Sustainable Development of Resources in International Investment Agreements

1. Sustainable Development of Resources in International Investment Agreements Cape Sounien, Greece / August 2013 Dr. Marie Claire Cordonier Segger Senior Legal Expert, Sustainable Development International Development Law Organization (IDLO)

2. Overview Sustainable Development (SD) of Natural Resources in International Investment Agreements (IIAs) • Introduction • Sustainable Development in International Law & Policy • ILA New Delhi Principles, duty to ensure SD of resources • SD in Intl Trade & Investment Regimes (Process / Provisions) • Other Investment Law Instruments for SD • A Future Agenda for SD, Trade & Investment Law

3. International DevelopmentLawOrganization IDLO enables governments and empowers people to reform laws and strengthen institutions to promote peace, justice, sustainable development and economic opportunity. Vision: A world where every person lives in dignity and under the rule of law. Mandate: As the only inter-governmental organization with an exclusive mandate to promote the rule of law, IDLO works to make institutions of law and justice work for people: • Creating a culture of justice entails responsive legal institutions, empowered citizens, and a legal system that enables fair and sustainable development outcomes. • We work in fragile, emerging and middle-income countries to strengthen their legal capacity for sustainable development and economic opportunity. • We provide technical legal assistance and capacity development at the national and local level, often in the poorest and most insecure parts of the world. • We work in partnership with local actors and with different legal systems in an enabling and empowering – rather than prescriptive or directive – manner. IDLO Global Expertise: We work with 20,000 legal professionals in 175 countries. Our growing network of 47 independent alumni associations, and our roster of 2,500 experts, gives IDLO expertise from around the world. IDLO Locations: Headquarters in Rome, liaison offices for the United Nations in New York and Geneva, field offices in Afghanistan, Kenya, Kyrgyzstan, Mongolia, South Sudan, Somalia, Bogota and Tajikistan.

4. Building a Culture of Justice

5. 2. Sustainable Development in International Law & Policy • What is development? - Growth of GDP, industrialisation, economic progress (Chicago School) - Participatory progress toward improvements in quality of life (UNDP) - Improvements in freedoms through capability and opportunity (Sen) - The Human Development Index, the Millennium Development Goals / Sustainable Development Goals, National Development Strategies • What is sustainable development, then? - Inter-generational equity (Brundtland) - Carrying capacity, respecting environmental limits to growth (Club of Rome) - Wise use of resources, focus on sustained yield and efficiencies (Pinchot) - Human scale progress in meeting individual/collective needs (Maxneef) - Development that can last - integration of environment, human rights and economic considerations in development decision-making (CISDL)

6. 2. Sustainable Development in International Law & Policy Debates continue on the legal status of sustainable development… • Is it a global policy objective? (decision-making, interstitial normative effects – Gabcikovo (majority), Agenda 21 / WSSD, Lowe) • Is it a binding customary principle or right? (state practice & opinio juris –Gabcikovo (dissent), Weeramantry, Attapatu, Boyle) • Is it the objective of treaties and lex ferenda customary principles? (object & purpose / institution mandate / objective of principles – WTO,Agenda 21 / WSSD, 40+ International treaties, Iron Rhine Railway / Pulp Mills, Cordonier Segger & Khalfan)

7. 2. Sustainable Development in International Law & Policy Evolution of SD Concept through Global Policy-Making Process (1972 –2012) • 1972 UNCHE, Stockholm, Sweden • 1987 Our Common Future (Brundtland Report) • 1992 UNCED, Rio de Janeiro, Brazil - Rio Declaration and Agenda 21 - UN Biodiversity, Climate Change and Desertification Conventions • 1992 – 2002 UN Commission on Sustainable Development (1 – 10) • 1997 UNGASS, New York • UN Regional Commissions and other regimes • 2002 World Summit on Sustainable Development, Johannesburg, South Africa - Johannesburg Declaration and Plan of Implementation & Partnerships • 2002 – 2012 UN Commission on Sustainable Development (10 – 20) • 2012 Rio+20 UN Conference on Sustainable Development - The Future We Want & Partnerships

