Arbitration Affirms National Responsibility for Pollution

Date April 15, 1935

An international jury declared that countries were responsible for their pollution and required Canada to compensate the United States for environmental damage caused by exhaust from a smelter in Trail, British Columbia.

Also known as Trail Smelter dispute; Trail Smelter arbitration

Locale United States; Canada

Key Figures

• Richard Bedford Bennett (1870-1947), prime minister of Canada, 1930-1935
• Charles Warren (1868-1954), American attorney
• Oliver Wendell Holmes, Jr . (1841-1935), associate justice of the United States, 1902-1932

Summary of Event

On April 15, 1935, the United States and Canada signed a special agreement to resolve the Trail Smelter dispute. Canada agreed to pay the United States $350,000 in compensation for agricultural damage in northern Washington State that was caused by exhaust from a metal refinery in Trail, British Columbia. This landmark case of international environmental law articulated the idea that a country is responsible for the pollution it generates. The Trail Smelter arbitration is unique in international law because it is the only case specifically related to air pollution crossing national borders.

In the Trail Smelter arbitration, Canada and the United States also asked the international jury that refereed the dispute to decide whether Canada should repay the United States for damages that happened after the jury’s award, to determine whether there was an acceptable amount of damage the smelter could cause in the future, and to decide how the smelter company should limit future damage. In another unique action in the history of resolving international disputes, the jury carried out an independent study to answer these questions. The Trail Smelter arbitration and its final decision provided guidelines for countries concerned about their responsibility for environmental pollution that affects other countries.

The problems that led to the Trail Smelter arbitration began long before 1935. Trail, British Columbia, is on the Columbia River, seven miles north of Canada’s border with the United States. Metal refining, primarily of lead and zinc, had been going on in Trail since 1906. Consolidated Mining and Smelting Company of Canada owned the smelter. By the 1920’s, the smelter at Trail was the largest metal-refining operation in Canada. The smelter roasted ores containing sulfides to extract and purify the metals. It also produced exhaust containing sulfur dioxide (SO²). Prevailing winds blew this exhaust down the river valley into Stevens County, Washington, to the south.

Farmers near Trail and in Stevens County recognized that the exhaust damaged crops, livestock, and buildings as early as 1925. Daily SO² production sometimes exceeded seven hundred tons by 1930. Consolidated Mining and Smelting Company of Canada also recognized the damage their exhaust caused. The company made some individual settlements and obtained permission from some property owners to allow exhaust to damage their land. Eventually, the exhaust angered Stevens County commissioners enough to make the commission vote for an announcement that condemned the smelter’s operation. In August, 1928, a citizen protection agency formed in Stevens County that stopped individual settlements from being made with the smelting company.

Because municipal law in the United States and Canada could not solve the ongoing problem, the U.S. government entered the dispute in 1927 and lodged an official complaint with Canada about the SO² exhaust. In December, 1927, the two governments agreed to refer the dispute to the International Joint Commission (IJC) for investigation. (The 1909 Boundary Waters Treaty between Canada and the United States created the International Joint Commission to referee disputes about the use and control of inland waters such as the Great Lakes on their mutual border. The IJC has six members, three from the United States and three from Canada. It has the authority to investigate and obtain precise information about any factors that might affect the existing or planned use of boundary waters.)

On August 7, 1928, the IJC began studying the Trail Smelter case to determine how much the exhaust damaged property and what compensation, if any, Canada owed the United States. On February 28, 1931, the IJC announced its unanimous decision that Canada owed the United States $350,000 for damages up to 1932. It also ruled that Consolidated Mining and Smelting Company of Canada should reduce SO² in the smelter’s exhaust. Canada accepted the commission’s report, and Consolidated Mining and Smelting Company of Canada voluntarily began reducing the SO² in exhaust. The United States, however, rejected the IJC decision because the United States believed the $350,000 was insufficient compensation for damages.

The United States and Canada continued to negotiate and signed an agreement in 1935 to refer their dispute to binding arbitration by an international jury. That jury had three members: Charles Warren of Massachusetts, a former U.S. attorney general, represented the United States; Robert Greenshields of Quebec represented Canada; and Jans Hostie of Belgium, the chairman, represented a neutral party to the dispute. A scientist assisted each country’s representative: Reginald Dean of Missouri for the United States and Robert Swain of California for Canada.

