Environmental Law

19/11/2016

Reflections on the Wildlife Justice Commission and its Public Hearing concerning Wildlife Trafficking in Vietnam

The illegal trade in wildlife is currently the fourth largest global illegal trade (following the illegal trade in narcotics, the trade in counterfeits, and human trafficking) and is resulting in drastic declines in the populations of many species, in addition to being strongly linked to other crimes such as corruption and fraud. While most countries have enacted laws to regulate the trade of wildlife specimens, both the strength and the enforcement of such laws vary considerably from one country to the next. This blog post briefly considers the role of a relatively new innovation – the Wildlife Justice Commission (WJC) – in improving this situation through a combination of investigative techniques, public dialogue, and international pressure.

The WJC is an NGO established in 2015 with the objective of contributing to the disruption of transnational organized crime involving wildlife, timber and fisheries. The Commission seeks to achieve this end, firstly, by sharing intelligence and working with domestic law enforcement agencies, thereby assisting governments to enforce the law. In instances in which governmental cooperation is not forthcoming, the WJC produces a ‘Map of Facts’ (essentially a case file based on the Commission’s on-the-ground investigations, which maps out criminal networks and their illicit activities) and engages in diplomacy in an attempt to convince national authorities to act on the information provided. Where this too yields unsatisfactory results, a Public Hearing may be held with the purpose of allowing experts and the public to consider fact-based evidence and pressuring the relevant government to take legal action.

Although still in its infancy, the WJC has already involved itself in several investigations, one of which has culminated in a Public Hearing, held in The Hague on 14-15 November 2016. The Hearing focused on the trafficking of specimens of various species that are listed on the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) in Nhi Khe, Vietnam. Whilst not a legal trial, the first portion of the Hearing followed a trial-like format, with an attorney presenting an overview of the case’s Map of Facts through the questioning of witnesses, supported by photographic and video evidence. On its second day, the Hearing involved a series of discussions with, and presentations by, academic experts and representatives of conservation-related NGOs, aiming primarily to suggest means of combating illegal wildlife trade, both in Nhi Khe specifically and as a broader global problem. The Vietnamese government was invited to participate, but elected only to send an observer.

The WJC Accountability Panel (Photo: M. Lewis)

The Hearing was held before an independent ‘Accountability Panel’, comprising an impressive lineup of international experts, including, inter alia, current/former judges from the International Criminal Court, Inter-American Court of Human Rights, and East Africa Court of Justice. Throughout the process, members of the Panel were able to question witnesses and other speakers, as was the Director of Proceedings (the position of which was filled by an international broadcast journalist). Questions from the Accountability Panel in particular highlighted the various limitations of the WJC’s approach and what an organization of this nature is able to do from a legal and practical perspective. The WJC has, on several occasions over the past year, sent undercover investigators to Nhi Khe (see further the Al Jazeera documentary ‘The Poacher’s Pipeline’). However, these persons – being representatives of an NGO rather than law enforcement officials – were unable to purchase wildlife products without themselves infringing the law. Thus, although they were able to demonstrate that large amounts of what appeared to be genuine wildlife specimens (as identified by experts on the basis of photographs) were being offered for sale in Nhi Khe, they were unable to prove the actual occurrence of transactions, obtain physical samples, or create opportunities for working their way to other links in the wildlife trafficking chain. They were further unable to investigate private sector involvement in the relevant organized crime networks by, for instance, subpoenaing the bank accounts into which sellers indicated that payments could be made; and did not explore the prevalence of public sector corruption through the direct investigation of government officials.

