International Corporate Environmental Compliance and Auditing Programs

Ridgway M. Hall Jr. and Kristine A. Tockman

Editors' Summary: As environmental laws throughout the world impose stricter requirements on corporations, international organizations are increasingly emphasizing the importance of corporate environmental auditing programs. This Article examines the principal environmental auditing programs applicable to corporations doing business in Europe. First, it discusses the European Union's Eco-Management and Audit Scheme. Next, it discusses environmental management standards issued by the International Organization for Standardization and the British Standards Institute. Finally, it examines the trade implications of environmental provisions in U.N. programs and international agreements such as the General Agreement on Tariffs and Trade and the North American Free Trade Agreement.

Ridgway M. Hall Jr. is a partner at the firm of Crowell & Moring in Washington, D.C. Kristine A. Tockman is a legal assistant at Crowell & Moring.

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Throughout the world, companies are encountering increasingly stringent and complicated environmental laws. In addition, they are being challenged to make environmentally friendly products. European environmental groups and the general public have become increasingly vocal over environmental concerns and increasingly effective in persuading lawmakers to adopt tougher environmental standards. Companies that do not comply with these new rules are at a competitive disadvantage. To ensure adherence to sound environmental practices, international organizations are increasingly emphasizing the importance of environmental auditing programs.

This Article examines the European Union's (EU's) Eco-Management and Audit Scheme (EMAS) and the political and economic atmosphere regarding environmental issues that business faces in Europe. It then discusses environmental management standards issued by the International Organization for Standardization (or ISO¹), as well as other international environmental management standards, from both a European and American business perspective. Finally, it examines the implications of international agreements on the growing link between trade and environmental issues.

The EU and International Environmental Auditing

EMAS

Development and Requirements of EMAS

The EU Council established EMAS in Regulation 1836/93,² allowing voluntary participation in an environmental management and auditing system for industrial facilities. The regulation became effective in April 1995. In July 1998, the EU Commission will reconsider whether the regulation should remain voluntary.

The scheme's objective is to promote continuous improvement in environmental performance through a company's establishment of an environmental policy and management program, through an objective audit of those policies, and through providing information about environmental performance to the public.³ The EU Commission drafted EMAS using U.S. corporate experience with environmental management and using the ISO 9000 quality management system developed by the International Organization for Standardization as a model.⁴ Lawmakers hope that companies will voluntarily participate in the regulatory scheme in order to avoid being put at a competitive disadvantage.

Consumer demand may also prove a strong incentive to participate in the scheme. Many large manufacturers are planning to participate. Because they have high profiles, they are under intense public scrutiny to comply with tough environmental laws. Other firms may be forced to participate as consumers demand proof of a firm's commitment to eco-friendly policy.

EMAS has developed a logo showing participation in the scheme. Although the logo cannot be used on products or product advertisements, it can be used on corporate letterhead, brochures, reports, and general company advertising that does not mention a product.⁵

The scheme especially encourages participation by small and medium-sized companies. To that end, EMAS directs the EU Commission to submit proposals to provide expert advice, information, technical assistance, training, and other support measures to smaller firms. EU member states may also encourage smaller firms to participate in the scheme by establishing support structures of their own. That kind of support could allow small and medium-sized companies to better compete with larger firms, which have more regulatory expertise at their disposal.

Environmental Policy and Program

EMAS requires participating companies to develop an environmental policy that demonstrates a commitment to legal compliance and continuous improvement of environmental performance. The policy must also be based on principles of "good management." Such principles describe elements of environmental stewardship, including fostering a sense of responsibility for the environment among employees "at all levels" and maintaining a policy of transparency, namely, providing information to, and keeping an open dialogue with, the public. The policy also must address approximately 10 specific issues.⁶

A written environmental policy must be adopted at the corporate level. Based on that corporate environmental policy, the company must develop an environmental program for each of its participating sites. The company policy must identify quantifiable deadlines and goals. Although outlining a generalized and optimistic policy may seem safer for some companies, it is not necessarily the best plan to follow. Since companies will be audited against progress with their own programs, auditors may demand a detailed program — with numbers and milestones. Failure to meet these objectives will then be broadcast in a negative public environmental statement. Companies must, therefore, tread carefully when writing their policy, making sure their programs are specific enough to satisfy auditors, yet not risking poor public environmental statements for failing to achieve these objectives.⁷

Unlike the BS7750 standards⁸ developed by Great Britain, which commit a company only to continued improvement of environmental performance and allow companies when setting up their environmental policies and goals to take financial and operational requirements into account, EMAS requires companies to ensure that "the environmental impact of all activities is reduced to the minimum."⁹

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The Environmental Management System

The EMAS regulation defines an environmental management system (EMS) for a company as "that part of the overall management system which includes the organizational structure, responsibilities, practices, procedures, processes and resources for determining and implementing the environmental policy."¹⁰ The EMS must meet requirements concerning organization and training, preparation of registers on environmental effects, and recordkeeping, all of which must be periodically audited.

Organization and Training. These requirements include:

1. defining and documenting "responsibility, authority and interrelations of key personnel who manage, perform and monitor work affecting the environment";¹¹

2. appointing a "management representative" with "authority and responsibility for ensuring the management system is implemented and maintained";¹² and

3. ensuring all employees are aware of potential environmental impacts of their work activities and understand the importance of complying with the regulations and the environmental benefits of improved performance.¹³

Fostering a sense of responsibility for the environment among employees is an imprecise requirement, and it may be difficult for companies to determine when they are in compliance.

Registers. The company must keep two registers. It must investigate the environmental effects of all its activities at the site and compile in one register a list of all "significant" effects. In general, the company must consider effects from normal and abnormal operating conditions; accidents; and past, current, and planned activities. Specifically, the company must consider:

1. controlled and uncontrolled releases to air and water;

2. solid and hazardous wastes;

3. contamination of land;

4. natural resource use;

5. discharge of thermal energy, noise, dust, odor, vibration, and visual impact; and

6. effects on specific parts of the environment and ecosystems.¹⁴

In the second register, the company must track all legal and policy regulations applicable to the company's activities, products, and services.

Recordkeeping. A company must establish comprehensive records detailing its environmental policy, program and objectives to "demonstrate compliance with the requirements of the environmental management system," as well as documenting progress in attaining environmental goals.¹⁵ These records may prove to be helpful to companies involved in litigation who want to show their commitment to the environment and their EMS.

