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International Responsibility and Liability

Abstract and Keywords

After more than fifty years of work, the International Law Commission codified the general (customary) regime for state responsibility in the Articles on Responsibility of States for Internationally Wrongful Acts, which were adopted in 2001. The law of state responsibility is based on the distinction between two types of rules: ‘primary rules’ and ‘secondary rules’. State responsibility for environmental damage has played a relatively limited role in environmental law, due in part to the fact that it does not cover the liability of private actors, who are those largely responsible for pollution. This article examines the consequences of the causation of transboundary environmental harm within several international legal regimes: state responsibility for breach of general environmental obligations; international civil liability regimes for harmful consequences of high-risk activities; liability regimes in multilateral environmental agreements; and the emerging general system of liability for harmful consequences of lawful activities involving high risk. It assesses the strengths and weaknesses of these international legal regimes, their usefulness as tools of environmental protection, and their effectiveness as systems of compensation.

Keywords: International Law Commission, state responsibility, primary rules, secondary rules, environmental harm, environmental obligations, civil liability, multilateral environmental agreements, environmental protection, compensation

1 Introduction: Scope of the Chapter

This chapter addresses the consequences of the causation of transboundary environmental harm within several international legal regimes: state responsibility for breach of general environmental obligations; international civil liability regimes for harmful consequences of high risk activities (such as nuclear and oil-related activities); liability regimes in multilateral environmental agreements (MEAs); and the emerging general system of liability for harmful consequences of lawful activities involving high risk. The chapter will offer an overview of these international legal regimes and will assess their strengths and weaknesses, their usefulness as tools of environmental protection, and their effectiveness as systems of compensation.

After more than 50 years of work, the International Law Commission (ILC) codified the general (customary) regime for state responsibility in the Articles on Responsibility of States for Internationally Wrongful Acts (ILC Responsibility Articles),1 which were adopted in 2001. The law of state responsibility is based on the distinction between two types of rules: ‘primary rules’, which are those that establish the obligations of states, and ‘secondary rules’, which are concerned with the breach of primary rules and with the consequences of such breach. The term ‘state responsibility’ is now widely used to denote secondary rules, following the decision of the ILC to limit its articles on state responsibility to these. As will be shown in this chapter, state responsibility for environmental damage has played a relatively limited role in environmental law, due in part to the fact that it does not cover the liability of private actors, who are those largely responsible for pollution. Furthermore, the state responsibility regime leaves unclear the extent to which states are responsible in relation to the environment towards the community of states generally (erga omnes) or towards group of states based on multilateral treaty regimes (erga omens partes).

(p. 1012) In the 1970s, the ILC also started work on a system covering the harmful consequences of lawful but high-risk activities. In 1997, facing insurmountable conceptual difficulties, the ILC decided to divide the liability topic into two projects. The first project involved work on primary obligations relating to the prevention of trans-boundary harm from hazardous activities, and, in 2001, it resulted in the adoption of a draft convention. The second project involved work on liability for injurious consequences of acts not prohibited by international law. After years of conceptual struggle and ‘misplaced emphasis’,2 the ILC is currently in the process of deciding what direction this project should take. It has switched its focus to the practical aspect of the allocation of loss and seems to be abandoning the concept of state liability in favour of civil liability.

The development of civil ‘high risk’ liability regimes marked a change of emphasis, channelling liability away from the state towards the operators. A further change of emphasis is reflected in a fundamental shift away from the compensatory approach of responsibility or liability regimes towards more pro-active systems set up in MEAs, aimed at encouraging and assisting states to fulfil their obligations in relation to the protection of the environment (see Chapter 43 ‘Compliance Procedures’). In a yet further development, states have begun to complement the compliance-oriented aspect of MEAs through the introduction of liability regimes within the MEAs themselves. On the one hand, important benefits derive from this incorporation of liability regimes into MEAs, such as their espousal of the polluter pays principle, the provision of compensation for victims, and their deterrent effect on potential polluters. However, on the other hand, their inclusion substantially increases the complexity and costs of negotiating MEAs, to an extent that may not really be justified by the benefits.

2 Primary Rules Of International Environmental Law

States' obligations arising under primary rules derive both from treaty and from general customary international law. In the environmental field, it is in fact treaties that have come to play by far the greater part in regulating state conduct. To appreciate the challenges that arise in applying the law of state responsibility in the environmental context, it is nonetheless important to consider the evolution of the field against the backdrop of its customary law foundations.

(p. 1013) 2.1 Evolution of Primary Rules

The traditional foundation of the regulation of the international behaviour of states in the environmental field is the customary law rule prohibiting the causation of transboundary damage—a rule that has its roots in the principle of state sovereignty (see Chapter 19 ‘Formation of Customary International Law and General Principles’ and Chapter 22 ‘Transboundary Impacts’). This classical approach to state responsibility developed on the basis of the award in the Trail Smelter Arbitration (United States v. Canada), in which the tribunal relied on ‘the principle of general international law’ prohibiting a ‘State …to use or permit the use of its territory in such a manner as to cause injury by fumes in or to the territory of another or the properties or persons therein, when the case is of serious consequences and the injury is established by clear and convincing evidence.’ The same basic premise underlay the decision of the International Court of Justice (ICJ) in the Corfu Channel case, in which the court referred to ‘every State's obligation not to allow knowingly its territory to be used so as to cause harm to the citizens or property of other States.’

The Trail Smelter rule was taken up in Principle 21 of the Stockholm Declaration on the Human Environment and Principle 2 of the Rio Declaration on Environment and Development, which extend the duty to prevent transboundary harm to areas outside states’ jurisdiction or control. The rule, which has become one of the few uncontested norms of customary international environmental law in the environmental field, was confirmed by the ICJ in the 1996 Advisory Opinion on the Legality of the Threat or Use of Nuclear Weapons.

The rule against significant transboundary environmental harm appears to include as well the duty to adopt preventive measures to protect the environment. Already in the Trail Smelter Arbitration, Canada was ordered to adopt measures to prevent further injury, and such a duty is now at the core of numerous contemporary environmental treaties.3 The same approach was adopted by the International Law Commission in Article 3 of the 2000 draft Convention on the Prevention of Transboundary Harm.4

Beyond the realm of the rule prohibiting transboundary harm, it remains difficult to identify uncontested principles of international environmental law. The paucity of judicial practice on principles such as precaution (see Chapter 25 ‘Precaution’) or sustainable development (see Chapter 26 ‘Sustainable Development’), and the divergence of views on their legal status among states and academic observers alike, complicate the task. Therefore, answering the central background questions of the law of state responsibility, pertaining to the status or content of the primary rule that was breached, is particularly taxing within international environmental law.

(p. 1014) 2.2 Due Diligence and the Strict/Absolute Liability Standard

The concept of due diligence derives from general international law. It is a relative concept, depending on the circumstances and issue at hand and taking into account the diverse conditions of particular states. There is almost unanimous agreement that the prevention of harm is an obligation of due diligence. This conclusion is reflected in the ILC's draft Convention on the Prevention of Transboundary Harm (Articles 3–7). From a practical point of view, however, the due diligence concept poses a host of evidentiary difficulties—causality being one of them. The paucity of international law practice, judicial or otherwise, concerning the definition of the standard of care required by states makes it very difficult to develop the law of state responsibility into a satisfactory framework for environmental protection.

