The Trail Smelter Case
THE TRAIL SMELTER ARBITRATION CASE( UNITED STATES VS CANADA) 1941, U.N. Rep. Int'L Arb. AWARDS 1905 (1949)
The Trail Smelter Case1 arose in the field of late 1950's and came up with the issue of International Environmental Law. In this case ‘it was damage caused by one State to the environment of the other that triggered the legal claim. Legally the issue was not viewed as different from damage caused to the public or private property, for instance by the inadvertent penetration of a foreign State's territory by armed forces. For the first time an International Tribunal propounded the principle that as State may not use, or allow its national's to use, its own territory in such a manner as to cause injury to a neighboring country'2. The facts of the case are lead below :-
‘The Columbia River rises in Canada and flows past a lead and zinc smelter located at Trail, in British Columbia (Canada). The smelter company was alleged to cause damage to trees, crops and land in the American States of Washington.3 The climate from beyond Trail on the United States boundary is dry, but not arid. The smelter was built under U.S. auspices, but had been taken over. In 1906, the Consolidated Mining and Smelting Company of Canada, Limited acquired the smelter plant at Trail. Since that time, the Canadian company, without interruption, has operated the Smelter, and from time to time has greatly added to the plant until it has become one of the best and largest equipped smelting plants on the American continent.4 In 1925 and 1927, stacks, 409 feet high, were erected and the smelter increased its output, resulting in more sulphur dioxide fumes. The higher stacks increased the area of damage in the United States. From 1925 to 1931, damage had been caused in the State of Washington by the sulphur dioxide coming from the Trail Smelter, and the International Joint Commission recommended payment of $350,000 in respect of damage to 1 January, 1932. The United States informed Canada that the conditions were still unsatisfactory and an Arbikal Tribunal was set up to "finally decide" whether further damage had been caused in Washington and the indemnity due, whether the smelter should be required to
1. 1941, U.N. Rep. Int'L Arb. AWARDS 1905 (1949)
2. Cassese Antonio, International Law, Oxford University Press, 2nd edition, 2005, New York, 484
3. Ibid pg 484.
4. Noah D. Hall, FOURTH IUCN ACADEMY OF ENVIRONMENTAL LAW WORLDWIDE COLLOQUIUM: IMPLEMENTING ENVIRONMENTAL LEGISLATION: THE CRITICAL ROLE OF ENFORCEMENT AND COMPLIANCE, Pace Environmental Law Review, Winter, 2007, 5
cease operation; the measures to be adopted to this end; and compensation due. The Tribunal was directed to apply the law and practice of the United States as well as international law and oractice.'5 ‘The United States Government, on February 17, 1933, made represents to the Canadian Government that the existing conditions were entirely unsatisfactory and that damage was still occurring and diplomatic negotiations were entered into, which resulted in the signing of the present convention.'6
‘The Court held Canada responsible for the conduct of the Trail Smelter and enjoined it to pay compensation to United States. The court also provided for future monitoring of the effects of the factory's activities on the environment, to prevent possible future damages to the United States environment.'7
‘The subsequent diplomatic negotiations led to the United States and Canada signing and ratifying a Convention in 1935. Through the Convention, the two countries agreed to refer the matter to a three-member arbitration tribunal composed of an American, a Canadian, and an independent chairman (a Belgian national was ultimately appointed). The arbitration tribunal was charged with first determining whether damages caused by Trail Smelter continued to occur after January 1, 1932 and, if so, what indemnity should be paid. Under the Convention, Canada had already agreed to pay the United States $ 350,000 for damages prior to 1932, based on the findings of the IJC. The arbitration tribunal addressed this first question in this context of the case determining that the damages caused by the Canadian smelter to properties in Washington State from 1932 to 1937 amounted to $ 78,000 (equivalent to approximately $ 1.1 million in 2006). The arbitration tribunal's more difficult, and ultimately more significant charge, was to decide whether the Canadian smelter should be required to refrain from causing damage in the State of Washington in the future, and what measures or regime, if any, should be adopted or maintained by the smelter, in addition to future "indemnity or compensation."
