LEGAL COMMITTEE REVIEWS DIPLOMATIC PROTECTION, LIABILITY FOR DAMAGE CAUSED BY ACTIONS NOT PROHIBITED BY INTERNATIONAL LAW

Fifty-eighth General Assembly

Sixth Committee

16^th & 17^th Meetings (AM & PM)

LEGAL COMMITTEE REVIEWS DIPLOMATIC PROTECTION, LIABILITY FOR DAMAGE

CAUSED BY ACTIONS NOT PROHIBITED BY INTERNATIONAL LAW

Debate Continues on Further Issues from Law Commission Report

Issues of diplomatic protection and international liability were on the agenda as the Sixth Committee (Legal) continued its consideration at two meetings today of the report of the International Law Commission.

Enrique Candioti (Argentina), Chairman of the Commission, introduced the chapters dealing with those questions (V and VI), the second of which was formally titled “liability for injurious consequences arising out of acts not prohibited by international law (international liability in case of loss from transboundary harm arising out of hazardous activities)”.

With regard to diplomatic protection, he noted articles relating to “legal persons” as distinct from natural ones, or citizens.  He said all provisions so far had referred to corporations as “legal person”.  That was by far the most common example of a legal person who in the past had enjoyed the protection of national States.  Now the concept of legal persons could encompass universities, foundations, public enterprises, schools, churches, non-profit organizations, non-governmental organizations, and even, in some cases, partnerships created under domestic law.

Turning to international liability, he recalled that the subject was rooted in work related to draft articles adopted in 2001 on the prevention of transboundary harm deriving from hazardous activities.  That had been the first part of the topic.  At this session, the legal regime for allocating loss in case of transboundary harm arising out of hazardous activities was considered.

The representative of Belarus, recalling the tragedy suffered by his country as a result of the Chernobyl nuclear facility disaster in neighbouring Ukraine, urged the elaboration of a comprehensive instrument to regulate harm caused by transboundary activities.

Recalling a 1988 disaster in his country in which tons of radioactive industrial wastes were dumped on its territory, the representative of Nigeria said the absence of relevant international legal instruments had increased the difficulty of dealing with associated human and environmental problems.  The work on international liability was, therefore, particularly welcome.

New Zealand’s representative called for compensation in situations when harm occurred despite preventive steps, a key concern for small States in relation to large.  He said a set of provisions to cover those events should be general; should place primary responsibility on the operator; should back a strict liability with insurance plus further government back-up; and should contain appropriate dispute settlement arrangements.

Additional speakers on those chapters were the representatives of Canada, Austria, Morocco, Norway (for the Nordic Group), Netherlands, India, Guatemala, Republic of Korea, Japan, Chile, Slovakia, Slovenia, Algeria, Russian Federation, Greece, Italy, Australia, Poland and Israel.

Also this morning, Committee Chairman Lauro Liboon Baja (Philippines) introduced the President of the International Court of Justice, Judge Shi Jiuyong, in a long-standing tradition prior to his address to the Assembly next Friday.  The Chairman acknowledged the mutual interest of the International Law Commission and the Court in each other’s proceedings.  The Judge, in turn, affirmed the close link between the two bodies in the development of international law.

In his statement, the representative of the Czech Republic supported the irreplaceable role of the Commission in the progressive development of international law.

Ending the Committee’s discussion on responsibility of international organizations, by speaking on the matter today, were the representatives of Egypt and Pakistan.

Established by the General Assembly at its second session in 1947, the International Law Commission has the mandate to promote international political cooperation and to encourage the development and codification of international law.

The Committee will meet again at 10 a.m. tomorrow, Thursday, 30 October, to begin considering chapters VII (unilateral acts of States) and VIII (reservations to treaties) in the Commission’s report.

Background

The Sixth Committee (Legal) met today to continue debate on the report of the International Law Commission, with a focus on diplomatic immunity and on international liability for injurious consequences arising out of acts not prohibited by international law.  (For background on the report, see Press Release GA/L/3238 of 27 October.)