Environmental Auditing

EMAS requires an environmental compliance program, which it defines as "a management tool comprising a systematic, documented, periodic and objective evaluation of the performance of the organization, management system and processes designed to protect the environment, with the aim of assessing compliance with company policies."¹⁶

Either company employees or external auditors must perform the audits at least once every three years. Top company management may decide how frequently it will require certain steps in the auditing process, depending on the scope of the company's activities, emissions, history of environmental problems, and interaction with the environment in general. Audits shall investigate:

1. control and reduction of the activities' enviornmental impacts;

2. energy and raw material management;

3. waste management;

4. noise reduction;

5. new products and processes;

6. product design, packaging, transportation, use, and disposal;

7. staff information and training on environmental issues;

8. environmental compliance of contractors and suppliers;

9. accident planning and prevention; and

10. external information on environmental issues.¹⁷

A company is audited against the standards contained in its environmental policy, whichmust show compliance with all applicable laws, efforts at continuous improvement of environmental performance, and good management practices. The auditor must prepare a written report describing the company's state of compliance with its environmental policy and identifying areas where corrective action is needed. The audit findings must be formally submitted to top company management. The company must also establish a mechanism to follow up on audit results to see that any necessary corrective action is taken.

Legal requirements include all local, regional, and national environmental laws, as well as all applicable EU laws. The requirement could pose significant problems because sometimes EU and national laws directly conflict with each other.

EMAS differs from the BS7750 and ISO standards¹⁸ in that it is primarily an environmental protection system, rather than simply an environmental management system. This difference has distinct consequences. Companies participating [25 ELR 10398] in an environmental management standard, like BS7750, essentially must show they have "effective management control over [their] environmental performance . . . the standard of performance itself is very much of secondary importance."¹⁹ EMAS participants, however, must not only define an environmental management system, but must devise measures aimed at protecting the environment and improving their environmental performance.²⁰

Although the scope of EMAS' requirements make it expensive to implement, EU member states and participants hope that these stricter requirements will translate into increased consumer confidence in their company or product, as well as greater prestige. They may also gain a competitive advantage by adopting the standards.

Environmental Statements and Validation

EMAS requires participants to prepare a comprehensive statement after each audit or audit cycle. These statements must be written specifically for the public in clear, non-technical language and must include:

1. A description of the participant's activities at the site.

2. The participant's eviornmental policy, including specific goals, for the site.

3. "An assessment of all significant issues relevant to the activities concerned." This implies disclosure of all"significant" items noted in the environmental register as well as all instances of noncompliance. The regulation does not give companies an indication of threshold, that is, to specify a measuring time for emissions limits, for example. In other words, if a company exceeded limits during a period of half an hour, it would be in compliance if a 24-hour measuring time were used, but not if it was expected to comply at all times.²¹

4. "A summary of the figures on pollutant emissions, waste generation, consumption of raw material, energy, water, noise and other significant environmental aspects." The emissions the company must track are defined broadly here as well.

5. "Other factors regarding environmental performance." This is a catchall requirement; the "other factors" do not necessarily need to be significant. The auditor is thus given more power to require disclosure of anything he or she feels significant.

6. A deadline for the submission of the next statement.²²

EMAS also requires verification and validation. A "verifier" is a third party required to check compliance with the regulation of environmental policies, programs, management systems, audit procedures, and environmental statements. The verifier is responsible for investigating the technical validity of the company's audit as well as confirming whether or not the environmental statement is reliable and thorough. The verifier then cites in a report cases of non-compliance with the regulation, technical problems with the company's EMS, or audits and points of disagreement with the company's environmental statement.

Once the EMS, auditing procedures, and accuracy of the environmental statement have been approved, the verifier may validate the environmental statement. The validation is the critical step that allows the company to participate in the EMAS system.

The Implications of EMAS for American Businesses

Many representatives of U.S. industries are voicing concern over the EU's new regulatory scheme. In making EMAS an international standard, the EU has run into problems reconciling regional management systems with the very different demands of foreign companies. Executives seem to be upset by Europe's relatively sudden interest in environmental standards. U.S. companies do not want to face strict (and relatively untested) EMAS regulations whenever they do business with European customers.

Even more problematic is EMAS' regulation requiring public reporting of all environmental information regarding any aspect of the company's management system. American firms want a much more clearly defined program of making information publicly available before they agree to Europe's regulatory scheme.

American firms that export their products to the EU or operate in the EU member states should be aware of several implications of EMAS. One major consideration is that market forces may demand participation in the regulatory scheme. Industries might decide to purchase goods only from suppliers who participate in the scheme. Retailers may give the best shelf space to products made by participating companies. Consumers might only buy products from participating companies.

Another concern for U.S. companies is the territorial scope of EMAS application. The EMAS environmental policy must be adopted at the "company" level. The regulation defines "company" as "the organization which has overall management control over activities at a given site."²³ Depending on where "overall management control" lies in the corporate structure, the company may be forced to adopt policy in accordance with the EMAS regulation for its worldwide operations in order to have one site in the EU qualify for the scheme.²⁴

Developing International Standards for Environmental Management

British Standard: BS7750

The British Standards Institute developed a standard for an environmental management system, BS7750, which was adopted in March 1992. The standard is designed to "enable any organisation [sic] to establish an effective management system as a foundation for both sound environmental performance and participation in environmental auditing schemes."²⁵

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The BS7750 process begins with an initial review covering four main areas:

1. legislative and regulatory requirements;

2. significant environmental effects;

3. existing environmental management practices and procedures; and

4. analyses of investigations of previous incidents and noncompliance.²⁶

The standard emphasizes documented responsibilities and adequate personnel for environmental performance management. Personal accountability for environmental performance is stressed in communications and training as well as in setting objectives and departmental targets. The standard includes a detailed environmental program for company activities such as purchasing, developing new products, manufacturing processes, installation of new facilities, and waste. Environmental management procedures must be documented in an environmental management manual. The manual must also provide auditing guidelines to periodically review the system for effectiveness.

BS7750 and EMAS have several key differences. Unlike EMAS, BS7750 can operate on a companywide basis, not just at site-level. EMAS applies to industrial activities, but BS7750 can be used by any organization. And, while BS7750 concentrates on internal management practices, EMAS focuses on public disclosure of information that has been externally validated.²⁷

BS7750 has been touted as the basis for an international standardization of the heretofore conflicting and complicated national environmental management systems. However, as seen above, there are deep divisions between business interests and policymakers over what, if any, guidelines in BS7750 should be incorporated into EMAS. Many in industry have called for dissolving BS7750 and EMAS altogether in favor of ISO standards.

Structure and Elements of the ISO

ISO is a global federation of national standards bodies, comprising over 100 members, one member per country. ISO's purpose is to "promote the development of standardization and related activities in the world with a view to facilitating international exchange of goods and services, and to developing cooperation in the sphere of intellectual, scientific, technological and economic activity."²⁸ The U.S. representative to the ISO is the American National Standards Institute (ANSI), headquartered in New York. ISO's work is carried out by some 2,600 technical bodies, international organizations, and advisory groups, which are divided into technical committees. Each ISO member has the right to be represented on any technical committee it chooses.

