Giving Power to the People: Comparing the Environmental Provisions of Chile's Free Trade Agreements with Canada and the United States

Author:Rachel T. Kirby
Position:J.D./M.A. Candidate, 2010, American University Washington College of Law and School of International Service
giving power to the people: comparing the
environmental proviSionS of chileS free traDe agreementS with
canaDa anD the uniteD StateS
by Rachel T. Kirby*
*Rachel T. Kirby is a J.D./M.A. C andidate, 20 10, America n University
Washington College of Law and School of International Service.
“Trade, of course, is neither inherently good nor bad; but
how it is conducted in the future is now a matte r of deep co n-
cern—and unprecedented opportunity.”1
Sixteen years ago, a new U.S. President offered an oppor-
tunity to increase North American environmental protec-
tion with an environmental side agreement to the North
American Free Trade Agreement (“NAFTA”) that gave citizens
a voice in enforcing environmental laws.2 The side agreemen t,
known as the North American Agreement on Envir onmental
Cooperation (“NAAEC”), provides a mech anism for citizens
to aim the international spotlight on a government’s failure to
enforce domestic environ mental laws.3 A similar agreeme nt
between Chile and Can ada, the Canada-Chil e Agreemen t on
Environmental Cooperation (“CCAEC ”), allows ordi nary citi-
zens to ask an i nternational body to investigate alleged non-
enf orcem ent of e nviron menta l
laws.4 While these mechanisms
are commonplace in a number
of interna tional trade agree -
men ts, the U. S.-Ch ile Free
Trade Agreement (“ USCFTA”)
includes a state-to-s tate dispute
resolution mechanism, but does
not allow for citizen submissions
on enforcement.5
As the inte rnational com-
munit y turn s its attentio n to
envi ronmen tal crises ar ound
the world, the Unit ed Stat es
must dec ide how to address lax
enforc ement of environ mental
laws by its trading partners.6 While
a free trade agreement is only one avenue for the United States
and en vironmental activist s to pursu e more eff ective enforce-
ment of every country’s environmental laws, this article argues
that a citizen enforcement mechanism is a vital tool that must be
included i n future agreements . Part I outlines the enforc ement
mechanisms under the CC AEC, NAAEC , and the US CFTA.
Part II argues that agre ements without citizen enfo rcement
mechanisms cannot effectively increase environmental enforce-
ment, while agreements with these provisions encourage interest
in environmental issues and pressure to strengthen environmen-
tal regulation s. Part III recom mends including citizen enforce-
ment mechanisms in future U.S. trade agreements. Finally, Part
IV concludes that fr ee trade agreements offer an a venue for
increased enforcement of envir onmental laws, and that citizen
enforcement procedures strengthen those agreements.
ccaec & naaec citiZen enforcement
The CCAEC and NAAEC address ineffective enforcement
of domestic environmental laws in two ways. The first is a state-
to-state dispute resolution mechanism f or a persistent failure
to enfor ce a party’s own environmental laws in a manner that
interferes with free trade.7 The second is a citizen submission on
enforcement procedure.8 This mechanism allows any citizen to
send a submission to either National Secretariat asserting that a
party to the CCAEC or NAAEC is “failing to effectively enforce
its environmental law.”9
The CC AEC e stablish ed a
Commission for Environmental
Cooperation (“CEC”) made up
of a Council, a Joint Submission
Commit tee, and a Joint P ub-
lic Adv isory Commit tee.10 A
citizen submission to the CEC
must meet seven largely proce-
dural criteria and be grounded
in a specific incid ent of n on-
enforcemen t.11 The J oint Sub-
miss ion C ommitt ee dec ides
whether the su bmission meri ts
a res ponse from the state, then
decides whet her to p roduce a
public factual recor d.12 W hile
the intent of the factual record is
to describe and report events without passing judgment on par-
ties’ actions, parties still resist the process.13
uScfta environmental State-to-State DiSpute
reSolution proceDureS
Like the CCAEC and NAAEC, the USCFTA obliges both
parties to “effectively enforce” domestic environmental laws.14
The process can only begin if a party has persistently failed to
effectively enforce its environmental laws “in a manner affecting
The United States must
decide how to address
lax enforcement of
environmental laws by its
trading partners.
