World Trade
Organization

 
EC Measures concerning meat and meat products (hormones)

2. New Zealand

92. New Zealand refers to its third party submission to the Panel relating to Articles 2.2 and 5.6. New Zealand submits that since the Panel found that there was no scientific evidence that indicated that an identifiable risk arises from the use of any of the hormones at issue when used for growth promotion purposes in accordance with good practice, the Appellate Body should consider the applicability of Articles 2.2 and 5.6 of the SPS Agreement to the import ban.

3. Norway

93. Norway stresses that the SPS Agreement does not contain obligations to harmonize different levels of protection. The right of every Member to set its own level of protection is, according to Norway, an inherent right that has always been accepted by the GATT and now by the WTO Agreement. In the view of Norway, Members have a variety of options when deciding on their appropriate level of protection. They may decide to adopt a more lenient approach or a more stringent approach. Member A may decide to have a (close to) zero tolerance for deaths related to the usage of certain substances, while Member B accepts one death per million per year. This is entirely for Member A and Member B to decide. When, thereafter, each Member chooses the measure necessary to achieve its level of protection, that measure must comply with the basic obligations of Articles 2, 3 and 5 of the SPS Agreement. As long as the existence of a risk is established, the WTO is only concerned with the justification of the measure the Member chooses to apply to achieve the level of protection it has deemed appropriate. According to Norway, there is no requirement on that Member to come to the same conclusions concerning the evaluation of the available scientific evidence that other Members or international organizations may have reached.

94. On the issue of burden of proof, Norway argues that the Panel erred when it described Article 3.1 as the general rule, thus imposing an obligation on Members to harmonize their SPS measures. Article 3.1 clearly states that harmonization is merely an objective or option, by using the words "... on as wide a basis as possible". The "exceptions" to this objective are not limited to situations covered by Article 3.3. There are others, as can be seen from the words "... except as otherwise provided for in this Agreement, and in particular in paragraph 3". Norway submits that instead of designating one paragraph of Article 3 as a general rule and others as exceptions, the Panel should have read Article 3 within the context of Articles 2.2 and 2.3. In the view of Norway, where the SPS measure is identical for domestic and imported products, the general rule -- as with all obligations -- is that the complainant must present a prima facie case of violation. The requirement in Article 2.2 that measures be "necessary" does not alter the above. SPS measures are not exceptional measures, and the burden of proving that a measure is not necessary rests in the first instance with the complainant.

95. In respect of Article 5.5, Norway submits that it is the level of protection that is at issue, rather than the measure, which must "conform to" other parts of the SPS Agreement. It is for the complainant to prove that a decision on different levels of protection violates Article 5.5.

III. Issues Raised in this Appeal

96. This appeal raises the following legal issues:

IV. Allocating the Burden of Proof in Proceedings Under the SPS Agreement

97. The first general issue that we must address relates to the allocation of the burden of proof in proceedings under the SPS Agreement. The Panel appropriately describes this issue as one "of particular importance"⁵⁴, in view of the nature of disputes under that Agreement. Such disputes may raise multiple and complex issues of fact.

98. The Panel begins its analysis by setting out the general allocation of the burden of proof between the contending parties in any proceedings under the SPS Agreement. The initial burden lies on the complaining party, which must establish a prima facie case of inconsistency with a particular provision of the SPS Agreement on the part of the defending party, or more precisely, of its SPS measure or measures complained about. When that prima facie case is made, the burden of proof moves to the defending party, which must in turn counter or refute the claimed inconsistency. This seems straightforward enough and is in conformity with our ruling in United States - Shirts and Blouses⁵⁵, which the Panel invokes and which embodies a rule applicable in any adversarial proceedings.

