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Copyright © International Chamber of Commerce (ICC). All rights reserved.
( Source of the document: ICC Digital Library )
by Antonio La ViñaDean, Professor, Ateneo School of Government; and Earl J Rivera-Dolera, Independent Arbitrator/Tribunal Secretary, The Arbitration Chambers, Singapore
One of the idiosyncrasies of discussions on climate change justice relates to the irony of its premise. Climate change affects everyone — each state (and its people), regardless of wealth, resources, or status and power in the league of nations, and yet it causes the most loss and damage to states with the least resources to respond, avert or mitigate it. Injustice and inequity characterizes the impacts of climate change and how responses are distributed. The irony lies in the fact that the major contributors to climate change — major carbon emitters — are conveniently located in states which are both the most technologically advanced and financially adept in responding to climate change perils, but the least likely to be most adversely affected.1 The crippling Indian heat wave of May 2015 and Typhoon Haiyan, one of the strongest storms to ever make landfall in the Philippines in November 2013, are just two examples what has been referred to as catastrophes linked to climate change, leaving thousands dead or to this day, lost.
As climate change-related events continue to affect lives, livelihood and the environment to levels previously unimagined, the notion of climate change “justice” necessarily must address human rights issues.
The Paris Agreement under the UNFCCC, a product of decades of negotiations and reconciliation of state party interests and public welfare, is a welcome addition (and hopefully the most binding and effective of all agreements upon ratification of states) to the plethora of agreements attempting to address the consequences of climate change. It remains to be seen, however, how the Paris Agreement could and should be implemented, how effective are its "teeth" upon ratification such that its well-meaning provisions in fact improve lives and provide a sound legal basis for climate change justice at the international level. State parties, prior to ratification, inevitably will examine the Paris Agreement provisions to ensure satisfactory legal certainty, foreseeability and predictability of rights and obligations arising therefrom, weighing these against macro-political and micro-political interests.
The legal milieu thus far is for climate-vulnerable countries (including middle income countries like the Philippines), less developed countries ("LDCs") and small island developing states (“SIDS”) to protect their interests by way of bilateral, multilateral and general treaties entered into for trade and investment purposes, providing therein a dispute resolution mechanism by way of arbitration or litigation in international courts rather than litigation in national courts should any dispute arise between a state against another state, or by an investor against the host state. The Paris Agreement addresses the need for a mechanism for the resolution of disputes relating to climate change justice, one of which is by way of arbitration. Specific issues however arise on this which this article aims to provide an overview of. These issues are in the details — how to proceed with arbitration at the domestic or international level avoiding costly and time-consuming challenges to jurisdiction, and the specific substantive and procedural concerns climate-vulnerable countries, LDCs and SIDS may have in addressing what they think is injustice caused to them by climate change-related events.
Article 24 of the Paris Agreement2 provides that Article 14 of the Convention3 on settlement of disputes shall apply. Article 14 of the Convention states that the parties refer disputes “concerning interpretation or application of the Convention by negotiation first or any other peaceful means of their own choice, failing which a party (which is not a regional economic integration organization) may then submit a dispute to the International Court of Justice ("ICJ") and/or arbitration in accordance with procedures to be adopted by the Conference of the Parties ("COP").” There appears to be no support for any regional economic integration organisation ("REIO") or any individual or group of individuals to commence a claim before the ICJ and understandably so, as [Page39:] Article 34 of the Statute of the ICJ provides for only state parties in cases before the ICJ. REIOs could however seek resolution of disputes by way of arbitration under Article 14.2(b) of the Paris Agreement. The “procedures to be adopted by the [COP] … in an annex on arbitration” hopefully could also provide guidance as to locus standi of non-state parties such as private corporate entities and/or individuals or group of individuals (whether as a class action suit or not) as claimants in arbitration — all of whom have valid interests, not at all subservient to state party interests.
The apparent loophole could potentially be covered by setting out arbitration agreements in bilateral or multilateral investment treaties that clearly state that “mandatory laws of the host state party” shall apply in the treaty as well, ie the Paris Agreement (and its dispute resolution mechanism) be made applicable to the treaty when it becomes part of the mandatory law of the host state once ratified by that host state. Any party to the treaties could also take the more convenient route and opt for an express reference to Article 24 of the Paris Agreement and Article 14 of the Convention as the preferred dispute resolution mechanism for disputes arising out of the Paris Agreement. While it is usually a non-state party (such as private or corporate entities acting as investor) who files a claim against a host state party, if the proposed provisions are clearly set out in the investment treaty, the state party could likewise commence arbitration proceedings against the investor, or if arbitration has been so commenced by an investor, the host state party could file a counterclaim4 against the non-state party/claimant for disputes arising from the Paris Agreement. No party can thus excuse itself from arbitral proceedings on the basis that it was not a party and it did not consent to an arbitration agreement. Whether individuals or group of individuals will have legal standing to file a claim in climate change disputes will be discussed later in this article.
