Can Trade Dispute Resolution Mechanisms Enhance State Compliance with International Health Regulations? Insights from MARPOL 73/78

Preventing or managing a global pandemic such as COVID-19 requires states to strictly comply with the World Health Organization's International Health Regulations 2005 (IHRs). However, like many multilateral environment agreements, the IHRs lack a strong dispute resolution mechanism to enhance state compliance. To bridge that gap, states have incorporated several environmental conventions into free trade agreements (FTAs) over the past fifteen years. This allows the trade agreement's dispute settlement process to apply to issues related to these environmental agreements and therefore promote environmental protection. A typical example is the International Convention for the Prevention of Pollution from Ships and its Protocols (MARPOL 73/78). Vessels, like viruses, are globally mobile. Vessel-sourced pollution also mirrors human-carried viral infection, because the locations of potential harm are unpredictable and widespread. Furthermore, the World Health Organization (WHO), like the International Maritime Organization (IMO), is "a technical organization based on evidence and science."[1] This Insight analyses how the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) dispute resolution mechanism may enhance state compliance with MARPOL 73/78.[2] It then offers some thoughts on how FTAs can be used to effectively promote compliance with the IHRs.

Since 2006, the United States has incorporated MARPOL 73/78 into five of its FTAs and used trade law to combat vessel-sourced marine pollution.[3] Signed in 2018 by eleven Asia-Pacific states, but not the United States, the CPTPP became the first mega-regional FTA to incorporate MARPOL 73/78.[4] All these FTAs require member states to adopt, maintain, and implement laws, regulations, and all other measures to fulfil their obligations under MARPOL 73/78. The following analysis explores the benefits and lessons to be drawn from such a legal system with a view to enhancing compliance with the IHRs.        

Resolve Disputes by Peaceful Means

Both MARPOL 73/78 and the IHRs require their member states to use peaceful means to resolve their disputes as a first step. Under MARPOL 73/78, negotiation is a precondition to initiating an arbitration.[5] Similarly, the IHRs require state parties to attempt first to resolve their disputes through negotiation, good offices, mediation, conciliation, or any other peaceful means of their choosing.[6] If parties fail to reach an agreement, they can refer the dispute to the WHO Director-General, who shall make every effort to settle it.[7] However, neither convention provides a clear procedure or timeline for resolving disputes by peaceful means, which may prolong the process and delay the establishment of an arbitral tribunal. Under the IHRs, the legal nature of referring the dispute to the WHO Director-General is unclear. Does this mean that the Director-General can control the dispute resolution and has authority to issue a binding decision (rather than acting as a settlement facilitator or sort of mediator) even if one party decides to default after referring a dispute for consideration? If intended to operate as a sort of mediator, what standards of independence or impartiality and natural justice should s/he be bound by? The referring procedure may be deliberately unclear and demonstrates that the culture of the WHO is to foster good faith performance of obligations and amicable dispute resolution among member states.[8]

In contrast, thanks to its incorporation into the CPTPP, MARPOL 73/78 can benefit from a three-step consultation procedure with strict timelines under the CPTPP. The three steps are referred to as environment consultations, senior representative consultations, and ministerial consultations, which, together, should not extend beyond sixty days after the date of receipt of a request under article 20.20 of the CPTPP, except where the parties agree otherwise.[9] If the dispute is not resolved, the requesting party may request consultations under the CPTPP Dispute Resolution Chapter or request the establishment of a panel.[10]    

Therefore, compared with the MARPOL 73/78's and the IHRs' peaceful dispute resolution mechanism, the CPTPP consultation procedures are more fully fleshed out. The tight timeline and clear steps of the CPTPP consultation procedure may be more effective than party-led peaceful means of dispute resolution in encouraging parties to focus on negotiations and, if that fails, to move to the next stage of dispute resolution. 

Arbitration

Under the IHRs, member states may submit their disputes to arbitration if they fail to reach an agreement by peaceful means and if all of them accept arbitration as compulsory.[11] The arbitration shall be conducted in accordance with the Permanent Court of Arbitration Optional Rules for Arbitrating Disputes between Two States.[12] Unlike MARPOL 73/78 where member states accept arbitration as compulsory, the IHRs allow member states to declare in writing at any time that they accept arbitration as compulsory with regard to all disputes concerning the IHRs or with regard to a specific dispute in relation to any other member state accepting the same obligation.[13] No member state has made such declaration so far. Therefore, the arbitration mechanism under the IHR is essentially a "paper tiger." 