99. The Panel, however, proceeds to make a general, unqualified, interpretative ruling that the SPS Agreement allocates the "evidentiary burden" to the Member imposing an SPS measure. To support this general statement, which renders the Panel's reference to our own ruling in United States - Shirts and Blouses little more than lip-service, the Panel first points to:

100. The Panel next quotes Article 5.8 of the SPS Agreement, while parenthetically noting that this Article "relates more to transparency than to any requirement of legal justification". ⁵⁷ Article 5.8 provides:

101. Lastly, the Panel seeks support for its general interpretative ruling in Article 3.2 of the SPS Agreement, which establishes a presumption of consistency with relevant provisions of that Agreement and of the GATT 1994 for measures that conform to international standards, guidelines and recommendations. From this presumption, the Panel extracts a reverse inference that if a measure does not conform to international standards, the Member imposing such a measure must bear the burden of proof in any complaint of inconsistency with a provision of the SPS Agreement. ⁵⁸

102. We find the general interpretative ruling of the Panel to be bereft of basis in the SPS Agreement and must, accordingly, reverse that ruling. It does not appear to us that there is any necessary (i.e. logical) or other connection between the undertaking of Members to ensure, for example, that SPS measures are "applied only to the extent necessary to protect human, animal or plant life or health ..." ⁵⁹, and the allocation of burden of proof in a dispute settlement proceeding. Article 5.8 of the SPS Agreement does not purport to address burden of proof problems; it does not deal with a dispute settlement situation. To the contrary, a Member seeking to exercise its right to receive information under Article 5.8 would, most likely, be in a pre-dispute situation, and the information or explanation it receives may well make it possible for that Member to proceed to dispute settlement proceedings and to carry the burden of proving on a prima facie basis that the measure involved is not consistent with the SPS Agreement. The Panel's last reason involves, quite simply, a non-sequitur. The converse or a contrario presumption created by the Panel does not arise. The presumption of consistency with relevant provisions of the SPS Agreement that arises under Article 3.2 in respect of measures that conform to international standards may well be an incentive for Members so to conform their SPS measures with such standards. It is clear, however, that a decision of a Member not to conform a particular measure with an international standard does not authorize imposition of a special or generalized burden of proof upon that Member, which may, more often than not, amount to a penalty.

103. In initiating its discussion on the requirements of Articles 3.1 and 3.3 of the SPS Agreement, the Panel turns once more to allocating the burden of proof between the complaining parties and the defending party. The Panel states:

104. The Panel relies on two interpretative points in reaching its above finding. First, the Panel posits the existence of a "general rule - exception" relationship between Article 3.1 (the general obligation) and Article 3.3 (an exception) ⁶¹ and applies to the SPS Agreement what it calls "established practice under GATT 1947 and GATT 1994" to the effect that the burden of justifying a measure under Article XX of the GATT 1994 rests on the defending party. ⁶² It appears to us that the Panel has misconceived the relationship between Articles 3.1, 3.2 and 3.3, a relationship discussed below⁶³, which is qualitatively different from the relationship between, for instance, Articles I or III and Article XX of the GATT 1994. Article 3.1 of the SPS Agreement simply excludes from its scope of application the kinds of situations covered by Article 3.3 of that Agreement, that is, where a Member has projected for itself a higher level of sanitary protection than would be achieved by a measure based on an international standard. Article 3.3 recognizes the autonomous right of a Member to establish such higher level of protection, provided that that Member complies with certain requirements in promulgating SPS measures to achieve that level. The general rule in a dispute settlement proceeding requiring a complaining party to establish a prima facie case of inconsistency with a provision of the SPS Agreement before the burden of showing consistency with that provision is taken on by the defending party, is not avoided by simply describing that same provision as an "exception". In much the same way, merely characterizing a treaty provision as an "exception" does not by itself justify a "stricter" or "narrower" interpretation of that provision than would be warranted by examination of the ordinary meaning of the actual treaty words, viewed in context and in the light of the treaty's object and purpose, or, in other words, by applying the normal rules of treaty interpretation. It is also well to remember that a prima facie case is one which, in the absence of effective refutation by the defending party, requires a panel, as a matter of law, to rule in favour of the complaining party presenting the prima facie case. ⁶⁴

105. Secondly, the Panel relies upon the reverse presumption or implication it discovered in Article 3.2 of the SPS Agreement. As already noted, we have been unable to find any basis for that implication or presumption. ⁶⁵

106. We believe, therefore, and so hold that the Panel erred in law both in its two interpretative points and its finding set out in paragraphs 8.86 and 8.87 of the US Panel Report and paragraphs 8.89 and 8.90 of the Canada Panel Report (quoted above). ⁶⁶

107. The legal interpretations developed and the findings set out above by the Panel appear to have been applied, inter alia, in the following paragraphs that have also been appealed by the European Communities:

...