One alternative way forward, which has been suggested by some writers, is the adoption of strict liability as a general standard for environmental damage.5 However, the standards of strict or absolute liability are themselves not free from difficulties, due to the difference between the concepts of strict liability and liability for risk. Moreover, some writers have distinguished between strict and absolute liability, in that strict liability offers greater range of exculpatory factors precluding responsibility than absolute liability.6 Furthermore, there is no prevailing state or treaty practice or case law that supports a general strict or absolute liability standard. The only relevant claim was based on the 1972 Convention on International Liability for Damage Caused by Space Objects, a convention that does establish an absolute liability standard, but this case was settled by an ex gratia payment and is, therefore, of no value as a precedent. In any case, other environmental treaties, such as the 1997 United Nations Convention on the Law of Non-Navigational Uses of International Watercourses, are based on the due diligence standard. Clarity on the prevailing standard cannot be sought in national laws, which also differ greatly in their support for strict or absolute liability.

2.3 Question of Harm

The question of harm (damage)7 too has caused many differences of views, misunderstandings, and misinterpretations. Like the question of fault, the issue of harm is (p. 1015) not covered by the ILC Responsibility Articles, since it was seen to belong to the realm of primary, rather than secondary, rules.8 In Trail Smelter, the Arbitral Tribunal recognized only economic harm. Yet the contemporary concept of harm arguably encompasses not only injury to persons and property, but also to the intrinsic value of the environment, including individual components and whole ecosystems.9 However, defining and evaluating purely ecological harm is complex and has remained controversial, as is evidenced by the problems that have arisen in this respect in national laws. Moreover, an additional problem arises in international law as it is unclear which entity, if any, would be entitled to claim for harm to common spaces—that is, areas beyond national jurisdiction. A further issue concerns the threshold of harm—that is, the level at which transboundary harm becomes impermissible or, in the terminology of the law of state responsibility, ‘wrongful’. This question is not settled. While the Trail Smelter case set the threshold of harm at a ‘serious’ level, Principles 21 and 2 of the Stockholm and Rio Declarations do not include any references to a threshold of harm. In turn, the treaty-based formulations that do exist differ from each other in this regard. For example, the 1997 United Nations Convention on the Law of Non-Navigational Uses of International Watercourses and the ILC draft Convention on the Prevention of Transboundary Harm appear to lower the threshold of harm to ‘significant’, which is defined by commentaries to these instruments as ‘not necessarily substantial but more than trivial.’ In short, the ambiguities in the threshold of harm contribute to the general confusion regarding the workings of the law of state responsibility in relation to the environment.

3 State Responsibility (Obligations Of States Under Secondary Rules)

3.1 General Framework of the Law of State Responsibility—Chorzow Factory Case

The general principles of state responsibility are applicable in the context of the breach of environmental law norms. These general principles can be traced back to (p. 1016) the judgment in the Chorzow Factory case, according to which an illegal act (or omission) requires reparation.10 This requirement is further developed in the following statement of the court:

‘The essential principle contained in the actual notion of an illegal act is that reparation must, as far as possible, wipe out all the consequences of the illegal act and re-establish the situation which would in all probability have existed if that act had not been committed. Restitution in kind, or if that is not possible, payment of a sum corresponding to the value which restitution in kind would bear; the award if need be of damages for loss sustained which would not be covered by restitution in kind or payment in place of it—such are the principles which serve to determine the amount of compensation for an act contrary to international law.’

3.2 Introduction to the Work of the ILC on State Responsibility

‘State responsibility’ was one of the original topics that the ILC was charged to codify when it was set up in 1948. Work on this topic started in 1956 and, originally, was limited to the narrow topic of diplomatic protection (though within this limited topic, the ILC's initial work addressed both primary and secondary rules). However, it was soon decided that the work on state responsibility should cover a much wider range of international obligations. At this stage, it became apparent that it would in fact be impossible to codify rules relating to the content of international obligations generally (‘primary rules’), due to their infinitely varying nature. It was therefore decided to limit the work to secondary rules, and this work started in 1963 and led, in 2001, to the adoption of 59 ILC Articles on Responsibility of States for Internationally Wrongful Acts (ILC Responsibility Articles). These articles concentrate on the ‘framework or matrix of rules of state responsibility identifying whether there has been a breach by a State and what were its consequences’11—that is, on secondary rules.

The ILC Responsibility Articles on state responsibility are ‘rigorously general in…character.’12 As one commentary has noted, they apply to ‘all types of international obligations regardless of their source, subject matter, or importance to the international community. They apply to both acts and omissions, to treaty obligations and customary norms, to breaches of bilateral as well as multilateral obligations, and the whole gamut of particular subject areas—human rights law, environmental law, humanitarian law, economic law, the law of the sea, and so forth.’13 As a result of their generality, the secondary rules of state responsibility can be articulated independently of the primary rules of obligation.

(p. 1017) 3.3 Main Elements of the ILC's Approach to State Responsibility

In the codification of these secondary rules, the ILC adopted the following broad approach. In Part 1 of the articles, it envisaged, as the necessary basis to trigger state responsibility, the commission of an internationally wrongful act by a state—an act or omission that is attributable to a state under international law and that constitutes a breach of an international obligation (Article 2). Such an internationally wrongful act entails the international responsibility of a state (Article 1). Chapter 5 of Part 1 identifies circumstances that preclude a finding of wrongfulness. These circumstances include force majeure, distress, necessity, compliance with peremptory norms, self-defence, consent of the state against which an otherwise wrongful act has been committed, and the fact that the wrongful act constituted a countermeasure in response to a prior breach of international law (Articles 20–7).

Part 2 of the Articles deals with what is referred to as the ‘content of the international responsibility of a State,’ which, broadly speaking, refers to the issue of remedies. These remedies are defined in general terms as reparation for injury, which can be accomplished in a number of ways, including restitution, compensation, and satisfaction. The final Part 3 of the Articles deals with the implementation of the international responsibility of a state. This part includes, first, rules on the ‘invocation’ of responsibility. As will be discussed in more detail later in this chapter, while an ‘injured State’ (Article 42) may always invoke the responsibility of another for a breach of international law, the articles also outline certain circumstances under which other states may invoke that responsibility (Article 48). Further, this part fleshes out the concept of countermeasures, by which is meant actions taken by an injured state against the state that is responsible for an internationally wrongful act in order to induce that state to comply with its obligations under Part 2 (Article 49).

Unfortunately, at this stage in the development of international environmental law, once one looks beyond stating the general principle that breaches of international law incur state responsibility, one encounters numerous problems. First of all, environmental treaties, to the extent that they address the issue, employ very different definitions of ‘environment’. Moreover, the content of many of the fundamental primary environmental rules remains vague and subject to significant disagreement between states (such as, for example, in the cases of the precautionary principle, sustainable development, and intergenerational equity) (see Chapter 25 ‘Precaution’; Chapter 26 ‘Sustainable Development’; and Chapter 27 ‘Equity’). Case law, which might help address the difficulties concerning the primary norms in the field, is scant. There are also further questions, specific to environmental law, that put in doubt the usefulness of the application of the general law of state responsibility. One such problem, to be discussed further in section 3.5 in this chapter, is the standing of states to invoke responsibility of other states in the case of breach (p. 1018) of obligations owed erga omnes (to the whole community of states) and erga omnes partes (owed to the parties of a multilateral treaty).

