9 - Derivative versus Direct Liability as a Basis for State Liability for Transboundary Harms  pp. 99-108

Derivative versus Direct Liability as a Basis for State Liability for Transboundary Harms

By Mark Anderson

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The Trail Smelter arbitration has become synonymous with the “polluter pays” principle – the basic vision of environmental liability that infuses both domestic and international law. Under the “polluter pays” principle, the polluter bears the expense of carrying out pollution prevention, control, and remediation measures. It is somewhat ironic that despite frequent characterizations of Trail Smelter as embodying, or even establishing, this principle, Consolidated Mining, the owner and operator of the polluting smelter, was not a party to the arbitration. The arbitration was instead between Canada and the United States, and the Tribunal's award directed Canada, not the smelter, to pay damages for environmental harms suffered in the United States. Given this somewhat paradoxical relationship between the perception of Trail Smelter as creating a “polluter pays” principle and the fact that the polluter was not a party to the arbitration, it is worth exploring the alternative theories of liability that could provide a basis for the Trail Smelter principle.

I am reminded of a story a friend once told me. While on a research expedition in a remote part of the world, one expedition member's camera was stolen. The expedition members contacted the local police. Several police officers went to the nearby village and summoned the villagers. The officers identified the village leader and told the villagers that the leader would be beaten until the camera was returned. The officers proceeded to beat the village leader until eventually the thief returned the camera.