Conference on Wealth, Security and Survival - Ordering A Changing World

  • Don McKinnon
Foreign Affairs and Trade

Held By the New Zealand Branch of the International Law Association Law School Wellington

Mr Chair, Ladies and Gentlemen


The millennium is giving rise to much consideration of the past.

You'll be pleased to hear I?m not going to look back a thousand years. But perhaps a hundred - ten might be easier.

My central proposition is that compared to how we were at the end of the last century we are much more fully aware of our interdependence than back then.

Our wealth, security, and survival all depend on common institutions - pretty different to the more expansionist, insular nationalist world of last century, when Dick Seddon was intent on colonising the Cook Islands and Niue for New Zealand.

While of benefit to all countries, these development holds a particular resonance for States who do not hold as large a place as others on the world stage.

Now our ultimate security depends on international mechanisms, and among these international law is of critical significance.

The comprehensive changes the world is experiencing extend well into the field of international trade, including such new issues as electronic commerce.

They include new permeability of borders, by individuals, by financial flows, by environmental threats, and by criminal threats including terrorism and the drug trade.

Bringing some order into this arena needs commitment, and in particular, commitment to work on solving some of the really hard problems generated in today's world.

Your presence here today for this conference indicates a commitment to this task.

It is also very appropriate for us to be gathered here to talk about these issues at the end of the UN Decade of International Law.

I?d like to participate by focusing on one way in which we address some of the hard issues: through international dispute resolution mechanisms.

It seems to me that whatever the dispute and whatever the context, international law will determine or at least influence the framework for resolution.

Resolving disputes peaceably and promptly, and in the process contributing to the codification of rules of international behaviour, is central to the rule of law. And being able to uphold and enforce our rights is fundamental for a small country like New Zealand.

I want to examine this issue through examples which have a particular resonance to us - trade disputes, human rights disputes and political disputes, whether regional or multi-national.


Certain bilateral trade disputes have been very much to the forefront in recent months.

So you?ll forgive me if I start right there.

As you will know, the WTO's present dispute resolution procedures were put in place in 1994, in the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU).

This constituted one of the outstanding achievements of the Uruguay Round and the DSU changed the conceptual basis for resolving trade disputes.

The old GATT of course favoured negotiation, conciliation and mediation.

Mutually agreed solutions are still expressly preferred, but the innovations included in the DSU demonstrate that States also wanted to put in place a firm predictable procedure for dealing with trade disputes.

And New Zealand, like other small States, has begun to reap the benefits.

I do not mean so much in reference to the outcome of cases so far - such as the decision in favour of New Zealand in the Special Milk Classes case with Canada.

I really mean the systemic benefits.

We wanted a system which was relatively quick and able to tackle disputes in a practical way.

We wanted a system which could contain a trade dispute and leave New Zealand's relationships with other involved countries reasonably healthy and intact. We want to be able to quarantine an issue in effect.

And, most importantly, we wanted a system which could produce definitive and enforceable outcomes.

By providing a solid framework which meets these concerns, the DSU does all this.

New advantages were also gained through the institution of the seven-member WTO Appellate Body. New Zealander Chris Beeby, who as an international lawyer will be known to many of you, is currently the Chair of that Body.

The value of the Appellate Body lies in ensuring that Panels interpret correctly and consistently the WTO Agreements, thereby reinforcing the authority of the dispute settlement system.

In terms of predicability, which is essential for a rules based organisation like the WTO, the most important innovation in the DSU was probably the negative consensus procedure for the adoption of panel and Appellate Body reports - and this has given the WTO some teeth.

Outcomes can no longer be vetoed by the ?losing? country, which really became a pocket veto in the hands of many with which we became familiar.

The DSU is seen by most observers as levelling the playing field. Less powerful countries were arguably disadvantaged under the old GATT system, where dispute settlement outcomes did not depend on the rules.

Under the WTO DSU, countries of all sizes have equal access to an impartial dispute settlement process and do not have to rely on economic or diplomatic might to resolve trade disputes in their favour.

It was instructive that the first dispute under the DSU was between two developing countries, and that developing countries have been active users of the system.

In practice, small countries like New Zealand will of course still exert all efforts to resolve a case diplomatically in the first instance ...

... and many cases are settled either prior to panel action or before the conclusion of the panel process.

For example, as you will be aware, New Zealand went to the WTO, in conjunction with others, in cases against Hungary on export subsidies and India on its Balance of Payments-based import restrictions: both were settled out of court before reaching a panel.