3.4 Reparation

The ILC draft Article 31 articulates a single system of reparation, which applies to all of international law, including environmental law: ‘1. the responsible State is under an obligation to make full reparation for the injury caused by the internationally wrongful act. 2. Injury includes any damage, whether material or moral, caused by the internationally wrongful act of a State.’ The forms of reparation envisaged by the law of state responsibility are restitution, compensation, and satisfaction, ‘either singly or in combination’ (Article 34). Article 35 on restitution describes it as the re-establishment of the situation that existed before the wrongful act was committed, unless restitution is materially impossible or involves a burden out of all proportion to the benefit deriving from restitution instead of compensation. Article 36 on compensation describes the obligation to compensate for the damage, ‘insofar as such damage is not made good by restitution.’ Compensation will cover any financially assessable damage, including loss of profits, insofar as it is established. Satisfaction is the form of reparation that is employed when restitution or compensation cannot be used. It may take the form of an acknowledgment of the breach, an expression of regret, or a formal apology (Article 37).

In practice, a number of hurdles stand in the way of reparation for environmental harm. The first and fundamental problem is, again, the question of the content of the primary rule. Aside from the previously mentioned concerns, to the extent that the scope of international environmental protection requirements remains uncertain, some environmental harm may simply fall outside the realm of what states can be held legally responsible for.14 For example, beyond the prohibition of transboundary damage, what is the scope of obligations to protect global commons or to protect ecosystems? In addition, cases involving environmental harm often raise particularly complicated causation questions. The general standard provided by the ILC Responsibility Articles may not prove too helpful in this context. The ILC commentary to the articles simply describes the link that must exist between the wrongful act and the injury in order for state responsibility to arise as a sufficient causal link, which is not too remote.15

The main forms of reparation—restitution and compensation—raise specific kinds of difficulties in the environmental context.Article 35 on restitution focuses on the restoration of the status quo ante.16 In principle, the utility of restitution to remedy environmental harm should be obvious. It may also avoid some controversies, as it relates to restoration of a pre-existing factual situation, which does not involve the (p. 1019) complex valuation questions associated with compensation. However, in some cases, environmental harms are irreversible, and, hence, restitution will be impossible. In other cases, restitution may be possible but will entail unreasonable burdens. As a result, restitution may not always be an option or may have to be complemented by compensation to ensure full reparation.

It is generally agreed that compensation is due only for established ‘financially assessable damage’, including environmental harm. Indeed, the UN Compensation Commission assessed Iraq's liability for environmental damage and the depletion of natural resources. The ILC certainly considered environmental harm to fall into this category, as the commentary to the ILC Responsibility Articles suggests by singling out pollution as one of the areas in which states may seek compensation for harm suffered. As the ILC also observed in its commentary to the articles, generally in the practice of states, when compensation has been awarded, payments have been made to reimburse the injured state for expenses reasonably incurred in preventing or remedying pollution or compensating for the diminished value of polluted property. Therefore, as the law stands at present, compensation will include clean-up costs and property devaluation. The ILC acknowledged, however, that actual damage would often extend to such environmental values as biodiversity, amenity, so-called ‘non-use’ values, which are, ‘as a matter of principle, no less real and compensable than damage to a property, though [they] may be difficult to quantify.’17 Similarly, it is unclear whether notional or non-market based value to depleted resources would be covered under the formulation of ‘financially assessable damage.’18

Finally, there are also other forms of non-quantifiable, non-individual harm to the environment, which cannot be remedied based on available methods of reparation. The ILC Rapporteur singled out as such the release of chlorofluorocarbons (CFCs) or other ozone-depleting substances causing environmental harm. Arguably, these kinds of diffuse wide-spread releases can only be addressed by special treaty regimes, which not only allocate risk but also introduce standards of conduct for the parties.19

The above considerations indicate that the general legal framework of the law of state responsibility is relevant to the reparation for environmental harm that can be evaluated on a traditional basis. International practice confirms that compensation for environmental harm encompasses restoration, clean-up costs, and harm to persons and private property. However, other elements that one may see as encompassed in the notion of environmental harm, such as the loss of biological diversity, wild fauna and flora, or ecosystems, escape the classical structure of reparation under the law of state responsibility. Therefore, when neither restitution nor compensation can be resorted to, satisfaction is the only remaining means of reparation for the injured state to rely on.

(p. 1020) In sum, the value of the law of state responsibility in cases of transboundary harm currently is limited. There is no certainty as to the applicable standard of fault. And even if claims for compensation are limited to ‘financially assessable damage’, the interpretation of this phrase has yet to take full account of the particular demands of environmental valuation. This suggests not that we abandon the goal of compensating for environmental loss but, instead, that we focus on methods of valuation and on overcoming the objection that something that is not necessarily ‘property and that has no ‘market value’ has no ‘financial or economic worth’.20

3.5 State Responsibility and the Multilateralism of Environmental Obligations

One of the problems of the law on state responsibility has been how to overcome the classical bilateralism of the duty/right paradigm21 and how to reflect the features of the many environmental obligations that have as a goal the protection of the common interest. Concerns regarding certain common areas or systems, such as the ozone layer, the climate system, or the high seas are good examples of common interests that should be protected. However, there may not be an obvious injured state when environmental harm is caused in these cases. The classical bilateral approach to international obligations flows from a particular concept of ‘injury’, which is rooted in a legal interest.22 It may be relevant to observe that both climate change (although with respect to climate change, there are likely to be at least some injured states, such as small island states) and biological diversity have been defined as having the character of ‘common concern , and deep-seabed mining together with outer space as having the character of the common heritage of humankind. Such concepts presuppose a ‘legitimate interest’ of the international community as a whole (see Chapter 23 ‘Common Areas, Common Heritage, and Common Concern’). The concept of obligations erga omnes may help address these types of issues. It relates to concerns in the protection of which all states have a legal interest.23 However, many aspects of the legal character of erga omnes obligations are still arguable, and the concept ‘is frequently invoked for more that it can bear.24 In 1974, the ICJ did not address the (p. 1021) legal possibility of an actio popularis by any state to enforce common environmental interests.25

Important changes were introduced by Articles 42 and 48 of the ILC Responsibility Articles, which manage in many respects to capture the expanding multilateralism of contemporary legal obligations. Even considering that Article 48 probably represents, at least in part, progressive development rather than existing customary law, it constitutes an important developments.26 It has been met, however, with a certain degree of scepticism by states.