Diplomatic Protection

The Commission considered the fourth report of the special rapporteur on the topic, covering draft articles 17 to 22 on the diplomatic protection of corporations and shareholders and of other legal persons.  It further adopted draft article 8 [10] “exhaustion of local remedies” -– which are by right open to an injured person before judicial or administrative courts or bodies.  Other articles also adopted by the Commission were article 9 [11] “category of claims” and article 10 [14] “exceptions to the local remedies rule”.

International Liability

Concerning the topic of international liability for injurious consequences arising out of acts not prohibited by international law (international liability in case of loss from transboundary harm arising out of hazardous activities), the Commission considered its special rapporteur’s first report analysing the existing liability of various regimes.  The report offered conclusions for the Commission’s consideration.

Statements on Responsibility of International Organizations

ESSAM RAMADAN (Egypt) said the issue of responsibility of international organizations was an important matter in need of codification.  To say the rules of an organization were the equivalent of national legislation was incorrect, since an organization’s rules could be the outcome of treaties and thus subject to international law.  It was also important to remain in conformity with the Geneva Convention and the Law of Treaties, and not to open the door on agreements previously achieved.  The conduct of peacekeeping forces must be attributed to the United Nations at the start, but if the injured party could prove that the action was in contravention to the agreed-upon mandate, then the contributing State must also assume responsibility.  The causal link in a wrongful act must be established.

He said the organization concerned was responsible in such a case, but the State had to be held responsible if it had acted in bad faith.  The court or tribunal involved would determine responsibility and it was up to the injured party to prove the case.  Those who held that the responsibility of an international organization could be dealt with in national courts should take into consideration that the International Law Commission had affirmed that the only reference for international organizations was international law.  Therefore, the Commission should consider and study the question of whether the International Court of Justice was the competent Court to decide on matters involving the United Nations and its specialized agencies and other bodies within its system.

He said that if the International Court of Justice was found to be the competent quarter in the very sensitive area of law, then other questions would arise.  For example, if the Security Council refused to take a decision because of a veto, it should be considered a violation of international law and the matter should be taken to the Court.  That would have ramifications if an injured State claimed that the veto had been used for the self-interest of a State and it was proved.  The matter of the Court’s competence in affairs involving the United Nations was important.  Relevant questions could not be ignored or left to national courts.

ROSS MASUD (Pakistan) said there was need for extensive study of international organizations.  He felt that the provisions of draft article 1 on the responsibility of international organizations were quite acceptable to his delegation.  Paragraph 2 of the article required some clarification, he said, adding that the reference to the international responsibility of a State was not clear in the text.  The reference should be to a “member State”.  He said article 2 on “use of terms” needed further consideration.

The provisions of draft article 3 on “general principles” were quite adequate, but he had some difficulties with the issue of attribution.  A reference should be made to rules of the organization.  The question of the legal personality of international organizations should be taken into account and he cited cases that had been heard by the International Court of Justice.  The question of peacekeeping forces had been the subject of legal cases in the past, he said, noting that the issue would not be easy to resolve.

OKON ISONG (Nigeria) affirmed the Commission’s pivotal role in implementing the principles enshrined in the Charter through the codification of international law.  He said it was a cardinal pillar of the United Nations system, and in the promotion and sustenance of international law.

Reviewing the report and welcoming the work on responsibility of international organizations, he turned to the issue of diplomatic protection.  He said the right to exercise it rested with a State of the same nationality as a corporation in respect of an injury.   However, the concerns of the corporate investor as a legal entity, and the interests of shareholders regardless of nationality, had also to be guaranteed adequate protection.  His country had created an investment regime that recognized the role of foreign direct investment.  It protected foreign investors while ensuring quality services to the country, thereby guaranteeing a stable and secure investment climate.