8. Public Int’l Law Treaties on Sustainable Development (1966 –) Three Tracks of Important Treaties: Enviro:1972 – 92 CITES, Basel Hazardous Wastes, Vienna Ozone & Montreal Protocol 1992 – 2008 UN CBD and Cartagena Protocol, UN FCCC and Kyoto Protocol, UN CCD (desertification), Stockholm POPs, Rotterdam PICs, FAO Seed Treaty, etc. Economic:1947 - 2008 GATT/WTO and regional agreements (EU, NAFTA, Mercosur, CAN, SADC, other FTAs and BITs) Social:1947 – 2008 UN Human Rights Covenants & Instruments, ILO Conventions. More than 300 Other Relevant Accords: 1966 ICCPR & ICESCR 1972 – 2002 UNCLOS, Regional Fisheries and Seas Conventions 1968 /02 African Nature Conservation Treaty 1983 ITTA 1985 ASEAN Convention 1998 Aarhus Convention 1998 Espoo Convention, etc. 2. Sustainable Development in International Law & Policy

9. Intergovernmental Institutions for Sustainable Development (1900s –) Three Sets of Intl Institutions: Environmental: - COPs/MOPs of major treaties like the UN CBD, UN FCCC, UN CCD, etc - UN Environment Programme, Global Environmental Facility, World Conservation Union (IUCN), etc - Regional institutions (NAAEC, EU DG, OAS, etc) Economic: - GATT/WTO, Intl Financial Institutions (WB, IMF, MIGA), ICSID, OECD, FAO, etc - UN Development Programme, UN Conference on Trade and Development, etc - Regional Economic Commission (UNECE, ECLAC, etc), and Regional Trade/Investment Agreements (EU, NAFTA, Mercosur, SADC, ASEAN, FTAs), etc Social: - UN Human Rights Commission, Office of the High Commissioner on Human Rights, ILO, - WHO, UNESCO, etc - Regional Human Rights Institutions (IAHRC, AHRC, Council for Europe), etc International SD Forum: United Nations Commission on Sustainable Development (UN CSD), under ECOSOC of the UNGA Other Sectoral /Regional Institutions: UNCLOS COPs and Regional Fisheries and Seas Commissions Intl Commodity Organisations (metals, tropical timber, etc) General Regional Institutions (OAS, OAU, EU, APEC, etc) International Non-Governmental Institutions and Networks: International institutes and civil society organisations (IISD, etc) International business organisations (ICCs, WBCSD, etc) 2. Sustainable Development in International Law & Policy

10. 2. Sustainable Development in International Law & Policy SD in ‘soft law’, the ICJ & PCAJ, academic literature: • “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs” – a balanced integration of social, economic and environmental aspects in development, keeping to renewable limits, placing priority on the poor. (1987 Brundtland Report, 1992 UNCED, 2002 WSSD) • The “… need to reconcile economic development with protection of the environment is aptly expressed in the concept of sustainable development.” (Case Concerning the Gabčíkovo-Nagymaros Project, ICJ, 1997, para 140) • Sustainable development is an explicit object & purpose of more than 40 recent multilateral & regional treaties, including trade and investment treaties. Over 300 treaties were explicitly highlighted in the 2002 WSSD JPOI, and SD principles inspire many of their provisions. • Seven principles of int’l law are found in treaties / laws on sustainable development, including international trade and investment treaties. (2002 ILA New Delhi Declaration on Principles of International Law related to Sustainable Development) • Recent Iron Rhine Railway (PCA) and Uruguay Pulp Mills (ICJ) decisions have, however, also pointed toward recognition of an emerging principle or right. “Today, both international and EC law require the integration of appropriate environmental measures in the design and implementation of economic development activities…” (Iron Rhine Railway Arbitral Award)

11. 3. ILA New Delhi Principles, duty to ensure SD of resources International treaties and tribunals on SD reflecting the 7 ILA New Delhi Principles of International Law related to SD in decisions: • Duty to ensure sustainable use of natural resources • Equity and poverty eradication • Precautionary principle • Common but differentiated responsibilities • Public participation, access to information and justice • Good governance • Integration (See A Newcombe 2007)

