The Trail Smelter Arbitration Case

The Trail Smelter Case arose in the field of late 1950's and came up with the issue of
International Environmental Law. In this case 'it was damage caused by one State to the
environment of the other that triggered the legal claim. Legally the issue was not viewed as
different from damage caused to the public or private property, for instance by the inadvertent
penetration of a foreign State's territory by armed forces. For the first time an International
Tribunal propounded the principle that as State may not use, or allow its national's to use, its own
territory in such a manner as to cause injury to a neighboring country'.

The higher stacks increased the area of damage in the United States. From 1925 to 1931, damage
had been caused in the State of Washington by the sulphur dioxide coming from the Trail
Smelter, and the International Joint Commission recommended payment of $350,000 in respect
of damage to 1 January, 1932. The United States informed Canada that the conditions were still
unsatisfactory and an Arbitral Tribunal was set up to "finally decide" whether further damage
had been caused in Washington and the indemnity due, whether the smelter should be required to
cease operation; the measures to be adopted to this end; and compensation due. The Tribunal was
directed to apply the law and practice of the United States as well as international law and
practice.' "The United States Government, on February 17, 1933, made represents to the
Canadian Government that the existing conditions were entirely unsatisfactory and that damage
was still occurring and diplomatic negotiations were entered into, which resulted in the signing
of the present convention."

"The Court held Canada responsible for the conduct of the Trail Smelter and enjoined it to pay
compensation to United States. The court also provided for future monitoring of the effects of the
factory's activities on the environment, to prevent possible future damages to the United States
environment."

“The subsequent diplomatic negotiations led to the United States and Canada signing and
ratifying a Convention in 1935. Through the Convention, the two countries agreed to refer the
matter to a three-member arbitration tribunal composed of an American, a Canadian, and an
independent chairman (a Belgian national was ultimately appointed).

-case determining that the damages caused by the Canadian smelter to properties in Washington
State from 1932 to 1937 amounted to $ 78,000

The Trail Smelter case came up with the issue of duty" of states to "prevent transboundary harm"
and invoking the "polluter pays“ principle. Firstly we move on to the “Transboundary Harm'
issue. “Transboundary Harm proceeds in three parts. Part One examines the historical
foundations of the case, its influence on international environmental law, and the smelter's
continuing yet largely unknown toxic legacy. Part Two examines the case's contemporary
significance for the law of transboundary environmental harm. Part Three looks beyond
environmental law to examine the significance of the Trail Smelter arbitration for legal responses
to other transboundary harms, from international terrorism to Internet torts." Illustratively:

Part One also examines the sjurisprudential legacy of the decision in an increasingly prevention-
focused, regulatory world. The usefulness of the Smelter case is limited by the fact that the
dispute turned more on the rights of states as "sovereign equals” and less on the undesirability of
transboundary pollution.

The enduring significance of the "due diligence" obligation was created by the Tribunal. The
obligation "not to cause serious environmental harm" - was originally intended to ensure the
continuing compliance of the Trail Smelter with pollution-prevention measures.

“Part Two examines the significance and potential relevance of the Trail Smelter principles to
important contemporary" issues in transboundary environmental harm. The issues surveyed
include genetically modified organisms, nuclear energy, global climate change, hazardous waste
transport, transboundary air pollution, and marine pollution, among others. The difficulty of
identifying any particular polluting entity as the single cause of global pollution problems, like
climate change cannot be identified.

One other key theme in Part Two is a recognition of the fact that although Canada voluntarily
assumed responsibility for the actions of a private company in the Trail Smelter arbitration, such
attributions of control are more problematic.'

Part Three innovatively examines the applicability of Trail Smelter to non-environmental forms
of "transboundary harm" as broadly defined, including terrorism, refugee flows, Internet torts,
drug trafficking, and human rights. Generally, such analyses find that Trail's lessons are not
easily transposed to other sorts of transboundary harm.

In other situations, the intense focus of Trail Smelter on theories of sovereign equality makes it
less well suited to address harms caused by private actors. Finally, the Trail Smelter remains
relevant insofar as it would counsel that states be held responsible for their own extraterritorial
actions which result in human rights violations abroad.

Only two General Principles have been evolved from the case of Smelter. “The first and more
general one is that enjoying every State not to allow its territory to be used in such a way as to
damage the environment of other States or of areas beyond the limits of national jurisdiction. -
every State is under the obligation not to allow knowingly its territory to be used for acts
contrary to the rights of the other States.

The second general principle attested to by the general and increasing concern of the States about
the environment and born out by the great number of treaties concluded that imposing upon
States the obligation to co-operate for the protection of the environment. It follows from this
principle that every State must co-operate for the protection of this precious asset, regardless of
whether or not its own environment has been or may be harmed. This principle can only be
applied jointly with the customary rule on good faith, which states every State must in good faith
endeavor to co-operate with other States with a view to protecting the environment.

The tribunal first concluded that there was no need to chose between the law of the United States
or international law to decide the case, as the law followed in the United States in dealing with
the quasi-sovereign rights of the States of the Union, in the matter of transboundary pollution, is
in conformity with the general rules of international law.

The tribunal further held that the “Dominion of Canada is responsible in international law for the
conduct of the Trail Smelter. Therefore, it is the duty of the Government of the Dominion of
Canada to see to it that this conduct should be in conformity with the obligation of the Dominion
under international law as herein determined"

The tribunal specifically noted that such damage would be actionable under United States law in
a suit between private individuals.

* Should U.S. domestic environmental laws be applied and enforced extraterritorially

* What international legal mechanisms exist to resolve transboundary water pollution

* What lessons may be drawn from the original Trail Smelter Arbitration decided over
sixty years ago?

This Article concludes that the use of international arbitration provides effective, and too often
overlooked, way to resolve transboundary water pollution issues.

Ultimately, the national adjudication of cross-border disputes does not provide a long-term
solution to transboundary pollution.

International arbitration, modeled after the famous Trail Smelter Arbitration, provides both a
more diplomatically and conceptually satisfying means of solving transboundary water pollution
disputes than national adjudication.

On both air and water pollution, the tribunal found certain United States Supreme Court
decisions which may be legitimately taken as a guide in this field of international law, for it is
reasonable to follow by analogy, in international cases, precedent established by that court in
dealing with controversies between the States of the Union or with other controversies
concerning the quasi-sovereign rights of that states, where no contrary rule prevails in
international law and no reason for rejecting such precedents can be adduced from the limitations
of sovereignty inherent in the Constitution of the United States.
no State has the right to use or permit the use of its territory in such a manner as to cause injury
by fumes in or to the territory of another or the properties or persons therein, when the case is of
serious consequences and the injury is established by clear and convincing evidence.

it is therefore the duty of the Government of the Dominion of Canada to see to it that this
conduct should be in conformity with the obligation of the Dominion under international law as
herein determined.

“The Trail Smelter arbitration also remains a historical anomaly; as such a dispute would likely
be addressed through domestic litigation.