Liability Annex to the Protocol on Environmental Protection to the Antarctic Treaty

Abstract

Twenty-nine States (the ‘Consultative Parties’), each with a substantial interest in Antarctica, collectively manage Antarctica through a system of consensus-based decisions. Traditionally, the Antarctic Treaty together with recommendations and measures adopted by the Antarctic Treaty Consultative Meetings (ATCM), the Convention on the Conservation of Antarctic Marine Living Resources (CAMLR Convention) and the Convention for the Conservation of Antarctic Seals (CCAS) form the basis of the Antarctic Treaty System. However, the Consultative Parties began to expand their environmental responsibilities in Antarctica in 1970 and agreed that they “should assume responsibility for the protection of the environment and the wise use of the Treaty area”. A major step in this regard was the addition to the Antarctic Treaty System of the Protocol on Environmental Protection to the Antarctic Treaty (PEPAT or the Protocol). Together with safeguarding free and peaceful scientific research, the Protocol incorporates the protection of the Antarctic environment into the Antarctic Treaty System. The Protocol has six annexes, with Annex VI (Liabilities Arising from Environmental Emergencies) being a product of the obligations contained in Articles 15 and 16 of the PEPAT. Specifically, Article 16 of the PEPAT states that:

1 Introduction and Regulatory Context

Twenty-nine States (the ‘Consultative Parties’), each with a substantial interest in Antarctica, collectively manage Antarctica through a system of consensus-based decisions.¹ Traditionally, the Antarctic Treaty² together with recommendations and measures adopted by the Antarctic Treaty Consultative Meetings (ATCM), the Convention on the Conservation of Antarctic Marine Living Resources (CAMLR Convention)³ and the Convention for the Conservation of Antarctic Seals (CCAS)⁴ form the basis of the Antarctic Treaty System. However, the Consultative Parties began to expand their environmental responsibilities in Antarctica in 1970 and agreed that they “should assume responsibility for the protection of the environment and the wise use of the Treaty area”.⁵ A major step in this regard was the addition to the Antarctic Treaty System of the Protocol on Environmental Protection to the Antarctic Treaty (PEPAT or the Protocol). Together with safeguarding free and peaceful scientific research, the Protocol incorporates the protection of the Antarctic environment into the Antarctic Treaty System. The Protocol has six annexes, with Annex VI (Liabilities Arising from Environmental Emergencies) being a product of the obligations contained in Articles 15 and 16 of the PEPAT. Specifically, Article 16 of the PEPAT states that:

Consistent with the objectives of this Protocol for the comprehensive protection of the Antarctic environment and dependent and associated ecosystems, the Parties undertake to elaborate rules and procedures relating to liability for damage arising from activities taking place in the Antarctic Treaty area and covered by this Protocol.

Article 16 of the PEPAT highlights that the Consultative Parties considered special liability rules they deemed necessary to achieve the objectives of protecting the Antarctic environment.⁶ Additionally, Article 15 of the PEPAT calls on Parties to provide prompt and effective response action to emergencies that may arise during the course of various human activities being undertaken in the Antarctic Treaty area. Despite being considered by some as one of the most innovative environmental liability regimes,⁷ Annex VI (Liability Annex or Annex) is not yet in force. However, the Liability Annex and the associated environmental liability regime that it creates needs to be seen as “an essential element in the enforcement of international commitments, and in the case of Antarctica commitments concerning the protection of the Antarctic environment”.⁸

With this in mind, the present Annex is divided into four Subchapters. First, Sect. 12.2 examines the essential features of the Liability Annex. Included is an examination of the Liability Annex’s scope of application as well as the extent of its liability model, including an examination of the exemptions, limitations and insurance requirements contained therein. Subsequent to this, the reasons and considerations that necessitated this particular liability model are examined in Sect. 12.3. Section 12.4 analyses the special features of the liability model, including the extent to which non-State operators may be held liable for emergencies emanating from their activities in Antarctica. Included in Sect. 12.4 is a discussion of the relationship that the rules on State responsibility may have with the Annex. Lastly, Sect. 12.5 examines the practical significance of the Liability Annex and includes an example by way of a hypothetical scenario. This examination was undertaken with an awareness that the Liability Annex has not yet come into force and highlights, where appropriate, possible reasons for this.

