Alternative Dispute Resolution: An Effective Mechanism for Settlement of Climate Change Disputes-I

Shivangi Tiwari[1] and Nishtha Pandey[2]

Oui, ce qui est en cause avec cette conférence sur le climat, c’est la paix [3]

Abstract

Climate change and its effects know no boundaries. Across the globe, rapid changes in weather and climate patterns are taking place. Due to disarrangements of this sort, the competition for scarce resources substantially increases, security risks for many countries escalate to a great extent as the pace at which these changes are taking place surpasses our ability to adapt.[4] To solve the disputes revolving around climate change, alternative dispute resolution methods, specifically arbitration and mediation, are of great significance. This paper seeks to emphasize that arbitration and mediation have an edge over the conventional legal processes in the arena of climate change dispute resolution. The paper initially navigates through the general introduction of arbitration and mediation followed by that of climate change disputes. Later the various types of climate change, their cause, and the rate of their increase are discussed concisely. Further, the paper exhaustively discusses why ADR should be preferred over standard legal methods of dispute resolution. The advantages of the ADR processes are enlisted and their feasibility is catalogued. In the end, the paper demonstrates that ADR has an upper hand over conventional legal methods of dispute resolution. After analysation, it was majorly found that, even though the instances of adopting ADR for dispute resolution of climate change have increased, it is far less than enough despite innumerable advantages over standard legal practices.

Introduction

Alternative dispute resolution (ADR) is the method of resolving disputes without going for formal litigation. The term encompasses within its purview any means of dispute resolution which takes place outside the court. This method originated in the United States in the 1970s in the wake of growing dissatisfaction amongst the masses towards litigation. ADR involves the disputants and a non-partisan third party who helps the parties to come to an amicable solution by initiating communication, discussion of the differences and thereby finding out the means to resolve the dispute.

In the modern days, the rapid increase in disputes relating to climate change has time and again proved that the most suitable method for the resolution of these disputes is through mediation or arbitration. Many reasons are backing the same as discussed below.

Firstly, the urgency to resolve the disputes in a timely manner necessitates the use of arbitration and mediation. Mediations and arbitrations, if desired can be concluded in a very short time. The processes can typically get over many months sooner than a dispute can be resolved in the courts. Perhaps the most important factor backing a quick resolution of emergency claims is that often quick payment of certain claims namely claims for personal injury, physical damage to homes and businesses, and lost business income may turn down the loss of claimants by ameliorating any further losses.[5]

Secondly and most importantly, a properly delineated dispute resolution approach to emergency claims ultimately results in enhancement party satisfaction both procedurally and substantively, because of its nature to benefit both the claimant as well as the payer.

Thirdly, the considerations relating to continuity of business may also drive the businesses involved in weather and climate disputes to strive to resolve those disputes more rapidly than any other comparable legal problems.

Fourthly, the uncertainty about the outcome of a dispute via litigation is another factor typically promoting the settlement in almost any kind of legal dispute.

Lastly, the processes involved in ADR allow the parties to select dispute resolution neutrals, which are construed as the engagement of dispute resolution professionals who are equipped with relevant expertise far more in extent than in a typical court system. Climate change disputes involve complex environmental, scientific, commercial, and insurance issues apart from legal issues. Thus, the requirement of a “subject-matter expert,” or at least a neutral who is aware of or is capable of learning relevant technical information in a lesser time is of great importance.

Modes of alternative dispute resolution

There are different modes of alternative dispute resolution like negotiation, conciliation, mediation, and arbitration. The two most common amongst them are arbitration and mediation, which are discussed below.

Arbitration

The process of arbitration resembles a simplified version of the trial which requires limited discovery and simplified rules of evidence. The process cannot be set in motion without the existence of a valid arbitration agreement or any other mode of agreement embedded with an arbitration clause before the emergence of the dispute. The disputant parties refer their dispute to one or more persons known as the “arbitrator”. The parties must abide by the decision of the arbitrator. The decision is called the “Arbitral Award”. The fair settlement of the dispute is the main objective of Arbitration. The arbitrators do not need to be lawyers, the disputants are free to select arbitrators from any other field which in their opinion is more suitable for the resolution of the dispute. For example, parties that are indulged in a construction dispute can choose an arbitrator with an engineering background if they wish. To compose a panel, the parties can zero in on a single arbitrator. If no consensus as to the choice of arbitrator is reached, each side selects one arbitrator and the two arbitrators selected thereby elects the third arbitrator. Usually, the arbitration hearings last between a few days to a week, and the panel meets only for a few hours each day.

