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May 2011Vol. 13, No. 2

MESSAGE FROM THE CHAIRS

Robin CraigFlorida State University College of Law

Chair, Marine Resources CommitteeABA Section of Environment,

Energy, and Resources

Roger MartellaSidley and Austin LLP

Chair, International Environmental LawCommittee

ABA Section of Environment,Energy, and Resources

Chris J. CostanzoSolarReserve

Co-Chair, International Environmental LawCommittee

ABA Section of International Law

Royal C. GardnerStetson University College of Law

Co-Chair, International Environmental LawCommittee

ABA Section of International Law

Welcome to this very special joint newsletter for theSEER Marine Resources and SEER and SILInternational Environmental Law Committees! Theoceans have always had a very clear connection tointernational law, dating back to ancient custom.Attempts to conform the international rules that apply

to the oceans range from Hugo Grotius’s 1609 MareLiberum to the most recent incarnation of the UnitedNations Convention on the Law of the Sea and theUnited States’s recurring debate over whether to ratifythat treaty. Our three committees are therefore veryhappy to present this joint newsletter recognizing thatconnection.

The articles in this newsletter address a variety ofcurrent topics at the intersection of marine resourcesand international law. One article, for instance—“Papahânaumokuâkea Inscribed as World HeritageSite”—describes how the World Heritage Conventionrecently changed the status of an American marineresource, the Papahânaumokuâkea Marine NationalMonument. This huge marine reserve protects the coralreef ecosystem of the Northwestern Hawaiian Islands,and it is now one of the few World Heritage Sites thatwas designated for both its ecological and its culturalimportance.

Other articles address emerging issues of globalimportance. In “Before the Sun Sets: Changing OceanChemistry, Global Marine Resources, and the Limits ofOur Legal Tools to Address Harm,” Mark Spaldingdiscusses the increasingly recognized—and increasinglyconcerning—problem of ocean acidification, which hasbeen described by some as climate change’s “eviltwin.” Like climate change itself, ocean acidificationrequires a global solution—and it also providesperspectives regarding reliance on geo-engineering as asolution to more conventional climate changeproblems. Chad McGuire, in turn, takes up the

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International Environmental LawCommittee NewsletterVol. 13, No. 2, May 2011Brett Grosko, Editor

In this issue:

Message from the ChairsRobin Craig, Roger Martella,Chris J. Costanzo, andRoyal C. Gardner .................................... 1

Papahânaumokuâkea Inscribed as WorldHeritage SiteOle Varmer and Theodore M. Beuttler .... 3

Before the Sun Sets: Changing OceanChemistry, Global Marine Resources, and theLimits of Our Legal Tools to Address HarmMark J. Spalding ..................................... 8

Marine Mammals and International Trade:Balancing Social Conscience with TradeObligations—A Summary and Update on theWorld Trade Organization Seal ProductsDisputeChad J. McGuire .................................. 13

Ban on the Use and Carriage of Heavy GradeOils in AntarcticaPeter Oppenheimer .............................. 18

Brazilian Pre-Salt Oil Reserve Exploration:Regulatory and Environmental AspectsRoberto Liesegang andMaristela Abla Rossetti ......................... 20

Copyright © 2011. American Bar Association. Allrights reserved. No part of this publication may bereproduced, stored in a retrieval system, ortransmitted in any form or by any means,electronic, mechanical, photocopying, recording,or otherwise, without the prior written permission ofthe publisher. Send requests to Manager,Copyrights and Licensing, at the ABA, e-mail:copyright@americanbar.org.

Any opinions expressed are those of thecontributors and shall not be construed torepresent the policies of the American BarAssociation or the Section of Environment,Energy, and Resources.

intersection of international trade and marine species in“Marine Mammals and International Trade: BalancingSocial Conscience with Trade Obligations—ASummary and Update on the World TradeOrganization Seal Products Dispute.”

Finally, of course, the oceans and associated coastalareas play important roles in both domestic energydevelopment and world energy and environmentalissues, and two articles in this newsletter discuss thatintersection. Oil spills have long been a concern inmarine environmental protection, and the summer 2010Gulf oil spill focused world attention on the continuingthreat that oil spills pose to the marine environment,prompting reformation of offshore drilling regulationboth in the United States and abroad. Moreover, Gulfoil spill issues were the subject of sessions at both theABA SEER 18th Section Fall Meeting in New Orleansin September 2010 and the ABA SEER 40th AnnualConference on Environmental Law in Salt Lake City inMarch 2011. “Ban on the Use and Carriage of HeavyGrade Oils in Antarctica” discusses this persistentenvironmental threat in a different environment,examining the growing threat of an oil spill in Antarcticaand its surrounding waters. This threat, the authorargues, could undermine the international agreementsto keep Antarctica as an international and peacefulecological preserve. In turn, Roberto Liesegang andMaristela Abla Rossetti discuss Brazil’s developmentof its vast oil fields in “Brazilian Pre-Salt Oil ReserveExploration: Regulatory and Environmental Aspects.”

We hope you enjoy this informative exploration intothese new developments and critical matters. Pleasecontact Brett Grosko at bgrosko@verizon.net, if youwould like to contribute to future issues of ournewsletters.

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PAPAHÂNAUMOKUÂKEA INSCRIBED ASWORLD HERITAGE SITE

Ole VarmerTheodore M. Beuttler

On December 3, 2010, resource managers, marinescientists, conservation activists, political leaders andpolicy makers commemorated the inscription of thePapahânaumokuâkea Marine National Monument inthe northwestern islands of Hawaii on the WorldHeritage list. They were also commemorating the 10thanniversary of the establishment of the NorthwesternHawaiian Islands Coral Reef Ecosystem Reserve(“Reserve”) by President Bill Clinton. At that time, theReserve became the single largest nature preserve everestablished in the United States. Calling the designation“a bold and visionary action,” President Clintonrecognized the work of an unprecedented coalition ofgovernment agencies, conservation groups, andconcerned citizens as “[a] big step forward, not onlyfor the United States, but for the oceans around theworld . . . setting a new global standard for coral reefand wildlife protection.” The Reserve is now part ofPapahanaumokuakea Marine National Monument,created by President George W. Bush in 2006. OnJuly 30, 2010, “Papahânaumokuâkea” was designatedas the first mixed site in the United States beingrecognized as a place of “outstanding universal value”for both its natural heritage and its cultural heritageunder the 1972 World Heritage Convention(“Convention”). It is also the world’s first culturalseascape recognized for its continuing connections toliving indigenous people.

Over the past few decades, this Convention hasbecome the mechanism for international cooperationon the conservation of the cultural and natural heritageof international significance by its Parties through theirdomestic laws and management plans. Today, 187countries or States are Parties to the Convention,making it an almost universally accepted set ofprinciples and framework of action. See http://whc.unesco.org/pg.cfm?cid=246.

This article will provide an overview of the WorldHeritage Convention and how it facilitates the

cooperation among Parties in their respectiveprotection and management of natural and culturalresources of mutual interest. It will also provide anoverview of how and why the very special place in themarine environment, now known asPapahânaumokuâkea, was inscribed on this mostprestigious list of predominantly terrestrial sites. Finally,it discusses how the listing of this and other sites in themarine environment have extended beyond theterritories of nations and onto their continental shelf andexclusive economic zone (EEZ) and whether it ispossible that the World Heritage Convention maysomeday include sites in the high seas, such as theTitanic, which will be protected by the 2001UNESCO Convention on the Protection ofUnderwater Cultural Heritage on the 100th anniversaryof its sinking in April 2012.

I. The Development of the 1972 WorldHeritage Convention and List of Sites ofNatural and Cultural Heritage: U.S.Leadership

A. The Catalyst for InternationalCooperation on Certain HeritageEnactment of international and domestic environmentaland historic preservations laws can often be traced to aharm or threat to resources that raises concernsufficient for action by governments. In the case of theWorld Heritage Convention, the catalyst was theimpending loss of ancient Egyptian temples at AbuSimbel from flooding caused by the construction of theAswan Dam. In response, fifty nations acting inconjunction with the United Nations Educational,Scientific and Cultural Organization (UNESCO) cametogether to assist in an $80 million project that includeddisassembling and relocating the temples to higherground. The project was a recognition of theinternational cultural significance of the Abu Simbeltemples and helped lead to the development of theWorld Heritage Convention as an agreement betweenParties to use their national sovereignty and authority toprotect and manage cultural resources of outstandingvalue to the world. With the help of the InternationalCouncil on Monuments and Sites (ICOMOS), partiesto UNESCO began preparation of a draft conventionon the protection of cultural heritage. During this same

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period there was also interest in protecting naturalresources as a result of the developing environmentalmovement.

