Common Spaces and Co-operation in the Use of Natural Resources


(p. 333) 14  Common Spaces and Co-operation in the Use of Natural Resources

1.  Introduction

The world’s resources and environment are at the same time shared and partitioned, indivisible and divided. A world of sovereigns creates the greatest collective action problem in history: international law is both the product of this world and one of the few tools at our disposal for addressing the problem. Yet apart from the concepts of res communis as applied to the high seas and outer space, and ‘the common heritage of mankind’ as variously and vaguely applied to the atmosphere and the oceans,1 international law depends to a great extent on voluntarist devices, in the form of treaties, agreements, international agencies, and organizations, in order to regulate access to resources not located wholly within national territory. Indeed, the use of such devices in the political conditions of the past led to a situation where the law appeared to prevent developing states from having control over their own resources, creating by way of backlash a demand for a ‘new international economic order’.2

Apart from such questions of economic self-determination, the subject as a whole is concerned with machinery, organization, and also the influence of technical considerations to a degree uncommon in other areas of the law. Customary international law plays a role, at times a dynamic role, but caution is needed to avoid postulating as rules what are in truth local or temporary factors. Moreover the agenda evolves with (p. 334) changes in technology: in the 1960s lawyers were concerned with activities such as atmospheric nuclear testing with potential to seriously affect the environment; more recently the concerns surrounding anthropogenic climate change have prompted the development of an international climate change regime.3

The following sections briefly identify some legal issues that can arise in connection with the use of shared resources; the generation and use of energy and other uses of transboundary water resources, and other forms of transboundary co-operation, as well as issues specific to the polar regions and outer space.

2.  CO-Operation in the Generation and Use of Energy

(A)  Nuclear Energy and the Non-Proliferation Treaty4

The utilization of atomic energy for peaceful purposes has been a major field for cooperation between states, and between organizations and states, for several reasons: its relation to questions of security and disarmament; its (controversial) contribution to dealing with anthropogenic climate change by providing a non-fossil-fuel-based energy source; the immense cost of development, and the risk posed to human health by nuclear accidents. The most important organization, the International Atomic Energy Agency (IAEA), was established in 1957.5 The IAEA provides assistance of various kinds for the development of atomic energy in particular states under a system of inspection and control to ensure, inter alia, that the aid is not used for military purposes. Following the increased concern about nuclear reactors after the Chernobyl accident,6 the IAEA oversaw the development of two new international agreements: the Convention on Nuclear Safety7 and the Joint Convention on the Safety of Spent Fuel and Radioactive Waste Management.8 The disaster at the Fukushima nuclear plant in Japan in 2011 has raised fresh concerns about the risks of nuclear power, and the regime is under scrutiny once again.9

(p. 335) Other relevant agencies include the European Atomic Energy Community (Euratom)10 and the Nuclear Energy Agency of the Organisation for Economic Co-operation and Development (OECD).11

As for the use of nuclear energy for non-peaceful purposes, international law does not contain a comprehensive prohibition of the threat or use of nuclear weapons as such, although it is unlikely that any actual use of nuclear weapons would be consistent with international law.12 The current nuclear disarmament regime consists primarily of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT),13 the Partial Test Ban Treaty of 1963,14 and the Comprehensive Nuclear Test Ban Treaty (CTBT).15 CTBT bans all nuclear explosions on earth, whether for military or peaceful purposes, and sets up a global verification regime monitored by the CTBT Organization. It was opened for signature in 1996 but is not yet in force, pending ratification by nine of the 44 ‘Annex 2 states’, being those states that possess nuclear technology. Pressure is mounting on those states that are yet to ratify, including the US, Iran, China, and Israel. There is also a strong movement to conclude a multilateral convention banning nuclear weapons, supported by over 130 states at the NPT Review Conference in 2010.16 However, the regime has faced many challenges, including North Korea’s continued testing of weapons and its withdrawal from the NPT,17 growing concern over Iran’s nuclear programme,18 and an apparently contradictory special deal between the US and India.19 French nuclear testing in the South Pacific has been the subject of disputes before the International Court.20 It is unlikely CTBT will come into force in the near future,21 and the conclusion of a multilateral ban could take decades. Nonetheless, recent steps taken by the US, including negotiating Strategic Arms Reduction treaties(p. 336) with Russia22 and pursuing CTBT ratification in the Senate, suggest that the only nuclear power to have actually used nuclear weapons is once more (and for the time being) ready to take a responsible role in the move towards nuclear disarmament.

