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WT/DS18/AB/R
20 October 1998
(98-0000)
Original: English

Australia - Measures Affecting Importation of Salmon

Report of the Appellate Body

(Continued)


C. Admission and Consideration of Certain Evidence

268. Australia claims that the Panel erred in admitting certain evidence submitted by Canada after 7 October 1997, the deadline set by the Panel in its working procedures. According to Australia, the Panel drew on some of this evidence in reaching its findings.211 Australia raises due process concerns, in particular, about the original and revised version of the "Vose Report", submitted to the Panel on 18 December 1997 and 5 February 1998, respectively. Australia also objects to the fact that the Panel considered, as stated in paragraph 8.98 of its Report, evidence which was referred to, but not submitted by Canada.

269. With regard to the "Vose Report", the Panel stated:

At our second substantive meeting, Australia requested us to exclude Annex K...the "Vose Report" . . . submitted after the 7 October 1997 deadline we imposed. ... [S]ince, in our view, the Vose Report is in any event not crucial to our report, we shall not further consider it in our examination. ...212

270. In footnote 315 of its Report, the Panel characterized the evidence at issue in paragraph 8.98 as:

Evidence referred to by Canada in its oral statement at the second substantive meeting, not submitted to the Panel, but not contested by Australia.

271. We note that the Panel explicitly stated that it would not consider the "Vose Report" in its final examination. We also note that Australia did not demonstrate that the Panel, contrary to this statement of the Panel, considered the "Vose Report" in its final examination. We, therefore, fail to see how Australia could raise due process concerns about the Panel's alleged "consideration" of this report.

272. More generally, with regard to Australia's claim that the Panel erred in admitting evidence submitted after 7 October 1997, we note that the Working Procedures in Appendix 3 of the DSU do not establish precise deadlines for the submission of evidence. Under the provisions of Article 12.1 of the DSU, panels are permitted to establish their own working procedures, in addition to those set out in Appendix 3. In this case, the Panel initially set the deadline for the submission of evidence on 7 October 1997, but later decided to admit evidence submitted after this date. We note that Article 12.2 of the DSU provides that "[p]anel procedures should provide sufficient flexibility so as to ensure high-quality panel reports, while not unduly delaying the panel process." However, a panel must also be careful to observe due process, which entails providing the parties adequate opportunity to respond to the evidence submitted. Whether the Panel afforded Australia adequate opportunity to respond is the question addressed in the next section.

273. Finally, with regard to the evidence Canada referred to, but did not submit, we note that this evidence was referred to in the 1996 Final Report, submitted by Australia as its risk assessment. It must, therefore, have been known and available to Australia. We can find no error in the Panel's consideration and admission of this evidence.

D. Right of Response

274. Australia claims that the Panel erred in failing to accord it an opportunity to submit a formal written rebuttal submission to respond to the oral statement made by Canada at the second meeting of the Panel. Australia contends that Canada raised "substantially new matters" in this oral statement.213

275. In paragraph 8.22 of its Report, the Panel stated:

At our second substantive meeting, Australia raised a procedural claim related to Canada's oral statement made at that meeting. According to Australia, Canada's oral statement introduced fundamental changes in the nature of its specific legal claims which are of such significance that Australia should be allowed to rebut them through a formal written rebuttal submission. On this ground, Australia requested the Panel to give it more time - suggesting one extra week - to submit a third written rebuttal submission. ... We thus granted Australia's request to submit a third written submission within one week after our second substantive meeting. We gave the same opportunity to Canada and specified that both third submissions had to be limited to the "fundamental changes" introduced by Canada as they were identified in an oral statement made by Australia at the second substantive meeting. On 13 February 1998, we received such third submission from both parties.214

276. We note that Australia in its appellant's submission contends that this description in paragraph 8.22 of the Panel Report is not accurate.215 However, it is clearly not within the scope of appellate review for us to examine the factual correctness of this description by the Panel.

277. We also note that while Australia contends that Canada's oral statement at the second meeting with the Panel raised "substantially new matters"216, Australia clarified during our oral hearing that it did not contend that the issues or claims that Canada raised were outside the Panel's terms of reference, in the sense of being "new claims" which the Panel had no mandate to examine.

278. We understand the essence of Australia's argument to be that it had no time to prepare an appropriate response to Canada's oral statement made at the second meeting of the Panel, given its length and the substantial elaboration of its arguments. However, from the Panel's description of the proceedings, it appears that Australia had requested one week to respond to Canada's oral statement and that the Panel granted Australia's request. A fundamental tenet of due process is that a party be provided with an opportunity to respond to claims made against it. In this case, we believe that the Panel did accord Australia a proper opportunity to respond by allowing Australia to submit a third written submission. We cannot see how the Panel failed to accord due process to Australia by granting the extra time it had requested.

