Arbitration Institute of the Stockholm Chamber of Commerce Bridging the Climate Change Policy Gap The Role of International Law and Arbitration
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1 Arbitration Institute of the Stockholm Chamber of Commerce Bridging the Climate Change Policy Gap The Role of International Law and Arbitration Concluding Keynote: IBA Initiatives in support of climate change mitigation and adaptation 21 November 2016 David W. Rivkin, President, IBA It is a great pleasure to be with you today at the close of an important and timely discussion of the way forward after Paris and Marrakech. There is a great opportunity for international law and arbitration to provide much-needed certainty and encouragement to the private sector to mobilise the significant green investment required to support the Paris Agreement. In Paris a year ago at the joint IBA, PCA, ICC and SCC conference, I discussed the role of arbitration to resolve private and public disputes arising from climate change. It is heartening to see the increasing focus on these issues in the last 12 months, particularly as we see increasing climate change litigation being brought around the world. The promotion of the rule of law has been central to the IBA s work since its founding in The rule of law underlies international law and arbitration, both of which encourage certainty and predictability, two key drivers for business. In the aftermath of Paris, businesses need to see the Paris Agreement and Nationally Determined Contributions translated into clear, achievable targets, and with enforcement options where appropriate. Developing such policies falls squarely within the expertise of many in this room. In doing so, I would like to encourage you to be mindful of the concept of climate change justice, which recognizes that climate change will disproportionately affect those who have the least ability to respond to climate change. This concept, first raised by Mary Robinson, was central to the IBA s 2014 Task Force Report -- Achieving Justice and Human Rights in an Era of Climate Disruption. As many of you know, the Report made over 50 recommendations to achieve greater justice and human rights in the global response to climate change. Mary Robinson called it a flagship report, and I have been delighted that UN negotiators, academics, grass-roots lawyers and others have relied on the Report. The Report addresses both mitigation and adaptation to climate change. For example, we proposed changes to the WTO system to encourage renewables; we made recommendations directed at the UN human rights bodies to support environmental rights; we suggested how developing countries might better harness processes like the Universal Periodic Review to draw attention to climate impacts; and we encouraged states to regulate multinational corporations, for example by increasing transparency of emissions. Some of the recommendations have understandably longer timeframes, but
2 I would like to talk today about several of the immediate recommendations on which we have been working to implement in the short term. Implementation of the Report s Recommendations After the publication of the Report, we immediately set about taking steps towards the implementation of the Report s recommendations. Implementation has extended across the IBA s diverse network of lawyers, and many of the IBA sections and committees have taken responsibility for the promotion of a certain number of the recommendations. Paris Agreement: One of the recommendations of the Report addressed to the international community was the incorporation of explicit language in the Paris Agreement for the protection of human rights during climate change activities and the development of a dispute settlement mechanism. I was heartened to see in the preambular language of the Paris Agreement the recognition that States should respect and promote their human rights obligations when taking climate change action. Arbitration: The Report included a significant focus on arbitration of environmental disputes. It applauded the work of the PCA in publishing specific Rules of Procedure for environmental disputes, and recommended that other institutions follow suit. As a result, the IBA s Arbitration Committee has been working closely with our partners in the Permanent Court of Arbitration, the Stockholm Chamber of Commerce Arbitration Institute, and the ICC International Court of Arbitration to promote the resolution of environmental disputes through arbitration, including in this conference. As many of you here will know, together we organized a successful joint conference in Paris during COP-21 on the arbitration of climate change related disputes, which was one of the drivers for today s conference. Corporate Responsibility: The Report made a series of recommendations for corporations, as well as encouraging states to regulate with the business community s desire for certainty in mind. At the Climate Action conference held in DC in May this year (a multi stake-holder summit hosted by the World Bank and UN and others including the IBA), we focused on the huge contribution that the business community has to make in the fight against climate change. In this regard, the Task Force s recommendations have proven prescient. The UN Global Compact recently published The CEO Study A Call to Climate Action, based on hundreds of one-to-one interviews with CEOs from the world s largest companies. One of the most compelling results of this research is that an overwhelming 91% of global CEOs view climate change as an urgent priority for business. These business leaders are calling for certainty, for legislative and fiscal action to increase investment, for global, robust and predictable carbon pricing mechanisms, for performance standards to enhance resilience and to reduce emissions and for the removal or phasing out of fossil fuel subsidies. 2