Recalling a 1988 disaster in his country in which tons of radioactive industrial wastes had been dumped on its territory, he said the absence of relevant international legal instruments had increased the difficulty of dealing with the associated human and environmental problems.  The work on international liability was, therefore, particularly welcome.  The legal regime on allocation of loss should be rigorously examined and the existing liability regimes analysed.  A study should also be conducted on how much of recent environmental disasters had resulted from violating the duty of prevention, an area of particular concern to developing countries since hazardous wastes were a major socio-economic and security threat to the world.

Finally, he endorsed the proposal of the special rapporteur to conduct a study of State practice on uses and management of shared natural resources.  He said the emphasis should be on the technical and legal aspects of the role of water.  The technical needs of developing countries should be noted so as to enhance their capacity to participate in further work on the subject.

Statement by President of International Court of Justice

Before the statement by the representative of Nigeria, the Chairman, LAURO LIBOON BAJA (Philippines) introduced the President of the International Court of Justice, Judge Shi, and noted that the Judge would be addressing the General Assembly on Friday.  He said he was aware of the interest of the Court in the Committee’s work; the Committee, in turn, followed the Court’s deliberations with great interest.  Its decisions were invaluable for international law.

JUDGE SHI JIUYONG, President of the Court, addressed the Committee following a long-established traditional practice.  He affirmed the close link between the International Law Commission and the Court in that both were responsible and intricately linked in the development of international law.  He said the Court would continue to observe with interest the issues before the Sixth Committee.

Introduction of Report

ENRIQUE CANDIOTI (Argentina), Chairman of the International Law Commission, introduced Chapters V and VI of the Commission’s report -- being discussed

today -- dealing respectively with the topics, diplomatic protection and international liability for injurious consequences arising out of acts not prohibited by international law.

He said the Commission made significant progress on its work on draft articles on diplomatic protection, and that it was well on its way towards completing the first reading of them next year.  It adopted draft article

8 [10])“exhaustion of local remedies”; article 9 [11] “category of claims” and article 10 [14] which lists exceptions to the local remedies rule.  He said delegations might wish to comment on that provision.

The Commission had before it draft articles 17 to 22 which dealt with the diplomatic protection of “legal persons” (unlike natural persons).  He drew attention to the fact that all the provisions discussed so far, in the context of the protection of legal persons, had dealt with the case of the corporation.  That was because it was by far the most common example of a legal person who had, in the past, enjoyed the protection of the national States.  However, there might be other legal persons, such as universities, foundations, public enterprises, schools, churches, non-profit organizations, non-governmental organizations, and even, in some cases, partnerships created under domestic law.  Article 22 contained a mutatis mutandis clause extending the rules applicable in the case of corporations to those other legal persons, he said.

In concluding his overview of the Commission’s work on diplomatic protection, he asked for comments on the diplomatic protection of members of a ship’s crew by the flag State; and the diplomatic protection of nationals employed by an intergovernmental international organization in the context of the Reparation for Injuries case.  Governments might also wish to comment on issues other than those already covered in the draft articles.

He then turned to the second topic, international liability for injurious consequences arising out of acts not prohibited by international law --international liability in case of loss from transboundary harm arising out of hazardous activities.  He recalled that the Commission had dealt with the liability aspects of the subject following the adoption in 2001 of draft articles on the prevention of transboundary harm from hazardous activities thus, concluding its work on the first part of the topic.  At its session, the Commission considered the first report of its special rapporteur dealing with the legal regime for the allocation of loss in case of transboundary harm arising out of hazardous activities.

The Commission chairman said that although the topic remained conceptually confounding, the Commission might be able to achieve a realizable objective, no doubt with the help of comments of governments on the different elements of liability referred to by the special rapporteur in paragraph 174 of the Commission’s report.

Statements on International Liability, Diplomatic Protection

ANDREI N. POPKOV (Belarus), speaking on international liability for injurious consequences arising out of acts not prohibited by international law (international liability in case of loss from transboundary harm arising out of hazardous activities) recalled the “terrible tragedy” of the Chernobyl nuclear facility in the Ukraine.  He said the incident should be considered when dealing with transboundary activities.  He shared the opinion that there should be a comprehensive convention that would regulate harm caused by transboundary activities and the payment of compensation.  The convention must define the obligations of States in such activities and their culpability. A special compensatory fund should be established, he said.

