Another Nail in the Coffin for Arbitral Dispute Resolution Agreements in the EU – the Judgment of the CJEU in Poland v. PL Holdings

1 hét 5 nap ago

In the latest episode of the intra-European Union (EU) investment arbitration saga, the Court of Justice of the European Union (CJEU, Court) ruled on 26 October 2021 in Poland v. PL Holdings (Case C-109/20) that EU Member States are precluded from concluding with investors from another EU Member State an ad hoc arbitration agreement identical to an arbitration clause of an international treaty deemed invalid under the CJEU’s Achmea case law (Case C-284/16).

This is the second ruling concerning investment arbitration during this busy autumn, following the Komstroy Judgement (Case C-741/19) of 2 September 2021 – in a period which is, without doubt, exceptional due to the COVID-19 global pandemic, whose impact on the phenomenon in question was initially considered doubtful (Acevedo A. & Rueda Á. M., 2020.). Yet, international arbitration has demonstrated itself to be both adaptable and resilient throughout the crisis and emerged more strongly positioned as a method of dispute resolution (Scherer, M. & Bassiri, N. et al., 2020., Garrigues, 2021.).

Factual Background

Four years after a Swedish court ordered the Polish government to pay a company millions, the CJEU has tossed out the fine because an arbitration clause in an international investment agreement is illegal...

The case concerns Poland’s application to the Swedish courts to set aside two awards (a partial award and a final award) rendered in 2017 in arbitration with PL Holdings, a company incorporated under Luxembourg law, under a 1987 investment treaty (bilateral investment treaty – BIT) concluded between Poland on the one hand, and BLEU (the Belgium/Luxembourg Economic Union) on the other. Under the treaty – which predated the EU’s single market and is administered by the Stockholm Chamber of Commerce (SCC) – disputes between investors would be referred to an arbitration tribunal (Quell, M., 2021.).

Based on that BIT, when the Polish government forced PL Holdings in 2013 to sell shares it held in two Polish banks, the company disagreed with the decision requiring it to do so. This decision had been taken by the Komisja Nadzoru Finansowego (Polish Financial Supervision Authority), which then initiated arbitration proceedings against Poland (Insight EU Monitoring, 2021a.). Poland claimed that PL Holdings forced a merger of two banks so it could control 99% of the bank’s stock, which was illegal under Polish law.

The arbitration was initially based on Article 9 of the BIT and was seated in Sweden and conducted under the SCC rules (Garcia, A., 2021.). In 2015, Poland initially challenged the jurisdiction of the arbitral tribunal on the basis that PL Holdings was not an “investor” within the meaning of the BIT. In a second stage, in 2016, it also raised the fact that the arbitration clause of the BIT – involving an intra-EU dispute – would be incompatible with EU law. The latter challenge was made a few days after the request for a preliminary ruling was lodged in Achmea, in which the CJEU ultimately held that arbitration agreements in bilateral investments treaties between the EU Member States are contrary to EU law (Croisant, G., 2021.).

Neither challenge succeeded before the arbitral tribunal, which declared itself competent, what is more, issued a partial award concluding that Poland had breached its obligations under the BIT when it first suspended voting rights attached to shares owned by PL Holdings in Polish banks and ultimately forced those shares to be sold, and then issued a final award specifying damages of approximately €150 million including costs (awarded PL Holdings 653 million Polish złoty in total) (JD Supra, 2021.).

Poland brought annulment proceedings against both awards before the Swedish courts to set them aside on the basis that the tribunal lacked jurisdiction to decide the case, because, under EU law, an arbitration clause in a BIT between two EU Member States (i.e. an intra-EU BIT, such as the BIT in question) was invalid (the so-called “intra-EU objection”). In response, PL Holdings argued that, notwithstanding any potential invalidity of the arbitration clause in the BIT, a separate ad hoc arbitration agreement had been concluded between the parties. Referring to Swedish arbitration law and principles of commercial arbitration, PL Holdings submitted that it had made an offer to arbitrate on the same terms as contained in the BIT arbitration clause when it filed its request for arbitration. It argued that Poland had tacitly accepted that offer in failing to challenge the tribunal’s jurisdiction based on the BIT arbitration clause in a timely fashion (Poland had raised the intra-EU objection in the arbitration, but only when it submitted its rejoinder).

