Kate Cook, Matrix Chambers

rticle 27 of the Cartagena Protocol requires the Parties to "adopt a process with respect to the appropriate elaboration of international rules and procedures in the field of liability and redress for damage resulting from transboundary movements of living modified organisms". In doing so, they are to analyse and take due account of "the ongoing processes in international law on these matters".

References to "liability" appear in the title of a number of international treaties which provide for a duty to compensate for damage caused by certain activities¹. In most cases, the duty to compensate for harm caused by the relevant activity is placed on private individuals or operators rather than directly on the State in which the activity takes place². In most of these instruments, liability is generally strict: the person seeking compensation for damage is not required to show that the liable person was at fault, merely that the installation or activity with which they are concerned caused the damage in question. States which become party to such treaties must take the necessary steps to ensure that the liability regime forms part of their domestic law so that an individual may seek compensation from the liable person in the national courts. In some regimes, this civil liability regime may be supplemented by provision for the State to make a contribution to the cost of meeting claims for compensation, often by the establishment of a fund, particularly in certain cases where the civil liability regime may not provide compensation for the damage in question.

National Law. At the national level, most States already have general laws on liability which require persons causing damage through their activities or products to compensate those who have suffered harm. These laws may in principle apply to harm caused by LMOs in certain circumstances. There may also be legislation providing for liability to be imposed without the need to show fault ("strict liability") in certain cases where the activity causing damage is considered to be particularly hazardous or where the person likely to be affected (such as a consumer) is not in a position to readily avoid the risk of, for example, a defective product. Recently, as the commercial application of modern biotechnology has increased, some States and regions have begun to consider whether to develop specific liability regimes to deal with any damage caused by LMOs. The European Union has recently issued a consultation paper on liability for environmental damage which includes specific reference to harm caused by LMOs.

The Trend Towards Treaty Based Liability Regimes. As for the position at the international level, there exist both general principles relating to the liability of States and a range of instruments providing for liability regimes, most of which relate to a specific sector or type of activity.

Although an increasing number of treaties on the subject have been negotiated, liability has proved a complex subject to tackle at the international level. Those instruments which have been completed have often taken some considerable time to negotiate and some, including the IMO’s HNS Convention (hazardous and noxious substances) and UNEP’s Basel Protocol (hazardous waste), are still awaiting the minimum number of ratifications to enter into force. In certain cases, such as the Council of Europe’s Lugano Convention, it is not clear whether the treaty will ever enter into force. Most of these treaties cover specific activities such as the carriage of hazardous and noxious substances by sea or the transboundary movement of hazardous and other wastes, or specific sectors such as nuclear energy. In contrast to most environmental liability instruments, the Council of Europe’s Lugano Convention covers a range of "dangerous activities", including various activities relating to LMOs³.

An international biosafety regime would in some respects fall into the existing pattern of treaty based liability regimes given the transnational nature of the activity concerned, namely the international transboundary movement of LMOs, and the likelihood that any harm arising from the activity may be transboundary in nature. Some of the solutions adopted in existing international liability regimes may therefore provide useful models for the Parties to the Protocol in their discussions under Article 27. In other respects, a biosafety regime would be more novel: the degree of scientific uncertainty as to the effects of LMOs in the environment and the role of the precautionary principle in this context are likely to be important points of discussion as the Parties consider the appropriate form of rules and procedures on liability in this area.

The process initiated under Article 14(2) of the CBD will clearly be of particular interest to the Parties to the Cartagena Protocol. Article 14(2) of the Convention calls for the Conference of the Parties to examine the issue of liability and redress for damage to biological diversity on the basis of "studies to be carried out". This exercise includes consideration of the issues of restoration and compensation but excludes examination of liability to the extent that this is deemed to be "a purely internal matter". While there are likely to be overlaps in the issues addressed under Article 14(2) CBD and Article 27 CP, there are also important differences in scope between the two processes. Article 14(2) of the CBD is directed at damage to biological diversity generally, rather than being limited to a consideration of damage caused by LMOs and is concerned exclusively with damage to biological diversity rather than with other kinds of damage which a protocol liability regime might ultimately also cover such as damage to human health or property.

Some Key Elements and Issues. Damage: Parties to any international liability regime must agree what types or "heads"of damage are to be covered. Earlier instruments such as the 1960 Paris Convention on Third Party Liability in Nuclear Energy tended to focus exclusively on loss of life, personal injury and damage to property, but more recent instruments have wider definitions of damage which may also cover economic loss (as opposed to direct physical damage) and damage to the environment. In relation to the latter, a number of formulations have been used which widen the application of the instrument to include environmental damage that is not covered by damage to property but also qualify the extent to which such damage is covered by reference to the cost of "measures of reinstatement" which are also defined.