12. 3. ILA New Delhi Principles, duty to ensure SD of resources The duty of States to ensure sustainable use of natural resources • ILA New Delhi Declaration: In accordance with int’l law, States have sovereign right to manage their natural resources pursuant to environmental and developmental policies, & the responsibility to ensure that activities within jurisdiction / control do not cause significant damage to environments of other States / beyond. • States under duty to manage natural resources in rational, sustainable & safe way for development of their peoples; conservation & sustainable use of natural resources… • Common concerns of humankind & common heritage of humankind. • Reflected in UN Framework Convention on Climate Change Preamble (sovereignty & responsibility); UN Convention on Biological Diversity Preamble (sovereignty & responsibility), Art 3 Principle and Art 10 (sustainable use); in UN Convention to Combat Desertification at Art 3(c) Principles (work toward sustainable use of scarce water & land) and in Art 10.4 (national action plans), Art 11 (regional and sub-regional actions), Art 17.1(a) (research and development), Art 19.1(c) & (e) (capacity-building); in FAO Seed Treaty at Art 1.1 Objective (conservation and sustainable use of PGRFA) then operational in Art 6 (measures for sustainable use of plant genetic resources); in the WTO Agreement at Preamble.

13. 3. ILA New Delhi Principles, integration The principle of integration and interrelationship, in particular in relation to human rights and social, economic and environmental objectives • Environmental protection shall constitute an integral part of the development process and shall not be considered in isolation from it. • Social, economic and environmental pillars of sustainable development should be mutually supportive, with social and economic considerations integrated into economic development decision-making. • Reflected in the UN Convention on Biological Diversity at Art 6 (integrate conservation and use into policies, plans, etc); in the Cartagena Protocol on Biosafety at Preamble (mutually supportive) and at Arts 2.4 and 2.5 (other int’l instruments); in FAO Seed Treaty at Preamble (synergies) and at Art 5.1 (promote an integrated approach); in GATT at Art XX (exceptions) and in NAFTA at Art 103, 104 and 104.1 (relationships with other accords), Art 1114 (enviro standards & investment) and 2101(exceptions).

14. 3. SD in Intl Trade & Investment Regimes Growing Network of RTAs and Int’l Investment Agreements (IIAs): • The investment and investor landscape has undergone fundamental changes in recent years (UNCTAD). • Since 2010, developing and transition economies have absorbed more than half of global FDI inflows, and in 2012 FDI flows to developing economies, for the first time ever, exceeded those to developed countries – with US$142 billion more (WIR 2013). • While many treaties and norms intersect and interact, IIAs are the primary international law instruments that govern foreign direct investment. • By the end of 2012, the overall number of IIAs approached 3,200 agreements, including close to 2,850 BITs and some 350 “other IIAs”1 (UNCTAD 2013). • Almost every country is party to one or more IIAs, covering two-thirds of global FDI stock and one-fifth of possible bilateral investment relationships (WIR 2011).

15. 3. SD in Intl Trade & Investment Regimes Original Focus of RTAs / Int’l Investment Agreements (IIAs): • IIAs seek to create ‘favourable conditions’ or a ‘stable framework’ for investment, for economic development, by impose binding obligations on States re: treatment of foreign investment: (i) a wide asset-based definition of investment; (ii) guarantees of non-discrimination (national and most-favoured-nation treatment); (iii) a minimum standard of treatment often expressed as ‘fair and equitable treatment’ coupled with an obligation not to impose arbitrary or discriminatory measures; (iv) the right to transfer investments and profits out of the host state; and (v) compensation for measures tantamount to expropriation. • Certain IIAs provide for rights of entry for foreign investment, prohibitions on performance requirements, and ‘stabilization clauses’ under which a State may commit to ‘freeze’ domestic regulatory developments that could affect the investor’s interests.