The Svea hovrätt (Svea Court of Appeal, Sweden) dismissed Poland’s application, finding that even though the arbitration clause in the BIT was invalid under EU law (according to Achmea), that did not prevent a Member State from concluding an ad hoc arbitration agreement with an investor to settle a dispute under the BIT at a later stage. Such an ad hoc agreement was based on the common intent of the parties to that dispute and was concluded according to the same principles as in commercial arbitration proceedings. It also found that Poland’s challenge to the validity of the arbitration clause was in any event out of time and therefore time-barred under Swedish law.

However, after an appeal was brought against the decision of the Court of Appeal, the Högsta domstolen (Supreme Court, Sweden) had doubts as to whether the aforementioned approach is compatible with the Achmea judgment (Insight EU Monitoring, 2021b.) and therefore suspended the proceedings and made a request to the CJEU for a preliminary ruling on the compatibility of such an ad hoc agreement with Articles 267 and 344 TFEU (principle of autonomy of EU law, as interpreted by the CJEU in Achmea and its subsequent case law) (Lowther, J., 2020.).

The Judgment of the CJEU

Thus the case concerns the compatibility of intra-EU investment arbitration, but with a twist. The Supreme Court did not ask whether the investor-state dispute resolution provision in the BIT, as such, is compatible with EU law. Instead, the question is whether, despite the assumed incompatibility of that treaty provision, a Member State can (still) enter into an ‘individual’ arbitration agreement with an investor, for instance by concluding a contract, or by omitting to challenge the jurisdiction of the arbitral tribunal in time (De Boeck, M., 2021.). In essence, the question was based on two premises: whether an ad hoc agreement was concluded and whether the BIT arbitration clause was incompatible with EU law for the reasons stated in Achmea and confirmed in Komstroy (Lawn, N. & Van Damme, I. et al., 2021).

In its judgment, the CJEU repeated its conclusions in Achmea and underlined that an arbitration clause in an international agreement between two Member States, which is capable of leading to a situation in which an arbitration body rules in disputes which may concern the application or interpretation of EU law, is contrary to Articles 267 and 344 TFEU as well as Article 4(3) TEU. To allow a Member State, which is a party to a dispute which may concern the application and interpretation of EU law, to conclude an ad hoc arbitration agreement with the same content as that clause would, according to the Court, entail a circumvention of the obligations under the Treaties as interpreted in Achmea. Moreover, the CJEU underlined that the consequences of that circumvention were no less serious because it concerned an isolated case, since, such an approach could be adopted in a multitude of disputes which may concern the application and interpretation of EU law, thus allowing the autonomy of that law to be undermined repeatedly (Johansson, M. & Lagerlöf, E. et al., 2021.). Further, given the requirements of Articles 267 and 344 TFEU, the CJEU stated that the validity of the legal basis of an arbitration body’s jurisdiction cannot depend on the conduct of the parties to the dispute.

The CJEU thus concluded that Articles 267 and 344 TFEU preclude national legislation which allows an ad hoc arbitration agreement to be used to continue arbitration proceedings initiated according to an invalid arbitration clause in an intra-EU BIT that has the same content. (Business Review, 2021.).

In addition, the CJEU’s reasoning was not limited to the question of compatibility. The CJEU found that the Member States have a positive obligation to challenge, before either the arbitral tribunal or the court with jurisdiction, the validity of an arbitration clause or ad hoc arbitration agreement. That positive obligation is based on EU law, especially the principles of the primacy of EU law and sincere cooperation. According to the CJEU, the positive obligation was also followed from its judgment in Achmea. The CJEU added that, in those circumstances, national courts must uphold an action to set aside an arbitration award made based on an arbitration agreement that is contrary to Articles 267 and 344 TFEU and the principles of mutual trust, sincere cooperation, and the autonomy of EU law (Lawn, N. & Van Damme, I. et al., 2021.).

The Implications of the Judgment

Although the result was not unexpected, considering the Court’s position in Achmea, the CJEU’s judgment in PL Holdings represents a further restriction of the possibility for a Member State to enter into an arbitration agreement with a private party, thus closing down a loophole that might have allowed, as a matter of EU law, such disputes to be resolved by arbitration despite the Court’s findings in Achmea (JD Supra, 2021.).