6. Mark W. Jarris & John E. Noyes, Cases and Commentary on International Law, West Publishing Company, 1997, St. Paul, 586
7. Supra note 2 pg 484
To answer these questions, the tribunal was directed to apply the law and practice followed in dealing with cognate questions in the United States of America as well as International Law and Practice, and give consideration to the desire of the High Contracting Parties to reach a solution just to all parties concerned.'8
The Trail Smelter case came up with the issue of "duty" of states to "prevent transboundary harm" and invoking the "polluter pays" principle. Firstly we move on to the ‘Transboundary Harm' issue. ‘Transboundary Harm proceeds in three parts. Part One examines the historical foundations of the case, its influence on international environmental law, and the smelter's continuing yet largely unknown toxic legacy. Part Two examines the case's contemporary significance for the law of transboundary environmental harm. Part Three looks beyond environmental law to examine the significance of the Trail Smelter arbitration for legal responses to other transboundary harms, from international terrorism to Internet torts.'9 Illustratively:
Part One examination ‘begins with a detailed account of the history surrounding the dispute, describing the important roles of the private parties involved and examining the actions of the state actors in arbitrating the dispute on behalf of the parties. Part One also examines the "jurisprudential legacy" of the decision in an increasingly prevention-focused, regulatory world. The usefulness of the Smelter case is limited by the fact that the dispute turned more on the rights of states as "sovereign equals" and less on the undesirability of transboundary pollution. Unlike the situation in Trail, in contemporary disputes the cause of damages is often unclear and the disputing countries often lack a history of cooperation and "reciprocal" interests which counsel them toward cooperation and moderation. The enduring significance of the "due diligence" obligation was created by the Tribunal. The obligation "not to cause serious environmental harm" - was originally intended to ensure the continuing compliance of the Trail Smelter with
8. Supra note 4 pg 6
9. Stepan Wood, TRANSBOUNDARY HARM IN INTERNATIONAL LAW LESSONS FROM THE TRAIL SMELTER ARBITRATION, EDITED BY REBECCA M. BRATSPIES & RUSSELL A. MILLER (NEW YORK: CAMBRIDGE UNIVERSITY PRESS, 2006) 347pages, Osgood Hall Law Journal.
pollution-prevention measures. Due diligence, is recognized by the "Draft Articles on Prevention of Transboundary Harm from Hazardous Activities" as the requisite level of intent needed to establish the liability of transboundary polluters. Part One closes with an account of a new dispute over pollution by the Trail Smelter - the United States Environmental Protection Agency (EPA) has recently issued a regulatory order under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) against Cominco relating to pollution of the Columbia River "watershed." An action to enforce the order is pending in United States Courts. The regulatory character of this action, and the attempt by the United States to directly regulate a foreign entity under a "strict liability" theory of accountability, demonstrates a drastic break in the character of modern transboundary pollution disputes.'10
‘Part Two examines the significance and potential relevance of the Trail Smelter principles to important "contemporary" issues in transboundary environmental harm. The issues surveyed include genetically modified organisms, nuclear energy, global climate change, hazardous waste transport, transboundary air pollution, and marine pollution, among others. The difficulty of identifying any particular polluting entity as the single cause of global pollution problems, like climate change cannot be identified. The requirement of "clear and convincing evidence" of "serious" environmental harm makes liability increasingly difficult to establish, and bilateral litigation becomes less effective in solving widespread pollution problems. States still reign supreme even in such international regulatory regimes, as conventions generally depend upon state cooperation and often are more concerned with preserving the sovereign equality of states than preventing pollution. One other key theme in Part Two is a recognition of the fact that although Canada voluntarily assumed responsibility for the actions of a private company in the Trail Smelter arbitration, such attributions of control are more problematic.'11
10. Lisa Gouldy, Transboundary Harm in International Law: Lessons from the Trail Smelter Arbitration. Edited by Rebecca M. Bratspies and Russell A. Miller. New York, New York: Cambridge University Press, 2006. Pp. xxi, 347. New York University Journal of International Law and Politics, Winter, 2006. 2.