3 Education & Knowledge Building: The Report emphasized the need to raise awareness of climate change justice for lawyers, the judiciary, and policy makers. We have been working hard to raise these issues throughout the past year: - In February, the IBA published a series of commentaries and critiques of the Report itself in a Special Edition of the IBA s Journal of Energy and Natural Resources Law. This Special Edition explained the key recommendations of the Report, and contained articles by a number of leading independent commentators, widening the discussion among the academic community. It is available online on the IBA s website. - In August, I was privileged to speak in Mexico at the Climate Summit of the Americas led by state, provincial and local government leaders. I provided a briefing on the IBA s work in this area and spoke also on the state of climate change litigation in the US. - Most recently, at the IBA s annual conference we held a Showcase Session on climate change, as well as a separate session coordinated by our Insurance Committee and Litigation Committee on Managing, Adapting and Resolving Climate Change Risks and Exposures. IBA Climate Change Network: Most importantly, we have carried out one of the Task Force Report s most specific recommendations for the IBA itself: the establishment of a network of lawyers specializing in climate change. At our Annual Meeting in September, I was therefore delighted to announce the launch of the IBA Climate Change Network, which will allow lawyers, academics and other practitioners to connect on climate change litigation, climate change and human rights issues and other developments in climate law around the world. The IBA s Section on Energy, Environment and Natural Resources, SEERIL, has been working with the Centre for Energy, Petroleum and Mineral Law and Policy at the University of Dundee, UK, to coordinate the Network, and invitations have been sent to 100 institutions to join. Anyone interested can request to join online through the IBA s website ( ). Rule of Law: The IBA is also presenting two programs in December as part of the World Bank s annual Law, Justice and Development conference, which for the first time ever is focusing on climate change. We have coordinated with Lexis Nexis to host a panel on The Rule of Law and Legal Institutions in Addressing Climate Change- Related Adaptation, Mitigation and Litigation, and we are also co-hosting a program on enforcing environmental obligations through financing mechanisms. Until now, the World Bank has not linked climate change with the rule of law and legal development. However our May event advocated the need to be mindful of the legal dimensions of climate change, including of course, the pursuit of climate justice, and I am excited that we will have further discussion on this at our event in December. 3
4 Working Groups: Finally, as many of you know, we launched two IBA Working Groups comprised of world leading judges, practitioners, academics and scholars, in response to specific recommendations in the Task Force Report. Both Groups reported on their work at the IBA s recent DC conference. Model Statute Working Group The Task Force Report recommended that a Working Group be established to draft a Model Statute on Climate Change Claims and Relief. The impetus for this was the increasing climate change litigation being brought in global efforts to address climate change and the existence of significant procedural barriers preventing litigants from effectively resolving these claims. This litigation continues to increase. The Dutch Urgenda litigation (in which a Dutch court held the Government liable for failing to fulfil its duty of care due to its failure to implement internationally agreed climate change targets 1 ) has set in motion a number of similar claims, most recently in Switzerland, Sweden and Belgium. We have also seen a lot of activity in the Our Children s Trust litigation in the US, in which a group of 21 minors has been granted standing to sue the federal Government for violating the youths constitutional rights by promoting the development and use of fossil fuels. 