Biting without teeth: the citizen submission process and environmental protection.

• Author: Lewis, Bradley N.

The Dominican Republic-Central American-United States Free Trade Agreement (CAFTA-DR), (1) recently ratified by the U.S. Con gress (2) and signed by the President, (3) has been a controversial piece of the Bush administration's economic policy. The treaty is principally aimed at expanding the market for U.S. business opportunities within the region and facilitating economic development in Central America and the Dominican Republic, (4) but its critics (5) charge that its environmental chapter (6) is toothless--that the citizen submission process (7) lacks sufficient standards and enforcement mechanisms to avoid derogation by the treaty's member states in the area of environmental protection. (8) This Comment suggests that such despair is premature.

Similar protests (9) were lodged against the analogous provisions of the North American Agreement on Environmental Cooperation (NAAEC), the side agreement to the North American Free Trade Agreement (NAFTA). (10) The critics' arguments have merit; these treaties protect foreign investors (11) and trade interests (12) by establishing uniform international standards and binding enforcement measures without including similar environmental provisions, (13) thus creating the possibility of a race to the bottom among member states as they erode environmental protections to compete for investment and trade. Nevertheless, despite the disequilibrium between the investment and trade provisions on the one hand, and the environmental provisions on the other, the record of environmental submissions under NAAEC demonstrates that these supposedly toothless environmental provisions can actually substantially offset the tendency toward an environmental race to the bottom that these treaties could otherwise create.

To prevent such a race, it is sufficient to establish uniform international standards and an effective means for deterring states from noncompliance with those standards, but these terms need not be explicit in the treaty's text. Indeed, given the tenor of international environmental law in general, (14) and the preferences of the United States in particular, (15) such explicitly strong environmental terms would likely prevent ratification. The solution must instead achieve the necessary environmental protections in a politically acceptable manner, and this Comment argues that in the hands of nongovernmental organizations (NGOs) acting strategically, the regime established by NAAEC and, by extension, CAFTA-DR's environmental chapter, will do just that.

In its analysis, this Comment employs Kal Raustiala's conception of international agreements as having three conceptually distinct features, two dealing with form--legality and structure--and one addressing substance. (16) According to Raustiala, legality refers to the formality with which an international agreement creates an international legal obligation, varying from legally binding contracts to nonlegally binding pledges. (17) Raustiala uses structure to measure the effectiveness of the agreement's enforcement mechanisms; an agreement can be either weak or strong in this regard. (18) Finally, the substance of an agreement refers to the coercive nature of its obligations and can range from deep to shallow. (19) Among these variables, Raustiala notes that trade-offs occur as states negotiate agreements, such that it is unusual for each of the three characteristics to be employed in the fullest sense in the same agreement. (20) In environmental agreements, the trade-offs generally involve legality and substance. (21) These trade-offs relate to political feasibility: the likelihood that contracting states will adopt and comply with a particular treaty provision. Agreements that reflect trade-offs are likely to enjoy political feasibility.

In these terms, this Comment argues that while the environmental provisions of NAAEC and CAFTA-DR are legally contractual and structurally strong, they cannot be substantively deep without becoming politically infeasible. Strategic NGOs, however, have the ability to effectively deepen the treaty's substance while maintaining political feasibility by exploiting CAFTA-DR's structural provisions. This thesis has value beyond the specific NAAEC/CAFTA-DR context; it offers a practical understanding of the potential effectiveness that seemingly shallow substantive treaty provisions can have if properly understood by strategic political actors.

Part I explains the identical features of NAFTA and CAFTA-DR that, without mitigating factors, could cause a race to the bottom by the signatories in enforcing their environmental standards. (22) Part II establishes a framework for analysis of political feasibility, and then moves on to apply that rubric to the NAAEC/CAFTA-DR context. Part III then argues that by establishing a citizen submission process and a network of environmental regulators, the treaties' environmental provisions enable NGOs to effectively deepen the substantive environmental provisions to a level sufficient to address the race to the bottom.

1. THE ENVIRONMENTAL RACE TO THE BOTTOM

   This Part discusses the race to the bottom in environmental protection that may result from the imbalance among the substantive (23) protections found in both NAFTA and CAFTA-DR. The danger associated with these treaties derives from their encouragement of regional trade and investment activities via substantively deep protections while employing comparatively shallow provisions in the environmental chapter. Among the explicit goals of the treaties are "[enhancing] the competitiveness of [the signatories'] firms in global markets," "[establishing] clear and mutually advantageous rules governing ... trade," and "[ensuring] a predictable commercial frame. work for business planning and investment." (24) To meet these goals, the treaties outline specific uniform standards to be observed with regard to cross-border investment (25) and trade, (26) and provide for a dispute resolution procedure to protect parties involved in these activities. (27) Parties seeking to make environmental claims, however do not, enjoy similar substantive protections under CAFTA-DR and NAAEC; neither treaty provides international environmental standards (28) nor an enforceable (29) private right of action (30) for such claims. (31)

   This Comment focuses not on the efficacy of the environmental provisions in combating the baseline environmental problems, but rather on the treaties' ability to counteract the derogative pressures introduced by the environmental race to the bottom. As an agreement involving the United States and six developing economies, (32) CAFTA-DR sets the stage for such a downward race among the Central American states (33) that would multiply the impulse to discount domestic environmental protections. By increasing the cross-border mobility of investment dollars (34) and goods among the member states via deep substantive protections, CAFTA-DR encourages the developing economies to compete for these newly available, but finite, sources of economic growth. The danger is that this competition may incite the Central American states to downgrade their domestic environmental protections in an attempt to decrease the costs of local economic activity, therefore attracting a greater proportion of foreign investment and trade. (35) The Sections below detail the specific provisions in CAFTA-DR and NAFTA that allow the possible environmental race to the bottom to occur--namely, the establishment of deep substantive protections for trade and investment, but shallow substance in the environmental provisions.

   1. Investor Protections

      NAFTA and CAFTA-DR provide deep substantive protections to investment interests by setting standards to be achieved by host states with regard to foreign investment, (36) and establishing a dispute resolution procedure to which private interested parties have access and from which they may seek an enforceable decision. (37) The scope and quality of these protections indicate the signatories' intent to assure investors that they will have the opportunity to litigate any grievances that may arise from their foreign investment, thus encouraging freedom of capital among member states. 38 In short, these provisions aim to promote cross-border investment by creating nonpreferential, uniform standards of protection. (39)

      Both treaties afford investors the benefits of national treatment, (40) most-favored-nation status, (41) and minimum standards of treatment. (42) Each of these provisions exemplifies the definite and binding quality of investor protections, which must be uniformly adopted and enforced against each signatory. The national treatment article ensures that foreign investors enjoy the same protections that benefit domestic investors, (43) and the most-favored-nation article assures signatories' investors that no other international investors will enjoy extra protections or assurances not available to investors from signatory states. (44) In addition to these comparative investor protections, the treaty also establishes minimum standards for investors, guaranteeing those protections "in accordance with customary international law, including fair and equitable treatment and full protection and security." (45)

      The investment provisions also give explicit procedural rights to private foreign investors, (46) allowing them to bring timely (47) claims against the host state itself (48) for a breach of a substantive duty conferred by NAFTA, CAFTA-DR, or an investment authorization or agreement. (49) Initially, disputes are to be addressed via informal "consultation and negotiation," (50) but if these prove unsuccessful, the aggrieved investor is allowed to institute arbitration proceedings against the state under the International Centre for Settlement of Investment Disputes (ICSID) or the United Nations Commission on International Trade Law (UNCITRAL) Rules. (51) These arbitration...