2 Liability Model

2.1 Material Scope of the Liability Annex

During the negotiations leading up to the adoption of the Liability Annex, there was considerable debate as to the scope of the planned regime. Some delegations were of the view that the Annex should apply to all activities governed by the PEPAT. Other delegations opposed this broad approach on the grounds that the response action obligation contained in Article 15 of the PEPAT is limited to those activities for which Article VII(5) of the Antarctic Treaty requires notification.⁹ Ultimately, the reference to Article VII(5) of the Antarctic Treaty was maintained and the Liability Annex, therefore, has a more limited scope. Specifically, Article 1 of the Liability Annex stipulates that it applies:

to environmental emergencies in the Antarctic Treaty area which relate to scientific research programmes, tourism and all other governmental and non-governmental activities in the Antarctic Treaty area for which advance notice is required under Article VII(5) of the Antarctic Treaty, including associated logistic support activities.¹⁰

The scope of potential liability, therefore, applies to environmental emergencies in the Antarctic Treaty area and to all governmental as well as non-governmental activities for which advance notice is required under the Antarctic Treaty. This includes activities related to tourism, scientific research programmes as well as logistical support activities such as the use of supply ships and aircraft.¹¹ The reference to Article VII(5), and therefore the requirement that advance notice must be given for certain activities, specifically excludes any activities for which notice is not required, such as fishing and whaling.¹² This said, there are several limitations inherent in the scope of application stipulated in Article 1.

2.2 Limitations to the Scope of Application of the Liability Annex

Several limitations to the Liability Annex’s scope of application require a brief explanation at the outset.¹³ First, unlike most liability instruments that cover damage to persons and property, the Annex only applies to environmental emergencies.¹⁴ Article 2(b) of the Liability Annex defines an environmental emergency as “any accidental event that has occurred, having taken place after the entry into force of this Annex, and that results in, or imminently threatens to result in, any significant and harmful impact on the Antarctic environment”. This definition implies that the Liability Annex only covers those events that have a “significant and harmful impact” on the environment.¹⁵ Therefore, any activity that only has a minor or transitory impact on the environment will not be covered by the Annex. The rationale behind this is that every human activity will have some impact on the fragile Antarctic environment and, even if not significant and harmful, would result in liability, creating a de facto tax/compensation regime rather than a liability regime.¹⁶

Second, the word “accidental” seems to suggest that any damage that is intentionally inflicted is not covered by the Liability Annex. This is contrary to international law generally where damage caused intentionally is often considered to be a more severe offence and can even increase liability.¹⁷ However, an examination of the object and purpose of the PEPAT clearly restricts this limitation. The object and purpose of Article 15 of the PEPAT (as an Article establishing the Liability Annex) reveals that “accidental” should be interpreted as any damage that was not anticipated when the activity in question was planned.¹⁸ In this regard then, the Liability Annex serves as “a mechanism to enforce Article 8 and Annex I”¹⁹ of the PEPAT, i.e. the practice of conducting an Environmental Impact Assessment (EIA) prior to commencing an activity. In this respect, the competent national authority assesses, based on appropriate domestic procedures, whether or not the proposed activity requires that an initial environmental evaluation (IEE) and full EIA under the PEPAT be conducted. If an IEE is undertaken, the operator, be it governmental or non-governmental, can anticipate that the proposed activity will at least have a minor or transitory impact. The situation has to be assessed differently, however, if an activity that was initially anticipated to have less than minor or transitory impact, based on the applicable domestic procedures, results in minor or transitory impact or an impact even greater than minor or transitory. In light of Article 1 (2) of Annex I PEPAT, no IEE or EIA is conducted in such a situation. Consequently, the impact concerned was not anticipated and, accordingly, will be covered by the Liability Annex. The same is true if a proposed activity which, in the context of an IEE, is anticipated to have only a minor or transitory impact but later generates impacts greater than minor or transitory.