B. United States Leadership in Developingthe World Heritage ConventionThe United States played a significant, leading role inthe development of the 1972 World HeritageConvention and particularly in proposing that its scopeinclude natural as well as cultural heritage. At a WhiteHouse conference in Washington, D.C., in 1965, theUnited States called for a “World Heritage Trust” thatwould stimulate international cooperation to protect“the world’s superb natural and scenic areas andhistoric sites for the present and the future of the entireworld citizenry.” In 1968, the International Union forConservation of Nature (IUCN) developed similarproposals for its members. These proposals werepresented to the 1972 United Nations Conference onthe Human Environment in Stockholm. Eventually, asingle text was agreed upon by all parties concerned,and the Convention Concerning the Protection ofWorld Cultural and Natural Heritage was adopted bythe General Conference of UNESCO on November16, 1972. By regarding heritage as both cultural andnatural, the Convention underscores the ways in whichpeople interact with nature, and of the fundamentalneed to preserve the balance between the two. Seehttp://whc.unesco.org/en/convention/#Brief-History.In 1973, the United States became the first nation toratify the Convention by a vote in the Senate of 95-0.The Convention entered into force on December 17,1975, after ratification by the requisite number ofStates Parties. The United States has served as amember of the World Heritage Committee for much ofthat body’s existence and in 1978 hosted the firstcommittee meeting that listed sites. Of the 12 siteslisted at that time, two were in the United States: MesaVerde and Yellowstone National Parks. The UnitedStates has always remained a party to the Conventionand has participated in meetings despite withdrawingfrom UNESCO in 1984 over concerns about budget,management, and politicization. See http://www.unesco.jp/meguro/reprint/rejoin.htm. Between1978 and 1994, twenty United States sites wereinscribed.

II. U.S. Obligations Under the WorldHeritage Convention

As a party to the Convention, the United States isobligated to “ensure the identification, protection,conservation, presentation and transmission to futuregenerations of the cultural and natural heritage . . .situated on its territory” and take “effective and activemeasures” to protect this heritage (Convention Arts. 4,5). The Convention calls on all States Parties to“recognize that such heritage constitutes a worldheritage for whose protection it is the duty of theinternational community as a whole to co-operate,” butdoes so while “fully respecting the sovereignty of theStates on whose territory the cultural and naturalheritage . . . is situated, and without prejudice toproperty right provided by national legislation.”(Convention Art. 6, available at http://whc.unesco.org/en/conventiontext/). The listing of asite does not in any way result in the loss ofsovereignty, rights, or authority over the site. To thecontrary, listing reflects a promise by the Party toprotect and manage a particular site in a mannerconsistent with its own laws and management plans asdescribed in the nomination package. If a listed sitesubsequently is included on the list of World HeritageSites in Danger (Art. 11), the Party is obligated toundertake appropriate measures to enhance or fulfillthe protection and management promised when it wasinscribed or risk having the site delisted.

III. Listing of Papahânaumokuâkea as aWorld Heritage Site

Under the Convention, the list of sites is determinedand maintained by the World Heritage Committee. Thecommittee is composed of 21 elected representativesof nations that are parties to the Convention. TheIUCN, the International Centre for the Study of thePreservation and Restoration of Cultural Properties(ICCROM), and ICOMOS make recommendationsto the committee as to whether sites meet the stringentstandards for listing under the Convention and itsimplementing guidelines. In general, the committeeadds about 25–30 sites per year to the list. Today,there are 911 sites on the list, located in 151 countriesaround the world.

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Pursuant to its authority under federal law, the NationalPark Service completed the process to identify sites tobe nominated by the United States to the WorldHeritage Committee and announced the decision inearly 2009. 16 U.S.C. § 470a-1, a-2, d; 36 C.F.R. §73; 74 Fed. Reg. 5,677 (2009). Papahânaumokuâkeawas among the sites nominated by the United Statesand submitted to the World Heritage Committee. See74 Fed. Reg. 5,677 (2009). The committeedetermined, based on the recommendations of itsadvisory bodies (ICOMOS and IUCN), that thenomination met at least one of the necessary criteria.The site was inscribed on the World Heritage list inJuly of 2010 during the committee’s meeting inBrasilia.

The addition of Papahânaumokuâkea to the list ofWorld Heritage Convention sites is a nod to more thana century of domestic efforts designed to protect therich cultural and natural resources of the NorthwesternHawaiian Islands (NWHI). The NWHI have beenfederally protected since 1909, Exec. Order No.1019, and have been designated as a National WildlifeRefuge for over 70 years. 5 Fed. Reg. 147 (1940). Asmentioned above, in 2000, President Clinton declaredthe federal submerged lands and waters surroundingthe NWHI as a Coral Reef Ecosystem Reserve,extending federal protections approximately 50 nauticalmiles out from the state of Hawaii’s seaward boundary.Exec. Order No. 13178, 65 Fed. Reg. 76,903(2000); Exec. Order No. 13196, 66 Fed. Reg. 7,395(2001). The state of Hawaii strengthened theseprotections in 2005 when it created the NorthwesternHawaiian Islands Marine Refuge, a state-regulated,restricted-entry protection zone encompassing allNWHI land and waters within Hawaii’s jurisdiction.HAW. CODE R. § 13-60.5. In 2006, President Bushexercised his discretion under the Antiquities Act byissuing Presidential Proclamation 8031, whichestablished the Northwestern Hawaiian Islands MarineNational Monument (subsequently renamedPapahânaumokuâkea). 71 Fed. Reg. 36,443 (2006).As codified in regulations promulgated by theDepartment of Commerce through the NationalOceanic and Atmospheric Administration, and theDepartment of the Interior through the Fish andWildlife Service, the proclamation prohibits, inter alia,

the taking, possessing, injuring, or damaging of anyliving or nonliving Monument resource withinPapahânaumokuâkea, and subjects prospectiveentrants to strict permit requirements. 50 C.F.R. pt.404 (2006).

IV. Recognition of the Outstanding Value ofPapahânaumokuâkea’s Natural andCultural Heritage

A. Natural HeritageThe remote chain of atolls and surrounding watersrepresent the first U.S. site to be added to the WorldHeritage list in over 15 years and the nation’s first onthe list of “mixed sites” designated for their outstandingvalue for both their natural heritage and their culturalheritage. Papahânaumokuâkea includes a 1200-mile-long string of coral islands, atolls, seamounts, banks,and shoals, running northwest from the main HawaiianIslands. The nearly pristine environment represents acomplete, holistic cross section of a Pacificarchipelagic ecosystem and supports a large number ofspecies found nowhere else, including 23 species thatare listed as threatened or endangered. The marinewaters are described as a top-predator-dominatedecosystem and include a large number of species foundnowhere else in the world. Nomination for Inscriptionof Papahânaumokuâkea Marine National Monumentfor Inscription on the World Heritage List, 2009; 74Fed. Reg. 5,677 (Jan. 30, 2009);Papahânaumokuâkea Marine National MonumentManagement Plan (2008).

B. Cultural HeritageThe islands and their significant archaeological sitesalso have deep cosmological and traditionalsignificance for living Native Hawaiian culture as anancestral environment, as an embodiment of theHawaiian concept of kinship between people and thenatural world, and as the place where it is believed thatlife originates and to where the spirits return afterdeath. On two of the islands, Nihoa andMokumanamana, there are archaeological remainsrelating to pre-European settlement and use. Naturaland cultural heritage are inseparably linked atPapahânaumokuâkea and it is the world’s first cultural

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seascape recognized for its continuing connections toliving, indigenous people.

Papahânaumokuâkea also reflects the rich maritimehistory of the Hawaiian Islands. Currently, 60 knownshipwreck sites have been identified, the earliest datingback to 1822. Combined with known American andJapanese aircraft losses that occurred during the Battleof Midway, there are a total of 127 potential maritimeresource sites, giving the area a significant andrelatively undisturbed marine archaeological legacy.Nomination for Inscription of PapahânaumokuâkeaMarine National Monument for Inscription on theWorld Heritage List, 2009.

V. Protection and Management Under theWorld Heritage Convention

The World Heritage Convention is the most widelyadopted international agreement for natureconservation and cultural preservation. The listing of asite does not affect the ownership, sovereignty,jurisdiction, or control of a site by the nationnominating it and does not provide any ownership,jurisdiction, or control to the United Nations,UNESCO, or any other international organization.Listing does, however, document internationalrecognition of the value of a site and the commitmentby the sovereign nation and the site’s owners for itslong-term protection and management under applicabledomestic laws. The legal significance of this inscriptionis really more about international recognition of thedomestic laws and management programs applied bythe United States and Hawaii to protect and managePapahânaumokuâkea than the application of any newinternational law.

Papahânaumokuâkea is cooperatively managed toensure ecological integrity and achieve strong, long-term protection and perpetuation of NorthwesternHawaiian Island ecosystems, Native Hawaiian culture,and heritage resources for current and futuregenerations. Three co-trustees—the Department ofCommerce, Department of the Interior, and state ofHawaii—protect and manage this special place.Papahânaumokuâkea is perhaps one of the first sites inthe United States, if not the world, in which the veryrestrictive measures on activities for protecting the

natural heritage also help preserve the cultural heritageas the heritage is inextricably linked particularly to thefirst nation people of Hawaii. Accordingly, throughoutthe process of developing the laws and managementplans, there has been a substantial effort by the UnitedStates to cooperate with the state of Hawaii inconsulting with representatives of Native Hawaiianpeople.

VI. Broadening the Geographic Scope ofthe World Heritage Convention: From theTerritory and Territorial Sea to the EEZ andContinental Shelf: Next Step, High Seas—Titanic?