11. Ibid pg 2.
‘Part Three innovatively examines the applicability of Trail Smelter to non-environmental forms of "transboundary harm" as broadly defined, including terrorism, refugee flows, Internet torts, drug trafficking, and human rights. Generally, such analyses find that Trail's lessons are not easily transposed to other sorts of transboundary harm. First, "liability regimes" imposing damages for continuing harms are not always appropriate to remedy non-environmental harms. In the cases of migration of refugees forcing the state from which the harm emanated to compensate other states for the harm engendered will not generally resolve the problem because the harms tend to arise from instability, poverty, or weak governments within those states. Not only will those states generally have little money to satisfy any potential judgment, but any such judgment could only serve to further destabilize the state and increase the harm.
In other situations, the intense focus of Trail Smelter on theories of sovereign equality makes it less well suited to address harms caused by private actors. For example, with respect to Internet torts or terrorism, states may not be well placed to prevent the commission of such harms by private actors. In addition, multinational corporations often operate across many different states, making it difficult to hold any one state responsible for their harmful actions. Rather, multinational corporations often have better resources and scientific knowledge to regulate their own actions in ways consistent with notions of "corporate social and environmental responsibility" and therefore states must work together with those corporations in that regard. Finally, the Trail Smelter remains relevant insofar as it would counsel that states be held responsible for their own extraterritorial actions which result in human rights violations abroad.'12
After the issue of the transboundary harm we can come up to the general principles which have been evolved from this case and its implications.
Only two General Principles have been evolved from the case of Smelter. ‘The first and more general one is that enjoying every State not to allow its territory to be used in such a way as to damage the environment of other States or of areas beyond the limits of national jurisdiction. This principle was first set out by the Arbitral Courts in the Smelter
12. Ibid pg 2.
case. This principle is substantially based on an even more general obligation, enunciated in the Corfu Channel13 case where the principle laid down that every State is under the obligation not to allow knowingly its territory to be used for acts contrary to the rights of the other States.'14
‘The second general principle attested to by the general and increasing concern of the States about the environment and born out by the great number of treaties concluded that imposing upon States the obligation to co-operate for the protection of the environment. This principle had already been eluded in the decision of the Smelter case. It is off course much looser than the previous one but already reflects a new approach to environmental issues, based on the assumption that the environment is a matter of general concern. It follows from this principle that every State must co-operate for the protection of this precious asset, regardless of whether or not its own environment has been or may be harmed. This principle can only be applied jointly with the customary rule on good faith, which states every State must in good faith endeavor to co-operate with other States with a view to protecting the environment. A blunt refusal to co-operate, unaccompanied by a statement of he reasons for such attitude, would amount to a breach of the principle.'15 After dealing with issues of transboundary harm and general principles applicable in this case we have to give the answers to the questions that has come up in this case relating to whether the Canadian smelter should be required to refrain from causing damage in the State of Washington in the future, and what measures or regime, if any, should be adopted or maintained by the smelter, in addition to future "indemnity or compensation."
‘The tribunal first concluded that there was no need to chose between the law of the United States or international law to decide the case, as the law followed in the United States in dealing with the quasi-sovereign rights of the States of the Union, in the matter
13. ICJ Reports, 1949;16 ILR
14. Supra note 2. pg 488
of transboundary pollution, is in conformity with the general rules of international law. The tribunal cited a leading international law authority: "As Professor Eagleton puts in ... 'A State owes at all times a duty to protect other States against injurious acts by individuals from within its jurisdiction.'"16The tribunal supplemented this general rule with a comprehensive summary of the United States Supreme Court's decisions regarding interstate transboundary pollution, including cases both between two sovereign states and between a state and local governments or private parties (such as cities and mining companies). Taking the decisions as a whole, the tribunal stated the following principles for transboundary pollution disputes:
No State has the right to use or permit the use of its territory in such a manner as to cause injury by fumes in or to the territory of another or the properties or persons therein, when the cause is of serious consequence and the injury is established by clear and convincing evidence.