On the question of diplomatic protection, he hoped work on the draft articles would be completed next year.  The question of State protection for crews could be elaborated in relation to the Convention on the Law of the Sea.  He also ruled out the extension of diplomatic protection to non-governmental organizations.

TED MCDORMAN (Canada) said that his country had relied upon the Barcelona Traction rule in past litigation as being a correct statement of the current state of customary international law.  (The 1970 Judgment of the International Court of Justice involved an incorporated Canadian corporation, Barcelona Traction Corporation, a majority of whose shareholders were nationals of Belgium.  The Court expounded the rule that the right of diplomatic protection in respect of an injury to a corporation belonged to the State under whose laws the corporation was incorporated and in whose territory it had its registered office, and not the State of nationality of the shareholders).

He said that one area of interest was the implication of development of various investment treaties on the Barcelona Traction rule.  The issue was whether the development and prevalence of bilateral investment treaties and multilateral investment treaties had moved customary international law away from the Barcelona Traction rule to a point where the State of the shareholder had a right of action. Canada agreed with the approach taken by the rapporteur in developing the articles on diplomatic protection of shareholders and corporations.

HANS WINKLER (Austria) began with a summary and specific comments on the draft articles that had been adopted on diplomatic protection.  On article 10, for example, he called for a more precise definition of the term “relevant connection” between the injured individual and a responsible State.  He said draft articles 17 to 22, dealing with diplomatic protection of corporations and shareholders, had inconsistencies.  Of particular note was the deletion of a reference to the traditional criterion of “incorporation” when defining the nationality of corporations.

Moving on to the question of international liability, he said the topic raised different and complicated questions needing to be addressed by the Commission.  Treaties on liability had been elaborated in recent years but their impact had been limited, due to the small number of States ratifying or acceding to the instruments.  It should be noted that negotiations on establishing liability regimes or identifying a need for them were going on in some areas.  Also of note was the observation that the overwhelming majority of existing liability regimes established civil liability systems.  A clear distinction should be drawn between the scope of a liability regime dealing with acts not prohibited by international law on the one hand, and the law of State responsibility concerning unlawful acts on the other.

Also, he said, the relationship between international liability regimes and national ones must be addressed.  It was not feasible to elaborate rules for liability under international law that did not take national rules into account.  As to the final form of the work on the matter, it was too early to determine.  The question depended on the development of specific liability regimes.  A “checklist” format should not be ruled out.  It could enumerate the issues needing further negotiations on liability regimes for specific activities.

MOHAMED BENNOUNA (Morocco) recalled he had been a special rapporteur on the question of diplomatic protection.  He said the area had come to codification maturity since a rich wealth of material in the form of groundwork and case-law was available.

He then commented on specific articles.  With respect to the criteria of the law of the nation where a corporation was based, for example, he said there should be a genuine link between the national and international law to complement the formal link.  The Barcelona Traction case was an area illustrative of where customary law could enter in, particularly in the case of shareholders, who could be harmed by a State’s actions.  Diplomatic protection should be afforded shareholders in regard to direct and indirect rights.  Headquarters and dividends, for example, had been determined in the Barcelona case to be direct rights.

With regard to special regimes of safeguarding, he said consideration should be given to extending the provisions on diplomatic protection, so as to apply to others besides corporations.  The entire area was too vague, as in relation to non-governmental organizations and many corporations which based their identity on being independent of any State.  The extension of the regime for corporate diplomatic protection could be the last part of traditional law still to be codified.

ROLF EINAR FIFE (Norway), speaking for the Nordic countries on the issue of international liability, said it was important to recognize that the item was a study of primary rules -– the identification of obligations of States regarding lawful activities which might nevertheless carry considerable transboundary harm.  The study must be distinguished from an analysis of secondary rules of State responsibility.