Thus, the fundamental premise of the Court’s reasoning in the present case is that an arbitration agreement that is invalid under Achmea remains invalid regardless of the form in which it manifests itself, and regardless of whether such invalidity benefits a Member State who had breached EU law not only by maintaining in force intra-EU BITs but also by failing to raise EU law as a defence when it had the opportunity of doing so in the arbitration proceedings (PL Holdings, paragraphs 51-52.). In this regard, Dániel Dózsa concludes that the thousand-year principle nemo auditur propriam turpitudinem allegans (no one may benefit from her wrong) must heed to the constitutional principles referred to above, even when they are invoked by a Member State in breach of EU law against a private party whose fundamental rights are in jeopardy (PL Holdings, paragraph 46., Dózsa, D., 2021.).

The CJEU was careful to circumscribe the effects of its judgment by stating that „the interpretation of EU law provided in the present judgment refers only to ad hoc arbitration agreements concluded in circumstances such as those at issue in the main proceedings” (PL Holdings, paragraph 67., Garcia, A., 2021.). The Court thereby confirmed that it did not extend Achmea to arbitration agreements between the EU Member States and investors made outside the context of intra-EU BITs, in other words, neither did it hold that all arbitration agreements between the EU Member States and investors are invalid. This also implies that the CJEU maintains the distinction drawn between investment treaty arbitration based on an intra-EU BIT and commercial arbitration in Achmea and Komstroy. It should be noted that in the latter case – the latest concerning the relationship between EU law and international investment law where the Court demarked the limits under which international investment tribunals can legally operate under EU law –, the CJEU concluded explicitly (and rather predictably) that there is no place for intra-EU arbitration proceedings under the Energy Charter Treaty (Suătean, I., 2021.), a multilateral agreement to which the EU, its Member States (apart from Italy which withdrew in 2016) and third states are parties. Within the EU such disputes must be resolved by the independent judiciary consisting of the EU and Member State courts and not by external quasi-judicial bodies (Eckes, C. & Ankersmit, L., 2021., Fouchard, C. & Thieffry, V., 2021.).

It should also be highlighted that neither did the Court follow the Advocate General’s Opinion (Opinion in Case C-109/20), in which Advocate General Kokott suggested that individual arbitration agreements between the Member States concerning the „sovereign application of EU law” might be able to escape the rule in Achmea and be compatible with the duty of sincere cooperation and autonomy of EU law, subject to the condition that national courts can „comprehensively review the arbitration award for its compatibility with EU law” by way of the preliminary reference procedure (Cahill, G., 2021.). According to several opinions on this subject, the Advocate General’s Opinion might come as a disappointment for those advocating for the necessity of greater clarity and certainty following Achmea (Korom, V., 2021., Dózsa, D., 2021.).

A Room for Hope?

It is noteworthy that in the aftermath of Achmea, the Commission attempted to reassure EU investors that, in the absence of intra-EU BITs, their cross-border investments will be protected by EU law which will be enforced via such infringement proceedings [COM (2018) 547 final, Korom, V., 2021.]. Conscious of the paradox created by the fact that extra-EU investment may be more effectively protected than intra-EU investment [since the CJEU confirmed – in Opinion 1/17, in the context of CETA – the validity of the investment court system provided for under some of the investment and trade agreement concluded by the EU with third states (see more: Croisant, G., 2019., Kanyuk, P. Á., 2019.)] and the fact that currently, most countries in the world are affected by these agreements in question, as of the 2837 valid BITs, 2269 are in force (UNCTAD, 2021, Szalai I., 2021.), the Commission is indeed working towards a comprehensive policy on intra-EU investments with the aim of better protecting and facilitating EU cross-border investment.

Following a 2020 public consultation (European Commission, 2021.), the Commission is considering the creation of a new legislative proposal concerning the intra-EU investment system, to be launched on 22 December 2021 (European Parliament, 2021.). The Commission contemplates, among others, setting out the substantive rights of specific investors in a new EU instrument, setting up an intra-EU investment court (similar to the EU’s proposal for a Multilateral Investment Court currently discussed at UNCITRAL), as well as extending and improving the “Solvit” mediation mechanism (Croisant, G., 2021.).

 

For a list of references, click HERE.