The Paris Agreement sets out the following areas that could be a springboard for disputes. They could be categorized into two:
based on the scope, scale, the parties that could potentially be involved, the level of difficulty in proving legal standing (with the commensurate level of difficulty in proving jurisdiction following not far behind), the level of difficulty in proving causation, the reliefs that could be claimed, and the nature of loss and damages that could be granted.
From a Macro-Political Perspective
The areas for dispute are wide in scope and could potentially trigger principles of public international law and human rights issues on a grand scale. The parties involved — either the claimant or respondent — could be a state, an international organization, or a private corporate entity.
In the example of Typhoon Haiyan where thousands of individuals perished and/or are missing, and billions worth of damages on infrastructure has been incurred, who could be the rightful claimant? Who could be the rightful respondent?
i. Who Is the “Claimant”?
In a straightforward environmental pollution case5, a state has (as usually set out in investment treaty provisions or commercial contracts entered into by the state or in a state-to-state treaty) the power to claim against another state or even a non-state party. The affected entities, people and area(s) may be more clear-cut therein than in a more complex case involving a supertyphoon where it may not be as easy to decipher who ought to be the claimant(s) and who ought to be the respondent(s), with the high level of difficulty in proving causation and quantification of loss(es) and/or damage(s) incurred, not to mention the logistical and administrative impracticality relating to payment of compensation at the enforcement stage. While there is no doubt that a state party has legal basis arising from the Paris Agreement to commence claims against say, major carbon emitters that contributed to the unusual patterns of the climate causing disruptive and destructive supertyphoons, its losses and/or damages could initially be only quantified based on the value of state-owned property and infrastructure damaged.
ii. Individuals or Group of Individuals as Claimants
In such cases involving supertyphoons, what then is the recourse of individuals or a group of individuals? As mentioned above, until the arbitration annex is finalised, the Paris Agreement only sets out a dispute resolution mechanism for state parties in the ICJ and for REIOs by arbitral tribunals. Non-state parties could resort to bilateral and/or multilateral investment treaties. Nothing is clear-cut for claimants who are individuals or a group of individuals. This would prove to be [Page40:] difficult considering that rarely would a state, an international organization or a corporate entity enter into a contract or investment treaty (and thereupon agree on arbitration as the dispute resolution mechanism) with individuals or groups of individuals.
Another hurdle for claimant individuals or groups of individuals is proving causation: that the respondent (whether a state, international organization or corporate entity) directly caused the harm done. The wide-scale damage in most climate change disputes would make it difficult to link the injured to the entity who caused the injury, the act or omission done and the loss or damages suffered. It will not always (and it may never) be unambiguous who caused such a catastrophe, the ensuing destruction and the resulting loss or damages. Such is the nature of catastrophic events that they cannot be predicted with any certainty, and the after effects cannot be sufficiently foreseen. Even if individuals or groups of individuals could rely on a valid arbitration agreement, the injured and the entity who could be linked as directly causing such injury could not have anticipated events of such catastrophic proportions, particularly not at the time they agreed to enter into an arrangement to resolve their disputes by way of arbitration. Is there then other way for individuals or groups of individuals to become claimants?
iii. State Responsibility
The authors take the view that individuals or groups of individuals should not be allowed to claim by themselves under the Paris Agreement. The sheer enormity and the scale of such a dispute is unthinkable. The more practical avenue for individuals or groups of individuals for redress of their climate change-related grievances should, in the authors’ view, be made on their behalf by the state whose mandate is to protect the rights of these individuals to life, livelihood and safe and clean environment. Arguably the best way to do this under current customary international law6 by way of the concept of state responsibility where an omission to act on behalf of its people affected by climate change-related events could constitute a breach of an international obligation of that state, ie breach of the Paris Agreement. It is suggested that a state could act as claimant in a class action suit on behalf of individuals and/or groups of individuals for redress of their internationally recognized human rights.
iv. Scope of Human Rights in the Paris Agreement
In the negotiations leading to the Paris Agreement, the inclusion of human rights provision was not straightforward. As late as 2014, only five parties supported the incorporation of human rights, led by the Philippine group of negotiators. By the time of the Paris Agreement in December 2015, however, the numbers dramatically increased to 150 parties — a telling signal to the international legal community that climate change is, and could be directly linked to acts that affect basic human rights to life, livelihood and a clean, safe environment. The provision was enshrined in the following text in the preamble:
Acknowledging that climate change is a common concern of humankind. Parties should, when taking action to address climate change, respect, promote and consider their respective obligations on human rights, the right to health, the rights to indigenous peoples, local communities, migrants, children, persons with disabilities and people in vulnerable situations and the right to development, as well as gender equality, empowerment of women and intergenerational equity.