Draft international standards adopted by the technical committees must be approved by the member bodies before the ISO Council accepts them as international standards. The draft standards must receive at least 75 percent approval by the member bodies voting.²⁹

In 1991, the ISO established the Strategic Advisory Group for the Environment (SAGE) to assess the need for international standardization of key elements of sustainable industrial development. SAGE is divided into subgroups, which made recommendations for the scope, objectives, and processes of standardization in their particular field. The subgroups studied environmental management systems, environmental auditing, environmental performance standards, life cycle analysis, environmental guidance for product standards, and industry mobilization plans.

SAGE recommended establishing a separate ISO technical committee on the environment. ISO adopted SAGE's recommendation, and Technical Committee 207 (TC207) was created. The U.N. Conference on Environment and Development requested all parties to support the use of ISO international standards as a "basis for environmental measurement, control, management and for harmonizing appropriate technical regulations."³⁰

TC207

TC207 is responsible for developing and writing an international environmental management system standard, and has been leading the drive for its adoption. This standard, known as ISO 14000,³¹ may be adopted as early as 1996.

During the development of ISO 14000, the TC207 meets regularly with the members of TC176, the technical committee that developed the ISO 9000 standards relating to quality management, in order to ensure that the "philosophy and architecture of the two families harmonize with each other."³²

TC207 is divided into a number of subcommittees dealing with the various aspects of environmental management. These subcommittees are, in turn, divided into working groups. These groups explore issues that are divided into two main groups — organization evaluation and product evaluation. Organization evaluation includes environmental management systems, environmental performance evaluation, and environmental auditing. Product evaluation focuses on life cycle assessment, environmental labeling, and environmental aspects in product standards.

The Audit Procedures group is an example of a working group in the Environmental Auditing (EA) Subcommittee. The United States is the secretariat of that working group. It is charged with developing audit procedures for management systems, compliance and performance, environmental statements, and program management.

The working groups and subcommittees comprise a diverse [25 ELR 10400] set of representatives of different countries, environmental organizations, public environmental groups, and industry. Agreeing on an international standard is a slow process, since 36 countries have representatives on the TC207 committee. Committee members must deal with basic differences such as language and culture as well as different experiences with national environmental regulations. Individual country delegations to the technical committees are often dominated by one particular interest group; for example, some have an over-representation of industry leaders, others are dominated by consultants or government standardization bodies.³³

The ISO 9000 Quality Management Standards

The ISO 9000 series, first published in 1987, is a set of manuals that describe international criteria for establishing and maintaining an effective quality management system. The voluntary system has been adopted in many countries around the world, including the United States.

The 9001 standard describes the concept of quality and provides guidelines as to which quality model to use. The 9002 standard is aimed at ensuring conformity at all stages in a product's life cycle: The standard's specific requirements involve development, production, installation, and servicing. The 9002 standard requires contractors to demonstrate their control over production and installation processes that will result in acceptable products.³⁴

The 9003 standard similarly requires suppliers' demonstrations of their ability to detect and control problems in the final inspection and test phase. The 9004 standard gives a more detailed explanation of the elements of a quality management system.³⁵

ISO 9000 Certification Process

Consultants or company personnel identify the necessary measures to be taken to establish a quality assurance program. The company negotiates a formal contract with a quality system registrar, who helps the company decide under which of the three quality standards it should be certified. The registrar compares the requirements of the selected standard to the company's quality assurance program.

The registrar prepares an assessment program for inspecting the quality management system at each site and selects an assessment team. A site audit is conducted by the assessment team to ensure the company's operations conform both to its own quality program and the requirements of the standard. (In 1992, the general failure rate was 70 percent.)

If the registrar is satisfied that the company's quality management system meets all the requirements of the standard, the registrar then issues a certification. If the audit finds deficiencies in the program, time limits are given for making corrections. The registrar, after verifying that the problems have been corrected, will then issue the certification. Audits are conducted by the registrar every six months after the initial certification, and a complete reassessment is performed every three years.³⁶

Drawbacks to ISO 9000

The EU's use of ISO 9000 could have undesirable impacts on U.S. exporters or U.S. companies' European subsidiaries for several reasons. First of all, the certification is expensive, raising U.S. manufacturers' costs of doing business in Europe. A universal quality standard levels the playing field in the sense that everyone has to meet the same standard; however, if one company is already meeting the standard and another company has to alter its products or processes (which may or may not improve the quality of the product), then the former has a competitive advantage. The certification system is constantly changing its rules and procedures, which leaves U.S. companies doing business in Europe unable to plan very far ahead. ISO 9000 does not include continuous improvement as a factor for certification.

ISO 9000 also does not require proof of product quality and manufacturing performance. In theory, a poor quality product and manufacturing performance could still qualify under the standard as long as the required quality system criteria were well-documented.³⁷

Incentives to Participate

The EU Products Liability Directive holds the manufacturer of a product liable, regardless of fault or negligence, if a person is harmed or another object is damaged by a faulty product.³⁸ Consequently, all manufacturers may have to prove their manufacturing process was consistent with the highest standards if they become involved in litigation. If the manufacturer can show that ". . . because of its internal quality assurance system the product was made and delivered defect-free and in conformity with the applicable [EU] standards, then that manufacturer may be able to exonerate itself of the liability."³⁹

Although initial costs of certification can be daunting, companies that have established quality management systems have found that the internal benefits of such a system outweigh the effort and cost. Market expectation that companies be certified under ISO 9000 has become so widespread that the series has become a de facto international standard. As a result, noncertified U.S. companies in some situations are at a competitive disadvantage regardless of the quality of their product or production methods.

The ISO 14000 Environmental Management Standards

Still under development, these voluntary international standards focus on corporate environmental management systems. The standards will help companies develop methods to achieve their environmental goals and to determine [25 ELR 10401] whether their management systems are effective in preventing or detecting environmental violations.

Besides providing companies with organization models for complying with various regional and national regulations, the standards provide guidelines and methods for companies that want to improve their environmental performance beyond what the law requires. The standards are expected to be released in 1996, but could be ready as early as 1995.

The ISO prohibits the use of its standards as regulations, so the 14000 series cannot be used by an enforcement agency to determine whether a company has complied with environmental laws. The standards would not replace governmental regulations.

ISO 14000 is expected to be a process standard, not a performance standard. It will not set environmental goals, prescribe regulations, or set levels of achievement. (The company sets its own environmental performance standards based on the substantive regulations adopted by the EU or the country itself.) Instead, ISO 14000 will provide companies with methods they can use to achieve environmental goals and regulatory compliance.