Article 42, which stipulates when a state can invoke the responsibility of another, rests on the concept of directly injured states. Article 42 applies not only to bilateral obligations, but also to collective obligations owed to the international community (erga omnes) or to a group of treaty parties (erga omnes partes). However, only when it is directly affected can a state invoke the responsibilities of another for violations of such obligations. Article 48 does suggest a way forward for third states wishing to redress breaches of obligations of public interest, irrespective of direct injury to them. It encompasses erga omnes obligations flowing from custom and obligations deriving from the multilateral environmental regimes that have been set up, for example, by the treaties on climate change and biodiversity, in the implementation and maintenance of which all parties have a common legal interest (obligations erga omnes partes).27 In fact, given the current state of customary law, collective obligations are almost entirely found in treaties. However, even when third states have standing under Article 48, they have only a very limited right to seek reparations and to adopt countermeasures in the event of the breach of community obligations. It appears that third states only have the right to seek cessation and assurances and guarantees of non-repetition of any breach of an obligation owed to the international community (Article 48). The law of countermeasures is also very limited. The adoption of countermeasures is only allowed on behalf of an injured state, and, in the case of ‘victimless’ breach, their use is altogether banned (Article 54).28

The unclear character of obligations erga omnes and, to a certain extent, erga omnes partes, coupled with the problems relating to reparations and countermeasures in cases of a breach of the obligations owed to the community of states, suggest the need for other more effective systems of ensuring compliance with such obligations. It appears that, at least in cases of obligations erga omnes partes, such a solution may be provided by treaty-based compliance mechanisms. Despite the promise of Article 48 of the ILC Responsibility Articles, the articles’ basic framework has not overcome the classical bilateralism of the redress of harm between states. The institutions of reparation and countermeasures traditionally rely on the bilateral relations of states. (p. 1022) Additionally, the general procedural requirements that standing before international courts requires consent and a well-defined legal interest preclude the submission of a claim of state responsibility in cases of ‘victimless’ harms to the global commons.

4 Development Of Primary Rules Of State Liability—Liability For Injurious Consequences Of Acts Not Prohibited By International Law

It was thought that the customary law standard ofdue diligence, without a clear normative content and requiring a complicated burden of proof, was not adequate to cover ultra-hazardous activities, such as those emanating from a nuclear power plant. These considerations prompted the International Law Commission to begin work in 1978 on the Articles on Liability for Injurious Consequences of Acts Not Prohibited by International Law.29 This regime was to be based on a standard of strict liability for activities involving risk of significant transboundary harm, which either is unforeseeable or, if foreseeable, is unpreventable even if a state takes due care.

The conceptual premise of this regime was the lack of wrongfulness on the part of the state conducting the activity or under the jurisdiction of which the relevant activities occurred. Therefore, the ILC sought to propound liability rules that would apply without a previous finding of responsibility for a wrongful act or omission. The conceptual basis is that certain activities are justified from a cost-benefit standpoint and should not be prohibited. However, if they cause injury, both the polluter pays principle and the notion of compensatory justice suggests the need for compensation by the state causing the injury to the state suffering the harm.30 This approach resulted in the separation of the liability topic from that of state responsibility—an approach that was seen by many to be ‘fundamentally misconceived’.31 The key complaint of the critics was that in the law of state responsibility, the issue is not whether the relevant activity as such is unlawful but whether the home state fulfils its due diligence duty to avoid causing transboundary harm.32

(p. 1023) Finally, following sustained criticism of several drafts, the ILC decided to further divide the liability topic into a part on the prevention of transboundary harm from hazardous activities and a part on liability for injurious consequences. The liability part is focused on the legal regime for allocation of loss from transboundary harm arising out of hazardous activities, on which two reports have been thus far submitted. It has now been reoriented to focus on civil, rather than state, liability. The first (prevention) part was completed in 2001 with the adoption of the draft convention on the primary obligation of states concerning harm prevention. The draft convention outlines primary rules of conduct aimed at preventing or minimizing the risk of significant transboundary harm (Articles 1 and 3). In other words, the fundamental premise underlying the draft convention is the need for management of risk and cooperation and consultation between states. Harm is defined broadly as losses to persons, property, and the environment, although there is no definition of what encompasses the environment. The commentary to the draft convention explains that risk of causing significant harm refers to a combined effect of the probability of occurrence of an accident and the magnitude of its injurious impacts.33

In keeping with what the ILC considered to be the basic standard of international environmental law, the level of care incorporated in the duty of prevention is that of due diligence. It encompasses the adoption of all appropriate measures for the prevention of significant transboundary harm by the state of origin (Article 3).34 The draft convention affirms a number of important procedural obligations between states, which have to contribute to the avoidance of significant transboundary harm: cooperation (Article 4); notification and information (Article 8); consultation on preventive measures (Article 9); and exchange of information (Article 12).

The draft convention is animated by a principle of the equitable balancing of interests, which emphasizes consultations between states to find the best possible solution regarding measures to be adopted in order to prevent significant transboundary harm or minimize the risk thereof (Article 9(2)). Article 10 provides a non-exhaustive list of factors to be taken into account in order to achieve an equitable solution. It is worth noting that the principle of equitable balancing of interests has long played a pivotal role in the context of the transboundary management of certain types of resources, notably freshwater resources. In the draft convention, the principle relates to the adoption of equitable measures for harm prevention, which places the balancing of interests in a totally different context. The interests of all involved states have to be considered, therefore departing from traditional bilateralism of international environmental law.

Another important feature of the draft convention is that it builds on existing international customary law, notably the no harm rule derived from the Trail Smelter Arbitration. By contrast, the previous liability drafts of the ILC had been attempts to promote progressive development of international law. The draft convention (p. 1024) clarifies the content of environmental procedural rules and, most importantly, confirms the duty of due diligence as the standard underlying international environmental obligations.

5 Civil Liability Regimes

5.1 Introduction

Given the difficulties inherent in establishing the direct liability of states in relation to environmental damage under the state responsibility or liability regimes, an alternative system has been developed based on civil liability regimes. These regimes recognize the competence of national courts, either in the state where the damage was caused or in the state of nationality of the polluter, to decide cases regarding the liability of the actual parties causing damage outside the state in which they are based. Such decisions thereby become enforceable in other states parties to the agreement. This system has been used to address a number of objectives, largely aimed at remedying shortcomings in the system of state responsibility or liability. Thus, first, the system has been perceived as embodying the polluter pays principle, although as will be seen later in this chapter, it does not do so in a completely pure form. Second, the system has been used to establish a principle of absolute liability with respect to ultra-hazardous activities. Third, it has been used, particularly through recent protocols to existing civil liability regimes, to clarify the inclusion of environmental damage as a head of claim. Fourth, the system is used to establish liability for economically beneficial activities that involve certain risks even when performed with due care, such as the maritime transportation of oil and other hazardous cargo and nuclear activities.35

Civil liability regimes arose, initially, in relation to particular forms of ultra-hazardous activity, notably in regimes relating to nuclear activities and to oil pollution by ships. In fact, these two regimes (both of which are described in more detail later in this chapter) remain the most significant examples of civil liability regimes. However, the concept has been introduced on a wider basis in the meantime. Thus, states started to include civil liability regimes as a part of more general regimes set up under MEAs—for instance, the 1999 Basel Protocol on Liability and Compensation for Damage Resulting from Transboundary Movements of Hazardous Wastes and Their Disposal (Basel Liability Protocol) to the 1989 Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (Basel Convention). The recent International Maritime (p. 1025) Organization (IMO) conventions—namely, the 1996 International Convention on Liability and Compensation of Hazardous and Noxious Substances by Sea (HNS Convention) and the 2001 International Convention on Civil Liability for Bunker Oil Pollution Damage—evidence the trend of the expanding number of (at least sectoral) civil liability regimes, which, however, as observed below are fraught with difficulties. As noted earlier, the ILC is still working on the Liability for Injurious Consequences of Acts Not Prohibited by International Law project, in which the focus has been switched from state to civil liability.