108. To the extent that the Panel ⁶⁹ purports to absolve the United States and Canada from the necessity of establishing a prima facie case showing the absence of the risk assessment required by Article 5.1, and the failure of the European Communities to comply with the requirements of Article 3.3, and to impose upon the European Communities the burden of proving the existence of such risk assessment and the consistency of its measures with Articles 5.4, 5.5 and 5.6 without regard to whether or not the complaining parties had already established their prima facie case, we consider and so hold that the Panel once more erred in law.

109. In accordance with our ruling in United States - Shirts and Blouses⁷⁰, the Panel should have begun the analysis of each legal provision by examining whether the United States and Canada had presented evidence and legal arguments sufficient to demonstrate that the EC measures were inconsistent with the obligations assumed by the European Communities under each Article of the SPS Agreement addressed by the Panel, i.e., Articles 3.1, 3.3, 5.1 and 5.5. Only after such a prima facie determination had been made by the Panel may the onus be shifted to the European Communities to bring forward evidence and arguments to disprove the complaining party's claim. ⁷¹

V. The Standard of Review Applicable in Proceedings Under the SPS Agreement

110. The European Communities appeals from certain findings of the Panel ⁷² upon the ground that the Panel failed to apply an appropriate standard of review in assessing certain acts of, and scientific evidentiary material submitted by, the European Communities. ⁷³ The European Communities claimed, more specifically, that:

The panel also erred in law because it:

111. In the view of the European Communities, the principal alternative approaches to the problem of formulating the "proper standard of review" so far as panels are concerned are two-fold. The first is designated as "de novo review". This standard of review would allow a panel complete freedom to come to a different view than the competent authority of the Member whose act or determination is being reviewed. A panel would have to "verify whether the determination by the national authority was _correct� both factually and procedurally". ⁷⁵ The second is described as "deference". Under a "deference" standard, a panel, in the submission of the European Communities, should not seek to redo the investigation conducted by the national authority but instead examine whether the "procedure" required by the relevant WTO rules had been followed. ⁷⁶

112. Clearly referring only to an appropriate standard of review of factual determinations by the domestic authorities of a Member, the European Communities submits that the principle of deference has been embodied in Article 17.6(i) of the Anti-Dumping Agreement, which reads as follows:

113. The European Communities further urges that the above-quoted standard, which it describes as a "deferential _reasonableness� standard" ⁷⁷ is applicable in "all highly complex factual situations, including the assessment of the risks to human health arising from toxins and contaminants"⁷⁸, and should have been applied by the Panel in the present case.

114. The first point that must be made in this connection, is that the SPS Agreement itself is silent on the matter of an appropriate standard of review for panels deciding upon SPS measures of a Member. Nor are there provisions in the DSU or any of the covered agreements (other than the Anti-Dumping Agreement) prescribing a particular standard of review. Only Article 17.6(i) of the Anti-Dumping Agreement has language on the standard of review to be employed by panels engaged in the "assessment of the facts of the matter". We find no indication in the SPS Agreement of an intent on the part of the Members to adopt or incorporate into that Agreement the standard set out in Article 17.6(i) of the Anti-Dumping Agreement. Textually, Article 17.6(i) is specific to the Anti-Dumping Agreement. ⁷⁹

115. The standard of review appropriately applicable in proceedings under the SPS Agreement, of course, must reflect the balance established in that Agreement between the jurisdictional competences conceded by the Members to the WTO and the jurisdictional competences retained by the Members for themselves. ⁸⁰ To adopt a standard of review not clearly rooted in the text of the SPS Agreement itself, may well amount to changing that finely drawn balance; and neither a panel nor the Appellate Body is authorized to do that.