In the Spreadable Butter case against the EU, progress enabled the dispute settlement process to be suspended, and we are close to an amicable settlement with the European Communities. The weapon of the DSU is relevant, however.

Review of the DSU

As you know, it was agreed in the Uruguay Round that the Dispute Settlement Understanding would be reviewed within 4 years of entry into force.

This process is due to be completed before the next WTO round gets underway later this year.

We are pleased with the way the DSU has been functioning to date.

Generally, we do not think there is the need or the widespread agreement which would be required to make significant changes to the rules.

One area where problems have been encountered, however, is the enforcement provisions of the DSU (Articles 21 and 22).

The recent WTO Appellate Body decision in the Bananas case has demonstrated that these provisions are not as clear as they could be.

New Zealand believes that the DSU review should now focus on clarifying these provisions, and we have been active in discussions in Geneva to this end.

There are other aspects of the dispute settlement mechanism where we can expect to see further pressures for evolution of the DSU over time.

One of these is the transparency of dispute settlement proceedings, where some WTO members are seeking to modify those DSU provisions which provide for the confidentiality of panel sessions and deliberations.

These and other sensitive issues will however take time to resolve.

The general sense of the WTO membership seems to be that since the DSU is working well, any change should be gradual, except where the need is clearly demonstrated.

Mr Chair,

The binding nature of WTO dispute settlement has ripple-on effects. Increasingly so.

Simon Upton will be speaking to you on environmental law tomorrow afternoon and I do not want to steal his thunder in any way.

I?ll just note that some WTO disputes involve trade measures taken in pursuit of environmental objectives,

and there are questions about whether WTO procedures will in all cases be the most appropriate vehicle to handle the issues in question.

And whether and in what circumstances it may be appropriate to seek to enforce environmental goals through trade measures.

I shall however leave such issues to you for the Conference Session focusing on environmental law.


I might also mention the work of an APEC expert group on dispute mediation, which has met yearly since 1995.

Its mandate has included State to State disputes, private disputes and mixed disputes between governments and private interests.

The expert group has given priority to facilitating access to information on mediation, conciliation and arbitration services available in member economies, and a guide has been put together by a consultant.

APEC members are also encouraged to work within the framework of other existing international agreements including the Convention for the Settlement of Investment Disputes, and the Convention on the Recognition of Foreign Arbitral Awards - to both of which New Zealand is party.

Most significantly, APEC Economic Leaders have emphasised such alternative forms of dispute settlement are complementary to WTO processes in particular.

The group was originally proposed prior to the conclusion of the Uruguay Round because some APEC members wondered if there were scope to defuse incipient disputes through some form of regional conciliation, before having recourse to more formal mechanisms.

I thought it topical to mention the work in APEC, given the September meeting in New Zealand.

And it also illustrates how international law can operate at a wider level to provide a framework for exchanging views on controversial issues.

I'm sure that you have to be genetically programmed to succeed in trade related disputes.

Political disputes I find are more straight forward, even if they are considered intractable.

The settlement of political disputes is of course a very broad area of dispute resolution.

These can include disputes across national borders, and often in today's world also disputes within national borders.

In both cases international law and the international community play an important role. Factors which are relevant here are:

- setting down standards for the conduct of combatants in the case of any military activity, under common Article 3 of the Geneva Protocols;

- dealing with large, sometimes massive fluxes of displaced persons and refugees;

- monitoring the human rights situation, and prosecuting persons indicted by the international tribunals for Rwanda and the former Yugoslavia; and in due course the new International Criminal Court;

- and encouraging peaceful settlement of disputes, in accordance with the UN Charter, and the establishment of stable good government.

In this respect I?ll touch on New Zealand's activities with respect to Nigeria, Sierra Leone and The Gambia, and subsequently Bougainville, ... before I return to the central role played by the United Nations in the implementation and enforcement of international law.

I have had the opportunity to be closely involved with the Commonwealth Ministerial Action Group - or CMAG as it is known.

CMAG was set up by Commonwealth Heads of Government in 1995,

and has worked to give practical effect to the Harare Declaration adopted in 1991 by the Commonwealth, setting out a broad framework of standards for good governance and human rights, pertaining to Commonwealth membership.

CMAG's instructions from the CHOGM held in Auckland were to deal with serious or persistent violations of the Harare Declaration's principles, by recommending measures for collective Commonwealth action.

CMAG's membership and role is not set out in a legal document.

But the flexibility this engenders has been a strength rather than a weakness.

