Introduction

The Cartagena Protocol on Biosafety to the Convention on Biological Diversity (CBD) was negotiated and entered into force in September 2003, and adopted by over 130 countries to address safety issues involved in the transboundary movement of genetically modified organisms (GMOs) resulting from modern biotechnology. The primary aim of the Convention is to protect biodiversity from any adverse effects of genetically modified organisms. However, this progress is not limited to the Protocol, but the trade of GMOs is also governed by the World Trade Organisation (the WTO), though with different object. The object therein is to prevent limitations on such progress. Thus the principal international regulatory structures for the trade in GMOs in the system established under the WTO and the Protocol are bound to come into conflict.

It is well established now that the benefits of GMOs is numerous, which shall be dealt elaborately in the course of the paper. However, there is no sufficient knowledge of its long-term effects on humans, animals and the environment. In this regard the Cartagena Protocol emphasizes to restrict the movement of GMOs in accordance with the Precautionary Principle, which requires an action to be deferred if there is any scientific uncertainty with regard to the effects of the action. On the other hand, what the WTO envisages is that trade should not be restricted unless there is a firm scientific evidence that such trade may be harmful to humans, animals or the environment.

Thus, this raises a concern for those countries which are parties to both the agreements, in that how should these countries manage their respective obligations under these two seemingly contradictory regimes?

Part II of the article deals with the governing structure of the Protocol. Part III analyses the benefit and pitfalls of the GMOs. Part IV deals with the balancing of this conflicting interest with tools like Scientific Risk Assessment and Precautionary Principle. Part V focuses upon how WTO can impede the efficacy of the Protocol, taking into consideration the Savings clause in the Protocol, application to Non-Parties and by analyzing International Case Laws addressing Trade and Environment. Part VI deals with the response of the WTO to the conflict. Part VII provides recommendations to resolve the trade and environment dispute, via the Waiver Clause, Interpretation Clause and incorporating the suggestion of the European Union. Concluding, the author submits that since the issue of GMOs has become even more emotive and politicized, the challenge is to achieve a solution which is both faithful to the environmentally focused and also palatable to the WTO.

The Cartagena Protocol on Biosafety

The CBD calls for Parties to consider the ‘need for and modalities of a protocol, including advance informed agreement (AIA) in particular, to ensure the safe transfer, handling and use of genetically modified organisms derived from modern biotechnology that may have an adverse effect on biological diversity and its components.’ In response to this mandate, the Parties to the CBD established a legally binding Biosafety Protocol to address the risks of trade in GMOs developed through the use of modern biotechnology.

A. The Objective of the Protocol

The Protocol entered into force on the 11 September 2003. The Protocol aims, “[T]o contribute to ensuring an adequate level of protection in the field of the safe transfer, handling and use of living modified organisms resulting from modern biotechnology that may have adverse effects on the conservation and sustainable use of biological diversity, taking also into account risks to human health, and specifically focussing on transboundary movements.” Further the Preamble of the Protocol and Article 1 set out that the main objective of the Protocol is to ensure protection against LMOs (or GMOs) in accordance with the precautionary principle contained in principle 15 of the Rio Declaration on Environment and Development (Rio Declaration).

B. Scope of the Protocol

The Protocol applies to two general categories of GMOs, viz GMOs intended for release into the environment (such as fish, plants and seeds); and those intended for use in food or feed, or for processing (such as soymilk and cornflakes). However, the operational sections of the Protocol covers only the GMOs in the first category because they are believed to pose greater peril to biodiversity and native species as they can mutate, migrate and multiply. Further Article 5 of the Protocol specifically excludes GMOs that are pharmaceuticals for humans.

C. The Advance Informed Agreement System

Articles 7 to 12 of the Protocol provide for an “Advance Informed Agreement System” (AIA), which requires an exporting country to obtain the consent of another country before shipping living GMOs to that country for the first time. Article 15 of the Protocol requires that a ‘Risk Assessment’ must be carried out for all decisions made in relation to the acceptance of GMO shipments. A party can accept the shipment with certain conditions, prohibit the import or request additional information from the exporter.