As humans are terrestrial beings, it is no surprise thatmost, if not all, of the sites inscribed during theConvention’s first decade were predominantlyterrestrial. Although some sites that were listedincluded coastal water components, they were allwithin the territorial jurisdiction of the State, includingits territorial sea. In 1972, a State’s maritimejurisdiction under customary international law wassimply the territorial sea that, under the old “cannonshot rule,” was limited to three nautical miles (nm) outfrom the State’s coastline. This was generally regardedas the limit that a coastal State could control throughcannons stationed along its coastline. Beyond the 3-nmline were the high seas where a coastal State had nomaritime jurisdiction, with the possible exception of acustoms zone or contiguous zone for purposes ofcontrolling customs and trafficking in the territory.

However, just as the Law of the Sea has evolved torecognize the need of coastal States to extend theirjurisdiction and control in the marine environment to a12-nm territorial sea and a 200-nm exclusive economiczone (EEZ), so has the World Heritage Committee’sinterest to list sites farther out in the marineenvironment to provide international recognition of theheritage beyond a State’s territory and well into itsEEZ. This is consistent with international recognition ofdomestic laws, jurisdiction, and authority by which anation can protect its heritage far out into the marineenvironment.

In addition to Papahânaumokuâkea, another significantaddition to the list of World Heritage sites in 2010 was

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the Phoenix Islands Protected Area (PIPA), anexpanse of over 400,000 sq. km. off of Kiribati,comprising the largest marine protected area in theworld. With outer boundaries reaching as far as 200nm from Kiribati’s coastline, PIPA is the first WorldHeritage site to extend to the full limit of a State’s EEZ.Just as the Law of the Sea recognizes that a nation’scontinental shelf may extend beyond the 200-nm EEZunder Article 76, it is reasonable to conclude that theWorld Heritage Committee could expand therecognition of heritage of outstanding universal valuethat may be located on this extended portion of thecontinental shelf. Perhaps the best candidate may bethe wreck site of RMS Titanic, which is already thesubject of protection under an international agreementand various orders under the maritime law of salvage.On April 14–15, 2012, the 100th anniversary of itssinking, it will become an “underwater culturalheritage” and thus protected by the laws of nations thatare parties to the 2001 UNESCO Convention on theProtection of Underwater Cultural Heritage.

Ole Varmer and Theodore M. Beuttler areattorney-advisors at the National Oceanic andAtmospheric Administration (NOAA), Office ofGeneral Counsel. The views expressed herein aretheirs alone, and do not necessarily reflect those ofNOAA, the Department of Commerce, or any otheragency.

Upcoming Section Programs—

For full details, please visit the “Events &CLE” link on our Section Web site:http://www.americanbar.org/groups/environment_energy_resources.html

May 17, 2011EPA Regulation of Electric Generation: TrainWreck or Clearing the Tracks for the NewEnergy Economy?Primary Sponsor: Edison Electric InstituteWashington, DC

May 19, 2011Nano Governance: The Current State ofFederal, State, and International RegulationQuick Teleconference

May 26-27, 201115th Institute for Natural Resources LawTeachersPrimary Sponsor: Rocky Mountain MineralLaw FoundationStevenson, WA

August 4-9, 2011ABA Annual MeetingToronto

October 12-15, 201119th Section Fall MeetingIndianapolis

February 22-24, 201230th Annual Water Law ConferenceSan Diego

March 22-24, 201241st Annual Conference on EnvironmentalLawSalt Lake City

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We know the “how” and the “why” but not a lot about“how much, where, or when.” We may learn moreafter a report is submitted from the January 2011Intergovernmental Panel on Climate ChangeWorkshop on Impacts of Ocean Acidification onMarine Biology and Ecosystems. In the absence of atimeline, absolute predictability, and geographiccertainty about the impacts of ocean acidification (bothindirect and direct), the members of the conservationcommunity calling for precautionary and urgent actionon ocean acidification to restore and promote abalanced ocean will be slowed up by some who wantto know more specifics about when do we expect toreach thresholds that will affect certain species, andspecifics about which parts of the ocean will be mostaffected and when. Some of those applying the brakeswill be scientists who want to do more research, otherswill be those who want to maintain the fossil fuel-basedstatus quo.

It is challenging to develop models for present andprojected economic effects on the commerce inspecific species and the people who depend on it.Likewise, we may not yet be able to fully evaluate thecost of inaction on affected communities, especiallythose whose coral reef resources are the basis of theireconomy, food security, and societal structure.However, we can begin to list the economicallyaffected constituencies—among them coastalcommunities; the shrimp, lobster, and crab fisheries;and the commercial shellfish harvesters and farmers.We can thus start to quantify the damages, or the costsof adaptation, such as installing extensive filtering andpH balancing systems in the short term and moving toonshore closed system aquaculture of shellfish andother animals. We can also presume that it will beincreasingly difficult for open ocean shellfish farmers tobuy insurance or to obtain financing for theiroperations.

This is a globally important economic issue: oceanbivalve mariculture (scallops, oysters, and mussels)alone has skyrocketed in the past two decades—doubling in the United States and representinghundreds of millions of dollars in direct and indirecteconomic activity (Andrew 2009 (citations omitted)).Often promoted as a small-scale sustainable

BEFORE THE SUN SETS: CHANGINGOCEAN CHEMISTRY, GLOBAL MARINE

RESOURCES, AND THE LIMITS OF OURLEGAL TOOLS TO ADDRESS HARM

Mark J. Spalding

Introduction

What we are about to see in the ocean is like themoments after the sun sets in the desert: the characterof the mountains and landscape changes—losing theirglow and warm colors, becoming gray and featureless.The ocean is receiving much of the emissions fromcars, power plants, and factories in its role as ourlargest natural carbon sink, but cannot absorb all suchCO

2 from the atmosphere in its plankton and plants.

Thus in a simple chemical reaction, the CO2 instead is

dissolved in water, but not fixed in plants or animals,and decreases the pH of the water, making it moreacidic. This has begun to change the pH of the oceanas a whole, and is expected to adversely affect theability of calcium-based organisms to thrive. As the pHdrops, we will see the loss of light under water, and ourcoral reefs will lose their color, our fish eggs, urchins,and shellfish will dissolve, the kelp forests will shrink,and our underwater world will become gray andfeatureless. There will be a new dawn when the colorand life return, after the system rebalances itself, but itis unlikely that any of us will be here to see it.

While we are changing the ocean’s chemistry at anunnatural speed and rate, we begin with the premisethat we all want and would collectively benefit fromrestoring and maintaining the pH of the world ocean ata level that supports resilient and productive seas,under the terms with which we are familiar. What dowe need to do to advance ocean acidification (OA)mitigation and adaptation strategies? The chemistry isstraightforward. The predicted continuation of thetrend toward greater acidity is broadly predictable, andharder to predict specifically. The effects on speciesthat live in calcium bicarbonate shells and reefs areeasy to imagine. Harm to oceanic phytoplankton andzooplankton communities, the basis of the food weband thus all commercial marine species harvest, isharder to predict, both geographically and temporally.

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The Monaco Declaration (October 2008) wasapproved by 155 scientists from 26 countries, who areleaders of research on ocean acidification, including itsimpacts. The following is a summary of declaration’sheadings, and is perhaps the beginning of a call toaction: (1) ocean acidification is under way; (2) oceanacidification trends are already detectable; (3) oceanacidification is accelerating and severe damages areimminent; (4) ocean acidification will havesocioeconomic impacts; (5) ocean acidification israpid, but recovery will be slow; and (6) oceanacidification can be controlled only by limiting futureatmospheric CO

2 levels.

In short, we can assume that there are significantcommercial, antipoverty, and national security intereststhat should fall into line with ocean conservationinterests to call for policy and law solutions that resultin OA mitigation and adaptation strategies. We knowthat ocean ecosystems are very resilient, so if thiscoalition of the self-interested can come together andmove quickly, it is probably not too late to proceed toa time and place in which we are promoting the naturalre-balancing of ocean chemistry.

I. International Law and Marine NaturalResources

Relevant international agreements establish a “firealarm” system that could call attention to the problemof ocean acidification at the global level. Thoseagreements include the UN Convention on BiologicalDiversity, the Kyoto Protocol, and the UN Conventionon the Law of the Sea. As a result, we have a processthat could bring the issue to the attention of the partiesto each of those agreements, using the power of moralsuasion to embarrass the governments into acting. Thisis especially important because the harm is mostlyanticipated and widely dispersed, rather than present,clear, and isolated. As we have already seen in lookingat climate change effects more broadly, if therecontinues to be little or no collective global action,many of the most vulnerable will examine whatadditional legal rights they may have.

Obviously attempts should be made to reachagreement on acting on OA before any nation resorts

community economic development tool, local bivalve,mussel, and pearl mariculture employs more than200,000 people in coastal villages in India. Maricultureof the giant clam is an emerging industry in remoteareas such as the Solomon Islands, where over-exploitation decimated the natural population of thesemollusks on which communities depend.