Third, the exclusion of fishing and, therefore, the activities of fishing vessels, was settled upon on the basis that another regime, namely the Conservation of Antarctic Marine Living Resources (CAMLR) Convention, which is applicable to fishing activities in Antarctica.²⁰ This, however, is regrettable since the CAMLR Convention does not include regulations on liability. While fishing vessels are thus covered by their own regime under the CAMLR Convention, such vessels are not correspondingly subjected to a separate liability regime. Given the number of fishing vessels in Antarctic waters and their potential to cause pollution or other environmental emergencies, this limitation to the Liability Annex’s scope of application is sub-optimal.²¹

Lastly, the area of application of the Liability Annex is limited to the Antarctic Treaty area and fails to acknowledge Antarctica’s “dependent and associated ecosystems”, references to which is made in several provisions of the PEPAT. The ecosystem approach dominates the regime of the PEPAT and the failure of the Liability Annex to reference damage to “dependent and associated ecosystems” is contrary to the repeated references to such ecosystems elsewhere in the PEPAT, including in Articles 15 and 16 which obligate Parties to establish a liability regime in the first place.²²

2.3 Actors Addressed by the Liability Annex

The Liability Annex applies to operators, who are defined as “any natural or juridical person, whether governmental or non-governmental, which organises activities to be carried out in the Antarctic Treaty area”.²³ An operator does not include a natural or juridical person who is performing but not organising or otherwise responsible for activities in Antarctica. For example, the captain of a vessel (in his role as a captain) or a juridical person acting on behalf of a State operator (as a contractor or subcontractor) are not classified as operators.²⁴ The definition of what constitutes an operator clearly allows for them to be either governmental or non-governmental, however, it must be borne in mind that the Liability Annex follows a traditional international law approach. It addresses States directly and places certain obligations and duties on them in fulfilling the goals of both the Liability Annex and the Protocol. In other words, although operators may be liable according to the provisions of the Annex irrespective of whether or not they are governmental or non-governmental, “the implementation and enforcement of the Liability Annex rests with States”.²⁵

2.4 Regime Established by the Liability Annex

General Aspects of Liability Under the Annex

Several recommendations adopted by the Antarctic Treaty Consultative Parties have acknowledged “that prime responsibility for Antarctic matters, including protection of the Antarctic environment, lies with the States active in the area which are parties to the Antarctic Treaty”.²⁶ On this basis, the Liability Annex obligates States parties to require their operators, namely those entities organising activities in the Antarctic Treaty area, to undertake reasonable preventative measures to reduce the risk of environmental emergencies (Article 3) and to establish contingency plans to respond to events that may potentially damage the Antarctic environment (Article 4). If these requirements are unable to prevent an environmental emergency, the Liability Annex obligates States parties to require “each of its operators to take prompt and effective response action to environmental emergencies from the activities of that operator” (Article 5(1)). Failure to take prompt and effective response action results in the liability of the operator to pay the costs of the required response action (Article 6). As a consequence of this, if an operator acts immediately to contain the damage, there is no liability.²⁷ Therefore, it must be highlighted that the liability regime enunciated in Article 6 is not for “some widely defined environmental damage”, but only for the costs associated with the required response action.²⁸ Given that an operator is obliged to have contingency plans in place before commencing activities (Article 4), it should, in theory, be easier and less expensive for the operator that caused the emergency to act rather than allow another operator to do so.²⁹ Together with the obligation that operators take response action, the liability to reimburse the costs of any response action taken by others provides an incentive for an operator to act. Consequently, the Liability Annex follows a logical course of measures. First, it prescribes safeguards to prevent environmental emergencies then it provides for specific action to be taken should such an environmental emergency materialise and, finally, it imposes financial liability on operators that fail to take such action.³⁰

State Liability and Response Action

That said, States will not be liable for the failure of an operator, other than its State operators, to take the necessary response action to the extent that the State party has taken appropriate measures within its competence, including the adoption of laws, regulations and enforcement measures (Article 10). Nevertheless, States parties are encouraged to take response action should the responsible operator not do so (Article 5(2)) but there is no absolute obligation to do so. In this context, a response action is defined in the Annex as “reasonable measures taken after an environmental emergency has occurred to avoid, minimise or contain the impact of that environmental emergency, which to that end may include clean-up in appropriate circumstances”.³¹ The Annex also defines “reasonable” in the context of preventative and response action as “measures or actions which are appropriate, practicable, proportionate and based on the availability of objective criteria and information”.³² Therefore, when evaluating whether there is a duty to take response action, the “technological and economic feasibility” of the action may be decisive factors.³³ It is noteworthy that these definitions indicate that rehabilitation or restoration of the environment to the state that it was in prior to the environmental emergency is not legally required under the Liability Annex. Additionally, the Liability Annex does not cover cumulative impacts that take place over a long period.³⁴ For example, the impacts of noise pollution over a prolonged period causing damage to marine mammals, or the cumulative impacts that the introduction of invasive species (through, for example, ship ballast water) may have on the Antarctic environment, are not covered by the Liability Annex.³⁵

