An Interview with Dr. Artemis Malliaropoulou
As part of the UR Intersectionality Campaign, we embarked on an in-depth exploration of Arbitration as a potential legal instrument in resolving disputes related to climate change. Our objective was to not only comprehend the inherent potential of this legal mechanism but also to assess its capacity to effectively address the complex, interconnected challenges that emerge in the realm of climate change. Our aim is to understand the possible intricate interplay between Arbitration and Intersectionality – particularly as a potential tool to foster indigenous rights.
In this context, we had the great pleasure of interviewing Dr. Artemis Malliaropoulou who showed us the importance of Arbitration in fostering Climate Justice.
Dr. Artemis Malliaropoulou’s primary area of focus is International Arbitration. She is a lecturer in the International and European Law program at The Hague University of Applied Sciences. In her education, she obtained an LL.B. followed by an LL.M. in EU Law and a PhD focusing on EU Law and Procedural Law. She has been admitted to the Athens Bar Association and has had the role of Solicitor of England and Wales. She has worked all across the globe in the UN Office of Legal Affairs in New York, the Council of the EU Legal Services in Brussels, the International Criminal Court in the Hague and many others.
When did arbitration start to be used as a mechanism to promote cooperation and address climate change disputes?
The moment in which arbitration started being used as a mechanism to address climate change disputes can be traced back many decades. Dr. Malliaropoulou highlights that climate change-related disputes are relatively new if we approach them from the perspective of when the definition of climate change was coined – that being in 1979 with the first publication of the US National Academy of Science. However, arbitration as a method of dispute resolution has been used since ancient Mesopotamia. In order to further clarify this point, Dr. Malliaropoulou refers to the Trail Smelter case from 1938.
“We did not know back in 1938 what climate change was but we still had environmental law issues that were at stake. In 1935 a Canadian-based corporation emitted hazardous fumes that caused damage to plant life, forestry, soil and crop yields, across the border in Washington DC. The International Joint Commission rendered a report that recommended Canada to pay the US damages that corresponded only to a quarter of what the local farmers requested. It is quite important to note that the International Joint Commission made no comment on whether the Canadian-based corporation should continue to operate or what measures they must undertake to cut pollution. The United States rejected this recommendation and therefore the International Joint Commission established an Arbitribunal to which it referred the dispute. In its first decision in 1938, the tribunal concluded that harm had occurred between 1932 and 1937 and ordered the payment of any damages of 78,000 USD as the complete and final indemnity and compensation for the damage occurred. Moreover, in 1941the tribunal concluded that no state has the right to use or permit the use of its territory in such a manner as to cause injury by whom in or to the territory of another or the properties of other persons in this territory when the case is of serious consequence and the harm is established by clear and convincing evidence. In this case, it is shown that arbitration has been used in climate change disputes long before climate change was defined as we know it today”.
What role can arbitration play in promoting international cooperation and collaboration in addressing climate change disputes?
As Dr. Malliaropoulou outlines, arbitration can be a game changer if the parties involved are aware of the benefits of arbitration and what it can offer, depending on the type of dispute.
“Article 14 of the UNFCCC sets out the rules that govern disputes between two or more parties on the interpretation or application of the convention including a step towards a digital solution framework. More specifically in the event of disputes, the issue is solved in the first settlement through negotiation or other peaceful means of choice where the parties may opt in and declare that they recognize that the dispute may be submitted either to the International Court of Justice or to arbitration in accordance with procedures to be adopted by the Conference of the Parties. Afferent arbitrary institutions like the International Chamber of Commerce, the Singapore International Arbitration Center, the London Code of International Arbitration and the Stockholm Chamber of Commerce all have a very significant number of environmental disputes under their belt. Since the Paris Agreement, both the business and industry sectors have responded to the significant investment opportunities generated by climate change-related and other green product programs. There are also a number of funding opportunities not only by the state but also by international development banks, international institutions, national bodies and of course private foundations. It is obvious that there are a number of disputes that may arise in the context of these new investments and based on past experiences, arbitration has a track record of solving these types of disputes”.
Can arbitration be more useful than court proceedings in resolving climate-related disputes? What advantages and disadvantages does it offer?
