isms (such as those in MEAs), is Atticle 23. Article 23

23WTO 5 April 2001, European Communltles- Measures Affectlng Asbestos and Asbestos-Contalning Products, WTJDS135JR and WTJDS135JR/Add. 1 (EC- AsbestoS), as modified by the Appellate Body Report, WT/D$135/AB/R (AB-2001-1). See also Thal/and- Restrlc.t/ons on Importation of and Interna/ Taxes on Cigarettes, BISD 3781200 (1990).

2~ DSU, ATteles 14 and 17(10).

25]bid., Articles 23, 21.5 and 22.7.

2(i lbid., .Atbcle 22.

27lbid., Article 21{5).

2e lbid., ArUcle 22{2).

@ Blackwell Publishers Ltd. 2002.


RECIEL 11 (3) 2002

of the DSU is entitled "The Strengthening of the Multi- latet'al System'. 1t provides th at:

23(1) When Members seek the redress of a violation of obligations or other nullification or impairment of benefits under the covered agreements or an impediment to the attainment of any objective ·of the covered agreements, they shall have re course to, and abide by, the rules and proced- ures of this Ondetstanding.

23(2)(a) ... Members shalh (a) not make a dete•·mination to the effect that a violation has. occur1·ed, that benefits have been nullified or impaired or that the attainment of any objective of the covered agreements has been impeded, except through recourse to disputesettlementin accordance with the rules and procedures of this Understanding, and shall make any such determination consistent l' the findings contained in the panel or Appellate Body report adopted bythe DSB or an arbitration award rendered under this Understanding ... [emphasis added]

Atticle 23 of the DSU is one of the most fu nd ameutai pi'Ovisions of the DSU. Not only does il pmhibit uni- lateral measures or countermeasures, and arguably sorne State 'behaviour' thal would potentially 'threaten the multilateral !rade system'," but il also provides

!hat the


has exclusive jmisdiction for allowing remedies for violations of the WTO Treaty.30 Il seems, thus, as ifWTO members have in advance provided to the


adjudicating bodies exclusive jmisdiction to address violations of


rule s.

In other words, the WTO adjudicating bodies ''lill 'attract' jurisdiction over any trade-related disputes.

The WTO dispute-seUlement mechanism cau be ttig- gered easily and quickly, and panels and the Appellate Body \'lÎII often be expected to make mpid rulings, arguably to the exclusion of the jurisdictions of other international fora. The exclusive and powerful jutisdiction of the


adjudicating bodies to deal with allegations of


violations does not resolve the complicated issue of overlaps and conflicts of

29 WTO 27 January 2000, United States-Sections 301-310 of th1J TradfJ Act of 1974, WT/08152/R (US- S!Jctloh 301 TradfJ Act).

This seems to have been one o( the conclLISions reached by the Panel - in the case of threat of unilateral determinations by a powerful State -the USA. The Panel was of the View that \-\ilh 'the indirect affect~ of the admittedly non-mandatory US Section 301, the risk of unilateral determination {both having "chilling effect• on Members and the mar1<et·place), as weil as the overall systemic damage of any spill-over effeCt of such discrelionary legislation, Vtere such - in particular in !ight of the economie power of the United States -asto lead to a conclusion that the United States, in maintaining such Section 301, appeared prima facle to be in viola·

tion of Article 23 of the DSU. M important reason why Article 23 of the DSU must be interpreted with ·a view to prohibiting arfoj form of unilateral action \s because su ch unilateral actions tlrealen the stab·

i!ity and predictability of the multilateral trade system ... Unilateral actions are, therefore, contrary to the essence of the multilateral trade system of the WTO .. .'. See US - S~Jc.tlon 301 Trade Act, ibid., at para. 6.14. See also ibid., paras 7.71-7.94.