Mediation

Mediation is another alternative to litigation and is the most widely used method of Alternative Dispute Resolution. In this process, a third neutral party works intending to assist two or more disputants in reaching an agreement. It is an uncomplicated party-centered negotiation process where a third party acts as a mediator for the amicable settlement of the disputes by making the use of appropriate communication and negotiation skills. The parties are the ones to control the process. The mediator does not impose his views and does not decide what a fair settlement should be.

The process of mediation is non-binding in nature. It is used for negotiating a wide range of case types. The process is private and strictly confidential, which is one of the biggest advantages of mediation. It is of the utmost importance that the mediator is impartial and utilizes his techniques to draw out dialogue between the parties most openly and constructively possible.

Rise in climate change dispute

Climate change has taken effect in the world over the last century, as its effects are no respecters of national borders. Alterations to weather patterns throughout the globe are unprecedented. These sorts of disruptions pose serious threats to many countries as competition for scarce resources grows and the pace of change exceeds our ability to adapt.

These changes are, however, accelerated by some of the disastrous events that have intimidated the existence of mankind, like for instance, early-season drought-driven wildfires in Colorado, Summer Hurricane Debby in Florida and Georgia. In many recent cases, concerns about the weather and climate change have been an important issue. Hurricane Katrina, in 2005, gave rise to an important decision by the Fifth Circuit Court limiting immunity for the Army Corps of Engineers[6]. These events point towards the fact that weather and climate-related events are thick and fast and ensue litigation, in this already spanning arena of climate change-related disputes.

Link between climate change and dispute

The direct link between climate change and disputes lacks scientific evidence and is frequently inconclusive. However, climate change could be at best regarded as a dispute multiplier, as it extends the dispute or the effect thereof. Some of the prime examples for the same could be:-[7]

  • Land and water - Climate change can intensify the land and water dispute as the land may become less fertile or flooded.

  • Food security - Reduced rainfall and rising sea levels may lead to a decline in agricultural production and loss of arable land. This may result in civil unrest as the competition for consumption may take the centre stage.

  • Migration and displacement - Climate change leads to scarcity and struggle for water and arable land which may, in turn, result in migration and give rise to a wide spectrum of problems. One of the gravest would be the animosity between the host and the migrant as access to new resources takes place.

  • Increasing inequality and injustice - Climate change broadens the gap between the haves and have nots, and this is the major cause of disputes. The reason for the same could be attributed to the fact that during these changes there is a part of the population which is the hardest hit. This instills and intensifies the grievances and conflict between the resource users and outside actors such as governments.

Classification of climate change disputes

Climate change disputes usually arise from the problems that would occur because of climate change or the policies adopted by international organisations. Changing climate would demand many transitions that would have to be made in terms of land, urban dwellings, infrastructure, industrial setup and their functioning etc, and for these transitions, one has to enter into new contracts and have to resort to other legal mechanisms that are potential legal conflicts.

Climate change could be broadly classified into three groups:[8]

(i) Contracts relating to the implementation of energy or other systems transition or adaptation in accordance with the Paris Agreement commitments.

These types of contracts may be entered by industry body, state or its entity, investor etc to synchronise with the Paris Agreement or other international documents which obligates one to cater to climate change. These are the transitions that usually take place in the infrastructure, land, energy etc and would require the parties to effectively allocate risks and enforce appropriate dispute resolution mechanisms.

(ii) Contracts without any specific climate related purpose but where a dispute in question, could give rise to a climate or related environmental issue.

Some contracts do not explicitly involve any terms regarding the climate or climate change, neither do they handle the subject matter that includes climate change or any related terms, however, these contracts do get affected due to the party's response to national laws, commitments towards Paris Agreement, national or international courts’ decisions related to the environment or climate change etc.

(iii) Agreements entered into in order to resolve existing climate change or related environmental disputes, potentially involving impacted groups or populations.

These contracts are entered into after a dispute has arisen. In such disputes, it gets very difficult for the parties to form a consensus on various aspects including dispute resolution. These types of disputes are very rare, but in those limited cases where the parties agree to be bound, they enter into a submission contract.