There are a number of common features of the nuclear and oil pollution civil liability regimes that may now be said to be typical of civil liability regimes, as they are largely reproduced in MEA-based civil liability regimes. These features include the strict liability of the operator; the limitation of this liability at a certain ceiling; and mandatory insurance or other form of financial security to cover the liability of the operator. Further, given that these liability ceilings may not be sufficient to cover the damage suffered by injured parties, the regimes have introduced (usually by supplementary convention) additional tiers of compensation. In relation to nuclear liability, this additional tier is funded by the states themselves and, in the case of oil pollution, by the oil industry. Another common feature is that the nuclear and oil pollution regimes recognize harm to the environment, primarily in the guise of costs of reinstatement of the affected environment.

There are also several inherent problems with civil liability regimes, which render them unsuitable for certain types of environmental damage. Problems arise, in particular, when there are difficulties in establishing a causal link between the damage, the activity, and the defendant, as in global climate change, ozone depletion, trans-boundary air pollution, and marine pollution, in relation to diffuse sources of harm from land-based pollution.36

5.2 Nuclear Liability

The civil liability regimes in relation to damage resulting from the peaceful use of nuclear energy are structurally very similar to those that deal with oil pollution damage. Some of the difficulties with these regimes stem from the fact that, since the early 1960s, two separate major regimes have co-existed. The first one came into existence under the auspices of the International Atomic Energy Agency (IAEA) (the 1963 Vienna Convention on Civil Liability for Nuclear Damage), and the second under the Organisation for Economic Co-operation and Development (OECD), and was set up by the 1960 Convention on Third Party Liability in the Field of Nuclear Energy (Paris Convention) and the 1963 Brussels Supplementary Convention. The new (p. 1026) regime set under the Vienna Convention was directed at worldwide participation. The parties to the Paris and Brussels Conventions are basically OECD members.Both these conventions were amended by the 1964 Additional Protocol and 1982 Protocol.

In 1988, a Joint Protocol Relating to the Application of the Vienna Convention and the Paris Convention (Joint Protocol) was adopted. The Joint Protocol established a link between the conventions, combining them in effect into one expanded liability regime. Parties to the Joint Protocol are treated as though they are parties to both conventions and a choice of law rule is provided to determine which of the two conventions should apply to the exclusion of the other in respect of the same incident. In 1997, the Protocol to Amend the Vienna Convention (in force in 2002) and the Convention on Supplementary Compensation for Nuclear Damage were adopted (not in force). In 2004, the parties to the OECD Paris and Brussels Conventions signed the Amending Protocol (not in force), which brought the Paris Convention more in line with the IAEA 1997 conventions. The amendments are aimed at the provision of compensation for more people for a broader scope of nuclear damage to include environmental damage and economic costs. They also shifted more of the burden of insurance onto industry and extended the definition of nuclear damage to include environmental damage and economic costs. The scope of application is also broadened. The definition of nuclear damage also contains the costs of measures to reinstate a sigificantly impaired environment, and the cost of preventive measures. Additionally, the geographical scope of the Paris Convention has been expanded.

The Paris Convention set a maximum liability of 15 million Special Drawing Rights—SDR (about €18 million), but this was increased under the Brussels Supplementary Convention up to a total of 300 million SDR (about €360 million), including contributions by the installation State up to 175 million SDR (€210 million) and other parties to the convention collectively on the basis of their installed nuclear capacity for the balance.The most important features of the revised Paris Convention, as amended by the 2004 Protocol include an increase in the nuclear operator's liability amount to a new minimum of €700 million. In addition, the minimum liability amount applicable to low-risk installations and transport activities will climb to €70 million and €80 million respectively.

The most important feature of the revised Brussels Supplementary Convention is a substantial increase in the three tiers of compensation under the convention. The first tier, corresponding to the minimum liability requirement under the Paris Convention, jumps to €700 million and continues to be provided by the operator's financial security, failing which it must be provided by the installation state from public funds.

The second tier climbs to a new high of €500 million and continues to be provided from public funds made available by the installation state. The third tier (international) rises to €300 million and continue to come from public funds provided by all contracting parties. Total compensation available under the revised Paris-Brussels regime is now €1.5 billion, compared to the previous amount of €300 million IMF Special Drawing Rights (approximately €350 million).

(p. 1027) Amended by the 1997 Protocol, the 1963 Vienna Convention sets the possible limit of the operator's liability at not less than 300 million SDR (about €360 million). The Convention on Supplementary Compensation for Nuclear Damage defines additional amounts to be provided through contributions by states parties collectively on the basis of installed nuclear capacity and a UN rate of assessment, basically at 300 SDRs per MW thermal (that is, about €360 million total).

The liability regimes were motivated by the recognition that, while the nuclear industry required encouragement for development, nuclear activity involves risks of serious accidents. Against this background, the core foundations of the conventions are the same: liability is absolute—no proof of fault or negligence is necessary (only a few exceptions are allowed); liability is channelled exclusively to the operator—either a state or a private party of the nuclear installation or a ship (in certain cases, a carrier or a handler of nuclear material may be treated as an operator); limitations may be placed on total duration or amount of liability; and payment up to the set limit of liability is supported by compulsory insurance or security held by the operator and guaranteed by the state of installation or registry. Under the Vienna Convention, the upper ceiling is not fixed, but it may be limited by the legislation of each state.

Recognizing that the amount for which the operator can be liable may not be sufficient to cover the damage suffered by injured parties, the Paris and Vienna Conventions provide for additional funds under supplementary conventions. This provision for payment of damages over and above the limited liability of the operator can be seen as compromising the polluter pays principle, notably because the additional payments are funded by the state.

The practical significance of the nuclear liability regime, however, may be questioned because major nuclear powers remain non-parties, such as the United States, Canada, South Korea, and Japan. Furthermore, some non-nuclear states did not ratify these conventions because they considered that victims might be able to obtain higher compensation under national laws than that provided by the conventions.37 States with a majority of the world's 440 nuclear power reactors are not parties to any nuclear liability conventions. Moreover, and probably related to these facts, neither convention has ever been the basis for a claim.38

5.3 Liability for Oil Pollution

Oil pollution damage is covered by an extensive number of conventions, adopted under the auspices of the IMO: the 1969 International Convention on Civil Liability for Oil Pollution Damage, as amended by the 1992 protocol (CLC Convention), which was a result of the Torrey Canyon catastrophe. Final amendments were (p. 1028) adopted in 2000 (amendments in force), including to the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, as amended in 1992 (Oil Fund Convention) and again in 2000. The 2000 amendment raised the maximum amount of compensation payable by the fund for a single incident, including the limit established under the 2000 CLC Convention amendments, to 203 million special drawing rights (SDR) (US $260 million), up from 135 million SDR (US $173 million).39

The amended conventions are widely used, and compensation of many hundred of millions of US dollars has been paid under them. The 1992 CLC Convention is based on the strict liability of the ship owner. However, ship owners can exonerate themselves if they prove that the loss resulted from war, hostilities, insurrection, civil war, natural phenomena, such as hurricanes that are of an exceptional character or persistence, or was wholly caused intentionally by a third party or by the negligence of those responsible for navigational aids (Article 3).