Half the human population lives on or near a coast, andthe ocean provides a substantial portion of the dailyprotein intake for hundreds of millions of peopleworldwide. Thus, ocean acidification presents asignificant potential threat to food security. Foodinsecurity, in turn, can result in the various internationalsecurity concerns that emerge from competition overbasic food resources, forced migration, and growingnumbers of refugees.

From an international marine resources lawperspective, we have a bad balance of equities andinsufficient development of facts. The cause of OA isglobal, as are the potential solutions. But most of thecosts are local in the form of lost fisheries, lost diving/snorkel tourism, and eventually, local protein shortagesdue to a substantial loss of the productivity of theocean. We do not have a specific international lawrelated to OA. When we look to extant internationalmarine resources treaties, we do not have many leversto use to force large CO

2 emitting nations to change

their behaviors. In the United States, there may be alimited use of the Clean Water Act to declare certainwater bodies as “impaired” as a result of pH changes.Likewise, we may be able to use the NationalEnvironmental Policy Act, the Endangered SpeciesAct, etc., to protect habitat and species from OA.However, none of these laws really contemplated CO

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pollution indirectly causing chemical shifts of pH in ournation’s waters, interpretation of law can go either way,and so the legal outcome is unpredictable. Thus, weget to the old saw that trial lawyers like to use: “If thefacts are not on your side, argue the law. If neither ison your side, argue like hell.” So, we have to beprepared to address this chemical modification loudlyand often and hope to heck that moral suasion willovercome mankind’s inclination toward inertia.

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expressly cover the rights and responsibilities of theParties in relation to protection of the ocean. Articles194 and 207 in particular endorse the idea that partiesto the UNCLOS must prevent, reduce, and controlpollution of the marine environment. Perhaps whendrafted these provisions did not have OA in mind, butthis obligation, combined with provisions forresponsibility and liability as well as for compensationand recourse to the legal system in each nation, maypresent some avenues to engage the parties to addressOA. Thus, UNCLOS may be the strongest arrow inour quiver, but the United States has never ratified it.

Arguably, once UNCLOS came into force in 1994, itbecame customary international law and the UnitedStates is bound to live up to its provisions. But wewould be foolish to say it would be that simple to pullthe United States into the UNCLOS dispute settlementmechanism when calling upon it to answer to avulnerable country’s demand for action on OA. Inaddition, even if the United States and China, theworld’s two largest emitters, were engaged in such amechanism, the complaining party might have a hardtime proving harm, or that the two emitter governmentsspecifically caused the harm, which are jurisdictionalrequirements for the UNCLOS dispute settlementmechanism.

II. U.S. Domestic Law, Opportunities toAddress the Most Significant Emitter

Ocean acidification is a global issue that requiresdomestic action. We can take proactive steps toaddress the issue, or we can fall into crisis-drivenpolicy making (often with all-or-nothing outcomes). In2009, following the efforts of many advocates includingStephen Lutz, Ph.D. (of the Ocean Foundation’s BlueClimate Solutions project), Congress passed theFederal Ocean Acidification Research and Monitoring(FOARAM) Act, which calls for the establishment of afederal ocean acidification planning process/program,which is to include (1) a robust observing network, (2)research to fulfill critical information needs, (3)assessments and support to provide relevantinformation to decision makers, (4) data management,(5) facilities and training of OA researchers, and (6)effective program planning and management. In this

to international litigation against the biggest emitters ofCO

2 in an effort to halt the trend toward OA. In the

United States, misperceptions about the role ofinternational treaties in domestic affairs abound. Anyinternational litigation might galvanize the public todemand reduced U.S. participation in any internationalagreements such as environmental treaties. On theother hand, such litigation, plus a call to protect jobsrelated to the ocean, might give the sittingadministration adequate cover to make urgentlyneeded commitments.

The UN Convention on Biological Diversity does notmention OA, but its focus on conservation of biologicaldiversity certainly is triggered by our concerns overOA, which has been discussed at various conferencesof the parties. At the very least, we can expect theSecretariat to actively monitor and report on OA goingforward.

The London Convention and Protocol and theMARPOL, the International Maritime Organizationagreements on marine pollution are too narrowlyfocused on dumping, emitting, and discharge by ocean-going vessels to really be of much assistance inaddressing OA.

The UN Framework Convention on Climate Change(UNFCC) and the Kyoto Protocol are the mainvehicles for addressing climate change. Neither theconvention nor the protocol refers to oceanacidification. And, the “obligations” of the UNFCCparties are expressed as voluntary. At best, theconferences of the parties to this convention will offer atime and place to discuss OA. However, the pooroutcomes of the Copenhagen climate summit and theConference of the Parties in Cancun do not bode wellfor action any time soon. And, a very small group ofconservatives are bringing to bear significant financialresources in the United States, as well as in othernations, to make climate change a political “third rail”for which those who raise it can be summarilydismissed as extremists who are seeking to underminethe American way of life, choice, and capitalism itself.

Similarly, the UN Convention on the Law of the Sea(UNCLOS) does not mention OA. But it does

11

shellfish farm harvests, and, despite investments inspecialized filtration systems, it has been predicted thatone or more shellfish mariculture harvests inWashington will experience full commercial failurewithin the next 24 months (Personal conversation withTony Haymet of Scripps Institution of Oceanography,Oct. 19, 2010).

CBD and EPA settled the May 2009 lawsuit and itwas voluntarily dismissed by CBD in March 2010. InNovember 2010, to fulfill its settlement obligations inpart, EPA released an official memorandum to assistregions and states in preparing, reviewing, andreporting the impacts of ocean acidification (thusformally acknowledging CBD’s interpretation of theClean Water Act). However, according to a December1, 2010, blog posting by the Center for OceanSolutions regarding the memorandum, there is aconcern that while the guidance reinforces therequirement to list a water body as impaired upon thedeviation from norm of 0.2 pH units, very few coastalstates have the high-resolution instruments necessary tomeasure the baseline pH level, determine the naturallevel of pH variation, and actually track changes in pH.

Although the memorandum does not impose newregulations for pH in the ocean, it is still an importantstep in recognizing ocean acidification as a seriousproblem for ocean and marine resources. Importantly,it gives the go-ahead to states and territories that haveaccess to reliable pH data to include acidifying watersin their 303(d) “impaired” lists. While thismemorandum marks progress in regulation related toOA, it is likely to be caught up in the concerted attackby conservatives funded by fossil fuel industry donateddollars to question whether EPA even has authority toregulate greenhouse gas emissions.

Another avenue for using the rule of law to ensure thatadequate attention is paid to OA is the EndangeredSpecies Act, which covers listing species, the design ofmanagement plans to promote recovery, encouragesinternational cooperation (something rare), andprescribing prohibited taking of such endangeredspecies. On January 25, 2011, the Center forBiological Diversity “filed a notice of its intent to suethe National Marine Fisheries Service for the agency’s

manner, we have a start toward better understanding ofthe problem, but probably not a sufficientlypreventative approach. (Unfortunately, funding cutsproposed in the House of Representatives wouldabolish NOAA’s nearly completed integrated oceanacidification program and strategic research plan,eliminating essential research that helps protect themillions of jobs associated with marine fisheries andcoastal recreation opportunities.)

Ocean acidification is not really tied back to a specificprivate firm or industry sector. Thus, we are reallytalking about government inaction to curb CO

2

emissions in general, which is not very easily addressedusing domestic courts. In addition, because OA is notbroadcast pollution sent across a boundary, but ispollution drawn inward by the ocean as a carbon sink(which we want it to be able to do, or else we wouldbe much worse off), we may not be able to reach thedirect harm causation threshold to gain jurisdiction.There may be problems of proof (absence ofimmediate damages—harm/costs), and it is unlikelythat one can obtain real injunctive relief, or punitivedamages. Lastly, almost every single government (orperson) contributes to CO

2 emissions, so no one can

really come to court with “clean hands” (and we willnote that a similar no-harm principle would limit the useof the International Court of Justice).

The first domestic legal action in the country wasbrought under the federal Clean Water Act and wasfiled in U.S. District Court in Seattle in May 2009. TheCenter for Biological Diversity asserted that the U.S.Environmental Protection Agency (and the state ofWashington) had failed to recognize the impacts ofocean acidification on waters off the state ofWashington, as they are required to do under section303(d) of the Clean Water Act. The CBD complaintlooks to demonstrate that CO

2 is a pollutant that is

causing a change in pH that falls within the definition of“impaired waters” that require remediation. The currentstandard which dates from 1976 (and which has beenadopted by most states) requires a finding ofimpairment if waters deviate more than 0.2 pH unitsfrom natural variation. There is no question that thewaters off Washington state exceed these criteria. As aresult, OA has been blamed for failures of some

12

precautionary principle (for example, we couldsubstantially increase the cost of coal, oil, andgas leases to seed such a fund).]