Standard of Liability

The Liability Annex sets a strict liability standard, i.e. liability without proof of fault³⁶ and, as such stands in stark contrast to liability based on fault or due diligence.³⁷ Under a due diligence liability regime, it would have to be proven that the operator has not acted in conformity with some due diligence obligation. In a situation where an operator has not violated a due diligence obligation, liability would not arise and the incentive given to operators to take prompt and effective response action to avoid liability would, therefore, diminish.³⁸

Liability of State and Non-State Operators

The liability enunciated in the Liability Annex applies to both State and non-State operators. It is important to differentiate between scenarios in which response action is taken by others, imposing the costs of the response action taken by others on the operator liable for the environmental emergency, and scenarios in which response action is required but none is taken. In the first scenario, it must be reiterated that the liability of operators is not for damage to the environment but is solely “to compensate the costs of response measures taken by other persons besides the [responsible] operator” (liability under Article 6(1)).³⁹ Incurring liability in the second scenario is a distinct possibility given the often difficult Antarctic weather conditions.⁴⁰ In this scenario, the Liability Annex differentiates between the costs of response action that should have been taken by State operators and non-State operators (liability under Article 6(2)).

The liability of State and non-State operators can be summed up in this regard as follows:

State operators must pay the whole sum of the cost of a response action that should have been taken whereas non-State operators must only pay “an amount of money that reflects as much as possible the costs of the response action that should have been taken”. The money must be paid, where State operators are concerned, directly into the fund [Article 6(2)(a)]. In case the emergency was generated by a non-State operator it can also be paid to the State which then “shall make best efforts to make a contribution to the fund referred to in Article 12 which at least equals the money received from the operator” [Article 6(2)(b)].⁴¹

The liability regime stipulated in Article 6 has come under increased scrutiny. This is due to three primary reasons: First, the “best efforts” of a State to contribute to the fund could be interpreted to mean that a State party may “withhold the money received instead of channelling it to the Fund”.⁴² Second, non-State operators may be in a somewhat privileged position vis-à-vis State operators since they are only required to pay an estimated amount that reflects, as much as possible, the envisioned response action versus State operators which are liable to pay the costs of real-world action. Lastly, the costs of response action taken are determined by a decision of the Antarctic Treaty Consultative Parties. This is problematic because such decisions are made through consensus, leaving the possibility that the State responsible for the emergency may withhold consent and the cost of response action may, therefore, wholly or in part not be agreed upon.⁴³

An additional, concerns arise with regards to the liability of State and non-State operators as the activities of both have become increasingly interconnected. One example of this is that certain State-operated facilities, initially designed to support scientific research, are increasingly being used for tourism purposes. This is the case with the Uruguayan National Programme, which “transports and accommodates between 20 and 50 paying visitors at their Artigas Station in King George Island to recover some of the station’s operating costs”.⁴⁴ Additionally, there are even reports of big hotel chains seeking permission from a State party to establish hotels in Antarctica.⁴⁵ Article 6(4) provides for joint and several liability when an environmental emergency arises as a result of the activities of two or more operators. However, the blurring of the lines between the activities undertaken by State and non-State operators, including which portion of an environmental emergency can be attributed to which operator, may pose future challenges in attributing liability under the Annex.

