What’s the price of nature? A first attempt by the ICJ
This article is part CliMates’ Judicial Review.
On 2 February 2018, the International Court of Justice (the “Court”) rendered a landmark decision on compensation for environmental damage, in Certain Activities Carried Out By Nicaragua in the Border Area (Costa Rica v. Nicaragua), Compensation Owed by the Republic of Nicaragua to the Republic of Costa Rica (“Costa Rica v. Nicaragua”).
The Costa Rica v. Nicaragua case is not the first international law decision addressing environmental or climate-related issues. In the Trail Smelter Case, a special arbitral tribunal established the “no-harm principle” for transboundary pollution. Several ICJ cases further asserted fundamental principles related to the protection of the environment, such as the prevention principle, environmental impact assessment and the protection of the wildlife (Pulp Mills, Whaling in the Antarctic, Gabcikovo-Nagymaros, Nuclear test). The Court has since established that the duty of States “to ensure that activities within their jurisdiction and control respect the environment of other states or of areas beyond national control” was part of international law.
Climate change issues have also raised human rights concerns. For instance, in 2005, petitioners from the Inuit Circumpolar Conference filed a petition to the Inter-American Commission on Human Rights seeking relief from human rights violations resulting from the impacts of climate change caused by acts and omissions of the United States. Although the Commission did not ultimately accept the petition, this case exemplifies a growing concern for States’ responsibility to consider human rights in their environmental actions.
Building on this jurisprudence, the Costa Rica v. Nicaragua case is the first foray of the ICJ into assessing costs for environmental damage. Such a decision may lead to new principles of international law. It also reaffirms the growing importance of international norms to protect the environment and fight climate change.
The case at hand is related to recurring border disputes between Costa Rica and Nicaragua in recent years. These disputes arose from an 1858 treaty, according to which the San Juan River belongs to Nicaragua, while Costa Rica has commercial access to the river. The drafting of the treaty has led to many different interpretations.
Between 2010 and 2013, Nicaragua proceeded to dredge the San Juan River to improve its navigability, and excavated three channels on the disputed territory. It severely impaired local ecosystems in the process, despite the area being protected under the Ramsar Convention of 1971 which requires the conservation and preservation of wetlands.
In December 2015, the ICJ decided that Costa Rica had sovereignty over a small area of wetlands near the San Juan River, called Isla Portillos/Harbor Head. The judgment gave one year to the parties to reach an agreement to compensate Costa Rica for the damage caused to the wetlands. Negotiations were unsuccessful and the issue of compensation went back to the ICJ.
In 2016, Costa Rica filed a new complaint alleging that Nicaragua had set up a new military camp in the area.
While the obligation to make reparations for wrongful acts is clearly established in international law, a claim for compensation for environmental damage had never been adjudicated by the ICJ.
In its first ruling ever on the assessment of costs for environmental damage, the Court declared that:
“It is consistent with the principles of international law governing the consequences of internationally wrongful acts, including the principle of full reparation, to hold that compensation is due for damage caused to the environment, in and of itself, in addition to expenses incurred by an injured State as a consequence of such damage. (…) damage to the environment, and the consequent impairment or loss of the ability of the environment to provide goods and services, is compensable under international law.”
The Court affirmed that such compensation concerned both the impairment of the environment as well as the costs incurred to restore the environment to its previous state.
Several international treaties such as the Ramsar Convention impose on States the obligation to preserve the environment. The ruling of the ICJ only builds on existing international principles. Therefore, while the formal recognition of the need for compensation for environmental damage by the ICJ is indeed a landmark, the judgment mostly addresses the methodology that should be used to evaluate the cost of environmental damage.
Both countries agreed that some environmental damage occurred. However, they fundamentally disagreed on the calculation of that damage. Costa Rica suggested an “ecosystem services approach” which put a high price on natural resources and recognised the full and long-lasting effects of the harm to the environment. This approach took into account the irremediable loss of certain ecosystems and a long period of full recovery (around 50 years) for the remaining ecosystems. Nicaragua preferred a “replacement costs approach” which was based on a drastically lower price of the preservation of the environment, did not take into account the ecosystem as a whole and considered the recovery period to be radically shorter.
In the end, the ICJ did not choose either of the methods suggested and proceeded with its own case-based evaluation of the damage. The ICJ decided not to attribute specific values to each environmental good and service before assessing the recovery period for each of them. Rather, it chose to proceed with an “overall assessment of the impairment or loss of environmental goods and services prior to recovery,” without using precise scientific values.
The Court then came to the difficult task of evaluating the amount of reparations for the environmental damage. It finally adjudicated USD 378,890.59 to Costa Rica, to be paid by Nicaragua by 2 April 2018. Costa Rica had initially requested USD 6.7 billion.
The issue of cost assessment appears to be extremely difficult when it entails complex phenomena such as impacts on biodiversity and the long term effects of climate change. Because of this, it is regrettable that the ICJ did not put forward a specific method of cost assessment.
The ICJ decision was followed by an Advisory Opinion from the Inter-American Court of Human Rights on 9 February 2018, in which the Court addressed the link between environmental protection and human rights for the first time. This Advisory Opinion was a response to Colombia’s consultation on the scope of States’ obligations to protect human rights from damage to the marine environment in the Caribbean. The Court stated that a healthy environment should be an “autonomous right”. It also recognised the impact of climate change on the enjoyment of human rights. It established new duties for the States in respect of the protection of marine areas in the Great Caribbean region, such as the obligation to realise effective environmental impact studies, to regulate activities that would cause harm to the environment, to cooperate with other States and to apply the precautionary principles when scientific uncertainty exists. These new duties could entail a much detailed approach to States’ responsibility for environmental damage than the one chosen by the ICJ in Costa Rica v. Nicaragua.
The ICJ decision and the Advisory Opinion from the Inter-American Court of Human Rights may have broader implications for international law. First, they could open the door for more international claims for transboundary environmental damage. We may see a significant growth of climate change and environmental litigation in the years to come. Second, the ICJ decision underlines the need to articulate better scientific evidence, assessment of costs and legal responsibility.
About the authors: Charlotte Blondel holds a master degree in International Law within the Global Alliance Program between Columbia University, Sciences Po Paris and Paris I Panthéon-Sorbonne. She holds a dual bachelor in Political Sciences and History from Sciences Po Paris and Paris IV Paris-Sorbonne. Her studies brought her to Berkeley, California, for an exchange year, as well as New York during her master program. She has been working with refugees and asylum seekers within the association France Terre d’Asile. She has also been an active member of CliMates since 2015. In January 2016, she launched the Youth on the Move initiative along with Marine Denis. She speaks French, English and Spanish and is currently learning Arabic! Alexandra Lutz completed her master degree in International Law within the Global Alliance Program between Columbia University, Sciences Po Paris and Paris I Panthéon-Sorbonne. She interned at the Columbia Center on Sustainable Investment and was a research assistant in Human rights at Columbia Law School. Her studies brought her to Tübingen, Germany, for an exchange year, as well as New York during her master program. She has a special interest for digital rights, gender and speaks French, German, English and Spanish. She is currently President of CliMates for 2018. She also loves to dance and to sing, and is – surprisingly – a musicals’ fan.