Several draft standards have been issued recently by ISO 14000 subcommittees. ISO 14000/CD 14001 describes the essential elements of an environmental management system. The standard's scope is intended to apply to environmental effects that the company can control and over which it can be expected to have an influence. The standard outlines environmental policy criteria, planning procedures, and more specific implementation and operation standards. It also includes an annex to the specifications to elaborate some of its core elements and to avoid misinterpretation.⁴⁰

ISO 14010, Guidelines for Environmental Auditing: General Principles of Environmental Auditing, is designed to "guide organizations, auditors and their clients on the general principles common to the execution of environmental audits."⁴¹ The draft standard also defines the environmental audit and related terms and discusses the general principles of environmental auditing. ISO 14011/1 is the draft standard for auditing environmental management systems. It establishes audit procedures for planning and performing an audit of an EMS to determine whether an EMS complies with audit criteria.⁴² ISO 14012 provides qualification criteria for environmental auditors. ISO 14024 addresses environmental labeling. ISO 14040 sets forth principles and practices for life cycle assessments, and ISO 14060 addresses environmental aspects of product standards.⁴³

Since ISO 14000 does not set specific environmental performance levels, one of its major goals is to develop effective tools companies can use themselves to measure their performance. For example, life cycle analysis gives companies a process for assessing their products' environmental impact and management from "cradle to grave," from the raw materials used in manufacturing, intended and unintended manufacturing wastes such as emissions, energy consumption, and land use, to the final disposal of the product.

The environmental auditing process is also a major EMS tool. Working groups on the EA subcommittee of the TC207 are developing step-by-step standards for conducting an EMS audit, establishing general environmental auditing principles, and identifying qualifications for both internal and third-party auditors.⁴⁴

The environmental performance evaluation is an internal method a company can use not only for self-evaluation, but for setting improvement targets. As emphasized above, ISO 14000 will not set the targets for the company, but will set the standards for the "methodologies" behind a company's environmental management system. These methodologies, not the actual environmental compliance data a company gathers in the process, are the focus of the audit.⁴⁵

Members of TC207 predict that ISO 14000 will have just as much, if not more, impact on industry than the ISO 9000 quality standards.⁴⁶ A single set of international environmental management standards could help companies achieve their commitments to environmental excellence; could harmonize national rules, labels, and registration processes; and could avoid conflicting regulations. Similarly, registered companies approved by independent third parties demonstrate to the public that they are serious about their commitment to environmental protection.⁴⁷ The credibility of that commitment is an important factor with an environmentally conscious consumer market.

A universally accepted standard could promote international trade by avoiding the disparate regional and national management standards that can cause trade barriers. If adopted, ISO 14000 could raise the standards for production, use, recycling, and disposal of products in developing nations, leading to greater sustainable development for those countries. ISO 14000 could become "a condition of doing business" in the competitive market.⁴⁸

Eco-Labeling

Eco-labeling is the process conducted by independent bodies approving certain consumer goods as environmentally preferable to similar products. An eco-label is the official stamp or seal of approval from those authorities that can be displayed on the product. The EU adopted the eco-labeling regulation in March 1992; it went into effect in November 1993.

The regulation requires that each EU member state provide information to the others regarding all awards that are made and rejected. Dissemination of information about product groups and criteria and details of labels awarded [25 ELR 10402] are to be made to the public by publication in the Official Journal of the European Communities. Member states are required to inform consumers and businesses about the purposes of an eco-label award and the application process.

In order for products to qualify for an eco-label, they must meet the following criteria:

1. the entire "life cycle" of manufacturing the product must have a "reduced environmental impact";

2. qualifying for an eco-label cannot compromise product or worker safety or product efficiency or purpose; and

3. the label cannot be awarded to food, drink, pharmaceuticals, or products deemed inherently dangerous.⁴⁹

Product groups are those products that serve similar purposes and have "equivalence of use."⁵⁰ Product groups manufactured inside the EU as well as imports will be subject to the same eco-labeling criteria. Once they are established, product groups will be valid for about three years, or more often depending on the development of new scientific or technical knowledge. As environmental science improves, the criteria will change and, in order to qualify for the new label, the product must comply with the updated criteria.

Industry is keeping an eye on eco-labeling development in both the United States and the EU. Manufacturers and other industrial groups such as the Chemical Manufacturers Association, the Society of the Plastics Industry, and the National Paint and Coatings Association are asking the U.S. Environmental Protection Agency not to adopt eco-labels.⁵¹ Some industry concerns are:

1. environmental impact should not be the most important factor in federal procurement;

2. environmental preferability should be determined by additional factors, such as product use, cost, quality, and availability;

3. determining the credibility and reliability of third-party certifiers is difficult;

4. awards by third parties are arbitrary in that they can only designate degrees of environmental impact; there are no absolutes or certainty in determining what is environmentally preferable; and

5. consumers can be mislead by eco-labeling if, for example, one product has the eco-label seal, but another product made by cleaner manufacturing processes does not.

The eco-labeling system presents possible barriers to trade. Although the eco-labeling requirement in the EU does not forbid the import of products without the seal, the system does make entering the competitive market more difficult. For example, foreign producers tend to view new national standards set by internal national bodies as rules made for the benefit of that country's producers and consumers. EU eco-label standards can be devised so national producers can follow the rules easily, but foreign producers cannot.

Some fear a "slippery slope" from voluntary labeling to mandatory labeling to a ban on imports without a label. For example, Holland wanted a complete ban on imports of tropical lumber by 1995, even though this is against rules of the General Agreement on Tariffs and Trade (GATT).⁵²

Eco-labeling standards around the world are disparate. Assessing how various national standards and eco-labeling schemes can be made to conform with international trade rules and setting out specific eco-labeling criteria will be a major focus of the Committee on Trade and Environment, part of the World Trade Organization (WTO).

Implications of International Agreements and Conventions

Robert Gallup, of Gallup poll fame, prepared an extensive survey for the Rio Earth Summit. One thousand people in 20 countries (accounting for two-thirds of the world's population) were surveyed on environmental issues in 1982 and 1992. In 1982, a majority in 4 out of 20 countries believed that pollution had adversely affected their health. In 1992, the majority in 14 of 20 countries held that belief. Furthermore, over 70 percent of the people in 18 of 20 countries believed their children and grandchildren's health would be affected by pollution.⁵³

As consciousness about environmental issues grows, policymakers and industry will be met with increasing demands for accountability and environmental stewardship. The following discussion of trade agreements and conventions focuses on that stewardship; as trade and environmental issues become increasingly intertwined, more international efforts are being made than ever before to ensure they are also mutually compatible.