116. We do not mean, however, to suggest that there is at present no standard of review applicable to the determination and assessment of the facts in proceedings under the SPS Agreement or under other covered agreements. In our view, Article 11 of the DSU bears directly on this matter and, in effect, articulates with great succinctness but with sufficient clarity the appropriate standard of review for panels in respect of both the ascertainment of facts and the legal characterization of such facts under the relevant agreements. Article 11 reads thus:

117. So far as fact-finding by panels is concerned, their activities are always constrained by the mandate of Article 11 of the DSU: the applicable standard is neither de novo review as such, nor "total deference", but rather the "objective assessment of the facts". Many panels have in the past refused to undertake de novo review⁸¹, wisely, since under current practice and systems, they are in any case poorly suited to engage in such a review. On the other hand, "total deference to the findings of the national authorities", it has been well said, "could not ensure an 'objective assessment' as foreseen by Article 11 of the DSU".⁸²

118. In so far as legal questions are concerned - that is, consistency or inconsistency of a Member's measure with the provisions of the applicable agreement - a standard not found in the text of the SPS Agreement itself cannot absolve a panel (or the Appellate Body) from the duty to apply the customary rules of interpretation of public international law. ⁸³ It may be noted that the European Communities refrained from suggesting that Article 17.6 of the Anti-Dumping Agreement in its entirety was applicable to the present case. Nevertheless, it is appropriate to stress that here again Article 11 of the DSU is directly on point, requiring a panel to "make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements ...".

119. We consider, therefore, that the issue of failure to apply an appropriate standard of review, raised by the European Communities, resolves itself into the issue of whether or not the Panel, in making the above and other findings referred to and appealed by the European Communities, had made an "objective assessment of the matter before it, including an objective assessment of the facts ...". This particular issue is addressed (in substantial detail) below. ⁸⁴ Here, however, we uphold the findings of the Panel appealed by the European Communities upon the ground of failure to apply either a "deferential reasonableness standard" or the standard of review set out in Article 17.6(i) of the Anti-Dumping Agreement.

VI. The Relevance of the Precautionary Principle in the Interpretation of the SPS Agreement

120. We are asked by the European Communities to reverse the finding of the Panel relating to the precautionary principle. The Panel's finding and its supporting statements are set out in the Panel Reports in the following terms:

121. The basic submission of the European Communities is that the precautionary principle is, or has become, "a general customary rule of international law" or at least "a general principle of law".⁸⁶ Referring more specifically to Articles 5.1 and 5.2 of the SPS Agreement, applying the precautionary principle means, in the view of the European Communities, that it is not necessary for all scientists around the world to agree on the "possibility and magnitude" of the risk, nor for all or most of the WTO Members to perceive and evaluate the risk in the same way. ⁸⁷ It is also stressed that Articles 5.1 and 5.2 do not prescribe a particular type of risk assessment and do not prevent Members from being cautious in their risk assessment exercise. ⁸⁸ The European Communities goes on to state that its measures here at stake were precautionary in nature and satisfied the requirements of Articles 2.2 and 2.3, as well as of Articles 5.1, 5.2, 5.4, 5.5 and 5.6 of the SPS Agreement. ⁸⁹

122. The United States does not consider that the "precautionary principle" represents customary international law and suggests it is more an "approach" than a "principle". ⁹⁰ Canada, too, takes the view that the precautionary principle has not yet been incorporated into the corpus of public international law; however, it concedes that the "precautionary approach" or "concept" is "an emerging principle of law" which may in the future crystallize into one of the "general principles of law recognized by civilized nations" within the meaning of Article 38(1)(c) of the Statute of the International Court of Justice. ⁹¹

123. 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. ⁹² We consider, however, that it is unnecessary, and probably imprudent, for the Appellate Body in this appeal to take a position on this important, but abstract, question. We note that the Panel itself did not make any definitive finding with regard to the status of the precautionary principle in international law and that the precautionary principle, at least outside the field of international environmental law, still awaits authoritative formulation. ⁹³