GMOs: Assured Benefits

Biotechnology and GMOs offer new opportunities for significantly increasing the productivity of agriculture, reducing the cost of food production, and decreasing the environmental damage caused by modern agricultural practices. Biotechnology focuses upon increasing products or services without increasing industrial throughput by providing industries the techniques that substitute for the extraction, pollution, and trade of energy-intensive natural resources. A few of the prime contributions that are worth mentioning are:

1. Producing more food on the same area of land, thus reducing pressure to expand into wilderness, rainforest, or marginal lands; 2. Reducing post-harvest loss of food, while improving the quality of fresh and processed food, thus boosting the realized nutritional yield per acre; 3. Displacing resource- and energy-intensive inputs, such as fuel, fertilizers, and pesticides, thus reducing unintended impacts on the environment and freeing those resources to be used for other purposes or conserved for the future. 4. Encouraging reduction of environmentally damaging agricultural practices, and adoption of sustainable practices, such as conservation tillage and encouraging integrated pest management.

The achievements of agricultural genetic engineering thus far include crops that resist herbicides, insects, virus, fungal, and nematodes. The catalog extends to include plants that photosynthesize and fix nitrogen, and that are more tolerant to salinity, drought, frost, and other greater yielding varieties.

GMOs: Analysing Pitfalls

Views on the benefits offered by GMOs, and the extent to which those benefits might be cancelled out by attendant risks to human health and the environment are polarized. Reservations include “use of biotechnology” and the criticisms leveled against “industrial agriculture”.

It is mentioned earlier that GMOs make “Industrial Agriculture” more productive. The objective is to increase yield and decrease costs of production, usually by employing economies of scale. However, the criticism against Industrial agriculture is that it relies on monoculture, or the cultivation of one crop at a time in a field, resting on a narrow genetic base, and is heavily dependent upon pesticides and fertilizer. And this has resulted in a severe decline in genetic diversity. Industrial agriculture, which uses fewer varieties of plants to increase productivity, has led to the loss of biodiversity and increased susceptibility to pests.

Moreover industrial agriculture also causes compaction, salinization, decline of organic matter and degradation of the soil’s physical structure which results in soil erosion and the deterioration of soil quality. Thus agricultural trade has become a central element of conflict over international environmental practices. Again the view of the critics is strengthened by the reservations about the use of biotechnology. These basically arise from the unresolved uncertainties surrounding the environmental and health implications of an often untested and ever-expanding range of GMOs.

Balancing the conflicting interests

The answer to the question as to whether GMOs constitute a threat to biosafety should be determined on a case-by-case basis after a “scientific risk assessment”. A rational decision as to whether or not to accept a risk is usually made after one has undertaken some kind of qualitative and/or quantitative analysis that balances the pros and cons of a risk. However, one may decide to accept a risk despite its costs because of its superior benefits, or reject another despite its benefits in light of its higher costs. The balancing of interests could be better understood from the recent case of European Community—Measures Concerning Meat and Meat Products. The case concerned a decision by the EU not to import US beef on the premise that the beef contained artificial growth enhancing hormones that could potentially have adverse effects on human health. At the Appellate Body, the EU claimed that its decision not to import beef was justified on the basis of the “precautionary principle”, which the EU claimed was a principle of customary international law.

A. Scientific Risk Assessment

Risk Assessment endeavours to assess and estimate the potential peril which could result from any product or activity. Thus a risk assessment is the evaluation of the likelihood and severity of harm to the environment or human health from exposure to a hazardous substance. In the process the first step is identification of the specific adverse effect(s) associated with a product or activity. The process further involves the assessment of the likelihood or probability that harm will occur and the consequences or damage that might result. The hazard component of risk assessment is then related to the level of exposure based on how often one engages in the particular activity or comes into contact with a particular product.

