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Case Study PIL2009

Faculty of Law , University of Oslo

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A concise introduction of the Case

Imperia has for a long period of time been particularly

engaged in the protection of a species of small bears that are
endemic to (i.e. only living within) the small island state of
Micronia. Micronia’s population has until recently suffered
2 However, recently there were
from severe poverty.
discoveries of valuable minerals on the island, and a number
of international mining companies have started to explore the
mineral resources. This has significantly improved the living
conditions of the population. Due to the activities of the
mining companies and the increasing development of
infrastructure and the local tourist industry, the habitat of the
small bears has been significantly reduced and the species
has been reported to be close to extinction.
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A concise introduction of the Case

The development in Micronia has received significant

attention in Imperia, and its population has demanded that its
authorities take action to prevent Miconia from taking acts
that would threaten the survival of the species. Micronian
authorities have2warned Imperia that any action it may take
would be regarded as an unlawful intervention in its internal
affairs and that Micronia would take any measure available to
prevent Imperia from implementing acts conceived as being
contrary to Micronian interests. Many Imperian corporations
have invested in Micronia, including in the mining and tourist
industry. There is also a significant export of mineral
resources from Micronia to Imperia. Both countries are
parties to the World Trade Organization.
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Diagram of the Case

An Industrialized An Industrializing country

country
Imperia protection of a species of small bears Micronia

Text Concept Text

Text Text

Minerals

mining companies Small Bears

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A Trilemma
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Legal Issues

We have four questions about this typical

case 2

We present and analyze them one by one

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Question 1

1 Provided that trade sanctions against

Micronian minerals are in violation of Article
XI of GATT, could such sanctions be justified
under Article2 XX of the GATT?
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Question 1
Article XX of GATT General Exceptions

Subject to the requirement that such measures are not

applied in a manner which would constitute a means of
arbitrary or unjustifiable discrimination between countries
where the same conditions prevail, or a disguised restriction
on international trade, nothing in this Agreement shall be
2
construed to prevent the adoption or enforcement by any
contracting party of measures:

(a) necessary to protect public morals;

(b) necessary to protect human, animal or

plant life or health;
…
(g) relating to the conservation of exhaustible
natural resources if such measures are made effective in
conjunction with restrictions on domestic production or
consumption;
…
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Question 1

GATT Article XX on General Exceptions consists of two

cumulative requirements.

For a GATT-inconsistent environmental measure to be

2 XX, a member must perform a two-tier
justified under Article
analysis proving:

first, that its measure falls under at least one of the

exceptions (e.g. paragraphs (b) to (g), two of the ten
exceptions under Article XX) and, then,
that the measure satisfies the requirements of the
introductory paragraph (the “chapeau” of Article XX), i.e. that
it is not applied in a manner which would constitute “a means
of arbitrary or unjustifiable discrimination between countries
where the same conditions prevail”, and is not “a disguised
restriction on international trade”.
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Question 1

GATT Article XI: Quantitative restrictions and licences

Article XI of GATT imposes another type of limit on measures
that a party can take to restrict trade. It prohibits the use of
quotas, import or export licences, or similar measures related
2
to the import or export of goods. This prohibition stems from
the fact that such volume-based measures are more
economically distorting than are price-based measures such
as tariffs and taxes. Agricultural products currently benefit
from an important exception to Article XI.
Article XI might conceivably lead to conflicts with the trade
mechanisms in some MEAs. For example, the Basel
Convention and CITES impose licence or permit
requirements for trade in the materials they control. To date
these types of provisions in MEAs have never been
challenged under trade laws.
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Question 2

2 Could a public statement warning the population of Imperia

against travelling to Micronia because it would contribute to
extinction of the
2 small bears be regarded as a violation of
international law?
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Question 2

Legal texts used for this question:

Convention on Biological diversity (CBD), article 11, p.1291:
each contracting party shall, as far as possible and as appropriate,
adopt economically
2 and socially sound measures that act as
incentives for the conservation and sustainable use of
components of biological diversity.
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Question 2

Rio Declaration on Environmental and Development, principle

2, p.1300: States have, in accordance with the Charter of the
United Nations and the principles of international law, the
sovereign right to exploit their own resources pursuant to their
own environmental2 and developmental policies, and the
responsibility to ensure that activities within their jurisdiction or
control do not cause damage to the environment of other States
or of areas beyond the limits of national jurisdiction.
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Question 2