Dr Malliaropoulou argues that the advantages of using arbitration in climate-related disputes are the same as the advantages that arbitration offers in every sector.
“I will use here the five ‘E’s’ famously promulgated by Professor Gary Born. Arbitration is more efficient, more expeditious, more expert, more even-handed and more enforceable. All these elements are of pivotal importance when it comes to climate change disputes”.
Let’s start with the first element, efficiency.
“When it comes to efficiency in arbitration we have a high degree of flexibility in how we want to have the proceedings and the specific needs of a special dispute. “We can give a voice to those who don’t have a voice based on domestic litigation. The arbitral institutions themselves can also contribute to efficiency in several ways such as issuing guidelines to assist the parties and monitor the case itself to make sure that the arbitrators are doing their job properly”.
With regards to the second element, expeditiousness.
“We have a number of mechanisms that render arbitration more expeditious. One of them is a procedure in which there is only one round of submissions. There can be only one hearing or no hearing at all. It can be a document only which has to be delivered in a specific period of time, usually six months, depending on the institutional rules, from the time when the file was sent to the arbitrator. If we compare that with domestic litigation, at least in a considerable number of jurisdictions, we see that it is simply not possible because of the caseload that the courts have to render a decision in six months”.
The third element is expertise.
“Another huge advantage of arbitration over litigation is the expertise of arbitrators. In litigation, you can end up with a judge with different areas of expertise. In England for example, if you have a specific dispute that is related to construction it will go to judges specialized in this but it is not the case everywhere. When it comes to climate change we still don’t have something equivalent. Moreover, in arbitration, it is up to the parties to appoint the arbitrators based on their expertise. If we talk about climate change disputes then the arbitrator needs to be an expert in the field”.
The fourth element is even-handedness.
“Even-handedness is the opposite of partiality bias, distrust and dishonesty. Arbitration is a process where parties can choose people that they trust and who deliver an independent and impartial final ruling. I know that this is the rule. There are a few jurisdictions in which the corruption index is updated annually but it does not mention that corruption in the judicial system in certain jurisdictions is possible. There are also soft flow instruments in arbitration that include specific guidelines. For example, we have the International Bar Association Guidelines that provide guidance to parties, arbitral institutions and tribunals”.
Lastly, enforceability.
“Enforceability is considered the most important aspect of international arbitration because the outcome of the dispute can be enforced on a global scale. An award can be enforced in any of the signatory states of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards. However the same cannot be said for litigation. For example, if you cannot enforce a Swiss Court decision in Greece”.
On the other hand, Dr. Malliaropoulou outlines that as Professor Gary Born stated in the first chapter of his famous Collection on International Arbitration, “Arbitration is a lot like democracy”.
“It is nowhere close to ideal but it is generally and correctly considered better than the alternatives”.
In order to illustrate how litigation may create a non-desirable burden of procedural complexities and doubts, Dr Malliaropoulou highlights the recent case of Duarte Agostinho before the European Court of Human Rights (2023)
“Six young applicants, all residing in Portugal, filed an action against Portugal and 32 other states for their joint failure to cut greenhouse gas emissions in line with the 2015 Paris Agreement. They argued that climate change effects such as wildfires impacted their physical and mental health. The Court examined two things. Firstly the issue of extraterritorial jurisdiction. The applicants were nationals of Portugal, not of the other 32 states which means that they exercised extra-territorial jurisdiction. In this aspect, the Inter-American Court of Human Rights developed high standards in its advisory position 23/17 requiring a causal link between the human rights violation committed abroad and the acts in the territory of the state of origin. The second element the Court examine is the exhaustion of all domestic remedies. The six applicants did not exhaust all the domestic legal remedies in any of the 33 states in question for financial reasons. It is important to mention that this obstacle does not really exist in arbitration which shows how disadvantageous litigation is compared to arbitration”.
What are some cases in which alternative dispute resolution was used to resolve climate-related disputes?
Dr Malliaropoulou illustrates two different fields of Arbitration and provides concrete examples respectfully.