The oil pollution liability regime was originally based on a two-tier system in which the owner of the tanker that caused the spill is strictly liable for the payment of compensation under the first tier, up to a maximum amount. The tanker owner is required to hold requisite insurance coverage, in which the source of money is provided by the Protection and Indemnity Clubs (P&I Clubs). The second tier, which covers liability above the ceiling on the liability of the owner under the first tier, is paid out of a supplementary fund set up by the Oil Fund Convention. The fund is made up of contributions from persons who receive oil by sea in contracting states. The concerns regarding the impact of liability limits and two-tiered compensation systems on the implementation of the polluter pays principle in the nuclear liability context do not apply with quite the same force in the oil pollution context. Since the additional payments are funded by the oil industry, it is possible to view the approach as providing ‘a very wide definition of the polluter in the case of an accident to an individual ship,’40 by extending the definition of a polluter from the actual individual operator to the industry as a whole.

In May 2003, a new protocol establishing a Supplementary Fund for Oil Pollution Damage was adopted (in force 2005), which introduced a third tier of compensation for oil pollution damage—the aim of which is to supplement the compensation available under the 1992 CLC and Oil Fund Conventions with an additional third tier of compensation. The protocol is optional and participation is open to all states parties to the 1992 Oil Fund Convention. Annual contributions to the fund will be made in respect of each contracting state by any person who, in any calendar year, has received total quantities of oil exceeding 150,000 tons.

(p. 1029) The Supplementary Fund has available an amount of about £436 million (US$ 845 million), in addition to the amount of around £162 million (US$ 314 million) which is available in the present 1992 Fund after the increase which took effect on 1 November 2003. As a result, the total amount available for compensation for each incident in the states which are members of the Supplementary Fund is approximately £597 million (US$ 1,159 million). The Supplementary Fund only covers incidents which occur after the entry into force of the protocol. One of the effects of the protocol will be the possibility of the payment of the compensation at 100 per cent of the amount of the damage agreed between the Fund and the victim in almost all cases. It will also avoid the need to fix the level of payment below 100 per cent of the amount of the damage suffered during the early stages of most major incidents as has been the case in respect of several recent incidents.

The conventions cover oil pollution damage that occurs in the territory, territorial waters, and the exclusive economic zone of a state party. An important factor of a successful claim is a uniform interpretation of the definitions and common understanding of what constitutes an admissible claim. The governments of the member states of the 1992 Oil Fund Convention have established policies and guidelines with a certain degree of flexibility.41 Claims in respect of pollution damage can fall under the following broad categories: preventive measures (including clean-up); damage to property; economic losses; and reinstatement/restoration of impaired environment. Of these, claims for preventive measures are the most complicated. The problem is the interpretation of ‘reasonableness’ of measures adopted by a government or a public body. What constitutes reasonable measures must be decided in each case, and the reasonableness of a measure is difficult to determine in the absence of any clear-cut interpretation. Thus, compensation for clean-up operations always constitutes a problem.

Spills may cause economic loss, such as an impairment of fishing activity or a reduction in tourism, and such loss may be consequential (that is, the direct result of physical damage to a claimant's property) or purely economic (that is, where the claimant did not suffer any damage to his own property but cannot conduct normal economic activities). The validity of the second type of claim is unclear, and it would seem that the only admissible type of claim is one involving loss or damage caused by oil contamination. Therefore, the starting point is the pollution not the incident itself. Thus in order to qualify for compensation, there must be a reasonable degree of geographic and economic proximity between contamination and the loss or damage sustained by a claimant.

Reasonable reinstatement measures are aimed at enhancing the speed of natural recovery of an environment impaired by an oil spill. There are a number of criteria to (p. 1030) be fulfilled for such costs to be admissible. These criteria are aimed at demonstrating that the measures were technically justified, and were likely to enhance significantly the natural process of recovery, and that the costs were reasonable and not out of proportion to the extent or duration of the damage and the benefits likely to be achieved. Compensation is payable only for reasonable measures that are actually adopted or to be adopted and only when a claimant has sustained an economic loss that can be quantified in monetary terms. Claims based on abstract quantification calculated according to theoretical models or claims of a punitive nature designed to punish a polluter are inadmissible.42

Although, the oil civil liability regimes have proved to be a useful tool in obtaining compensation in a large number of cases, it may be said that there are a number of problems that may arise in relation to them, such as the lack of certainty as to the precise, fixed, and objective definition of damage, which is re-defined by the court in each case, depending on the particular circumstances of a case; the difficulties relating to the interpretation of ‘reasonableness’; the only partial implementation of the polluter pays principle (encompassing, at present, operators as well as persons who receive oil and, in the case of nuclear liability, the state); the high burden of proof; and often lengthy litigation.

5.4 General MEAs Setting Up Civil Liability Regimes

Attempts to set up general civil liability regimes under MEAs were seen as one way to overcome the problems inherent in the paradigm of state responsibility for trans-boundary environmental harm. While there are now several such regimes adopted or under development, the focus in this chapter will be on the 1999 Liability Protocol to the Basel Convention, which (though it is not yet in force) typifies such regimes and allows us to highlight the challenges involved in their establishment.

The drafting of the Basel Liability Protocol was completed after six years of protracted negotiations. Its aim is to set up ‘a compensation regime for liability and for adequate and prompt compensation for damage deriving from the transboundary movement and disposal of hazardous wastes (Article 1). Article 6 imposes a duty to notify other states concerned of the proposed transboundary movement of hazardous wastes. The whole process of exporting such wastes is very complicated, therefore, there may be many different parties liable. However, the protocol identifies as the party usually liable the actual exporter, who is strictly liable, albeit only up to a certain limit (Article 12 and Annex B).The protocol also imposes time limits on making claims of ten years from the date of the incident, and of five years from the date when the claimant knew, or ought reasonably to have known, of the damage (Article 13).

(p. 1031) Damage is defined as including loss of life or personal injury; loss or damage to property; loss of income deriving from an economic interest in use of the impaired environment; and costs of certain measures taken to prevent, minimize, or mitigate damage or to effect environmental clean up (Article 2). One of the contentious issues during negotiations was the problem of supplementary payments in the event of damage to the environment exceeding the liability limits set by the protocol. Article 15 (1) provides that in such an event any supplementary measures must be covered by existing mechanisms. It is understood that such a mechanism is provided by the Technical Co-operation Trust Fund, established under the Basel Convention and supplied by voluntary contributions. Developing countries, however, were in favour of a separate fund. The Basel Liability Protocol provides for the possibility of liability based on fault in cases of damage caused by non-compliance with the requirements of the Basel Convention or through intentional or negligent conduct (Article 5).

The Basel Liability Protocol demonstrates the complexity of designing viable civil liability regimes and of the issues and interests to be reconciled. The protocol had to take into account the economic interests of industry, including insurance concerns, relating to waste transfer and concerns of transit and recipient countries as to the risk involved in movements of such materials and securing proper compensation. It also had to be acceptable to both developed and developing countries.

