Environmental Dispute Resolution

The PCA has been regularly included as the forum for dispute resolution under bilateral and multilateral treaties, contracts, and other instruments concerning natural resources and the environment, and offers specialized rules for arbitration and conciliation of these disputes.

Interstate environmental disputes

Interstate environmental disputes administered by the PCA have arisen under a variety of legal instruments, including multilateral treaties such as the 1992 OSPAR Convention, the 1982 UN Convention on the Law of the Sea, the 1960 Indus Waters Treaty, and the 1976 Rhine Chlorides Convention. PCA-administered interstate environmental disputes have also arisen under bilateral treaties and ad hoc arbitration agreements. Additionally, the PCA has been included as the appointing authority and/or the forum for the arbitration of disputes arising out of a number of multilateral environmental treaties (listed below). The PCA is also among the dispute settlement options recommended in the Draft International Covenant on Environment and Development, a model agreement developed by non-governmental organizations with the aim of facilitating treaty negotiations in the environmental sector.

Mixed environmental disputes

The PCA administers disputes between States and non-State actors arising under a range of bilateral and multilateral investment treaties, contracts, and other instruments. Several of these disputes concern legal issues relating to domestic environmental regulatory frameworks as well as host State obligations under international environmental law. For example, the PCA has administered a number of disputes relating to the Kyoto Protocol’s Clean Development Mechanism, and has also been referenced in a number of other notable instruments arising out of multilateral environmental frameworks:

• The Compact: A Contractual Mechanism for Response in the Event of Damage to Biological Diversity Caused by the Release of a Living Modified Organism, a private sector initiative concerning liability issues arising out of the 1992 Convention on Biological Diversity, provides for binding arbitration between a State and a signatory company.
• The Gold Standard Foundation, a body that provides a certification scheme for premium quality carbon credits generated by qualifying projects under the Kyoto Protocol’s Clean Development Mechanism and other carbon-trading schemes, has included an adapted version of the PCA’s optional rules in their process for appeals against certification decisions.
• The Green Climate Fund (GCF), a new multilateral fund designed to help developing countries limit or reduce their greenhouse gas emissions and adapt to the unavoidable impacts of climate change, incorporates the 2012 PCA Rules in a number of GCF-related instruments.

Specialized environmental rules for arbitration and conciliation

The PCA Optional Rules for Arbitration of Disputes Relating to the Environment and/or Natural Resources (“Environmental Rules”) were adopted in 2001. These Rules were drafted by a working group and committee of experts in environmental law and arbitration in order to address the principal lacunae in environmental dispute resolution. The PCA Optional Rules for Conciliation of Disputes Relating to the Environment and/or Natural Resources were adopted in 2002. The PCA’s Environmental Rules for arbitration and conciliation provide the most comprehensive set of environmentally tailored dispute resolution procedural rules presently available. The PCA’s Environmental Rules are referred to in a treaties and contracts, such as the 2003 Protocol on Civil Liability and Compensation for Damage Caused by the Transboundary Effects of Industrial Accidents on Transboundary Waters and the Model Emissions Reduction Purchase Agreements developed by the International Emissions Trading Association.

The Environmental Rules provide for the establishment of a specialized list of arbitrators considered to have expertise in this area. The Environmental Rules also provide for the establishment of a list of scientific and technical experts who may be appointed as expert witnesses pursuant to these Rules.  Parties to a dispute are free to choose arbitrators, conciliators and expert witnesses from these Panels. However, the choice of arbitrators, conciliators or experts is not limited to the PCA Panels.

The PCA is available to give advice and assistance to States, international organizations and private parties involved in the design and administration of new, specialized environmental dispute settlement procedures.

Promotion of international environmental law and governance

The PCA actively promotes and participates in the development of international environmental law and governance. In the past, the PCA has collaborated with the UN Environment Programme to convene a joint Advisory Group to consider developments in the field of environmental dispute resolution. The PCA has participated in the negotiations on developing liability and redress mechanisms under the UN Convention on Biological Diversity and the Intergovernmental Committee for the Biosafety Protocol. The PCA has also contributed to a report of the Secretariat of the UN Convention to Combat Desertification on the design of treaty-based environmental arbitration and conciliation procedures. Most recently, the PCA has participated in the multilateral negotiations under the UN Framework Convention on Climate Change (‘UNFCCC’) and presented at on matters relating to climate change dispute resolution and compliance.