The Precautionary Principle, Trade and the WTO
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1 The Precautionary Principle, Trade and the WTO A Discussion Paper for the European Commission Consultation on Trade and Sustainable Development November 7th 2000 Peter Hardstaff, Trade Policy Officer, RSPB
2 Summary The key points of this paper are: The precautionary principle is an important part of risk assessment and decision-making. There is no conflict between sound science and using the precautionary principle. Although science can assess risks, decisions on the acceptability of risk and uncertainty cannot be based on science alone. A critical question is therefore how to make this decision-making process as transparent and accountable as possible. The current formulation of precaution in the WTO s SPS Agreement is inadequate. A better model is the Biosafety Protocol which is a welcome development in operationalising the precautionary principle. In order to enable governments to take effective precautionary action without being undermined by challenges in the WTO, the WTO s rules need to be changed. Achieving such change is easier said than done given the opposition of many developing countries (due to mistrust and not seeing the issue as a priority) and the USA (due more to fundamental differences over how precaution is viewed). Options open to the EU to try and change this situation include: * pushing for further development of the precautionary principle in MEAs; * promoting further dialogue through UNEP and UNCTAD; * further refining the EU paper and engaging in discussions in appropriate fora; * identifying case studies of precautionary decision-making to help inform the debate; * further dialogue with the USA on risk assessment and precaution; * being less defensive about precaution and promoting a more realistic attitude towards risk assessment; * further efforts to build trust with developing countries, including modifying the EU s trade agenda. 1
3 Introduction At the risk of over simplifying, the idea behind the precautionary principle is that a lack of scientific certainty or scientific consensus should not prevent action being taken to protect the environment or public health. Some would add further nuances or caveats to this, but the fundamental point - that those responsible for taking decisions can exercise a safety first approach - is very important. This is because there are cases, particularly concerning environmental and public health protection, where uncertainty over the potential adverse impacts of an activity requires decision-makers to be precautionary. Critics claim that the precautionary principle gives governments too much leeway in the kind of decision-making that should, in any case, be the domain of individual consumers. Consumers, it is argued, should be responsible for deciding how risk averse to be, and the state should therefore play a minimal role. Such a view tends to ignore the existence of market failure. Full information on producers, production methods and the potential impacts of, and risks associated with, a product or activity is often unavailable to consumers. Cases where products are novel, information is scarce, the issues are extremely complex and/or the science is uncertain are precisely those where governments have a responsibility to act, and to do so in accordance with the precautionary principle. Few scientists would argue that we live in a world characterised by a high degree of scientific certainty and few would argue that governments have no responsibility in the fields of environmental or public health protection. The precautionary principle therefore has a great deal of relevance in the modern world. However, the increasing prominence of both international trade and the desire for increased health and environmental protection has thrown the precautionary principle and market access into conflict. The precautionary principle is now one of the issues at the heart of the trade and environment debate. For example debate on this issue has, to a greater and lesser degree, played a part in: the hormone treated beef dispute between the US and the EU; the debate over the potential environmental impacts of genetically modified organisms; the work of the WTO s Committee on Trade and the Environment; the WTO s Seattle Ministerial Conference; negotiations on the Biosafety Protocol, and; EU-US Transatlantic Economic Partnership discussions. On the one hand, it is argued by some that the precautionary principle is used as an excuse by governments to block market access rather than to protect the environment or public health, meaning that it is being used as an arbitrary and/or unjustifiable trade barrier. On the other hand, it is argued that international rules aimed at preventing such trade barriers have gone too far and have curtailed (or will curtail) legitimate government action. At the very heart of this trade-precaution debate lie questions concerning sound science, risk assessment and the nature of decision making. These need to be addressed before considering how to deal with the current trade/precaution conflict. 2
4 Sound Science and Risk Assessment Much of the debate concerning the precautionary principle revolves around whether its use constitutes a scientifically sound approach to decision-making. Critics of precaution argue that it is unscientific and maintain instead that risk assessment is a more sound scientific approach. The first point to recognise is that a risk assessment is normally based on a range of political and methodological assumptions that are often unscientific and subjective. For example, the assessment will be critically affected by the choice of what to research, how to define and measure hazards, whether/how to consider cumulative impacts, whether/how to consider alternatives, how to discount future events against present actions and whether/how to measure costs and benefits. It will also be affected by methodological assumptions concerning such issues as exposure to harm, and extrapolating data from animals to humans. The second point is that, perhaps because of the above range of assumptions, risk assessment can be unpredictable and subject to wide variations. Give