124. It appears to us important, nevertheless, to note some aspects of the relationship of the precautionary principle to the SPS Agreement. First, the principle has not been written into the SPS Agreement as a ground for justifying SPS measures that are otherwise inconsistent with the obligations of Members set out in particular provisions of that Agreement. Secondly, the precautionary principle indeed finds reflection in Article 5.7 of the SPS Agreement. We agree, at the same time, with the European Communities, that there is no need to assume that Article 5.7 exhausts the relevance of a precautionary principle. It is reflected also in the sixth paragraph of the preamble and in Article 3.3. These explicitly recognize the right of Members to establish their own appropriate level of sanitary protection, which level may be higher (i.e., more cautious) than that implied in existing international standards, guidelines and recommendations. Thirdly, a panel charged with determining, for instance, whether "sufficient scientific evidence" exists to warrant the maintenance by a Member of a particular SPS measure may, of course, and should, bear in mind that responsible, representative governments commonly act from perspectives of prudence and precaution where risks of irreversible, e.g. life-terminating, damage to human health are concerned. Lastly, however, the precautionary principle does not, by itself, and without a clear textual directive to that effect, relieve a panel from the duty of applying the normal (i.e. customary international law) principles of treaty interpretation in reading the provisions of the SPS Agreement.

125. We accordingly agree with the finding of the Panel that the precautionary principle does not override the provisions of Articles 5.1 and 5.2 of the SPS Agreement.

Continue with EC Measures concerning meat and meat products (hormones)

⁵⁴ US Panel Report, para. 8.48; Canada Panel Report, para. 8.51.

⁵⁵ Adopted 23 May 1997, WT/DS33/AB/R, p. 14.

⁵⁶ US Panel Report, para. 8.52; Canada Panel Report, para. 8.55.

⁵⁷ US Panel Report, para. 8.53; Canada Panel Report, para. 8.56.

⁵⁸ US Panel Report, para. 8.54; Canada Panel Report, para. 8.57.

⁵⁹ SPS Agreement, Article 2.2.

⁶⁰ US Panel Report, paras. 8.86 and 8.87; Canada Panel Report, paras. 8.89 and 8.90.

⁶¹ US Panel Report, para. 8.86; Canada Panel Report, para. 8.89.

⁶² US Panel Report, footnote 288; Canada Panel Report, footnote 393.

⁶³ Paras. 169-172 of this Report.

⁶⁴ Appellate Body Report, United States - Shirts and Blouses, adopted 23 May 1997, WT/DS33/AB/R, p. 14.

⁶⁵ Para. 102 of this Report.

⁶⁶ See para. 103 of this Report.

⁶⁷ US Panel Report, para. 8.151; Canada Panel Report, para. 8.154.

⁶⁸ US Panel Report, para. 8.165; Canada Panel Report, para. 8.168.

⁶⁹ US Panel Report, paras. 8.151 and 8.165; Canada Panel Report, paras. 8.154 and 8.168.

⁷⁰ Adopted 23 May 1997, WT/DS33/AB/R, pp. 14-16.

⁷¹ Our finding that the Panel erred in allocating the burden of proof generally to the Member imposing the measure, however, does not deal with the quite separate issue of whether the United States and Canada actually made a prima facie case of violation of each of the following Articles of the SPS Agreement: 3.1, 3.3, 5.1 and 5.5. See in this respect, footnote 180 of this Report.

⁷² US Panel Report, paras. 8.124, 8.127, 8.133, 8.134, 8.145, 8.146, 8.194, 8.199, 8.213 and 8.255; Canada Panel Report, paras. 8.127, 8.130, 8.136, 8.137, 8.148, 8.149, 8.197, 8.202, 8.216 and 8.258.

⁷³ EC's appellant's submission, para. 140.

⁷⁴ EC's appellant's submission, para. 139.

⁷⁵ EC's appellant's submission, para. 122.

⁷⁶ EC's appellant's submission, para. 123.

⁷⁷ EC's appellant's submission, para. 128.

⁷⁸ EC's appellant's submission, para. 127.

⁷⁹ On the other hand, as suggested by the United States, we must note the Decision on the Review of Article 17.6 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, which states:

This Ministerial Decision evidences that the Ministers were aware that Article 17.6 of the Anti-Dumping Agreement was applicable only in respect of that Agreement.

