NACEC and Issues of Dispute Settlement
February 26, 2001
John D. Wirth*

At the annual meeting of the Association of American Law Schools held in San Francisco, January 3-6, I participated in a panel on North American Cooperation organized by Professor Marly Weiss of the University of Maryland Law School. The title of our session was Procedures and Remedies Under NAFTA and its Labor and Environmental Side Agreements: Comparative Reflections on International Dispute Resolution Mechanisms. As a member of the Joint Public Advisory Committee (JPAC) of the North American Commission for Environmental Cooperation (NACEC) I shared the platform with Law Professor Robert Lutz, a specialist on the growth and development of international practice in dispute resolution, and John McKennirey, a Canadian government official and first director of the Nafta Labor Commission.

NACEC itself is organized in three divisions: the Council, which is the policy-making arm of the Commission, comprised of the three environmental ministers and their staffs; the tri-national Secretariat based in Montreal; and the 15-member JPAC which represents the public, or broadly speaking civil society. Interestingly, when the JPAC first met in 1994 it organized itself not on the basis of nationality, but as a group of citizens representing the emerging community of North America, emphasizing the development of cooperative practices across our three countries.

While considerable public interest has always attached to enforcement issues, the dispute settlement mechanism and sanctions, the bulk of the Commission's work has concentrated on advancing cooperation and harmonizing procedures. For example, considerable progress has been made in the Sound Management of Chemicals program, including, most notably, Mexico's decision to phase-out the use of DDT. Taking Stock is a yearly report on pollution releases in Canada and the U.S., with Mexico gearing up to participate as well according to the same reporting protocol. Programs to promote environmental management training and capacity building, of particular interest to Mexico, are ongoing. Research on North American trade corridors and the environmental effects of trade is another aspect of NACEC's work plan. Information on these and other programs is documented on the Commission's web site.

To be sure, the role of citizens' participation in enforcement is arguably the most innovative aspect of the Commission's charge under the North American Agreement on Environmental Cooperation (NAAEC, the side agreement to the main Nafta treaty):

The NAAEC provides, under Articles 14 and 15, a means by which anyone living in any of the three countries of North America may bring the facts to light concerning the enforcement of environmental legislation on the books of any of the three countries.

Under Article 14, written assertions that a party to the NAAEC is failing to enforce an environmental law effectively may be submitted by any person of nongovern-mental organization to the Secretariat of the NACEC, the institution established to steward the implementation of the NAAEC. If the submission is determined to satisfy a number of criteria and factors (identified in paragraphs 1 and 2 of Article 14), a response will be requested from the party named in the submission. In light of that response, the Commission may proceed with the development of a factual record on the matter, as provided by Article 15."

Of some 28 submissions to date (December, 2000), only two have resulted in factual records: the Cozumel Pier case opened in 1996, followed by B.C. Hydro in 1997. One submission was withdrawn: the effects of groundwater drawdown by Fort Huachuca on the San Pedro River bird sanctuary. (This was subsequently investigated by the Secretariat under Article 13 of the NAAEC; the recommendations of an expert group headed by Greg Thomas of the Natural Heritage Institute and a trinational advisory committee on which I served have been published.) Ten submissions are pending and the rest have been dismissed. Given that only two submissions have resulted in factual records, and that these two (Cozumel and Ontario Hydro) are still being considered by the parties, is the process under Articles 14 and 15, however innovative, a viable instrument?

My first comment is that the Article 14 process in particular is still being worked out. In 1994, this section of the NAAEC still included bracketed language. Unable to find agreement among the parties, the Council asked the JPAC to develop guidelines, which it did in 1994-95 after extensive consultations with the public in all three countries. The submission process has been governed by these guidelines ever since, and as of current writing the three governments are still unable to find common ground over certain process issues. Driving this disagreement over language are differences of law, style, and political culture.

