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U.S. - Colombia Trade Pact: Environmental, Labor Rights

New York Law Journal

October 24, 2008
by Stephen L. Kass and Jean McCarroll

On Nov. 22, 2006, President George W. Bush and President Álvaro Uribe Vélez of Colombia signed the U.S.-Colombia Trade Promotion Agreement (TPA), a bilateral free trade agreement that is currently awaiting congressional approval.

Supporters of the TPA argue that it will stimulate economic relations between the two countries, while its opponents cite widespread antiunion violence in Colombia and a lack of labor and environmental protection in the TPA as reasons to withhold ratification, at least at this time.

The TPA has now become a subject of debate between Senators Barack Obama and John McCain and is likely to receive increased attention following the presidential elections.

The TPA would reduce or eliminate tariffs on U.S. goods exported to Colombia, which are currently subject to tariffs of up to 35 percent.[1] The TPA would also make permanent the existing duty status of Colombian exports to the United States, more than 90 percent of which already enter duty-free. The TPA is thus expected to bring economic gains to both countries, who shared more than $18 billion in trade in 2007.[2] Although Congress has not yet officially voted on the TPA, it voted on April 10, 2008 to revoke the president's "fast track" authority, which provided that Congress would vote, with no amendments, on all trade agreements within 90 days of their submission. At the time, the TPA was the predominant trade agreement on the table and revocation of fast track was seen by opponents as rejection of that pact.[3]

The Colombian TPA is notable because environmental, human rights, and labor concerns have played a prominent role in the ratification debate. In the public debates regarding the TPA, labor rights have received considerably more attention than environmental issues, and the most intense opposition to the TPA has come from human rights and labor organizations concerned about Colombia's human rights record and widespread antiunion violence.[4] In April 2008, Human Rights Watch issued a report opposing ratification of the TPA because of Colombia's continuing high rate of killing of trade unionists (17 union members murdered in the first quarter of 2008; more than 400 murdered since 2002).

This column reviews the TPA's environmental provisions, which are more extensive than those of most previous trade agreements but lack an effective enforcement mechanism. This is particularly unfortunate because of the sensitivity of Colombia's ecosystem and heightened concern about the effects of climate change and accelerating deforestation in Colombia.

We therefore suggest a possible mechanism for addressing the TPA's environmental enforcement shortcomings and also suggest that such a mechanism might contribute to a resolution of the current confrontation between free-trade advocates who favor the TPA and those who insist that respect for labor rights must be a condition to expanded free trade.

Environmental Challenges

There are a number of environmental challenges in Colombia that could be exacerbated by the TPA. These fall into three areas: pesticides in the cut flower industry, deforestation, and biodiversity loss.

The recently reauthorized Andean Trade Preferences Act allows Colombia's flowers to enter the United States duty-free. Colombia's cut flower industry, with $630 million in worldwide sales, is the second-largest flower exporter in the world (after the Netherlands) and provides the United States with the large majority of its roses, carnations, and chrysanthemums.[5] However, the industry's success does not come without a price, and large-scale flower plantations have serious side effects for worker health and the environment.

Workers on flower plantations in Colombia - the vast majority of whom are young women - are exposed to approximately 127 types of pesticides and, according to one critic, suffer a variety of exposure-related symptoms, from headaches to nausea to asthma.[6] According to one study by students at American University, a quarter of the pesticides that Colombia imports are not registered for use in their countries of origin, often because they are illegal or are considered too toxic by the World Health Organization.[7] Flower plantations are also alleged to contribute significant pollution to streams and groundwater.[8]

The greatest threat to Colombia's forests is increasing worldwide demand for palm oil, which has skyrocketed as the world has focused more attention on renewable fuels.[9] Biodiesel fuels are produced mainly from rapeseed and palm. Although 90 percent of palm oil plantations are based in Malaysia and Indonesia, they are rapidly expanding in South America, including Colombia. European demand for palm oil is growing steadily and, ironically, deforestation to make room for new plantations is accelerating in Colombia (as in Asia). Amazon Watch, a large environmental advocacy group, contends that "rapid expansion of Colombia's monoculture palm oil production, driven by surging demand for biodiesel, has already resulted in widespread violence, illegal land appropriation and large-scale deforestation."[10] The land used for oil palm plantations in Colombia increased from 145,027 hectares in 1998 to 275,317 hectares in 2005, and the Colombian government has stated its intention to increase production to 6 million hectares by 2020. This significant loss of forest land translates directly into reduced ability to absorb greenhouse gases and thus contributes to climate change, rather than slowing it.