A Prominent example of a submission contract is when a population is affected by investments made in the protected forestry impacting their livelihoods and access to natural resources.. Similarly, a population may be impacted by the establishment of a wind farm or solar power panel installation, affecting arable land or fisheries.

Globally, climate change litigation is growing with no bounds. Claimants are now better funded, resourced and organized. They look into the trends of these Climate Change disputes globally and try to replicate on the national level, some even take cues from the international data, and set new targets. According to one count, the number of climate-related cases now stands in excess of 1,300, with cases having been brought in from at least 28 countries. The United States, Canada, Australia, New Zealand, the United Kingdom and the EU are particular hot spots. Leaving behind conventional issues, there is an influx of innovative cases with different sets subject matter at hand. Moreover, the courts are also stepping in to create laws where the legislation is either absent or inadequate.

Arbitration in climate change disputes

How can parties access arbitration in climate change-related disputes?

Just like many other disputes, the existence of an arbitration agreement between the parties is a prerequisite in cases related to climate change disputes. As arbitration is a popular and well-acclaimed method of dispute resolution in sectors that are most likely to be affected by the implementation of climate change policies (such as energy, construction, industrial systems and infrastructure), these sectors usually make use of arbitration clauses. In disputes where there is no pre-existing relationship between the parties, such as disputes arising in the industrial sectors, an agreement post-emergence of the dispute would be needed. Arbitration is considered to become a more common method of dispute resolution, more so because the parties usually try to avoid the costly parallel proceedings that may lead to conflicting decisions. [9]

Current and potential use of arbitration in climate change related disputes

The Commission on Arbitration and ADR of the International Chamber of Commerce (the “ICC”) published a report in November 2019. The report examines the role of arbitration and ADR in the resolution of international disputes related to climate change.

According to the report, around 70% of all new ICC arbitration cases in 2018 arose out of the sectors which are expected to be impacted the most by climate change, with the construction, engineering, and energy sectors alone accounting for over 40%. The Report also highlights that investments related to climate change are increasing rapidly and that systems transition of the scale proposed by the Intergovernmental Panel on Climate Change (IPCC) will recalibrate regulatory risk and investment strategy in sectors where arbitration and ADR are present and are of relevance.

Expertise of arbitrators and experts

The ICC Report admits the relevance of, access to appropriate scientific expertise disputes relating to climate change. It also acknowledges the potentiality of the parties under the ICC Rules to have a conclusive influence on the choice of arbitrators, the powers of the parties relating to the same includes:

  1. Specification of the competence and skills which their arbitrators should have in their arbitration agreements;

  2. Calling for the ICC Court to consult them before making an appointment of a sole arbitrator or presiding arbitrator; and even

  3. The power to challenge the appointment of arbitrators can be on grounds of lack of impartiality or independence or otherwise.

The ICC Rules also allow for the possibility of both party-appointed experts and/or tribunal-appointed experts in proceedings. This opens the door for the tribunal to have access to any climate change-related expertise which it may need to decide the issues in dispute. The ICC can also provide assistance in the appointment of tribunal-appointed experts by way of providing expert recommendations along with that it may also assist with the administration of expert proceedings.[10]

Contrary to the institutions such as the Permanent Court of Arbitration (“PCA“), no formal list of specialised environmental arbitrators or technical and scientific environmental experts is maintained by the ICC. This is highlighted as a potential working point by the ICC, as it issues a recommendation to the ICC to reach out to climate change scientists and other technical and modelling experts.

Advantages of arbitration in climate change related disputes

The Report notes that, apart from the advantage of being a neutral forum, the arbitration benefits from the New York Convention, which allows proper enforcement of arbitral awards and cross-border recognition. The non-alignment of international arbitration enhances its suitability, provided the likely presence of States and state entities as parties to the dispute. The Report underlines the various specific procedural features of arbitration which can be adapted to suit climate change-related disputes. The six procedural features which are identified in the Report are as follows:

  • Access to appropriate scientific and other expertise

Guaranteeing the availability of appropriate expertise is conceivably the most important feature of arbitrating climate change-related disputes. The appointment of arbitrators with relevant expertise can fulfil this prerequisite. The guidance relating to the drafting of the relevant legal, scientific and technical expertise of the arbitrators and experts is provided in the report.