 

Author: dr. Petra Ágnes Kanyuk

MTA–DE Public Service Research Group

Ph.D. Student, Géza Marton Doctoral School of Legal Studies of the University of Debrecen

 

Source of the picture:

https://www.iisd.org/articles/covid-19-support-litigation [accessed November 5, 2021]

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European Parliament declares Polish Constitutional Tribunal illegitimate in the face of threat to the primacy of EU law

2 hét 3 nap ago

In a resolution adopted on 21 October, the European Parliament (EP) declared the Constitutional Tribunal of Poland as not only “lacking legal validity and independence” but also “unqualified to interpret the Constitution of Poland”. This scathing denunciation comes as an answer to the 7 October decision of the Constitutional Tribunal that found the provisions of the Treaty on European Union (TEU) incompatible with the Polish Constitution on multiple grounds, thus posing a direct challenge to the established principle of the primacy of EU law.

The contested decision of the Constitutional Tribunal is the final verdict in the proceedings initiated by Mateusz Morawiecki, the Prime Minister of Poland, in response to the Court of Justice of the European Union (CJEU) ruling earlier this year that amendments to the Polish law concerning the appointment of judges to the Polish Supreme Court were likely to be in breach of EU law. The amendments in question made it possible for the Polish Parliament – where Morawiecki’s Law and Justice (PiS) party has a ruling majority – to handpick the members of the National Council of the Judiciary – the body responsible for the nomination of judges to be appointed to the Supreme Court – who were formerly directly elected by the judiciary. Thus politicized, the independence of the National Council’s nominations – particularly with regard to the newly established disciplinary chamber of the Supreme Court, where former prosecutors were appointed to rule over disciplinary and criminal cases against judges – was called into question by the Supreme Court itself, which took the position that the disciplinary body could not be considered a court, as it was not nominated by an independent body, then applied to the CJEU for a preliminary ruling on the issues concerning the loss of independence of the National Council.

This preliminary ruling – in which the CJEU found that national provisions like the amendments in question, which have the effect of removing effective judicial review of the decisions of the National Council, are liable to infringe EU law and emphasized that “the effects of the principle of primacy of EU law were binding on all bodies of a Member State” was followed up by the European Commission bringing an action for failure to fulfil obligations before the CJEU against Poland on 1 April 2021. Pending the final judgment of the Court in the case, the Commission asked the Court to adopt the necessary interim measures to avoid further “serious and irreparable harm to the legal order of the European Union and, consequently, to the rights which individuals derive from EU law and the values 8 on which that Union is founded, in particular that of the rule of law”. The CJEU complied with this request and in its judgment issued on 14 July 2021, ordered Poland to immediately suspend the provisions allowing the disciplinary chamber of the Supreme Court to decide on requests for the lifting of judicial immunity, suspend the effects of decisions already taken by the disciplinary chamber on the lifting of judicial immunity and suspend the provisions preventing Polish judges from directly applying EU law protecting judicial independence, and from applying for preliminary ruling on such questions to the CJEU. Poland did not comply with these interim orders.

It is against this legal backdrop that Morawiecki submitted a 129-page petition to the Constitutional Tribunal of Poland concerning the resolution of a potential conflict between EU law and the Polish Constitution. In a decision published on 7 October, the Constitutional Tribunal challenged the jurisdiction of the CJEU, the principle of the primacy of EU law and the constitutionality of the EU Treaties, arguing that several provisions of the TEU – specifically, the first and second subparagraphs of Article 1 in conjunction with Article 4(3) and the second subparagraph of Article 19(1) – are inconsistent with the Polish Constitution. The Tribunal expressed particular concern about the second subparagraph of Article 1 which describes the TEU as marking “a new stage in the process of creating an ever closer union among the peoples of Europe” and which, in the view of the Tribunal, represents the threat of EU institutions – and the CJEU in particular – acting beyond the competences willingly transferred by Poland under Article 90 of its Constitution.

On the one hand, this Polish case is far from being the first time that the constitutional court of a Member State has challenged the principle of primacy and its potential to trigger ‘ultra vires’ acts by the EU institutions: the Federal Constitutional Court of Germany has famously scrutinized the limits of the principle with reference to the Grundgesetz in a long line of cases starting from the Solange judgments, through the Maastricht and Lisbon decisions, up to its most recent judgment – adopted last year – on disapplying the European Central Bank’s decision on the EU’s Public Sector Purchase Programme; nor is it without precedent in the practice of the Constitutional Tribunal of Poland, which, as commentators have pointed out, has never explicitly recognized the primacy of EU law over the Polish Constitution. On the other hand, this verdict goes a step further than the previous cases in that it does not only call the principle of primacy into question, but launches a broader attack on the EU Treaties, claiming the incompatibility with the Polish Constitution of the interpretation by the CJEU of several key TEU provisions (including Articles 1, 2 and 19).

