THIRD WORLD NETWORK BIOSAFETY INFORMATION SERVICE

Dear Friends and colleagues,

Re: Treaty on liability for GMO damage closer to completion

The Group of the Friends of the Co-Chairs on Liability and Redress in the Context of the Cartagena Protocol on Biosafety held its 3rd meeting in Kuala Lumpur from 15th to 19th June 2010.

Progress was made at the meeting, bringing an international law on liability and redress for damage caused by GMOs a step closer to finalization. The new treaty is slated for adoption at the fifth Conference of the Parties serving as the Meeting of the Parties (COPMOP5) to the Cartagena Protocol in October 2010 in Nagoya, Japan.

Two outstanding issues remain to be resolved – financial security and products thereof – and a further Group of the Friends meeting is scheduled for 6-8 October 2010, just before COPMOP5 to be held in Nagoya on 11-15 October.

Please find below a TWN report on the outcomes of the meeting. A version of this report was first published in the South-North Development Monitor (SUNS) #6953 on 28 June 2010.

 
With best wishes,

Third World Network
131 Jalan Macalister,
10400 Penang,
Malaysia
Email: twnet@po.jaring.my
Website: www.biosafety-info.net and www.twnside.org.sg
 

Treaty on liability for GMO damage closer to completion

Kuala Lumpur, 25 June (Lim Li Lin and Lim Li Ching) – The text of an international law on liability and redress for damage caused by living modified organisms (LMOs) came a step closer to finalization following a meeting of a negotiating group under the Cartagena Protocol on Biosafety.

The new treaty is slated for adoption at the fifth Conference of the Parties serving as the Meeting of the Parties (COPMOP5) to the Cartagena Protocol in October 2010 in Nagoya, Japan.

(The Cartagena Protocol uses the term “living modified organisms” for what is commonly known as genetically modified organisms (GMOs). The Protocol is a treaty under the Convention on Biological Diversity, CBD.)

The Group of the Friends of the Co-Chairs on Liability and Redress in the Context of the Cartagena Protocol on Biosafety had its third meeting in Kuala Lumpur on 15-19 June 2010 to further negotiate international rules and procedures on liability and redress. The first meeting was held in Mexico City in March 2009 and the second in Kuala Lumpur/Putrajaya in February 2010. The Co-Chairs are Rene Lefeber from the Netherlands and Jimena Nieto from Colombia.

The Group of the Friends comprises six representatives each from the African Group, the Latin America and Caribbean Group, and Asia-Pacific; two representatives each from the European Union and Central and Eastern Europe; and one representative each from New Zealand, Norway, Switzerland and Japan.

The liability and redress negotiations have been underway since 2005, with a working group under the Cartagena Protocol having met five times. Its last meeting was held in March 2008, in an endeavour to complete the process within the four years as specified in the Cartagena Protocol. Because of the deep divisions on the issue, the negotiations could not be completed as mandated, despite extra small group meetings of the Friends in Bonn before and during COPMOP4 in 2008.

As such, another two meetings of the Group of the Friends were mandated by a decision in Bonn. However, the last meeting in February 2010 still could not resolve the difficult issues. Hence a decision was made to meet again in June.

Meanwhile, the text for a Supplementary Protocol on liability and redress (containing square brackets, indicating a lack of consensus) was communicated to Parties by the Executive Secretary of the CBD on 6 April 2010, to meet the requirement that the text of any proposed protocol has to be communicated to the Parties at least six months before its adoption.
 
The main outstanding issues to be resolved were: (i) imminent threat of damage;
(ii) financial security; (iii) whether the scope should refer to “activities” or “living modified organisms”; (iv) products thereof; (v) the definition of “operator”; (vi) the reference to international law/obligations; (vii) civil liability; (viii) reservations;
(ix) objective; (x) signature; (xi) order of Articles; (xii) preamble; and (xiii) title.

No other issue was opened for discussion; as agreed Articles had already been adopted by the Group of the Friends at the February 2010 meeting.

The following is a summary of the discussions and final outcomes of some of the more contentious issues discussed at the June meeting. The Articles referred to here are those in the text officially communicated to the Parties on 6 April 2010; changes have been made since to the order and numbering of Articles.