different scientists the same assessment to conduct and they will most likely come up with different results. This will be further compounded when different methodologies are used. For example, in a 1991 benchmarking study that compared eleven risk assessments of the same problem, the European Commission found that they got eleven different risk estimates ranging from risks of 1 in 400 to 1 in 10 million 1. While critics of the precautionary principle argue that it can be subjective, political and unpredictable, they ignore the fact that the same applies to risk assessment. So what is a sound scientific approach? A sound scientific approach will be based on, amongst other things, a clear understanding of the limitations of science and risk assessment, a recognition of the assumptions involved in scientific research and risk assessment, analysis of alternatives in risk assessment and decision-making based on available science but taking into account other considerations (social, economic, cultural etc.). There is therefore no conflict between sound science and using the precautionary principle in risk assessment and risk management (decision-making). The two are in fact complementary. Precaution and Decision-Making In risk management, the precautionary principle allows for the fact that science may not have all the answers or that scientific opinion may be divided. It is therefore an attempt to accommodate the complexities of an uncertain world into decision-making. This does however bring the precautionary principle into conflict with those who want decisions to be based entirely on the results of available scientific evidence or on majority scientific opinion. That said, it is important to recognise that support for such science-based decision-making is more a product of political expediency and commercial interest than of adherence to a higher scientific ideal (see example on page 4). 1 Contini et al (1991). Benchmark Exercise on Major Hazard Analysis. EUR EN Commission of the European Communities, Luxembourg. cited in Tickner, J et al. (1999). The Precautionary Principle in Action: A Handbook. Science and Environmental Health Network, USA. 3
5 The precautionary principle is intended to allow decision-makers the option of deciding that a product or activity is unacceptable because: 1) The available scientific evidence is not good enough (e.g. the right questions have not been asked in the research) and does not provide an adequate level of scientific certainty. 2) There is convincing and rigorous scientific evidence that casts doubt over the majority scientific opinion. Although there are many cases where this will not be necessary, there are clearly cases where it is. Decision-makers are in a difficult position because science does not necessarily always have the answers and it can also present conflicting evidence. The precautionary principle is a way to help deal with such situations. A further aspect of the precaution debate is how much risk decision-makers are prepared to accept. It is clear that, even when there is plenty of evidence and the calculated risks are small, there are still social, environmental, political, economic and cultural factors to deal with in assessing whether risks are acceptable. Put simply, some people are more cautious than others. Sound science when it suits? Canadian industry (and correspondingly the Canadian Government) does not want European regulation of biotechnology to take into account social and economic criteria because it fears constraints on market access for economically valuable GMOs. Canada has thus been pushing for decisions based on sound science and risk assessment and it opposed the use of socio-economic criteria in the Biosafety Protocol. Canadian industry (and correspondingly the Canadian Government) does want domestic endangered species legislation to take into account social and economic criteria 2 because it fears decisions based solely on the science (i.e. which species are at risk) may constrain its ability to exploit what it sees as economically valuable natural resources. This case is slightly simplified but illustrative nonetheless. It is therefore impossible to expect that decisions can be based purely on science, and it is important to recognise that other factors play a part. For example, if decisions were based solely on the scientific evidence, it is highly likely that cigarettes would be banned and medicinal use of marijuana would be legalised in the UK. However, cultural, social and economic factors, as well as public opinion, all play a part in the fact that cigarettes are legal and marijuana is banned in the UK. This situation is unlikely to change without some kind of social and cultural (and thus political) shift. As well as recognising the multiple aspects of risk management, it also important to acknowledge that risk acceptability is different in different parts of the world. One country s inalienable right is another country s threat to social order (e.g. varying gun control policies and speed limits in different countries). Also, some populations accept, and in fact expect, a greater degree of government intervention than others. It is hardly surprising therefore that there is currently no one-size fits-all approach to risk management and perhaps it is unlikely that there ever will be. We therefore cannot expect all countries to have the same attitude towards the potential risks posed by, for example, habitat loss, river pollution, food poisoning and, of course, genetically modified organisms (GMOs). 2 Morrison, S. (2000). Wildlife Law Sparks Concern. Financial Times. 12/4/00. 4