Considering the directness of this attack, it should come as no surprise that the heated plenary debate with Morawiecki and European Commission President Ursula von der Leyen, taking place during the 18-21 October session of the European Parliament, culminated in the adoption of the harshly-worded resolution, in which MEPs expressed their concerns over the Polish Constitutional Tribunal having been transformed “into a tool for legalising the illegal activities of the authorities”, and as such, “lacking legal validity and independence” and “unqualified to interpret the Constitution of Poland”; expressing that the EP “deeply deplores” the decision of 7 October “as an attack on the European community of values and laws as a whole”. The EP has also expressed its full support for “Polish judges who still apply the primacy of EU law and refer cases to the CJEU for preliminary ruling (…) despite the risk to their careers, including disciplinary removal from adjudication, dismissal or forced resignation” and for the “tens of thousands of Polish citizens who took to the streets in peaceful mass protests, fighting for their rights and freedoms as European citizens”.

These strong words, however, are not the only negative consequence Poland has found itself facing. On 27 October, the CJEU ruled that the continued refusal of Poland to comply with its interim orders on the suspension of the national legislation on the jurisdiction of the disciplinary chamber of the Supreme Court represents serious and irreparable harm to the legal order of the European Union, and as such, Poland is to pay the Commission a penalty of €1 million per day until it complies with the obligations arising from the interim orders or, if it fails to do so, until the date of delivery of the final judgment.

Further reading:

Press release of the CJEU on the judgment of 2 March
Press release of the CJEU on the judgment of 27 October

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Why is it so urgent that the United States of America ratifies the Convention on Biological Diversity?

3 hónap ago

Introduction

The Convention on Biological Diversity (hereinafter: “CBD”, or “the Convention”) is an international convention signed in Rio de Janeiro, dedicated to promoting sustainable development. It seeks to conserve the diversity of life on Earth at all levels – genetic, population, species, habitat and ecosystem – and to ensure that this diversity continues to maintain the life support system of the biosphere overall[1]. The Convention recognizes that biological diversity is about more than plants, animals and micro-organisms and their ecosystems – it also is about how dependent people are on a healthy environment and that we need nature in our lives.

The Convention was opened for signature on 5 June 1992 at the Rio Earth Summit and entered into force in December 1993. With 196 parties to date, it enjoys almost universal participation, with the notable exception of the United States.[2] To be specific, the United States has signed but not yet ratified this international treaty, whose signature is a common interest all over the world in order to protect species and habitats, and which could mitigate the significant and irreversible changes that are currently occurring to the natural world.  Only four member states of the United Nations are not Parties to the CBD, namely: Andorra, South Sudan, the United States of America and the Holy See (the Vatican).

In my blog, first of all, I would like to point out the main reasons why it is so important for every state to submit to this legally binding Convention.

Secondly, I will discuss why the ratification by the U.S. would mean a milestone for the whole world that is actually quite urgent. After discussing the importance of these impacts, through the example of the worst environmental disaster for the U.S. - the 2010 Gulf Oil Spill - I will sum up its consequences and the current situation: that is, how they still refuse to make the effort that they should. 

What specific steps must Parties to the Convention take to protect biodiversity?

The conservation of biological diversity is a common interest under the Convention; on the other hand, the biodiversity located within the territory of each country is part of the national wealth of the respective countries. Consequently, only the state itself can decide on the exploitation of the components of biodiversity and, above all, the benefits of natural resources also belong to them. Therefore, the Convention establishes – and this is considered an essential requirement – that individual countries cannot cause damage to biodiversity outside their borders through their activities on their territory.[3] Biodiversity is inseparable from sustainable development, as it provides essential goods for economic recovery, social well-being and an adequate quality of life: for example, for food production, carbon sequestration and regulation of the water cycle. In addition to climate change, the loss of biodiversity is the most critical global environmental threat, resulting in significant material and well-being losses. At the international level, the EU is a strong advocate for the protection of biodiversity and the sustainable use of natural resources. It spends more than €350 million a year supporting biodiversity in developing countries, through programs focused on biodiversity and programs that integrate biodiversity in other areas. For example, in 2018, the EU funded 66 protected areas in 27 countries in sub-Saharan Africa.[4]

The Contracting Parties undertake to establish a system of protected areas to ensure the protection of natural habitats, maintain viable populations of species, develop regulations for the conservation of endangered species and populations, and ensure their compliance. The section of the Convention concerning management related activities applies to in situ conservation of ecosystems and the maintenance and recovery of viable populations of species in their natural surroundings; also, that the measures should include the reinforcement of terrestrial, marine and aquatic protected area systems. On the other hand it implements ex situ measures as well, preferably in the source country.