Exemptions from Liability

The Liability Annex provides for five instances where States parties and/or their operators are exempt from liability (Article 8). Specifically, if an act or omission was necessary to protect human life or safety; if the event which caused the damage constituted, in the unique context of Antarctica’s environment, a natural disaster of an exceptional character which could not have been reasonably foreseen; if the environmental emergency resulted from an act of terrorism; if the environmental emergency resulted from an act of belligerency against the activities of an operator; or if an environmental emergency resulted from reasonable response action taken by an operator pursuant to the rules of the Annex.⁴⁶ These exemptions are similar to those under other existing liability regimes and, possibly also relevant in so far as exemptions go, is that the usual principles of sovereign immunity also apply with respect to vessels in government service. The actions of such vessels may still give rise to State liability, however, the vessels themselves remain immune from search and seizure.⁴⁷

Limits of Liability

Article 9 of the Liability Annex provides limits to any liability incurred.⁴⁸ For example, response cost liability is limited by differentiating between situations in which a ship is involved⁴⁹ and those situations where no ship is involved, such as when activities take place on the ice shelf.⁵⁰ Somewhat concerning is that the maximum amounts stipulated under the Annex are less than those available under other liability regimes. The challenge that this presents is that a State party who is also a party to one of these other liability regimes with higher limits may face certain complications regarding the adoption of domestic legislation—whereby the Liability Annex sets certain limits but a State party is bound by higher limits under another international law instrument.⁵¹ Additionally, the limits for situations involving a ship are linked to the size of the ship, which is a rather anachronistic approach since it has been recognised that even relatively small ships can cause substantial damage.⁵² During the negotiations, many States parties felt that the limits contained in Article 9 were generally too low.⁵³ That said, Article 9(4) does allow for a review of the limits every three years, or sooner at the request of any party.

As is commonly accepted under several other liability regimes, the limits of liability cannot be relied on where the “environmental emergency resulted from an act or omission of the operator, committed with the intent to cause such emergency, or recklessly and with knowledge that such emergency would probably result”.⁵⁴ The limitations of liability articulated in Article 9 are necessary and were intensively discussed in the lead up to the Annex’s adoption since limits are fundamentally linked to the ability of operators to obtain insurance because unlimited liability cannot effectively be insured against.⁵⁵

Insurance for Liability

The incorporation of the limits referred to above must be seen against the obligations contained in Article 11 of the Liability Annex that requires States parties to ensure that their operators “maintain adequate insurance or other financial security”. Insurance is necessary to reimburse operators that have undertaken response action on behalf of an operator that caused damage to the environment or where the latter has to rely on technical assistance to undertake adequate response action.⁵⁶ Significant in the context of insurance under the Liability Annex is a presentation given by the International Group of Protection and Indemnity Clubs (P&I Clubs) at the 40th meeting of the Antarctic Treaty Consultative Parties. P&I Clubs provide insurance cover for approximately 90% of the world’s ocean-going tonnage.⁵⁷ Specifically, the P&I Clubs noted that its insurance would, in principle, cover the liabilities of “commercial operators” (being ship owners) as prescribed in Article 6 of the Annex.⁵⁸ However, the P&I Clubs also highlighted that the Annex’s definition of “operator” is broader than “shipowner” and could include “actors other than the ship owner and may include parties that did not have [insurance] cover with the P&I Clubs”.⁵⁹ Such other actors, then, would need to find other market cover in order to fulfil their obligations under Article 11 of the Annex. In this regard, the Russian Federation noted that it has already implemented the Liability Annex and that several Russian National Expedition Antarctic Ships are already insured.⁶⁰ However, Russia also made clear:

that there remained the issue of the insurance of existing equipment and facilities in the Antarctic. From its own practice, it noted that it was difficult to find insurance companies prepared to insure in Antarctica because they do not have the necessary abilities or capabilities, and knew that they would have to rely on National Antarctic Programmes for their expertise.⁶¹

Apart from this, there are two additional questions that insurers have raised that need further attention: First, whether insurers will be entitled to invoke protection available to the insured, such as the exemptions listed under Article 8, and second, whether insurers may subrogate and claim reimbursement from the fund established under Article 12, an issue that will be discussed in the next section.⁶²

The Fund

Article 12 of the Annex establishes a Fund which is to be administered and maintained by the Antarctic Treaty Secretariat. The purpose of the fund is to provide “inter alia, for the reimbursement of the reasonable and justified costs incurred by a Party or Parties in taking response action pursuant to Article 5(2)”.⁶³ In other words, reimbursement from the fund is foreseen in situations in which the operator that caused the damage cannot be identified, or where the operator that caused the damage does not take the prompt and effective response action as required under the Annex.⁶⁴ Therefore, the fund reimburses the costs incurred by States parties that engage in response action, such as in instances where a State party cannot fully recover its costs from the responsible operator. However, reimbursement from the fund is limited to the extent that such costs are “reasonable and justified”.⁶⁵