16. 3. SD in Intl Trade & Investment Regimes Increasing Numbers of IIA Claims Affect SD interests: • In most IIAs, foreign investors enforce these protections and rights through investor-state arbitration provisions under which the state provides its general consent to an independent arbitration of claims under the IIA (UNCITRAL, ICSID, etc). • As of December 2012, there were 514 known investment treaty arbitrations, with 96 respondent countries. 62 new cases filed in 2012 alone. (UNCTAD) • SD concerns were first raised in a series of controversial claims under Ch 11 of the North American Free Trade Agreement (NAFTA): - Ethyl v. Canada: export & interprovincial trade ban on MMT fuel additive - Azinian v. Mexico: cancellation of a municipal waste site concession - Metalclad v. Mexico: refusal to grant permit for a hazardous waste site - SD Myers v Canada: Canadian measures to prohibit PCB waste exports - Methanex v. United States: Californian ban on the use of MTBE fuel additive (See Newcombe 2007; Gehring, Cordonier Segger & Newcombe 2010, UNCTAD IPFSD 2013)

17. 3. SD in Intl Trade & Investment Regimes Sustainable Use of Resources in WTO Agreements • “Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to … allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with [members] respective needs and concerns at different levels of economic development...” (1994 WTO Agreement, Preamble) • “The preamble of the WTO Agreement -- which informs not only the GATT 1994, but also the other covered agreements -- explicitly acknowledges ‘the objective of sustainable development’” FN: “This concept has been generally accepted as integrating economic and social development and environmental protection.” (WTO US – Shrimp/Turtle case, AB Decision, Para 120, & note 207) • “In that framework, assessing first the object and purpose of the WTO Agreement, we note that the WTO preamble refers to the notion of ‘sustainable development’. This means that in interpreting the terms of the chapeau, we must keep in mind that sustainable development is one of the objectives of the WTO Agreement.” FN: Refs 1992 Rio Declaration & Agenda 21, “…the concept [in A21 means] to put in place development that is sustainable - i.e. that "meets the needs of the present generation without compromising the ability of future generations to meet their own needs".” (WTO Shrimp/Turtle case, Recourse to Art. 21.5, Para 5.53, & note) (See Cordonier Segger, Gehring & Newcombe 2005)

18. 3. SD in Intl Trade & Investment Regimes Calls for Sustainable Development in IIAs: • “Investment is critical to the ability of developing countries to achieve needed economic growth to improve the welfare of their populations and to meet their basic needs in a sustainable manner, all without deteriorating or depleting the resource base that underpins development…” (1992 Agenda 21) • Sustainable development requires increased investment, for which domestic and external financial resources are needed. Foreign private investment... which depend[s] on a healthy investment climate, [is] an important source of financial resources.” (1992 Agenda 21) • “.. future agreements on investments should take into account the objectives of sustainable development” … “when developing countries are parties to these agreements, special attention should be given to their needs for investment.” (1997 UNGASS) • “[We will build] the necessary domestic and international conditions to facilitate significant increases in the flow of foreign direct investment to developing countries, in particular the least developed countries, which is critical to sustainable development, particularly foreign direct investment flows for infrastructure development and other priority areas in developing countries to supplement the domestic resources mobilized by them.” (1992 JPOI) • “We will work together to ensure that our fiscal, monetary, trade, and structural policies are collectively consistent with more sustainable and balanced trajectories of growth... As we commit to implement a new, sustainable growth model, we should encourage work on measurement methods so as to better take into account the social and environmental dimensions of economic development...”(2009 Pittsburgh G20)

19. 3. SD in Intl Trade & Investment Regimes SD Innovations in Trade & Investment Treaty Procedures: Innovative changes in the process of treaty making & arbitration: • Assessment / sustainability review procedures ex-ante the conclusion of T&I agreements • Consultations between national trade, investment, environment, development authorities • Transparency in treaty making – release of draft texts, transcripts, public hearings • Use of amicus curia briefs and consultation of SD experts in trade and investment arbitration (See Gehring, Cordonier Segger & Newcombe, 2010; Bernasconi 2010; Malik 2010)

20. 3. SD in Intl Trade & Investment Regimes SD Innovations in Trade and Investment Treaty Provisions • Preambular recognition of sustainable development 1) Provisions to prevent T&I treaties from constraining SD measures • Reservations & exceptions (enviro, health, natural resources) • New interpretations of ‘like products’ & ‘like circumstances’ • Environmental treaties to prevail in the event of conflicts • Commitments to avoid lowering standards to attract investment (See Miles 2008, Gehring, Cordonier Segger et al 2013)