66FALL 2009
trade betwe en the Parties.”15 Under the C CAEC, a citizen can
pursue an enf orcement matter for a sin gle failure to effectively
enforce an environmental law.16 The dispute settlement provi-
sions of the USCFTA, however, are strictly between government
parties, and require both a persistent pattern of non-enforcement
and a showing that the failure affects trade between the parties.17
Parties first address disputes under the environmental provi-
sions of the USCFTA with consultations.18 If consultations fail
to resol ve the matter within sixty days, the complaining party
can initiate the USCFTA dispute resolution procedures.19 First,
the parties conv ene a me eting
of the Commis sion to resolve
the i ssue.20 N ext, the parties
convene an arbitral panel if the
issue remains unresolved.21 The
panel ca n impose fines of up to
fifteen million dollars per day on
the non-enforci ng part y.22 Th e
complaining party can sus pend
USCFTA tr ade benefits if the
party fails to pay the fine.23
effective enforcement of environmental lawS
protect the environment, human health, anD
foreign inveStment StreamS
Environmen tal laws do not e nforce th emselves; govern-
ments or private citizens must enforce those laws.24 The impor-
tance of enforcement is especially true in Latin America, where
many countries have an inconsistent historical relationship with
the rule of law.25 Effective environmental protection req uires
both eff ective environmental laws and con sistent enforcement
of those laws.26
Foreign and domestic investors are unlikely to comply with
environmental laws if there are no consequences for violations.
Because environmental compliance can be expensive, compa-
nies and investors that violate environmental regulations gain a
competitive advantage against those who do comply. Effective
enforcement reassures investors that competitors are not gain-
ing a competitive advantage by avoiding envi ronmental com-
pliance.27 Overall, trade and investment that leads to increas ed
prosperity may strengthen effective environme ntal protections,
but the government or citizens must enforce those protections.28
State-to-State DiSpute reSolution alone DoeS
not increaSe enforcement of environmental lawS
While state-to-st ate disp ute reso lution t heoretically pro-
vides a venue for environmental advocates to work though their
governme nts, government action carr ies burdens that make
action unlikely.29 States have neither the capacity nor authority
to effec tively monitor en forcement of ano ther state’s env iron-
mental laws.30 The absence of a citizen enforcement mechanism
and the requirement that the disputed pattern of non-enforce-
ment affect trade between the parties hampers efforts to improve
environmental protection through treaty provisions.31
State Espousal Mechanisms Lead to Mutual Non-
Both states in a free trade agreement have non-environmen-
tal reas ons to sign an agreement.32 As a result, environmental
disputes are unlikely because each state has an interest in not
enforcing environmental provisions of the treaty.33 A citizen
alleging that her government has failed to enforce environmen-
tal laws has little control over the diplomatic concerns of either
government party to the treaty.34 Because environmental issues
are not a priority, neither party has
an interest in enforcing environ-
mental treaty provisions. At the
same t ime, the cons equences
of sta te-to-state dispute resolu-
tion are trade sanctions, which
undermin e th e pur pose of t he
agreeme nt: free trade.35 As a
result , no party has us ed the
NAAEC or CCAE C govern -
ment arbitrati on pr ovisions or
the USC FTA state-to-state dis-
pute resolution procedures.36
High Burdens of Proof Make an Unused Procedure More
The USCFTA provides a dispute resolution mechanism for
state parties to pursue trade sanctions.37 A state party must show
that there is a persi stent pattern of non-enforcement and that
the pattern affects trade between Chile and the United States.38
These hurdles to successful sanctions are high even if a state had
an incentive to pursue a dispute.39
The state must first show that there was a persistent pattern
of non-enforcement.40 Effective en forcement requir es consis-
tency to be effective, but enforcement in Latin America is more
likely t o be inconsiste nt, precluding proof of a consistent pat-
tern.41 Second, a state must show that the pattern of non-enforce-
ment aff ected trade be tween the count ries.42 For ex ample, the
state could show that non-enforcement gives domestic facilities
in the complained-against country an advantage over facilities in
the complaining country.43 In a complex global economy, a state
is unlikely to be able to prove a specific impact on trade between
the parties.44 These high burdens of proof substantially limit the
already unlikely state-to-state dispute resolution procedure.