Adherence to risk assessment principles and development of required data using sound, science-based protocols and measurement techniques can ensure safe use of biotechnology products. However, the step ahead of the risk assessment of the GMOs depends on applicable policy objectives relating to environmental and other socio-economic goals. Risk assessment offers a quantitative assessment of risk based on the best available science, but the decision as to whether, or to what extent, GMOs should be regulated is a policy judgment made by risk managers. For example, the irreversibility of introducing living modified organisms into the environment, the large uncertainties about the risks of such introductions and the widespread human and ecological exposure to GMOs may give rise to a precautionary approach.

B. Precautionary Principle

The Biosafety Protocol contains one of the strongest references to the precautionary principle to date, and is the first protocol of its kind to include the precautionary principle in the operational part of the protocol, rather than just making reference to it in the preamble. As a result the Protocol has been described as “propelling the precautionary principle to the forefront of international environmental law”.

Article 10(6) of the Protocol, in conformity with Principle 15 of Rio Declaration sets out that “Lack of scientific certainty due to insufficient relevant scientific information and knowledge regarding the extent of the potential adverse effects of a living modified organism on the conservation and sustainable use of biological diversity in the Party of import, taking also into account risks to human health, shall not prevent that Party from taking a decision, as appropriate, with regard to the import of the living modified organism in question ... in order to avoid or minimize such potential adverse effects.”

The Precautionary Principle firstly encompasses the level of risk that justifies precautionary action. Agreements which deal with risky yet beneficial activities often employ higher risk-triggering levels. An example is the Rio Declaration, which both require “threats of serious or irreversible damage” to trigger precautionary action. However, the level of risk identified in the Protocol is “potential adverse effects”, which is significantly lower than the Rio Declaration, and signals that precautionary action is easily justified under the Protocol.

Secondly the Protocol allows a party to make a “decision as appropriate with regard to import in order to avoid or minimize such potential adverse effects” when precaution is triggered. Significantly, the Protocol does not require any consideration of the benefits of an activity or its cost effectiveness. In this way the Protocol concentrates exclusively on the potential impact on biodiversity. Thirdly the protocol requires only “certainty”, in contrast to “lack of full scientific certainty” required by the Rio declaration for the precautionary principle to be invoked. Thus the parties to the Protocol do not need scientific consensus to trigger the precautionary principle.

Further the Protocol also requires that all decisions be made in accordance with a risk assessment. Article 15(3) of the Protocol states that parties can require exporters to carry out the required risk assessment which importantly, will enable developing countries to enact measures based on the precautionary principle, even if they do not have the means themselves to perform risk assessments.

Though under the Protocol lack of scientific knowledge or consensus should not be interpreted as indicating that there is or is not a risk, risk assessments are to be carried out on a case-by-case basis and “in a scientifically sound manner”. In conclusion the Precautionary Principle is ambiguous as to what level of risk is acceptable, what role costs should play in risk decisions, what quantum of scientific evidence is sufficient for making decisions, and how potential risk-risk tradeoffs should be addressed.

Thus it seems possible for a party to the Protocol to conduct a risk assessment in accordance with the Protocol, find that there is no scientific evidence that the particular GMOs have any negative effects, and still ban their importation. As a result, the tie up of the obligation to perform a risk assessment with the precautionary principle is unclear.

The Issue: Will the WTO impede the efficacy of the Biosafety Protocol?

Notwithstanding its environmentally promising preambular language and the establishment and charge of the Committee on Trade and Environment (CTE), the WTO has always been criticized for ignoring environmental concerns in favor of free trade. It has also been argued that the WTO Dispute Settlement Body focuses on ‘whether environmental laws are trade-friendly, not whether one member’s laws are appropriate for the environment.’ If that be true it is very likely that environmental issues will not be given priority over trade concerns, regardless of the gravity of harm to the environment.