Draft Articles on Prevention of Transboundary Harm from

Hazardous Activities, preamble, p.1874: bearing in mind the
principle of permanent sovereignty of states over the natural
resources within their territory or otherwise under their jurisdiction
2 also in mind that the freedom of states to carry
or control, bearing
on or permit activities in their territory or otherwise under their
jurisdiction or control is not unlimited.
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Question 2

According to the article 11 of the CBD, a state can warn its

population about the probable extinction of species. A public
statement can be made in order to warn people that travel to a
country like Micronia, which contains the world’s only population
of a small bear 2species. We can see that the Convention on
Biological Diversity in its article 11 provides the possibility for a
State to adopt sound measures that act as incentives for the
conservation of biological diversity.
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Question 2

The Draft Articles on Prevention of Transboundary Harm from

Hazardous Activities, in its general principles, says that the
freedom of states to carry on or permit activities in their territory or
otherwise under their jurisdiction or control is not unlimited.
So, a such public2 statement, taken by the State of Imperia, cannot
be regarded as a violation of international law. The protection of
environment is an international issue and each state has to
contribute to its protection. So the sovereignty of the State can be
limited in presence of a big issue as the protection of the
environment.
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Question 2

On the other hand, according to the Rio Declaration on

Environmental and Development in its principle 2, it is clear that a
State has the sovereign right to exploit its own resources pursuant
to its own environmental and developmental policies, and the
responsibility to2ensure that activities within its jurisdiction or
control do not cause damage to the environment of other States
or of areas beyond the limits of national jurisdiction.
The activities of the mining companies and the development of
tourism do not cause damage to the State of Imperia. It is a
national issue which concerns only Micronia. A public statement
from a foreign country can be regarded as a violation of the
sovereignty of the State concerned.
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Question 2
The Draft Articles on Prevention of Transboundary Harm from
Hazardous Activities in its general principles reminds us the
principle of permanent sovereignty of states over the natural
resources within their territory.
So, it is also possible to consider the public statement of Imperia
as a violation of2international law, and a violation of the
sovereignty of the State of Micronia.
As advisor to the Imperial Ministry of Foreign Affairs, I would say
that there is a dilemma between the sovereignty of the State of
Micronia and the international protection of the environment.
Considering the fact that these small bears only exist in Micronia,
it is important to warn the population of Imperia, and from other
states, of the effects of tourism on the environment of this small
island. A public statement, which aim is to warn population about
impacts of tourism on the wildlife of the island, cannot be regarded
as a violation of international law.
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Question 3

3 Could a law punishing Imperian

corporations
2
investing in Micronia be
regarded as a violation of international law?
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Question 3

UN Charter of Economic Rights and Duties of States (UNGA Res.

3281 XXIX 1974):

2
Two perspectives:

1) Literal Interpretation
2) Purposive Interpretation
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Question 3

1) Literal Interpretation:

UN Charter of Economic Rights and Duties of States (UNGA Res. 3281

2 2:
XXIX 1974), Article

Each state has the right to:

b) regulate and supervise the activities of transnational corporations within

its national jurisdiction and take measures to ensure that such activities
comply with its laws, rules and regulations, and conform with its economic
and social policies… Transitional corporations shall not intervene in the
internal affairs of the host State…
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Question 3

2) Purposive Interpretation:

UN Charter of Economic Rights and Duties of States (UNGA Res.

3281 XXIX 1974):
2
Article 30: The protection, preservation and enhancement of the environment
for the present and future generations is the responsibility of all States. All
States shall endeavour to establish their own environmental and developmental
policies in conformity with such responsibility. The environmental policies of
all States should enhance and not adversely affect the present and future
development potential of developing countries. All states have the
responsibility to ensure that activities within their jurisdiction or control do not
cause damage to the environment of other States or of areas beyond the limits
of national jurisdiction. All States should co-operate in evolving
international norms and regulations in the field of the environment.
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Question 3

Article 24: All States have the duty to conduct their mutual economic relations
in a matter which takes into account the interests of other countries. In
particular, all States should avoid prejudicing the interests of developing
countries.
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Article 25: In furtherance of world economic development, the international
community, especially its developed members, shall pay special attention to the
particular needs and problems of the least developed among the developing
countries…with a view to helping them to overcome their particular difficulties
and thus contribute to their economic and social development

Article 32: No State may use or encourage the use of economic, political or
any other type of measures to coerce another State in order to obtain from it the
subordination of the exercise of its sovereign rights.
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Question 3

The UN Declaration on Permanent Sovereignty over Natural

Resources (UNGA Res. 1803 (XVII)) also supports this:

Article 5. The free2and beneficial exercise of the sovereignty of peoples and

nations over their natural resources must be furthered by the mutual respect of
States based on their sovereign equality.