a citiZen enforcement proceDure iS a better
mechaniSm for increaSing enforcement of
environmental lawS anD promoting public
intereSt in the environment
A citizen enforcement mechanism strikes a balance between
state sovereignty a nd the public desire for a cleaner environ-
ment.45 Because citizen submissions do not rely on government
action, countries cannot subsume environmental issues to other
diplomatic concerns .46 Enforcement of domest ic law preserves
state interest in sovereignty because the treaty does not impose
an international standard.47 At the same time, a defined mecha-
nism for action fosters civil society interest in the environment.48
No state party has used
the state-to-state dispute
resolution procedures
Citizen Submissions Do Not Rely on a Government to
Initiate Treaty Enforcement Actions
Unlike state-to-state dispute resolution, the citizen submis-
sion process provides a venue for citizens to report instances of
non-enforcement in their own neighborhoods or in a protected
area used by the public.49 Citizens have an interest in protecting
the natura l areas they use, and are
more likely to report a failure to
enforce than the government.50
Citize ns can direc tly observe
envir onmental viola tions an d
a lack of state action in their
neighborhoods.51 In contras t,
limited resour ces re strict state
monito ring of anot her state’s
enforcement activity.52 Citizens
and other private actors are also
better equipped to identify inef-
fect ive e nforcem ent b ecause
they are closer to violations.53
Citizen Submissions Balance
State Sovereignty and Public
Interest in Enforcement of
Environmental Laws
Relying on citizen enforcement addresse s the wides pread
concern of La tin American countries that environmental provi-
sions in free trade agreements are an effort to restrict their sov-
ereignty with outside standards.54 The CAAEC’s requirement
to enforce domestic environmental laws allows a country to set
a level of environmental protection it feels is appro priate.55 At
the same time, as an environmental community develops, that
community can pressure the governmen t to incr ease levels of
environmental protection and enforcement.56 States also see the
citizen subm ission as a le sser threat because of the absence of
trade sanctions associated with a factual record.57
Enforcement of domestic environmental law imposes lower
sovereignty costs on Latin American states.58 Because only citi-
zens ca n initiate t he submission process, the process does not
raise concerns o f a lack of democratic accountability.59 As a
community of environmental activists develops, that community
can lobby for more protective environmental laws, making the
government more responsive to community concerns.
In contr ast to the dispute resoluti on proceeding under the
USCFTA, the citizen submission process does not carry a direct
threat of trade sanctions and instead relies on the deterrent effect
of factual records.60 This limitation preserves the benefits of the
free trade agreement while prov iding cons equences fo r non-
enforcement of the terms o f the agreement.61 The absence of
trade sanction s also prevents a state-to-state dispute resolution
from pu nishing exporters and other private parties who might
not have been involved in the state’s non-enforcement.62
Citizen Enforcement Fosters the Development of a
Community of Environmental Activists
While the citizen submission process is theoretically acces-
sible to the general public without legal assistance, this process
can be more successful when there is a civil society commu-
nity ready to bring claims.63 At the same time, the process’ con-
crete avenue for action provides a
mechan ism for enviro nmental
organ izations in m ore deve l-
oped coun tries to work wi th
growing organizations in L atin
Americ a.64 Thes e connections
between environmental organi-
zations foster the development
of the envir onmental commu-
nity , st rengthe ning dom estic
envir onmental prote ctions as
well as the citizen submission
process.65 Some criticize the cit-
izen submission process because
it does not legally bind the gov-
ernmen t to take any acti on.66
However, even a limited citizen
submissi on p rocess is a va luable
tool for environmental advocates to pressure government actors
to pursue environmental protection.67
As long as the United States continues to expand free trade
with Latin America, free trade agreements should include a citi-
zen enforcement mechanism. To ensu re citizens have en viron-
mental l aws to monitor, the United States should refrain from
signing agreements with states th at do not ha ve an effective
legal framework for environmental protection. While access to a
citizen submission process will not immediate ly provide effec-
tive environmental protection, it is an important step.
incluDe a citiZen SubmiSSion on enforcement
mechaniSm in future free traDe agreementS
While the CCAEC cit izen submission proce ss i s we ak
when compared to U.S. citizen suit provisions, the process is an
innovative mechanism in internati onal law.68 Historical ly, pri-
vate citizen action in the international arena was only available
through state action, but citizen submissions allow governments
to stay an arm’s length from the proceedings. States cannot
accuse other gover nments of manipulating the environme ntal
dispute res olution process for other purposes because the sub-
mission process does not involve government action.