The preamble language is arguably the closest thing the international legal community has to international law linking human rights and climate change justice. While considered soft law by most, such well-thought out provision of the preamble could be a potential source of enforceable rights against human rights violations. Similar wordings could also be found in the constitutions of a number of states.7 The ICJ had made soft law (ie customary canons of interpretation) as its basis for its decision in the case of Gabcikovo-Nagymaros.8 The authors believe and see no reason why this cannot be same case in the context of arbitration.
It is also important to note that the language of provisions relating to human rights in the Paris Agreement is not just about the people who directly suffer climate change injustice. It is also about the rights of the people with respect to actions committed by the government in addressing to mitigate or respond to climate change. In climate-vulnerable countries, LDCs and SIDS, measures have been undertaken for adaptation such as government policies relating to locating and relocating communities into areas least likely to be affected by the impact of climate change.
Human rights safeguards have also been provided for in the Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (“REDD+”)9 covering forests, communities and rights of indigenous peoples. Albeit not the first time reference being made on human rights in the climate change regime, the REDD+ human rights safeguards have been facilitated into this regime so that non-state parties can invoke human rights violations in relation to acts made or omitted to specifically “address,” mitigate or respond to climate change that could affect them. The REDD+ is thus a minefield for many sorts of potential conflicts that could arise in its implementation or non-implementation. Climate vulnerable countries, LDCs and SIDS need an [Page41:] effective dispute resolution mechanism that adequately addresses the nuances of the REDD+ rights and obligations; and the Paris Agreement appears to provide such mechanism.
v. Issues on Mitigation Arising from the Paris Agreement
Mitigation under the Paris Agreement is now enshrined as a commitment to reduce emissions by 2025 or 2030. This is another source of potential arbitrable disputes when there is a failure by a developed country to comply with its net emission reductions. Other acts or omission that may provide a springboard for such disputes include failure to prepare and/or maintain internationally determined mitigation contribution, failure to quantify the economy-wide absolute emission reduction obligations, failure to enhance mitigation actions, and failure to perform a simple an obligation such as to communicate the first and subsequent mitigation contributions. These are all binding obligations, breach of which could be a potential source of an arbitrable dispute. A problem arises, however for such claims — who ought to be the rightful claimant? Could a state party to the Paris Agreement be the claimant in such disputes even if it did not incur any loss or damage? Pursuant to Article 24, this, apparently, could be the case.
vii. Support and Finance Issues Under the Paris Agreement
Support and finance on the part of developed countries play a big part in the Paris Agreement as these provide the necessary financial assistance to mobilize mitigation and adaptation measures, among other things, to be undertaken by LDCs to avert the impact of climate change. But in the event that a developed country refuses or fails to comply with its support and finance obligations under the Paris Agreement, could the LDC (or any state party) file a claim by way of the dispute resolution mechanism set out in that agreement? Apparently, this appears to be the case.
viii. Art 15 — Compliance Mechanism10 Under the Paris Agreement
Article 15 provides for an expert-based committee to be established to facilitate implementation and promote compliance of the Paris Agreement. The committee or the mechanism process shall be “expert-based” — is “facilitative” in nature, transparent, “non-punitive, non-adversarial and non-judicial”. There is no police power, no coercive power, no adjudicatory functions.
A party’s intended compliance — whether an agreement is international or domestic in scope — is the heart of any agreement. Absent that, then there is no point in entering into the agreement, in the first place. Absent an effective compliance mechanism, the Paris Agreement — in whatever form or substance — will be put to naught and rendered toothless.
The compliance mechanism ought to be a double-edged sword:
The Paris Agreement will be judged by users and observers alike as to the effectiveness not only of the substantive obligations it has managed to set out, but the success of compliance or enforcement of such obligations. Similar to Article 24.2(b), the procedures for the committee referred to in Article 15 are still subject to what will eventually be adopted by the COP. It remains to be seen how the compliance mechanism pans out noting that developed countries do not want (and understandably so) the same compliance and facilitation procedure that apply to LDCs and SIDS. The Kyoto Protocol left us with a rich experience on compliance mechanisms but the difference is that the Kyoto Protocol’s compliance mechanism has been made applicable only to developed countries because only they had reduction of carbon emission commitments. The compliance mechanism in the Paris Agreement applies to both developed countries, climate vulnerable countries, LDCs and SIDS as well.
From a Micro-Political Level
These areas could be a more fertile ground in order for disputes arising from the Paris Agreement to be referred to arbitration. They usually involve contracting parties such as individuals or groups of individuals, corporate entities, public or private entities doing purely or substantially commercial business under commercial agreements with state parties.