2 However, climate change litigation strategies face various difficulties relating to the diffuse, non-specific, unpredictable and non-causative harm caused by climate change. These issues cause difficulties establishing, for example, claimants standing or a causal link between harms and GHG emissions. The Task Force Report noted that these legal barriers have significant negative implications for the achievement of climate change justice for individuals and communities. The Task Force recognised that climate change litigation would be more effective, and produce more equitable results, if states could recognise, and in appropriate cases remove, these barriers. The concept of a Model Statute was based on the UNCITRAL arbitration Model Law, where states have successfully adopted model provisions for domestic arbitration laws around the globe. During his report at the IBA s recent meeting in DC, Justice Brian Preston, one of the Working Group s Co-Chairs, explained that the Model Statute must necessarily be 1 Urgenda Foundation v. The State of the Netherlands, C/09/456689/HA ZA , Judgement of 24 June Kelsey Cascade Rose Juliana, et al. v the United States of America, et al, No. 6:15-cv TC, Order of 8 April 2016, online: < The Court held that given the allegations of direct or threatened harm, albeit shared by most of the population or future population, the court should be loathe to decline standing to persons suffering an alleged concrete injury of a constitutional magnitude. Kelsey Cascade Rose Juliana, et al. v the United States of America, et al, No. 6:15-cv TC, Order of 8 April 2016, online: < The plaintiffs claimed that government inaction on climate change amounts to a breach of their constitutional rights to life, liberty and property and the government s public trust duties, in addition to a claim that regulations relating to the export of gas are unconstitutional. 4
5 understood against the backdrop of the Paris Agreement. As we know, the Paris Agreement imposes a number of obligations on States, including, significantly, binding obligations of conduct on States in relation to mitigation. Article 4.2 of the Agreement states that each State party shall prepare, communicate and maintain successively nationally determined contributions (NDC) that it intends to achieve. Parties shall pursue domestic mitigation measures, with the aim of achieving the objectives of such contributions. Moreover, States must review their NDCs every five years and subsequent NDCs must represent a progression and reflect [the State s] highest possible ambition. 3 Because the compliance mechanism in the Paris Agreement is left to be determined in future negotiations, 4 it is possible that in the interim, domestic climate change litigation could have a role to play in ensuring that States comply with their obligations and NDCs. The Model Statute is intended to complement these developments by reducing procedural and evidence obstacles in such litigation. The Working Group has therefore been developing a set of model provisions for use by States. Wherever possible, the draft articles are sourced from existing examples in statute, constitutions or judicial rules and are drawn from a variety of legal systems, including common and civil law jurisdictions. The draft articles are intended to serve as a resource for legislatures, government departments, judiciaries, and litigants considering the complex issues that emerge when pursuing climate change litigation before the courts and other tribunals. The articles might be incorporated wholesale or individually into domestic rules of court and procedural rules or into environmental or climate change laws and instruments. Alternatively, they may be referred to by domestic or international judges or arbitrators as an interpretive or reference tool, thus contributing to the development of best practice to prevent future climate change and allow greater access to justice. The Model Statute is therefore best described as a menu of options, as opposed to a complete code. Moreover, it is not intended to restrict States which already have advanced environmental legislation or open access to the courts, but instead to highlight examples for other States to follow as appropriate in their particular judicial and legal context. Justice Preston explained that the Working Group has elected to focus primarily on the procedural and evidentiary obstacles to pursuing climate change litigation, principally focusing on future commitments. The Working Group is surveying the myriad of different types of climate change related claims, focusing on a variety of countries, regions and legal systems in order to identify best practices and issues. At this stage, the Working Group is hoping that the Model Statute will address issues of jurisdiction of domestic courts; claimants standing; evidence; causation; permissible defences; and available remedies and costs. While the Model Statute considers a range of remedies, it specifically does not consider historical damages claims; in that regard, 3 Paris Agreement, United Nations Framework Convention on Climate Change (12 December 2015)., Article 4(3). 4 Paris Agreement, Article 15(3). 5