Article 7. Violation of the rights of peoples and nations to sovereignty over their
natural wealth and resources is contrary to the spirit and principles of the
Charter of the United Nations and hinders the development of international co-
operation and the maintenance of peace.
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Question 3

Conclusion: purposive vs. literal interpretation?

The conflict here highlights the tension of a state’s ability exercise its
sovereignty in an international context without infringing on another state’s
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sovereignty: Imperia with regards to its right to dictate laws to Imperian
corporations, and Micronia with regards to its right to further develop its country
while making full use of its natural resources.
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Question 3
Question 3 Presentation Notes:

There is nothing in this Charter which explicitly prohibits countries from placing sanctions on its own
corporations in relation to trade. In fact, Article 2 affirms Imperia’s right to regulate transnational
corporations in order to conform with its social policies. Thus, this article would allow Imperia to take
measures such as punishing Imperian corporations investing in Micronia on the basis of requiring such
corporations to conform with the states’ environmental policy.

When reading the Charter as a whole – and especially Article 30, Imperia’s desire to punish Imperian
2
corporations that invest in Micronia, comes into conflict with Micronia’s claim to state sovereignty in
making decisions that enable its development. Particularly important is that the environmental policies of
all States should enhance and not adversely affect the present and future development potential of
developing countries. Thus, even though Imperia’s proposed law could be legitimate, this law would also
be contrary to the spirit of this Charter on Economic Rights and Duties of States, particularly if such
actions adversely affect present and future development of Micronia. Moreover, further reading of the
Charter suggests it is the responsibility of developed countries to aid developing countries in areas of
economic and environmental development. Other provisions that support this ‘purposeful’ interpretation of
the Charter include Articles 24, 25 and 32.

While imposing punishments on Imperian corporations investing in Micronia would not be an explicit
violation of international law, its actions could be seen as a violation of the spirit and principles of the UN
Charter. As an advisor to the Foreign Affairs ministry of Imperia, I would suggest that since Imperia has
heavily invested in Micronia, such a law would not be economically beneficial for either country. A better
way to ensure the protection of Micronian bears and uphold a purposive interpretation of the Charter
would be to work together with Micronia to develop and implement environmental safety and protection
policies. This would give effect to the state interests of both countries, while minimally affecting the others’
state sovereignty.
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Question 4

4 Could a law punishing any corporation, i.e. regardless of its

nationality, investing in Micronia be regarded as a violation of
2
international law?
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Question 4

Question 4 is strongly co-related to question 3, the only difference

is concerned with the Nationality of the companies .

According to the given case both Imperia and Micronia are

member states 2of WTO , under WTO framework, a law punishing
any corporations from a member state would violate the free trade
principle.

But the issue here is Could a law punishing a corporation from

non-WTO member state?
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Question 4

Although a none-WTO member state shall not be bound by GATT agreement, according
to UN Charter, all states are bound by some universal principles under this Charter!

Art 2 points out as the following

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Question 4
UN Charter Art 2

Fundamental Principles

1The Organization is based on the principle of the sovereign equality of all its Members.

2 All Members shall settle their international disputes by peaceful means

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3 The Organization shall ensure that states which are not Members of the United
Nations act in accordance with these Principles so far as may be necessary for the
maintenance of international peace and security.

4 Nothing contained in the present Charter shall authorize the United Nations to
intervene in matters which are essentially within the domestic jurisdiction of any state or
shall require the Members to submit such matters to settlement under the present
Charter; but this principle shall not prejudice the application of enforcement measures
under Chapter Vll.
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Question 4

Firstly ,
General Assembly resolution 1803 (XVII) of 14 December
1962, "Permanent sovereignty over natural resources“ is
one legal resource to solve this problem

2
Legal resources:
General Assembly resolution 1803 (XVII) of 14 December
1962, "Permanent sovereignty over natural resources"

Legal Literature:
Sovereignty over Natural Resources: Balancing Rights
and Duties By Nico Schrijver.