He noted the preventive principle of good-neighbourliness and cooperation and the emerging customary obligation of the precautionary approach.  That obligation, he said, had been incorporated in a number of international instruments and was a corollary to the objective of sustainable development.  Nordic countries understood the reluctance of some countries to commit themselves to allocating risks and losses to States rather than relying solely on rules of due diligence to provide a basis for liability.  Nevertheless, a focused debate on how to bring the matter forward was needed, they said.  Both effective prevention and the protection of innocent victims required addressing State liability aspects.

He said the Nordic countries agreed that States should have flexibility to develop schemes of liability that could suit their particular needs.  At the same time, such schemes must fully take into account particular needs of other States and innocent victims who might suffer from hazardous activities.  They were flexible as to the final form of the draft articles.  A convention might be preferable at least for the liability part, they said, and added that a regime on reparation might also be established through other instruments.

JOHAN G.LAMMERS (Netherlands), speaking on diplomatic protection, said the ruling of the International Court of Justice in the Barcelona Traction case was a reflection of customary international law and should, therefore, be used as a basis for the draft articles on diplomatic protection of corporations.  The Commission should, however, not shy away from progressive development of law in that area, if necessary, he said.  The Netherlands believed that the rules set forth in the Barcelona Traction case were not entirely satisfactory, and that they were being remedied by the conclusion of bilateral and multilateral investment treaties which offered greater protection to Dutch investors.

Regarding protection of crew members dealt with earlier by the International Law Commission, he said the current regime adequately covered them, and his country therefore did not consider it necessary to include diplomatic protection of crew members by the flag State in the draft articles being prepared by the Commission.

NIGEL FYFE (New Zealand) said the topic of international liability was particularly important from the perspective of small States in relation to both prevention and liability.  Trite as it was, the world was increasingly interdependent; one aspect was that activities in one State could result in consequences elsewhere.  A range of benefits could derive from an activity and yet result in harm to others.  All appropriate measures should be taken to prevent or minimize risks.  In addition, compensation, relief or assistance should be made available when harm occurred despite preventive measures.  That was a key concern to small States, especially in relation to large ones.

The draft articles on prevention were useful but applied only to the first half of the above concerns, he continued.  The recent work on State responsibility showed the direction for allocating loss and providing compensation in situations where no wrongful act was committed.  It did not need to be a large or complex task to come up with a set of provisions that were residual and general in character.  They would help shape the development of more detailed regimes for particular forms of ultra-hazardous activities and serve as back-up for specific regimes.

He laid out the key features of those provisions, saying they should be general, should place primary responsibility on the operator, should back the strict liability by insurance cover plus government back-up and should back the provision by appropriate dispute settlement arrangements.  Elements to be covered included environmental damage and compensation for economic loss.  The provisions should be elaborated as a set of articles to be teamed with those on prevention.

MANIMUTHU GANDHI (India), returning to the issue of responsibility of international organizations, said there was need for a more precise definition for the draft articles on the topic.  Any definition of international organizations essentially included intergovernmental organizations, although non-State entities like those bodies could also become members of international organizations in some cases.  It was appropriate to exclude non-governmental organizations from the scope of the topic as they did not perform any governmental functions.  His delegation agreed with the recommendation of the special rapporteur on the topic that the present study should only be concerned with responsibility under international law and should not deal with issues concerning liability of international organizations.

On the topic of international liability, he said States preferred civil liability regimes.  He stressed the merit of a strict liability regime for certain selected hazardous activities.  It should be remembered that not all States authorizing lawful hazardous activities had the means to pay residual compensation.  The primary liability should be that of the operator.  Development of State liability of residual character in certain well-defined cases might be of some use, he said.