(B)  The Energy Charter Treaty23

The Energy Charter Treaty, together with the Protocol on Energy Efficiency and Related Environmental Aspects,24 establishes an ambitious multilateral regime for energy cooperation, building on the political declaration of the 1991 European Energy Charter25 following the collapse of the Soviet Union. The Charter was an attempt to accelerate economic recovery in Eastern Europe through co-operation in the energy sector. Its current membership reflects the growing importance of the Asian energy market. There are 52 members including the European Union. Russia signed the Treaty in 1994, but in 2009 announced its intention not to ratify the Treaty; provisional application ended on 18 October 2009 in accordance with Article 45(3)(a).26

The Treaty includes provisions on energy-related foreign investment and trade, dispute resolution, and energy efficiency. The investment regime is particularly noteworthy, being the first such regime contained in a widely ratified multilateral agreement. The regime is divided into pre-investment and post-investment provisions. The pre-investment provisions govern market access, and are largely framed as ‘best endeavours’ undertakings. By contrast, the post-establishment regime provides for binding obligations resting on the principles of most-favoured nation and national treatment. A salient feature is the inclusion of the right for foreign private investors to initiate compulsory arbitration proceedings against non-compliant state parties (Article 26).

(C)  Other Cases

Further areas of concern in the sharing of energy resources include the creation and maintenance of transnational energy grids and the international transport of energy. Liberalization of energy-related trade has proceeded apace but the corresponding extension and integration between national grids has not kept up. As yet there are no multilateral instruments governing transnational energy grids, but there(p. 337) are proposals for extensive integrated grids in Northern Europe,27 and progress has been made with hydropower development and power interconnection in the Greater Mekong Subregion.28 The Association of South East Asian Nations (ASEAN) signed an Agreement on ASEAN Energy Cooperation in 1986 and is working towards the establishment of an ASEAN power grid, as well as trans-ASEAN gas pipelines.29 Initiatives such as these present numerous legal and political challenges.

Article 7 of the Energy Charter Treaty provides that parties shall facilitate free transit of energy materials and products on a non-discriminatory basis, and shall ‘encourage relevant entities to cooperate’ in modernization, development, and operation of the infrastructure required for the transport of energy, such as transmission lines and pipelines. Various European states have declared that Article 7 is subject to general and conventional international law on jurisdiction over submarine cables and pipelines, reflected in Article 7(8). The transport of nuclear energy is governed by IAEA Regulations and the Convention on Physical Protection of Nuclear Material.30

3.  Transboundary Water Resources

(A)  Shared Freshwater and Canals

(i)  Shared freshwater resources31

The term ‘international’ with reference to a body of water is merely a general indication of rivers and reservoirs which geographically and economically affect the territory and interests of two or more states. Conceivably a body of water could be ‘internationalized’, that is, given a status entirely distinct from the territorial sovereignty and jurisdiction of any state, on the basis of treaty or custom, general or regional. Rivers separating or traversing the territories of two or more states are usually subject to the territorial jurisdiction of riparian states up to the medium filum aquae, taken to be(p. 338) the deepest channel of navigable waters or thalweg.32 But there are exceptions where some other boundary is agreed—for example the River San Juan, which forms part of the boundary between Nicaragua and Costa Rica, runs wholly in Nicaragua: the boundary is the right bank of the river on the Costa Rican side. However, the border treaty between the riparians also provides Costa Rica with a right of navigation on the San Juan ‘con objetos de comercio’.33 This right and its qualifier were considered in Navigational Rights, with the International Court determining, inter alia, that the phrase meant ‘for the purposes of commerce’, thereby ascribing to Costa Rica the right to carry goods and passengers on the river,34 as well as finding that persons so travelling were not required to obtain Nicaraguan visas or make payment to Nicaragua.35

The legal regime of rivers, creating rights for other riparians and non-riparian states and limiting the exercise of territorial jurisdiction for individual riparians, consists to a large extent of treaty law, and the International Court has focused on the terms of the particular treaty, making secondary reference to general international law or local cus-tom.36 Broadly, there are different legal regimes for navigational and non-navigational uses of rivers.37 The early assumption that navigational uses enjoyed primacy is no longer accurate; irrigation, hydro-electricity generation, and industrial uses are now more prominent in many regions than navigation, fishing, and floating of timber, and domestic use is growing rapidly.

Lac Lanoux concerned the interpretation of a treaty between France and Spain. However, the tribunal made observations on certain Spanish arguments based on customary law. On the one hand, the tribunal seemed to accept the principle that an upstream state is acting unlawfully if it changes the waters of a river in their natural condition in a way that could do serious injury to a downstream state. On the other, the tribunal stated that ‘the rule according to which States may utilize the hydraulic force of international watercourses only on condition of a prior agreement between the interested States cannot be established as a custom, or even less as a general principle of law’.38

(p. 339) The issues of liability for changes in the flow of a river as between riparian states will be determined within the framework of the law of treaties in combination with the principles of state responsibility, as in Gabčíkovo-Nagymaros. At the same time the Court referred to the ‘basic right’ of Hungary ‘to an equitable and reasonable sharing of the resources of an international watercourse’.39 The case was in some respects special since a boundary river was involved.

