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The PCA Environmental Arbitration and Conciliation Rules
At an Extraordinary Meeting held on June 19, 2001, the Administrative Council[1] of the Permanent Court of Arbitration adopted by consensus the Optional Rules for Arbitration of Disputes Relating to Natural Resources and/or the Environment (“Environmental Arbitration Rules”). These rules result from the efforts of the International Bureau of the PCA together with a working group and drafting committee of experts in environmental law and arbitration, and incorporating the comments of PCA Member States. The Rules seek to address certain lacunae in environmental dispute resolution identified by the Working Group[2] and PCA Member States.
One gap identified by the working group is that there had been no “unified forum” to which States, intergovernmental organizations, non-governmental organizations, multinational corporations, and private parties could have recourse when they had agreed to seek resolution of disputes relating to the environment and/or natural resources. The PCA Environmental Arbitration Rules can provide that unified forum and be used in a variety of contexts, whether treaty based or commercial contract. Of course, any non-state parties must give consideration to requirements of domestic legislation which may have bearing on the arbitration of the dispute[3]. Based on the widely accepted United Nations Commission on International Trade Law (UNCITRAL) Rules, it is hoped that these Rules will be applicable in the broadest possible spectrum of disputes relating to the environment and/or natural resources.
Key features of the Environmental Arbitration Rules are:
- availability for use by any combination and number of parties: States, intergovernmental organizations, non-governmental organizations, multinational corporations, and other private entities where all parties can agree to use them. This was seen as necessary because disputes concerning the environment often involve multiple parties of mixed origin (governmental/non-governmental, and even commercial) (Introduction, Article 1) Special attention was given to ensuring harmony with existing environmentally related agreements so that references to these procedures could be inserted in such agreements seeking to adopt arbitration rules;
- provisional measures of protection and security focused on mitigating or preventing serious harm to the environment (Article 26);
- a roster of government nominated arbitrators, experienced in natural resources and environmental law, who can make themselves immediately available to the parties (Article 8.3). That panel is nominated by the Member States and the Secretary-General as the case may be. In a departure from the 1976 UNCITRAL Arbitration Rules, the Secretary-General acts as the default appointing authority where parties fail to agree upon an arbitrator or an appointing authority fails or refuses to act (Articles 6-8)[4]. This ensures rapid constitution of the tribunal and thus a more rapid response to the dispute;
- a roster of government nominated experts in environmental science available to assist either the parties or the tribunal (Article 27.5). That panel would be nominated by Member States and the Secretary-General so that parties would have immediate access to expert advice. Time is of the essence in preventing or relieving environmental damage. The Secretary-General has current biographies and contact details for approximately 100 scientific experts;
- confidentiality procedures designed to protect information impacting national security, and for commercial parties, intellectual property, trade secrets, and other proprietary information, and where the parties so agree, allowing for a “confidentiality advisor” to view information and report on it, but not reveal it in detail to the party from whom it did not originate nor to the tribunal (Article 15.4-6);
- reduced time-periods as compared to the other PCA and the UNCITRAL Arbitration Rules, intended to permit a speedy and dynamic response to the issues presented to the tribunal.
After the adoption of the Environmental Arbitration Rules, the International Bureau produced a draft of Optional Rules for Conciliation of Disputes Relating to Natural Resources and/or the Environment (“Environmental Conciliation Rules”), which Member States commented on, and the Administrative Council adopted by consensus on April 16, 2002. These rules complement the Environmental Arbitration Rules and, taken together with those Rules, enable the PCA to provide the international community with a wider variety of ADR procedures and services especially tailored to environmental and/or natural resources disputes than presently available anywhere. Some of the innovative features of the Environmental Conciliation Rules are:
- like the Environmental Arbitration Rules, SEQ CHAPTER \h \r 1the Environmental Conciliation Rules, and the services of the Secretary-General and International Bureau of the PCA, are available for use by private parties, other entities existing under national or international law, international organizations, and States where all parties can agree to use them (Introduction, Article 1);
- the Rules may be used in relation to disputes between two or more States parties to a multilateral agreement relating to access to and utilization of natural resources concerning the interpretation or application of that agreement (Article 1.2);
- the parties are free to choose conciliators from the PCA Panel of Arbitrators constituted under the PCA Optional Rules for Arbitration of Disputes Relating to Natural Resources and/or the Environment, or Members of the PCA (Introduction);
- the parties are free to choose expert witnesses from the PCA Panel of Scientific and Technical Experts constituted under the PCA Optional Rules for Arbitration of Disputes Relating to Natural Resources and/or the Environment (Introduction);
- recommendations to the conciliator(s) meant to facilitate resolution of environmental disputes, such as suggestions for the establishment of an implementation committee to monitor the implementation of a settlement agreement (Article 12);
The parties naturally have complete freedom to agree upon any individual or institution to make appointments. In order to provide a failsafe mechanism to prevent frustration or delay of the conciliation, the Rules provide that the Secretary-General will make appointments if the parties do not agree upon such a person or institution, or if that person or institution chosen does not act.