In the 1935 agreement, Pierre Boal, the acting chargé d’affaires for the U.S. government at Ottawa, accepted the original compensation that the International Joint Commission gave the United States in 1931. Boal and Richard Bedford Bennett, the prime minister of Canada, asked the jury to find a permanent settlement to the dispute. The settlement would identify how much Canada owed the United States for environmental damage that happened after 1932. It would also issue guidelines to restrict further environmental pollution. The jury made its final decision on March 11, 1941, after several years of study. It gave the United States an additional $78,179.51 for damages that occurred between 1932 and 1937. It also imposed permanent restrictions on the smelter’s SO² exhaust. The Trail Smelter dispute officially ended on January 24, 1950, when the United States returned $8,828.19 of unused compensation to Canada.

To meet the new exhaust limits, Consolidated Mining and Smelting Company of Canada had to remove more SO² from its stack than the combined exhaust of all other smelters operating in North America at the time. Over the years, SO² removal cost the company $20 million. SO² exhaust that was dispersing at a rate of 10,000 tons per month in 1930 declined to a rate of 475 tons per months by 1937. The company sold the recovered sulfur as fertilizer to help pay the costs of removing the sulfur from the exhaust.

Significance

The ruling in the Trail Smelter arbitration reflected a specific incident. Its immediate effect was to solve a border dispute between the United States and Canada. The two sides agreed to accept an impartial jury’s decision, and the jury established the cause and provided the solution to a clear-cut case of environmental pollution. The importance of the Trail Smelter arbitration as a precedent setter has increased with time. Its ruling became a guide for solving similar disputes on a global basis.

In international law, the principle of good neighborliness is the basis for the regulation of pollution that crosses national borders. This principle—that one must use one’s own resources in a manner that will not injure another—comes from the tradition of Roman law that underlies law practice in most Western societies. The Trail Smelter dispute was the first instance in which a dispute over air or water pollution was refereed by an international jury. The jury had precedents on which to base its decision in past U.S. Supreme Court decisions.

In State of Georgia v. Tennessee Copper Company and Ducktown Sulphur, Copper, and Iron Company (1907), Associate Justice Oliver Wendell Holmes, Jr., stated in the Court’s opinion that “the state has the last word as to whether its mountains shall be stripped of their forests and its inhabitants shall breathe pure air . . . it is a fair and reasonable demand on the part of the sovereign that the air over its territory should not be polluted.” The decision in the Trail Smelter arbitration applied this idea of good neighborliness with respect to environmental pollution, ruling that “under the principles of international law . . . 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 country or to the properties or persons therein, when the case is of serious consequence and the injury is established by clear and convincing evidence.”

In the Trail Smelter arbitration, studies identified the level of environmental damage by “clear and convincing evidence,” and the Canadian government accepted responsibility for the damage its citizens caused. By the mid-1960’s and early 1970’s, air pollution crossing national borders was occurring over much of northern Europe and Scandinavia. Many scientists linked it to stream and lake acidification and forest decline. The damage, however, was not clear and convincing in many people’s eyes. Identifying the polluters was difficult.

The Swedish government became very concerned with long-range air pollution and blamed SO² exhaust from English and German industrial complexes for the acid rain appearing in Sweden. Sweden’s concern led it to organize a conference addressing this issue, and the United Nations Conference on the Human Environment took place in Stockholm in 1972. The conference provided Swedish scientists with an opportunity to present their case that acid rain was an international issue.

The U.N. Conference on the Human Environment initiated the development of international environmental law. Conference participants summarized their conclusions about international environmental issues in a series of governing principles. Principle 21 was the most appropriate for international pollution and clearly reflected the ruling in the Trail Smelter arbitration. Principle 21 stated that countries had the right to exploit their own natural resources and follow their own environmental policies, but they also had the responsibility “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.”