21. 3. SD in Intl Trade & Investment Regimes SD Innovations in Trade & Investment Treaty Provisions 2) Provisions for environmental & social cooperation parallel to T&I treaties • FTA environmental chapters, parallel treaties on environmental cooperation, joint work programmes on T&E issues, transparency / factual records processes for non-enforcement of environmental law • FTA labour chapters, parallel treaties on labour & human rights cooperation, joint work programmes on T&L issues, complaints processes for non-enforcement of labour law. 3) Integrated provisions to favour more sustainable T&I through treaties • Carefully tailored commitments in each chapter of RTA or IIA: - encouraging voluntary CSR & anti-corruption measures for investment - facilitating trade in environmental goods & services, - permitting green procurement, - facilitating & certifying trade in sustainable forest products, etc (See Hepburn & Vuyela 2010; French 2010, Gehring, Cordonier Segger & Newcombe 2010)

22. 3. SD in Intl Trade & Investment Regimes

23. 4. Other Investment Law Instruments for SD Funding Mechanisms to Encourage Investment in Sustainable Development Projects - Global Environment Facility (WB / UNEP / UNDP) - World Bank Development Funds (inc Prototype Carbon Fund) Investment Mechanisms in Other SD Treaties - Parallel environmental & social cooperation agreements in RTAs (FTAs, AAs & ECAs) - Clean Development Mechanism, REDD+, NAMAs (UNFCCC/Kyoto Protocol) - Compliance Fund (Vienna Ozone Convention/Montreal Protocol) Multilateral System and MTAs (FAO ITPGRFA) Bio-prospecting Instruments and ABS (UN CBD/Nagoya Protocol) Public-Private Partnerships to Encourage Sustainable Investment - UN Global Compact - Socially Responsible Investment Instruments (GRI, Equator Principles) - Extractive Industries Transparency Initiative (Rukundo & Cabrera 2010; Beatens 2010, Gehring, Cordonier Segger & Newcombe 2010)

24. 5. A Future Agenda for SD in IIAs • Economic, social and environmental law have developed as distinct communities with distinct legal regimes. Treaties in these areas have increasingly evolved as regimes (ongoing negotiations, dispute settlement procedures) rather than mere contracts between States. As UNCTAD notes, 1,300 IIAs are soon coming up for review/renewal. • As communities and systems have grown, potential for overlaps (even conflicts) between them has greatly increased, risking duplication, lack of coherence, waste of scarce resources and political will, contradictory programming & fragmentation. Overlaps between economic, environmental and social legal regimes should be identified early, analysed, and accommodated in a balanced way. • International, regional and bilateral investment regimes are working toward this balance, but progress is slow. Sustainable development is an objective of several FTAs, and starting to be reflected in new BITs. Instead of one international legal regime simply trumping the other, a commitment to SD might bring principles, such as a duty to ensure SD of natural resources, into play to help reconcile and integrate legal rules.

25. 5. A Future Agenda for SD in IIAs • In international economic law dispute settlement, SD is not a ‘trump card’, but solid arguments can be made and can prevail. New process tools such as impact assessments might enhance positive T&I effects, seeking “triple-win” scenarios. • Innovative provisions in IIAs may have the potential to deliver economic, environmental and social development benefits – a triple-win scenario that matches global policy goals for SD & investment. As UNCTAD IPFSD notes, key issues for IIAs include: • - How to strengthen the sustainability dimension of IIAs; • - How to preserve appropriate regulatory space for host countries; • - How to deal with the complexity of a fragmented treaty regime characterized by overlaps and incoherence; and • - How to address serious deficiencies in investor-State dispute settlement. • An SD Law Research Agenda supports new IIA provisions to take SD principles, such as duty to ensure SD of natural resources, into account. This involves (1) changes in investment law processes; (2) careful analysis of the intl rules of investment law; and (3) making investment instruments in other SD treaties more effective.