Another important step is that research that contributes to the conservation of biological diversity will be supported and encouraged, and the Parties will work together to use the results of scientific research and develop methods for the conservation and sustainable use of biological resources. “Special attention should be given to the development and strengthening of national capabilities by means of human resource development and institution-building, including the transfer of technology and/or development of research and management facilities.”[5]

To protect and exploit genetic resources, the Convention establishes that States can exercise sovereign rights over genetic resources. The Convention lists the general provisions to guarantee access to biological resources in areas under national jurisdiction and beyond. The Parties undertake to share fairly and equitably the benefits derived from the commercial and other utilization of genetic resources. The dissemination of technologies for the exploitation of biological resources, including biotechnology, to developing countries under the Convention will be subject to the most-favored-nation principle in the future. The economic benefits of biotechnological processes must also be shared fairly and equitably. The extent of this must be agreed upon between the interested parties.

According to the convention, the parties must develop an appropriate strategy for the protection of biological diversity. Special attention should also be paid to this issue in environmental impact assessments. The convention describes the general principles and requirements for conducting environmental impact assessments. An important objective of the Convention is to achieve the sustainable use of natural resources. To this end, it contains requirements for the development of scientific knowledge in this regard and for the development of a global monitoring system and information systems to support data exchange.

To protect biodiversity, the Convention recognizes the need for developed countries to help developing countries financially, through technological know-how and the transfer of tools and procedures. This assistance should not be included in existing development aid, but should be seen as an additional source to it. Under the Convention, the Conference of the Parties will periodically review, inter alia, the situation of countries with economies in transition in relation to the Convention. These countries can be included in a list to be attached to the Convention, temporarily exempting them from the obligation to provide financial assistance.

For what reasons would it be a milestone if the U.S. ratified the Convention?

The U.S. has a huge environmental footprint, and the protection of nature requires international cooperation and coordination. Their leadership is needed to protect domestic and global biological resources.  The absence of the U.S. makes this harder for several reasons. The U.S. is home to some of the world’s best conservation researchers and tools, including those used for monitoring wildlife populations. Another key reason for them to join the agreement is that the U.S. could help other countries develop conservation strategies that don’t come at the expense of Indigenous people and local communities, which has been the case historically.[6]

They also are guilty of harming native populations for the sake of protecting wildlife (most famously when creating Yellowstone National Park.)

In addition, the U.S. possesses transparent laws, dispenses significant foreign aid, and embodies a tradition of public engagement that leads to greater biodiversity-related protection and enforcement than most countries. The U.S. has also been a good international partner in other environmental agreements and treaties such as the Convention on International Trade in Endangered Species (“CITES”), the Ramsar Convention on Wetlands, and the Montreal Protocol on Substances that Deplete the Ozone Layer. The interests of the United States stand to benefit greatly from such multilateral cooperation and the continued ability to access biological diversity from other countries across the globe.[7]

To what extent would U.S. ratification change its international obligations regarding protection of the Gulf’s biological diversity? 