A. Conflict between Agreements: Which one prevails?

The Biosafety Protocol contains provisions that could impede rights that members of the WTO currently enjoy. The common parties to the Agreements shall have to determine which of the two shall prevail. The Vienna Convention on the Law of Treaties provides that when conflicts arise between two treaties concerning the same subject matter and between countries that are a party to both of the conflicting agreements, the latest treaty will prevail. This rule, however, has two exceptions, in that firstly it does not apply if a treaty contains a clause specifying its relationship to other international agreements and secondly, it offers no rules of conduct pertaining to non-Parties to either one of the treaties at issue.

1. The Savings Clause in the Protocol

In relation to the first limitation to the Vienna Convention rule, the draft Protocol, as advocated by the United States, included a savings clause in the body of the text. However, after lengthy negotiations during the Montreal session, the parties agreed to shift the savings clause to the preamble of the Protocol. The non-presence of the saving clause in the operational part of the Protocol may suggest that the parties intended it to have less force. However the Vienna Convention on the Law of Treaties clearly states that the preamble of a treaty, while not directly enforceable, is still part of the treaty for the purposes of interpretation.

The Savings clause is ambiguous and has been interpreted in many different ways. The United States claims that the savings clause in the Protocol “makes it crystal clear that the treaty does not alter - and fully preserves - the rights and obligations of governments under the rules of the World Trade Organization ...”. It is, however, submitted that the United States refers only to the second paragraph of the savings clause and ignores the third, which states that the Protocol will not be subordinate to other agreements meaning thereby that the United States cannot categorically claim that WTO rules trump the Protocol. Again a number of commentators claim that the lack of clarity in the savings clause is an entry to GMO-related trade disputes,and could also “give lawyers at the WTO an excuse to ignore the Protocol altogether”.

Article 2(4) of the Protocol also appears to deal with the relationship between the Protocol and other agreements. It states:

“Nothing in this Protocol shall be interpreted as restricting the right of a Party to take action that is more protective of the conservation and sustainable use of biological diversity than that called for in this Protocol, provided that such action is consistent with the objective and the provisions of this Protocol and is in accordance with that Party's other obligations under international law.”

This clause seems to suggest that the protections provided for in the Protocol are a minimum and that only agreements which provide for greater protection can trump the Protocol. On that basis it could be argued that WTO rules, which provide for a lower level of protection than the Protocol, should be subordinate to the Protocol. Since the relationship between the two agreements cannot be clarified by reference to the texts alone, it is likely that if a dispute arose as to how the two agreements relate, that dispute would need to be referred to some form of dispute resolution process.

2. Non Parties

The second deficiency of the applicability of the Vienna Convention is the issue of non-Parties in the Biosafety Protocol negotiations. The non-Party issue in the Biosafety Protocol centers on the United States’ involvement in the Biosafety Protocol. Despite its non-Party status to the CBD, the United States was active in the Biosafety negotiations, advocating that the Biosafety Protocol should not impact WTO rights and obligations.

If domestic law alone were applied, countries with inadequate or nonexistent biosafety regulations would be defenseless against the importation of products beyond their borders, especially GMOs that are able to reproduce. Therefore, uniform trade restrictions or guidelines for developing and developed countries are necessary to ensure proper regulation of LMOs and the adequate protection of biodiversity in all countries.

Article 24 of the Biosafety Protocol allows parties to trade in GMOs with non-Parties only in a manner consistent with the objectives of the Biosafety Protocol. Again the language of the Article is vague and is subject to various interpretations. A broad interpretation could be quite troublesome for importing countries, especially considering that the same Article also recommends that Parties to the Biosafety Protocol conduct trade with non-Parties while only encouraging non-Parties to conform to the Biosafety Protocol. Alternatively a narrow interpretation could require non-Parties to adhere strictly to the specific provisions of the Protocol.

B. International Case Laws Addressing Trade (WTO) and Environment (Biosafety Protocol) Disputes

As evinced from the above analysis, international treaty law does not always clearly resolve the dispute between two or more conflicting international agreements. Thus we need to resort to international trade case laws to fathom whether the Biosafety Protocol and the WTO can move ahead together?