Additionally, there is no automatic entitlement to reimbursement as this is subject to ATCM approval.⁶⁶ Unfortunately, the ‘non-guarantee’ of reimbursement arising from this approval requirement may act as a deterrent for States when deciding whether or not to take response action on behalf of the responsible operator or to act at all.⁶⁷ An additional deterrent is the fact that non-State operators may have no right at all to even apply for reimbursement since it is States parties who need to make a proposal for reimbursement to the ATCM.⁶⁸ This point has been criticised since the Annex places broad and significant obligations on operators but then seems to foresee compensation under Article 12 only for States.⁶⁹

Currently, there are no detailed operational procedures for the fund, although it is envisaged that it will be financed by payments made by operators who fail to take the necessary response action, as required under Article 6(2), as well as by voluntary contributions from States or non-State actors that are allowed under Article 12(4).⁷⁰

Enforcement and Jurisdiction

An examination of enforcement and jurisdiction under the Liability Annex requires taking two distinctions into account,⁷¹ namely (1) the difference between action for liability under Article 6(1) that involves reimbursement of costs for response action taken by other States parties, and action for liability under Article 6(2) that deals with liability arising when an environmental emergency occurs but no response action is taken. The second distinction that must be taken into account is the difference between taking action against a State operator as opposed to a non-State operator. Enforcement of compensation obligations under the Annex rests with the States parties and requires appropriate implementation systems to be set up in advance.⁷² Therefore, States parties have to enact the necessary legislation within their domestic legal orders to allow for compensation actions related to Antarctica to be processed in their domestic courts.⁷³ The lack of a central international dispute settlement system to hold non-State operators liable may create fragmented jurisprudence whereby domestic courts of different States come to different findings.

As alluded to earlier, the Liability Annex distinguishes between State and non-State operators but only States parties are entitled to sue. This may be due to the fact that during the negotiations leading up to the adoption of the Annex, States wanted to prevent undesirable actions that may be brought by other operators or even environmental activists.⁷⁴ In addition, States have traditionally been reluctant to have disputes in which they or their operators are embroiled decided in the national courts of other States.

With this in mind, together with the different liability actions stipulated under Article 6(1) and 6(2), the Liability Annex allows for three possibilities to claim compensation.⁷⁵ First, if a State party has taken response action on behalf of a non-State operator which caused damage, that State party can bring an action against the non-State operator in the courts in only one State party where the operator is either (1) incorporated; (2) has its principal place of business; (3) is habitually resident; or if there is no such State party, (4) in the courts of the State party where the activities that led to the environmental emergency were organised.⁷⁶ Second, if the environmental emergency is caused by a State operator and another State’s State operator takes response action, the dispute is subject to the inter-State dispute settlement procedures of Articles 18, 19 and 20 of the PEPAT, i.e. negotiation, enquiry, mediation, conciliation and lastly arbitration (Article 7(4) Liability Annex).⁷⁷ Third, if a State operator should have taken response action but did not and no response action is taken by any other party, liability is resolved by the ATCM or, should that fail, the resolution should be sought using the dispute mechanism provided by Articles 18–20 of the PEPAT.⁷⁸

3 Reasons for the Chosen Liability Model

The Antarctic Treaty consists of three main pillars, namely that Antarctica shall be used for peaceful purposes (Article I); that international cooperation in scientific research in Antarctica shall be promoted (Article II); and that the Antarctic environment shall be preserved.⁷⁹ However, neither the Antarctic Treaty nor any other of the original international instruments of the Antarctic Treaty System currently in force (such as the CAMLR Convention and CCAS), include a liability clause.⁸⁰ Although the 1988 Convention on the Regulation of Antarctic Mineral Resource Activities (CRAMRA)⁸¹ does contain liability provisions, it never came into force.⁸² After the failure of CRAMRA, the PEPAT was negotiated to provide “comprehensive protection of the Antarctic environment and dependent and associated ecosystems” (Article 2 of PEPAT). Without addressing liability this aim would be unattainable and, for this reason, Article 16 of the PEPAT was included that requires States parties to elaborate rules and procedures relating to liability for damage to the Antarctic environment.