31J See WTO 17 July 2000, United States- lmport M~Jasures on C~Jrtain Ptoducts from the EC, W"f/DS165JR, at para. 6.133.



jurisdictions. It is interesting to note that Article 11(3) of the Agreement on Application of Sanitary and Phytosanitary Measures (the SPS Agreement), entitled 'Consultations and Dispute SeUlement' provides that:

(n]othing in this Agreement shall impair the rights of members under other international agreements, including the right to re sort to the good offices or dispute-settlement mechanisms of other international organizations or estab- li.shed und er any international agreement.

This provision refers to the possibility of using other mechanisms under other international agL·eements, in parallel to those of the WTO.


Most binding environ mental treatîes contain more or Jess detailed provisions on the seUlement of disputes.

They are charactelized by their optional nature and by the fact th at in most cases their results are not usually binding on the parties.

The basic madel of dispute seUlement in MEAs involves a progressive process that facilitates dispute resolution by subjecting the dispute ta gradually more intrusive and formal mechanisms.3L The 1Standard menu' in eludes optional adjudication by the Interna- tional Court of Justice (ICJ), arbitration, or concilia- tion at the request of a party.

The scope of dispute-seUlement mechanisms is norm- ally limited to disagt·eements arising from the intet-pretation or application of the MEA. In cases of dispute, the first step is generally to seek a solution through consultation, negotiation or other peaceful means between the parties. If this fails, a second stage may consist of a joint request by the disputing parties for intervention by a thit·d party through good offices, fact-findîng, conciliation or mediation.32 Under each of these methods, the thit·d party attempts to assist the pat1ies to reach an agreement that ends the dispute, although the leve! of involvement valies.33 Alternat- ively, or for th ose disputes not resolved in accordance

31 S. Porter and D. Hunter; 'Dispute Resolution in the Context of Tran.sboundary ErNironmental Impact Assessment, A Review of Selected Bilateral and Multilateral Agreements', in D.. Hunter et al.

(eds), International Envlronmental Law and Poilcy {FoundaL·on Press, 199$), 495, at 496.

32 ln seme MEAs, such as the Vi enna Convention fo( the Protection of the Ozone. Layer, if an agreement is not reached through negoti- ation, the next step might be good offices or mediation by a third party (Article 11(2) of the Vienna Convention for the Protection of the Ozone Layer). ln other MEAs, mediation is part of the remedies induded in the first stage (for instance Article XX)/ of the Antarctic Convention on Marine Living Resources).

33 SeeS. Porter and D. Hunier, n. 31 aboVe, at 497.

@ Black'.'leJI Publi~her~ Lfd. 2002.

with negotiation or mediation, the case may be sub- miUed to binding dispute seUlement, frequently at the ICJ or thwugh arbitration, if the countties in dis- pute agree to it. The majority of MEAs do not oblige pat1ies to solve their disputes through binding adjudi- cation processes (su ch as th at of the ICJ), although in many cases parties can set their preferences upon ratification of the agreement. Some MEAs fot·esee compulsory conciliation, ifpat1ies have not accepted the same or any procedure for dispute seUlement!' For that pm-pose, a conciliation commission may be created at the request of any party. However, unless otherwise agreed, the decision or recommendation of the commission is again not binding. Some MEAs establish that parties must consider the decision in good faith!'

In recent years1 many environmental tt-eaties have incot-porated free-standing non-compliance procedures, used as a dispute-avoidance mechanism.36 Non- compliance procedures are characterized by their non-controversial and technical assistance-oriented nature. Tiley are not·mally administered by a special dedicated institutional mechanism, such as a standing or implementation committee. The size and composi- tion of the commiUee may vary, but in general, they should try to reflect an 'equitable geographical distli- bution' (for instance the Montreal Protocol) or an ad- equate representation of those members most likely to be affected by the MEA (for instance proposais for the Committee of the Base] Convention on the Control of Transboundary Movements of Hazardous Waste and their Disposal).37 Severa! possibilities ttigger the immobilization of su ch a ·commiUee. Review often can be initiated either thmugh a complaint fr·om one pa11y against another, or by the secretaliat of the MEA in any situation where it suspects a, party of non-compliance.38 It has been common under the Montreal Protocol to

34 See, for instance, Vienna ConvenUon for the Protection of the Ozone Layer, Article 11(5); Conyention on Biological DiVer'sity, Art-

ide 27(4). ·

!.5 See, for instance, Vi enna ConvenU on for the Protection of Ozone Layer, NUde 11(5).

