STATEMENT OF PORTUGAL TO THE SIXTH COMMITTEE OF THE 59th UNGA (Agenda Item 144)

NEW YORK, 3 NOVEMBER 2004
STATEMENT BY MR. LUÍS SERRADAS TAVARES, DIRECTOR OF THE DEPARTMENT OF LEGAL AFFAIRS OF THE MINISTRY OF FOREIGN AFFAIRS, TO THE SIXTH COMMITTEE OF THE 59^th SESSION OF THE GENERAL ASSEMBLY [Agenda Item 144: Report of the International Law Commission on the work of its Fifty-Sixth Session - Chapter IV: Diplomatic Protection; Chapter VII: International Liability for injurious consequences arising out of acts not prohibited by International Law (International Liability in case of loss from transboundary harm arising out of hazardous activities)]

Mr. Chairman,

Let me begin by thanking the Chairman of the International Law Commission, Mr. Teodor Melescanu, for his introduction of the Report of the Fifty-Sixth Session of the Commission.

I have the honour to take the floor today on Chapters IV and VII of the Report of the International Law Commission (ILC).

We note once again the progress made by the ILC during this year's session, namely with the adoption, on first reading, of the draft articles on diplomatic protection and of the draft principles on liability.

While we would like to concentrate today on those two issues, we will come back later to comment in general the work of the ILC in the current session.

Diplomatic Protection (Chapter IV of the Report)

Mr. Chairman,

The approval on first reading of 19 articles on Diplomatic Protection in less than 10 years since the topic was first identified as suitable to codification and progressive development proves that the topic indeed was ripe and adequate for that purpose.

We are grateful for the work done by the two Special Rapporteurs - who are present here today - Ambassador Bennouna and Professor Dugard.

My delegation believes that the text of the draft articles accomplished so far is undoubtedly an excellent starting basis for the further work of the Commission.

The ILC has requested States to comment at this point the full set of draft articles and its commentaries.

Now that we have a complete overview on the matter, Portugal feels that some comments are still warranted. Today we shall signal some of the issues that from our standpoint are more problematic, without prejudice to developing these and other aspects in writing before 1 January 2006, as requested by the Commission.

Mr. Chairman,

Let me turn first to article 3, paragraph 2. In this matter, we would like to draw the Commission's attention to the fact that the exception to the general rule laid down in this provision might not be sufficient in today's international legal system. For instance, the rule and its exception may not cover the right of any Sate of the European Union to deliver diplomatic protection to citizens of other member states providing that in a third State territory there is no diplomatic representation of the latter, as stated in article 20 of the Treaty establishing the European Community. Maybe a number 3 is needed to widen the scope of the exception, bearing in mind that in relation with integration processes around the world the same problem may also arise.

Regarding article 8, my Delegation reiterates the concern voiced the last two years with regard to the diplomatic protection of stateless persons and refugees. We continue to believe that the requirement of both lawful and habitual residence sets a threshold that is too high and could lead to a situation of lack of effective protection for the individuals involved. We invite again the ILC to give due consideration to this issue when embarking upon the second reading of the draft articles.

Mr. Chairman,

Our major concerns lay in draft articles 11 and 12 on the issue of shareholders as autonomous subject of diplomatic protection, which we had not yet the chance to comment before.

Firstly, in our view and after reading the whole set of draft articles, Portugal feels that the protection provided to shareholders is maybe too generous and departs from existing customary international law. Quite to the contrary, the solution proposed hardly qualifies as "progressive" development of international law.

A careful analysis of the articles and their commentaries shows that the articles were drafted solely on the basis of the "Barcelona Traction" case and that some of the draft provisions put forward covers matters that the Court had not expressly addressed, as recognized by the Commission herself on page 35, paragraph 5, of the Report.

As such, our view is that innovation, rather than progressive development, is being proposed in the draft articles. As far as we can conclude, the Commission bases its proposals, in her own opinion, not on solid arguments given by the International Court of Justice, but on prognosis reasoning.

Mr. Chairman,

Our main concern is the following:

Should indeed a shareholder, either as natural or legal person, benefit from a special protection, other than the one already provided in the draft articles for State nationals?

In particular, and firstly, we find no added value in the specific provisions concerning shareholders, in relation to the protection which is afforded to nationals, in cases where the shareholder is directly injured by a State's act. Shouldn't, in this instance, the protection be provided for in general terms, as nationals, and not as a shareholder?

Secondly, these draft articles are meant to protect nationals as such. Providing special protection for shareholders wouldn't one be protecting the investment rather then the national? And would it be justifiable this kind of protection, creating a positive discrimination in favour of shareholders?

My Delegation believes that the protection of shareholders as investors is well placed and better grounded within specific instruments of international law, to which the ILC makes reference in her Report, like the bilateral treaties for protecting foreign investments. Draft article 18 seems to recognise, or at least to accept, precisely this.

Thirdly, also as it is stated in the "Barcelona Traction" and "ELSI" cases, as well in the Commission's Report, most of the direct injuries to shareholders are produced in violation of their individual rights. And these rights are mostly, if not solely, provided by internal law, rather than international law.

Mr. Chairman,

We know the subject is very difficult and potentially controversial, as the Chairman of the ILC rightly underlined it in his introductory statement. Nevertheless, Portugal would like, also in this topic, to contribute in a constructive and positive manner to the debate, but, at the same time, promoting a solution well grounded in international law.

We appreciate that similar difficulties are still to be resolved on the second reading concerning other aspects that touch upon the scope of the present draft articles, namely with regard to possibly widening it to include - as well as the protection of members of the crews of ships and of shareholders - the issue of functional protection of nationals employed by international organisations and the question of diplomatic protection in the context where a State or an international organisation administers a foreign territory or a State, issues that Portugal had raised already before.

International Liability in case of loss from transboundary harm arising out of hazardous activities (Chapter VII of the Report)

Mr. Chairman,

Let me turn now to the issue of international liability. My Delegation welcomes the work achieved by the Commission this year on the topic and commends the Special Rapporteur, Dr. Rao, for having presented in his Report a set of concrete provisions on the allocation of loss in case of transboundary harm.

The eight draft principles approved on first reading this year are indeed a sound basis for the further work of the Commission. The substance contemplates many of the concerns put forward by my Delegation and others last year. We shall reserve more detailed observations on the drafting of these principles as well as on the commentaries for the written comments due in January 2006.

Let me just advance a few ideas that we feel could be better reflected upon. Although we agree, in general, with the balance given between the role of the State and of the operator as the primary subject of liability, my Delegation considers that the role of the State could still be made more decisive, in view of the fact:

The State, and not the operator, is the subject of international law;

The State is prima facie responsible to provide adequate compensation, according to the international law principle that the State is liable for acts emanating from its territory; and

The State should set up (internationally or domestically) mechanisms to recover costs from the operator.

Mr. Chairman,

As to the final form of the work on this topic, Portugal still believes that it should be the one of a set of draft articles - and not principles - to complete those on prevention already adopted by the Commission, which could lay, in due course, the basis for an international convention on liability in case of transboundary harm arising out of hazardous activities.

We hope that the Commission takes this concern into account, which is also shared by others, when embarking upon the second reading of the issues of prevention and allocation of loss, the two components of the liability topic.

Thank you Mr. Chairman.