26. Thank you

27. EU-CARIFORUM Economic Partnership Agreement Article 3 Sustainable development • 1. The Parties reaffirm that the objective of sustainable development is to be applied and integrated at every level of their economic partnership… eradicating poverty in a way that is consistent with the objectives of sustainable development… Article 83.2 Services Liberalization • …the EC Party shall allow the supply of services… in sub-sectors: 26. Environmental Goods and Services Article 138, Environmental Cooperation: • 1. With a view to achieving sustainable development and in order to help maximise any positive and prevent any negative environmental impacts resulting from this Agreement, the Parties recognise the importance of fostering forms of innovation that benefit the environment in all sectors of their economy. Such forms of eco-innovation include energy efficiency and renewable sources of energy. • 2. Subject to the provisions of Article 7 and 134, the Parties agree to cooperate, including by facilitating support, in the following areas:… (a) projects related to environmentally-friendly products, technologies, production processes, services, management and business methods, including those related to appropriate water-saving and Clean Development Mechanism applications; (b) projects related to energy efficiency and renewable energy…” (c) promotion of eco-innovation networks and clusters, including through public-private partnerships...”

28. EU-Central America-DR Regional Trade Agreement Preamble: • “IMPLEMENT this Agreement in a manner consistent with environmental protection and conservation, promote sustainable development, and strengthen their cooperation on environmental matters; … PROTECT and preserve the environment and enhance the means for doing so, including through the conservation of natural resources in their respective territories; …PRESERVE their flexibility to safeguard the public welfare;” Not Lower Environment Standards for Investment: • Article 10.11 Investment and Environment : “Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining, or enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental concerns.” General and Specific Exceptions: • Art 9.14 Public Procurement Exceptions: “(b) necessary to protect human, animal, or plant life or health; 2. The Parties understand that paragraph 1(b) includes environmental measures necessary to protect human, animal, or plant life or health.” Environmental Cooperation Chapter: • Article 17.9: 1. The Parties recognize the importance of strengthening capacity to protect the environment and to promote sustainable development in concert with strengthening trade and investment relations… 3. The Parties recognize that strengthening their cooperative relationship on environmental matters can enhance environmental protection in their territories and may encourage increased trade and investment in environmental goods and services. 4. The Parties have negotiated an ECA. The Parties have identified certain priority areas of cooperation for environmental activities as reflected in Annex 17.9 and as set out in the ECA. The Parties also have established an Environmental Cooperation Commission… … Environmental Cooperation Agreement: • Annex 17.9: 3. Priorities..(a) strengthening each Party’s environmental management systems, including reinforcing institutional and legal frameworks and the capacity to develop, implement, administer, and enforce environmental laws, regulations, standards, and policies; (g) facilitating technology development and transfer and training to promote the use, proper operation, and maintenance of clean production technologies; (h) developing and promoting environmentally beneficial goods and services; …

29. Sustainable Development Law Sustainable Development Law: Law at the area of intersection between three fields. Broad purpose is: “socially, economically & environ-mentally sound development that can last.” (CISDL, 2002)

30. 1. Sustainable Development in 1998 - 2001 US-Shrimp (WTO) • “Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to … allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with [members] respective needs and concerns at different levels of economic development...” (1994 WTO Agreement, Preamble) • “The preamble of the WTO Agreement -- which informs not only the GATT 1994, but also the other covered agreements -- explicitly acknowledges ‘the objective of sustainable development’” FN: “This concept has been generally accepted as integrating economic and social development and environmental protection.” (WTO US – Shrimp/Turtle case, AB Decision, Para 120, & note) • “In that framework, assessing first the object and purpose of the WTO Agreement, we note that the WTO preamble refers to the notion of ‘sustainable development’. This means that in interpreting the terms of the chapeau, we must keep in mind that sustainable development is one of the objectives of the WTO Agreement.” FN: Refs 1992 Rio Declaration & Agenda 21, “…the concept [in A21 means] to put in place development that is sustainable - i.e. that "meets the needs of the present generation without compromising the ability of future generations to meet their own needs".” (WTO Shrimp/Turtle case, Recourse to Art. 21.5, Para 5.53, & note)