A cit izen submission mechanism harn esses the collective
knowledge of c itizens to identify instances of envir onmental
non-enfor cement.69 State interests in preserving sovereignty
would likely limit any effort for states to monitor each others’
domestic en vironmental enforcement.70 A citizen enf orcement
mechanism balances the public int erest in consistent enforce-
ment and the state interest in sovereignty.
Because citizen
submissions do not rely
on government action,
countries cannot subsume
environmental issues to
other diplomatic
68FALL 2009
At the same time, th e CEC governing bodies should have
more freedom to prepare factual records without political inter-
ference.71 The practical consequences of a factual record are lim-
ited to public disclosure of state action, and the sta te can blunt
criticism of any absence of enforcement with future enforcement
action.72 Because treaties require enforcement of domestic law,
not of a politically unattainable international standard, govern-
ments should be able to effectively enforce their own domestic
law.73 Overall, a citizen submission process within a free trade
agreement can be an effective mechanism to improve enforce-
ment of environmental laws if the CEC has the political freedom
to pursu e factual record s.74 A trading partner, however , needs
a basic environmental framework before increased enforcement
will increase environmental protection.
Do not enact free traDe
agreementS with StateS
that Do not proviDe
for environmental
While a citizen submission
process can incr ease effective
enforce ment of environmental
laws, increased enforce ment of
laws that do no t e xist cannot
protect the environment. While
some argue that free trade brings
increa sed prosperit y that will
in turn i ncrease en vironmental
protections, investor protection
provision s in free trade agree-
ments ar e a threat to new envi-
ronmental laws.75 Because of these
investor protect ion pro visions, effective environmenta l laws
must be in place before a free trade agreement can improve their
While the United States and Chile enacted the USCFTA
after Chile had achieved a high level of environmental protection,
the recent U.S.-Peru Agreement does not increase environmen-
tal protection.77 Peru has environmental laws, but those laws do
not meet the “high level” of environmental protection required
by the treaty.78 Trade agreements can foster increased environ-
mental enforcement, but only if the partner country has effective
environmental laws. If increasing environmental protection is a
goal of the United States and other de veloped countries, thos e
countries s hould not sign trade agreements with countries that
lack legal environmental protection.
While inclusion of any environmental provisions in free
trade agreement s is a step forward, lip service to increased
enforcement of environmental laws is not sufficient. Effectiv e
enforcement of domestic environmental laws should be a stan-
dard con dition of future U.S.
free trade agreements. Allowing
state-to-state dispute resolution
on environmental issues is no t
suffic ient to actually in crease
enf orcem ent bec ause st ates
tend to rely on mutua l non-
enforcement when there are no
other conse quences. A citizen
submission on enforcement pro-
cess is much more effective at
increasing enforcem ent because
it ta kes advantage of, and even
increases , publ ic awar eness o f
non-enforcem ent. While a c iti-
zen enforcement process alone
will not solve the world’ s envi-
ronmental problems, it i s an important step towa rds increas -
ing governmen t acc ountability for effective enfor cement of
environmental laws.
Effective environmental
laws must be in place
before a free trade
agreement can improve
their enforcement
Endnotes: giving power to the people: comparing the environmen-
tal proviSionS of chileS free traDe agreementS with
canaDa anD the uniteD StateS
1 hilary f. french, coStly traDeoffS: reconciling traDe anD the environ-
ment 61 (1993) (arguing that the United States should use free trade agreements
to increase global environmental protection), available at
2 North American Agreement on Environmental Cooperation, Sept. 8, 1993,
Can.-Mex.-U.S., 32 I.L.M. 1480 [hereinafter NAAEC]. See also William J.
Clinton, Governor of Ark., Expanding Trade and Creating American Jobs, at
North Carolina State University, Raleigh, N.C. (Oct. 4, 1992) (calling for envi-
ronmental and labor agreements with NAFTA), available at http://www.ibiblio.
3 NAAEC, supra note 2, art. 14, 15, 22.
4 Canada-Chile Free Trade Agreement, Dec. 5, 1996, Can.-Chile, available at
chile-chili/menu.aspx?lang=en [hereinafter CCFTA]; Canada-Chile Agreement
on Environmental Cooperation, Feb. 6, 1997, Can.-Chile, available at http:// [hereinafter CCAEC].
Endnotes: Giving Power to the People: Comparing the
Environmental Provisions of Chile’s Free Trade Agreements with
Canada and the United States continued on page 91