Additionally, the ‘freezing’ of territorial claims under the Antarctic Treaty leaves Antarctica in a somewhat strange position. Antarctica is neither a “common space outside national jurisdiction nor clearly under the sovereignty of certain States”.⁸³ This results in several questions arising: Which States would be entitled to claim for damage to the Antarctic environment? Which States would be injured should an environmental emergency occur in Antarctica? How should the value of the damage to the environment be evaluated? Who should pay whom and how much should be paid if there is environmental damage that cannot be cleaned up?

Lastly, although several international conventions exist that deal with questions associated with environmental liability, the scope of such conventions is limited and often apply “exclusively to pollution damage caused in the territory, including the territorial sea and exclusive economic zone of a State party”.⁸⁴ Given the unique status of Antarctica, there are no coastal States or territorial seas and such conventions are not necessarily applicable.

With all of the foregoing in mind, it is clear that a Liability Annex was necessary to provide a regime that can first, fix liability for environmental damage and, second, determine the required response action.⁸⁵

4 Special Features of the Liability Annex

In so far as the Liability Annex’s special features go, two points require particular attention: First, the applicability of the Annex to non-State entities/operators and second, the relationship that State responsibility may have with the Liability Annex.

4.1 Non-State Actors and the Liability Annex

As demonstrated above, the Liability Annex applies to operators that conduct activities in Antarctica. Such activities are conducted either by States parties through State operators or by non-State operators. Therefore, to effectively regulate all operators, the Annex establishes obligations as well as corresponding liability for both State and non-State operators. However, implementation and enforcement of the Liability Annex remain with States. Non-State operators shall thus be held liable for any failure to take the necessary response action through the appropriately incorporated national legislation. This requires States to ensure that they have taken all appropriate measures, “including the adoption of laws and regulations, administrative actions and enforcement measures”, to hold non-State operators liable for any failure to take response action to an environmental emergency they cause.⁸⁶ Additionally, States parties must also ensure that non-State operators maintain adequate insurance or other financial security as well as undertake preventative measures and contingency plans.

4.2 State Responsibility and the Liability Annex

In line with the International Law Commission’s (ILC) reasoning that having a compensation mechanism for activities that are not prohibited does not diminish the need for the prevention or mitigation of damage, the Liability Annex follows a tiered approach to protecting the Antarctic environment. It does so by prescribing safeguards to prevent environmental emergencies, then providing for specific action to be taken should an environmental emergency arise and, finally, imposing liability.⁸⁷ In this regard, prevention and contingency planning are as integral to the Annex as liability for failure to take the necessary response action. Therefore, liability cannot be separated from prevention and, specifically in the case of the Liability Annex, liability cannot be completely disassociated from State responsibility.⁸⁸ In this regard, Article 10 is entitled “State Liability” and requires brief mention because although it refers to liability, its focus is on addressing instances where a State fails to “comply with its legal obligations to take appropriate measures to prevent harm by non-State actors within its jurisdiction”.⁸⁹ Such a failure is generally the basis for a claim under the laws of State responsibility.

Traditionally, State responsibility for internationally wrongful acts refers to “the entirety of the ‘secondary’ rules determining the legal consequences of a violation of the obligations established by the ‘primary’ rules”.⁹⁰ In describing international liability on the other hand, the ILC stated that:

Contrary to State responsibility, international liability rules were primary rules, for they established an obligation and came into play not when the obligation had been violated, but when the condition that triggered that same obligation had arisen.⁹¹

In this way, any liability that may arise out of activities that are not prohibited by international law within the Antarctic Treaty area, such as tourism or scientific research activities, would constitute special primary rules within the context of Antarctica. However, “a State’s failure to respect the rules surrounding these activities brings into play the mechanism of secondary rules of international State responsibility for wrongful acts”.⁹² The regimes of international liability and State responsibility within the context of Antarctica do not, therefore, conflict but are somewhat complementary. Wolfrum even goes so far as to say that liability within the Liability Annex “can be interpreted as an expansion of the customary law-based regime on international responsibility”, supplementing “the existing regime concerning international liability”.⁹³

It appears that if Annex VI come into force, it would not be a self-contained regime (“autonomous systems decoupled from general international law”).⁹⁴ Consequently, the general rules surrounding State responsibility will continue to apply in the Antarctic Treaty area and should do so in a manner complementary to the special primary and secondary rules established by the Liability Annex.