• Adding the evidence of OA and the harm it isbringing to our efforts to reduce CO

2 output

currently undertaken in the context ofaddressing global climate change

• Support for the inclusion of coastal and marineecosystem carbon and OA in internationalclimate change negotiation texts

• Identification of rehabilitation/compensationschemes for OA environmental damage(standard polluter pays concept) that makesinaction far less of an option

• Reduction of other stressors, such asoverfishing and use of destructive fishing gear,on marine ecosystems to increase resilience inthe face of ocean acidification

• Curtailment of subsidies for coal, oil, and gasexploration and development, and replacementwith support for renewable wind, solar, andocean energy sources

• Mitigation by reducing CO2 emissions (to

achieve less than 350 ppm concentrations).

In the absence of new policies (and their good-faithimplementation), we can expect attempts atinternational litigation, and we have already begun tosee domestic litigation. The cumulative effects of thislitigation may eventually take its toll on resistance tochange. But we have to remember that at the sametime OA is just one stressor of many acting to harmmarine natural resources, that it undermines resilienceand that all the stressors cumulate in causing harm. Inthe end, the cost of inaction will by far exceed theeconomic cost of acting. We need to act before the sunsets. But that would require present-day sacrifice,which is up there with “eating less and exercising more”as an appealing choice to pursue.

Mark J. Spalding, J.D., M.P.I.A, is the presidentof the Ocean Foundation in Washington, D.C. Hewould like to thank Lea Howe for the fine researchassistance that she provided on this article. Mr.Spalding may be contacted atmspalding@oceanfdn.org.

failure to protect 82 imperiled coral species under theEndangered Species Act. These corals, all of whichoccur in U.S. waters ranging from Florida and Hawaiito U.S. territories in the Caribbean and Pacific, facenumerous dangers, but global warming and oceanacidification are the overarching threats to theirsurvival.” (CBD, 2011).

Our National Environmental Policy Act, in addition tocreating the President’s Council on EnvironmentalQuality and promoting the enhancement of theenvironment, requires environmental impact statementsthat could now (with the November 2010 EPAmemorandum on OA) be called upon to limit federalgovernment action that might harm the environment inthe context of ocean acidification.

Insurance against failure of harvested or farmedshellfish may be one answer to compensation for harmto commercial interests as the result of OA, but it isunlikely to be an affordable solution and only gets tothe compensation issue, and not to prevention of harm.

Conclusion

International marine natural resources really are part ofthe foundation of our economies and the stability ofnations. Ocean acidification is a dire threat to thoseresources. Right now the probability of harm is high,and the consequences if they are allowed to occur areserious. We have no mandatory rule of law to triggerreduction of CO

2 emissions (and even our international

good intentions expire in 2012), thus we have to usethe laws we have to urge new international policy. Suchan international policy should address:

• Restoration of marine plant communities likesea grass meadows, mangroves, etc., that willin turn restore the ocean’s capacity to naturallyfix and sequester carbon

• Reduction of land-based and nonpointpollution sources including nitrates, sulfates,and traditional pollutants that exacerbate and/or contribute to OA

• Increasing protected habitat and habitatconnectivity[These first three items could be paid for via aresilience fund consistent with the

13

MARINE MAMMALS AND INTERNATIONALTRADE: BALANCING SOCIALCONSCIENCE WITH TRADE

OBLIGATIONS—A SUMMARY AND UPDATEON THE WORLD TRADE ORGANIZATION

SEAL PRODUCTS DISPUTE

Chad J. McGuire

Introduction

It should come as no surprise that the use and trade inmarine mammals have generated a great deal ofinternational debate. Domestically in the United States,federal laws including the Endangered Species Act (16U.S.C. § 1531 et seq.) and the Marine MammalProtection Act (16 U.S.C. §1361 et seq.) have oftenhighlighted the morality questions surrounding ourtreatment of marine mammals. In addition, thecommercial success of programs such as AnimalPlanet’s Whale Wars, and documentaries such as TheCove, have heightened a global public awarenessfocusing on the treatment of marine mammals.

One marine mammal species presently at the center ofan international dispute is the pinnipeds, or fin-footedmammals, commonly referred to as seals. Currently,the European Union is attempting to expand traderestrictions associated with the importation of sealproducts that began in the 1980s. The new restrictionsare frustrating a few northern hemisphere countries andco-signatories to international trade agreements,specifically Canada and Norway. Seal hunting occursin these countries, and the products form the basis ofcertain exports aimed at European markets. Thus, theexpansion of the ban by the European Union has thepotential to impact international trade between WorldTrade Organization countries. As such, there are legalissues touched upon by the proposed expansion.

The purpose of this article is to provide a summary ofthe current debate surrounding the proposed EuropeanUnion expansion of barriers to trade in seal products.This article will also identify some of the potential legalissues at the heart of the ban. Finally, some policyconsiderations that may arise depending on how thiscase ultimately resolves itself will be highlighted. What

is reinforced in this case study is the notion that theinteraction between domestic policy and internationallaw can often create unique frustrations whereseemingly independent goals can lead to legal conflicts.This case study is an example of how these legalconflicts can arise, how such conflicts may be resolved,and the impact of such resolutions for the internationalcommunity.

I. History of the European Ban on theImportation of Seal Products

Beginning in the 1980s, Western European countries(hereinafter collectively, the EU) have consistentlyespoused a policy of limiting the importation of seal-related products. In the 1980s, the focus was largelyon the seal pup skins and related products. Thiscoincided with a ban by Canada that endedcommercial hunting of white coat seal pups. Thisundoubtedly was due, in part, to the pressure placedon the respective governments through citizenawareness and action at this time.

More recently, the EU has adopted regulationsexpanding this earlier ban to all types of seal productsfrom commercial hunting. For example, the morerecent regulations of 2009 expand the ban from whitecoat pups to seals of any age hunted for commercialpurposes, including products derived from thoseactivities (see Regulation (EC) No 1007/2009 of theEuropean Parliament and of the Council, 2009 O.J.(l286) 36, available at http://trade.ec.europa.eu/doclib/docs/2009/november/tradoc_145264.pdf).Certain countries that hunt seals and use their productsin trade, led by Canada, have challenged the new EUregulations as being prohibitive to trade in violation ofWorld Trade Organization agreements. (A summary ofthe Canadian complaint, and associated documents,can be found here: http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds400_e.htm.)

The Canadian position against the EU’s action iscentered on free trade principles, where the mainargument suggests the EU cannot take unilateral stepsto prevent the importation of seal products when doingso impacts free trade agreements to which the EU is asignatory. The EU, in turn, believes its actions do not

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directly implicate these free trade agreements, andfurther, even if the EU seal product ban did implicatecertain free trade agreements, such agreements containimportant exceptions that apply in this case.

The current status of this case is pending as of January2011. Canada filed an official request for consultationwith the World Trade Organization in November 2009(joined by a request by Norway in 2010 for similarconsultations), and the parties are now in disputeresolution consultations. While the ultimate outcome ofthis process is unknown, the legal and policy issuesraised are worth considering. This article will nowhighlight a few of the legal issues presented in the case,as well as some of the policy considerations that mayarise depending on the ultimate resolution of this case.

II. Legal Issues Presented

The countries of Canada and Norway have identified anumber of international legal issues relevant to theproposed EU action. Specifically, Canada claims theproposed EU regulation for implementation of the sealproduct ban is inconsistent with various articles of theTechnical Barriers to Trade (TBT) Agreement; variousarticles of the General Agreement on Tariffs and Trade1994 (GATT); and Article 4.2 of the AgricultureAgreement. Norway essentially mirrors the argumentsmade by Canada in its complaint for consultation withthe WTO.

The basis for these legal claims includes the followinglogic: The EU seal product ban establishes aprohibition on the importation of certain seal products,but makes exceptions that discriminate in favor of EUcountries, as well as certain non-EU countries beyondNorway and Canada. In addition, there is a basis forargument that the EU regulation contains a certificationprocess that is discriminatory and trade restrictive inviolation of a number of international agreements,which the EU is signatory to. There is also a moretechnical safeguarding argument that suggests theproposed regulations do not establish adequateprocedures to ensure the seal produce ban is capableof being fully enforced after implementation.

The common characteristics of the arguments for andagainst the legitimacy of the EU seal ban may bedivided into the following categories: discriminationclaims, necessity defenses, and protectionism. Thebasis for each categorical legal claim is explained infurther detail below.

A. Discrimination ClaimsThe discrimination claims made by Canada andNorway focus on preference, or where the EU actionis resulting in discrimination against or amongst foreignproducts. One of the main tenets of the World TradeOrganization is to ensure fairness and nondiscriminationin global trade. The EU argues its ban isnondiscriminatory because it is neutral, applying to allseal products regardless of origin. Canada andNorway counter the impact of ban is discriminatorybecause it focuses unnecessarily on seal products. Forexample, the seal exporting countries argue that if theEU wanted to prevent acts of animal cruelty (obviouslya purpose behind the EU ban), then why limit theaction to seal products? Why not include such EUmember actions as bullfighting, which can be rationallyargued to be rife with animal cruelty. This argument isbolstered by the fact that EU member countries do notthemselves engage in the exportation of seal products,the target of the importation ban, but EU members doengage in other acts of arguable immorality towardanimals such as bullfighting. If the purpose of theregulation is to protect animal welfare, then an honestpolicy movement by the EU would capture all aspectsof animal cruelty. By focusing only on activities existingoutside of EU-member countries (or creatingexceptions for EU-member activities), the regulation isfacially discriminatory.