⁸⁰ See, for example, S.P. Croley and J.H. Jackson, "WTO Dispute Panel Deference to National Government Decisions, The Misplaced Analogy to the U.S.Chevron Standard-of-Review Doctrine", in E.-U. Petersmann (ed.), International Trade Law and the GATT/WTO Dispute Settlement System (Kluwer, 1997) 185, p. 189; P.A. Akakwam, "The Standard of Review in the 1994 Antidumping Code: Circumscribing the Role of GATT Panels in Reviewing National Antidumping Determinations" (1996), 5:2 Minnesota Journal of Global Trade 277, pp. 295-296.

⁸¹ Panel Report, United States - Underwear, adopted 25 February 1997, WT/DS24/R; Panel Report, Korea - Anti-Dumping Duties on Imports of Polyacetal Resins from the United States, adopted 27 April 1993, BISD 40S/205; Panel Report, United States - Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Atlantic Salmon from Norway, adopted 27 April 1994, ADP/87; and Panel Report, United States - Initiation of a Countervailing Duty Investigation into Softwood Lumber Products from Canada, adopted 3 June 1987, BISD 34S/194.

⁸² Panel Report, United States - Underwear, adopted 25 February 1997, WT/DS24/R, para. 7.10

⁸³ DSU, Article 3.2.

⁸⁴ Paras. 131-144 of this Report.

⁸⁵ US Panel Report, paras. 8.157 and 8.158; Canada Panel Report, paras. 8.160 and 8.161.

⁸⁶ EC's appellant's submission, para. 91.

⁸⁷ EC's appellant's submission, para. 88.

⁸⁸ EC's appellant's submission, para. 94.

⁸⁹ EC's appellant's submission, para. 98.

⁹⁰ United States' appellee's submission, para. 92.

⁹¹ Canada's appellee's submission, para. 34.

⁹² Authors like P. Sands, J. Cameron and J. Abouchar, while recognizing that the principle is still evolving, submit nevertheless that there is currently sufficient state practice to support the view that the precautionary principle is a principle of customary international law. See, for example, P. Sands, Principles of International Environmental Law, Vol. I (Manchester University Press 1995) p. 212; J. Cameron, "The Status of the Precautionary Principle in International Law", in J. Cameron and T. O'Riordan (eds.), Interpreting the Precautionary Principle (Cameron May, 1994) 262, p. 283; J.Cameron and J. Abouchar, "The Status of the Precautionary Principle in International Law", in D. Freestone and E. Hey (eds.), The Precautionary Principle in International Law (Kluwer, 1996) 29, p. 52. Other authors argue that the precautionary principle has not yet reached the status of a principle of international law, or at least, consider such status doubtful, among other reasons, due to the fact that the principle is still subject to a great variety of interpretations. See, for example, P. Birnie and A. Boyle, International Law and the Environment (Clarendon Press, 1992), p. 98; L. G�ndling, "The Status in International Law of the Precautionary Principle" (1990), 5:1,2,3 International Journal of Estuarine and Coastal Law 25, p. 30; A. deMestral (et. al), International Law Chiefly as Interpreted and Applied in Canada, 5th ed. (Emond Montgomery, 1993), p. 765; D. Bodansky, in Proceedings of the 85th Annual Meeting of the American Society of International Law (ASIL, 1991), p. 415.

⁹³ In Case Concerning the Gabc�kovo-Nagymaros Project (Hungary/Slovakia), the International Court of Justice recognized that in the field of environmental protection "... new norms and standards have been developed, set forth in a great number of instruments during the last two decades. Such new norms have to be taken into consideration, and such new standards given proper weight ...". However, we note that the Court did not identify the precautionary principle as one of those recently developed norms. It also declined to declare that such principle could override the obligations of the Treaty between Czechoslovakia and Hungary of 16 September 1977 concerning the construction and operation of the Gabc�kovo/Nagymaros System of Locks. See, Case Concerning the Gabc�kovo-Nagymaros Project (Hungary/Slovakia), I.C.J. Judgement, 25 September 1997, paras. 140, 111-114. Not yet reported in the I.C.J. Reports but available on internet at http://www.icj-cij.org/idecis.htm.