In the case of navigable rivers it is accepted that customary law does not recognize a right of free navigation.40Only a minority of states have accepted the Barcelona Convention and Statute on the Regime of Navigable Waterways of International Concern of 1921,41 which provides for free navigation as between the parties on navigable waterways of international concern. Several treaty regimes for specific river systems provide for free navigation and equality of treatment for riparian states only.42 By contrast the treaty regime for the Danube has long conferred rights of navigation on non-riparians. The Belgrade Convention of 1948 maintained free navigation for all states whilst retaining powers of control for riparian states.43 Navigation by warships of non-riparian states is prohibited. In construing a treaty which creates machinery for supervision of an international regime of navigation, a tribunal may prefer not to employ a restrictive interpretation of the powers of the agency of control as against the territorial sovereigns.44

In the River Oder case, the Permanent Court, referring to the various conventions since the Act of the Congress of Vienna in 1815, stressed the ‘community of interest of riparian States’ which in a navigable river ‘becomes the basis of a common legal right, the essential features of which are the perfect equality of all riparian States in the use of the whole course of the river and the exclusion of any preferential privilege of any one riparian State in relation to the others’.45

In 1966 the International Law Association (ILA) adopted the Helsinki Rules on the Uses of Waters of International Rivers as a statement of existing international law covering both navigational and non-navigational uses.46 The ILA also adopted the(p. 340) comprehensive revised Berlin Rules on Water Resources in 2004.47 The International Law Commission worked on the topic for over 20 years, culminating in the adoption of the Convention on the Law of Non-Navigational Uses of International Watercourses in 1997. Part II of the Convention sets out general principles for watercourses, including factors to be considered for ensuring equitable and reasonable utilization and participation, the avoidance of significant harm and how to remedy it, and general obligations of co-operation including sharing of information. Part III contains detailed provisions on prior notification of planned measures. In the absence of agreement no particular use of the watercourse enjoys inherent priority over others.48

A further advance occurred in Gabčíkovo-Nagymaros. There, the Court considered a dispute arising from a 1977 agreement between Czechoslovakia and Hungary to dam the Danube River in their respective territories in order to produce hydroelectric power in peaking mode. When Hungary refused to construct its dam due to environmental concerns, Slovakia diverted the river further onto its territory and built a second upstream dam—a contingency known as ‘Variant C’. The question was whether Slovakia was entitled to undertake Variant C despite the objections of its co-riparian. The Court noted that not only was the Danube a shared international watercourse, but also an international boundary river to which the principle of perfect equality between riparian states applied. Thus, by unilaterally diverting the Danube, Czechoslovakia assumed control of a shared resource and deprived Hungary of its right to a reasonable and equitable share thereof. In so deciding, the Court extended the principle in the River Oder case to non-navigational uses of watercourses.49

(ii)  International canals

Canals are in principle subject to the territorial sovereignty and jurisdiction of the state or states which they separate or traverse. Where the canal serves more than one state or otherwise affects the interests of more than one state a treaty regime may be created to regulate use and administration. The history of three canals of international concern has provided the basic materials for jurists seeking to establish general rules.

The Suez Canal was built and opened in 1869 under a private law concession for 99 years granted by the Egyptian government to the Universal Suez Maritime Canal Company. For most of its history the latter was a joint Franco-Egyptian company with aspects of its existence and functioning subjected to either French or Egyptian law. The British government was the largest shareholder. Eventually the affairs of the Canal were regulated by the Convention of Constantinople in 1888.50 Article I provided that the Canal ‘shall always be free and open, in time of war as in time of peace, to every(p. 341) vessel of commerce or of war, without distinction of flag’. The parties agreed not to interfere with the free use of the Canal and not to subject it to the right of blockade.