CONNIE TARACENA SECAIRA (Guatemala) reviewed the last four articles, saying that diplomatic protection of companies was complicated by several factors.  One was the existence of transnational corporations whose ownership by nature crossed borders across a number of nationalities.  Their ownership also changed rapidly through shareholders.  Further, the concept of incorporation did not exist in some national legal systems.  The text of article 17 on ownership should address these issues by clarifying the relationship between a corporation and the various States with which it could have links. 

She said a company needed a State that could exercise diplomatic immunity on its behalf, but there should not be two States to exercise such a right.  The criteria should be set out to cover situations such as when a corporation was more closely and permanently linked with a State other than where it had been incorporated, perhaps on the basis of where its principle economic activities took place.  The State of nationality of the shareholders should also be considered, including when the corporation’s State of nationality differed from that of its shareholders, and when the corporation ceased to exist. 

SHIN KAK-SOO (Republic of Korea), speaking on diplomatic protection, said his delegation regarded the rule of the International Court of Justice in the Barcelona Traction case as part of customary law, and that today’s rules and practices governing foreign investment had been built upon that ruling.  It believed that the State of incorporation was entitled to exercise diplomatic protection with respect to injury to a corporation.  The State of nationality of shareholders should also be entitled to exercise diplomatic protection for reasons of equity, if the corporation had ceased to exist or if the injury to the corporation was caused by the State of incorporation.

He said it was important that rules of the 1982 Convention on the Law of the Sea and the jurisprudence of the International Tribunal for the Law of the Sea were not prejudiced in cases concerning diplomatic protection of members of a ship’s crew by a flag State.  As regards diplomatic protection of nationals employed by an intergovernmental organization, his delegation believed that the 1949 decision of the International Court of Justice in the Reparation for Injuries case should be fully respected. 

HUKIHIRO WADA (Japan) noted the work the Commission had accomplished on the complex issue of protecting legal persons and their shareholders.  Future deliberations, he said, should focus on a number of areas.  On the relationship between customary international law and bilateral agreements, he said, the issue of protecting foreign investment must take into account the developments made in bilateral investment treaties as well as international and regional frameworks on investment protection.  Draft article 21 dealing with the question did not adequately identify the relationship between customary international law on diplomatic protection and special law pertaining to bilateral and other investment treaties.  The drafting committee should perhaps add relevant provisions in the final clause of the entire text of draft articles rather than confining the scope of the matter to disputes involving foreign investment and legal persons.

Moving on, he said the criteria for determining the nationality of an enterprise should not include that of genuine or effective links since that was difficult to determine in a global world.  A draft article should be elaborated to allow for flexibility in applying the draft articles to legal persons other than corporation.  Finally, with regard to the diplomatic protection of nationals employed by an international organization, the International Court of Justice had acknowledged the status of the United Nations as a legal person.  The functional protection of the United Nations to file a claim for damage imposed on its employees had been recognized.  However, the criteria or means of adjustment had not been set out between the functional protection of the United Nations and the diplomatic protection that could be exercised by the injured person’s State of nationality.  Perhaps the State could exercise its right when the functional right could not be exercised by the United Nations. 

CLAUDIO TRONCOSO (Chile), speaking on diplomatic protection, observed that there were several dissenting opinions in the Judgment of the International Court of Justice on the Barcelona Traction case.  There was need for a genuine link requirement, to enable States to provide diplomatic protection to shareholders of its nationality.  There was sufficient foundation in the special rapporteur’s report to support that.  His delegation shared the views of the special rapporteur on article 22, regarding the extension of diplomatic protection of corporations to other entities or legal persons.  He said the case of non-governmental organizations warranted further study.  He reiterated the ideas expressed last year by Chile that the International Law Commission should approach the issue of diplomatic protection of the crew of a ship by a flag State carefully, studying rules embodied in the Convention on the Law of the Sea.