VII. Findings and Conclusions

279. For the reasons set out in this Report, the Appellate Body:

(a) reverses the Panel's findings that the 1988 Conditions and the 1996 Requirements are within the Panel's terms of reference; and concludes that the SPS measure at issue in this dispute is the import prohibition on fresh, chilled or frozen salmon set forth in QP86A, as confirmed by the 1996 Decision, rather than the heat-treatment requirement set forth in the 1988 Conditions;

(b) considers that the Panel's reference to Article 6.1 of the SPS Agreement is not "a legal finding or conclusion" and that the Panel did not, therefore, exceed its terms of reference;

(c) reverses the Panel's finding that the measure at issue, as it applies to ocean-caught Pacific salmon, is not based on a risk assessment in accordance with Article 5.1, and that Australia has acted inconsistently with Article 5.1 and, by implication, Article 2.2 of the SPS Agreement, because the Panel made this finding on the wrong premise that the heat-treatment requirement, rather than the import prohibition, is the SPS measure at issue in this dispute;

(d) finds, on the basis of the Panel's factual findings, that the 1996 Final Report is not a risk assessment within the meaning of Article 5.1 and the first definition in paragraph 4 of Annex A of the SPS Agreement, and that Australia, by maintaining without a proper risk assessment, an import prohibition on fresh, chilled or frozen ocean-caught Pacific salmon, has acted inconsistently with Article 5.1 and, by implication, Article 2.2 of the SPS Agreement;

(e) upholds the Panel's finding that, by maintaining the measure at issue as it applies to ocean-caught Pacific salmon, Australia has acted inconsistently with its obligations under Article 5.5 and, by implication, Article 2.3 of the SPS Agreement;

(f) reverses the Panel's finding that the measure at issue, as it applies to ocean-caught Pacific salmon, is "more trade-restrictive than required" to achieve Australia's appropriate level of protection, and that Australia has acted inconsistently with Article 5.6 of the SPS Agreement, because the Panel made this finding on the wrong premise that the heat-treatment requirement, rather than the import prohibition, is the SPS measure at issue in this dispute;

(g) is unable to come to a conclusion on whether or not the SPS measure at issue, i.e., the import prohibition, as it applies to ocean-caught Pacific salmon, is consistent with Article 5.6 of the SPS Agreement as a result of insufficient factual findings and undisputed facts in the Panel record;

(h) finds that the Panel erred in its application of the principle of judicial economy by limiting its findings under Articles 5.5 and 5.6 to ocean-caught Pacific salmon, and in considering that it was unnecessary to address Articles 5.5 and 5.6 of the SPS Agreement with respect to other Canadian salmon;

(i) finds that by maintaining the SPS measure at issue with regard to other Canadian salmon, Australia has acted inconsistently with Article 5.5 of the SPS Agreement;

(j) is unable to come to a conclusion on whether or not the SPS measure at issue, i.e., the import prohibition, as it applies to other Canadian salmon, is consistent with Article 5.6 of the SPS Agreement as a result of insufficient factual findings and undisputed facts in the Panel record;

(k) concludes that a finding of inconsistency with Article 2.3, first sentence, can be reached independently of a finding of inconsistency with Article 5.5; but because of insufficient factual findings and undisputed facts in the Panel record, is unable to determine whether the measure at issue constitutes arbitrary or unjustifiable discrimination within the meaning of Article 2.3, first sentence, of the SPS Agreement;

(l) concludes that the Panel's consideration and weighing of the evidence in support of Canada's claims relates to the Panel's assessment of the facts and, therefore, falls outside the scope of appellate review;

(m) concludes that the Panel did not abuse its discretion contrary to its obligations under Article 11 of the DSU;

(n) concludes that the Panel's admission and consideration of certain evidence submitted, or referred to, by Canada does not raise due process concerns contrary to the DSU; and

(o) concludes that since the Panel granted Australia extra time to respond to the oral statement made by Canada at the second meeting of the Panel, the Panel did not fail to accord due process to Australia contrary to the DSU.

280. The Appellate Body recommends that the DSB request that Australia bring its measure found in this Report, and in the Panel Report as modified by this Report, to be inconsistent with the SPS Agreement, into conformity with its obligations under that Agreement.

Signed in the original at Geneva this 7th day of October 1998 by:

_________________________
Claus-Dieter Ehlermann
Presiding Member

_________________________
Christopher Beeby
Member

________________________
Said El-Naggar
Member


211Australia's appellant's submission, para. 116.

212Panel Report, para. 8.4.

213Australia's appellant's submission, para. 107 ff.

214We also note that in para. 7.8 of the "Interim Review" part of its Report, the Panel stated:

Australia submits that it should have been given the opportunity to rebut the "fundamental changes" introduced by Canada through a formal written submission, not through a written comment limited to certain matters... Whether the additional opportunity we granted to the parties to submit arguments resulted in a formal written submission or a written comment is in our view irrelevant.

215Australia's appellant's submission, paras. 108, 110 and 111. Australia does not regard the short paper entitled "Written Comment by Australia", submitted on 13 February 1998 to have status of a formal written submission. (Australia's appellant's submission, para. 114.)

216Australia's appellant's submission, para. 107. See also the Notice of Appeal, point 6.