Overcoming Trade Barriers: The Waste Packaging Example

National environmental compliance regulations can act as trade barriers, as demonstrated by the debate surrounding the EU's waste packaging directive. Efforts to adopt such a directive were not only driven by the desire to reduce the environmental impact of packaging, but by concerns over the proliferation of disparate national packaging waste programs, which were causing trade barriers.⁵⁴

Several EU member states, particularly France, complained that their national waste packaging markets were being flooded by cheap imports from other countries that had more stringent packaging recycling programs. These member states strongly advocated a standard waste-packaging program. Countries such as Germany and Denmark, with successful waste packaging schemes, objected to adopting standard waste management targets, saying they would be forced to lower their high environmental standards to comply with such a regulation.

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Several examples illustrate the levels of regulatory disparity between the members of the EU. The German Ordinance on the Avoidance of Packaging Waste has been the model for other waste packaging management systems. It requires manufacturers to collect and reuse all packaging waste they produce. The "over-success" of the collection program has resulted in the flooding of the EU secondary raw materials market and damage to the domestic markets of France and Britain. French law regarding "waste resulting from the abandonment of packaging" applies to all packaging and requires manufacturers to take back and reuse all household packaging waste they have put on the market. Dutch packaging laws only apply to those industries that signed an agreement with the Dutch government, known as the Dutch Packaging Covenant. In Belgium, each of the three Belgian regions — Flanders, Wallonia, and Brussels — has its own waste packaging system, although the groups are negotiating ways to create uniform national waste packaging legislation.⁵⁵

A compromise was reached in Directive 94/62/EC On Packaging and Packaging Waste, passed in December 1994. The directive takes into account both concerns for protecting environmental standards and for the creation of trade barriers: "[T]he differing [waste packaging] measures . . . should be harmonized, in order, on the one hand, to prevent any impact thereof on the environment or to reduce such impact, and, on the other hand, to ensure the functioning of the internal market and to avoid obstacles to trade and distortion and restriction of competition with the [EU]."⁵⁶

The directive applies to all packaging on the EU market. The directive gives general requirements for reducing the environmental impact of packaging and specific requirements for six packaging categories: returnable, recyclable, recoverable, recoverable in the form of energy recovery, compostable, and biodegradable packaging. Within three years of adoption of the directive, only packaging that meets these requirements will be allowed onto the EU market. The EU Commission would authorize EU member states to charge a tax to finance these programs, as long as they do not create trade barriers.

GATT

The original GATT was written over 40 years ago when environmental policy was in its infancy; consequently, there are no major environmental measures in the GATT itself. However, there are some exceptions to a country's GATT obligations based on environmental protection. Article XX(b) exempts measures taken that are "necessary to protect human, animal or plant life or health."⁵⁷ Article XX(g) exempts measures "relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption."⁵⁸ These exceptions are made under the condition that the measures not be "applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade."⁵⁹

There has been widespread disagreement about how to interpret GATT rules to reflect environmental concerns while maintaining free international trade. Some of the most controversial issues are as follows:

1. Production and process methods. GATT rules prohibit a country from using production processes as a way to distinguish (and consequently discriminate against) an imported product that is physically indistinguishable from a domestic one. Since sometimes it is not the product but the production methods themselves which harm the environment, it is desirable to be able to differentiate between products based on their production methods. If this were allowed, on the other hand, countries could easily construct production processes designed to exclude foreign products. A nominally environmentally motivated measure could be tailored to restrict imports.

2. GATT and International Environmental Agreements (IEAs). It has been proposed that GATT be amended to allow countries to impose trade measures for environmental purposes only when those measures are related to an IEA. Advocates of this approach feel it will limit the ability of countries to use the environment to disguise trade barriers made for protectionist purposes.

3. Use of Trade Measures to Protect the Environment. The United States has long used trade measures to protect the environment.⁶⁰ U.S. trading partners are concerned with what they see as a U.S. trend to impose such trade measures to protect the environment outside U.S. jurisdiction without international consensus. Much debate focused on limiting countries' ability to impose unilateral trade restrictions.⁶¹

The WTO was created to help implement the agreements reached during the Uruguay Round negotiations and to provide a permanent forum to address new international trading issues. The preamble of the Agreement Establishing the World Trade Organization states that the parties agree to pursue trade "with the objective of sustainable development, seeking both to protect and preserve the environment and enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development. . . ."⁶² This is the first time that a major multilateral trade agreement has recognized sustainable development as a guiding principle.⁶³

The Uruguay Round Ministerial Decision on Trade and the Environment,⁶⁴ signed on April 14, 1994, seeks to co-ordinate [25 ELR 10404] trade and environment policy by establishing a Committee on Trade and the Environment under the WTO. The Ministerial Decision directed the Committee to make environmental and trade policy mutually supportive using the following terms of reference:

1. identifying trade and environmental policy linkages to promote sustainable development;

2. giving special consideration to the needs of developing countries;

3. avoiding protectionist measures while promoting environmental objectives agreed to at the U.N. Conference on Environment and Development in Rio de Janeiro;

4. implementing trade disciplines to govern trade measures used for environmental purposes as well as environmental policies that have significant trade effects; and

5. making recommendations to ensure these goals are fully compatible with the international trading system.⁶⁵

Under these terms of reference, the Committee will address the following issues:

1. trade provisions in multilateral environmental agreements;

2. environmental policies that significantly affect trade;

3. trade measures used for environmental purposes;

4. environmental manufacturing policies regarding product standards and technical regulations, packaging, labeling, and recycling;

5. dispute settlement procedures for international environmental agreements;

6. the effect of environmental policies on market access, especially regarding developing countries and environmental benefits of removing trade restrictions; and

7. exports of domestically prohibited goods.

The Committee's priorities are likely to be standards harmonization, eco-packaging and labeling, trade measures for environmental purposes, and developing country issues.

Other Key Provisions in the Final Text of the Uruguay Round Agreements

Agreement on Sanitary and Phytosanitary Measures. Sanitary and phytosanitary (S&P) measures refer to governmental requirements for health protection and food safety. Such requirements govern such things as food processes and production methods, meat inspection rules, and pesticide approval.

Governments have been imposing nontariff measures, such as standards, to protect domestic producers from foreign imports. The Agreement tries to remedy this problem by prohibiting governments from using S&P measures that would constitute a disguised restriction on trade, defined as "a measure which is masquerading as a food safety measure [for example], but which is really intended to protect a domestic industry from foreign competition."⁶⁶

The S&P Agreement requires that S&P measures must be scientifically based and must not be "maintained without sufficient scientific evidence."⁶⁷ This will prevent governments from using phony health concerns to construct trade barriers. Governments must also use international standards as the basis of their S&P measures, but may use more stringent standards if scientifically justified or if the government determines the level of safety is inadequate. Countries must accept other countries' S&P measures, even if they are different from their own, if the exporting country demonstrates to the importing country that its safety methods achieve the level of protection required by the importing country.⁶⁸

Agreement on Technical Barriers to Trade. The Agreement on Technical Barriers to Trade (TBT) addresses product standards and other technical regulations to ensure that those requirements are not disguised trade barriers. Environmental measures related to product standards may not be more trade restrictive than necessary, must not discriminate against imports, and must be open for comment on proposed new measures.⁶⁹

Like the S&P Agreement, the TBT Agreement requires that governments use international standards as a basis for their domestic standards. Governments retain the right to adopt stricter standards than those agreed upon internationally.