31. 2. Sustainable Development in 2006 Iron Rhine Railway (PCA) • The 2006 Iron Rhine (Belgium v Netherlands) Award of the Arbitral Tribunal struck under the auspices of the Permanent Court of International Arbitration: “There is considerable debate as to what, within the field of environmental law, constitutes “rules” or “principles”; what is “soft law”; and which environmental treaty law or principles have contributed to the development of customary international law. Without entering further into those controversies, the Tribunal notes that in all of these categories “environment” is broadly referred to as including air, water, land, flora and fauna, natural ecosystems and sites, human health and safety, and climate. The emerging principles, whatever their current status, make reference to conservation, management, notions of prevention and of sustainable development, and protection for future generations.” • “Since the Stockholm Conference on the Environment in 1972 there has been a marked development of international law relating to the protection of the environment. Today, both international and EC law require the integration of appropriate environmental measures in the design and implementation of economic development activities. Principle 4 of the Rio Declaration on Environment and Development, adopted in 1992 which reflects this trend, provides that “environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it.” Importantly, these emerging principles now integrate environmental protection into the development process. Environmental law and the law on development stand not as alternatives but as mutually reinforcing, integral concepts, which require that where development may cause significant harm to the environment there is a duty to prevent, or at least mitigate, such harm…. This duty, in the opinion of the Tribunal, has now become a principle of general international law. • This principle applies not only in autonomous activities but also in activities undertaken in implementation of specific treaties between the Parties. The Tribunal would recall the observation of the International Court of Justice in the Gabčíkovo-Nagymaros case that “[t]his need to reconcile economic development with protection of the environment is aptly expressed in the concept of sustainable development” And in that context the Court further clarified that “new norms have to be taken into consideration, and . . . new standards given proper weight, not only when States contemplate new activities but also when continuing with activities begun in the past” (Ibid.). In the view of the Tribunal this dictum applies equally to the Iron Rhine railway.” (emphasis added) • “As the Tribunal has already observed above… economic development is to be reconciled with the protection of the environment, and, in so doing, new norms have to be taken into consideration, including when activities begun in the past are now expanded and upgraded… Applying the principles of international environmental law, the Tribunal … is of the view that, by analogy, where a state exercises a right under international law within the territory of another state, considerations of environmental protection also apply. The exercise of Belgium’s right of transit, as it has formulated its request, thus may well necessitate measures by the Netherlands to protect the environment to which Belgium will have to contribute as an integral element of its request. The reactivation of the Iron Rhine railway cannot be viewed in isolation from the environmental protection measures necessitated by the intended use of the railway line. These measures are to be fully integrated into the project and its costs.” (emphasis added).

32. 3. Sustainable Development in 1997 Gabcikovo Nagymaros and 2006 Uruguay Pulp Mills (ICJ) • In the Case Concerning the Gabčíkovo-Nagymaros Project, the majority recognized that “… need to reconcile economic development with protection of the environment is aptly expressed in the concept of sustainable development.” (Case Concerning the Gabčíkovo-Nagymaros Project, ICJ, 1997, para 140) • In the 2006 Pulp Mills on the River Uruguay case, pleadings on Provisional Measures of July 2006, Uruguay “maintained that the provisional measures sought by Argentina would therefore irreparably prejudice Uruguay’s sovereign right to implement sustainable economic development projects in its own territory;” and asked the Court: • “…in particular to preserve its sovereign right, pending a decision of the Court on the merits of the case, to implement sustainable economic development projects on its own territory that do not, in its view, violate Uruguay’s obligations under the 1975 Statute or the anti-pollution standards of CARU;…” • It is possible that a concern for this right of a State, which forms the outer boundary of the principle of sustainable development, was a principal element in the ICJ’s reasoning in its first Order with regards to Provisional Measures in the Pulp Mills on the River Uruguay case, where it stated: • “… the present case highlights the importance of the need to ensure environmental protection of shared natural resources while allowing for sustainable economic development;… it is in particular necessary to bear in mind the reliance of the Parties on the quality of the water of the River Uruguay for their livelihood and economic development;… from this point of view account must be taken of the need to safeguard the continued conservation of the river environment and the rights of economic development of the riparian States;…”