In addition to its effects on global climate change, deforestation results in substantial biodiversity loss. Colombia's unique environment is home to about 10 percent of the world's species, making it among the most biodiverse countries on earth.[11] Its ecosystems vary from the tropical rainforest to open savannas, and about 18 percent of its species are endemic. Yet, the country's Chocó rainforests along the Pacific coast are being cut to make room for new palm plantations and industrial gold mining.[12]

Environmental Law

Unlike the U.S. Constitution, Article 79 of the Colombian Constitution provides that "every person has the right to enjoy a healthy environment" and that "it is the duty of the state to protect the diversity and integrity of the environment" and "to conserve areas of special ecological importance." Colombia was also one of the first countries in Latin America to adopt environmental legislation, which it did in the 1960s. Although Colombian law purports to protect workers' health and the environment, enforcement is said to be sporadic. The law provides for maternity rights, including 80 days' paid leave, but plantation workers who become pregnant are often quickly terminated.[13] (Largely in response to U.S. consumer demand, the Colombian Association of Flower Exporters has urged its members to adopt voluntary codes of conduct regarding labor rights and the environment through a voluntary certification program known as Florverde.[14]) Similarly, Colombian law does not offer strong protections for the country's forests. In 2006, the country adopted its General Forestry Law, which gave broad rights to timber interests. Public interest groups challenged the law in court, and a constitutional tribunal held in early 2008 that the law was unconstitutional.[15]

TPA's Environment Provisos

The TPA includes a number of important provisions, some of which are based on similar provisions in the North American Free Trade Agreement (NAFTA) and its corollary North American Agreement on Environmental Cooperation (NAAEC). These include obligations to implement key multilateral environmental agreements, to maintain and enforce domestic environmental laws, to protect biodiversity, and to enable citizen participation in the environmental enforcement process.[16]

Article 18.2 of the TPA requires each party to "adopt, maintain, and implement laws, regulations, and all other measures to fulfill its obligations" under a number of multilateral agreements, including the Convention on International Trade in Endangered Species, the Montreal Protocol, Marpol 73/78, the Ramsar Convention on wetlands, and agreements protecting tuna, whales, and Antarctic marine life. This goes a step beyond NAFTA, which has been criticized for its failure to require ratification of any international environmental agreements. However, it provides little added benefit because both Colombia and the United States are already a parties to those agreements.

Article 18.3 addresses enforcement of environmental laws. Paragraph 2 requires that parties "shall not waive or otherwise derogate from such laws in a manner that weakens or reduces the protections afforded in those laws in a manner affecting trade or investment between the Parties" (emphasis added). In one sense, this too goes farther than the NAAEC (which merely recommended that the parties to NAFTA should not derogate from their protective regulations).[17] The TPA also states that parties should provide citizen enforcement remedies, sanctions for violations of environmental laws, and voluntary and incentive-based mechanisms for enhanced environmental performance.[18] Article 18.4 includes a citizen enforcement provision, which provides that "interested persons may request [a] Party's competent authorities to investigate alleged violations of its environmental laws, and that each Party's competent authorities shall give such requests due consideration in accordance with its law."[19]

Despite these drafting improvements, the TPA does not incorporate the full citizen submissions procedure under the NAAEC, which permits interested parties to submit claims of nonenforcement to NAFTA's tripartite Commission for Environmental Cooperation (CEC), in addition to pursuing local remedies under domestic law. In practice, citizen submissions to the CEC have been used primarily by Mexican and Canadian NGOs to bring enforcement claims against their own governments, rather than for transnational enforcement claims.[20] Although Article 18.6 of the TPA establishes an Environmental Affairs Council to oversee implementation of the agreement's environmental provisions, the absence of an independent entity like the CEC with its own professional staff (and companion Joint Public Advisory Committee (JPAC) of citizens and nongovernmental organization representatives) is likely to reduce the Environmental Affairs Counsel to window-dressing.

Article 10.7 of the TPA includes provisions that also mirror those of NAFTA Chapter 11, but goes one step farther in clarifying that "except in rare circumstances, nondiscriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, and the environment, do not constitute indirect expropriations."[21] The Office of the U.S. Trade Representative apparently included this language to assuage concerns regarding expropriation claims based on such regulations. As we have previously noted, NAFTA Chapter 11 has not proved to be the disaster that many environmentalists feared.[22] Nevertheless, the provisions of Article 10.7 are a useful signal to future arbitration to avoid the excesses of the early NAFTA Chapter 11 awards.

Improving the TPA

As a practical matter, it is highly unlikely that the TPA will be ratified so long as killings of union members continue. The real issue, then, is to avoid a resumption of such killings after the TPA becomes effective.

Unfortunately, Chapter 17 of the TPA, which addresses labor rights, includes no enforcement mechanism. There is not even a provision comparable to Article 18.8, which provides, in the case of environmental matters, that any person "may file a submission asserting that a Party is failing to effectively enforce its environmental laws," and that a designated advisory committee under Article 18.7(4) has a duty to review such submissions. Yet without some form of public oversight, the TPA's aspirational labor provisions will have little effect.