Dispute Settlement Understanding. The Dispute Settlement Understanding improves the much-criticized settlement procedures by enforcing strict time limits, increasing public access to information, and providing methods with which countries can effectively enforce their rights. Important elements include:

1. automatic adoption of panel reports;

2. the right to retaliate if the losing party has not implemented panel recommendations or paid a fine within an agreed time period;

3. establishment of a standing appellate body whose members are experts in law, international trade, and GATT matters;

4. limiting appeals to questions of law and legal interpretation and requiring appeals to be completed within 60 days in most cases;

5. creating an integrated settlement system under which the same procedures will apply to all disputes arising from all Uruguay Round agreements; and

6. authorizing panels to form expert advisory groups for technical or scientific issues and improving methods for panels to use experts' advice.⁷⁰

North American Free Trade Agreement

The scope and depth of environmental provisions in the North American Free Trade Agreement (NAFTA) represent an unprecedented attempt to deal with environmental problems raised by international trade and will have far - reaching effects on future trade agreements. NAFTA's environmental [25 ELR 10405] protection provisions are much stricter than those in GATT. Unlike the original GATT, whose text does not include the word "environment," environmental issues were an integral part of NAFTA negotiations. The environmental provisions were drafted to ensure that the parties could take legal action to protect the environment while not impeding free trade.

NAFTA states that the United States, Canada, and Mexico must trade and invest "in a manner consistent with environmental protection and conservation," to "promote sustainable development," and to "strengthen the development and enforcement of environmental laws and regulations."⁷¹ Under NAFTA's TBT Agreement, each country may set its own standards of environmental protection as long as the standards do not act as unnecessary obstacles to trade. NAFTA also discourages pollution havens, stating that countries should not encourage investment by lowering their environmental standards.⁷²

In fact, NAFTA supports the principle that environmental standards should be harmonized upwards. Parties are called on to "pursue equivalence" and use "international standards" as a basis, but "without reducing the level of protection of human, animal, or plant life or health."⁷³

Expected benefits of increased trade and investment include more available resources being devoted to environmental protection and cleanup and an increase in environmentally friendly products and services. Growth and higher incomes also help raise interest in environmental protection.

The dispute resolution measures in NAFTA place the burden of proof on the country challenging an environmental regulation. A country defending an environmental standard can elect to have the case decided by a NAFTA panel rather than a GATT panel. The right to select the forum applies only under certain environmental treaties or domestic environmental laws. Therefore, if a country imposes an environmental measure aimed at protecting the "global commons," the complaining country, rather than the defending party, chooses the forum.⁷⁴

During his campaign, President Clinton indicated that NAFTA needed stronger environmental provisions before it could be signed. Pursuant to the President's statements, negotiations commenced on the North American Agreement on Environmental Cooperation (NAAEC), which became known as a "side" or "supplemental" agreement to NAFTA. The NAAEC was reached on August 13, 1993, and finalized in early September.⁷⁵

The NAAEC's objective is to promote sustainable development, cooperation in the protection of the environment, and compliance with environmental laws. The NAAEC requires each country not only to ensure that its laws provide for high levels of environmental protection, but to strive continually to improve those laws. Each country must publish laws, regulations, procedures, and rulings and must promote public participation in developing environmental laws and policies.⁷⁶

The NAAEC established the Commission on Environmental Cooperation. The Commission is charged with facilitating cooperation between the United States, Canada, and Mexico on virtually any environmental issue. Reports must be prepared on particular environmental issues, the state of the North American environment, and the activities each country has taken to fulfill their treaty obligations. The Commission's governing body, the Council, must monitor NAFTA's environmental effects. The Council's subsequent reports could play a very important role in determining the relationship between environment and trade.⁷⁷

The Basel Convention

The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal⁷⁸ was signed by over 50 countries, including the United States, during 1989 and 1990. The major provisions in the original agreement include:

1. a ban on covered waste imports and exports between parties to the agreement as well as nonparties;

2. a requirement for notice to and written consent of the receiving country and any transit country before covered waste may be exported;

3. a commitment by both the exporting and importing countries to ban the waste shipment if it is believed that the waste would not be managed in an environmentally sound manner in the importing country;

4. standard notification requirements and requirements for contracts between exporters and importers;

5. an obligation on the exporting country to assume responsibility for disposal of any waste an exporting company ships illegally; the same obligation for the importing country if an importer acts illegally;

6. a commitment among parties to the Convention to share information and develop an environmentally sound management system; and

7. a ban on exports of covered wastes to Antarctica.⁷⁹

In March 1994, a conference of the parties to the Basel Convention adopted Decision 11/12, deciding to immediately ban all transboundary movements of hazardous waste from the member states of the Organization for Economic Cooperation and Development (OECD) to non-OECD states for final disposal. By December 31, 1997, all transboundary movements of hazardous wastes from OECD states to non-OECD states destined for recycling operations will be banned as well.

[25 ELR 10406]

The Global Environment Facility

The U.N. Development Programme, the U.N. Environment Programme, and the World Bank formed the Global Environment Facility (GEF) in November 1990 as a source of funding for projects in developing countries that have global environmental benefits. The GEF originally was established as a three - year pilot facility, operating from June 1991 to June 1994. Programs focused on biodiversity, global warming, international waters, and ozone depletion. Developing countries were not pleased with the initial program focus on these subjects. Those countries wanted GEF programs to emphasize national environmental issues such as poverty alleviation and sustainable development.⁸⁰

Negotiations establishing GEF II were completed in 1994, and extra funds were pledged to support a restructured, permanent facility. Twenty - six countries, including the United States, pledged over $ 2 billion. Over one-half of the funds come from the United States, Japan, France, and Germany.⁸¹ While the GEF must continue to advocate awareness of global environmental problems, its mission has expanded to ensure that "economic development, particularly in developing countries, does not eclipse environmental concerns."⁸² The restructured GEF will help developing countries improve the way they foster development, encourage public participation to identify and plan project priorities and increase environmental awareness at the local and regional levels.⁸³

U.N. Programs

Just as international trade and environmental issues are increasingly becoming a global concern, the forum for setting environmental regulatory policy and recommendations is also shifting from individual national agendas to the international stage. These developments will need to be considered and reflected in the environmental policies and the compliance and auditing programs of the multinational corporation.