6 Recognition of all these aspects of decision-making is a first step to a sensible debate about using the precautionary principle. The next step is to address the potential conflicts between national-level decision-making and international responsibilities such as the WTO rules. Important questions to address include: 1) Does the use of the precautionary principle pose a threat to market access? 2) If so, is this important, and for whom? 3) If it is important, are there cases where use of the precautionary principle is not legitimate? 4) If so, how can we ensure that governments have the right to take precautionary decisions on behalf of their population whilst minimising potential for abuse? 5) Do the current international trade rules achieve this adequately or do they need to be changed? This paper will not explore all of these questions. Instead, based on an assumption which may not necessarily be correct that the answer to the first three questions is yes, the next section will, in the context of questions four and five, outline the latest international development of the precautionary principle - the Biosafety Protocol - and compare it to WTO rules. Latest Developments: The Biosafety Protocol The Biosafety Protocol is an international agreement aimed at regulating the trade and use of Living Modified Organisms (LMOs) 3. The Protocol establishes a process of Advanced Informed Agreement (AIA) including risk assessment and decision-making procedures for importers of LMOs 4. One of the major bones of contention during the Biosafety Protocol negotiations in Cartagena (February 1999), and subsequently in Montreal (January 2000), was whether and how to incorporate the precautionary principle within the Protocol. The eventual compromise that was reached involved referring to Principle 15 of the Rio Declaration 5 in the preamble and objectives of the Protocol and then providing a more detailed description in the Protocol s decision-making procedures. This description reads: Lack of scientific certainty due to insufficient relevant scientific information and knowledge regarding the extent of the potential adverse effects of a living modified organism on the conservation and sustainable use of biological diversity in the Party of import, taking also into account risks to human health, shall not prevent that Party from taking a decision, as appropriate, with regard to the import of the living modified organism in question as referred to in paragraph 3 above, in order to avoid or minimize such potential adverse effects 6 (underlining added). 3 i.e. living GMOs. 4 For a full explanation of the Biosafety Protocol, see the RSPB briefing: The Biosafety Protocol: An Analysis, copies of which should be available at this conference. 5 Principle 15 of the Rio Declaration states that: In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation. 6 Biosafety Protocol, Article
7 What this basically means is that an importer can ban, or impose conditions on, the import of an LMO 7 if the evidence presented in the risk assessment is felt to be incomplete. On the face of it this only applies to uncertainty regarding the extent of impacts (i.e. how bad they are) and does not specifically allow precautionary action where uncertainty exists on the nature of the potential impacts (i.e. what the impacts actually are). However, it is difficult to know at this stage what impact such semantics will have on real world decision-making. This definition also does not take into account cases where there is a lack of scientific consensus. That said, the risk assessment procedure set out in Annex II of the Protocol does state that, Lack of scientific knowledge or scientific consensus should not necessarily be interpreted as indicating a particular level of risk, an absence of risk, or an acceptable risk 8 (underlining added). The Protocol does therefore deal with this issue to some degree. How then does this compare with the existing rules of the WTO s Agreement on Sanitary and Phytosanitary Measures (SPS) 9? Precaution is dealt with in Article 5.7 of the SPS Agreement, which states that: In cases where relevant scientific evidence is insufficient, a Member may provisionally adopt sanitary or phytosanitary measures on the basis of available pertinent information, including that from the relevant international organizations as well as from sanitary or phytosanitary measures applied by other Members. In such circumstances, Members shall seek to obtain the additional information necessary for a more objective assessment of risk and review the sanitary or phytosanitary measure accordingly within a reasonable period of time. The problems with this definition are that: it seems to suggest that precautionary decisions are not objective; it requires that precautionary decisions are provisional; it places a requirement on regulators to actively seek further information; it seems to assume that it is just a matter of time before further scientific evidence will appear that will facilitate a more objective decision; it leaves it to a WTO Dispute Panel to decide what a reasonable period of time is in which to gather further information and take a more objective decision. The SPS Agreement therefore does not adequately recognise that the precautionary principle is a rational and objective response to scientific uncertainty and scientific disagreement. Precautionary action is also a rational and objective response to unacceptable risk. Also, a precautionary decision is not, de facto, a provisional measure. There may be cases, although rare, where science is unable to adequately establish sufficient certainty or consensus. This presents real problems for WTO Panels in deciding what is a reasonable period of time to gather more information and review the 7 This precautionary principle definition only applies to decisions made on LMOs for intentional introduction into the environment (e.g. seeds for planting) and LMO commodities (e.g. seeds for food, feed and processing). 8 Biosafety Protocol, Annex II Paragraph 4. 9 Before the Biosafety Protocol was agreed, the SPS Agreement was where GMO regulators would most likely have turned to for guidance. 6