Alternatively, CPTPP members can resolve their disputes on MARPOL 73/78 compliance through a panel mechanism. Under MARPOL 73/78 and the IHR, arbitral awards shall be binding and cannot be appealed.[14] In contrast, the CPTPP panel will first issue an initial report, which is not final and binding.[15] The disputing states are then allowed to submit written comments on the initial report to the panel.[16] After considering the comments, the panel may modify its report and make any further examinations it considers appropriate, and it will then issue a final and binding report.[17] This process may help the panel fully deliberate the parties' positions, because it is primarily concerned with ensuring an accurate representation of the parties' arguments and that all matters have been taken into account. This is especially valuable for resolving trade-related environmental and global health disputes. Ultimately, if the disputing parties' feedback has been taken into account, the final report will more likely be accepted.   

Enforcement

Unlike trade law, international environmental law and international health law make use of soft measures such as persuasion, public opinion, international reputation, technical assistance, and financial support to guarantee their implementation rather than impose real sanctions. MARPOL 73/78 and the IHRs require states to immediately comply with any arbitration awards.[18] However, they do not provide a mechanism for enforcement in cases of non-compliance. Therefore, it is not surprising that one commentator has described the MARPOL 73/78 system as "depend[ing] entirely on voluntary compliance. . . . [T]he Member Governments themselves determine whether or not they are in compliance with [MARPOL] regulations a majority of the time."[19] Similarly, an expert argues that "[c]ritics have even questioned the binding legal nature of the IHRs, given the lack of enforcement, or even compliance monitoring mechanisms, and the apparent disregard of states parties for the WHO's recommendations."[20] Neither the IMO nor the WHO have the funding and institutional mechanisms to establish an enforcement authority.  

In contrast, the CPTPP has a strong enforcement mechanism: it allows the complaining state to retaliate by suspending benefits of equivalent effect if the responding state fails to comply with the panel's final report within a reasonable period of time.[21] Thus, the CPTPP enforces its environmental obligations with the threat of real trade sanctions. Linking trade retaliation in FTAs with obligations of environmental protection represents a striking progress towards enforcement.

Dispute Settlement Practice for MARPOL 73/78

The dispute resolution mechanism under the CPTPP (and U.S. FTAs that have incorporated MARPOL 73/78) has not been invoked for vessel-sourced marine pollution thus far. There may be at least two reasons for this.  

First, coastal states, their nationals, and companies impacted by vessel-sourced pollution can seek compensation pursuant to the 1969 International Convention on Civil Liability for Oil Pollution Damage (1969 CLC), the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (1971 Fund Convention), and the protocols to these conventions. Therefore, states may not have incentives to go through the dispute resolution and, ultimately, the retaliation mechanism under FTAs. However, there are no equivalent conventions, like the 1969 CLC and 1971 Fund Convention, to safeguard innocent states, their nationals, and companies from human-carried viruses such as COVID-19. Therefore, compared with vessel-sourced pollution, there is an urgent need to resolve disputes concerning the IHRs. 

Second, the traditional practice of consensual dispute settlement at the IMO may reflect the fact that states believe the problem of marine pollution is better approached through cooperation rather than unilaterally-initiated litigation.[22] The IMO, like the WHO and many other UN special agencies, considers itself as "primarily a technical organisation seeking to avoid all political controversy and dispute[s]."[23] Therefore, most of the marine pollution treaties concluded under the auspices of the IMO contain very limited dispute settlement mechanisms or none at all. The arbitration mechanism under MARPOL 73/78 is already comparatively strong.[24] States may be hesitant to submit their disputes on MARPOL 73/78 to arbitration in hope that disputes will be resolved within the institutional machinery of MARPOL 73/78 (by commission, meeting of the parties, or the Marine Environment Protection Committee of the IMO) rather than by an arbitral tribunal.[25] These institutional dimensions are also at play at the WHO and may also explain why the arbitration mechanism under the IHR has never been invoked. The question is whether the strong and compulsory trade dispute resolution system under FTAs is compatible with or will change this tradition. 

In conclusion, the availability of the FTA compulsory dispute resolution mechanism is an undeniably important symbolic success to encourage MARPOL 73/78 compliance and may induce diplomatic cooperation in settling vessel-sourced pollution. This insight is extremely important for the IHRs. As of April 24, 2020, COVID-19 has infected over 2.6 million people and caused over 187,000 deaths worldwide.[26] The world needs a strong dispute resolution mechanism to safeguard global health under the IHRs. If direct reforms are not feasible, incorporating the IHRs into FTAs using the MARPOL 73/78 in the CPTPP model is worth exploring to prevent or manage the next pandemic.

About the author: Jie (Jeanne) HUANG is Associate Professor at the University of Sydney Law School, Australia. Dr. Huang specializes in dispute resolution and Chinese law.