The EU may rationally counter such arguments byarticulating the specific reasons for the ban, its relationto sovereign self-determination, and highlighting whereexceptions exist within existing international tradeagreements. One such exception is the defense ofnecessity, which is described next.

B. NecessityBeyond the discrimination claims, there is also thequestion of whether the EU seal product ban isnecessary to achieve its animal welfare goals, and

15

tangentially whether this form of ban is the leastrestrictive means of achieving animal welfare goals.Necessity is often presented as a defense to a claimthat a nation is violating international trade obligations.For example, it may be possible for a country totechnically violate a trade obligation if the reason forthe violation is to protect public morals (GATT ArticleXX(a)), or the violation is being done to protect life orhealth (GATT Article XX(b)).

The EU will likely focus much of its rationale for theexpanded regulations on necessity grounds. Forexample, the EU may argue the regulations are simplya natural extension of the original ban on certain sealproducts from the 1980s. The current expansion nowsimply codifies preexisting public moral concernsallowed under GATT Article XX(a), and also toprotect fundamental public health considerations underGATT XX(b). The Canada/Norway response willlikely focus on the discriminatory impact this expansionhas, limiting the necessity argument by noting theacceptance by the EU of these seal products since the1980s even while the EU has limited other sealproducts since that time, thus casting doubt on thegenuineness of the authenticity defense.

C. ProtectionismProtectionism claims can be made under both theGATT and TBT Agreements identified above.However, a major difference between these twointernational agreements is the GATT allows forexceptions to protectionism when there is a valid basis,such as the necessity defenses under Articles XX(a)and XX(b) identified above. The Technical Barriers toTrade Agreement or, TBT , in contrast, has limitedexceptions when it comes to protectionism. Thus,under a direct reading, one may find the EU banviolates the TBT because the ban actually engages inprotectionism of animals beyond EU borders, alsoknown as extraterritorial protectionism. However, theextent to which the TBT Agreement is applicable in thiscase is not presently known. This is mainly because theTBT is a newer trade agreement with limited legalprecedent from which insights may be drawn.

Defenses to TBT violation claims include possiblesubject matter jurisdiction. For example, the TBT

prohibits technical barriers to trade. A prohibition onseal products has little to do with “technical” barriersper se, and thus it may be argued the TBT simply doesnot apply to the proposed EU regulation. It may alsobe argued that the EU regulation is no more restrictivethan necessary to achieve a fundamental purpose, thatpurpose being to protect animal welfare. Indeed, theTBT Agreement, while providing no substantiveprovisions allowing the current EU action, does suggestin its preamble that countries should be free to takenecessary measures to ensure the protection of,amongst other national interests, animal health and theenvironment. This preamble language alone may beargued to justify the actions of the EU, even underTBT scrutiny, so long as the actions themselves are notarbitrary, but rather reasonable in scope andapplication.

Questions do arise as to the merits of these defenses.For example, the TBT Agreement does not havesubstantive exceptions for health, safety, or publicmoral enforcement. In short, the TBT Agreement’smandatory language suggests, if it applies in this case,the EU ban might be seen as restrictive. Meanwhile,the more permissive language included in the TBTpreamble suggests there are exceptions for health,safety, and animal welfare that might be implicated tosupport the EU seal product ban. Ultimately, theresolution will likely depend on which areas of the TBTAgreement are given weight as negotiations unfoldduring the WTO consultation process.

III. Policy Issues for Consideration

Now that some of the legal issues have beenconsidered, the remainder of this article turns to a fewpolicy questions. Relevant areas of inquiry include howthe resolution of this case might impact the perceivedvalidity of international trade agreements. For example,a restrictive interpretation favoring free trade mightsuggest important moral considerations of nations willbe limited in favor of international trade. A more liberalinterpretation favoring the EU ban might leave somecountries questioning the overall validity andenforcement of international trade agreements. Thesepolicy questions are further outlined below.

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A. Policy Implications of a Restrictive “Pro-Trade” InterpretationAny resolution of this current dispute that leads to arestrictive interpretation would likely favor theenforcement of international trade obligations overindividual country norms. While this may be a goodresult for those who favor freedom of internationaltrade, it carries a heavy lesson for countries that valuetheir capacity to make unilateral decisions supportingmoral convictions. For the EU, the lesson of arestrictive resolution might be that certain internationaltrade agreements come at the expense of advocating aparticular moral position, or at the very least findingalternative ways to express moral convictions that areless directly connected to trade, especially importationbans.

Some might argue a resolution favoring trade overindividual nation norms will ultimately benefit goals ofglobalization, while having a limited impact on nationalsovereignty. This is especially true where alternativemechanisms to express preferences exist in themarketplace. For example, the United States proposedtuna importation ban in the 1980s, aimed at protectingagainst dolphin bycatch, was struck down as anunlawful barrier against trade. However consumerpreference, where dolphin safe tuna was chosen by theAmerican public, ultimately led to an effective resultbecause pressure was placed on exporters to altertheir fishing techniques in order to protect dolphins.Consumer choice, rather than direct governmentaction, limited demand on moral grounds, ultimatelyachieving the intended goal.

While the results may be different, the alternative ofrelying on consumer choice to advocate a moralposition can play a significant, and maybe moreappropriate, role in expressing specific nationpreferences. The EU citizenry can always choose tonot purchase imported seal products, thus creating aneffective ban their importation. With no viable market,the sourcing countries must either find other markets,or alter their exporting strategy. As with the U.S.dolphin-safe tuna saga, the moral debate may likely bebetter played out in the marketplace rather thanthrough a government-based ban. This is especiallytrue when such a ban has implications that go beyond

the moral question, and begin to impact fundamentalassumptions about the assurances free tradeagreements provide between countries.

B. Policy Implications of a Liberal “ProNational Morals” InterpretationA more liberal interpretation, one that favors the EUban in the face of free trade challenges, presents adifferent set of policy considerations. As suggestedabove, the more obvious impact of a decisionsupporting the EU ban is the reduced confidencemember countries might have in the validity andenforceability of free trade agreements in general. If asignatory to a free trade agreement can rely onindividual moral convictions to prevent the importationof certain products, then one can imagine countriesemploying “morality” as a means to block the importingof certain “immoral” products in specific situations.Even when such morality claims may be successfullychallenged in a dispute resolution forum, like the WTO,a reduced confidence in the enforceability of the tradeagreement can result from the possibility that countriesmay successfully challenge trade obligations onmorality grounds. The lack of clarity alone can haveconsequences for free trade.

Thus, the policy considerations surrounding a liberalinterpretation are focused largely on the impacts suchan interpretation can have on fostering free tradeagreements, as well as supporting incentives forcountries to become signatories to such agreements.There is little doubt most market economy countriesfavor free trade. However, most of these countries alsoenjoy the fruits of sovereignty, which includefundamental rights like self-determination. The balanceto be struck here may be between the relative merits ofexceptions to free trade for reasons such as defendingmorals, as outlined in Article XX(a) of GATT forexample, and the need to ensure free trade agreementsmeet their fundamental tenet, free trade, while alsofostering assurance that other countries will not readilybe capable of frustrating the fundamental purpose ofsuch agreements. Such a balancing act can be difficult,and the ultimate resolution of this present dispute willprovide some interesting insights into how themandates of free trade agreements are currentlyviewed in the international community.

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Conclusion

As suggested at the beginning of this article, there is aninherent frustration that arises when a country yieldssome measure of sovereignty for the benefitsconnected to international free trade agreements. Thiscase study of the expanded EU ban on seal productimports is a prime example of how these frustrationsmay arise. In this case, the EU desires to enforce basicmoral principles it associates with the protection ofmarine mammals. However, its capacity to do soimpacts international trade agreements that help tosupport open markets from which the EU benefits. Thequestion then becomes one of balancing nationalsovereignty, and specifically moral expressions within asovereign, against the impacts such actions have on thefundamental purpose of international agreements, in thiscase freedom of trade.

What this article points out is the legal basis for theEU’s actions is both potentially supported (GATT),while also potentially violating international agreements(TA). While there may be no clear basis to legally callan outcome of this present case, the consultation andnegotiations that occur between the countries within theWTO framework will be telling in determining thecurrent state of this balance between sovereign rightsand international obligations. From a policy standpoint,the ultimate resolution of this case may impact thefuture expectations of countries when it comes to freetrade agreements. A liberal result might diminish theexpectations that free trade agreements can be reliedupon to enforce free trade obligations. Meanwhile, aconservative result might work to diminish the capacityof nations to enforce their moral voices. Whatever theresult, this case is likely to have impacts that extendwell beyond the boundaries of the seals that are at theheart of the present controversy.

Chad J. McGuire is an assistant professor ofpublic policy at the University of Massachusetts,Dartmouth. His work surrounds questions ofenvironmental law, policy, and sustainability. Hecan be reached for comment atcmcguire@umassd.edu.