Financial security

The issue of financial security was not resolved, and proved to be the most contentious issue. A further Group of the Friends meeting is scheduled for 6-8 October, just before the COPMOP5 to be held in Nagoya on 11-15 October. This issue, together with whether or not “products thereof” or products derived from GMOs should be included within the scope of the Supplementary Protocol, will be the last two outstanding issues to be resolved by the Group of the Friends in Nagoya. The issue of financial security will inevitably be the most difficult to resolve, with many entrenched and polarized positions among the Parties.

Co-Chair Lefeber started the Kuala Lumpur discussion by asking whether there were any objections to Article 12.1 dealing with financial security. The current provision has not been agreed to and is couched in non-obligatory language (“may”). It allows Parties to “require the operator to establish and maintain, during the period of any applicable time limit, financial security, including through self-insurance.”  It also contains a qualifier – "consistent with international law/obligations” – that has not been agreed on.

Ten countries objected to the inclusion of the provision – Brazil, Paraguay, Ecuador, Mexico, Colombia, Costa Rica, Cuba, Panama, South Africa and New Zealand. The Co-Chair then proposed deletion of the provision, without hearing from the majority of countries that supported its inclusion. This provoked heated and impassioned responses, particularly from African Group countries. Liberia, Cameroon, Egypt, Malaysia, India, Bolivia, Peru, the EU, Switzerland, and Norway spoke in favour of the provision. Switzerland and the EU indicated that they already require this in their national laws.
   
The developing countries in favour of having a provision on financial security argued that the provision is not even mandatory, and that a debate and negotiation on the issue is the way forward, not deletion of the provision altogether. Egypt said that it would “feel ashamed to accept a situation where sovereign rights are not asserted in an environmental treaty, just because it may constitute some trade difficulty”.

“All countries are equal, and some are more equal than others,” it said. “In the African Group, very few countries are going to be able to exercise their sovereign rights if they do not have a clause in an environmental treaty that allows them to do that, as without this, they would not dare exercise their sovereign rights.”

Egypt explained that there is an African model biosafety law that was approved many years ago by Heads of States that includes financial security, and that it was impossible for the African Group to accept a Supplementary Protocol that does not recognize the sovereign right of a country to have financial security.

The Co-Chair agreed that the provision was supported by the majority of countries, and then asked if the Friends who were objecting to Article 12.1 could be flexible and accommodate new language that would take into account those concerns. Of the ten objectors, Brazil and Paraguay were adamant that they could not accept any provision on financial security, whilst the others indicated that they were willing to work on text and find compromise language. (However, Brazil and Paraguay both later signaled that a compromise could be found in Nagoya.)

Further discussions on the issue during the meeting proved unsuccessful.

Malaysia pointed out that Parties have the right to ask for financial security in any case, that this is not something new, and some countries already require it. But if a provision were not included in the Supplementary Protocol, then countries that are against its inclusion would lose the right to regulate the implementation of financial security measures in other countries. This could be done through establishing criteria that Parties should take into account when implementing the financial security provision of the Supplementary Protocol.

Due to the very divergent views on the issue, it was concluded that formal negotiations at this stage on Article 12 would not bring results, hence only an informal discussion was held one night to “brainstorm” on financial security.

Other international obligations/agreements

The relationship of the Supplementary Protocol to other international obligations and agreements was an issue in relation to a number of provisions. This is usually understood to refer to the relationship with the World Trade Organization agreements.

Under Article 7.1, a Party shall provide for response measures “[consistent with international obligations]”, and implement them in accordance with its domestic law. Article 7 is on response measures, the core of the Supplementary Protocol.

(Under Article 12.1 dealing with financial security, “consistency with international law/obligations” has not been decided on, and that whole provision remains in square brackets.)

Japan proposed a new Article 7.8, and the deletion of Article 7.1: “The response measures shall be implemented [in a manner consistent with international obligations and] in accordance with the domestic law of the Parties.” Brazil also wanted the issue mentioned specifically in Article 7.

Malaysia and India suggested that this issue should be dealt with in the preamble, much like it was resolved in the negotiations of the Cartagena Protocol on Biosafety.

