Position Paper on Opt-Out for Bilateral, Multilateral Agreements

by Basel Action Network (BAN) and West Coast Environmental Law Association

1 September 1999

On the second day of what is presumed to be the final negotiating meeting for the Basel Convention Liability Protocol, the developed countries have revealed their intentions to opt-out of the protocol by use of the exclusion found in Article 3 (5) (f). This paragraph would allow these countries to opt out by making use of bilateral, regional, or multilateral agreements -- with the only caveat being the extremely weak and imprecise language "provided there exists a liability and compensation regime applicable to damage resulting from such movements that meets the aims of the protocol." This exclusion has major implications for the viability of the protocol, whether it will become merely a non-OECD regime, whether it will ever include a compensation fund, and indeed whether it will ever enter into force.

OECD Red, Amber Green Decision:

It has been revealed that OECD countries intend to make use of their OECD agreement with respect to hazardous waste recycling exports within the OECD area. As most of these countries are forbidden from exporting to non-OECD countries because of the Basel Ban Amendment, this represents the vast majority of OECD waste trade. For exceptions to intra-OECD trade, those countries can simply make use of bilateral agreements (see below).

EU Waste Shipment Regulation:

To our knowledge, while the EU Council Regulation has never been submitted to the Basel Secretariat as a valid Article 11 agreement, we can think of no legal reason why it cannot be considered such. Indeed statements have been made by the EU presidency that they consider it as such. This means that certainly within the EU countries, where again most of EU waste trade is confined, the protocol will not apply.

Bilateral Agreements:

Indeed any hazardous waste transaction in the world can be exempted from the protocol! Under paragraph 3 (5) (f) any two countries may deprive victims of potential remedies by simply entering a bilateral agreement (even a simple letter will qualify) and declaring that they are using a regime that"meets the aims of the protocol." However this language allows liability provisions much weaker than those found in the protocol.

At first glance, one might think that the problem can be solved by strengthening the wording of 3 (5) (f). But once one realizes that even with wording to the effect that the substitute regimes must be equal or stronger than the Protocol, this will not address the issue of ratification incentive.

For if the OECD countries (where the wealth of the world is concentrated) can opt out of the entire protocol, there exists no motivation for them to ratify the protocol when it will only create obligations upon them and no rights or privileges. Indeed the obligation to support developing countries via Article 16 (Compensation and Implementation Fund) will likely be seen as a burden and a disincentive to ratification. If OECD countries are not part of the protocol then the fund will be an empty fund.

While OECD countries such as Germany explain that they simply refuse to abandon their stronger domestic liability laws and that is why they intend to opt out via the OECD regime, this in our view is not a valid justification for retaining paragraph 3 (5) (f). This valid principle of protecting countries' sovereign right to enact stronger legislation (including financial limits, strict liability, fault-based liability, insurance coverage etc.) can and should be clearly reflected in Articles 10 and 23. This principle can be accomplished without the destructive effect of Article 3 (5) (f). Germany and others possessing stronger legislation on liability should appropriately support this principle in Articles 10 and 23.

Conclusion:

We find the paragraph, Article 3 (5) (f), to be a fundamental threat to what remains of the viability of the protocol and to international cooperation . It contains a massive exclusion rendering the entire liability exercise meaningless and guarantees that the protocol will never enter into force.

We strongly urge that 3 (5) (f) be deleted in its entirety.

END