5 Practical Relevance of the Liability Annex

At the 41st ATCM, the Secretariat noted that

the issue of liability and the progress towards ratifying Annex VI were not included on the agenda [for 2018]. The Meeting agreed to extend an invitation to the International Group of Protection and Indemnity Clubs (IGP&I Clubs), the International Maritime Organisation (IMO) and the International Oil Pollution Compensation Funds (IOPC Funds) to participate in the liability discussions at ATCM XLII.⁹⁵

Before coming into effect, all 28 Consultative Parties present during the adoption of the Liability Annex will need to approve it. Of the 17 Consultative Parties that have approved the Liability Annex thus far, five have reported that they are passing domestic legislation designed to implement the Liability Annex.⁹⁶ A number of the other Consultative Parties have indicated that they will pass the relevant domestic legislation once Annex VI enters into force.⁹⁷ As part of its strategic work plan, the ATCM recently re-stated that a decision originally made in 2020 should be taken “on the establishment of a timeframe for the resumption of negotiations on liability and that discussions on this matter would continue at ATCM XLIV”.⁹⁸

The above said, only a little more than half of the required 28 Consultative Parties have approved the Annex in the 14 years since it was adopted, which has led to considerable consternation among certain authors who claim that the inability to bring the “long-sought Antarctic Liability regime into force after such a long gestation period is surely the greatest failure of the whole Madrid Protocol project”.⁹⁹ Other authors have noted that despite the Annex’s relatively narrow scope, it took “five times the effort involved in negotiating the entire Protocol and its five other Annexes”.¹⁰⁰

Contemporary international environmental law has made clear that any environmental protection regime that hopes to be effective must include a comprehensive liability scheme. Two points related to the reluctance of States to ratify the Liability Annex are worth mentioning in this regard. First, unlike the shipping industry or the deep seabed regime, Antarctica’s geographic isolation and harsh environment have traditionally limited the economic incentives and opportunities that draw operators’ attention. However, the profitability and environmental impacts associated with the recent increase in Antarctic tourism industry have the potential to change this traditional perception.¹⁰¹ Second, the reimbursement procedure for States who take necessary response action to protect the Antarctic environment after an incident occurs is both time-consuming and may have uncertain outcomes. As such, there remains a relatively high risk that any State party taking response action to an incident caused by another party may ultimately have to carry the costs of the response action itself.¹⁰² Conceivably then, the economic risks associated with taking response action coupled with the comparatively low economic incentives traditionally associated with Antarctica have made States reluctant to ratify the Liability Annex. However, it has to be emphasised that an increase in private activity in Antarctica, particularly the diversification of Antarctic activities related to tourism, makes it unlikely that issues concerning liability will continue to be largely hypothetical.¹⁰³

To date, there have been no court cases and no legal disputes concerning international liability and State responsibility that relate to the Antarctic Treaty System generally and the Liability Annex in particular.¹⁰⁴ However, it is probably only a matter of time before tourism, climate change and other activities related to the Anthropocene start having a significant impact on the fragile Antarctic environment. The Annex establishes special rules for State operators, however not every undertaking in Antarctica is operated by a State. For example, the German Alfred Wegener Institute is financed by the German State, at both the federal and State level, but is nonetheless classified as an independent research institute.¹⁰⁵ The lack of clarification or definition of what constitutes a “State operator” adds additional strain to the various issues surrounding response action and liability, insurance and the establishment of the fund discussed earlier.

Therein lies the greatest challenges facing the Liability Annex. With 11 approvals still required to enter into force, it will be for the States parties to ensure that the liability provisions contained within the Annex do not go from being limited in scope to empty verbiage.¹⁰⁶ If anything, the Liability Annex does highlight the need for States parties to cooperate in regulating their own nationals uniformly as an effective means of enforcing Antarctic norms.¹⁰⁷