Legal nature of loss and damage decision

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Date produced: 12/11/2013

What is the legal status of the COP 18 Doha decision relating to loss and damage. In particular, is it legally binding?

1. Decision under the UNFCCC

Decision 3/CP.18, taken in Doha, on “Approaches to address loss and damage associated with climate change impacts in developing countries that are particularly vulnerable to the adverse effects of climate change to enhance adaptive capacity” in paragraph 9 states that the COP:

“Decides to establish, at its nineteenth session, institutional arrangements, such as an international mechanism, including functions and modalities, elaborated in accordance with the role of the Convention as defined in paragraph 5 above, to address loss and damage associated with the impacts of climate change in developing countries that are particularly vulnerable to the adverse effects of climate change;”

The decision reflects a strong political commitment of the Parties to the UNFCCC. However, legal scholars and States in general agree that COP decisions, despite often being framed in mandatory language, are not legally-binding on the Parties to the UNFCCC. This view is, for example, based on Article 18 of the Kyoto Protocol which provides that procedures and mechanisms to address cases of non-compliance entail only non-binding consequences. Binding consequences would require an amendment to this Protocol. From this it is deducted that decisions by the Parties under the UNFCCC or the Kyoto Protocol lack binding force.

2. General international law

Although the law in this area is still being developed (and therefore may not be used at source of binding international law), it is worth considering some developments which might be useful in the debate on loss and damage.

The International Law Commission’s (ILC) 2006 Draft principles on the allocation of loss in the case of transboundary harm arising out of hazardous activities, for example, state: “Each State should take all necessary measures to ensure that prompt and adequate compensation is available for victims of transboundary damage caused by hazardous activities located within its territory or otherwise under its jurisdiction or control.” The ILC Draft principles envisage, in particular, the establishment of international arrangements and funds (to supplement industry-based funds) if only global efforts can tackle a problem.

However, the Draft Principles reflect the expected development of public international law and at present there is probably no substantive right to compensation for individual claimants (in the sense of the polluter pays principle). The concept of prompt and adequate compensation, however, appears to enjoy increasing recognition within the international community. Thus it could be argued that States are at least obligated to gradually develop the necessary legal frameworks on liability and compensation for environmental damage to areas outside their jurisdiction.

There are examples of such arrangements by the international community: the international oil pollution compensation funds (the 1971 Fund, the 1992 Fund and the Supplementary Fund) providing compensation for oil spills from tankers, and the liability regime for nuclear accidents under the Convention on Third Party Liability in the Field of Nuclear Energy (Paris), the Supplementary Convention (Brussels) and the IAEA Vienna Convention on Civil Liability for Nuclear Damage. The UN Security Council established a Compensation Commission in 1991 to process claims and pay compensation for losses resulting from Iraq’s invasion and occupation of Kuwait.

Other international arrangements to ensure adequate compensation include the International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances by Sea, the International Convention on Civil Liability for Bunker Oil Pollution Damage and the Nagoya–Kuala Lumpur Supplementary Protocol on Liability and Redress to the Cartagena Protocol on Biosafety. The “Hull Doctrine” of international investment law employs a similar standard of prompt, adequate and effective compensation being owed to investors whose property or rights are diminished by a host state.