The 2010 Gulf Oil Spill was the worst environmental disaster in U.S. history. Studies indicate that it will take parts of the Gulf, such as deep ocean ecosystems, decades to recover. However, unfortunately the legal landscape governing offshore drilling is still unchanged from before the spill. The U.S. still outsources drilling safety and spill cleanup to the industry, which has proven far more adept at extracting oil than protecting the environment. In my opinion, the possible outcome of the U.S. ratifying the Convention – the increased protection of the law of the sea and of biological diversity – would be more aligned with their obligations than the objective of setting a new record of oil production, like they did in 2019.[8] Americans are still not serious enough about reducing their nation’s dependence on fossil fuels and accelerating the transition to clean energy. This failure stands out as the continuing tragedy of the spill. The preamble of the Convention states that “the intrinsic value of biological diversity and of the ecological, genetic, social, economic, scientific, educational, cultural, recreational and aesthetic values of biological diversity and its components…(and) also of the importance of biological diversity for evolution and for maintaining life sustaining systems in the biosphere.” The CBD further affirms “that the conservation of biological diversity is a common concern of humankind,” Consequently, by ratifying the Convention, it would apply to the U.S., so they would be required to reduce fossil fuels and to develop clean energy, besides many other obligations. In 2012 the Congress passed the RESTORE Act in response to the spill, but only to ensure that the responsibility to restore the environment would be shared among Gulf coastal states. The laws in the U.S. were too silent about drilling safety and future oil spills. They are still more focused on their income from oil than on protecting biodiversity and making sure it is not going to happen again. In terms of new regulations, the Obama administration enacted new safety rules. Many of these had unfortunately been reversed by the Trump administration. President Trump also expanded offshore drilling. However, while the oil industry is more committed to protecting the sea these days than it was in 2010, without the U.S. ratification to the Convention, their promise is still not an enforceable obligation. BP paid an enormous amount to the harmed states, but the U.S. is still not addressing its responsibility for the disaster sufficiently. Many people have hopes that the Biden administration – which has already reversed many actions of the Trump administration for the better – may ratify the Convention. By doing that, they would have a much greater obligation regarding the creation of new domestic rules – such as to protect the sea and biological diversity, and to help address impacts of global warming, unstable weather patterns, and other abrupt changes caused by stressed ecological systems - to stop being as harmful on the environment as they are in the present. 

The three objectives of the Convention – conservation of biological diversity, the sustainable use of its components, and the fair and equitable sharing of the benefits arising from the use of biological and genetic resources – would apply naturally to the U.S. so their obligation would be much more extensive. The Member States, in accordance with the Charter of the United Nations and the principles of international law, have to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or areas beyond the limits of national jurisdiction.[9]

The United States is already in full accordance with the substantive terms of the CBD, which provide discretion and flexibility based upon national circumstances. No new legislation at either the federal or state level is necessary for the United States to ratify and implement the CBD immediately, and future legislative and administrative amendments would not be precluded.[10]

If the U.S. participated in the Convention, besides these obligations, it would also save them money in the long run. Financial resources would be used more efficiently by helping coordinate federal agencies with other international agreements. They could also keep their sovereignty on all issues, with no exceptions. 

Closing thoughts and consequences

Protecting biodiversity maximizes the resilience of ecosystems and large regions – and indeed, the entire world – so that the use of land, water and air is done sustainably. This is good for food and water security, overall global well-being, and the long-term maintenance of biodiversity’s many economically beneficial services. The CBD is the one legal tool that brings these important issues together. It should be ratified by the U.S. Senate in short order because it is without legal controversy, it will benefit the people of the United States, and it will make the world a better place for all its inhabitants.[11]

For a list of references, click HERE.
Source for the image used: https://www.undp.org/press-releases/world-wildlife-day-highlights-import...

 

Author: Beáta Bella Szutor
law student, University of Debrecen Faculty of Law

[1] https://www.cbd.int/gbo1/chap-02.shtml

[2] https://www.iisd.org/articles/biological-diversity-protecting-variety-life-earth 06.08.2021.

[3] Dr. Bándi Gyula, Dr. Faragó Tibor and Dr. Lakosné Horváth Alojzia – Környezetvédelmi és Területfejlesztési Minisztérium – 2004. – Nemzetközi Környezetvédelmi és Természetvédelmi Egyezmények – 39.

[4] Action against biodiversity loss, nature conservation and the nature protection strategy of the European Union - https://ec.europa.eu/info/sites/default/files/biodiversity_hu.pdf 06.08.2021.

[5] Rio summit page 215, C, international and regional cooperation and coordination

[6] The US must show leadership on biodiversity | Edward Norton | The Guardian 06.08.2021.

[7] William J. Snape, Joining the Convention on Biological Diversity: A legal and scientific overview of why the United States must wake up https://www.biologicaldiversity.org/publications/papers/SDLP_10Spring_Snape.pdf 06.10.2021.

[8] https://theconversation.com/bp-paid-a-steep-price-for-the-gulf-oil-spill-but-for-the-us-a-decade-later-its-business-as-usual-136905 06.08.2021.

[9] art. 15.1 (“Recognizing the sovereign rights of States over their natural resources, the authority to determine access to genetic resources rests with the national governments.”)

[10] id. https://www.biologicaldiversity.org/publications/papers/SDLP_10Spring_Snape.pdf 9., 06.10.2021.

[11] id. https://www.biologicaldiversity.org/publications/papers/SDLP_10Spring_Snape.pdf 11., 06.10.2021

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