Comparative Guide Chile - U.S. FTA and DR - CAFTA - Chapter 19: Environment

A Comparative Guide to the Chile-United States Free Trade Agreement and the
Dominican Republic-Central America-United States Free Trade Agreement


Chapter Nineteen: Environment


Table of Contents

Environmental issues are dealt with in a separate Chapter of the Agreement in both the Chile-U.S. FTA (Chapter 19) and DR-CAFTA (Chapter 17) and are subject to dispute settlement mechanisms similar and equivalent to those established for the treatment of commercial issues.

However, for each Party the only obligation that can be subject to dispute settlement is the non-compliance with its own Environmental laws and only if the failure “to effectively enforce its Environmental laws… (is) in a manner affecting trade between the Parties…”. Each Party retains its sovereignty of legislation and monitoring of its Environmental laws.

Objectives: the objective, found only in the Chile–U.S. FTA, is to ensure that trade and environmental policies are mutually supportive and that environmental laws and policies promote and encourage high levels of environmental protection through non-discriminatory measures and the elimination of trade distortions where both trade and environment would be enhanced.

Levels of Protection: (Chile-U.S. FTA Art.19.1 and DR-CAFTA Art.17.1) Parties are required to ensure that their laws provide high levels of environmental protection and to seek the improvement of their environmental laws; retaining, however, the right to determine their own levels of environmental protection and development of laws. The only significant difference is that in the case of DR-CAFTA this Article refers to both laws and policies while in the case of Chile it only refers to laws.

Enforcement of Environmental Laws: (Chile-U.S. FTA Art.19.2 and DR-CAFTA Art.17.2) in both Agreements the Parties are required to strictly comply with their own Environmental legislation, with respect to the environmental protection and environmental development policies defined in the text. This is the only obligation subject to dispute settlement after the period of consultation with experts. Each Party retains, however, “the right to exercise discretion with respect to investigatory, prosecutorial, regulatory, and compliance matters and to make decisions regarding the allocation of resources to enforcement with respect to other environmental matters determined to have higher priorities”.

Environmental Affairs Council: (Chile-U.S. FTA Art.19.3 and DR-CAFTA Art.17.5) both Agreements establish an Environmental Affairs Council comprised of cabinet-level officials or their designees. The Environment Affairs Council will oversee the implementation and review progress under the Environmental Chapter and supervise the activities of the Environmental Cooperation Mechanism. In the case of DR-CAFTA there are two exceptions (Arts. 17.8 and 17.10) to the decision making process in the Council. DR-CAFTA further states that the Council “shall include a session in which members of the Council have an opportunity to meet with the public to discuss matters relating to the implementation” of the Chapter on Environment.

DR-CAFTA also requires the designation of a contact point in the respective Ministry.

Opportunities for Public Participation: (Chile-U.S. FTA Art.19.4 and DR-CAFTA Art.17.6) this Article ensures the provision, reception and consideration of public communications on matters related to the Environment.

In the case of the Chile-U.S. FTA, each Party shall make best efforts to accommodate requests for consultations by persons or organizations, however, in the case of DR-CAFTA such efforts should be restricted to requests made by persons of that Party –i.e. a national or an enterprise of that Party.

Environmental Cooperation: (Chile-U.S. FTA Art.19.5 and DR-CAFTA Art.17.9) both Agreements commit the Parties to promote cooperative activities on any environmental matter that they consider appropriate.

In the case of DR-CAFTA, the Parties identify certain priority areas of cooperation and establish an Environmental Cooperation Commission that is responsible for developing, revising and updating a work program that reflects the national priorities for cooperation.

Environmental Consultations and Collaborative Environmental Consultations: both Agreements establish a consultation mechanism that seeks mutually satisfactory solutions of any difficulty that might arise among the Parties (Chile-U.S. FTA Art.19.6 and DR-CAFTA Art.17.10). The Chapter allows for the possibility to consult with experts or mediators. This mechanism is required to be used before any other dispute settlement mechanism.

Procedural Matters: (Chile-U.S. FTA Art.19.8 and DR-CAFTA Art.17.3) this Article requires each party to ensure that judicial, quasi-judicial, or administrative proceedings are available under its law to sanction or remedy violations of its environmental laws.

They require ensuring due process and the existence of effective remedies or sanctions to violation of its own environmental laws.

The main significant difference is that in the case of DR-CAFTA decisions by each Party’s judicial, quasi-judicial, or administrative tribunals shall not be called for examination under the Agreement.

Relationship to Environmental Agreements: (Chile-U.S. FTA Art.19.9 and DR-CAFTA Art.17.12) there are no significant differences in this Article.

Principles of Corporate Stewardship: (Chile-U.S. FTA Art. 19.10) this Article only appears in the Chile-U.S. FTA and aims at encouraging enterprises operating within each Party’s territory or jurisdiction to incorporate sound principles of corporate stewardship in their internal policies.

Definitions: both Agreements contain similar definitions on environmental law and statute or regulation. The Chile-U.S. FTA also includes a definition for the term territory while DR-CAFTA defines judicial or administrative proceeding (Chile-U.S. FTA Art.19.11 and DR-CAFTA Art.17.13).

Environmental Cooperation: (Chile-U.S. FTA Annex 19.3 and DR-CAFTA Annex 17.9) the Chile-U.S. FTA identifies all the cooperation projects that have been identified during the negotiating process while DR-CAFTA only states the need to create a framework for environmental cooperation.

Measures to Enhance Environmental Performance: (DR-CAFTA Art.17.4) this Article only appears in DR-CAFTA.

Submission on Enforcement Measures and Factual Records and Related Cooperation: (DR-CAFTA Arts. 17.7 and 17.8) these Articles only appear in DR-CAFTA and regulate who can file a submission, what can be a matter in the submission, what are the appropriate bodies such a submission should be filed with, what are the conditions for the submission to be processed and who decides on the matter.

The submissions should be aimed at promoting enforcement of national environmental laws and can be filed by any person of a Party. Due to the existence of the North American Agreement on Environmental Cooperation, there is a special proceeding for submissions filed by a person residing or established in the territory of the US asserting that the US is failing to effectively enforce its environmental laws. The end result is a factual record that may be made public if the Council, by a vote of any Party, decides so; and the Council recommendations to the Environmental Cooperation Commission related to matters addressed in the factual record.