When the Committee met again this afternoon, IGOR GREXA (Slovakia), speaking on diplomatic protection, said its extension to legal persons such as corporations should be carefully considered.  Taking into account the lack of State practice in that area, his delegation agreed that a separate set of articles was not necessary.  The proposed mutatis mutandis formula in draft article 22, after flexible redrafting, seemed sufficient.  He observed that bilateral investment treaties provided protection of investments.  As regards diplomatic protection of shareholders, he said the International Law Commission should base its work on the views expressed by the International Court of Justice in the Barcelona Traction case.  The proposed article 18, after some improvements, might sufficiently define the necessary threshold for a State’s intervention on behalf of shareholders.

He said Slovakia was not convinced of the need for a flag State to exercise diplomatic protection in respect of crew members of a ship who were nationals of a third State.  The issue was sufficiently covered by the 1982 Convention on the Law of the Sea.

META BOLE (Slovenia) said that State practice, codification and jurisprudence in the field of diplomatic protection had not always been consistent.  Her delegation did not support the Commission’s position on diplomatic protection of members of a ship’s crew of a third nationality by a flag State.  The United Nations Convention on the Law of the Sea should be the basis for any work in that area.  Her delegation did not favour functional protection by international organizations of their officials, irrespective of their nationality.  Further work was required.  The 1949 decision of the International Court of Justice in the case of “Reparations for injuries suffered in the service of the United Nations” could be considered only as an exception to the nationality principle, she said.

Slovenia did not favour the extension of diplomatic protection to shareholders in addition to legal persons such as corporations.  She said the Commission should continue to address the question with great care.

ALI HAFRAD (Algeria), speaking on diplomatic protection, said his delegation shared the view that functional protection of officials by international organizations should be excluded.  The question had already been dealt with by the International Court of Justice in the 1949 case of “Reparation for injuries”.  Diplomatic protection for crew members of a ship was already governed by relevant provisions of the 1982 United Nations Convention on the Law of the Sea and of the International Tribunal for the Law of the Sea.

STEPAN KUZMENKOV (Russian Federation) said, with regard to diplomatic protection, that there were a number of articles involving matters of principle.  It was important to avoid situations in which several States had the right to claim diplomatic protection for persons.  Situations involving corporations were based not only on the concept of diplomatic protection but also on the basis of bilateral treaty arrangements, particularly as applied to investors.  Exceptions could be formulated more strictly.  With regard to article 21, it was important to avoid a formulation by which a person would be forced to choose between mechanisms protecting human rights and diplomatic protection.  The norm extending protection beyond corporations in article 22 introduced a complication that perhaps should be removed.

FANI DASCALOPOULOU-LIVADA (Greece), speaking on diplomatic protection, said the State of the nationality of a corporation was entitled to exercise such protection to that entity as was ruled in the Barcelona Traction case.  She said the provisions of article 18 on protection of shareholders did not reflect customary international law.  With regard to diplomatic protection of non-governmental organizations and other similar bodies, she said the Commission was entering legally unchartered territory and should proceed with caution.

On the topic of international liability, she said her delegation had been among those who had vigorously supported the Commission, examining the legal regime of loss in case of transboundary harm arising out of hazardous activities.  Following the elaboration of the draft articles on prevention, it would be a logical continuum to deal with the question of liability for damage caused by hazardous activities.  Her delegation believed therefore that the activities covered by the articles on prevention should also be addressed by those on liability.  As regards damage to the environment, she said it would be advisable to take into account the novel provisions of the very recent Kiev Protocol on Civil Liability and Compensation for Damage caused by Transboundary Effects of Industrial Accidents on Transboundary Waters of 2003, elaborated in the context of the Economic Commission for Europe (ECE) by a working group which she chaired.

IVO BRAGUGLIA (Italy) said he welcomed the intention to consider next year the diplomatic protection of ships’ crews, an area not covered by the Law of the Sea Convention.  Another subject suitable for the Commission’s study was the extent to which the draft articles on diplomatic protection were applicable in situations involving human rights.

On international liability, he said the Commission would be well engaged to establish a general model treaty that could be applied in concert with individual specific regimes.  In the area of international liability, the interests at stake were high and the financial implications immense.  The development of an effective safeguard mechanism would be of particular interest to many States.