Some instruments, such as the 1997 Protocol to amend the Vienna Convention, include a requirement that in order to fall within the definition of damage, the impairment to the environment must not be "insignificant". In relation to environmental damage caused by LMOs, this issue may be particularly important. Is any level of contamination by modified genetic material sufficient to constitute (significant) damage to the environment? Should some sort of threshold be used in order to demonstrate that contamination is indeed significant. Alternatively, in view of the precautionary principle, is it appropriate to set such thresholds?

Another issue relates to the question of the foreseeability of damage. Assuming that the potential effects of LMOs are to some extent uncertain, if the regime is to reflect the precautionary principle, will a "state of the art" defence, as found in many product liability regimes, be appropriate or will a different approach be required, for example requiring a defendant to show that she adopted a precautionary approach in considering the possible adverse effects of an LMO product which she developed⁴.

Channelling: In strict liability regimes, liability is "channelled" to a particular person who is made liable for damage, subject to any defences or exonerations which may be provided. Different instruments have resolved the question as to who should be made liable in different ways. In some cases the "operator" or person exercising control of the relevant installation or activity is made liable (nuclear energy, dangerous activities under the Lugano Convention). In other cases, the liable person is someone associated with the activity but not necessarily in direct control of the activity at a particular time, for example the ship owner in the case of the oil pollution regimes. In a number of cases, the burden of liability is shared among different actors involved in and standing to gain from the activity in question. In the oil pollution and HNS regimes, both ship owners and cargo receivers are subject to liability in different ways. In the case of the oil pollution regimes, separate instruments are involved but in the HNS Convention both forms of liability are contained in one instrument. In the 1999 Basel Protocol strict liability is channelled to different individuals at different stages of the transboundary movement: the notifier of the waste shipment, the disposer of the waste and in some circumstances the exporter. The advantage of making a number of different actors liable is that it spreads the burden of strict liability more widely among those benefiting from the activity, the disadvantage is that it renders the regime more complicated and more likely to give rise to disputes as to which actor was liable at a particular point in time, for example in the case of the Basel Protocol as to the point at which the disposer took possession of the waste.

Each regime has to be framed according to the specific characteristics of the activity involved. In the case of the transboundary movement of LMOs, should the strict liability approach be adopted, the Parties will need to consider the various actors involved in the trade, including manufacturers, producers, exporters, carriers and importers and determine where liability should be channelled with a view to spreading the burden fairly whilst also designing a regime that is not overly complex.

Parties will also have to consider to what extent, if at all, States, in particular exporting States, should be made liable over and above their potential responsibility under existing international law. Again different instruments have approached this in a number of ways, by providing for State contributions to compensation funds (HNS, oil pollution) or by declaring that the instrument does not affect the rights and obligations of the Contracting Parties under the rules of general international law on State responsibility. Such discussions are likely to be affected by shifts in the pattern of international trade, as those States which have principally been importers of LMOs begin to export LMO products themselves as the technology becomes more widely available.

Causation: In contrast to most other liability instruments which leave the matter to national law, the Lugano Convention contains a specific provision on causation. In the case of biosafety, the establishment of causation of damage may pose a particular challenge given the level of scientific uncertainty as to the precise functioning of ecosystems, the possibility of multiple factors giving rise to a particular environmental impact and so on. Parties will need to consider whether the determination of causation is best left to national courts or merits some specific harmonised approach.

Many other issues will need to be addressed including whether there should be compulsory insurance and maximum limits on compensation (which are common features of international liability regimes), what time limits should apply to claims, and who should have standing to bring claims (should environmental groups be accorded such rights in respect of environmental damage?). It is likely that novel solutions may have to be found to some of these issue.

1: For example the 1969 International Convention on Civil Liability for Oil Pollution Damage, the 1963 Vienna Convention on Civil Liability for Nuclear Damage, the 1999 Basel Protocol on Liability and Compensation for Damage Arising from Transboundary Movements of Hazardous Wastes and Their Disposal.
2: An exception is the 1972 Convention on International Liability for Damage Caused by Space Objects under which the launching State is made absolutely liable for damage. In some sectors governed by international liability regimes, such as nuclear energy, the operator is likely to be a State run or State owned.
3: The Convention uses the term "Genetically Modified Organism" see the definition at Article 2,3.
4: Use of this defence is under discussion within the European Union in relation to environmental liability generally, see the European Commission’s White Paper on Environmental Liability, COM 2000/66, adopted 9 February 2000, at paragraph 4.3