In 1954 Britain and Egypt agreed on British withdrawal from the Suez Canal base; the parties recognized that the Canal ‘which is an integral part of Egypt, is a waterway economically, commercially and strategically of international importance’.51 In 1956 the Egyptian government nationalized the Canal Company, under a law providing for compensation,52 but made no claim to alter the status of the Canal itself. Britain, France, and other states argued for the illegality of this measure, linking the status of the Company and the concession with the status of the Canal, and alleging that the nationalization was incompatible with the ‘international status’ of the Canal. As a result of the Franco-British invasion later in the same year Egypt abrogated the 1954 Agreement.53 On 24 April 1957 Egypt made a declaration confirming the rights and obligations arising from the Convention of Constantinople: the Declaration was registered under Charter Article 102, although in law it was a unilateral act.54

Until 1978 the Panama Canal Zone was occupied and administered by the US, independently of Panama, under the Hay–Bunau–Varilla Treaty of 1903,55 which provided that the Canal should be neutral in perpetuity and open to the vessels of all nations. Even before this, the Hay–Pauncefote Treaty had guaranteed free navigation, even in time of war, in terms borrowed from the Convention of Constantinople.56 But by a Treaty of 1977 (as amended in 1978), Panama was recognized as ‘territorial sovereign’ with rights of management of the Canal granted to the US for the duration of the Treaty.57

The Kiel Canal, though important for international commerce, was controlled by Germany untrammelled by special obligations until, in the Treaty of Versailles, it was provided that, except when Germany was a belligerent, the Canal was to be open to vessels of commerce and of war of all nations on terms of equality (Article 380). In 1936 the relevant provisions of the Treaty of Versailles were denounced by Germany, and other states seem to have acquiesced in this.58

It is doubtful if the existing materials justify any general principle of international canals. But there is some authority to the contrary in The SS Wimbledon. In 1921 a British vessel chartered by a French company, en route to Danzig with munitions for the Polish government, was refused access to the Kiel Canal. The issue was whether, given that Poland and Russia were at war, Germany was justified in holding that(p. 342) Article 380 of the Versailles Treaty did not preclude the observance of neutrality. The judgment, in upholding an expansive interpretation of the right of transit, referred to the Suez and Panama Canals as ‘precedents’ which were

merely illustrations of the general opinion according to which when an artificial waterway connecting two open seas has been permanently dedicated to the use of the whole world, such waterway is assimilated to natural straits in the sense that even the passage of a belligerent man-of-war does not compromise the neutrality of the sovereign State under whose jurisdiction the waters in question lie.59

It will be noted that this proposition was ancillary to an exercise in treaty interpretation and that even the general proposition depends on the incidence of ‘permanent dedication’. Moreover, interested states are reluctant to generalize: in 1956 the US regarded the Suez Canal as having an ‘international status’, while denying this in the case of the Panama Canal.60

(B)  Joint Boundary Commissions

Joint boundary commissions have been used to facilitate trans-border co-operation and the resolution of boundary disputes between neighbouring states for centuries, with the Ottoman commissions in the late 1400s,61 or the Caro-Ornano commission attempting to negotiate the border between France and Spain in the 1780s.62 Today there are 72 joint boundary commissions operating in different regions of the world.

Traditionally the primary function of a boundary commission has been to delimit or demarcate and maintain the boundary, frequently as part of a peace settlement or dispute resolution process. Commissions are often also involved in ongoing cross-border water and environmental management.63 They are usually established by treaty, and can be temporary or permanent. Examples include the Canada/US International Joint Commission,64the US/Mexico International Boundary and Water Commission,65 and the Cameroon/Nigeria Mixed Commission.66

(p. 343) In Pulp Mills, the Court had occasion to consider the role of the Administrative Commission of the River Uruguay (CARU), as established by the 1975 Statute of the River Uruguay.67 The Statute established CARU as a co-operative interface between Argentina and Uruguay for management of the river, a position that the Court took seriously. Accordingly, when Uruguay failed to inform Argentina through CARU that it was ready to issue initial environmental approval for two contested pulp mills, the Court held it to be in breach of its international obligations.68

(C)  Joint Development Zones69

Since the Second World War the jurisdiction of coastal states over marine resources (living and non-living) has expanded dramatically.70 The need for co-operation in the exploitation of such resources in areas that are subject to competing unresolved territorial claims, or where the resources straddle maritime boundaries, has led to the practice among states of establishing joint development zones (JDZs). In other cases the establishment of a JDZ may actually be a permanent alternative to drawing a definitive boundary line.

The practice of establishing JDZs as an interim measure to enable exploitation to proceed for the benefit of two or more states with overlapping claims is reinforced by UNCLOS Articles 74(3) and 83(3), which provide that pending agreement on the delimitation of the EEZ or continental shelf, respectively, the states concerned ‘shall make every effort to enter into provisional arrangements of a practical nature’.71 These arrangements are set down in bilateral treaties, governing matters such as the allocation of rights and obligations arising from exploitation activities, supervision and management of the exploitation, protection of the marine environment, inspection rights, and dispute settlement.72

JDZs are important both in the context of non-living resources, such as off shore hydrocarbon deposits,73 and for the exploitation, conservation, and management of transboundary fish stocks.74 Examples include zones established between Nigeria and(p. 344) São Tomé and Principe;75 Indonesia and Australia;76 and various arrangements in North East Asia.77

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