M See, for instance, Montreal Protocol on Substances lhat Deplete the Ozone Layer; Article 8: Resolution Xl-1 of the Convention on lnternational Trade in Endangered Spedes of Wild Fauna and Flora, Annex 1; Rotterdam Convention on the Prior lnformed Consent Procedure (or Certain Hazardous Chemicals and PesUcides in International Trade. Article 17; Kyoto Protocol, Article 18.

~ G. Handl and E. Deutsch, 'Compliance Control Mechanisms and International Ënvironmental Obligalions', 5 Tulaoo Journal of Inter- national and Comparative Law (Spring, 1997), 29.

ss For instance, see for the Montreal Protocol: Report of the Tenth Meeting of the Parties to ihe Montreal Protocol on SUbstances that Depiete the Ozone Layer (UNEP/Ozl.Pro1.1019, 1998), Decision XJ

10; but also see Kyoto Protocol under which the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat may not initiate proceedings: Report of the Conference of the Parties on lts Seventh Session, FCCCJCP/2001113JAdd.3 (2002), Decision 24/CP.7, at 69.



initiale the review through self-reporting by a party defaulting on its obligations despite its best efforts to the contraty. It might fmther be possible to authorize a standing or implementation committee ta starl a review at its own initiative if, upon its own pet·iodic review of the secretariat's analytical summalies of information pwvided by the parties, the commiUee conclu des that there is evidence of possible non-implementation or non-compliance, and provided neither a pat1y, nor the convention secretariat on its own, has ta ken the neces- saty steps to bting the case formally before the standing or implementation committee.39

Often, ifthe standing or implementation committee of a MEA finds that a pat1y will not be in compliance, despite best effot1s, it may issue recommendations in the form of a repm1 and submit the recommendations to the Conference of the Pat1ies of the MEA to decide on the steps to bting the State back into compliance.

These non-compliance procedures usually do not dictate a standard response ta aH cases of non- compliance, but instead allow patties to tailor theil·

responses to the specifie circumstances and needs of the non-compliant party. This response may include assistance with collecting and repot1ing data, technical or financial assistance, technology transfer, or informa- tion transfer and personnel h-aining.40

If a committee finds that a party has not made a suffi- dent effot1 to meet its obligations, ot· if it is otherwise warranted by the circumstances, the commiUee may recommend punitive action against the non-compliant patty. These can range from suspension of the pat1y's rights and ptivlleges under the MEA (for example deniai of access to fi nan cial resom·ces) to tmde resttic- tions." Under the Montreal Protocol, parties also adopted an indicative list of measures that might be ta ken by ils Meeting of the Patti es in respect of non- compliance.42 TI1ese measures include the suspension of rights to trade substances covered by the Pt·otocol."

s~ See G. Handl and Ë. Deutsch, n. 37 above. The Implementation Commîttee of the Montreal Protocol was recently strengthened and authoriz:ed to report and make recommandations 'in situations in wtlch there has been has been a persistent pattern of non-cornpliance' (see ibid., Meeting of the Parties, Decision X/10, para. 3).

~0 See D. Hunter et al., n. 31 above, at 480.

~1 For instance, the suspension of trade with countries in non- compliance under' CITES. See CITES Resolution 5.2, n, 7 above.