The European Union proposed that Article 22.1 of the CBD would be the more appropriate reference: “The provisions of this Convention shall not affect the rights and obligations of any Contracting Party deriving from any existing international agreement, except where the exercise of those rights and obligations would cause a serious damage or threat to biological diversity” – as the Supplementary Protocol is primarily focused on damage to the environment and the liability of the operator. It suggested adding this concept to Article 18.3, which deals with the relationship of the Supplementary Protocol with the CBD and Cartagena Protocol.

This was translated into a possible additional Article: “The provisions of the Supplementary Protocol shall not affect the rights and obligations of any Party deriving from any existing international agreement, except where the exercise of those rights and obligations would cause a serious damage or threat to biological diversity”.

Japan wanted this additional Article deleted, while the EU and Malaysia spoke in favour of deleting Article 7.8 instead, and stressed that actually neither was needed, but that the new Article was only needed to balance Article 7.8 that was proposed by Japan. Malaysia insisted that there should be no hierarchy implied or subordination of the Supplementary Protocol to other international agreements or obligations.

The EU suggested adding the term “mutatis mutandis” to Article 18.3, in order to make the provisions of the CBD and the Cartagena Protocol apply to the Supplementary Protocol. This would mean that Article 22.1 of the CBD would apply to the Supplementary Protocol. Malaysia suggested specifically highlighting this by adding the phrase “including in particular paragraph 1 of Article 22” (of the CBD).

Colombia suggested a new Article 18.4 as a way forward: “This Supplementary Protocol shall be implemented in accordance with international obligations”.

In the end, the additional Article was deleted and the following were adopted as a package on this issue: Article 7.8 “Response measures shall be implemented in accordance with domestic law”; Article 18.3 “Except as otherwise provided in this Supplementary Protocol, the provisions of the Convention and the Protocol shall apply, mutatis mutandis, to this Supplementary Protocol”; and Article 18.4 “Without prejudice to paragraph 3 above, this Supplementary Protocol shall not affect the rights and obligations of a Party under international law”.

Malaysia (supported by Namibia) said that Article 18.4 merely re-states and makes visible an existing reality. By the same token, it said, the attempts to make visible a right to have financial security were resisted. It said that until the issue of financial security is included in the Supplementary Protocol, it would like to keep Article 18.4 in square brackets or record its reservation in a footnote.

However, it was decided that this concern would only be reflected in the report of the meeting. Brazil objected to this inclusion in the report, saying that financial security and the relationship to other international obligations/agreements are different issues, which are not linked. Its understanding was that the Supplementary Protocol would be adopted as a whole. Brazil’s understanding will also be reflected in the report of the meeting.

Imminent threat of damage

The concept of “imminent threat of damage”, although widely accepted and used in other environmental and/or liability and redress laws, faced stiff opposition at the Kuala Lumpur meeting and took up the first two days of discussions. The concept essentially allows for preventative measures to be taken, in the event of a grave and immediate threat of damage. This is in line with the precautionary principle that is an accepted principle underpinning the CBD and the Cartagena Protocol.

However, Paraguay, China and South Africa objected to the inclusion of the concept in the Supplementary Protocol, citing trade concerns, whilst others such as Brazil, Colombia, Mexico, Japan and Ecuador preferred the concept to only apply in relation to response measures (i.e. measures taken in response to damage caused by GMOs).

Peru, Bolivia, Malaysia, South Korea, Norway, the EU and the African Group (with the exception of South Africa) strongly supported the concept, arguing that it was essential to fulfill the goals of the Supplementary Protocol and was in line with the objective of the Cartagena Protocol, as the administrative approach to deal with liability has to include a preventative function. With regard to the concern that the inclusion of the concept could lead to arbitrary measures that could impede trade, they highlighted that the Cartagena Protocol already provides safeguards and that qualifiers could be crafted to ensure that the application of such measures is adequately guided.

Initial discussion focused on the operationalization of the concept of imminent threat of damage in relation to response measures as articulated in Articles 7.2 and 7.3, which relate to the actions required of the operator and competent authority respectively. The question was, while these actions are required in the event of damage, should they also apply to cases where damage has not yet occurred but is a strong possibility?

At the end of prolonged discussion, Colombia proposed language to address the specific scenario raised by imminent threat of damage, in a separate Article.

