The EU and Chile Suspend the Swordfish Case Proceedings at the WTO and the International Tribunal of the Law of the Sea
February 06, 2001
For the past decade, the EU and Chile have been engaged in a controversy over swordfish fisheries in the South Pacific, resorting to different international law regimes to support their positions. Chile claims that the EU fails to cooperate with the coastal state to ensure the conservation of the highly migratory species, in violation of the United Nations Convention on the Law of the Sea (UNCLOS). The EU claims that Chilean denial of port access violates substantive provisions of the General Agreement on Tariffs and Trade (GATT 1994).
During these ten years, the parties have carried on bilateral consultations, exchanged notes, and even experimented with a bilateral technical commission. However, lack of success motivated the EU to bring the case before the World Trade Organization (WTO) in April 2000. As consultations between the Parties still did not succeed in settling the controversy, a Panel was finally established by the WTO's Dispute Settlement Body (DSB) in December 2000.
Chile insists that the issue at stake in the controversy is not of a commercial nature, but relates to the need for conservation measures ensuring the sustainable fisheries for swordfish. On this basis, Chile invited the EU to engage in formal dispute settlement under UNCLOS Part XV. In November 2000, the Parties agreed ad-referendum to the establishment of a special five-judge Chamber of the International Tribunal of the Law of the Sea (ITLOS). The agreement was ratified in December 2000.
Swordfish (Xiphias gladius), migrate through the vast waters of the Pacific Ocean. Along their extensive journeys, the swordfish cross the jurisdictional boundaries of maritime delimitation and entitlement, opening the possibility that broad concepts, such as those relating to the global commons, the common heritage of mankind and the interests of future generations, might apply to them.
The Case at the WTO
The EU claims that the Chilean prohibition on unloading of swordfish in its ports under Article 165 of its fisheries laws is inconsistent with GATT 1994 Articles V (providing for freedom of transit for goods through the territory of each contracting party on their way to or from other contracting parties) and XI (prohibiting quantitative restrictions on imports or exports, subject to some exceptions for imports of agricultural or fisheries products). As the issue of port access in the context of Article V is dealt with elsewhere (see further reading), this Insight will focus on another issue of the case: market access and the conservation of exhaustible natural resources.
Underlying the EU's request for access to Chilean ports is the aspiration to re-export swordfish to the markets of NAFTA member-states, particularly the United States. The question is whether the transition toward sustainable development of renewable natural resources requires the implementation of an effective management and conservation framework before a new market is opened. In the context of world fisheries, conservation groups and others are concerned about collapse of valuable commercial stocks resulting from the lack of effective management and conservation regimes.
GATT 1994 Article XX (g) allows contracting parties to adopt and enforce measures relating to the conservation of natural resources if this is done in conjunction with restrictions on domestic production or consumption, provided that there is no arbitrary discrimination, no abuse, and no disguised restriction on trade. This provision has been the object of controversy in several cases, including the recent WTO Appellate Body decisions on the 1996 Reformulated Gasoline CaseShrimp/Turtle Case. Although the preamble to the WTO Agreement recognizes the need to preserve the environment, and the case law interprets GATT 1994 with increasing deference to environmental concerns, critical issues remain unresolved. and the 1998
Among other open questions, may a country enact unilateral measures to ensure the conservation of fish stocks within and beyond its jurisdiction? Although unilateral measures are not prohibited per se, they are certainly strongly discouraged even when they may be the only reasonable or possible course of action for environmental protection. The trade case law has struggled with this issue in several cases, including the Tuna/Dolphin I and II Panel Reports. The point becomes more complicated when multilateral action fails or is delayed in the face of urgent calls for conservation. It is not clear what extent of effort a country must undertake in negotiations before its unilateral, extra-territorial measures may be found to square with the terms of Article XX.
The Case before the ITLOS Chamber
Chile has requested the ITLOS Chamber to declare whether the EU has fulfilled its obligations under UNCLOS Articles 64 (calling for cooperation in ensuring conservation of highly migratory species), 116-119 (relating to conservation of the living resources of the high seas), 297 (concerning dispute settlement) and 300 (calling for good faith and no abuse of right). Chile further asserts that the EU has failed to enact and enforce substantive conservation measures on its vessels fishing in the area, that the EU has failed to report its captures to the relevant international organization (in this case the Food and Agriculture Organization), and that the EU has failed to cooperate with the coastal state in ensuring the conservation of highly migratory species.