“Firstly, Commercial Arbitration, in which confidentiality is one of the main factors, means that we are only privy to the general cases. Here I suggest cases arising from the Carbon Market. They exist to give incentives for remission reduction at the least cost, by purchasing a carbon credit, a government or company can offset a portion of its emissions. In this regard, there is a Kyoto Protocol setting out flexibility mechanisms for the development of carbon markets.
- Joint implementation
- Clean development mechanism
- Emissions trading
Today the Carbon Market has largely outgrown the Kyoto Protocol. Therefore, a lot of cases are referred to Arbitration Courts. (e.g., The World Banks Forest Carbon Partnership facilities which use the Secretary General of the Permanent Court of Arbitration as the arbitral seat).
Regarding cases which successfully resolved climate-related issues; a Danish firm successfully claimed damages from its Russian counterpart regarding a joint implementation project. The Danish company had reduced emissions from the Russian state-owned gas pipelines, but the Russian entity had failed to get the relevant points registered in Russia, hereby blocking the issuance of the joint implementation project. Thus, we know that arbitration is successful when dealing with contract-related climate issues.”
Dr Malliaropoulou then moves on to the area of Investment Arbitration.
“These cases are available to the public, due to taxpayers’ money interest. Thus, transparency is vital. Here a relevant case concerns The Netherlands which passed a law prohibiting the use of coal for electricity production in 2019 (based on the Paris Agreement). This prohibited five coal plants from producing electricity through the use of coal. In theory, the oldest plant out of the five plants involved in this case is owned by Vattenfall, the other four are owned by RWE. Two plants were commissioned in 2015 and 2016 after having received the necessary governmental permits. In terms of compensation, in 2019, the Netherlands agreed to pay Vattenfall 52.5 million euros to close their plant by 2020. Regarding the other four plants, the negotiations are ongoing, but RWE commenced ICSID Arbitration in February 2021. The Netherlands responded by issuing anti-arbitration injections before the German courts to block the exit arbitration.
The claim made by RWE: the law would cause unequal damages in view of the economic life span exceeding 2040. The latest plant commissioned cost RWE more than 3 billion euros.
Claim by the Netherlands: it has an obligation to uphold the Paris Agreement and Climate change goals.
Conclusion: This is still ongoing and is an exercise of balance between climate goals and investment goals.”
Focusing now on intersectionality in environmental challenges: Are there mechanisms in place to ensure meaningful participation and representation of Indigenous communities in arbitration procedures when the damage caused by one party directly impacts them due to climate change?
Intersectionality in environmental challenges recognizes that various social identities, such as race, ethnicity, gender, and socioeconomic status, intersect with environmental issues. Indigenous communities often face unique environmental challenges due to historical injustices, such as land dispossession and resource extraction. Arbitration in this context refers to the need for fair dispute resolution mechanisms, as conflicts between Indigenous communities and governments or corporations often arise over environmental issues. These disputes highlight the importance of recognizing the diverse and interconnected nature of environmental problems, considering the specific vulnerabilities of marginalised groups, and involving them in decision-making processes to address these challenges equitably.
Dr Malliaropoulou starts by outlining the two key elements of any Arbitration procedure: consent and flexibility.
“Focusing on the Indigenous people, securing consent is vital. This can be general, such as through a treaty like the UN Declaration on the Rights of Indigenous People (2005), or case-specific. After having established the substantial law, the procedural rules will have to be evaluated. For instance, the 2011 Guiding Principles on Business and Human Rights endorsed by the UN Human Rights Council articulate the international responsibility of Businesses to respect Human Rights. In turn, there is the Business and Human Rights Arbitration Working Group which published in 2019 at the ICJ, the Hague Rules on Peace and Human Rights Arbitration.”
Dr Malliaropoulou outlines that there are indeed tools to address human rights violations by businesses and proceeds to present a specific example through Inter-state arbitration as a model for the peaceful resolution of disputes involving non-state actors.
“The Government of Sudan vs The Sudan People’s Liberation Movement/Army (Abyei Arbitration) before the PCA (2008). This case is unique because it dealt with an inter-state dispute during a conflict in which Indigenous rights were at stake, second it was a fast-track procedure, and third, it was completely transparent.