Despite these constraints, the Panel was ultimately prepared to confirm the conclusions in the WJC’s Map of Facts, finding, inter alia, that Nhi Khe is a major hub for the illegal processing and retail distribution of wildlife; that the various persons of interest identified in the Map of Facts have been actively involved in illegal wildlife trade and ancillary crimes; and that these activities have occurred openly within local and provincial police jurisdiction. While the Panel acknowledged that the Vietnamese government has taken a number of positive actions towards curbing the illegal wildlife trade, it also identified various failures in Vietnam’s approach and enumerated a series of surprisingly detailed recommendations. These included measures to enforce existing laws (for instance, use of the WJC’s Map of Facts to conduct an investigation targeting individuals and networks operating in Vietnam, the pursuit of criminal prosecutions where sufficient evidence is available to support these, and the allocation of resources to detect illegal trade on social media); as well as measures to address inadequacies with the laws themselves (for instance, amending organized crime and corruption statutes to incorporate the maximum number of ancillary crimes, enacting laws to address civil asset forfeitures, and ensuring the prompt entry into force of a new penal code addressing the illegal killing and trafficking of wildlife). The Panel stressed that implementation of the recommended actions would contribute to Vietnam’s compliance with its international commitments under CITES, the UN Convention against Transnational Organized Crime, and the UN Convention against Corruption. It further encouraged the other Parties to these Conventions to take appropriate measures to support Vietnam and called upon the CITES Standing Committee to take note of its recommendations and to consider imposing trade sanctions on Vietnam.

(Photo: M. Lewis)

Of course, the recommendations of the WJC’s Accountability Panel are in no way legally binding, and the above process was not conducted under the banner of any particular treaty or intergovernmental organization. Nevertheless, the process does appear to offer several advantages. It is considerably quicker and cheaper than bringing a case before an international tribunal, such as the International Court of Justice, and does not hinge upon states’ acceptance of jurisdiction. Unlike the compliance mechanisms that have emerged under various environmental treaties, its recommendations need not be endorsed by a body that is made up of states Parties and thus inherently political (such as a Standing Committee or Conference of the Parties), but are instead issued by a panel of independent and internationally respected experts. Further, while many treaty compliance mechanisms fail to allow NGOs to either trigger non-compliance proceedings or participate in the functioning thereof, WJC Public Hearings are arranged by an NGO and rely heavily upon public participation. Apart from giving NGOs and the broader public the opportunity to inform the Accountability Panel’s case-specific recommendations, this approach enabled the Vietnam Public Hearing to act as a platform for both shining a spotlight on the seriousness of illicit wildlife trafficking (this being an issue which often fails to receive high priority in countries’ law enforcement agendas) and exchanging ideas about how this challenge can be combated. Discussions highlighted not only the need for aggressive enforcement in consumer countries, but also a variety of other necessary measures, such as focusing on demand reduction; working with communities in supplier countries to address human-wildlife conflicts and create alternative sustainable livelihoods; and supporting collaborative, evidence-based investigations between countries in order to build intelligence along the entire trafficking chain. They further emphasized the role that states’ national laws can play in (i) pressuring other countries to address wildlife crime by providing for the imposition of sanctions against countries that undermine the effectiveness of international wildlife treaties (see, e.g., the Pelly Amendment to the US Fishermen’s Protective Act, the use of which played an important role in pressuring Taiwan to control trafficking in rhinoceros horn and tiger bone); and (ii) ‘internationalizing’ the laws of other countries by making it an offence to trade in wildlife taken/possessed/sold in violation of any foreign law, thereby enhancing states’ ability to dismantle transnational organized crime networks (see, e.g., the US Lacey Act).

Vietnam has recently engaged in a flurry of activities aimed at demonstrating its commitment to combating wildlife trafficking (including its hosting this week of the Hanoi Conference on Illegal Wildlife Trade). However, it remains to be seen whether these activities will be sustained over time and will extend to include implementation of the recommendations from the WJC’s Public Hearing. It will also be interesting to see how these recommendations are treated (if they are acknowledged at all) by future meetings of the CITES Standing Committee and Conference of the Parties, given that they did not emanate from a procedure agreed to by governments. At the very least, the WJC has demonstrated that it has a useful role to play in collecting and verifying information, as well as encouraging the international community to take a serious interest in efforts to combat illicit wildlife trade. Hopefully, the Commission’s Public Hearing procedure will also prove to be an effective catalyst for action by governments and other stakeholders.