The book are found in a Swedish library ,or you can access
the book on the Internet
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Permanent sovereignty over natural resources
1. The right of peoples and nations to permanent sovereignty over their natural wealth
and resources must be exercised in the interest of their national development and of the
well-being of the people of the State concerned.
2. The exploration, development and disposition of such resources, as well as the import
of the foreign capital required for these purposes, should be in conformity with the rules
and conditions which the peoples and nations freely consider to be necessary or
desirable with regard to the authorization, restriction or prohibition of such activities.
3. In cases where authorization
2 is granted, the capital imported and the earnings on that
capital shall be governed by the terms thereof, by the national legislation in force, and by
international law. The profits derived must be shared in the proportions freely agreed
upon, in each case, between the investors and the recipient State, due care being taken
to ensure that there is no impairment, for any reason, of that State's sovereignty over its
natural wealth and resources.
4. Nationalization, expropriation or requisitioning shall be based on grounds or reasons
of public utility, security or the national interest which are recognized as overriding purely
individual or private interests, both domestic and foreign. In such cases the owner shall
be paid appropriate compensation, in accordance with the rules in force in the State
taking such measures in the exercise of its sovereignty and in accordance with
international law. In any case where the question of compensation gives rise to a
controversy, the national jurisdiction of the State taking such measures shall be
exhausted. However, upon agreement by sovereign States and other parties concerned,
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Permanent sovereignty over natural resources

5. The free and beneficial exercise of the sovereignty of peoples and nations over
their natural resources must be furthered by the mutual respect of States based on
their sovereign equality.
6. International co-operation for the economic development of developing countries,
whether in the form of public or private capital investments, exchange of goods and
services, technical assistance, or exchange of scientific information, shall be such as
2
to further their independent national development and shall be based upon respect for
their sovereignty over their natural wealth and resources.
7. Violation of the rights of peoples and nations to sovereignty over their natural
wealth and resources is contrary to the spirit and principles of the Charter of the
United Nations and hinders the development of international co-operation and the
maintenance of peace.
8. Foreign investment agreements freely entered into by or between sovereign States
shall be observed in good faith; States and international organizations shall strictly
and conscientiously respect the sovereignty of peoples and nations over their natural
wealth and resources in accordance with the Charter and the principles set forth in the
present resolution.
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Question 4

Secondly,

Resolutions adopted by the General Assembly 3281 (XXIX). Charter of Economic

Rights and Duties of States is another legal basis to solve this legal problem

2
 Charter of Economic Rights and Duties of LOGO
States

Resolutions adopted by the General Assembly 3281 (XXIX). Charter of Economic

Rights and Duties of States
Chapter 1 Fundamentals of International Economic Relations
Sovereignty, territorial integrity and political independence of States;
Sovereign equality of all States;
Non-aggression; 2
Non-intervention;
Mutual and equitable benefit;
Peaceful coexistence;
Equal rights and self-determination of peoples;
Peaceful settlement of disputes;
Remedying of injustices which have been brought about by force and which deprive a
nation of the natural means necessary for its normal development;
Fulfillment in good faith of international obligations;
Respect for human rights and international obligations;
No attempt to seek hegemony and spheres of influence;
Promotion of international social justice;
International co-operation for development;
Free access to and from the sea by land-locked countries within the framework of the
 Charter of Economic Rights and Duties of LOGO
States

Resolutions adopted by the General Assembly

2 of Economic Rights and Duties of States

3281 (XXIX). Charter

Article 7
Every State has the primary responsibility to promote the economic, social and cultural
development of its people. To this end, each State has the right and the responsibility to
choose its means and goals of development, fully to mobilize and use its resources, to
implement progressive economic and social reforms and to ensure the full participation
of its people in the process and benefits of development. All States have the duty,
individually and collectively, to co-operate in eliminating obstacles that hinder such
mobilization and use.
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Question 4

If a WTO member state have some problem with a none-WTO state,how to

deal with the dispute?

Now we have to refer to bilateralism

ILC draft articles on prevention of trans-boundary harm from hazardous

activities can be a good reference
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Question 4
ILC draft articles on prevention of transboundary harm from hazardous activities

Dispute settlement

2. Failing an agreement on the means for the peaceful settlement of the dispute within
a period of six months, the parties to the dispute shall, at the request of any of
them, have recourse to the establishment of an impartial fact-finding commission.
6. The Commission shall adopt its report by a majority vote, unless it is a single-
member Commission, and shall submit that report to the parties to the dispute
setting forth its findings and recommendations, which the parties to the dispute
shall consider in good faith.
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Question 4

So Sovereignty of a state should be respected at any circumstances

2 we have to strike the balance between Free Trade and

From my perspective,
Environment Protection
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