  • Recourse to measures and procedures for the early or urgent resolution of disputes

Avoidance of any delays in the disputes relating to climate change, reasonableness, and avoiding any delay are of great significance. The expedited procedures mentioned in the ICC report, use of emergency proceedings, and other interim measures of relief are some of the other methods which are mentioned under the report. The appropriate and timely applications of the other management techniques are also very essential.[11]

  • Opportunity for the application of climate change commitments and/or law

The growth in the awareness and the adoption of commitment and policies relating to climate change by industries and regulatory authorities appear to become part of the body of ‘applicable law’ upon which the tribunals could count upon to resolve a dispute.

  • Increased transparency

The frequent involvement of the States and the State authorities along with the vested interest of the people is viewed as a potential cause for the need to improve the transparency in climate change disputes. This procedural feasibility is provided by Arbitration.

  • Possibility for the involvement of third parties

It is a frequently raised question that whether persons other than the ones who are the disputants could be allowed to take part in these proceedings, such as those citizens who are affected, non-governmental and intergovernmental organizations should be allowed to participate in the arbitration. Unequivocal and clear concurrence of the relevant parties is naturally paramount in determining such a question. In this respect, the Report addresses the joinder of additional parties and consolidation of compatible proceedings.

Mediation in climate change disputes

Mediation provides a chance for thoughtful solutions to the dispute which are highly catastrophic and sudden in nature. It generally deals with problems that are high on emotionality. Mediation allows the parties to explore “win-win” situations in which all of them are in much better condition than they would have been if they had chosen the option of litigating in the court. Mediation has been an active part of peaceful conflict resolution for thousands of years in a variety of societies around the world, in one form or the other. However, there are variations in this application in different countries over time.[12]

The environmental catastrophes are increasing in all spheres including frequency, reach, and cost, and hence are generating conflicts around the world. Without mediation, open dialogue, collaborative negotiation, and a common approach to implementing solutions to these problems, improving aid and recovery, and systemic preventative approach to future disasters, and other such relieves would be ineffective, and would be delayed by years, if not decades.[13]

The report of the Security Council identified the potential benefits that skillful, impartial third-party mediation can bring to the peaceful settlement of disputes. it was stated that mediation will be essential to combat the changes in climate. It becomes all the way more necessary when Copenhagen looms. However, it is also true that such an approach would require a new kind of leadership and decision-making skill that goes beyond the national interests.[14]

Why mediation?

  • The major reason for opting for mediation is to settle certain weather and climate-related legal disputes and create solutions that are not available in court. For example, an owner who unknowingly causes pollution is unaware of the remedy to be used and further course of action that should be adopted. In conventional litigation settings, the parties would argue multiple defences, but here, innocent property owners are not interested in owning polluted property. In these circumstances, defendants would often end up buying the polluted property, and then later handle the legal and economic consequences. Similar solutions can be available for weather or climate-damaged properties, where again, defendants may want to argue with regards to causation, damages, related defences, and those which are potentially responsible for economic loss to damaged properties. With the assistance of mediation as a legal tool, the concerned parties may agree to acquire the properties and then handle them appropriately as legal and economic factors may demand.[15]

  • Mediation revolving around environmental issues involves multiple parties and technical issues necessitating more extensive upfront assessment work, convening of the appropriate parties, mutual learning, and collaborative fact-finding, as well as agreement building and implementation Therefore, opting for a conventional legal process in this situation, would make the process more tedious.[16]

  • The researchers have time and again reiterated the effectiveness of mediation for environmental issues as they are more useful for building cooperative working relationships. Moreover, in the past too, it has been successful, though infrequently used for negotiating environmental conventions and treaties at both national and international levels.[17]

  • Mediation is more effective than other forms of dispute resolution. In mediation parties are the decision-maker themselves and not the mediator, unlike in the case of arbitration. It has an upper edge from conciliation too as in mediation there is almost no operational time in bringing the parties to the mediation table.[18]

  • Mediators and other conflict resolution professionals have considerable experience in formulating a mediation plan for decades and so. Hence, they have much better ways of reaching agreements. By adopting mediation, the United Nations, without significant financial investments, could significantly improve the quality of conversations and mediations at important climate change meetings.[19]

Suggestions for effective mediation

  • Mediators should strive to figure out beforehand the possibility of emergence of any new climate-related conflicts might emerge. For example, In Nigeria, the community of cattle herders, due to the degradation of the quality of land, flocked southwards into the areas which were traditionally occupied by the farming communities, later on, there were vociferous riots between the two communities. In 2018, more than 1,300 were killed in a six-month period.[20]

  • Mediators should ensure that they turn to the right expertise who has the calibre of understanding the chief environmental and resource issues that may aggravate a conflict.