10/11/2016

WTO limitations for domestic climate smart agriculture policies

Achieving the Paris Agreement’s climate goals will require states to start focusing both on reducing emissions from agriculture and on the sequestration potential of agriculture and land use.  The imminent rise in global food demand coupled with the decline in fertile agricultural land caused by climate change will further necessitate the drafting and implementation of effective policies. These policies have to aim for mitigation, adaptation and food security, the three pillars of ‘climate smart agriculture’. Climate smart agriculture is an approach to developing the technical, policy and investment conditions to achieve sustainable agricultural development for food security under climate change (FAO 2013).  Examples of climate smart practices are the introduction of rotational grazing management schemes, crop rotation, minimum tilling, permanent native vegetation on farmland and the use of compost and other soil additives to increase soil carbon levels.  Examples of climate smart technologies are sophisticated, computerized drip-irrigation systems, and methane capture and conversion technologies in animal raising facilities.  A comprehensive regulatory framework to incentivize the agricultural sector to convert from conventional practices to become climate smart is still largely lacking, not just in the EU, but worldwide. Incentives that already are applied on a small scale are subsidies and tradable offsets under a carbon pricing mechanism. It is expected that future policies aimed at advancing the implementation of climate smart practices and technologies in the farming sector will use one of these or both instruments.

Both are voluntary instruments in the sense that farmers can choose not to apply for a subsidy or participate in an offset scheme, yet both do have an impact on trade because these instruments incentivize certain agricultural practices thus favouring some domestic farmers and their products over foreign farmers and their (imported or exported) products. When drafting a policy aimed at stimulating climate smart agriculture, it is, therefore, important to remain within the legal boundaries set by international trade law. There has been remarkable little attention for these trade law limitations to domestic policies in the area of climate smart agriculture. In Australia, for example, there does not seem to have been any debate on possible WTO requirements for the domestic Australian carbon farming initiative, which is a scheme aimed at stimulating farmers to reduce emissions or increase sequestration through offsets that are bought up by the government in reversed auctions. Academic literature does exist, but mostly focuses on the WTO boundaries for domestic climate law in a broad sense. That literature is rather worrying. Because it takes a broad perspective and deals with all potential instruments that may infringe upon a wide range of WTO instruments, it looks as if the WTO is a huge stumbling block for domestic policies.^[1]

In my view, it is more worthwhile to focus on the two most likely instruments. As stated above, policies aimed at stimulating climate smart agriculture are likely to be some sort of government subsidy of a system of offsets from agriculture that are allowed in the carbon market. These instruments primarily have to be assessed against the requirements of two WTO instruments: the Agreement on Agriculture (AoA) and the Agreement on Subsidies and Countervailing Measures (SCM).

Domestic policies aimed at stimulating the adoption of climate smart agricultural practices and technologies are environmental protection programmes that, in principle, are allowed under the so-called ‘Green Box’ of the AoA, provided the support is only given in the start-up phase and is terminated after the benefits from the conversion to climate smart practices, be it from improved productivity, the generation of energy or from the sale of carbon credits on the private carbon market, greatly surpass the costs involved. Incentives that have a positive impact on production, such as for soil carbon projects, and that are not allowed under the AoA’s Green Box, are actionable under the SCM Agreement. It is hard to say in general whether payments to farmers, be it through a subsidy or through the carbon market, are not actionable because they do not cause adverse effects on competing producers in other countries. This very much depends on the individual case.

Several carbon farming methodologies definitely have production-enhancing co-benefits and would, therefore be actionable under the SCM Agreement. Soil sequestration projects, for example, are known to have a tremendous positive impact on the production of crops. Financing such projects could, therefore, be seen as granting an actionable subsidy, as long as they are not covered by the AoA. This means that it is up to the injured WTO member state to prove these subsidies caused serious prejudice to its interests, i.e., that because of the subsidy, it suffers from displaced imports into the market of the subsidizing country, displaced exports to third countries, significant price suppression, or an increase in the world market share by the subsidizing country.  Should a country succeed and subsequent consultations not lead to an agreement, the injured state can take countermeasures.