Taken together then, the Environmental Arbitration and Conciliation Rules are a concrete response to the calls issued in Rio Principle 26, asking States to find means to “…resolve all their environmental disputes peacefully…”, and Rio Principle 10 by providing access to justice to “all concerned citizens”[5]. The PCA presented a paper at the World Summit on Sustainable Development which bore witness to these facts. It is now hoped that States will consider adoption of references to these Rules in multilateral environmental agreements as the procedures for arbitration. Doing so would save the considerable time and expense needed to negotiate new rules of procedure. Indeed, the PCA has been involved in the negotiations of multilateral environmental agreements which foresee, but have not yet adopted such arbitration or conciliation procedures, such as the United Nations Framework Convention on Climate Change. Further, these Rules will prove useful in future liability regimes, such as the one being contemplated under the United Nations Cartagena Protocol on Biosafety. The United Nations Economic Commission for Europe has convened a working group to draft a Civil Liability Protocol to the 1992 Watercourses and 1997 Transboundary Effects of Industrial Accidents Conventions, and that working group has adopted a reference for private-private arbitration of claims arising under that Protocol using the PCA Environmental Rules[6]. Parties negotiating Bilateral Investment Treaties, Production Sharing Contracts, Emissions Trading Contracts, Bilateral and Regional Environmental Agreements, Liability Conventions, and any agreement relating to natural resources and environment should consider a reference to these Rules. Doing so could mend some aspects of the fragmentation that has taken place in the field of international environmental law[7].
* This note was provided by Dane Ratliff, Assistant Legal Counsel, Permanent Court of Arbitration.
[1] The assembled 97 Member States of the PCA acting as governing council for the Court.
[2] The working group considered and drafted the Rules from 1998 until their adoption.
[3] Note that Article 1(1) states that “characterization of the dispute as relating to environment or natural resources is not necessary for jurisdiction, where all the parties have agreed to settle a specific dispute under these rules”. This provision was inserted with a view to avoiding potential conflicts which might arise with public policy at the enforcement stage and/or jurisdictional stage. Private parties using these (or any other for that matter) rules for disputes relating to the environment and or natural resources, should research whether a particular dispute is arbitrable under the law governing the arbitration.
[4] The Secretary-General of the PCA is named in Articles 6(2) of the 1976 UNCITRAL Rules as the person to designate an appointing authority at the request of either party if no appointing authority has been agreed upon, or if the appointing authority agreed upon by the parties refuses or fails to act, and 7(2)(b) in the same capacity but for a tribunal of three arbitrators. In cases relating to environment and/or natural resources, the PCA is at present the only institution which has government nominated arbitrators and scientists serving on rosters, and the rules therefore name the Secretary-General of the PCA as the appointing authority directly. Nowhere more than in environmental cases could it be argued that expertise in the subject matter is relevant to efficient settlement of the dispute.
[5] See 1992 Rio Declaration on Environment and Development reprinted in 31 ILM (1992) 874 et. seq.
[6] See http://www.unece.org/env/civil-liability/meetings-working-group.html, for a copy of the instrument.
[7] For an analysis of fragmentation concluding that not all of it is bad, see Ellen Hey, “Reflections on an International Environmental Court”, in International Investments and the Protection of the Environment: The Role of Dispute Settlement Mechanisms (KLI, The Hague, 2001) 271-305 esp. at 281-287.