1. The Beef Hormones Case and the Precautionary Principle

Despite an opportunity to make an authoritative decision on the status of the precautionary principle at international law, it was not materialized by either the Panel or the Appellate Body. The Appellate Body held that “The status of the precautionary principle in international law continues to be the subject of debate among academics, law practitioners, regulators and judges. The precautionary principle is regarded by some as having crystallized into a general principle of customary international environmental law. Whether it has been widely accepted by Members as a principle of general or customary international law appears less than clear.”

Thus the Appellate Body opined that the Precautionary Principle did not justify measures that were inconsistent with the SPS Agreement. However, it was emphasized that the Precautionary Principle was “reflected” in the SPS Agreement at article 5(7). Article 5(7) allows members to introduce measures that are not supported by “sufficient scientific evidence” on a provisional basis, subject to further evidence being obtained.

Article 5(7) allows for provisional measures that are based on “available pertinent information”, but the Appellate Body made it clear that the principle was only relevant as a provisional measure and could last only until a state had an opportunity to undertake a more objective risk assessment. This indicates clearly the extent to which the precautionary principle is unpopular with the WTO.

In conclusion we find that Beef Hormones underlines the conflict between the concept of a risk assessment contained in the SPS Agreement and the precautionary principle, in that whereas the Protocol gives parties the ability to manage risks through the precautionary principle, the SPS Agreement does not give parties this ability except in a limited form under Article 5(7).

2. Japan—Measures Affecting Agricultural Products

The case of Japan—Measures Affecting Agricultural Products (Japan) further considered article 5(7) of the SPS Agreement. In Japan, Japan had enacted a law that prohibited the importation of eight agricultural products originating from the United States on the grounds that they were potential hosts to codling moths, identified as a pest by Japan. The United States claimed that the testing requirement was inconsistent with the SPS Agreement and took its case to the WTO. Japan claimed that its laws were justified on the basis of the precautionary principle, as expressed in Article 5(7) of the SPS Agreement.

The Appellate Body held that article 5(7) operates only as “a qualified exemption from the obligation not to maintain SPS measures without sufficient scientific evidence” and that a member could only adopt a provisional measure where “relevant scientific information is insufficient” and was based on “available pertinent information”. Further the Appellate Body also determined that as Japan had not sought additional information upon which to conduct a risk assessment, and had failed to review its provisional policies within four years, it had violated the second part of Article 5(7). This signifies that article 5(7) creates an “illusory” benefit for WTO members as it requires members that seek to rely on it to continually gather and assess all new information as it becomes available.

In conclusion we find that both the Protocol and the SPS Agreement (though article 5.7) permit countries to impose import restrictions based on the precautionary principle. However, while the Protocol does not set any time limits on the use of such measures, the SPS Agreement only allows the precautionary principle to be used provisionally, where there is uncertainty, while further risk assessment is undertaken. The Japan case provides another example of the conflicting approaches of the two agreements. Response of the WTO to the conflict

The conflict between WTO rules and MEAs has long been recognised by the WTO. The Committee on Trade and Environment states in its terms of reference that it aims to “identify the relationship between trade measures and environmental measures, in order to promote sustainable development”.

The CTE has been institutionally separated from the WTO committees that have responsibility for the development of WTO agreements. One commentator has described the work of the CTE as “non-aggressive and uninspiring”. Despite focusing on the environment, the CTE is still part of the WTO and thus its focus is primarily on the trade impacts of environmental measures, not on the environmental impacts of trade rules.

The WTO has described the work of the CTE as based on two fundamental principles: (1) The WTO is only competent to deal with trade. In other words, in environmental issues its only task is to study questions that arise when environmental policies have a significant impact on trade; and (2) The WTO is not an environmental agency. The relationship between the WTO and MEAs was raised at both the Fourth WTO Ministerial Conference, held in Doha, Qatar in 2001 and the Fifth WTO Ministerial Conference, held in Cancun, Mexico in 2003.