The accused state could argue that the subsidies are non-actionable because these are meant to promote adaptation of existing facilities to new environmental requirements imposed by law and/or regulations, as allowed under the SCM Agreement.  It is, however, unlikely that all of the six conditions for this exception clause to apply are met as current schemes are voluntary, the subsidies are not one-time but re-occur every time new abatement has been achieved, and the payments are not limited to 20 per cent of the cost of adaptation.  The condition that financial assistance should be directly linked to and proportionate to a firm’s pollution reduction,  is only met in case of emissions abatement projects, such as methane capture. Sequestration projects are not covered as these do not reduce the firm’s own emissions. Whether the condition that the financial assistance needs to be available to all firms which can adopt the new equipment and/or production processes is met, depends on the design of the regulatory scheme. The Australian scheme, for example, under which only farmers with winning bids in a reversed auction receive government funds, seems incompatible with the latter condition.

The other WTO instruments are only relevant to a very limited extend. The GATT and TBT Agreement, generally, are not applicable in the case of the two instruments that are most likely to be used to stimulate climate smart agriculture. The GATS requires a policy to enable foreign service providers to be active under a carbon pricing mechanism aimed at offsets from agriculture. The TRIP Agreement requires states to protect the invention of climate smart technologies to be protected under patent law. Should policies be aimed at a rapid adoption of patented climate smart technologies, then states can opt for excluding a climate smart technology from patentability based on grounds of avoiding serious prejudice to the environment.

To further facilitate the adoption and implementation of policies promoting climate smart agriculture, the international community should take action in the area of international trade law. Unfortunately, climate change is not addressed in a comprehensive manner in the ongoing negotiations on liberalizing environmental goods and services, on the relationship between the WTO and the UNFCCC and the Paris Agreement, and on agriculture, nor in the regular meetings of the Committee on Trade and the Environment and the TBT Committee.  It is clear that policies aimed at stimulating climate smart agriculture cannot be neatly assessed under one of the current WTO Agreements, but instead are situated in between and across the various agreements, depending on the specific type of measure and the specific activity that is incentivized. It seems that it is difficult to give due consideration to climate smart agriculture in all of the ongoing negotiations and discussions within the WTO framework, although several realistic options to at least create more room do exist. The most realistic and feasible options in my view are including climate smart agriculture technologies in the yet to be concluded WTO Agreement on Environmental Goods and Services and to recognize carbon sequestration as an agricultural product under the AoA so that it becomes possible to support farmers’ sequestration measures under the Green Box.

[1] For example, David Blandford and Tim Josling, Greenhouse Gas Reduction Policies and Agriculture: Implications for Production Incentives and International Trade Disciplines (Geneva: International Centre for Trade and Sustainable Development, 2009); David Blandford, “Climate Change Policies for Agriculture and WTO Agreements”, in Joseph A. McMahon, Melaku Geboye Desta (eds.), Research Handbook on the WTO Agriculture Agreement. New and Emerging Issues on International Agricultural Trade Law (Cheltenham: Edward Elgar, 2012), pp. 223 et sqq.; David Blandford, International Trade Disciplines and Policy Measures to Address Climate Change Mitigation and Adaptation in Agriculture, E15 Expert Group on Agriculture, Trade and Food Security Challenges Think Piece (Geneva: ICTSD/WEF, 2013); Andrew Green, “Climate Change, Regulatory Policy and the WTO. How Constraining are Trade rules?”, 8:1 Journal of International Economic Law (2005), pp. 143 et sqq.; Christian Hberli, WTO Rules Can Prevent Climate Change Mitigation for Agriculture, Working Paper No. 2016/06 (London: Society of International Economic Law, 2016); Deok-Young Park (ed.), Legal Issues on Climate Change and International Trade Law (Cham: Springer International, 2016); Richard G. Tarasofsky, “Heating Up International Trade Law: Challenges and Opportunities Posed by Efforts to Combat Climate Change”, 2:1 Carbon and Climate Law Review (2008), pp. 7 et sqq.

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This project has received funding from the European Union’s Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No 655565.