What may be needed, for both environmental and labor issues, is an independent Citizens Oversight Committee, with representatives from both countries, to monitor and report publicly on the parties' respective compliance with their environmental and labor laws and corresponding treaty obligations. The JPAC under NAFTA has performed an analogous role in attempting to strengthen the CEC's environmental review role by injecting independent views into what otherwise would have been a stillborn CEC process.

The TPA could also be strengthened by expanding the availability of sanctions when one party fails to comply with its environmental and labor obligations. Article 21.16 provides that a party may "suspend benefits" when the parties are unable to reach an agreement regarding compensation after an arbitral panel has issued a decision (which is similar to many safeguard provisions contained in other trade agreements). Although this Article provides a backstop for a number of other trade issues that may arise under the TPA, it is not sufficient to address environmental or labor problems.

For this reason, the TPA should include a separate mechanism for dispute resolution under chapters 17 and 18. Such a mechanism could include procedures by which citizens can bring complaints to the proposed Citizens Oversight Committee, which would then review the complaint and submit its findings to a dispute resolution panel or simply issue its recommendations to the parties. If a party fails to take corrective action following such a report, the other party could then suspend any or all of its obligations under the TPA until the underlying enforcement failure is cured.  

and Jean M. McCarroll, together with Clifford P. Case, direct the environmental practice group at Carter Ledyard & Milburn. Elizabeth C. Black, an associate of the firm, assisted in the preparation of this column.

 

Reprinted with permission from the October 24, 2008 edition of The New York Law Journal  © 2008 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.

Endnotes


[1] The White House, Fact Sheet: U.S.-Colombia Free Trade Agreement Essential to Our National Security, http://www.whitehouse.gov/news/releases/2008/03/20080312-3.html. (March 12, 2008); see also U.S.-Colombia Trade Promotion Agreement (hereinafter TPA), full text available at http://www.ustr.gov/Trade_Agreements/Bilateral/Colombia_TPA/Final_Text/Section_Index.html.

[2] James Pehtokoukis, Susan Schwab on the Colombian Trade Deal, U.S. NEWS & WORLD REPORT (Sept. 23, 2008).

[3] Phillip Cryan, Labor and the Colombian Free Trade Agreement, FOREIGN POLICY IN FOCUS (Sept. 18, 2008).

[4] See, e.g., Human Rights Watch, US: Reject Colombia Free Trade Deal: Bogota Fails to Tackle Anti-Union Violence and Impunity, http://hrw.org/English/docs/2008/04/07/colomb18460_txt.htm (April 7, 2008).

[5] U.S. Commercial Service, Trade Never Smelled So Sweet: Colombian Flowers Make Bouquet Bucks, http://www.buyusa.org/Colombia/en/pastevents.html.

[6] Jennifer Hattam, "The Hidden Life of Cut Flowers," SIERRA (July 2001).

[7] American University Trade & Environment Database, Rose Trade and the Environment, http://www.american.edu/TED/rose.htm.

[8] Hattam, supra note 6.

[9] Paolo Pontoniere, "Deforestation: The Dark Side of Europe's Thirst for Green Fuel," NEW AMERICA MEDIA (Feb. 28, 2006).

[10] Amazon Watch et al., Letter to Congress, http://www.citizenstrade.org/pdf/envirocolombiaTPAsign-onhouse.pdf (May 15, 2008).

[11] Mongabay.com, Colombia: Environmental Profile, http://rainforests.mongabay.com/20colombia.htm.

[12] Id.

[13] Kevin Watkins, "Deadly Blooms," The Guardian (Aug. 29, 2001).

[14] See Florverde, at http://www.florverde.org/florverde-highlights.html.

[15] Grupo Semillas, La Corte Constitucional Declara Ley Inexequible la Ley Forestal, at http://www.semillas.org.co/sitio.shtml?apc=I1 — — &x=20155467; Sonia Parra, Colombia: Controversy Over Forestry Law Simmers On, http://ipsnews.net/news.asp?idnews=35002.

[16] Office of the U.S. Trade Representative, U.S.-Colombia Free Trade Agreement Benefits the Environment, http://www.ustr.gov/assets/Trade_Agreements/Bilateral/Colombia_TPA/asset_upload_file658_13718.pdf (March 2008).

[17] NAFTA Art. 1114.

[18] TPA Art. 18.4-18.5.

[19] TPA Art. 18.4, Par. 1.

[20] Inger Weibust, "Is NAFTA's Citizen Submission on Enforcement Matters (CSEM) a Forum for Transnational Activism and Politics?," paper presented at the annual meeting of the International Studies Association, http://www.cpsa-acsp.ca/papers-2008/Weibust.pdf (March 26, 2006).

[21] TPA, Annex 10-B, Par. 3(B).

[22] Stephen L. Kass and Jean M. McCarroll


Stephen L. Kass

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