The U.N. Conference on Environment and Development

The U.N. Conference on Environment and Development (UNCED), commonly referred to as the "Earth Summit," was held June 3-14, 1992, in Rio de Janeiro, Brazil. The historic meeting has been the most comprehensive effort yet to carry out a 1989 mandate from the U.N. General Assembly to" . . . devise integrated strategies that would halt and reverse the negative impact of human behavior on the physical environment and promote environmentally sustainable economic development in all countries."⁸⁴

More governments were represented at the UNCED than at any previous meeting, 178 in all. The conference resulted in five major agreements that were signed by most of the participating governments. The Framework Convention on Climate Change establishes requirements for combatting climate change, including returning greenhouse gas emissions to 1990 levels by 2000 and following strict policy evaluation and reporting processes. The Convention on Biological Diversity focuses on preserving biological diversity by protecting species and ecosystems. Countries have sovereign rights over biological resources, but should share the benefits of those resources in a "fair and equitable" way on "mutually agreed terms." Countries must develop plans to protect biodiversity. The Rio Declaration is a statement of principles for action on environment and development. The Forest Principles emphasize the sovereign right to use forest resources and outlines various principles of forest protection and management. Agenda 21 is a massive blue-print for sustainable development.⁸⁵

The U.N. Environment Programme

The U.N. Environment Programme (UNEP) is the major intergovernmental institution created specifically to address environmental issues. It was established in 1972 and is headquartered in Nairobi, Kenya. UNEP's scope of work involves the global environmental assessment program (Earthwatch), environmental management activities, and supporting measures. Of these three tasks, UNEP has focused on environmental assessment, creating the Global Resource Information Database, the Global Environment Monitoring System, and the Infoterra system.⁸⁶

UNEP has formed many partnerships with other international organizations (such as the World Bank and the Organization of American States) and has played a central role in many key environmental agreements and conventions like the Montreal Protocol, the Basel Convention, and the GEF.

The U.N. Conference on Trade and Development

The U.N. Conference on Trade and Development (UNCTAD) has played an important role in shaping international environmental and trade policies. The Conference's sponsoring body, the Trade and Development Board, decided last year that it will address the trade and environment theme as a separate issue at each of its annual sessions.⁸⁷

International Enviromental Standards From a U.N. Perspective

Agenda 21 and directives from the UNCTAD have called for the development of international standards. The UNCTAD [25 ELR 10407] secertariat notes in a report on sustainable development: "In order for the determination of environmental standards to involve countries which are . . . at different stages of development, an international process is . . . required. The ISO provides a forum for such a process."⁸⁸ UNCTAD questions whether harmonization of production standards is justifiable in light of the generally accepted fact that a country's domestic environmental problems should be based on its own policy decisions.⁸⁹

The United Nations supports the idea that internationally agreed - upon standards reduce adverse trade effects. For example, Agenda 21 outlines the need for specific types of standards and standardization practices. A few references from Agenda 21 Action Programmes note:

1. the need for "strengthening of existing methods for environmental management";

2. government encouragement of "the development of management tools and practices"; and

3. the need for "globally harmonized classification and labeling systems."⁹⁰

Agenda 21 also states that "national systems for environmentally sound management [of chemicals] should be in place by the year 2000," and that "standard setting and monitoring are two key elements essential for gaining control over waste - related pollution."⁹¹

Conclusion

It is clear that the international community, and the EU in particular, has responded to the widespread public demand for protection of the environment and public health in much the same manner as the U.S. Congress has, though perhaps (fortunately) without the same thirst for detailed "command - and - control" regulations coupled with an adversary litigation - based enforcement philosophy. As individual nations have moved to adopt their own compliance programs, there has been a recognized need for uniform international standards and quality assurance. This has led to such conventions as EMAS, the ISO 14000 program, and U.N. initiatives.

For U.S. - based multinational corporations, or for any U.S. company seeking to enter overseas markets, careful attention to these conventions and standards is essential, both for competitiveness and compliance. For those with overseas facilities, some of these standards provide procedures and benchmarks for environmental auditing and compliance programs. The treaties and conventions discussed above may impact specific activities and should be included in any corporate compliance program and strategic business plan where applicable.

The international process for setting global environmental agendas and standards will not be smooth. Trying to harmonize the diverse priorities of economic, trade, and environmental issues of industrialized and developing countries will involve lengthy and complex negotiations. Throughout this process, companies that institute environmental, health, and safety auditing and management programs that incorporate or accommodate emerging international standards are likely to be the most effective competitors in the world market.

1. "ISO" is the Greek word meaning "equal."

2. Council Regulation 1836/93 of June 29, 1993, 1993 O.J. (L 168) 1 (allowing voluntary participation by companies in the industrial sector in a European Community eco-management and audit scheme).

3. Id.

4. See infra notes 34-39 and accompanying text.

5. Council Regulation 1836/93, supra note 2, at 5.

6. See infra note 17 and accompanying text.

7. Roszell Hunter, EU Eco-Management and Auditing Regulation, 17 Int'l Env't Rep. (BNA) 142, 144 (Feb. 9, 1994).

8. See infra notes 25-27 and accompanying text.

9. Council Regulation 1836/93, supra note 2, at 1.

10. Id. at 2.

11. Id. at 8.

12. Id.

13. Id. at 9.

14. Id.

15. Id. at 10.

16. Id. at 2.

17. Id. at 9.

18. See infra notes 25-48 and accompanying text.

19. ECO-MANAGEMENT AND ECO-AUDITING: ENVIRONMENTAL ISSUES IN BUSINESS 60 (Linda S. Spedding et al. eds., 1993).

20. Id.

21. Hunter, supra note 7, at 146.

22. Council Regulation 1836/93, supra note 2, at 4.

23. Id. at 3.

24. Hunter, supra note 7, at 144.

25. TOLLEY'S ENVIRONMENTAL HANDBOOK: A MANAGEMENT GUIDE 14.10 (Freshfields Envtl. Law Group ed., 1993).

26. Id. at 14.10.

27. Id. at 14.11.

28. ISO, INTERNATIONAL STANDARDIZATION EFFORTS TO PROMOTE THE WORLD-WIDE APPLICATION OF SUSTAINABLE DEVELOPMENT 1 (Feb. 1992) [hereinafter INTERNATIONAL STANDARDIZATION EFFORTS].

29. QUALITY MANAGEMENT AND QUALITY ASSURANCE STANDARDS: GUIDELINES FOR SELECTION AND USE, ISO 9000, at 1 (Int'l Org. for Standardization, 1st ed. Mar. 15, 1987) [hereinafter ISO 9000].