The tribunal further held that the “Dominion of Canada is responsible in international law for the conduct of the Trail Smelter. Therefore, it is the duty of the Government of the Dominion of Canada to see to it that this conduct should be in conformity with the obligation of the Dominion under international law as herein determined”.17
Applying these principles to the dispute at hand, the tribunal required the Trail Smelter to "refrain from causing any damage through fumes in the State of Washington."18 The tribunal specifically noted that such damage would be actionable under United States law in a suit between private individuals. Further, the tribunal ordered a detailed management regime and regulations for the smelter to prevent sulphur dioxide emissions from reaching levels that cause property damage in Washington State. The tribunal also indicated that it would allow future claims for damages that occur, despite the imposed management regime.'19
16. CONVENTION FOR SETTLEMENT OF DIFFICULTIES ARISING FROM OPERATION OF SMELTER AT TRAIL, B.C. U.S. Treaty series No. 893. Art XII
17. Ibid Art XII last Para
18. answer to the question of refraining of the Canadian smelter
19. Supra note 4 pg 6
‘The emergence of the Trail smelter dispute raises significant questions about the ability of Canada and the United States to resolve transboundary pollution disagreements:
* Should U.S. domestic environmental laws be applied and enforced extraterritorially against Canadian companies that operate exclusively in Canada?
* What international legal mechanisms exist to resolve transboundary water pollution disputes between the United States and Canada satisfactorily and effectively?
* What lessons may be drawn from the original Trail Smelter Arbitration decided over sixty years ago?
Answers to these questions are important, for the Trail smelter dispute which does not stand alone. The United States has numerous other environmental disputes along the Canadian border that are either ongoing or are in the making, and the number of disputes is expected to grow. Accordingly, the countries need an effective means to resolve their transboundary pollution problems.
This Article discusses some of the legal mechanisms available to resolve transboundary water pollution disputes between the United States and Canada, as viewed through the context of the Trail smelter dispute. This Article concludes that the use of international arbitration provides an effective, and too often overlooked, way to resolve transboundary water pollution issues.20 Part I describes the current Trail smelter dispute, and the unique environmental problems the Trail smelter is believed to have caused to the Upper Columbia River Basin. Part II analyzes the legal obstacles facing the U.S. Environmental Protection Agency and others wishing to use domestic environmental laws to hold Canadian companies liable for transboundary pollution. Although the United States may be successful in its attempt to hold Canadian polluters liable through EPA initiated U.S. domestic litigation, extraterritorial application of U.S. environmental law creates significant problems, and seriously encroaches upon Canadian sovereignty. Ultimately, the national adjudication of cross-border disputes does not provide a long-term solution to transboundary pollution. Part III explores an available,
20. Shaw M.N., International Law, Cambridge University Press, 4th edition, 1997, U.K., 595
underutilized international environmental law mechanism that the countries could potentially use to effectively resolve the Trail smelter and similar disputes. To the extent that Canada and the United States attempt to resolve disputes legally, rather than through diplomatic negotiation, the best legal solution to those disputes may lie in international arbitration. International arbitration, modeled after the famous Trail Smelter Arbitration, provides both a more diplomatically and conceptually satisfying means of solving transboundary water pollution disputes than national adjudication. Indeed, despite its contentiousness, the Trail smelter dispute provides a unique opportunity to set the stage for renewed environmental cooperation between the United States and its northern neighbor.'21
In this case Canada was held liable to the United States for the damages and injuries done by fumes carried by the winds from a privately owned company of smelter in Canada and was required to prevent such damages in future. The tribunal found it unnecessary to decide whether the question should be answered on the basis of United States Law or the International Law, since the law followed between the states of the United States in the manner of air pollution, is in conformity with the general rules of International law. Pointing to the absence of international decisions dealing with air pollution, the tribunal said, “The nearest analogy is that of water pollution”, but again found no interrelation decisions. On both air and water pollution, the tribunal found certain United States Supreme Court decisions which may be legitimately taken as a guide in this field of international law, for it is reasonable to follow by analogy, in international cases, precedent established by that court in dealing with controversies between the States of the Union or with other controversies concerning the quasi-sovereign rights of that states, where no contrary rule prevails in international law and no reason for rejecting such precedents can be adduced from the limitations of sovereignty
21. Austen L. Parrish, TRAIL SMELTER DEJA VU: EXTRATERRITORIALITY, INTERNATIONAL ENVIRONMENTAL LAW, AND THE SEARCH FOR SOLUTIONS TO CANADIAN-U.S. TRANSBOUNDARY WATER POLLUTION DISPUTES, Boston University Law Review, 2005, April. 2, 3.
