THE DUE DILIGENCE PRINCIPLE FROM INTERNATIONAL TO DOMESTIC LAW:APPLYING THE PRINCIPLE IN PRACTICE.

• Author: Pain, Nicola

1 THE DUE DILIGENCE PRINCIPLE IN PUBLIC INTERNATIONAL LAW

The principle of due diligence is a broad concept which appears in numerous areas of public international law such as humanitarian, human rights, environment and law of the sea. (1) In the context of international environmental law due diligence requires States to take measures to ensure the activities of public and private entities within their jurisdiction do not cause harm to other States. (2) Fundamentally the obligation of due diligence is one of harm prevention and increasingly requires States to adopt a precautionary approach in cases of potential transboundary environmental harm. (3) As discussion of its development will identify, the principle has been recognised in various contexts such as by the International Court of Justice ('ICJ'), in specific treaty regimes and in soft law instruments. It can be regarded as an emerging principle of customary international law.

The principle of due diligence as articulated in public international law is an important concept aimed at reducing transboundary environmental harm. Due diligence in public international law has a particular meaning and methods of implementation which befit relationships between nation States. (4) This article will explore how the general obligation and transboundary focus of the international due diligence principle may usefully inform domestic considerations of prevention and precaution in Australian environmental law focussing at the sub-national level on the state of New South Wales ('NSW').

The extent to which aspects of the due diligence principle exist in Australian case law and environmental legislation at national and sub-national levels will be considered. How domestic law enables preventative and precautionary outcomes to be achieved by requiring actions such as environmental impact assessment ('EIA) to be undertaken (and methods of criminal enforcement which are not available under public international law) will be explored. Finally management of the Murray-Darling Basin ('MDB') in much of south eastern Australia and the Montara oil spill incident in 2009 in the Timor Sea are two case studies which suggest the principle of due diligence may usefully inform Australian environmental law to enhance its effectiveness at a sub-national level and at an international regional level.

1. Development of the due diligence principle in public international law

   In order to consider how due diligence may inform domestic law, it is first useful to outline the development of due diligence in public international law. The principle of due diligence has a long history in both public international law generally and international environmental law. (5) In the context of environmental law, due diligence has its origins in the 'no harm' principle and subsequent formulations of the principle of prevention. (6) It has increasingly been considered as including elements of the precautionary principle as will be discussed below. (7)

   One of the first instances in which the 'no harm' principle was considered was the Trail Smelter arbitration between the United States and Canada. (8) It was held that:

   ... no State has the right to use or permit the use of its territory in such a manner as to cause injury by fumes in or to the territory of another or the properties or persons therein, when the case is of serious consequence and the injury is established by clear and convincing evidence. (9) In 2010 the decision of the ICJ in the Pulp Mills case (10) clarified what may be required of a State in fulfilling its obligations of prevention and due diligence. The ICJ found that '[a] State is thus obliged to use all of the means at its disposal in order to avoid activities which take place in its territory, or in any area under its jurisdiction, causing significant damage to the environment of another State'. (11) Such actions may include the adoption of appropriate rules and measures and being vigilent in their enforcement, exercising administrative control of public and private operators, considering necessary technology to be used and the implementation of EIA. (12)

   The Stockholm Declaration 1972 saw the 'no harm' principle expand to be formulated as a principle of prevention requiring States to take responsibility for actions not only within their territorial boundaries, but within their jurisdiction or control. (13) Principle 21 of the Stockholm Declaration obliges States to ensure that 'activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction.' (14) The Rio Declaration 1992 reinforced and expanded the 'no harm' and preventative principles with the first international iteration of the precautionary principle. (15) Principle 15 of the Rio Declaration provides that '[w]here there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.'

   The United Nations Convention on the Law of the Sea (' UNCLOS') (16) also articulates the principle of prevention and has been specifically considered in the context of due diligence as will be discussed below. UNCLOS provides general obligations for States to 'protect and preserve' and take 'all measures' necessary to 'prevent, reduce and control pollution' in the marine environment. (17)

   In 2011 the Seabed Disputes Chamber of the International Tribunal of the Law of the Sea ('ITLOS') established under UNCLOS delivered its advisory opinion on State responsibilities for activities on the seabed and ocean floor and subsoil thereof (beyond the limits of national jurisdiction). (18) Nauru and Tonga requested the opinion after they had sought approval for deep seabed mining activities in reserved areas (areas reserved solely for conducting particular activities) in 2008. Of most relevance to the development of due diligence was the ITLOS' consideration of the phrase 'responsibility to ensure' in article 139 of UNCLOS. Article 139 provides that:

   States Parties shall have the responsibility to ensure that activities in the Area, whether carried out by States Parties, or state enterprises or natural or juridical persons which possess the nationality of States Parties or are effectively controlled by them or their nationals, shall be carried out in conformity with this Part. ITLOS advised that:

   [t]he sponsoring State's obligation 'to ensure' is not an obligation to achieve, in each and every case, the result that the sponsored contractor complies with the aforementioned obligations. Rather, it is an obligation to deploy adequate means, to exercise best possible efforts, to do the utmost, to obtain this result. To utilize the terminology current in international law, this obligation may be characterized as an obligation 'of conduct' and not 'of result', and as an obligation of 'due diligence'. (19) As usefully summarised by Boyle, the ITLOS Advisory Opinion clarified the obligation of due diligence identified in Pulp Mills noting that due diligence is a 'variable concept' which may change over time and differ in respect of different risks, (20) that the measures to be taken must be 'reasonably appropriate' (21) and that the precautionary approach was integral to the principle of due diligence. (22) The ITLOS Advisory Opinion was particularly significant because it considered the obligation of due diligence to include taking precautionary measures and recognised that these two principles are moving towards becoming principles of customary international law. (23)

   The most recent articulation of the obligation of due diligence was in the South China Sea Award of the Permanent Court of Arbitration in 2016. The Philippines brought an action against China claiming that it had breached its obligations of due diligence under UNCLOS by supporting unlawful fishing, including of endangered species, had illegally constructed artificial islands in the South China Sea and had permitted unlawful fishing in the Philippine's Exclusive Economic Zone. (24) The Award was significant for its finding that China had breached is obligations of due diligence in relation to the alleged harmful fishing practices of Chinese-flagged vessels. In this way the Award confirmed that a State's obligation to exercise due diligence applies beyond a State's jurisdiction. (25) Fietta et al have suggested that this could have implications in the future by suggesting that any State which is a party to UNCLOS could have jurisdiction to bring a claim of failing to be duly diligent. (26) The court's willingness to make this finding was particularly significant given that China did not participate in the proceedings. The decision found that China had breached its obligations of due diligence on all three grounds.

2. Challenges in implementing due diligence in public international law

   Due diligence in public international law has both benefits and limitations. Firstly, the concept of due diligence can lack specificity (27) in that there is little guidance as to what constitutes sufficiently diligent conduct in a particular circumstance. In public international law terms due diligence is effective because its flexibility enables a broad spectrum of actors to engage in a regime of environmental protection. Once engagement increases the definition and 'strictness' of the standard of due diligence to be taken can be strengthened. (28) For example, the 2011 ITLOS Advisory Opinion clarified and built upon the concept of due diligence established in Pulp Mills by stating that due diligence requires any relevant measures taken to be 'reasonably appropriate' (29) and that the concept is variable and can thus require higher levels of vigilance for higher risk activities. (30) Guidance can also be drawn from clear expressions of the due diligence principle in treaty law. For instance, article...