8 decision. Finally, the burden should lie with the proponent, rather than the regulator, of an activity to seek and present further information. The Biosafety Protocol is an improvement on the SPS Agreement because it does not assume that precautionary decisions are provisional and therefore does not require those taking precautionary action to actively seek further information and review the decision within a reasonable period of time. That said, the use of the words insufficient relevant scientific information in the Protocol s definition could be interpreted as meaning that there will always be a point at which sufficient information will come into existence. However, the important point is that there is no requirement for the regulator to seek such sufficient information. Also unlike the SPS Agreement, in some cases 10 the Protocol allows importers to require exporters to carry out risk assessments and/or require exporters to pay for risk assessments 11. This is potentially significant as it goes some way to placing the burden of proof (i.e. that an LMO poses an acceptably low risk of adverse impacts on biodiversity) onto the proponents of the activity (i.e. the exporters of LMOs). Although the Protocol does not specifically state that precautionary measures are provisional, there is a system for reviewing decisions. A Party of import can, in light of new evidence, review a decision at any time 12. Also, an exporting Party can request an importing Party to review a decision in light of changed circumstances or new evidence that could affect the risk assessment, and the importer has to respond to such a request within 90 days and provide a reason for its decision 13. Again, this is an improvement on the SPS Agreement because, like SPS, the Protocol recognises the importance of reviewing decisions in light of new evidence but crucially it places the burden of seeking further information on those proposing an activity, rather than on those regulating it. In summary, the Biosafety Protocol has enhanced the status of the precautionary principle in international law. Countries can take precautionary decisions concerning LMO imports and the Protocol s description and operation of the precautionary principle is an improvement on Article 5.7 of the WTO s SPS Agreement. It is therefore a positive development in the ongoing process of operationalising the precautionary principle in law. The Way Forward The Biosafety Protocol has made some progress in addressing the issue of how to operationalise the precautionary principle. It strikes a reasonable balance between trying to ensure that national governments can take precautionary decisions that are consistent with the risks acceptable to their populations whilst also trying to ensure that the precautionary principle is used in a transparent way and includes evaluation of available scientific evidence. However, it is by no means the last word on the issue and further debate on the precautionary principle is both necessary and inevitable, 10 i.e. for risk assessments concerning LMOs for intentional introduction into the environment. 11 Biosafety Protocol, Articles 15.2 and Biosafety Protocol, Article Biosafety Protocol, Articles 12.2 and
9 especially in terms of its use in the risk assessment process and its relationship with trade rules and the need to change Article 5.7 of the SPS Agreement. If it is left to WTO Dispute Panels to decide how the principle can and should be used, there is a possibility that such high profile environment-related disputes could further undermine both the principle and the WTO. This is especially true for politically sensitive issues such as GMOs so a political solution is therefore likely to be preferable. The EU has, of course, made clear its intention to pursue such a negotiated solution. There is, however, uncertainty as to how exactly to go about finding a compromise because of opposition to such negotiations. In very broad terms, there are two main groups opposed to clarification and use of the precautionary principle within the trade system; a large group of developing countries and a group of industrialised countries, most notably the USA. Generally speaking, the developing countries are wary that the introduction of any environment issue into the WTO, such as the precautionary principle, is merely a front for eco-imperialism (i.e. an excuse to impose western standards on them) and/or an alternative way to block their imports if tariffs are reduced. If such mistrust can be overcome, the EU is likely then to come up against the fact that the issue is not a priority for most developing countries and movement on issues such as implementation, capacity building and agricultural/ textiles reform will be needed first. Countries such as the USA on the other hand, whilst equally concerned about market access for their products (e.g. GMOs), have a more fundamental objection to the precautionary principle. Perhaps this can only really be explained through cultural differences concerning public acceptability/trust of science and government intervention which have resulted in different regulatory systems. So what can the EU do? Possible ways forward could include: Pushing for further development of the precautionary principle through MEAs. This could help strengthen ties with many countries that, outside the WTO, are supporters of the principle; Refining the EU s paper on the precautionary principle and continuing to use it to promote discussion in appropriate fora; Continuing discussions with the USA and other sceptical industrialised countries on precaution, risk assessment and the nature of regulation/decision-making in the respective countries; Identifying case-studies of precautionary decision-making in different countries to inform the debate; Promoting more discussion about the value-judgements that are part and parcel of risk assessment to try and create a more sensible debate about science and decision-making; Building trust with developing countries. Given the continuing opposition to the EU s broad agenda for a comprehensive round, this may require a serious rethink of the EU s trade agenda and priorities. For example, concessions may have to be made on implementation, reform of current agreements and the scope of further negotiations in order to foster greater trust between the parties. One of the many challenges of globalisation is reconciling the desire for global agreements with the need to allow for flexibility because of different social, cultural, environmental and economic circumstances and values. The debate over the precautionary principle is, perhaps, a test case for 8
10 this reconciliation and will only be successfully resolved if there is greater understanding of the realworld issues surrounding risk-assessment, precaution, science and decision-making. 9
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