Abstract

http://ssrn.com/abstract=516384
 


 



Extraterritorial Protection of Natural Resources in Constitutional and International Legal Discourse


David A. Dana


Northwestern University - School of Law

March 2004

Northwestern Law & Econ Research Paper No. 04-05; Northwestern Public Law Research Paper No. 04-01

Abstract:     
Two kinds of domestic regulation aimed at protecting endangered species and their habitat have proven very controversial. In one kind of regulation, a national legislature (in the United States, Congress) or agency provides regulatory protection for a species located in one distinct part of the country, at the behest of people who live in other parts of the country. Federal protection of the spotted owl and its old-growth habitat in the Pacific Northwest is arguably an example of this sort of regulation. In a second kind of regulation, a national legislature or an agency attempts to protect a species in another country by enacting trade restrictions designed to compel actors in the other country to help to preserve the species in question. U.S. trade restrictions designed to save dolphins off the coast of Mexico and turtles in the waters off Malaysia are arguably an example of this kind of regulation.

In a loose sense, both kinds of regulation are "extraterritorial." With the first, spotted-owl-type category, the regulation is extraterritorial in the sense that its political proponents/enactors in large measure live outside the states, the territories, if you will, where the species to be protected live and the direct economic impact of the regulation will be felt. With the second, tuna-dolphin kind of regulation, the regulation is extraterritorial in the sense that it is directed toward species that live outside not merely some part of the nation but outside the nation altogether. The extraterritorial aspects of these two types of regulation may help account for the controversy they engender: some people in Washington or Oregon seem to be particularly peeved by federal spotted-owl protections because New Yorkers and Californians, in effect, made such protections a political reality. We know without doubt that one of the sources of complaints about restrictions on the import of dolphin-unsafe tuna into the United States was that the United States simply had no business meddling in how fishermen in other countries, in other nations' waters, conduct their business. But extraterritorial protection of endangered species and their habitat is controversial not simply because it seems like cross-border meddling, but also because of the values that motivate the protection efforts. By and large, the destruction of a species and its habitat does not threaten discernible economic or health harm to people who live far away, in different states or countries. If it did, the meddling might not seem to be, in fact, meddling. Most extraterritorial regulatory protection is driven by the option value of possible uses in the future of bio-diversity in general and particular species and habitats, and, even more, by intrinsic valuation of the continued existence of species and habitats as an end in itself. The skepticism about extraterritorial, species-oriented regulation likely reflects, in part, skepticism about option and existence values as a predicate for government action.

To date, most of the legal academics who have addressed regulation aimed at protection of species and habitats within the United States and regulation aimed at the protection of species outside the United States have not focused on the common question posed by these two types of regulation - namely, when should people in one place (be it state(s) or nation(s)) be able to enact and implement regulations to persuade or compel people in other places (be it state(s) or nation(s)) not to harm species or habitats located wholly in those other places? What are the affirmative rationales for such regulations, and when are those rationales more or less robust?

What are the potential dangers or costs of such regulations and, again, when are those costs particularly worthy of attention? These inquiries necessarily focus us on two bodies of law that are not often considered in tandem: American constitutional law and especially the law regarding Congress' enumerated powers, and the General Agreement on Tariffs and Trade (GATT) as implemented by the World Trade Organization (WTO). As detailed in Part One, the U.S. Constitution and GATT are both ambiguous regarding the legitimacy of extraterritorial species-oriented regulation. The Constitution unquestionably permits Congress to protect species and habitat on federal land, but the text of the Commerce Clause is a very problematic basis on which to justify species regulation on non-federal land. At the same time, the very substantial jurisprudence built up around the Commerce Clause in the last seventy years, as well as the dominant conception of the United States as involving a single national community on many levels, supports federal regulation on non-federal land. In the case of GATT, the situation is arguably the reverse. The text of Article XX of GATT provides some textual basis for extraterritorial species-oriented regulation in the form of domestic trade restrictions. But the dominant conception of the WTO as a limited form of international cooperation singularly focused on curbing the threat of protectionism and trade wars, a conception some WTO appellate panel decisions openly embrace, works against a reading of GATT that would permit species-oriented trade restrictions. In sum, the legality of species-oriented regulation under the United States Constitution and under GATT is contestable.

Where, as here, legal arguments are indeterminate, "policy" considerations are particularly important because legal decisionmakers will enjoy broad discretion to shape outcomes. Moreover, at least in the case of GATT, amendment to the basic legal documents would seem to be a realistic possibility. The remainder of the Article, Parts II-V, thus turns from the descriptive to the normative in asking what kinds of extraterritorial species-oriented regulation should be permissible. To anticipate the conclusion, I argue that extraterritorial legislation of the first, spotted-owl type is presumptively socially desirable and presumptively should be upheld as lawful. But extraterritorial legislation of the second, tuna-dolphin sort poses a substantial risk of cost-benefit irrationality - of the imposition of costs disproportionate to the garnered benefits. As a consequence, WTO decisionmakers should construe Article XX as permitting them to engage in something that approximates cost-benefit review. Such a review itself has disadvantages, but would appear to be the second best alternative in a world without first best solutions. Part II of the Article develops the affirmative case for extraterritorial species-oriented regulation. This case builds on a recognition of the significance of interstate losses in option and existence value that may result from species and habitat destruction, and the lack of reliability of contractual bargaining or cross-boundary migration as a means of avoiding these losses. Part III addresses the principal critique of extraterritorial species-oriented regulation - that it is a pretext for socially-destructive, illicit economic protectionism. I argue that pretext concerns are overblown. All regulation raises the possibility of pretextual motivation, and that possibility is no more troublesome, indeed may be less troublesome, in the context of species-oriented regulation than in many other contexts. As discussed in Part IV, the principal concern regarding extraterritorial species-oriented regulation should not be pretext, but rather that the costs such regulation imposes have not been adequately considered. In the United States, the federal political process operates to accord full weight - or even more - to the costs of regulation aimed at preserving species and their habitat within the United States. But the federal political process in the United States (as well as national political processes elsewhere) does not ensure meaningful consideration of the costs borne by foreign nationals as a result of regulation aimed at the preservation of species in foreign lands and waters. Hence, there is a need for some sort of cost-benefit review ex post, after the regulation aimed at protecting species abroad has been adopted.

Keywords: International Trade, administrative, constitutionational, environtmental

JEL Classification: F10, K00, N5, N7

working papers series


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Date posted: March 11, 2004  

Suggested Citation

Dana, David A., Extraterritorial Protection of Natural Resources in Constitutional and International Legal Discourse (March 2004). Northwestern Law & Econ Research Paper No. 04-05; Northwestern Public Law Research Paper No. 04-01. Available at SSRN: http://ssrn.com/abstract=516384

Contact Information

David A. Dana (Contact Author)
Northwestern University - School of Law ( email )
375 E. Chicago Ave
Unit 1505
Chicago, IL 60611
United States
312-503-0240 (Phone)
312-503-2035 (Fax)
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