The EU has requested the Tribunal to declare whether Chile has violated UNCLOS Articles 64, 116-119 and 300, mentioned above, as well as Articles 87 (on freedom of the high seas including freedom of fishing, subject to conservation obligations) and 89 (prohibiting any State from subjecting any part of the high seas to its sovereignty) . The EU contends that Chile unilaterally applies its EEZ conservation measures to the adjacent high seas and that Chile negotiated the Galapagos Agreement, under the auspices of the Permanent Commission of the South Pacific (CPPS), without the participation of all interested States.
Would the ITLOS Chamber use international environmental law to interpret UNCLOS provisions? In this regard, the 1999 ITLOS judgment on provisional measures in the Bluefin Tuna Cases implicitly recognizes the relevance of the precautionary principle to the management of sustainable fisheries. That case involved assertions by Australia and New Zealand that Japan had failed to cooperate in the conservation of southern bluefin tuna. The Tribunal cited the scientific uncertainty regarding measures to be taken to conserve southern bluefin tuna, considered that the parties should in the circumstances act with caution, and ordered provisional measures designed to preserve existing stocks pending resolution of the dispute.
Likewise, the emergence under customary law of the general obligation to respect the environment beyond areas of national control (ICJ Nuclear Weapons Advisory Opinion, 1996), and the duty to consider the interests of other states when a states exercises its fishing rights under the Convention on the High Seas (ICJ Fisheries Jurisdiction cases, 1974), may shed light as to how ITLOS would assess the use of fishing gear that produces significant levels of bycatch, including sharks and migratory leatherback turtles and albatross seabirds. Chile would argue that in the global commons such as the high seas, these environmental norms have, out of necessity, acquired the character of obligations erga omnes, allowing for third-State remedies.
The Provisional Agreement
During the last week of January 2001, the EU and Chile finally reached an agreement that effectively suspends proceedings at the WTO and at the ITLOS. This provisional agreement, which will become operational in March 2001, rests on a pilot phase where the Parties undertake to resume bilateral cooperation. If this provisional arrangement fails, proceedings would then resume.
There are three cornerstones of the agreement: the re-establishment of a bilateral technical commission, port access for fish caught under a new scientific fisheries program, and the creation of a multilateral conservation forum for the Southeast Pacific. The technical commission will meet in April 2001 to design conservation measures for the stocks and will subsequently meet periodically to review the information provided by the scientific fisheries expeditions. The scientific fisheries program will allow each Party to unload in the Chilean ports of Arica, Iquique, and Punta Arenas up to a thousand tons of swordfish each year. Finally, the experience of the technical commission will lay the grounds for the establishment of a multilateral conservation organization open to the participation of interested States.
Longliners and fishing gear used in scientific fisheries will be subject to a satellite vessel monitoring system (VMS) and the fishing vessels will carry scientific observers on board. These requirements will supply the technical commission with reliable information as to the vessels' operations. The use of VMS and the presence of scientific observers on board vessels are interesting innovations in fisheries management. This practice could be regarded as contributing to emerging international minimum standards in the law of fisheries, to be emulated by other States in other fora.
Finally, the political context of this provisional arrangement is set by the ongoing negotiations between the EU and Chile for the conclusion of a free trade agreement. In the end, the EU obtained port access for the four ships that had been traditionally fishing in the area.
The provisional agreement reached by the Parties is a first step in setting up the legal framework necessary to ensure the conservation of marine biodiversity in the South Pacific. This arrangement underscores the need for international cooperation for high seas fisheries conservation. However, the agreement does not address issues related to subsidies afforded to the fishing industry. Because subsidies can be expected to boost fishing fleet capacity and thus may lead to overfishing, they may be expected to continue to fuel disputes between fishing and conservation interests.
About the Author:
Marcos Orellana, Associate Professor of International Law at the Universidad de Talca, Chile, and Of Counsel for the Center for International Environmental Law (CIEL)
For Further Reading:
Carolyn Deere, Net Gains: Linking Fisheries Management, International Trade, and Sustainable Development, IUCN 2000
David Downes and Brennan van Dyke, Fisheries Conservation and Trade Rules, Greenpeace and CIEL, 1998, available at www.ciel.org
Marcos Orellana, The Swordfish in Peril: the EU Challenges Chilean Port Access Restrictions at the WTO, BRIDGES August 2000, available at www.ictsd.org
Francisco Orrego VicuÃ±a, THE CHANGING LAW OF HIGH SEAS FISHERIES, Cambridge University Press, 1999
Ernst-Ulrich Petersmann, THE GATT/WTO DISPUTE SETTLEMENT SYSTEM, Kluwer Law, 1997
UNEP, Fisheries Subsidies and Overfishing: Towards a Structured Discussion, Draft November 2000, available at www.unep.ch/etu/etp/acts/manpols/fishery.htm