  • Mediators should ensure that they craft the agreements in a way that leaves the doors open for maneuvering. Thus, ensuring that the agreements remain viable irrespective of the climate shifts.

  • Mediators can actively help proponents look for ways in which cooperation over environmental challenges namely, climate change or shared resources such as transboundary water can help in peacebuilding and reconciliation between the divided communities. This can be particularly fruitful for people to work jointly, even in cases where political dialogue is not working.

Feasibility for Mediation

Parties who are considering whether or not to engage in mediation must first assess whether the dispute is amenable to the process of Mediation. One of the ways the professionals assess it is through the process of “Best Alternative to a Negotiation Agreement” (BATNA). [21]In this, the mediators examine the feasibility of a negotiated process and evaluate the conflict using a set of criteria:

  • Uncertainty regarding the outcome.

If parties are uncertain about the strength of their position, or on their influential acumen on the decision-makers, a court, or a jury, then, in that case, mediation provides them with the opportunity to have greater and more direct control over the result.[22]

  • The cost of winning may be disastrous

The possibility of more years of inaction, or frustration that none of the sides has been willing to make a concession is one of the key features, which the parties must be aware of, before adopting mediation as an alternative method of dispute resolution.

3. Common ground or trade-off balance exists

The recognition of common ground is the most important part as it forms the basis of arriving at the settlement. Although it is impossible to ascertain whether a compromise could be reached at the early stages of the process, individual assessment by the parties regarding the issues upon which they could compromise will make the way ahead easy and less cumbersome.

4. Overlapping jurisdictions and diverse interests

Diverse interests in a community could be no less than a nightmare. Moreover, different cultures, economic resources, and organizational structure act as a hindrance. However, mediation provides a structure for talks, with ground rules that identify the purpose of the talks and formalize the negotiation process.

5. Parties may need to preserve their relationship

Winning in court or in the political arena may negatively affect the relationship among parties as in many cases they have to conduct business together. It is always desirable that parties reach a stage in a consensus process where they candidly explore tradeoffs