CALL FORNOMINATIONS

The Section invites nominations forthree awards:

The Environment, Energy, and ResourcesGovernment Attorney of the Year Award willrecognize exceptional achievement by federal,state, tribal, or local government attorneys whohave worked or are working in the field ofenvironment, energy, or natural resources and areesteemed by their peers and viewed as havingconsistently achieved distinction in an exemplaryway. The award will be for sustained careerachievement, not simply individual projects orrecent accomplishments. Nominees are likely tobe currently serving, or recently retired, careerattorneys for federal, state, tribal, or localgovernmental entities.

The Law Student Environment, Energy, andResources Program of the Year Award willrecognize the best student-organized educationalprogram or public service project of the yearaddressing issues in the field of environmental,energy, or natural resources law. Nominees arelikely to be law student societies, groups, orcommittees focused on these three areas of law.

The State or Local Bar Environment, Energy, andResources Program of the Year Award willrecognize the best CLE program or public serviceproject of the year focused on issues in the field ofenvironmental, energy, or natural resources law.Nominees are likely to be state or local barsections or committees focused on these practiceareas.

Nominations for all three awards are due at theABA Section office by May 16, 2011. The Awardwill be presented at the ABA Annual Meeting inToronto in August 2011. Award recipients shouldplan to be present at the award presentation.

For more information, visithttp://www.americanbar.org/groups/

environment_energy_resources/projects_awards/awards.html

18

BAN ON THE USE AND CARRIAGE OFHEAVY GRADE OILS IN ANTARCTICA

Peter Oppenheimer

The Significance of Antarctica and ItsMarine Environment

Antarctica, a large, frozen landmass surrounded by theSouthern Ocean’s sea ice, holds most of the world’sice and fresh water. While it is perhaps the coldest,driest, and windiest place on Earth, the Antarcticregion’s extensive sea ice supports a richly diverseecosystem. In a 1997 study, the U.S. AntarcticProgram External Panel described the Antarctic sea icezone as “one of the most dynamic biological systemson Earth,” supporting bountiful sea life and impressivefisheries (U.S. ANTARCTIC PROGRAM EXTERNAL PANEL,THE UNITED STATES IN ANTARCTICA (1997), http://www.nsf.gov/pubs/1997/antpanel/3enviro.htm (lastvisited Feb. 1, 2011)).

In 1959, 12 nations signed the Antarctic Treaty, settingaside the continent as a scientific preserve and banningall military activity. These nations’ initial scientific andpolitical interests in Antarctica have gradually evolvedinto a genuine recognition of the need to protect thearea’s marine environment. This need culminated in thesigning of the Protocol on Environmental Protection tothe Antarctic Treaty, or the Madrid Protocol, in 1991.The primary objective of the protocol is the protectionof the Antarctic environment and associatedecosystems. The protocol requires all activities inAntarctica to be planned and conducted in a mannerthat will avoid significant changes in the marineenvironment.

Threats to the Antarctic MarineEnvironment

As shipping and fishing in the Southern Ocean hasincreased over the last decade, so has the risk ofvessel incidents in the region. A significant portion ofthe current shipping activity in Antarctica involvescruise ships, and statistics show that cruise tourism hastrended upward since earlier in the decade, stabilizingrecently. According to the International Association ofAntarctica Tour Operators (IAATO), 36,875 touristsvisited Antarctica during the 2009–2010 season ascompared to 27,950 in the 2004–2005 season and

11,423 in the 2001–2002 season (Tourism Statistics,INT’L ASS’N OF ANTARCTIC TOUR OPERATORS, http://www.iaato.org/tourism_stats.html (last visited Feb. 1,2011)).

In 2007, the M/V Explorer, a polar class cruise ship,sank off the Antarctic Peninsula after colliding with aniceberg. Fortunately, all aboard were rescued and onlya small amount of relatively light grade oil wasreleased. Many of the larger cruise ships and fishingvessels that operate in Antarctic waters use heavygrade oil (HGO) as their fuel. HGO is slow to breakdown in the ocean, persists longer in low temperaturesand thus could have a significant adverse impact onAntarctica’s near-pristine marine ecosystem if releasedor spilled. It likely would be extremely difficult andcostly to remediate as well. The combustion of HGOas a fuel also produces high emissions of sulphur oxideand greenhouse gases.

Given the biological richness and vulnerability of theAntarctic marine environment to vessel sourcepollution, the area south of 60 degrees south latitudehas been designated as a Special Area under AnnexesI, II, and V of the International Convention for thePrevention of Pollution from Ships (MARPOL).Special Area designation under these three annexes,which respectively regulate discharges into the sea ofoil, noxious liquid substances, and garbage, imposesmore stringent discharge requirements on vesselstransiting these waters and provides a higher level ofprotection for the marine environment.

Threats Addressed Through anInternational Effort

At its 60th session in 2010, the International MaritimeOrganization’s Marine Environment ProtectionCommittee (MEPC) adopted an amendment to AnnexI of MARPOL to ban the use or carriage in bulk ascargo of HGO by vessels in Antarctic waters. Thisban, which takes effect on August 1, 2011, willminimize risks to the marine environment in theAntarctic and the Southern Ocean from potential spillsor releases of HGO.

This amendment to MARPOL Annex I, like manyother environmental protection measures, was theresult of concerted efforts by several stakeholders. Theprocess began when Norway raised the issue at the

19

27th Antarctic Treaty Consultative Meeting (ATCM) in2004. Recognizing the potential threat of the use ofHGO by ships operating in the Antarctic Sea area,Norway indicated that the area south of 60 degreessouth latitude required extra protection from the risk ofoil discharge and spillages. Norway noted that HGO iswidely used by cruise ships and large fishing vessels inAntarctic waters, and highlighted the characteristics ofHGO that could have devastating consequences for theenvironment in the event of a spill. Agreeing that theissue warranted further investigation, the AntarcticTreaty Consultative Parties asked the Council ofManagersof National Antarctic Programs (COMNAP)and IAATO to conduct a study and report to ATCMon the present and planned use of heavy fuel by shipsin Antarctic waters.

The IAATO/COMNAP report, presented in June2005, concluded that operational pollution by heavyfuels is recognized as the biggest threat of ships at sea(COMNAP/IAATO, The Use of Heavy Fuel Oil inAntarctic Waters, https://www.comnap.aq/publications/comnapatcm/2005_28atcm_ ip067Rev1/view (last visited Feb. 1, 2011)). The report providedthe justification for ATCM Decision 8 (2005), throughwhich ATCPs requested the International MaritimeOrganization to examine mechanisms to restrict the useof HGO in Antarctic waters in light of the high risk offuel release in the areas and the high potential foradverse environmental impacts associated with a spill(Antarctic Treaty Consultative Meeting, The Use ofHeavy Fuel Oil (HFO) in Antarctica, Decision 8(July 17, 2005), http://www.ats.aq/documents/cep/atcm28_d8_e.pdf (last visited Feb. 1, 2011)).

In 2006, Norway submitted a formal proposal toMEPC to amend MARPOL Annex I to prohibit theuse and carriage of HGO in the Antarctic Sea area,initiating discussions and negotiations (InternationalMaritime Organization [IMO], Use and Carriage ofHeavy Grade Oil on Ships in the Antarctic Sea,submitted by Norway, IMO Doc. MEPC 54/6/4 (Jan.13, 2006)).

Subsequently, New Zealand submitted valuable dataand technical information relevant to the debate,helping to resolve some divisive issues (InternationalMaritime Organization [IMO], Use and Carriage ofHeavy Grade Oil on Ships in the Antarctic Area,

submitted by New Zealand, IMO Doc. BLG 12/16/1(Nov. 30, 2007)).

While from the beginning many member governmentsand NGOs supported Norway’s proposal in principle,several issues needed resolution before the membergovernments could settle on the final text of aMARPOL amendment. For example, a decision wasreached to exempt search-and-rescue vessels from thenew ban. The strongest opposition to the proposedHGO ban came from the cruise industry. The CruiseLines International Association (CLIA) expressedconcerns about the negative effect the ban could haveon the cruise industry and the subsequent economicconsequences (see International Maritime Organization[IMO], Comments on Proposed Amendments toMARPOL Annex I, submitted by Cruise LinesInternational Association (CLIA), IMO Doc. MEPC59/10/8 (May 20, 2009)). Specifically, it noted thatlighter grade fuels are more expensive, and that suchcosts would result in higher fares for passengers (id. at3–4). CLIA suggested that there would be a significantimpact not only to the vessel operators but also to theeconomies of port cities due to a reduction in cruisesaround the South American continent (id. at 2).

Conclusion

The protection of the Antarctic region and its marineenvironment is consistent with the obligation of allnations under customary international law as reflectedin the Law of the Sea Convention to protect andpreserve the marine environment. Although theAntarctic region and its rich marine biodiversity arebeyond the jurisdiction and control of any one county,nations acting together through internationalorganizations can adopt meaningful protections forAntarctica’s unique and fragile ecosystems.

Peter Oppenheimer is senior counselor at theNational Oceanic and Atmospheric Administration(NOAA) Office of General Counsel forInternational Law (GCIL). The views expressedherein are his alone, and do not necessarily reflectthose of NOAA, the Department of Commerce, orany other agency. The author would like toacknowledge the assistance of Yoona Cho, intern atGCIL and law student at the American UniversityWashington College of Law.