Benefits: the tribunal went substantially further in relation to the protection of Indigenous rights, as they set out the general principles of law and practice that provided an underlying basis for continuing protection of the Rights of Indigenous People. They derived applicable general principles of law and practice protecting the Rights from case law from International Courts and tribunals as well as International Treaties. Further, guarantees of traditional rights for Indigenous populations are found in Convention 169 of the International Labour Organization concerning Indigenous and Tribal Peoples in Independent Countries. This set out that countries have a positive obligation to safeguard Indigenous Peoples’s land rights and traditional land usage.
Overall: the Tribunal stated that the traditional rights, in the absence of an explicit agreement to the contrary, have been deemed to remain unaffected by any territorial delimination. Thus, the Indigenous People in the area shall retain their established land rights. The Tribunal precedent recognized Indigenous Rights as a matter of general principle but also it enforces these rights in a pragmatic and effective manner.
Do you think Arbitration is the most suitable mechanism to resolve Investor-State disputes, whilst taking the rights of Indigenous communities into consideration?
Dr. Malliaropoulou’s short answer to this question is that yes, it is possible, however, it is up to the user to make it happen.
“As states prepare their nationally determined contributions towards the Paris Agreement they are likely to encounter claims by foreign investors affected by regulatory measures intended to mitigate greenhouse gas emissions. In terms of bilateral investment treaties, they contain a general exception but there is no direct mechanism for the deployment of defences against liability in general.”
Dr Malliaropoulou proceeds to explain the four ways in which Indigenous people can partake in Arbitration disputes.
“1. They might be the investor claimants against the state and invoke the specific protections owned to Indigenous people in support of their claim.
2. A foreign investor might complain about measures taken by a host state which were put in place for purposes of regulating or protecting the rights of Indigenous people.
3. A foreign investor might complain to the host state about actions taken by Indigenous people adversely affecting the investment.
4. A group of Indigenous people who have an interest in the case might intervene in the proceedings to make submissions about the potential relevance of the rights of Indigenous peoples”.
How can States be held accountable for any potential violations of the indigenous peoples’ right to be included and consulted in projects affecting their customary land, as arbitration is a private mechanism and indigenous people often lack the financial resources to participate in such a costly dispute resolution?
Dr Malliaropoulo starts by asking a question in return, namely whether the stereotypical thought that Ligitation is cheaper than Arbitration still stands true. The answer is that it depends, however, she presents us with two valuable alternatives.
“Firstly, Arbitration offers third-party funding options. Secondly, the pro-bono work of law firms should not be underestimated. For instance, in the case I mentioned earlier involving the Sudanese People’s Liberation Army and The Government of Sudan, the former was represented by a law firm which took the case pro-bono, their work actually being labelled Herculean”
To conclude, do you think arbitration is a suitable long-term solution regarding the topic of climate change as it is a pressing issue which affects all of us – yet with a higher burden on some vulnerable groups?
“I need to be realistic, Arbitration is not a solution to all problems arising out of climate change disputes. But it is a powerful tool.”
Key elements …
The interview with Dr Artemis Malliaropoulou shed light on the significance of Arbitration as a valuable tool for addressing climate change disputes and promoting climate justice. The historical roots of Arbitration in environmental issues, such as the Trail Smelter case, demonstrate its long-standing role in resolving environmental conflicts before climate change was formally defined. Dr Malliaropoulou highlighted the efficiency, expeditiousness, expertise, even-handedness, and enforceability of Arbitration as advantages over court proceedings in handling climate-related disputes.
Furthermore, Dr. Malliaropoulou discussed the critical role of consent and flexibility in Arbitration, emphasizing the need for Indigenous communities to give their consent and participate meaningfully in dispute resolution processes. She highlighted various mechanisms, such as international agreements, guidelines, and transparency, that can ensure the protection of Indigenous Rights in Arbitration proceedings.
The discussion underlined the intersectionality of environmental challenges, recognizing that marginalized communities are among the most vulnerable to the impacts of climate change. Dr Malliaropoulou suggested that, with the right measures in place, Arbitration can be a suitable mechanism for resolving disputes while taking Indigenous Rights into consideration. She also addressed the issue of resource constraints among Indigenous communities and suggested solutions such as third-party funding and pro bono legal assistance.