[1] The author is a third-year law student at Hidayatullah National Law University and can be reached at shivangi.1995@hnlu.ac.in. [2] The author is a third-year law student at Dr.Ram Manohar Lohiya National Law University and can be reached at nishthapandey3103@gmail.com. [3] Translates into ‘what is at stake with this climate conference, is peace’. H.E. Mr. François Hollande, President of France, Opening of the Leaders Event, COP21, Paris, 30 November 2015. [4] John Sturrok, ‘Mediation and Climate Change’ (Mediate India - Everything Mediation, December 2009) <https://www.mediate.com/articles/sturrockJ8.cfm> accessed 17 April 2021. [5] Krystyna Blokhina Gilkis, 'Alternative Dispute Resolution' (Legal Information Institute, 8 June 2017) <https://www.law.cornell.edu/wex/alternative_dispute_resolution> accessed 18 April 2021. [6] R Wayne Thorpe, ‘Mediation and Arbitration in Weather and Climate Disputes’ (Natural Resources & Environment, Fall 2012) <https://www.jamsadr.com/files/uploads/documents/articles/thorpe-mediation-weather-nre-2012-11.pdf> accessed 27 April 2021. [7] Mikkel Funder, Signe Marie Cold-Ravnkilde and Ida Peters, ‘Addressing Climate Change and Conflict in Development Cooperation- Experiences from Natural Resources Management’ (DIIS Report, 2012) <https://www.diis.dk/files/media/publications/import/extra/rp2012-04-addressing-climate-change_web.jpg_1.pdf> accessed 28 March 2021. [8] Amanda Neil, Melissa Conway and Emma Roberts ‘ICC Task Force predicts climate change related disputes will increase exponentially’ (Freshfields Bruckhaus Deringer, 9 December 2019) <https://www.lexology.com/library/detail.aspx?g=29c85d5d-599a-4fed-9526-0a88c63b758e> accessed 27 March 2021. [9] Amanda Neil, Melissa Conway and Emma Roberts ‘ICC Task Force predicts climate change related disputes will increase exponentially’ (Freshfields Bruckhaus Deringer, 9 December 2019) <https://www.lexology.com/library/detail.aspx?g=29c85d5d-599a-4fed-9526-0a88c63b758e> accessed 27 March 2021. [10] Herbert Smith and Freehills ‘Arbitration of Climate Change Disputes’ (Herbert Smith Freehills, 20 December 2019).<https://hsfnotes.com/arbitration/2019/12/20/arbitration-of-climate-change-disputes/#_ftn1> accessed 28 April 2021. [11] Juan Pablo Valdivia Pizarro, 'The Value of Arbitration and ADR in Resolving Climate Change Related Disputes: A View into the ICC Commission’s Report' (Linklaters, 31 March 2021). <https://www.linklaters.com/en/insights/blogs/arbitrationlinks/2021/march/the-value-of-arbitration-and-adr-in-resolving-climate-change-related-disputes> accessed 27 March 2021. [12] R Wayne Thorpe, ‘Mediation and Arbitration in Weather and Climate Disputes’ (Natural Resources & Environment, Fall 2012) <https://www.jamsadr.com/files/uploads/documents/articles/thorpe-mediation-weather-nre-2012-11.pdf> accessed 27 March 2021. [13] Kenneth Cloke, 'Conflict, Climate Change, and Environmental Catastrophe: How Mediators Can Help Save the Planet' (2011) 12 Cardozo J Conflict Resol 307. [14] John Sturrock, ‘Mediation and Climate Change’ (Mediate India - Everything Mediation December 2009) <https://www.mediate.com/articles/sturrockJ8.cfm> accessed 25 April 2021. [15] R Wayne Thorpe, ‘Mediation and Arbitration in Weather and Climate Disputes’ (Natural Resources & Environment, Fall 2012) <https://www.jamsadr.com/files/uploads/documents/articles/thorpe-mediation-weather-nre-2012-11.pdf> accessed 27 March 2021. [16] United Nations Security Council, ‘Report of the Secretary-General on Enhancing Mediation and its Support Activities’ (Security Council S/2009/189:8, April 2009) <https://peacemaker.un.org/sites/peacemaker.un.org/files/SGReport_EnhancingMediation_S2009189%28english%29.pdf> accessed 20 April 2021. [17] Mediator Beyond Border International, ‘Supporting Statement for the Inclusion of Mediation in Climate Change Treaty Negotiations’(Mediation beyond Border- Partnering for Peace and Reconciliation) <https://mediatorsbeyondborders.org/wp-content/uploads/2012/10/SupportingStatementfortheInclusionofMediationinClimateChangeTreaty.pdf> accessed 21 April 2021. [18] Supporting Statement for the Inclusion of Mediation in Climate Change Treaty Negotiations’(Mediation Beyond Border) <https://mediatorsbeyondborders.org/wp-content/uploads/2012/10/SupportingStatementfortheInclusionofMediationinClimateChangeTreaty.pdf> accessed 21 April 2021. [19] Kenneth Cloke, 'Conflict, Climate Change, and Environmental Catastrophe: How Mediators Can Help Save the Planet' (2011) 12 Cardozo J Conflict Resol 307. [20]Oli Brown, ‘Heating up: mediation and climate change’ (Prio Climate and Conflict, 9 July 2019)<https://blogs.prio.org/ClimateAndConflict/2019/07/heating-up-mediation-and-climate-change/> accessed 18 April 2021. [21]Roger Fisher and William Ury, ‘Getting to Yes - Negotiating an agreement without giving in’ (1981) <https://www.fd.unl.pt/docentes_docs/ma/AGON_MA_25849.pdf> accessed 25 April 2021. [22]Alana Knaster, ‘Resolving Conflicts Over Climate Change Solutions: Making the Case for Mediation’ (2010) <https://digitalcommons.pepperdine.edu/cgi/viewcontent.cgi?article=1016&context=drlj> accessed 29 April 2021.

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