General Issue
Vol. I, No. 2
(Fall '09)

The increasing dominance of developing countries like India, China, Bangladesh and Pakistan in the global ship-breaking industry illustrates the paradoxical nature of economic globalization. While such operations provide access to employment and cheap material resources, they also pose serious long-term and irreversible harm to local environment and human health. In addition, the transnational character of the ship- breaking trade has militated against effective domestic oversight of its environmental hazards and has turned international regulation into an imperative.

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This article reviews the international attempts to mitigate the environmental concerns underlying ship-breaking. The Basel Convention on the Transboundary Movement of Hazardous Wastes 1989 was one such attempt which however suffered from certain gaps in its implementation. These lacunae in the Basel regime have led to the adoption of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships in May 2009. The paper compares the key features of this new Convention with the Basel regime and infers that while the former has made few significant breakthroughs in oversight of trade in end-of-life ships, not only does it ignore certain basic norms of international environmental law including the ‘polluter pays principle’ but it also contains the same gaping holes that were discovered during the application of Basel Convention to ship-breaking.

The recent WTO Appellate Body decision in Brazil – Retreaded Tyres raises several interesting institutional and substantive issues. Institutionally, it starkly illustrates the inherent tension and potential for conflict that exists between regional dispute settlement systems and the WTO dispute settlement mechanism. In showing remarkably little deference towards the earlier decision of the MERCOSUR Arbitral Tribunal on the same issue, the Appellate Body essentially espouses a regime of supremacy – of WTO law over regional dispute settlement bodies, and of jurisprudence generated by WTO appellate bodies over jurisprudence generated by WTO panels. This attitude appears to be unsustainable in the light of the increasing proliferation of international courts and tribunals and the inevitable consequence of disputes being adjudicated by different courts and tribunals at various levels. Substantively, the dispute is a prime example of the difficulties of balancing non-trade interests and trade interests, with the latter prevailing. However, the Appellate Body’s narrow application of Article XX of GATT leaves WTO members such as Brazil insufficient room to address legitimate, urgent environmental and health problems through restrictions on trade.

With the recognition of the need to heighten protection of intellectual property especially with regard to counterfeit trademark and pirated copyrighted goods, the enforcement of intellectual property rights at the borders has emerged as a significant issue in recent times. In view of this, the scheme of border measures has been discussed internationally at various fora including the World Trade Organization, the World Customs Organization, and the World Intellectual Property Organization as well as during negotiations of many multilateral and bilateral free trade agreements. India too, sought to enable right holders to enforce intellectual property rights at the border and, thereby, enhance border protection of intellectual property rights. In this regard, the Government of India notified the Intellectual Property Rights (Imported Goods) Rules, 2007 in May, 2007. The Rules, based on the model legislation by the World Customs Organization, seek to empower the Customs authorities to suspend the clearance of goods suspected to be infringing intellectual property in India. Further, they empower the Customs authorities to adjudicate on the issue of infringement and to seize or dispose the goods on finding in favour of the right holder. The Rules, however, present a major source of concern for importers. They fail to strike a balance between the rights of the right holders and the safeguards provided to the importers or the obligations of the right holders. In view of this, they present immense potential for abuse and their implementation has had a chequered history. The controversy surrounding the dual – SIM patent, presently being argued before various Indian fora, highlights the issues raised by the implementation of these rules, and presents a case for their re- evaluation.

While liberalization and free trade play an important role in trade law, related concerns for labour and human rights cannot be ignored. These concerns have given rise to the modern concept of the “social clause”, a provision in trade agreements allowing sanctions to curb labour exploitation. The WTO, however, via the Singapore Ministerial Declaration, has taken the stance that concerns for labour rights fall outside the domain of its regulation and are not to be used for protectionist purposes. In this manner, strict sanction has been given under the WTO regime to principles of international trade law such as Most Favored Nation status and National Treatment. Barring a few exceptional circumstances, these principles bar nations from imposing unilateral trade sanctions that target a particular nation.

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This note makes a case for unilateral trade sanctions imposed with an aim to protect labour and basic human rights. While agreements such as the North American Agreement on Labor Cooperation under the NAFTA have failed to act as an enforceable social clause, a strong case for practicable incorporation of labour and human standards can be made under Article XX of GATT. Article XX of GATT, if interpreted as a social clause allowing for countermeasures in defence of erga omnes obligations, acts as a “backdoor” for the entry of human and labour standards in the WTO trade regime. An appraisal of measures allowed under Article XX suggests that if unilateral trade sanctions are absolutely necessary to curb violations of labour rights, such sanctions can be justified under the WTO regime.

This brief comment discusses my thoughts on the state of international arbitration today. I begin by charting out the evolution of legal mechanisms governing arbitration internationally, including: the New York Convention of 1958, the UNCITRAL Arbitration Rules of 1976, and the UNCITRAL Model Law of 1985. I then move on to discuss the problems affecting the enforcement of arbitral awards today, in particular the mindset of the judges of national courts towards enforcement. Any introduction to international arbitration today would be incomplete without a reference to the system of settlement of investment disputes. Here, I discuss the effect of Bilateral Investment Treaties and the role of the International Centre for Settlement of Investment Disputes. I conclude by commenting on some attributes of a good arbitrator in today’s world.

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