42 Montreal Protocol, Report of the Pourih Meefihg of ihe Parties, Decision N-5, .Annex V. See also Article 18 of the Kyoto Protocol, which provides for the development of an indicatiVe list of conse- quences, taking inlo account the cause, type, degree and freqJency of non-compliance by the Conference of the Parties.

43 'Suspension, in accordance with the applicable rules of interna- tional law concerning the suspension of the operation of a treaty, of specifie rights and priVileges und er the Protoco\, whether or not subject to tlme limits. including those concerned with industrial rationalization, production, consumption, trade, transfer of tech- no!ogy, financial mechanism and instilutlonal arrangements.' See ibid., para. 1.

© Blackwell Publi5hers Ud. 2002.


REC/EL 11 (1) 2002

Questions on the binding or non-binding nature of the response measures resulting from a non-compliance procedure44 and the relationship of the non-compliance procedure with the dispute-seUlement mechanisms foreseen in a MEA have yet to be answered in these regimes.45 Moreover, the use of dispute-seUlement mechanisms in MEAs is limited and should further develop in the futm·e.


As seen above, most MEAs do not have any com- pulsmy dispute-seUlement mechanisms thal produce binding decisions. Furthermore, they do not refer to any exclusive jurisdiction1 but provide for a 1menu~ of dispute-seUlement means, usually consisting of the ICJ or arbitration to be agreed by the pat1ies46 The non-compliance mechanisms do not provide for any exclusive authority in favour of the MEA bodies, but their triggering mechanisms are generally fairly simple- often the non-compliance provisions may be invoked by the non-complying MEA State, by a com- petent executive body of the MEA or, eventually, by another MEA State.

The situation is different \vithin the WTO, where At1- icle 23 of the DSU provides th at WTO-related disputes cau be debated only before the WTO's adjudicating

#This question a rose, for ii1Stance, under the Montreal Prolocol regime during the non-compliance procedure conceming Russia. ln this regard, it is also interesting to analyse Artide 18 o( lhe Kyolo Protocol, Which stipulates that 'any procedJres and mechanisms under this Article entai ling binding consequences shall be adopted by meai1S of an amendment of this Protocol', sugge.sting that responses lhat are not part of such an amendment would nol be binding. For a detailed discussion of compliance in the Montreal and Kyoto regimes, see J. Werksman, 'Comp!iance and the Kyoto Protocol: Building a Backbone intO a ~FleXible~ Regime', 9 Yb/EL (1998), 47.

45 Al1hough considered distinct and .separa te procedures, the rel a·

tionship betv1een traditional dispute-settlement mechanisms and non-compliance procedures raises conceplual questions concern.

ing. for instance, the need to exhaust proceedings or the simu\lane- ous actiVation of proceedings~ HO\•ro'ver, sorne authors consider thal, for instance in the case of the Montreal Protocol, be cause an implementation committee is a polilical organ, a case would nol be sub ji.Jd/ce if discussed nor res /Ud/cata if decided. For a detailed discussion, see G. Handl ami Ë. Deutsch, n. 37 above, at 37; and see M. Koskenniemi, 'Breach of Treaty or Norr-Compliance?

Refiections on the Enforcement of the Montreal Protocol', 3 Yb/EL (1993), 123.

-»The exception to this rule is the International Tribunal of the Law of the Sea (ITLOS), which enjoys mandatory jurisdiction over ali State parties to UNCLOS in disputes relating to activites based in the seabed CY'ea (section 5 of Part Xl of UNCLOS). For a detailed description of the ITLOS regirpe, see P. Sands (ed.), Manual on

lntematlonal Courts and 7tibunals (Bulterworths, 1999), 39-40.



bodies (a panel, the Appellate Body or through arbil- ration undet· Article 25 of the DSU). It also seems clear thal it is only hefore the


adjudicating bod- ies that WTO violations can be the abject of claims47 (which is distinct from stating thal only the WTO Agreement can be invoked, argued, or interpreted by panels and the Appellate Body when examining a claim ofWTO violation). Moreover, recommendations of panels and the Appellate Body through their quasi- automatic adoption by the DSB are binding, and, if not respected, may lead to sanctions.

