1. 1 Environmental law Chapter 21 © 2005 Thomson/West Legal Studies In Business

2. 2 Tension in Environmental Agenda “North” Developed countries Pushing environmental concerns, legislation and treaties “South” Developing countries view environmental concerns with some skepticism As a luxury As anti-development and protectionism in disguise

3. 3 Issues Is environmental regulation a prerogative of rich countries? Should First World companies adhere to higher standards than required when doing business in the Third world?

4. 4 Environmental Law: A No- Growth Anti-Development Tool? Poorer countries are willing to pollute as a price of development Want to produce at lower cost to compete Examples: China and coal burning

5. 5 Remedies? International regulation is the only real solution for a problem that is not contained by national boundaries

6. 6 Examples of problems Polluter pays: Trail Smelter, Regulation of products: Lobster from Canada Litigation against polluters near site or in home country: Aguindo v. Texaco

7. 7 U.S.- Import Prohibition of Certain Shrimp by Malaysia, WTO Appellate Body U.S. had requirements that shrimp trawlers adopt TEDs or turtle excluder devices. Malaysia was not certified as having adopted a program. They challenged the U.S. procedure. The WTO panel ruled that the revised guidelines were not “unjustified discrimination” and Malaysia appealed to the WTO Appellate Body. Upheld the ruling. Why?

8. 8 U.S. Standards for Reformulated and Conventional Gasoline The EPA enacted the “Gasoline Rule” which provided a different more stringent standard for foreign refiners than domestic refiners. Venezuela challenged the Gasoline Rule as an “arbitrary or unjustifiable discrimination” under Article XX of GATT. A WTO panel ruled in favor of Venezuela and the U.S. appealed.

9. 9 U.S. Standards for Reformulated and Conventional Gasoline The Appellate Body found that the “Gasoline Rule” was discriminatory and a “disguised restriction of international trade.” What result?

10. 10 Calls for International Solutions REGIONAL –National laws –NAFTA side agreement: CEC –EU and ASEAN –National legislation addressing the “Circle of Poison” GLOBAL –Basel Convention on Transboundary Waste –Convention Int. Trade in Endangered Species –Montreal Protocol –Climate Control Convention

11. 11 Implications for Business Watch national law Be aware of NGO’s - Greenpeace Track international developments Corporate decision about level of environmental safeguards Hudson River Audubon case