inherent in the Constitution of the United States. The tribunal referred to one Swiss case, on water pollution, Georgia vs Tennessee Copper Co.22 It concluded that
under the principles of international law, as well as the law of the United States, no State has the right to use or permit the use of its territory in such a manner as to cause injury by fumes in or to the territory of another or the properties or persons therein, when the case is of serious consequences and the injury is established by clear and convincing evidence.'23
‘Considering the circumstances of the case, the Tribunal held that the Dominion of Canada is responsible by international law for the conduct of the Trail Smelter. Apart from the undertakings of the Convention, it is therefore the duty of the Government of the Dominion of Canada to see to it that this conduct should be in conformity with the obligation of the Dominion under international law as herein determined.
Therefore, so long as the present conditions in the Columbia River Valley prevail, the Trail Smelter shall be required to refrain from causing any damage through fumes in the State of Washington; the damage herein referred to and its extent being such as would be recoverable under the decisions of the courts of the United States in suits between private individuals. The indemnity for such damage should be fixed in such a manner as the Governments should agree upon.'24
‘The Trail Smelter arbitration also remains a historical anomaly; as such a dispute would likely be addressed through domestic litigation. With liberalization of jurisdictional rules in both countries and the growth of environmental enforcement opportunities under domestic law, citizens no longer need to rely on their federal
22. 206 U S 230 (1907)
23. William W. Bishop, International Law cases and Materials, Little Brown & Company, 1971, Canada, 399
governments to seek a remedy for transboundary pollution. In fact, when citizens recently sought to remedy transboundary water pollution from the same Trail Smelter facility at issue in the original arbitration, they sued the company in United States federal court under United States domestic environmental law.'25
25. Supra note 4 pg 13.
1) Noah D. Hall, FOURTH IUCN ACADEMY OF ENVIRONMENTAL LAW WORLDWIDE COLLOQUIUM: IMPLEMENTING ENVIRONMENTAL LEGISLATION: THE CRITICAL ROLE OF ENFORCEMENT AND COMPLIANCE, Pace Environmental Law Review, Winter, 2007.
2) Stepan Wood, TRANSBOUNDARY HARM IN INTERNATIONAL LAW LESSONS FROM THE TRAIL SMELTER ARBITRATION, EDITED BY REBECCA M. BRATSPIES & RUSSELL A. MILLER (NEW YORK: CAMBRIDGE UNIVERSITY PRESS, 2006) 347pages, Ossgood Hall Law Journal.
3) Lisa Gouldy, Transboundary Harm in International Law: Lessons from the Trail Smelter Arbitration. Edited by Rebecca M. Bratspies and Russell A. Miller. New York, New York: Cambridge University Press, 2006. Pp. xxi, 347. New York University Journal of International Law and Politics, Winter, 2006.
4) Austen L. Parrish, TRAIL SMELTER DEJA VU: EXTRATERRITORIALITY, INTERNATIONAL ENVIRONMENTAL LAW, AND THE SEARCH FOR SOLUTIONS TO CANADIAN-U.S. TRANSBOUNDARY WATER POLLUTION DISPUTES, Boston University Law Review, 2005, April.
5) JUTTA BRUNNEE, BOOK REVIEW: Transboundary Harm in International Law: Lessons from The Trail Smelter Arbitration, American Journal of International Law, 2008, April.
6) CONVENTION FOR SETTLEMENT OF DIFFICULTIES ARISING FROM OPERATION OF SMELTER AT TRAIL, B.C. U.S. Treaty series No. 893.
1) Cassese Antonio, International Law, Oxford University Press, 2nd edition, 2005, New York
2) Mark W. Jarris & John E. Noyes, Cases and Commentary on International Law, West Publishing Company, 1997, St. Paul.
3) Shaw M.N., International Law, Cambridge University Press, 4th edition, 1997, U.K.
4) William W. Bishop, International Law cases and Materials, Little Brown & Company, 1971, Canada.
5) D.J. Harris, Cases and Materials on Public International Law, Thomson Sweet and Maxwell, 6th edition, 2004, London.
6) Ian Brownlie, Principles of Public International Law, Clarendon Press, 5th edition, 1948, Oxford.
7) Carter and Trimble, International Law, Asper Law and Business 3rd edition, 1999, New York.