Y et, a single dispute, or aspects thereof, may involve issues !hat would appear to be of relevance to the non- compliance and the dispute-seUlement provisions of a MEA, while the same governmental actions also affect trade and are th us WTO maUers covered under Al1icle 23 of the DSU. Based on At1icle 23 of the DSU and the automatic nature of the DSU mechanism, it is doubt- ful that any WTO adjudicating body would stop its pt·ocess for the only reason thal a pal'allel dispute is being addressed in another forum, unless the parties agree so. Il may, therefore, be difficult to speak of pure conflicts between dispute fora, since


members have declared WTO fora as exclusively mandated to adjudicate WTO-related disputes. Moreover, the abject and PUl'Pose of a MEA's mechanism may often differ from those of the WTO and thus not deal with the same subject maUers.

This leads to the conclusion thal while a MEA party is the subject of a non-compliance (ol' dispute-seUlement) process for its actions or inactions, the same govern- mental action(s) (and their trade impacts) could be examined before a WTO adjudicating body, pursuant to an allegation of a WTO violation. This is indeed a frequent situation, where States are bou nd by multiple obligations thal apply in a concomitant manner and are subject ta parallel jurisdictions. For instance~ in the Southern Bluefm Thna Case, the arbitral tribunal stated thal:

... But the Tribunal reoognizes as weil that it is a connnon- plaœ ofinternationallawand State practiœ for more thau one treaty to bear upon a particular dispute. There is no reason why agi ven act of aState may not viola te its obligations under more thau one treaty. There is frequently a parallelism of treaties, bath in their substantive content and in their pro- visions for settlement of disputes arising thereunder . ... the conclusion of an implementing conventi~n does not neces- sarily vacate the obligations imposed by the framework con- vention upon the parties to the implementing convention.''~8

Even in situations where bath ll-eatles would provide for their exclusive jutisdiction over a specifie matter,

47 DSU, At~ cl es 3, 4, 7 and 11.

48 Arbitral Tribunal constituted under Annex Vll of the UNCLOS, Av.tard on Jurisdicbon and Admissibility of 4 August 2000, Austra/la and New Zeaiandv. Japan (SofJthem 8/uefin Tuna Case), at91.

© Blac:kwell Publishers Ltd. 2002.

in the absence of an intemational authotity to assess such conflict, parties may be faced with two parallel procedures.

An example of such parallel jul'isdlctlons between the WTO mechanism and thal of another treaty is the EC - Sword{ish dispute'' Iti thal dispute, Chile enacted swordfish conservation measures by regulating equip- ment and limiting the number of fish thal could be caught by denying new permits. 6


Chile effectlvely pro- hibited the utillzation of ils pot1s for the ]andlng and servicing of EC-based long-liners and factory ships that disregard minimum conservation standat·ds. The EC challenged these measuœs as being contrary to ils WTO tights pursuant to Al1icle V of GATT, which pro- vides for the free transit of goods along the territories of its members. Chile contended thal the WTO does not limit ils sovereignty over its pot1s and demanded that the EC enact and enforce conservation measures for its fishing operations on the high seas, in accord- ance '\vith the United Nations Convention on the Law of the Sea (UN CLOS). Chile then initiated the dispute- seUlement provisions of UNCLOS and invited the EC to agree to resolve the dispute before the Intel'natlonal Tribunal of the Law of the Sea (ITLOS). The EC fin ally agreed to the formation of an ai·bitral ttibunal under UNCLOS. In this case, the substantive issues before the WTO adjudicating bodies could have included the tight of Chile to ben elit from the application of At1icle XX of GATT, which authmizes a WTO member to give pLimity- under cet1ain conditions - to environmental considerations when acting pm·suant to other h-eaties (such as UNCLOS).