In the Paris Agreement, areas requiring new technology and infrastructure in order to comply with the developing countries’ obligations for mitigation and adaptation would require investment agreements ranging from short-term raw material arrangements to long-term infrastructure investments. Care ought to be made in drafting these investment agreements. They will have to ensure that obligations under the Paris Agreement, the Convention, the Kyoto Protocol and other mandatory laws of the state are being met and yet at the same time, investors are adequately protected.
Climate change-related provisions could be made part of any commercial and investment agreements that contain arbitration agreements. These proposed provisions include references to compliance with emission reduction schemes and/or emission trading schemes and could potentially be made part of commercial contracts or investment agreements involving renewable energy, low-carbon technologies, Clean Development Mechanism, and investments in wind, solar, and biofuel technology.
It is important to stress that in order for climate change related disputes to be determined by way of domestic arbitration there has to be an agreement/contract/document entered into by the parties which is legally binding. If none exists, the party claiming can only resort to the judicial process or litigation in state courts.
Much of the domestic action has been through court litigation most especially for claims initiated by individuals or groups of individuals. Domestic arbitration could be pursued if the parties are domestic corporate entities entering into contracts (with an arbitration agreement) with the state.
National litigation proceedings arising out of climate change disputes are not uncommon. Notable achievements by claimants in state courts include:
We now have a legally binding Paris Agreement subject to the ratification procedure. Because climate change concerns span across international borders, the disputes arising therefrom could implicate states, international organizations, corporations, state-owned entities and even individuals or groups of individuals state and private carbon emitters risk loss of lives, livelihood and degradation of natural environment, among other notable impacts of climate change.
The Paris Agreement now provides a legal basis for climate change disputes to be resolved by arbitration; that is not controversial. The more controversial issue relates to identifying the rightful claimant(s) and/or respondent(s) in such disputes, not an easy task for disputes of a grand scale that have proven to affect thousands of lives. Issues relating to locus standi, causation and quantification for loss and damages thus remains unclear at this stage. The challenge now is to set up implementing rules of the Paris Agreement akin to the binding treaties and implementing rules now commonly used in international commercial arbitration and has proven to be very useful among arbitration practitioners — the UNCITRAL Model Law and Rules of Arbitration — given the huge potential to consider how the existing use of international arbitration mechanisms in resolving climate change disputes may be advanced and expanded, both in the context of contractual and treaty obligations.
“Achieving Justice and Human Rights in an Era of Climate Disruption”, International Bar Association, Climate Change Justice and Human Rights Task Force Report of July 2014, available here http://www.ibanet.org/PresidentialTaskForceClimateChangeJustice2014Report.aspx
Article 24: The provisions of Article 14 of the Convention on settlement of disputes shall apply mutatis mutandis to this Agreement.
Article 14 of the Convention reads:
See the case of Perenco Ecuador Limited v The Republic of Ecuador (ICSID Case No. ARB/08/6) available in the internet at https://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=showDoc&docId=DC6492_En&caseId=C301
See full text of the Train Smelter case available at http://legal.un.org/riaa/cases/vol_III/1905-1982.pdf
International Law Commissions’ Responsibility of States for Internationally Wrongful Acts,
Article II, Section 16 of the 1987 Philippine constitution reads: “The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature; Article 71, Chapter 7 of the 2008 constitution of Ecuador reads: “Nature, or Pacha Mama, where life is reproduced and occurs, has the right to integral respect for its existence and for the maintenance and regeneration of its life cycles, structure, functions and evolutionary processes. All persons, communities, peoples and nations can call upon public authorities to enforce the rights of nature.
ICJ Reports 1997, Gabcikovo-Nagymaros Project (Hungary/ Slovakia)
available in the internet at http://unfccc.int/files/land_use_and_climate_change/redd/application/pdf/compilation_redd_decision_booklet_v1.2.pdf
Available in numerous news websites, one of which is https://theecoreport.com/dutch-court-ruled-the-state-has-a-duty-of-care/
The Sabin Center for Climate Chamge Law study, “Climate Change in the Courts”, available in the internet at http://web.law.columbia.edu/sites/default/files/microsites/climate-change/bna_on_non-us_survey.pdf
Gbemre v Shell Petroleum Development Company — (2005) AHRLR 151 (NgHC 2005) available at http://www1.chr.up.ac.za/index.php/browse-by-subject/418-nigeria-gbemre-v-shell-petroleum-development-company-nigeria-limited-and-others-2005-ahrlr-151-nghc-2005.html
Greenpeace International’s press release available at http://www.greenpeace.org/international/en/press/releases/2015/Philippines-launches-worlds-first-national-human-rights-investigation-into-50-big-polluters/
Greenpeace International’s press release as at 27 July 2016 available at http://www.greenpeace.org/international/en/press/releases/2016/Worlds-largest-carbon-producers-ordered-to-respond-to-allegations-of-human-rights-abuses-from-climate-change/