33. Public Int’l Law Treaties on Sustainable Development (1966 –) Three Tracks of Important International Treaties: Enviro: 1972 – 92 CITES, Basel Hazardous Wastes, Vienna Ozone & Montreal Protocol 1992 – 2008 UN CBD and Cartagena Protocol, UN FCCC and Kyoto Protocol, UN CCD (desertification), Stockholm POPs, Rotterdam PICs, FAO Seed Treaty, etc. Economic: 1947 - 2008 GATT/WTO and regional agreements (EU, NAFTA, Mercosur, CAN, SADC, other FTAs and BITs) Social: 1947 – 2008 UN Human Rights Covenants & Instruments, ILO Conventions. More than 300 Other Relevant International Accords: 1966 ICCPR & ICESCR 1972 – 2002 UNCLOS, Regional Fisheries and Seas Conventions 1968 /02 African Nature Conservation Treaty 1983 ITTA 1985 ASEAN Convention 1998 Aarhus Convention 1998 Espoo Convention, etc. 4. SD in International Law & Policy

34. Intergovernmental Institutions for Sustainable Development (1900s –) Three Sets of Intl Institutions: Environmental: - COPs/MOPs of major treaties like the UN CBD, UN FCCC, UN CCD, etc - UN Environment Programme, Global Environmental Facility, World Conservation Union (IUCN), etc - Regional institutions (NAAEC, EU DG, OAS, etc) Economic: - GATT/WTO, Intl Financial Institutions (WB, IMF, MIGA), ICSID, OECD, FAO, etc - UN Development Programme, UN Conference on Trade and Development, etc - Regional Economic Commission (UNECE, ECLAC, etc), and Regional Trade/Investment Agreements (EU, NAFTA, Mercosur, SADC, ASEAN, FTAs), etc Social: - UN Human Rights Commission, Office of the High Commissioner on Human Rights, ILO, - WHO, UNESCO, etc - Regional Human Rights Institutions (IAHRC, AHRC, Council for Europe), etc International SD Forum: United Nations Commission on Sustainable Development (UN CSD), under ECOSOC of the UNGA Other Sectoral /Regional Institutions: UNCLOS COPs and Regional Fisheries and Seas Commissions Intl Commodity Organisations (metals, tropical timber, etc) General Regional Institutions (OAS, OAU, EU, APEC, etc) International Non-Governmental Institutions and Networks: International institutes and civil society organisations (IISD, etc) International business organisations (ICCs, WBCSD, etc) 4. SD in International Law & Policy

35. Int’l ‘Jurisprudence’ on Sustainable Development (1893 -) Significant ICJ/PCA Decisions 1893 Pacific Fur Seal Arbitration (United States / Canada) 1907 Trail Smelter Arbitration (United States / Canada) 1974 Nuclear Tests Cases ICJ (Australia and NZ / France) 1993 Maritime Delimitation ICJ (Denmark / Norway) 1996 Legality of Use of Nuclear Weapons ICJ (Advisory Op) 1997 Gabcikovo – Nagymaros, ICJ (Hungary / Slovakia) 2005 Iron Rhine Railway, PCA (Netherlands / Belgium) 2006 Pulp Mills on the River Uruguay, ICJ (Argentina / Uruguay) Relevant ITLOS Cases 1999 Southern Bluefin Tuna Prov. Measures (Australia and NZ / Japan) 2001 MOX Plant Order (Ireland / England) 2003 Johor Land Reclamation Prov. Measures (Malaysia / Singapore) Relevant WTO Cases 2001 Chile – Swordfish Case (WTO & ITLOS) 1991 US – Tuna Dolphin Case 1996 US – Reformulated Gas Case 1998 US – Shrimp Turtle I Case 2003 US – Shrimp Turtle II Case (Compliance) 1990 Thai – Cigarettes Case 1998 EU – Beef Hormones Case 2000 EU – Asbestos Case 2006 EU – Biotech Case 2007 Brazil – Retreaded Tires Case 4. SD in International Law & Policy