In a situation such as the EC -.Sword{ish dispute, it is conceivable that bath 'adjudicating bodies (that of ITLOS and WTO) would examine whether UNCLOS effectively requires, authmizes or tolerates Chile's measuœs, and tlms whether such Chilean measures are ln compliance with UNCLOS - an element that could influence the panel (or the Appellate Body) in its decision whether Chile may benefit from the applica- tion of Article XX. The two institutions could have reached different conclusions on factual aspects ot· on the intet'Pt-etation of the MEA's provisions. Fm1unately, the pat11es reached an agreement and suspended theil' disputes bath before ITLOS and before the WTO.

Howevet·, this example highlights that, at the moment, there does not seem to be any solution to this possibil- ity of having different ttibunals handling diffet-ent aspects of the same dispute. The issue is whether, wh en and how WTO members thal at-e also parties to MEAs should deal with the many different dispute fora concerned with various asp~cts of a dispute when

49 WTO Chhe - Measures Affectlng the Transit and lmportaUon of Swordfish, WT/DS193 {EC-Swordfish).

M See M.O. Cruz 'The Sv.'Ordfish if) Peril', 4:6 Bridges {Ju!y-August 2000), 11.



findings from these varions fora cau lead to disparate and even inconsistent conclusions.

Timing between the Different Dispute- SeUlement Mechanisms: ls there an Obliga- tion to Exhaust the Dispute-SeUlement Mechanism of MEAs before using those of the WTO? Even if there is no conflict in a strict sense," the relationship between the dispute-settlement mechanisms of MEAs and those of the WTO may still raise important tensions, namely with regard to their sequence and timing. A 1996 repot"l of the WTO CommiUee on Trade and Environment (CTE) stipulated in ils conclusions and recommendations th at:

if a dispute arises bet\veen WTO members, parties to a MEA, over the use of trade measures they are applying betvreen themselves pursuant to the MEA, they should consider trying to resolve it through the dispute-settlement mechanisms available under the MEA.6z

Y et this, at best, has solely the legal value of a recom- mendation of the WTO CTE, which would find rele- vance in a WTO panel, but does not constitute an amendment to Article 23 of the DSU. More directly, if a MEA obliges its parties to use its dispute-seUlement mechanism in case of disagreement," the refusai to use such a MEA mechanism could constitute a viola- tion of the MEA itself. But in the absence of any MEA pmvisions as to when the MEA dispute mechanism is to be used genet·ally, and/or in relation to the WTO mechanism, is there an obligation to 'exhaust' the MEA mechanism before initiating a WTO dispute?"

Or would this interpretation be viewed as inhibiting the right of a WTO member under the DSU to initiale a formai dispute whenever it considers that a benefit has been impaired or nullified?

:;, Except if one is of the view that pursuing the DSU proœss wou!d necessarify empty the mechanisms of the MEA of their object and purpose.

.52 Report (1996) of the CommJttee on Trade and &Mronment N'JTI CTE/1), para. 178.

53 See, for instance, Article 11(3.) of the Vtenna Convention for the Protection of the Ozone Layer or Article 20(3.) of the Base! Conven·

lion on the Control of TransOOundary MoVements of Hazardous Wastes and their Oispooal.

MJn international law, there is a pr1nciple oblîging States to e>1laust local remedies before having recourse to international dispuJe·

settlement mechanisrrn>, but the dispute mechanism of a MEA is not a local remedy and thus oannot benefit from the application of this principle. On the issue of the eXhaustion of local remedies in international law and its application to WTO jutisprudence, see P.J. Kuijper, 'The law of GATT as a Special Field of International law', ';0W NY!L (1994), 227; and P.J. Kuijper, 'The New Dispute SeUlement System', JWT (1995), 49; R.S.J. Martha, 'Wor1d Trade DispUte SetUement and the E:xhaustion of local RemeOes Rule', 30!1 JWT(1996),107.

