Canada - Certain Measures Affecting the Renewable Energy Generation Section (DS412)

Clinic: Graduate Institute, Spring 2012

Beneficiary: IISD, CELA, and Ecojustice

Introduction

Full report available here

The International Institute for Sustainable Development (‘IISD’), the Canadian Environmental Law Association (‘CELA’) and Ecojustice Canada (‘Ecojustice’) hereby submit the following amicus curiae brief in the matter Canada — Certain Measures Affecting the Renewable Energy Generation Sector (DS412).

According to Article 13 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (‘DSU’), a Panel can ‘seek information and technical advice from any individual or body which it deems appropriate’. Following the Appellate Body ruling in U.S. --Shrimp ‘a panel has the discretionary authority either to accept and consider or to reject information and advice submitted to it, whether requested by a panel or not. Accordingly, the Panel can consider unsolicited amicus curiae briefs submitted by non- governmental organizations (‘NGOs’) on their own motion. There is no prescribed procedure for submitting an amicus curiae brief to a Panel. Therefore we respectfully submit this brief through the Rules Division of the WTO Secretariat.

Qualifications of the Amici

IISD is a Canadian-based, public policy research institute that has a long history of conducting cutting-edge research into sustainable development, including the interlinkages between international trade and the environment. IISD's Geneva offices house the Global Subsidy Initiative (GSI) — a programme dedicated to analysing the complex interplay between subsidies and sustainable development. CELA is a non-profit, public interest organization established in 1970 to use existing laws to protect the environment and to advocate for environmental law reforms. Funded by Legal Aid Ontario, CELA is one of 77 community legal clinics located across Ontario, 17 of which offer services in specialized areas of the law. Ecojustice is a charitable organization dedicated to strengthening environmental laws in Canada through litigation, research and law reform efforts. Ecojustice has offices in Vancouver, Toronto, Calgary and Ottawa and does work across Canada. While Canada is one of the governments that provide funding to IISD and the CELA, this funding is not connected to our amicus curiae brief. We submit this brief on our own initiative and have not received any financial or other incentives related to this work from any of the parties involved in this dispute.

Nature of Interests

We believe that the findings of this Panel could be significant in clarifying the relation of the GATT 1994 Article XX exceptions to current global issues, such as climate change. Subsidies are one of several economic policy instruments WTO Members use to combat climate change. Where correctly implemented, they can be one of the most efficient and least trade distortive instruments to protect the environment. Given the potential advantages of addressing climate change issues through subsidies rather than more trade-distortive instruments such as tariffs or import restrictions, we are concerned that the latter measures may be afforded much greater leeway under WTO law to pursue legitimate environmental objectives than is offered to subsidies.

We do not take a position as to whether the Canadian measures at issue in this dispute are WTO-consistent. Our sole interest is to submit arguments on how the Panel could use the existing WTO law on subsidies to contribute to a mutually supportive relationship between the WTO Agreements and sustainable development, as called for by the Marrakesh Agreement Establishing the World Trade Organization (‘Marrakesh Agreement’) and the Doha Ministerial Declaration.

How our Amicus Curiae Brief Can Contribute to a Positive Solution of this Dispute

In previous cases, Panels and the Appellate Body based their decisions to accept unsolicited amicus briefs primarily on the time of filing and the content of the brief.

First, we submit our amicus curiae brief prior to the second substantive meeting of the Panel with the parties. This allows the parties to reply to the brief through written or oral submission if they wish to do so.

Second, our amicus curiae brief provides additional legal arguments that may assist the Panel in its deliberations on the dispute at hand. We note that amicus curiae briefs should not be repetitive of the arguments submitted by the parties or the third parties to the dispute. Our representatives have attended the open hearing of the Panel’s first substantive meeting with the parties and the third parties. In particular, we noticed that no party disputes that subsidies can be an appropriate instrument to support renewable energy. Nevertheless, such subsidies can be deemed prohibited or actionable by the WTO Subsidies and Countervailing Measures Agreement (‘SCM Agreement’). This makes it all the more important that the Panel interprets the SCM Agreement in a way that allows a considered balancing between the Members’ obligations and their rights to protect the environment. For this purpose, we suggest two distinct interpretative approaches for the Panel’s consideration, neither of which has been advanced by the parties to this dispute:

- to apply Article XX of the GATT 1994 as a defence for breaches of provisions of the SCM Agreement; and

- when assessing whether a ‘benefit’ exists under Article 1.1 of the SCM Agreement, give due consideration to the special character of environmental measures.

We are aware that Canada has not invoked Article XX of the GATT 1994 in its submissions. We further take note that in the Panel’s first substantive meeting with the parties and third parties, Korea (as a third party) expressed concern about the compatibility of the disciplines of the SCM Agreement and Members’ rights to pursue environmental policies. We concur with Korea that this issue is of systemic importance to be considered by the Panel. While the main argument of our amicus curiae brief concerns the application of Article XX of the GATT 1994 to the SCM Agreement, many of these arguments are equally valid to demonstrate that legitimate policy goals should be taken into account when assessing the existence of ‘subsidies’ under Article 1.1 of the SCM Agreement.

Specifically, we respectfully invite the Panel to:

1. Accept our amicus curiae brief;

2. Draft the panel report in a manner that does not prejudice the applicability of Article XX of the GATT 1994 to the SCM Agreement; and

3. When assessing whether a ‘benefit’ exists under Article 1.1 of the SCM Agreement, give due consideration to the special character of environmental measures.

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