They have allowed CMAG to tailor its efforts to individual circumstances in the three countries on its ?watch list?: Nigeria, Sierra Leone, and The Gambia.

This is just part of a wealth of activity under what is loosely described as the ?good governance? umbrella of the Commonwealth.

These processes do not produce legally binding outcomes.

But they reinforce and help implement standards derived directly from a wide body of international human rights and humanitarian law.

In the case of Nigeria, pressure to move to an election and a civilian Government from a repressive military regime was not entirely the result of Commonwealth action, but collective action of many including the EU and the United States who had the real economic clout - but we did know that Nigeria did not want tot be expelled from the Commonwealth.

Sierra Leone is still the saddest case in Africa, with the legitimate Government having minimal influence beyond the capital of Freetown, the revolutionary forces controlling the countryside, and the Nigerian Army providing most of the stability.

But the challenge remains to get a resolution agreed to by all the parties and some form of powersharing.

The Gambia, while remaining on the watchlist still has not complied with all good governance objectives but is willing to pursue dialogue.


In the case of Bougainville, we have seen circumstances exemplifying in full a breakdown between a nation's capital and an island province - between Port Moresby and the North Solomon province , dominated by Bougainville.

The consequences were disorder, development of opposition factions, formation of a ?rebel army? and declaration of a rebel Government, civil disorder, anarchy and the breach of some of the basic principles of international humanitarian and human rights law.

As you know, the conflict there grew out of a dispute between landowners over the Panguna copper mine in the Central Bougainville mountains, which was operated by an Australian mining company (BCL).

Civil unrest erupted in January 1989 and the conflict became an ongoing struggle between the PNGDF and its Bougainville allies and the BRA, with endemic local level violence.

What could be done?

To put the loss of life in context for you - 3,000 lives have been lost in Northern Ireland in the last 30 years but as many as 20,000 people may have been killed in the Bougainville conflict.

Restoring democratic processes under a legitimate Government posed a task that seemed difficult in the extreme.

The Papua New Guinea Government had already pursued many options in trying to solve the Bougainville crisis.

While international law looks to peaceful methods for bringing an end to such conflicts, the realities of an internal national crisis are particularly hard to address.

But the international community has a strong interest in helping bring back stability within any country.

New Zealand offered to become involved, actively engaging with the rebels but keeping dialogue open with then Prime Minister Sir Julius Chan and his Government.

We provided a venue and facilitation for the meetings in New Zealand and encouraged the parties to take part.

We were a friendly Pacific neighbour, and more broadly because we all have a vested interest in the prosperity, security and survival of our neighbours and communities in general, whether they are close to home or further afield [such as East Timor or Nigeria].

If you had been to Bougainville in 1993 as I did and saw the appalling cloak of emptiness and hopelessness on the faces of the people, you would have said, as I did, 'this can not go on, we must get it solved.'

But we have to remember that in the long run, it is not our responsibility to establish or keep peace on Bougainville.

This belongs to the people of Papua New Guinea and particularly those who live in Bougainville.

It is their work to reinvent peaceful government in line with expected international standards and norms of conduct, but with their own Melanesian characteristics, in their own territory.

UN Charter

Let me now briefly return to the key role of the United Nations in the peaceful settlement of disputes.

It is not always the most exemplary in terms of performance, but the UN is still the only show in town where all can go and be heard - a clearing house for disputes between them all - small, medium and large.

For more than 50 years now, New Zealand has resolutely supported the UN Security Council. We have served on it three times.

And we seek to support the collective security role of the UN as actively and tangibly as possible, including by contributing New Zealand personnel to UN peacekeeping operations, and currently a police contingent in East Timor.

The Security Council veto remains a problem.

For more than 50 years New Zealand has also consistently spoken out against the Security Council's veto. We regard it as inconsistent with the principle of the sovereign equality of states - also a founding principle of the UN Charter.

Our concern about the veto continues to be voiced in the UN working group which has been considering Security Council reform for over six years.

The veto is inextricably bound to the other items on the reform agenda.

For instance, if the Council is enlarged to reflect modern rather than post-war realities, should permanent membership be extended to today's new leading nations? And if so, should they also have the veto, extending further its inequity? New Zealand has taken the view that they should not, but there are no simple answers.

A stark and recent example of the Council hamstrung by the prospect of the veto was the situation in Kosovo. The veto had a direct impact on the pacific settlement of a security issue with international repercussions.