© Black..-tell Publi~;hers Ltd. 2002.


·In practice, therc appears to be no real obligation to exhaust MEA dispute-seUlement mechanisms before initiating a procedure under the WTO; moreover, most of the procedures in MEAs are not compulsory.

This indicates that acrimonious parties may poten- tially use the WTO dispute-seUlement procedure for maUet-s already dealt with undet· a MEA and thal the WTO dispute-seUlement mechanism could not be stopped.

Shot1 of any agreement between the patties and in the absence of any interriational mie as to how these different mechanisms interact, many scenarios may emerge. As discussed before, in light of the quasi- automatic nature of the WTO dispute process and Atticle 23 of the DSU, it is doubtful thal a WTO panel would decline jmisdiction because another dispute process - albeit more relevant and beUer eqnipped - has been seized of a similar or related dispute. If bath processes were triggered at the same time, it is prob- able th at the WTO panel pro cess would go mu ch faster than the MEA process. So, what arguments can be raised before a WTO adjudication body with regard to a related MEA's dispute-seUlement mechanism?

Good Faith Arguably, the ptinciple of good faith would require a State to negotiate settlements to dis- putes that it faces under international instruments to which lt is bound. The ICJ bas stated !hat:

the obligation [to negotiate] constitutes a special applica- tion of a principle which underlies ail international rela- tions, and which is moreover recognized in Article 33 of the Charter of the United Nations. N>

Even in situations where the WTO process bas been tliggered, governments can continue the MEA dispute process if they consider it necessaty or beneficiai ta the WTO procedure, for instance as evidence of good faith efforts to negotiate l\ mutually agreed solution. In this sense, tl~e 'WI'O panel may examine and consider a MEA dispute avoidancefseUiement mechanism as a legal fact.

In the US - Shrimp/Tttrtle Case, the Appellate Body stated that the USA bad failed to undet1ake 'sel"ious act"oss-the-board negotiations' with othel" WTO mem- bers." Such refusai was one of the elements used by the · Appellate Body to conclude thal the USA had applied its measures in a discriminatorY manner, contrary to the provisions of the chapeau of Article XX of GATT,

55 lCJ 20 February 1969, Federal /{epupilc of Germ any v. Denmark (North Sea Conilnental Shelf), (1969) ICJ Rep. 3., para. 86.

rosSee US-Shrlmp/Turtle, n. 4 above, at para. 166; WTO AB 15 .JJne 2001, United States- fmpori Prohibition of Certain Shrlmp and Shrimp Products- Recourse to Ar/Jcle 21{5) by Malaysia, INTI D$58/RW (AB-2001-4) {US-Shrimp/Turl/e (21.5 DSU)), at paras 115-13.5 on the duty of cooperàtion in international la\'/.



which itself is an expression of the general plinciple of good faitll. The Appellate Body was obviously not speaking of DSU consultations, since these had taken place in this case. In this context, one may argue that

· the 'obligation to consult prim· to imposing unilateral measures' has attained the leve! of a general plincip\e of law. The absence of prior ccnsultation with a view to reaching a cooperative agreement \'lÎthin a MEA may be evidence of bad faith and as a violation of due pmcess, contrary to the good faith application of the measure as required by the provisions of the chapeau of Article XX." But would this good faith plinciple oblige a WTO member, which is also a party to a MEA, to use first (and exhaust) the more specifie MEA mechanism, even when it overlaps \vith that of the WTO? It is doubtful. Arguably, the refusa\ to use the MEA dispute mechanism may constitute a violation of the MEA, but wou\d not ccnstitute a violation of the WTO per se. But such refusai to exhaust the MEA's dispute-seUlement mechanism - bence to not consult fully and properly \'lÎth the most appropliate and expett fot'Um - could be an element used by a panel or the Appellate Body wh en assessing the good faith of a patty to a WTO dispute.

