11/07/2024

Private International Law and Sustainable
Development: Establishing International
Traceability of Critical Raw Materials
Supply Chains

Presented byAssociate Professor Jie (Jeanne) Huang / Professor Luke
NottageCo-director / Associate Director of the Center for Asian andPacific Law at the University of Sydney (CAPLUS)

The University of Sydney

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Table of Contents
1.
2.
3.
4.
5.

Traceability and Critical Raw Materials Global Supply Chains
Conflict of laws to achieve traceability
Insufficient international legal framework to resolve conflicts
Inspirations from private international law: Three Models of Traceability
Preliminary insights and lessons

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1. Traceability and Critical
Raw Materials Global Supply
ChainsThe University of Sydney

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The concept ofcritical rawmaterials (CRMs)
is dynamic and canvary acrossdifferent
jurisdictions(Goddin, 2018, p.
118). Typically, it
encompasses three
key aspects: supply
risk, environmental
consequences, andsusceptibility tosupply disruptions(Peck, 2018, p.
97).
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What is traceability?

– Traceability is understood as the ability to “identify and trace the history,application, location and distribution of products, parts and materials to ensure
the reliability of sustainability claims in the areas of human rights, labour(including health and safety), the environment and anti‐corruption”; and “theprocess by which enterprises track materials and products and the conditions inwhich they were produced through the supply chain” in both consumption andpost‐consumption.
ISO 9001:2015. United Nations Global Compact Office, A Guide to Traceability A Practical Approach to Advance
Sustainability in Global Supply Chains (New York, 2014). Organisation for Economic Co‐operation and Development (OECD),
Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector (Paris, 2018).

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Why do we need traceability?

The US Inflation
Reduction Act(IRA)The EU Digital
Product Passport(DPP)

A minimum percentage of the value ofsuch critical minerals in the battery
must be either extracted or processed in
the US or in a US FTA partner country
or recycled in North America

The European Commission defines DPP
as “a structured collection of productrelated data with predefined scope andagreed data ownership and access rights
conveyed through a unique identifier”

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Traceability about what and between who?
– Product data
– Process data

– Stakeholders– First consumption• Miner, Refiner, Precursor and CAM producer, battery cells andmodules manufacturer, battery pack producers, car manufactuer,importer, exporter, shipper, government regulators, End-users,consumer organizations, etc– Recycle:• Re-user, re-manufacturer, repurposer, waste collector, dismantler,
new manufacturer etc
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7Benefits of traceability– Rule-based global TRACEABILITY can enhance the VISIBILITY,TRANSPARENCY, and TRUST of supply chains– ESG compliance with obligations under the Paris Agreement for
Climate Change– Access to finance: investors and lenders– Consumers– Circular economy– …

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2. Conflict of laws toachieve cross-bordertraceability

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Sustaining these criticalresources will require global
cooperation.
Transparency
and privacy
protection

Law for Industry
specificstandards andconformity
assessment

Digital legal
identifiers

Cross-borderdata flowThe University of Sydney

But no overarching,integrated legal/ethicalinstrument
covering the sustainableproduction and consumptionof Lithium-ion batteries andother mineral products - toinform businesses,governments, andconsumers.
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Eg LITHIUM– Mined in Australia, Processed in
China, Traded in London/UK, andConsumed in the EU/US– Major conflict of laws issues:– Different laws/standards forESG– Insufficient interoperability ofESG reporting tools
Image source: https://www.sydney.edu.au/newsopinion/news/2023/08/31/mapping-australia-s-hidden-lithium-reserves.html

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Page 1111Provisions related to traceability ofWTO
data in Asia Pacific

Aus-Sing
AusRCEP/
CPTP DEP Digital
China AANZ
PA
EconomyFTA
FTA
Agreement

Trade facilitation provisions(paperless trade, etc)

Yes

Yes

Yes

Yes

Yes

Yes

Fraudulent & deceptivecommercial activities and otherconsumer protection provisions

NoLimited Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

NoYes

Yes

Personal information protection
and privacy
Cybersecurity

As anexcepti Limited YesonNoNo
YesFree cross-border transfer ofinformation

NoNoProhibition of data localisation

NoNo

Open government data, digital
identities,
The Universityof Sydney e-payment, etc

NoNoLimitedLimitedNo

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3. Insufficient international
legal framework to resolve
conflicts

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Existing legal infrastructure

Conventions

• WTO
• FTA
• Others, e.g. the 1961 Apostille Convention: a jewel
in the HCCH Crown

Model Law on Electronic Transferable
International model laws • UNCITRAL
Records (MLETR), etc.

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International standards• UN/CEFACT• GS1 global data model• ISO, etc.

National/Regional Laws

• Data protection law• Consumer protection law• Trade law• Dispute resolution, etc.