5.5 Conclusions on Sectoral and MEA-Based Civil Liability Regimes

If holding states liable for environmental harm is fraught with difficulty, it would appear that civil liability regimes are also not always an adequate or suitable tool for ensuring compensation. Another drawback is that civil liability treaties do not ‘provide compensation in the case of damage to non-economic components of the environment (such as fauna or flora not exploited by man) where it is not possible to take measures to restore the environment.’43 Thus, they do not address the problem of compensating for damage to the environment as such. Practice demonstrates as well that states are very reluctant to ratify liability regimes, and that there is no single system that provides a general pattern that could be applied across the board. In fact, such a solution is impossible, as liability regimes should fit structurally the activity in question. Thus, the one successful liability regime, namely that which is available for oil pollution damage, would not necessarily be a model for other areas. Even this regime is not free from shortcomings, as noted earlier in this chapter, since compensation under this regime is based on reasonableness—a concept that lends itself to many different interpretations. Some states that are parties to the oil liability (p. 1032) regime—for example, France in case of the Amoco Cadiz spill—have in the past decided to initiate claims outside the treaty regime in US courts because possible compensation is higher.

In sum, the apparent trend towards the negotiation of liability regimes must be carefully considered in order to avoid wasting precious negotiating resources on regimes that will not prove effective in preventing or compensating environmental damages. Each issue area must be closely scrutinized to determine whether a civil liability regime would be beneficial for redressing environmental damage, as it clearly appears that several environmental fields are not suitable for such regimes.

5.6 Development of a General Regime on Civil Liability—Work of the ILC on a Liability Regime

In 2003, Special Rapporteur Rao submitted the first report on the liability regime. Although the project retains the old title on liability for injurious consequences, it is in fact now becoming a legal regime for the allocation of loss in case of transbound-ary harm arising out of hazardous activities and focuses only on the issue of civil liability. The main premise of the commission's work will be to develop a model that would be both general and residual in character.44 The Rapporteur drew several very important conclusions for his future work from the criticism of the previous work of the ILC, which was characterized by a very piecemeal and unfocused approach. In his first report, the Rapporteur presented the main principles on which civil liability and compensation would rest, namely that liability is to be attributed to the person most in control of the activity—that is, the operator who has to take out insurance to cover his liability; that the casual link between the person and the activity should be reasonably traced; and that the limited liability of the operator should be supplemented by additional funding mechanisms. The state should also ensure that means are available within the legal system, in accordance with international standards, for the equitable and expeditious compensation and relief of victims of transboundary harm, since harm to persons and property is compensable. Where actual restoration of the environment or natural resources is impossible, costs incurred to introduce equivalent elements could be reimbursed.45 It may be noted that the basic points covered in the draft largely follow the format established in the nuclear and oil pollution conventions.

In his second report, Rao presented the views of states on the allocation of loss.46 Support was given for assigning liability first to the operator, as the main beneficiary (p. 1033) of the activity and the creator of the risk. An important feature of such a scheme is that it is in line with the polluter pays principle. However, the issue concerning the types of harm eligible for compensation is one of the matters not solved and one that remains in dispute. Both states and the ILC were of the view that harm to persons, property, including the elements of state natural heritage and state patrimony, as well harm to the environment and natural resources within the jurisdiction or control of a state should be covered. Harm to global commons remains a contentious issue. Some of the members of the ILC felt that global commons are sufficiently protected through several conventions, such as the 1982 UN Convention on the Law of the Sea (however, these conventions do not contain rules on liability). Some were of the view that a more integrated approach to the regulation of the global commons should be centred on obligations erga omnes. Numerous obstacles were mentioned preventing inclusion of redress of harm to the environment per se, such as problems in establishing a causal connection, the standing of parties to sue, and the quantification of harm.47 In 2004, the the ILC adopted the complete set of draft principles, which differed in certain fundamental aspects from the set proposed by the special rapporteur in his second report. In particular, it changes the principles from hard law to soft law by replacing the imperative ‘shall’ to the persuasive ‘should’ in the operative provisions of the draft. Principle 1 as adopted by the ILC confirms that the principles apply to ‘damage caused by activities not prohibited by international law which involve a risk of causing significant transboundary harm through their physical consequences.’ Thus liability is not absolute as that would be on liability for ‘unforseeable damage’.48

The difficulties of setting up an efficient and general liability regime are illustrated by the failure to enter into force of the 1993 Council of Europe Convention on Civil Liability for Damage Resulting from Activities Dangerous to the Environment (Lugano Convention), which harmonizes laws on environmental damage but which due to several factors, such as its incorporation of unlimited liability and the existence of a number of sectoral liability treaties, will probably never become binding.

In conclusion, the work of the ILC on civil liability for environmental harm, although conceptually different from the earlier drafts, may still encounter difficulties, which may be summarized as follows: (1) civil liability regimes are not uniform and therefore may make it problematic to set up a general system, such as the 1993 Lugano Convention; (2) the scope and the extent of the role of the state in redress of (p. 1034) victims is unclear; (3) the scope of compensation for harm is ill-defined and the compensability of the intrinsic value of the environment is questionable, as is the compensability of harm to the global commons; and (4) for environmental harm to be eligible for compensation, there usually must be an anthropocentric element.

6 Conclusions

The lack of effectiveness of state responsibility as a means of addressing environmental harms results, in part, from the vague and ill-defined nature of the many primary rules of international environmental law. The due diligence requirement that is inherent in many of these primary rules is also not well suited to allowing for compensation of transboundary environmental harm. However, other reasons for the ineffectiveness of state responsibility flow from the outlook and structure of its secondary rules. For example, the goals of state responsibility are not focused directly on promoting compliance with environmental norms. Rather, state responsibility is reactive and aimed at setting up a system of dealing with the consequences of breaches of the norms of international law. It is triggered only by the commission of a wrongful act by a state. In addition, state responsibility may shape the behaviour of states to a certain extent through deterrence. However, by definition, state responsibility has very limited indirect influence, mediated through a state, on the private actors who are primarily responsible for causing pollution.

Efforts have been made to fill at least the latter gaps through the development of various civil liability regimes. It would appear that these regimes were intended as a means both for encouraging environmental protection and for enhancing the chances of pollution victims being compensated. As for the first of these roles, three potential benefits are generally mentioned. First, they can help with the implementation of the polluter pays principle. Second, they play a potential role as an economic instrument, providing incentive for compliance with environmental standards and, thereby, preventing the occurrence of environmental harm. Finally, they are supposed to provide a ‘back up’ system, which can be activated in the event of the occurrence of environmental harm, notwithstanding the legal framework of the underlying protection regime. Close scrutiny reveals, however, that there is as yet little supporting evidence for these arguments. There is a marked absence internationally and domestically of evidence indicating the effectiveness of either the preventive or incentive functions of strict liability regimes.49 Sadly, there are no clear indications that they shape the behaviour of the polluter.

(p. 1035) These weaknesses in the responsibility and liability approaches to environmental protection highlight the need for a ‘new way’. Given the importance of preventing environmental harm, this new way may lie in the development of compliance regimes that help keep harms from occurring in the first place.

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                        (1) Draft Articles on Responsibility of States for Internationally Wrongful Acts, Report of the International Law Commission on Its Work of Its Fifty-Third Session, 56 U.N. GAOR Supp. (No. 10) at 43, UN Doc. A/56/10 (2001) [ILC Report on Fifty-Third Session]. See J. Crawford, The International Law Commission's Articles on State Responsibility, Introduction: Text and Commentaries (Cambridge: Cambridge University Press, 2002).

