Instilling a fiduciary obligation in governance.

• Author: Wood, Mary Christina
• Position: Advancing the Sovereign Trust of Government to Safeguard the Environment for Present and Future Generations, part 2

1. INTRODUCTION II. THE TRUST DUTIES OF GOVERNMENT A. Substantive Duties 1. The Duty of Protection 2. The Fiduciary Obligation 3. The Duty of Restoration and Recouping Natural Resource Damages B. Procedural Duties 1. The Duty of Undivided Loyalty 2. Duty to Provide an Accounting III. THE INTERFACE BETWEEN TRUST OBLIGATIONS AND STATUTORY LAW A. The Trust as an Interstitial Duty to Guide Agency Discretion B Incorporating the Trust Approach into Permit Programs 1. Hard to Say No 2. The Moratorium as a Tool for Saying No IV. ENFORCING THE TRUST A. Defining the Trust Duties B. Evaluating Whether There has Been a Breach of Fiduciary Obligation C. Crafting the Remedy 1. Declaratory Relief 2. Natural Resource Accountings and Restoration Plans D. Injunctive Backstops and Other Remedies V. THE PUBLIC TRUST AND PRIVATE PROPERTY RIGHTS A. The Ecological Context of Property Rights 1. Natural Infrastructure and Private Property 2. The "Tragedy of Fragmentation" 3. Depleting Nature's Trust: By Hook and by Crook and Countless Other Ways B. The Nature of Private Property 1. The Bargain and Reciprocity 2. The Limits of Boundaries 3. Ownership as Adjusting to the Needs of Society C. A Nature's Trust Principle Applied to Private Property: "The Earth Belongs in Usufruct to the Living" VI. INFUSING THE PUBLIC TRUST IN GOVERNMENT A. Guiding Principles 1. Working with the Balance of Power 2. Focused Attention, Emergency-Style 3. Economic Vision Within Natural Resources Law B. Specific Initiatives 1. The Executive a. Changing Mindsets: From Bureaucrat to Trustee b. Redirecting Agency Resources to Restore Natural Assets c. Fiduciary Decision Making in Climate Crisis d. The Duty of Loyalty, Taken Seriously 2. Congress 3. The Judicial Branch 4. The International Realm 5. The Domestic Legal Academy VII. CONCLUSION I. INTRODUCTION

   Even as the world faces unprecedented ecological crisis, government continues to permit destruction of the natural environment through environmental law. The present model under which most agencies operate is one of political discretion to destroy public resources. With irrevocable climate thresholds looming and the survival of future generations at stake, society urgently needs a new paradigm for holding government at all levels accountable in protecting natural wealth. A companion Article, Part I of Advancing the Sovereign Trust, argued for a transformative shift in environmental management by drawing upon enduring sovereign trust principles embedded in United States Supreme Court jurisprudence. Presenting a second-generation iteration of the public trust doctrine, the Article formulated a "Nature's Trust" framework that could infuse government with the abiding obligation to protect and restore natural assets to benefit present and future generations of citizens. Under a Nature's Trust approach, the discretion in the statutes yields to a binding fiduciary obligation to protect the people's trust. As a wide lens through which to view regulatory action, the trust approach encompasses all public natural resources management.

   This Article, Part II of Advancing the Sovereign Trust, brings definition to the Nature's Trust framework as it functions within the structure of modern environmental law. It casts the trust principle as an interstitial protective obligation that operates within the statutory context. It explores the dilemmas and challenges in urging or forcing government officials to remake their public identities from bureaucrat to trustee. Section II begins by discussing the substantive and procedural duties of governmental trustees, asserting that the fiduciary duties of the sovereign trust define obligations and loyalties of agency officials towards the public as the beneficiary class. Section III presents the interface between public trust obligations and statutory law, exploring tools such as moratoria for incorporating the trust approach into modern permit programs. Section IV discusses enforcement of the trust and the pivotal role of the judiciary, arguing that the judicial branch is equipped to enforce the people's trust, where necessary as a last resort, through common law remedies. Section V evaluates implications of a trust approach for economic activity and private property rights. It suggests that a public trust encumbrance on private title has never been extinguished and remains an antecedent servitude to preserve natural infrastructure. Finally, Section VI sets forth specific recommendations for incorporating a trust approach within the United States and on the international level as well.