At Doha emphasis was laid on the need for resolution between the two systems. The Protocol was used as an example of where such a relationship needs to be addressed. The EU the Ministerial Document produced from the Doha meeting included a clause mandating negotiations on trade and the environment, which sets out, at para 31(i), that such negotiations will address “the relationship between international trade agreements and MEAs.” These negotiations will be aimed at enhancing the “mutual supportiveness” between trade agreements and MEAs.

Prior to the Cancun Ministerial Conference in 2003, the Chairperson of the CTE submitted a report on the status of the negotiations it mandated. That report noted that, since the negotiations were launched, delegations had “actively engaged in developing a common understanding of the mandate” which had evolved from two specific mandates: to identify specific trade obligations in MEAs and conceptualise a discussion of the relationship between the WTO and MEAs.

A solution within the confines of WTO seems a hard deal. It is argued that, in contrast to the Protocol, the WTO is very powerful in terms of its binding disputes settlement and enforcement mechanisms. Thus any solution would necessarily have to be part of the WTO system in order to avoid being overwhelmed by the political might of the WTO. At the 1999 Seattle anti-globalisation protests one banner proclaimed “God is dead. The WTO replaced it”.

WTO Reform: Recommendations to resolve the trade and environment dispute

There is a need for WTO reform to better meet environmental needs. The academic arena is replete of suggestions in this regard. One commentator concludes that the WTO system could be amended to provide an exception for environmental purposes in MEAs. However the challenge is to establish an exception that has clear boundaries so to prevent it from being used as a protectionist device.

A. The Waiver Clause

The WTO Agreement explicitly allows parties to waive WTO obligations in exceptional circumstances, if such waiver is approved by a three-fourths majority of WTO parties. The Biosafety Protocol could be submitted to the WTO for waiver, meaning that to the extent acting in accordance with the Protocol would breach a party’s WTO obligations, those obligations would be waived. However, such waiver could only act as a temporary solution, because any waiver can be used only in exceptional circumstances and always has a terminating date.

B. Interpretation Clause

A member country could submit an application to the General Council of the WTO requesting an authoritative interpretation of the relationship of the WTO Agreements with the Protocol in order to avoid future conflicts. This sort of interpretation may find more legitimacy with the international community than ad hoc Panel interpretations and would help parties to both agreements to understand their obligations.

C. Suggestion by the European Union

An innovative suggestion of the EU involves amending the GATT so that MEAs are clearly covered in the article XX exceptions, article XX would include a proviso that any measures taken under specific provisions of an MEA “shall be presumed to be necessary for the achievement of the environmental objectives of the MEA” or, alternatively, “necessary for the protection of the environment” and thus would not be subject to the strict tests imposed by the WTO agreements in relation to environmental exceptions. This suggestion was addressed by the WTO in its World Trade Report for 2003. The WTO acknowledged that MEAs create obligations of similar standing to WTO obligations. However, the report did not go beyond mentioning the suggestion.

Conclusion

The Protocol goes a long way to reconciling trade and environmental objectives and its elaboration of the precautionary principle is a major contribution to international environmental law. However, the Protocol faces a major obstacle: the WTO also regulates the trade in GMOs and the two systems conflict. The Protocol provides that parties can use the precautionary principle to manage the risks associated with trade in GMOs. The SPS Agreement on the other hand, requires scientific justification for any trade restrictive measure that is not provisional in application.

The WTO has been conscious of this problem since the formation of the CTE in 1994. However, there has been very little substantive progress by the WTO resolving the conflict mainly due to the WTO’s strong-- almost exclusive--trade focus, and its inability to address environmental issues. However, because the WTO is so powerful, any solution to the conflict between the WTO and the Protocol must be sanctioned by the WTO.

With the Protocol having entered into force, the issue of GMOs has become even more emotive and politicised. The challenge is to achieve a solution which is both faithful to the environmentally focussed and heavily precautionary Protocol, and palatable to the WTO, an organisation preoccupied with free trade and dominated by countries with a vested interest in the unrestricted trade of GMOs.