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BRAZILIAN PRE-SALT OIL RESERVEEXPLORATION: REGULATORY AND

ENVIRONMENTAL ASPECTS

Roberto LiesegangMaristela Abla Rossetti

Introduction

The purpose of this article is to provide an overview ofthe way in which Brazil is attempting to secure anddevelop some of its recent large oil field finds over thelast decade. Specifically, the article reviews theregulatory and environmental aspects associated withthe development of these fields. Questions are raisedabout how the legal framework will be developed tobest apply this important resource find to the benefit ofthe people of Brazil at-large. Some recommendationsare made in this regard, including important policydirections needing to be addressed to fully realize thesocial benefits and potential of this important resource.

The last decade (2000–2009) will likely beremembered in Brazil as the oil decade. This statementis supported by recent national oil reserves discoveredby the government-controlled company PetróleoBrasileiro S/A (PETROBRAS) (see Brazilian FederalLaw 2004/53, Brazilian Federal Law 9478/97 forinformation on government control of Petrobras).Indeed, this most recent discovery could place Brazilamong the largest oil exporters in the world.

These reserves are found in an unexplored areatechnically called pre-salt reserves because they lieunder an approximately 2-km layer of salt, deep belowthe seabed. For that reason, oil and natural gasreserves are probably five to seven thousand feetbelow sea level. (A summary of the geologicalinformation regarding this large reserve is available athttp://www.petrobras.com.br/minisite/presal/pt/perguntas-respostas/.)

The pre-salt reserves include several fields spreadalong the Brazilian coast, stretching from waters offEspírito Santo state southward via Rio de Janeiro, SãoPaulo, and Paraná states to Santa Catarina. Accordingto Petrobras, the Lula Field, which is the main pre-salt

field, is expected to produce as much as five to eightbillion barrels (http://www.petrobras.com.br/minisite/presal/pt/perguntas-respostas/). Should these estimatesbe confirmed, the pre-salt reserves could place Brazilamong the ten largest oil producers worldwide.

The policies designed to revert this huge energy andbusiness potential to the direct and indirect benefit ofthe population, thus accelerating the development ofthe country as a whole, have been widely discussed inBrazil.

Regulatory Aspects

The old Brazilian Oil Law (Law 9478/97), which is stillin force and which shall continue regulating areas notincluded in the pre-salt region, states that Brazilian oilfields shall be explored under a concession model. Inshort, the government grants a concession to exploreoil wells, but ownership of the wells is not transferredto the concessionaire. The government remains ownerof the wells even after the concession is granted. Suchconcession only grants the concessionaire the right toexplore the well, which allows the research and oilextraction under the conditions proscribed by law.However, Law 12351/2010 was enacted onDecember 22, 2010. This new piece of legislationimpacts oil, natural gas, and other fluid hydrocarbonsextraction and production under a production-sharingmodel in pre-salt and strategic areas.

Under the new production-sharing model, thecontractor engages, on its own account and at its ownrisk, in exploration, analysis, development, andproduction activities and, in the case of a commercialdiscovery, it acquires the right to (1) appropriate thecost oil, which is a portion of the produced oil that maybe required only in case of a commercial discovery andwhich corresponds to the cost of its investments in theexploration, analysis, development, production, anddeactivation of facilities; (2) the production volumecorresponding to the royalties owed; as well as (3) aportion of the surplus oil, in the agreed proportion andunder the agreed terms and conditions.

Both models involve (a) auctions of oil blocks involvingseveral companies, and (b) ownership of the wellsremaining in the hands of the government. Under the

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sharing model, the company offering the highestpercentage of oil to the government is the winner.

We understand that Petrobras will derive most of thebenefits of the production-sharing model, because thecompany already owns a substantial share of the pre-salt blocks explored to date. In addition, Petrobrasderives statutory benefits in view of the fact that it willbe allowed to operate all blocks under the futuremodel and that it will participate in the syndicatesauthorized to explore the pre-salt layer.

Allocation of the royalties from oil exploration amongthe Brazilian states and municipalities is also aconflicting issue. Pursuant to the new law, royaltiesfrom oil exploration shall be paid to the producingstates and municipalities (Article 49, Law 9478/1997).However, the Brazilian Congress is already discussinga proposal to regulate the distribution of the royaltiesfrom oil exploration among all Brazilian states andmunicipalities.

As stated by Norman Gall in his article, Oil in DeepWaters, published in the Brazilian newspaper OEstado de São Paulo on January 30, 2011, “Lula’ssuccessor as Brazil’s president, Dilma Rousseff,supervised drafting of the new legal framework whilechairing the Petrobras governing board before enteringthe 2010 election campaign. Furious Congressionaldebate on the new institutional regime focused almostentirely on distribution of royalties among states andmunicipalities, neglecting the governance and technicalissues posed by deep-water exploration andproduction.”

The aforementioned Law 12351/2010 has alsoapproved the creation of a social fund to receive partof the pre-salt oil revenues to support state-run social,economic, and environmental programs. However,there are still no specifications on how the investmentsof this fund will be allocated.

Environmental Aspects

After the 2010 incident involving the British PetroleumDeepwater Horizon platform in the Gulf of Mexico andin view of the new regulation concerning exploration of

the pre-salt layer, the Brazilian government wasexpected to hold in-depth discussions on theenvironmental aspects related to the matter. However,the legal framework designed to regulate oilexploration and production in the pre-salt area has notbeen followed by specific federal laws to regulate theenvironmental aspects related to this issue.

In an attempt to regulate these aspects, the São Paulostate government has organized a multidisciplinary teamby means of Executive Order No. 53392/2008,involving several state departments, for the purpose ofstudying and evaluating the environmental impacts ofpre-salt oil exploration in the Santos Basin. On theother hand, the Brazilian Congress and the BrazilianCouncil for the Environment—CONAMA (an agencywithin the Ministry of Environment, which has beencreated to resolve on environmentally friendly rules andstandards)—have not yet established criteria forpreventing and combating pollution from the pre-saltlayer exploration. Therefore, environmental licensing inthe pre-salt areas is subject to the same procedurescontemplated in CONAMA Resolution No. 237/1997for other undertakings and activities deemed actually orpotentially pollutant.

In this regard, there is still no law on criteria andmethods to guarantee a safe operation by means ofprior risk analyses for the purpose of establishing thelevel of detail and the scope of the studies required forenvironmental licensing of the activity and the actions tobe performed to minimize and prevent incidents. Inaddition, in violation of rules contemplated in theBrazilian Federal Constitution and in the BrazilianEnvironmental Policy, which contemplates the joint andseveral liability of direct and indirect polluting agentsfor environmental damages, Law 12351/2010 hasexcluded the Brazilian federal government from the listof entities liable for environmental damages resultingfrom pre-salt oil exploration, even though the federalgovernment is entitled to part of the pre-salt oil surplus(and is therefore an indirect polluting agent).

Pursuant to the provisions of Law 12351/2010, thefederal government and Pré-Sal Petróleo S.A. - PPSA(a state-owned company incorporated to manageproduction-sharing agreements) will not be liable for

22

any risk involved in the exploration, evaluation,development, production, and deactivation ofexploration and production facilities under the sharingagreements. Although Law 12351/2010 is not clearwith regard to the environmental liability of the federalgovernment and of PPSA, we understand that thewording of the provisions of such law could beconstrued to exempt the federal government and PPSAfrom liability with regard to costs, investments, andenvironmental risks.

We also understand that since the federal governmentis a party to these sharing agreements through theMinistry of Mines and Energy, owns part of the naturalresources, and is entitled to proceeds generatedthrough this activity, it could not be excluded from thelist of entities subject to joint and several liability andshould be liable for environmental damages. Therefore,we conclude that the Brazilian government shouldcreate a legal framework contemplating theenvironmental protection of pre-salt areas, similar tothe initiative of the São Paulo tate government, so thatBrazil is able to foster economic development andenvironmental protection.

Conclusion

In short, the discovery and future exploration of pre-salt oil fields will certainly affect the Brazilian society asa whole, both positively and negatively. The Braziliansociety will benefit from technological evolution, capitalinvestment, a boost in the domestic economy, andother possibilities of economic development offered bythis scenario. On the other hand, such explorationcould cause irreparable damage to the environment.The Brazilian government is preparing the Brazilianlegal framework for this scenario, creating new formsand tools to authorize oil exploration for the benefit ofsociety, new forms of royalty distribution to theBrazilian states and municipalities, establishment ofmechanisms to receive these resources, and guaranteeof reinvestment of such funds in society, in addition tothe preservation of the society in order to achievesustainable oil exploration. However, to the extent thatthese tools are used, the Brazilian society shouldrequire strict compliance with these rules. Governmentindustrial policies should not only foster economic

development, but should also do so while maintainingand advancing environmental and social interests.Social and environmental interests should bepreserved, aiming at an exploration of resources inpartnership with the society and designed to preservethe environment.

Roberto Liesegang and Maristela Abla Rossettiare partners at Xavier, Bernardes, Bragança,Sociedade de Advogados. The authors would like tothank Thomas Magalhães for his assistance in writingthis article.

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