Paraguay, China and South Africa, the strongest objectors to including the phrase “imminent threat of damage”, were invited by the Co-Chairs for a separate discussion. Eventually, these countries agreed on the inclusion of the phrase “sufficient likelihood of damage” to describe the situation that should also be addressed by preventative response measures. The objectors also insisted that this compromise was on the understanding that the concept would only be included in Article 7 on response measures.

The final formulation of the paragraph addressing sufficient likelihood of damage in Article 7 reads: “Where relevant information, including available scientific information or information available in the Biosafety Clearing-House, indicates that there is a sufficient likelihood that damage will result if timely response measures are not taken, the operator shall be required to take appropriate response measures so as to avoid such damage”.

Attempts to make reference to the precautionary principle in this paragraph were rebuffed, and this was eventually moved to the preamble: “Reaffirming the precautionary approach contained in Principle 15 of the Rio Declaration on Environment and Development”. Also in the preamble is reference to sufficient likelihood of damage: “Recognizing the need to provide for appropriate response measures where there is damage or sufficient likelihood of damage, consistent with the Protocol”. There is no other mention of sufficient likelihood of damage in the draft Supplementary Protocol.

This was the compromise reached despite valiant attempts led by Peru and Bolivia to have the concept explicitly mentioned in the Scope and Objective, as well as in the definition of “operator” and “response measures”. In the latter, the concept is captured by the inclusion of the idea that, among others, response measures are reasonable actions to prevent damage. The inclusion of the concept of sufficient likelihood of damage in the operational text of the Supplementary Protocol is significant, even though it is not explicitly mentioned in the Scope and Objective.

Operator

On the definition of “operator”, one of the issues was how to deal with the multiplicity of operators throughout the chain. It was decided that the definition of operator could include the permit holder, person who placed the LMO on the market, developer, producer, notifier, exporter, importer, carrier or supplier. This is an indicative, not exhaustive, list of possible operators that should be determined at the national level.

Also of concern was how to capture in particular, the operators that are responsible at the time of the condition giving rise to the damage, as well as the operators at the time that the response measure is required. Text specifying these options was debated but ultimately deleted.

It was however decided that the definition of operator should include both the person in direct and indirect control of the LMO. This is understood to capture both the person that is in operational control of the LMO when the response measures are required (e.g. the carrier) as well as the person responsible for damage due to the intrinsic properties of the LMO (i.e. the developer or producer).

Another issue was on how to incorporate the concept of “imminent threat of damage” into the definition of operator. No agreement was reached on this, and the definition of operator makes no reference to damage or possible damage. However, the provision on response measures specifies that action must be taken by the operator in the event of damage or a “sufficient likelihood of damage”.

After some debate, it was also decided that the definition of operator should not be restricted to response measures, as the term also appears in the provision on financial security.

The final text defining operator reads: “any person in direct of indirect control of the LMO which could, as appropriate and as determined by domestic law, include, inter alia, the permit holder, person who placed the LMO on the market, developer, producer, notifier, exporter, importer, carrier or supplier.”

Civil liability

The issue of civil liability, whereby victims of damage from GMOs can turn to national courts for redress, almost caused the negotiations to collapse in Bonn in 2008 due to strenuous objections from several Parties to having international substantive rules for civil liability.

A group of Like Minded Friends emerged at that time “representing those countries whose position is that an international instrument on liability and redress should have binding elements on civil liability”.  The Like Minded Friends grouping comprised around 80 developing countries (including all of the African Group) and
Norway.
 
An agreement was reached in Bonn which essentially said that the international liability and redress regime would be legally binding and would comprise administrative approaches, whereby liability would be a matter to be resolved between the liable entity and the executive arm of a government, via response measures that address damage. The regime would also contain one binding provision on civil liability that would preserve the right of Parties to put in place domestic laws and policies on civil liability and redress. 
 
The one provision on civil liability to be included in the legally binding Supplementary Protocol proved to be the most contentious at the last meeting of the Group of the Friends in February 2010. While there had been general agreement over language implementing the Supplementary Protocol and addressing damage to biodiversity, including through civil liability approaches, similar language dealing with traditional damage proved too difficult to resolve.

Thus, the resulting text from the February meeting was in brackets, and called for Parties to assess whether domestic law provides for adequate rules and procedures for traditional damage “incidental” to damage to biodiversity, and to consider several options for applying civil liability approaches.