30. INTERNATIONAL STANDARDIZATION EFFORTS, supra note 28, at 6.

31. See infra notes 40-48 and accompanying text.

32. Chris Roerden & Pat Meller, Beyond ISO 9000: Environmental Management, TOTAL QUALITY REV., July/Aug. 1994, at 57. The authors note here that the goal in developing ISO 14000 is not to expand the scope of ISO 9000 or integrate both sets of standards into one: "[ISO's] integrated environmental management system . . . would meet the standards of two separate but compatible series." Id.

33. Telephone Interview with Joe Cascio, Chairman of the U.S. Technical Advisory Group for TC207 (Oct. 13, 1994).

34. ISO 9000, supra note 29, at 4.

35. Id.

36. Daniel J. Meckstroth, The European Community's New Approach to Regulation of Product Standards and Quality Assurance (ISO 9000): What It Means for US Manufacturers, MANUFACTURERS' ALLIANCE FOR PRODUCTIVITY AND INNOVATION ECONOMIC REP., 9-10 (1992).

37. Id. at 14.

38. Id. at 12.

39. Id. at 12-13.

40. Meeting of TC207, Subcomm. 1, Work Group 1, Feb. 1-2, 1995.

41. GUIDELINES FOR ENVIRONMENTAL AUDITING: GENERAL PRINCIPLES OF ENVIRONMENTAL AUDITING, ISO 14010 (Int'l Org. for Standardization, Unofficial Committee Draft prepared by TC207 Subcomm. 2 (Envtl. Auditing), Work Group 1 (Principles), Oct. 4, 1994, as revised by TC207 Subcomm. 2, Jan. 17, 1995).

42. Id.

43. Id.

44. See supra note 33 and accompanying text.

45. Roerden & Meller, supra note 32, at 56. One question that has not yet been resolved by the subcommittee is "What happens when an auditor performing a voluntary assessment to ISO 14000 comes across incriminating data . . . the sort of data that requires anyone learning of a violation to report it?" Id. by U.S. standards, the response would be to correct the violation promptly and comply with any applicable reporting requirements.

46. Id. at 57.

47. Telephone Interview, supra note 33.

48. Id.

49. Suzanne Clabon, Ecolabeling, REV. EUR. COMMUNITY & INT'L ENVTL. L., Mar. 1994, at 23.

50. Id.

51. Industry Commenters Oppose EPA Adoption of Ecolabels to Signify Product Preference, 24 Env't Rep. (BNA) 2044 (Apr. 1, 1994).

52. General Agreement on Tariffs and Trade, opened for signature Oct. 30, 1947, TEXT OF THE GENERAL AGREEMENT (July 1986) [hereinafter GATT].

53. Rosalie Bertell, Popular Consciousness About the State of the Environnment, WOMEN & ENV'TS, Winter/Spring 1993, at 49.

54. Lucas Bergkamp & Gail N. Martiri, European Packaging Laws: Take-Back Schemes, Product Standards, and Eco-Taxes, 17 Int'l Env't Rep. (BNA) 192 (Feb. 23, 1994).

55. Id. at 194.

56. European Parliament and Council Directive 94/62/EC on Packaging and Packaging Waste, 1994 O.J. (L 365) 10.

57. GATT, supra note 52, art. XX(b).

58. Id. art. XX(g).

59. Uruguay Round Trade Agreements, TEXTS OF AGREEMENTS, IMPLEMENTING BILL, STATEMENT OF ADMINISTRATIVE ACTION, AND REQUIRED SUPPORTING STATEMENTS, 103d Cong., 2d Sess. 1204 (General Printing Office, Sept. 27, 1994).

60. For example, Congress passed several major pieces of environmental legislation in the past few years containing trade measures, including the International Dolphin Conservation Act of 1992, the High Seas Driftnet Fisheries Enforcement Act, and the Wild Bird Conservation Act of 1992.

61. Uruguay Round Trade Agreements, supra note 59, at 1294.

62. Id. at 1223.

63. Id.

64. Id. art XX(g).

65. Id. at 1316.

66. Id. at 1229.

67. Id. at 1225.

68. See id. at 1224-31.

69. Id. at 1232.

70. Id. at 1240.

71. Preamble of the North American Free Trade Agreement (U.S. Government Printing Office: 1992-330-817/70635).

72. The actual text of the agreement reads: "a Party should not waive or otherwise derogate" from domestic environmental standards to encourage an investor. Note the use of "should," rather than the prescriptive "shall" or "must." Steve Charnovitz, NAFTA: An Analysis of Its Environmental Provisions, 23 ELR 10067, 10072 (Feb. 1993).

73. Id. at 10071.

74. Id. at 10067.

75. Daniel Magraw, NAFTA's Repercussions: Is Green Trade Possible?, ENVIRONMENT, Mar. 1994, at 40.

76. Norma S. Manguia Aldaraca, The North American Agreement on Environmental Cooperation, REV. EUR. COMMUNITY & INT'L ENVTL. L., June/Sept. 1994, at 100.

77. Magraw, supra note 75, at 40.

78. U.S. EPA, Office of Solid Waste, Entry Into Force of the Basel Convention, Environmental Fact Sheet (Apr. 1992).

79. Id.

80. Shoshana K. Mertens, Towards Accountability in the Restructured Global Environment Facility, REV. EUR. COMMUNITY & INT'L ENVTL. L., June/Sept. 1994, at 105.

81. US $ 2 Billion Pledged to the GEF, NGO NETWORKER, Spring/Summer 1994, at 1.

82. Global Environmental Facility to Allow NGOs to Observe Meetings for First Time, 17 Int'l Env't Rep. (BNA) 619 (July 27, 1994).

83. Id.

84. U.N., AGENDA 21: PROGRAMME OF ACTION FOR SUSTAINABLE DEVELOPMENT (final text of agreements negotiated at the UNCED, June 1992).

85. See MICHAEL GRUBB ET AL., THE EARTH SUMMIT AGREEMENTS (1993); J. WILLIAM FUTRELL, THE TRANSITION TO SUSTAINABLE DEVELOPMENT LAW (Environmental Law Institute Research Brief No. 3, Apr. 1994).

86. THE INTERNATIONAL POLITICS OF THE ENVIRONMENT, ACTORS, INTERESTS AND INSTITUTIONS 32 (Andrew Hurrell & Benedict Kingsbury eds., 1992).

87. See U.N. Trade and Development Board Secretariat, UNCTAD's Contribution, Within Its Mandate, to Sustainable Development: Trade and Environment, U.N. Conference on Trade and Development, 40th Sess. at 3 (Aug. 6, 1993).

88. Id. at 27.

89. Id. at 28.

90. INTERNATIONAL STANDARDIZATION EFFORTS, supra note 28, at 4.

91. Id.