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Australia and New Zealand Free Trade Agreement– Section C - Creating a Conducive Environment for Electronic Commerce– Article 8 - Digital Trade Standards and Conformity Assessment
1. The Parties recognise the important role of relevant international standards in reducing
barriers to trade and fostering a well-functioning digital economy, including theirpotential to decrease trade compliance costs and increase interoperability, reliability andefficiency.
2. Each Party shall, where appropriate, encourage the adoption of international standards
that support digital trade.
3. The Parties shall endeavour to explore collaborative initiatives, share best practices andexchange information on standards, technical regulations and conformity assessment
procedures in areas of mutual interest with a view to facilitating electronic commerce
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Page 15and digital trade.
15We can learn from the existing traceability
systems – Seafood, textile/leather, and ‘conflict minerals’ from war zones,

But we need more

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4. Inspirations from privateinternational law: Three
Models of Traceability

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Three models to resolve conflict of laws in global traceability
1. Limited Decentralisation with an International Agreement and Local Central
Authority in Each Country: e.g. the Apostille Convention (for public documents
such as birth, marriage and death certificates-123 parties) and the Convention on
International Trade in Endangered Species of Wild Fauna and Flora (for exportpermits-184 parties).
2. Decentralised but with an International Agreement: e.g. the New York Convention
on the Recognition and Enforcement of Foreign Arbitral Awards (172 parties)– With some centralisation from UNCITRAL Model Law / arbitration law at seat
3. Decentralised without a Widely-accepted International Agreement: e.g. cross-border
recognition and enforcement of civil and commercial judgments hinging on
bilateral treaties or domestic laws. (Convention of 30 June 2005 on Choice of Court
Agreements-34 parties; Convention of 2 July 2019 on the Recognition andEnforcement of Foreign Judgments in Civil or Commercial Matters-29 parties)
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Model One: de-centralized with local Central authority in eachcountry– Global mutual recognition ofbirth, marriage, and deathcertificates and other public
documents across borders underthe Apostille Convention with125 member states– The Convention of 5 October 1961
Abolishing the Requirement ofLegalisation for Foreign Public Documents– Hague Conference on Private
International Law
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Traceability System under the Convention on
International Trade in Endangered Species of Wild
Fauna and Flora (“CITES”)

Three categoriesof subject matter

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Model Two: Decentralized-with proceduralverification and reciprocity requirement– Arbitration awards– United Nations Convention on
the Recognition and Enforcementof Foreign Arbitral Awards (172member states)– Define what are arbitration awards– Confidential information v.
public enforcement
Image source:

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https://viamediationcentre.org/readnews/Mzg3/Whether-Arbitral-Page 21

Award-can-be-binding-on-Non-Signatory-to-the-Arbitration-Agreement21– Member state courts cannot refuse recognition / enforcement of foreignseated arbitration unless problem with the arbitration agreement (or subjectmatter arbitrability) or procedure (including ‘public policy’)– No review of the merits (substantive contents) of the arbitral award– If refusal in one state, award creditor can seek enforcement in another– But growing ‘deference’ to decisions of first court(s)? (& arbitrators)?
– Some further centralisation is injected by NYC Art V allowing (but notrequiring!) refusal if award has been set aside by courts at the agreed seat
– Also tendency (but not eg in France) for NYC enforcing courts to (mostly)defer to seat court decisions that instead uphold challenges to awards– Facilitated by convergence in seat arbitration law through UN Model Law– Reciprocity reservation was permitted and quite often taken by states– This encouraged NYC ratifications by others seeking to grow local arbs
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Model Three: recognition without widely adopted
international framework– Judgments– Based on domestic law– With/without Reciprocity

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Page 2323– Convention of 30 June 2005 on Choice of Court Agreements (34member states)– Convention of 2 July 2019 on the Recognition and Enforcement ofForeign Judgments in Civil or Commercial Matters (29 member states)– 1. A judgment given by a court of a Contracting State (State of origin)shall be recognised and enforced in another Contracting State(requested State) in accordance with the provisions of this Chapter.
Recognition or enforcement may be refused only on the grounds
specified in this Convention.
– 2. There shall be no review of the merits of the judgment in therequested State. There may only be such consideration as is necessary
for the application of this Convention.
– 3. Recognition or enforcement may be refused on limited grounds (e.g.
no capacity of a party, undue service, fraud, public policy, etc.)
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4. Preliminary insights andlessons

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These conflict-of-law frameworks have significantly
reduced the cost of international business
transactions
These frameworks focus on• Decentralization• Vocabulary/semantics• Procedure

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Take Away

Thank you and Questions

Sustaining our planet’s mostcritical raw materials will require
global traceability anchored by acarefully-designed conflict-oflaws framework

Jeanne.huang@Sydney.edu.au
Luke.Nottage@sydney.edu.au

The University of Sydney

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