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C. Dispute Resolution of Non-Enforcement and Enforcement Matters
The Agreement divides disputes into enforcement and non-enforcement
matters. The procedures and duties of the Council and the Secretariat differ
depending on which category governs a particular dispute.
1. Enforcement Matters
The Agreement characterizes a dispute as an enforcement matter when a
government is accused of failing to effectively enforce environmental laws.24
The Agreement further divides enforcement matters according to the nature and
timing of the government's alleged nonperformance. If a complaint simply alleges
that a government has failed to adequately enforce environmental laws,
Articles XIV and XV supply the procedures for resolving the dispute.25 However,
if a complaint also alleges that the government has established a pattern of
continuous, negligent execution of environmental laws for an extensive period
of time, then Articles XXII through XXXVI regulate the dispute.26
a. Article XIV
Under Article XIV, non-governmental organizations and individuals residing
in the appropriate territory may initiate dispute resolution by petitioning the
Secretariat.27 This petition, commonly called a "submission," must not exceed fifteen pages and must clearly identify the Submitters.28 The Secretariat evaluates
the submission to determine if it needs to prepare a response or to compile
a factual record." The Council reviews the Secretariat's evaluation and may instruct
the Secretariat to create a factual record and/or publicly disclose the final
record, if the decision is supported by a two-thirds vote. The record, which
includes public comments, may influence the government's perception of the
controversy However, Article XIV does not provide any binding method for
settling disputes or enforcing environmental obligations.
b. Article XXII
Article XXII of the Environmental Side Agreement governs disputes in which
a party alleges that a government subject to NAFTA continuously and persistently
fails to enforce environmental laws.3" The Article XXII process begins
when any party requests consultation.3" If the parties do not settle the dispute,
or settle it inappropriately, any participant may then request the Council to intervene.
The Agreement requires the Council to hold a special session within
twenty days of the request, unless other arrangements are made.32 The process
incorporates the expertise of CEC members, but Article XXII also allows the
Council to consult non-governmental experts.
If the special session does not resolve the dispute after sixty days, Article
XXII allows NAFTA parties to utilize a Council-supervised arbitration panel.3
Any party to the allegation may request the services of an arbitration panel, but
the Council must agree to use the panel by a two-thirds vote. 4 The panel is
composed of five arbitrators selected from a roster of governmental and nongovernmental
experts. The panel's duty is to review the complaint to determine
if there is a consistent pattern of non-enforcement. Article XXII mandates that
submissions must be in writing to provide parties with notice. It also guarantees
a hearing so that all parties have the opportunity to participate in the process.
The panel must report its conclusions within 180 days of convening. The
panel's report must include specific findings and recommendations. The parties may submit written comments during a sixty-day period before the panel publishes
its final report. If the final report validates the allegations, then the parties
should implement the resolutions offered in the final report. The parties may
resolve the dispute in three different ways.3" First, the parties may agree to implement
the panel's specific plan. Second, the parties may agree to implement certain
aspects of the plan. Third, the parties may fail to agree on any plan. If the
parties implement the plan partially or not at all, then Article XXII requires
further enforcement procedures. 36
If the parties do not fully resolve the dispute, the panel may reconvene
upon request. If the parties agree on only certain aspects of the plan, and fail to
adequately implement that plan, the panel must reconvene within sixty days of
a formal request.37 If the panel agrees that implementation is deficient, it can
impose a monetary enforcement assessment against the deficient party.3 If that
party neglects to pay the assessment, the council can suspend any NAFTA benefits
held by the offending party up to the assessment amount.39 If the parties do
not adopt any plan at all, then the panel, upon request, will reconvene within
ninety days and impose a monetary enforcement assessment at that time.4" If
the parties continue to neglect their duty to fulfill the assessment, the Council
may suspend their NAFTA benefits. The Council may impose trade sanctions as
a last resort.41
2. Non-Enforcement Matters
The Agreement characterizes complaints that do not implicate enforcement
of environmental laws as non-enforcement matters. Article XIII of the Agreement
governs non-enforcement matters. This section allows the Secretariat to
investigate the charges and prepare a report, which the Council supervises.42
The Council may instruct the Secretariat not to investigate particular charges.
When the Secretariat does investigate, the Council may choose to publicly disclose the final report. Generally, the dispute resolution process for non-enforcement
matters is less detailed than the process required for enforcement matters
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