NICOLA LOFFLER (Australia) said that with regard to diplomatic protection of ships’ crews by the flag State, the right of the flag State to bring a claim on behalf of the crew or passengers should be excluded.  The issue was adequately covered in the Law of the Sea.

On international liability and the relationship between the State and the operator, she said the specific procedural and substantive requirements that States would place on operators would vary by industry.  Still, those requirements should focus on contingency plans for responding to incidents carrying a risk of transboundary harm.  The State should ensure that an operator was in a position to take action with a view to minimizing harm, while the operator should be required to maintain appropriate insurance for the purpose.  The scope of the topic should not be unduly limited and the final form should be determined once the draft articles on liability were determined.  Still, conditions indicated they would be most helpful in the form of general rules to supplement other instruments.

The guiding principle, she urged, should be that innocent victims would not bear loss alone and that compensating such a loss rested with those in control when an incident occurred.  Where the operator did not have the financial resources to provide adequate compensation, the sources should be supplemented by State funds on the principle that the activity had been allowed and that the activity and/or industry had benefited the State in that capacity.

REMIGIUSZ A. HENCZEL (Poland) reiterated his country’s support for the International Law Commission’s work on diplomatic protection so far.  He said it represented a solid basis for codification reflecting customary international law while incorporating some progressive developments.  With regard to article 17, containing a definition of the State of nationality to be applied to corporations, he said there was still a lack of a generally acceptable basis for other rules concerning diplomatic protection for such entities.  The formula for diplomatic protection for shareholders in article 18 seemed to be reasonable and practicable. Mechanisms provided by bilateral or even multilateral agreements on the protection of foreign investments might not always be sufficient.  

He reiterated his delegation’s support of the topic of international liability, viewing it as a logical follow-up to the draft articles on prevention of transboundary harm and the issue of State responsibility.  He expressed regret that the question of the “global commons” was left out to make the Commission’s consideration of the topic manageable.  He said the Commission should continue to develop its own model of allocation of loss, which should be both general and residual in character.

ALAN BAKER (Israel) said that the scope of the draft articles on diplomatic protection should be confined essentially to the traditional boundaries of nationality of claims and exhaustion of local remedies, and to customary international law in which the State had full discretion in the exercise of diplomatic protection.

On the issue of international liability, he said it would be preferable to provide for a general obligation on States to assert in their national legislation rules regarding liability of the operator and his responsibility to compensate.  A minimal threshold for the implementation of that obligation should be considered.  He said the issue of damage to the environment should not be included within the framework of the Commission’s work but left to environmental forums.  Israel did not see the need for a specific multilateral convention on the topic but rather the creation of guidelines or model rules.

JAN CIZEK (Czech Republic) commented in detail on the articles concerning diplomatic protection and said he hoped the important topic would be concluded during the current quinquennium of the Commission’s work.  He said there was no need to extend the scope of the draft articles to protection of ships’ crews.  Also, the functional protection exercised by an international organization and its officials was not an appropriate subject for the issue of diplomatic protection.

Noting the delicacy of the Barcelona Traction case outcome, and the contradictory views in the separate opinions handed down by the judges at the International Court of Justice, he said he was not of the view that the general rule should be modified.  He did not favour departing from the rule by which a State of the nationality of a corporation was entitled to exercise the right of diplomatic protection rather than the State of the nationality of shareholders whose rights were violated by injury to the corporation.  The general rule and the exceptions accurately reflected the current state of customary international law.

He commented further on provisions in the Barcelona Traction case, and recalled the irreplaceable role the Commission played in the progressive development of international law.  He noted that this year’s Commission report was 300 pages long; two years ago it had been more than 500 pages, 300 of which had contained the final text of the draft articles and commentaries on State responsibility.  He said any attempt to set a page limit on the Commission’s reports, or on those of its rapporteurs, would be inappropriate. 

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