                        (2) P.S. Rao, First Report on the Legal Regime for Allocation of Loss in Case of Transboundary Harm Arising Out of Hazardous Activities, UN Doc. A/CN.4/531 (21 May 2003) at para. 16.

                        (3) P. Birnie and A. Boyle, International Law and Environment (Oxford: Oxford University Press, 2002) at 111–12.

                        (4) It requires all parties to adopt ‘all appropriate measures to prevent or minimise risk of significant transboundary harm.’

                        (5) See, e.g., L.F.E. Goldie, ‘Liability for Damage and the Progressive Development of International Law’ (1965) 14 Int'l & Comp. L.Q. 1189; G. Handl, ‘Balancing of Interests and International Liability for the Pollution of International Watercourses’ (1975) 13 Canadian Y.B. Int'l L. 156 at 167–70; and A.L. Springer, The International Law of Pollution (Westport: Quorum Books, 1983) at 133–4.

                        (6) L.E.F. Goldie, ‘Concepts of Strict and Absolute Liability and Ranking of Liability in Terms of Relative Exposure to Risk’ (1985) 16 Netherlands Y.B. Int'l L. 174 at 175.

                        (7) In this chapter, the words ‘harm’ and ‘damage’ are used interchangeably.

                        (8) J. Crawford, International Law Commission, First Report on State Responsibility, UN Doc. A/CN.4/490/Add.4 (1998) at para.117.

                        (9) See Birnie and Boyle, note 3 above at 12–4; and A. Boyle, ‘Reparation for Environmental Damage in International Law: Some Preliminary Problems,’ in M. Bowman and A. Boyle, eds., Environmental Damage in International and Comparative Law (Oxford: Oxford University Press, 2002) 17. See generally on the legacy of Trail Smelter Arbitration, R. Bratspies and R. Miller, eds., Transboundary Harm in International Law, Lessons from Trail Smelter Arbitration (Cambridge: Cambridge University Press, 2006).

                        (10) Case Concerning Factory at Chorzow (Claim for Indemnity), 1928 P.C.I.J. (ser. A) No. 17.

                        (11) Crawford, see note 1 above at 2. 12

                        (12) Ibid. at 12.

                        (13) D. Bodansky and J.R.Crook ‘The ILC's State Responsibility Articles’ (2002) 96 A.J.I.L. 773 at 779–80.

                        (14) See note 9 above at 21–2.

                        (15) Crawford, see note 1 above at 295.

                        (16) Ibid. at 213.

                        (17) Ibid. at 223.

                        (18) Birnie and Boyle, see note 3 above at 24.

                        (19) Crawford, see note 1 above at para. 118.

                        (20) Boyle, see note 9 above at 25–6.

                        (21) J. Crawford, Third Report on State Responsibility, UN Doc. A/CN.4 (507) (2000) at 43, para. 96.

                        (22) South West Africa Cases (Ethiopia/South Africa; Liberia/South Africa), Judgment of 18 July 1966, [1966] I.C.J. Rep. 20 at 20–3.

                        (23) Barcelona Traction, Light and Power Company, Limited (Belgium/Spain), (Second Phase), Judgement of 5 February 1970, [1970] I.C.J. Rep. 32 at para. 33 [Barcelona Traction]; see also Advisory Opinion on Legal Consequences ofthe Construction ofa Wall in the Occupied Palestinian Territory, Judgment of 9 July 2004J2004] I.C.J. Rep. 9 at paras. 154–9 and dispositif subpara. 3(d).

                        (24) Barcelona Traction, see note 23 above, Judge Higgins s separate opinion, para. 37; see also paras. 38–9.

                        (25) Nuclear Tests Cases (Australia v. France, New Zealand v. France), Judgment of 20 December 1974, [1974] I.C.J. Rep. 253 at 387.

                        (26) J. Peel, ‘New State Responsibility and Compliance with Multilateral Obligations: Some Case Studies of How New Rules Might Apply in the International Context’ (2001) 10 R.E.C.I.E.L. 82.

                        (27) Crawford, see note 1 above at para. 106(a).

                        (28) Peel, see note 26 above.

                        (29) J. Brunnée, ‘On Sense and Sensibility: Reflections on International Liability Regime’ (2004) 53 Int'l & Comp. L.Q. 351.

                        (30) This notion is included in legal principles and recommendation adopted by the Brundtland Commission Experts Group on Environmental Law of the World Commission on Environment and Development, Summary of Principles in Annex 1 to Our Common Future (Oxford: Oxford University Press, 1987).

                        (31) See, e.g., A. Boyle, ‘State Responsibility and Liability for Injurious Consequences of Acts Not Prohibited by International Law: A Necessary Distinction?’ (1990) 39 Int'l & Comp. L.Q. 1.

                        (33) ILC Report on Fifty-Third Session, see note 1 above at 387.

                        (34) Ibid. at 392.

                        (35) T. Gehring and M. Jachtenfuchs, ‘Liability for Transboundary Environmental Damage: Towards a General Liability Regime?’ (1993) 4 Eur. J. Int'l L. 92 at 93 and 94; L. A. de la Fayette, ‘New Approaches for Addressing Damage to the Marine Environment,’ (2005) 2 J.M.C.L. 167.

                        (36) R. Churchill, ‘Facilitating (Transnational) Civil Liability Litigation for Environmental Damage by Means of Treaties: Progress, Problems, and Problems’ (2001) 12 Y.B. Int'l Envt'l L. 3 at 41.

                        (37) Ibid. at 10. The Russian Federation ratified the 1963 Vienna Convention in 2005.

                        (38) Ibid. at 9 and 10.

                        (39) However, only if three states contributing to the fund receive more than 600 million tonnes of oil per annum. The maximum amount is still raised to 300.740 million special drawing rights (SDR) (US $386 million), up from 200 million SDR (US $256 million). It entered into force in 2003.

                        (40) Churchill, see note 36 above at 40.

                        (41) Oil Spill Compensation, A Guide to the International Conventions on Liability (London: International Petroleum Industry Environmental Conservation Association and International Tanker Owners Pollution Federation Limited, 2004).

                        (42) Ibid. at 10–12.

                        (43) Churchill, see note 36 above at 34.

                        (44) Rao, see note 2 above at para. 152.

                        (45) Ibid. at para. 153.

                        (46) P.S. Rao, Second Report on the Legal Regime for Allocation of Loss in Case of Transboundary Harm Arising Out of Hazardous Activities, UN Doc. A/CN.4/540 (21 May 2003).

                        (47) Ibid. at para. 36.

                        (48) International Law Commission, Report on the Work of the 56th Session of the ILC 2004, Supplememnt no. 10, Doc.A/59/10; see, in depth, A. Boyle, ‘Globalising Environmental Liability: The Interplay of National and International Law’ (2005) 17 J. Envt'l L. 3. On 26 May 2006, the Drafting Committee completed the second reading of the set of draft principles, having taken into account the comments and observations of governments, suggestions by the Special Rapporteur, and the debate in plenary. The draft principles have retained the same title and structure as adopted on first reading (A/CN.4/L.686).

                        (49) Brunnée, see note 29 above at 365.