INTRODUCTION

The Trail Smelter arbitration is renowned for its holding: “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.” Those words have been the subject of an immense amount of scholarly attention. But the procedure that produced the holding is worthy of study in its own right.

The U.S. and Canadian governments created an innovative mechanism to address a common problem in international relations: transboundary environmental harm caused and felt by private actors. The procedure was apparently successful. It resulted in a decision accepted by the governments, payment of damages to the victims of the pollution, and changes in the operation of the polluter to reduce the level of harm. Despite this apparent success, however, the Trail Smelter procedure has never been used again to resolve a private dispute over international environmental harm. Why not?

This chapter argues that the refusal to apply the Trail Smelter procedure to resolve such conflicts is a result of fundamental flaws in the procedure itself. In establishing the procedure, the U.S. and Canadian governments faced three basic questions: (a) whether to refer the dispute to an international or a domestic tribunal; (b) whether to allow the real parties in interest to appear on their own behalf, or to appear for them; and (c) whether to instruct the tribunal to apply domestic or international law.