6 it takes note of the Task Force s expressed preference for litigation that secures declaratory or interim relief against states, whereby individuals can hold governments to account for their domestic regulation of GHGs instead of ad hoc litigation against individual emitters that does not address broader climate concerns. 5 The focus is therefore on claims being brought to effect positive change by governments, and not on historical private damages claims. The Working Group released a 20-page report in September, which is currently out for consultation, and is hoping to publish the Model Statute in I am hopeful that the Model Statute may also be useful in future in improving rules of procedure for international environmental arbitration with a focus on climate change justice. Adaptation WG The Task Force Report surveyed the current law on climate change induced migration, the impact of climate change on food security, and international regulation of technology transfer, three classic adaptation issues that have not been covered by traditional rules under international law. One of the key recommendations was therefore to establish an IBA Working Group focused particularly on these issues, to see how we might contribute to greater certainty in these areas. First, in the area of migration, the Task Force Report called for the establishment of a Working Group to consider existing initiatives 6 as models to build consensus towards new norms, institutions and coordinated actions on climate change related migration. Migration is a quintessential human rights concern, and the likelihood of massively exacerbated population movements as climate change takes hold is undoubtedly one of the major human rights consequences of our failure to rein in carbon usage. Building upon those prior initiatives, the Working Group has been developing practical recommendations, which can be incorporated into national, regional and international laws and policies, to address climate-related migration, both across borders and within countries. Notably, the Working Group has been examining an important, but relatively underexplored, area of climate-related migration labor mobility and the potential synergies between well-managed labor mobility and climate change adaptation. Second, recognizing food security as a primary justice concern connected with climate change, the Task Force Report also recommended further work on the legal dimensions of the link between food security and climate change. Therefore, the Working Group 5 IBA Task Force Report, p The Task Force Report points to the U.N. Guiding Principles on Internal Displacement, the Peninsula Principles on Climate Displacement Within States, the Nansen Principles and the Nansen Initiative. 6
7 has been developing recommendations to strengthen legal protections related to food security and identifying opportunities to address climate change adaptation and food security challenges jointly within a human rights-based approach. Third, despite the fact that technology transfer has had a central place in the international legal architecture established to address climate change (for example, in the UNFCCC 7 ), the Task Force Report also identified significant constraints on technology transfer and the lack of a concrete framework for its facilitation. As a result, the Working Group has been developing recommendations with respect to mechanisms for funding technology transfers and the possibilities for reforming international investment law to insure that technology transfer is not unduly impeded. In particular, the Working Group has elected to set aside the question of intellectual property protection (while acknowledging its importance), given the already vast literature on the matter and because such debate has tended to obscure other important questions. By doing so, the report will refocus the conversation on human rights and developmental needs, and on the other legal obstacles to successful technology transfer. The Working Group will release its report in early The time to consider these issues and to implement a proper legal structure is now, before potential climate change causes crises. We have seen in the refugee crisis that nations do not fare well when the problem reaches crisis stage. Conclusion I remain convinced that the legal profession has a critical role to play in the fight to combat climate change. If we are to work through some of the difficulties of the gaps left by the Paris Agreement, and to implement the vast investment that is needed from the business sector, we will need lawyers who not only understand these issues but that can challenge their clients to take bold action. We have a wonderful wealth of diversity in the lawyers represented not only by the IBA but all of the organizations here today, and I am hopeful that the ideas we have raised today can keep moving us forward not only to deal with climate change but to ensure that those most vulnerable are protected throughout this transition. 7 United Nations Framework Convention on Climate Change art. 4(5), May 9, 1992, 1771 U.N.T.S. 107 ( The developed country Parties and other developed Parties included in Annex II shall take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other Parties, particularly developing country Parties, to enable them to implement the provisions of the Convention. In this process, the developed country Parties shall support the development and enhancement of endogenous capacities and technologies of developing country Parties. Other Parties and organizations in a position to do so may also assist in facilitating the transfer of such technologies. ). See more recently, Paris Agreement, United Nations Framework Convention on Climate Change (12 December 2015), Article 10. 7
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