The African Group had however reserved the right to re-visit the wording of this paragraph, in a footnote to the text. It reiterated its position at the recent June meeting, that there must be a binding article on civil liability in the Supplementary Protocol, in line with the Bonn agreement, and proposed continuing the negotiations on the basis of the bracketed text. 

The discussion then focused largely on the following issues: (i) whether the obligations to apply and develop general and specific civil liability laws or a combination of both, in relation to traditional damage (spelt out as material or personal damage) should be mandatory; (ii) whether to narrow the consideration of traditional damage as “incidental” to damage as defined in the Supplementary Protocol, and how strong this linkage should be; and (iii) whether an assessment of the adequacy of domestic laws is necessary before the application or development of civil liability laws.

The bracketed text had limited the application of civil liability to material or personal damage “incidental” to the damage as defined in Article 2.2(c) which defines damage as “an adverse effect on the conservation and sustainable use of biological diversity, taking also into account risks to human health”.

Malaysia argued that the dictionary meaning of “incidental” conveyed an impression of minor accompaniment and subordination, which would severely limit the applicability of civil liability to very few situations.

Bolivia argued for the deletion of the phrase, while Japan and the EU stressed that there should be some linkage to an adverse effect on the conservation and sustainable use of biodiversity.

The Co-Chairs proposed a compromise package: that the obligation on Parties to assess and apply or develop civil liability laws should be mandatory, and that the linkage between traditional damage and damage to biodiversity be addressed by the term “associated with”. The latter was viewed as a better option than “incidental to” and would provide more leeway for inclusion of a broader range of damage scenarios.

Diverging opinions however emerged on the issue of assessment, with the EU adamant that any assessment needs to be clearly defined in terms of when it should be conducted, and would be a precursor to considering applying or developing civil liability laws. Various proposals by the EU were shot down, and it then dug in its heels saying that it had been flexible in accepting the opening up of the text, to help Parties have more committed civil liability provisions. The EU claimed that it needed to take home the text and consider whether it was workable, saying that, “we have some very firm instructions on the issue”.

So after a break, the reconvened meeting was pleasantly surprised to find that the EU had dropped its insistence on having reference to an assessment. The final text reads:

“Parties shall, with the aim of providing adequate rules and procedures in their domestic law on civil liability for material or personal damage associated with the damage as defined in Article 2, paragraph 2 (c):

(a)    Continue to apply their existing general law on civil liability;
(b)    Develop and apply or continue to apply civil liability law specifically for that purpose; or
(c)    Develop and apply or continue to apply a combination of both.”

The whole of Article 13 was eventually adopted late in the night, to applause.

Reflecting on the tortuous path of the issue of civil liability, from its consideration as the main liability and redress approach at the start of the negotiations on Article 27 of the Cartagena Protocol itself, to the 2008 compromise in Bonn to accept a binding administrative approach with the inclusion of one provision on civil liability, to the near collapse at the last meeting on this issue, several developing country delegates were pleased that there was finally something legally binding on civil liability.

In light of the progress made on the one binding civil liability provision, Malaysia proposed that the heavily bracketed consolidated text of the draft guidelines on civil liability (following comments from Friends and observers on a draft prepared by the Co-Chairs) be shelved. The guidelines were part of the Bonn agreement, emerging as a compromise between those who wanted civil liability as the core of the Supplementary Protocol, and those who favoured the administrative approach.

Malaysia said that Parties should complete the Supplementary Protocol and implement its binding civil liability provision as a first priority, and that the guidelines could be revived in the future if needed, particularly after the entry into force of the Supplementary Protocol and the outcome of any review of the implementation of the civil liability provision (as envisaged by an article on assessment and review).

Japan objected, wanting the guidelines to be finalized and seeking assurance that there would not be proposals for extension of the mandate to work on the guidelines beyond COPMOP5. In the end, it was decided that the text of the consolidated draft guidelines would be attached to the report of the meeting for further consideration in Nagoya.

The Nagoya meeting will need to resolve the sticky issues of financial security and products thereof, but with 19 of the 21 Articles already adopted and seven brackets remaining, the prospects are promising that the world will finally see an international treaty addressing liability and redress for damage resulting from GMOs. While compromises have been made along the way, the Supplementary Protocol would herald a start in ensuring that those responsible for damage are held to account.