In Mexico, for example, the right of citizens to sue their own government for non-enforcement came after the NAAEC and is still being tested, the San Ignacio salt works (gray whale) case being a most notable recent example. Mexican officials have been particularly concerned about disclosure of information during the submission process, about the leaking not just of proprietary information (which is safeguarded under NAAEC), but especially of reporting that impinges on their control of the process itself. The PRI ceded ground to NGOs, but it did so grudgingly. Furthermore, SECOFI, the powerful trade ministry, made no secret of its opposition to the process. Since November, however, the new government of Vicente Fox has embraced the environmental perspective, to the extent of creating a new office in the environmental ministry devoted to citizens' participation. This is headed by Regina Barba, until recently the Chair of JPAC.

As for Canada, during this period deep cuts in the budget of Environment Canada eroded its capacity to monitor and enforce Canadian environmental laws, and only three of the ten provincial governments have ratified the Side Agreement. The Federal government has been slow to foster a National Advisory Committee of citizens' groups, the counterpart to the U.S. NAC (and the parallel Government Advisory Committee of State, local and tribal officials). And while Canadian NGOs have been eager to avail themselves of Article 14, responsible officials in the Canadian federal bureaucracy have reacted warily while seeking to protect the government from what they believed was the risk of liability.

The result was a protracted effort by sub-ministerial staff in Mexico and Canada to bureaucratize the submission process, making the guidelines less transparent and more amenable to government supervision. This wholly unexpected (but in retrospect understandable) conjuncture of interests by Mexico and Canada came to a head at the June Council meeting in Dallas, where in closed session changes were discussed but then set aside in the face of vigorous objection by EPA Administrator Carol Browner. The upshot is that no changes in the guidelines would be made without consulting JPAC, and JPAC was charged with reviewing the submission process in light of questions raised by the parties, and after further input from the public. Having argued consistently against weakening the submission process, JPAC itself emerged from this critical Council meeting with enhanced stature.

At JPAC meetings in Washington (October, 2000) and in Montreal (December), the public--as it has been all along--was overwhelmingly for retaining the current guidelines, with certain suggestions for fine-tuning. The issue will probably be resolved at the upcoming June Council meeting in Mexico City, although with all three governments under new administrations it remains to be seen how the parties will line up.

It is possible that JPAC may be charged with taking a direct role in decision-making with respect to factual records, as for example pronouncing on the merits of a factual record. In its implementation role, the Secretariat itself does not pronounce on the merits of a factual record. It is possible that the Secretariat may be asked to do more to assist submitters, but its role in discouraging frivolous submissions by a rigorous interpretation of the guidelines will surely continue.

On balance, the experience with Articles 14 and 15 has been both positive and significant. Fines and sanctions remain as a possible ultimate remedy for a persistent pattern of non-enforcement, but far more important in each immediate submission has been the role of information. Critics of the process have missed the powerful role of "intrusive sunshine" in exposing bad practices, which are then reported by the press. The role of citizens' participation has been strengthened, both through the enhanced stature of JPAC, and through the heading-off of efforts to circumscribe and bureaucratize (that is, to weaken) the submission process. And because NACEC is politically accountable to the three governments, these protected discussions over the implementation of Articles 14 and 15 are artifacts of an important learning process, markers of what can be called the emergence of a North American community.

In conclusion, while process issues over enforcement are important, it bears repeating that much of the Commission's work is concerned with advancing other aspects of cooperation. Pending issues include:

• Ratifying the long delayed Transboundary Environmental Impact Agreement (TEIA) among the three countries.
• Full participation by Mexican industry in the yearly Taking Stock report.
• Reaching agreement among the parties on emerging environmental trends.
• Additional research on the environmental effects of Nafta, using the same criteria and a common research agenda.
• Recent challenges to environmental law under Article 12 of the main Nafta Agreement.
• Securing an adequate budget for NACEC, which is seriously underfunded.

* John D. Wirth is Gildred Professor of Latin American and Environmental History at Stanford University. He serves as one of the 5 U.S. members of JPAC, and is President of the North American Institute. His most recent book is Smelter Smoke in North America, The Politics of Transborder Pollution, University of Kansas Press, 2000.

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