The rapid deterioration of security in Kosovo - the ambitions of both Milosovic and the KLA - were brought to the Council's attention as early as March 1998, and again in September 1998, and again in October 1998.

Then earlier this year, efforts to secure a peace broke down at Rambouillet, and yet the Council was constrained by the threat of a veto from deciding on appropriate action.

Taking into account the circumstances of growing humanitarian tragedy and urgency, what was to be done?

As you know, NATO's airstrikes occurred without a Council resolution explicitly authorising military intervention.

This episode raises a number of fundamental questions.

Were we at risk of going down what the UN Secretary-General described as, ?the dangerous path to anarchy? where groups of nations can take action without Council endorsement?

Clearly some action was essential to prevent massive human rights violations and crimes against humanity.

And there is a legitimate role for the Council in a security breakdown occurring within rather than across borders. Certainly it has acted several times in recent years elsewhere - in Somalia, Bosnia, and Angola.

But the Council could not unite around these humanitarian objectives in Kosovo, leading the Secretary-General to wonder whether the international community was betraying what he described as, ?the very ideals that inspired the founding of the UN??

Commentators have argued that there is or should be a right at international law of intervention in circumstances of serious humanitarian danger, quite separate from any Security Council mandate. They say that international law has evolved to the point where it no longer regards the way in which a State mistreats its own citizens on the scale seen in Kosovo as an internal matter.

This could be illustrated drawing on international action in response to apartheid in South Africa, the establishment of the Rwanda and Yugoslavia war crimes tribunals, and now the setting up of the International Criminal Court.

From a purely pragmatic point of view, without NATO intervention the humanitarian crisis would have been even more appalling. To my mind, it was justified in the circumstances, although the issues it raised require a careful response.

It is a cause for satisfaction that the Council now lies at the heart of the settlement in place for Kosovo. But it is a cause for concern that the threat of the veto led the Council to forfeit its primacy on the issue.

This has to be a very strong message to those who see reform of the Security Council as a threat to their own status and remind them that by their action they could make the Security Council totally impotent and irrelevant.

When it comes down to it, NATO's action highlights the need for reform of the Security Council to ensure that it can be an effective guardian for norms of acceptable human behaviour and international law.

Ladies and Gentlemen,

I began with a reference to the closing of the Decade of International Law.

To end, it might be more fitting to refer to two other notable anniversaries this year.

Firstly, the Centenary of the first International Peace Conference, commemorated in May in The Hague and also to be celebrated this month in St Petersburg.

This centenary is of course shared by the Permanent Court of Arbitration, which was established by the 1899 Peace Conference and of which New Zealand is a member.

As I was saying at the beginning of this speech, the world was quite different a hundred years ago, but who would have thought that after World War Two and after the end of the Cold War -atrocities in Somalia, Rwanda, Bosnia, the Congo, and Serbia would so dominate the last decade of this millennium and leave so many dead or scared for another two generations - at least.

From among these themes, I have focused primarily today on dispute settlement, and we would not say the scorecard looks very good.


The area of disarmament, on which I have not touched at all, is a full topic in itself. I can't do it justice now and will leave it to you at your session tomorrow on international security.

With respect to international humanitarian law it is timely for me to refer to the 50th anniversary of the Geneva Conventions ...

... which will be celebrated in November this year at a conference of the Red Cross in Geneva; and in a smaller way on the actual anniversary, 12 August.

This anniversary will be an appropriate time for New Zealand to underline the importance of applying systematically and rigorously the principles of international humanitarian law and to identify the way forward for its development, even allowing latitude for specific ethnic or customary values, it will indeed be a challenge

In particular we should support ongoing efforts for the implementation of humanitarian law in internal conflicts, as well as in international wars, but lets not believe that this in itself will be enough, a framework yes but not enough to replace strongly motivated and committed people.

Ladies and Gentlemen,

I have barely scratched the surface of questions related to ?ordering a changing world?.

But when it comes down to it, the implementation of international law is an incremental process based within a society itself. The tragedy of Kosovo illustrates this only too vividly. If society is not prepared to support such a body of work, then other remedies will need to be sought.

Do we dare look forward now.

With your goodwill and that of many others? the world one hundred years from now will have made further significant progress on all the ?tough issues?: environmental issues, disarmament, human rights and international humanitarian law, international crime, and successful international trade.

In so doing we will help ensure the wealth, security and survival of more people in more places around the globe, but following the experiences of the last decade, I could not say that I open your conference brimming with optimism.

But I have much pleasure in opening this Conference and wishing you inspiration and success in your discussions.