Not Yet out of the Woods: Australia's Attempt to Regulate Illegal Timber Imports and World Trade Organization Obligations

Article excerpt

Abstract

The Illegal Logging Prohibition Bill, introduced in the Commonwealth Parliament in 2011, gives effect to a 2010 election commitment of the Gillard government to restrict imports of illegally logged timber products into Australia. This article assesses whether the Bill safely navigates the competing norms and values that the international trade and environmental law regimes embody. It finds that while the Bill pursues legitimate environmental purposes, aspects of it raise potential problems of incompatibility with WTO law because it takes a decentralised national standards approach. The article also considers the main regulatory alternative to the Bill, namely the creation of uniform Australian standards for all timber products (embracing both imports and locally produced timber) which would meet minimum requirements of sustainability, biological diversity and pollution control. It is argued that this encounters its own trade law difficulties. The article concludes by placing the trade law issues in the broader political context of WTO dispute settlement, and contends that the Bill has a reasonable chance of operating successfully and stimulating similar regulatory approaches in other timber-importing jurisdictions.

I Introduction

In November 2011, the Illegal Logging Prohibition Bill ('Bill') was introduced in the Commonwealth Parliament. The Bill gives effect to a 2010 election commitment of the Gillard government to restrict the importation of illegally logged timber products into Australia. To achieve this objective, the Bill establishes offences that impose criminal sanctions on those who import or process illegally logged timber. The Bill has been the subject of extensive Parliamentary scrutiny which has raised several important issues of international environmental law and international trade law.

The Senate Rural Affairs and Transport Legislation Committee issued its original report on an exposure draft of the Bill in June 2011 supporting the legislation. (1) In November 2011 the Senate referred the Bill to the Committee a second time, and in February 2012 the Committee again recommended that the Bill be passed. (2) The Liberal Party members of the Committee issued 'Additional Comments' that identified several concerns about aspects of the legislation, including the concerns of Indonesia and several other states over the consistency of the Bill with Australia's obligations under World Trade Organization ('WTO') law. (3)

The Bill has now been referred for yet further review by another Parliamentary committee, the Joint Standing Committee on Treaties ('JSCOT'). JSCOT's usual role is to consider whether the Australian government should enter into treaties; however, it does have the capacity to inquire generally into 'matters arising from treaties'. The Bill falls within this latter category because of its potential international legal implications. Effectively, though not expressly, the Bill seeks to balance Australia's commitments under several international regimes, specifically those under multilateral environmental agreements, anti-corruption treaties, and WTO law.

The purpose of this article is to assess whether the Bill safely navigates the competing norms and values that these regimes embody. It finds that while the Bill pursues legitimate environmental purposes, aspects of it raise potential problems of incompatibility with WTO law because it takes a decentralised national standards approach, imposing trade restrictions on the import of timber harvested unlawfully in the place where it was logged, rather than according to general Australian-identified criteria for sustainable forest products. While this article disagrees with a recent assessment of the legislation as being clearb, inconsistent with WTO rules, (4) it acknowledges that legitimate questions have been raised, and that the consistency of the Bill with WTO law will depend to an extent on the quantification of certain unclear costs and benefits under the scheme, as well as the nature of implementing regulations yet to be enacted. …