Abuse of Rights AState may possibly argue that once one of the dispute-seUlement bodies (WTO or MEA) has pronounced itself on an issue, there is a presumption that parties 'accept' this decision, because they brought the issue to that fot'Um (although sorne may argue that this would not be the case under the WTO system, where the parties do not need to agree to bling a case to a panel). Re-initiating a parallel mechanism where tl1e same remedies are claimed could be seen as an abuse of tights. However, the applicable law before a MEA body and the applic- able law before WTO bodies are different and the

r~medies offered by. the systems are also generally dtfferent It may be dtfficult to speak of abuse of tights when a State is pursuing different remedies and

~lari.fications on different aspects of the sa me dispute

Hl different fora. Moreover, an argument can be made that for trade-related mattet'S, WTO members have given their plior consent to give priority to the DSU process over that of other treaties, which primity can be exercised at ali times. This would not imply tbat the MEA dispute pm cess cannat be exercised, but it would make it difficult to argue that the use of the WTO mechanism is an abuse of lights since the MEA dis- pute process is ongoing. Fin ally, it is also doubtful that any MEA or WTO dispute-seUlement fol'Um would

57 See N. Angel et, 'la Mise en oeuvre des mesures coercitiVes économiques des Nations Unis dans ta Communauté européenne', XXVI Revue belge de droit JnternaUonaJ (1993), 500, at 525. See atso the long discussion of the Appet!ate Body in US - Shtimp/

TuHJe (21.6 DSU), ibid., on the duty for international cooperation at paras 115-135.

© Blackwe11 Publishsrs Ltd. 2002.

refuse to proceed on allegations duly made pm'Suant to their respective treaties on the basis that another fora is examining similar facts and related matters.

Res J ud icata Res judicata is a general plincip\e of law where a final judgment rendered by a comt of competent jutisdictîon on the metits is conclusive as to the tights of the parties and constitutes an absolute ~ bar to those patties from subsequent actions involving the sa me claim. demand or cause of action.68 The EC- Sword{ish dispute is an example. If the ITLOS process had been completed before a WTO dispute-seUlement ttibunal was completed, it would be difficult to argue that there is J'es judicata based on a binding ITLOS judgment. The patties may be the same and the sub- ject matter may be related, but legally speaking the applicable law would not be the same. Since the applicable law would always differ (albeit they may con tain sim il at· provisions), it is difficult to speak of J'es judicata between two dispute-seUlement mechanisms of two different treaties. The judgment rendered in

· ITLOS would likely not constitute 1·es judicata before theWTO.

The Relevant Rule. of International Law (A'!icle 31(3)(c) of ~he Vienna Convention) Atttcle 31(3)(c) of the V1enna Convention on the Law of Treaties mandates any interpreter of a treaty pro- vision ta take into account any other rule of inter- nat~onal law applicable to the parties. A MEA dispute avotdance and seUlement mechanism constitutes legal t'Ules applicable between parties, which must be taken into account by a WTO adjudicating body (pursuant to Atticle 31(3)(c) of the Vien na Convention) when inter- preting WTO obligations and in respect of the pro- cedural stages of its dispute-seUlement mechanism.

In this sense, one may argue that when interpreting the requirements of Article XX and other GATT pro- visions, the existence of such a MEA mechanism and the binding conclusions o(a MEA process should be taken into account wh en relevant in the interpretation and application of Atticle XX.

Expertise Aiticle 13 of the DSU allows any WTO panel to request from the pàtties, or from other sour"';', any relevant information. Arguably, this cculd mclude evidence from proceedings in other fora.

~or insta~Jce, a


panel may want to require expèit mformatton from a MEA · secretatiat, or, with the agreement of the parties, it may also want to use the analysis or data collected dming a MEA process and it could do so in using Atticle 13 of the DSU.

«~. Black's Law Dictlonary, 6th edn, f'Nest Pub\ishing, 1990), at 1305.




Related subjects :