The 1972 Stockholm conference noted that humans have basic rights to freedom, equality, and adequate living conditions, including a quality environment that permits a dignified life and well-being. Development and environmental protection had to coexist. The conference report also implied that countries had a duty to avoid causing environmental damage to other countries and a duty to prevent pollution.

Modern development often produced industrial pollutants that did not respect international boundaries. The U.N. Conference on the Human Environment began an era of cooperative agreements between countries to deal with global environmental issues. Burning coal to produce energy also produced SO². This raised international attention because SO² contributed to acid rain. Industrialized nations also produced and used chlorofluorocarbons (CFCs). Chlorofluorocarbons reacted with ozone and destroyed it. CFCs may have contributed to thinning the ozone layer that protected the earth from ultraviolet radiation.

In 1985, the Vienna Ozone Layer Convention concluded that protecting the ozone layer is an urgent global responsibility. The Montreal Protocol on Substances That Deplete the Ozone Layer followed soon after. On September 16, 1987, twenty-four nations and the European Economic Community (EEC) agreed to freeze CFC consumption in 1990 at the levels that had existed in 1986. They also agreed to reduce CFCs by a formula based on a gradual reduction of global CFC emissions. Chlorofluorocarbons would be reduced 20 percent by 1994 and an additional 30 percent by 1999. The era of international cooperation to reduce global air pollution was clearly under way.

Beginning with the Trail Smelter arbitration, the world community began to recognize that the environmental consequences of pollution are global rather than local. It also recognized that individual countries are responsible for the pollution they cause. International law now requires nations to recognize this responsibility and take appropriate action. Unlike the results of the Trail Smelter arbitration, however, this responsibility is in principle only. The first tentative steps to move beyond principles and take action began with cooperative agreements such as the Montreal Protocol. The Trail Smelter arbitration, by successfully resolving an environmental dispute involving air pollution and by reducing that air pollution, remained unique in its application throughout the twentieth century.

Bibliography

Boyle, Alan, and David Freestone, eds. International Law and Sustainable Development: Past Achievements and Future Challenges. New York: Oxford University Press, 1999. Collection of essays discusses developments in international environmental law as of the end of the twentieth century. Includes tables of cases and treaties and index.

Brunnée, Jutta. Acid Rain and Ozone Layer Depletion: International Law and Regulation. Dobbs Ferry, N.Y.: Transnational, 1988. Readable book places the Trail Smelter arbitration in the context of ongoing global prevention of air pollution. Chapter 2 provides a good summary of the scientific background surrounding acid rain and ozone depletion. Chapter 4 presents concise discussion of international environmental law.

Madders, Kevin. “Trail Smelter Arbitration.” In Decisions of International Courts and Tribunals and International Arbitrations, edited by Rudolf Bernhardt. Vol. 2 in Encyclopedia of Public International Law. New York: North Holland, 1981. Brief legal summary of the Trail Smelter arbitration describes the case chronologically in terms accessible to lay readers.

Maine, Frank. “Address to Conference Delegates.” In Effects of Acid Precipitation on Terrestrial Ecosystems, edited by Thomas Hutchinson and Magda Havas. New York: Plenum Press, 1980. Provides a useful summary of the issues involved in pollution across national borders. Describes the role and responsibilities of the International Joint Commission very well.

Rüster, Bernd, and Bruno Simma, eds. International Protection of the Environment. Vol. 15. Dobbs Ferry, N.Y.: Oceana, 1979. Collection of documents from international environmental law includes the text of the convention that initiated the original Trail Smelter arbitration, the final ruling of the arbitration tribunal, and correspondence between the United States and Canada with respect to the dispute. Excellent source for the background of the case and the reasoning behind the tribunal’s final decision.

Schmandt, Jurgen, Judith Clarkson, and Hilliard Roderick, eds. Acid Rain and Friendly Neighbors: The Policy Dispute Between Canada and the United States. Durham, N.C.: Duke University Press, 1988. Well-documented chronological overview of atmospheric pollution negotiations between the two countries.

Social Learning Group. Learning to Manage Global Environmental Risks. 2 vols. Cambridge, Mass.: MIT Press, 2001. Examination of global environmental management focuses on international efforts to address climate change, acid rain, and ozone depletion.