2. THE TRUST DUTIES OF GOVERNMENT

   While a sovereign trusteeship differs from a private one in significant ways, nevertheless, basic standards from the private realm apply with equal force. (1) Most importantly, a trust approach holds trustees to the "most exacting fiduciary standards." (2) This obligation has both substantive and procedural components.

   1. Substantive Duties

      1. The Duty of Protection

         Trust law imposes a fundamental duty on the trustee to protect the assets of the trust from damage. (3) As one leading treatise explains:

         The trustee has a duty to protect the trust property against damage or destruction. He is obligated to the beneficiary to do all acts necessary for the preservation of the trust res which would be performed by a reasonably prudent man employing his own like property for purposes similar to those of the trust. (4) Scores of cases emphasize this duty of protection, (5) and many hold that the duty imposes an affirmative obligation on government. (6) Under well-established principles of private trust law, trustees may not sit idle and allow damage to occur to the trust. (7) As the Supreme Court said in Geer v. Connecticut: "[I]t is the duty of the legislature ... to preserve the subject of the trust...." (8)

         The duty to protect trust assets is also a duty to prevent waste to those assets. (9) Trustees and cotenants alike have duties to protect the asset against waste. (10) A trustee that fails to protect the property against "waste" is liable to the beneficiaries. (11)

      2. The Fiduciary Obligation

         In the case of a financial res, a trustee's performance is measured according to investment or market norms. (12) When determining these norms, courts rely on the opinions of financial experts. (13) In the case of a natural res, the management norm must be tied to the health of the asset as defined by scientists with relevant expertise. The basic fiduciary duty is to maintain the asset's ability to provide a steady abundance of environmental services for future generations. (14) In the case of fisheries, this usually means maintaining harvestable populations. (15) In the case of forests, it means maintaining a sustainable yield of timber over time while preserving the full integrity of other forest functions. (16) For several decades, scientists have set management goals to assure equilibrium in natural ecosystems. (17) These same goals can be invoked by courts as fiduciary obligations.

         In the face of climate crisis, the most pressing matter is defining a fiduciary obligation for protecting the atmosphere, a trust asset that has never before been "managed." Only recently have scientists developed any sort of prescription that could be used as a structure to guide atmospheric recovery efforts. The Union of Concerned Scientists has published A Target for U.S. Emissions Reductions (Target) based on the extensive body of climate science developed so far. (18) The Target maps a climate stabilization pathway whereby the industrialized nations on Earth must collectively: 1) arrest the rising trajectory of carbon emissions by 2010, 2) reduce emissions an average of 4% per year starting in 2010, and 3) reduce carbon by an average of at least 70%-80% below 2000 levels by 2050. (19)

         The scientifically established structure reflected in the Target, as adapted to comport with changed scientific understanding, (20) can be invoked as a generic standard of fiduciary obligation applicable to each industrialized nation. Such targets also can be "scaled down" to each subnational jurisdictional level (21) and applied to states and cities. In essence, the Target can crystallize the kind of organic obligation incumbent on all legislatures and agencies as trustees and trustee-agents of the atmosphere. By drawing upon the actual needs of the asset to formulate a fiduciary obligation, the trust approach stands in marked contrast to a discretionary political approach characteristic of today's climate negotiations.

      3. The Duty of Restoration and Recouping Natural Resource Damages

         Trustees have an affirmative duty to recoup monetary damages against third parties that destroy trust assets. (22) In the United States, common law provides a possible basis for recovery of natural resource damages (NRDs) under the public trust and the doctrine of parens patriae. (23) State, federal, or tribal governments are able to assert claims. (24) Natural resource damages must be applied to restoration of the trust. (25) Statutory law also provides a basis for recovering natural resource damages for common types of pollution. (26) The Comprehensive Environmental Response, Compensation, and Liability Act (27) and the Oil Pollution Act (28) contain extensive NRD provisions. (29) Large monetary sums have been awarded under these Acts for damage to coastlines and wildlife caused by oil spills, and damage to vast watersheds caused by mining. (30)

         Under public trust theory, the sovereign must pursue damages in order to make the public--the beneficiaries--whole again and to restore the asset for future generations. Failure to seek damages is, by all private trust standards, an abdication of trust responsibility. Yet, much natural resource loss has accrued to the public's trust without any attempted recovery against the private parties. That may be changing. Suits have been brought by sovereigns against third parties for carbon...