119

      DISSENTING OPINION OF JUDGE AD HOC DUGARD

   Unable to accept methodology of quantification as accepted by the Court —
Increased valuation of impairment to environmental goods and services — Court
should have had regard to considerations such as protection of the environment,
climate change and gravity of respondent State’s conduct — Erga omnes nature of
obligation not to harm gas regulation services.

                             table of contents

                                                                     Paragraphs

  I. The Methodology Employed by the Court in Arriving at
     Compensation for Environmental Damages in the Sum of
     US$120,000                                                           8-18
 II. Increased Valuation of the Impairment to Environmental
     Goods and Services                                                  19-21
III. The Inclusion of a Valuation for Soil Formation and Ero-
     sion Control                                                        22-28
IV. Equitable Considerations                                                29
 V. Protection of the Environment                                        30-32
VI. Climate Change                                                       33-39
VII. The Gravity of the Respondent State’s Actions                       40-46
Conclusion                                                                  47

                                      *
  1. I agree with all the ﬁndings of the Court except its decision to make
an award of US$120,000 to Costa Rica for environmental damages relat-
ing to the impairment or loss of goods and services arising out of Nicara-
gua’s unlawful activities. My disagreement on both the reasoning of the
Court and the quantum of damages awarded is so fundamental that I
believe this opinion is more accurately described as a dissenting opinion
than a separate opinion.
  2. On the face of it this case may appear to be trivial. Damage to a
wetland of 6.19 hectares for which the injured State claims a mere
US$6,711,685.26 in compensation hardly suggests that this is an impor-
tant case requiring the serious attention of the International Court of

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120              certain activities (diss. op. dugard)

Justice. Such an assessment would, however, be wrong. The dispute
between Costa Rica and Nicaragua involves three fundamental issues: the
forcible invasion of the territory of a State, the purposeful damage to an
internationally protected wetland and the calculated and deliberate viola-
tion of an Order of this Court.

  3. Costa Rica has claimed compensation for the costs and expenses
incurred in investigating, monitoring and remediating Nicaragua’s unlaw-
ful actions. It has also claimed compensation for material damage to the
environment caused by Nicaragua’s actions.

   4. I will say little about the Court’s Judgment relating to Costa Rica’s
claim for costs and expenses in investigating Nicaragua’s incursions into
its territory and in remediating the damage caused to its environment by
Nicaragua. The Court may have been too strict on occasion in dealing
with Costa Rica’s claims but to a large extent Costa Rica has only itself
to blame for failing to produce satisfactory evidence of the costs and
expenses it claims to have incurred. Costa Rica’s principal claim con-
cerned the salaries paid to its staﬀ responsible for monitoring the dis-
puted area but, although it is very possible that staﬀ were appointed
expressly for this purpose or paid overtime for this work, insuﬃcient evi-
dence was produced to this eﬀect.

  5. It is Costa Rica’s claim for material damage caused to the environ-
ment that forms the subject of the present opinion. This claim obliges the
Court to place a monetary ﬁgure on the harm done to Costa Rica’s envi-
ronment by Nicaragua’s unlawful activities. Inevitably this monetary
quantiﬁcation will be seen as the measure of the Court’s concern for the
protection of the environment in an age in which most nations agree on
the need for a national and international commitment to the preservation
of the environment of our planet.

   6. The assessment of damage to the environment is a diﬃcult task ren-
dered even more diﬃcult by the absence of an agreed scientiﬁc method
for making such an assessment. This is reﬂected in the diﬀerent method-
ologies proposed by the Parties in the present dispute for making this
assessment and in the vastly diﬀerent estimates advanced. Costa Rica
claims US$2,880,745.82 while Nicaragua estimates that only the paltry
sum of US$34,987 is due.
   7. My disagreement relates to both the method employed by the Court
to reach its decision on the quantum of damages to be awarded and the
amount determined by the Court in its quantiﬁcation of environmental
damages. The Court has decided to award Costa Rica US$120,000 in
compensation for the damage caused to its environment. While I would
have assessed the amount due at considerably less than the amount
claimed by Costa Rica I would have awarded Costa Rica considerably

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121                 certain activities (diss. op. dugard)

more than that awarded by the Court. In my judgment the sum of
US$120,000 constitutes a mere token for substantial harm caused to an
internationally protected wetland by the egregious conduct of Nicaragua.
In this opinion I will critically examine the methodology employed by the
Court in arriving at the sum of US$120,000 and comment on its failure to
have regard to equitable considerations, such as the character of the
aﬀected terrain, the implications of deforestation for climate change and
the conduct of Nicaragua.

      I. The Methodology Employed by the Court in Arriving
      at Compensation for Environmental Damages in the Sum
                          of US$120,000

  8. The quantiﬁcation of damages in respect of environmental harm is
not easy. This was emphasized by the United Nations Compensation
Commission (UNCC) established in 1991 to consider claims arising out
of Iraq’s unlawful invasion and occupation of Kuwait 1. The Panel of
Commissioners stressed the “inherent diﬃculties in attempting to place a
monetary value on damaged natural resources” 2 while the Working
Group of Experts entrusted by the United Nations Environment Pro-
gramme to assist the UNCC described the valuation of environmental
damage as “a challenging task” which raised “inherent analytical and
practical diﬃculties in specifying the appropriate elements of damage, the
nature and extent of the damage required to allow for recovery and the
determination of the amount of compensation” 3.

   9. This is the ﬁrst occasion on which the Court has considered a claim
for environmental damage. In evaluating the harm suﬀered by Costa Rica,
therefore, it was open to the Court to determine the methodology which
it considered appropriate. The Court, having examined the Parties’ diﬀer-
ent methodologies, concluded that it would not “choose between them or
use either of them exclusively for the purpose of valuation of the damage
caused to the protected wetland in Costa Rica”, and that it would take

  1  See Security Council resolution 687 (1991), paras. 16 and 18. See further on the
United Nations Compensation Commission (UNCC), R. Higgins et al. (eds.), Oppenheim’s
International Law: United Nations, Vol. II, Oxford University Press, 2017, p. 1254 ﬀ.
  2  UNCC Governing Council, Report and Recommendations Made by the Panel of
Commissioners concerning the Fifth Instalment of “F4” Claims, UN doc. S/AC.26/2005/10,
30 June 2005, para. 81.
   3 “Conclusions of the Working Group of Experts on Liability and Compensation

for Environmental Damage arising from Military Activities”, United Nations Environ-
ment Programme, Liability and Compensation for Environmental Damage: Compilation of
Documents, Nairobi, 1998, para. 44.

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122              certain activities (diss. op. dugard)

elements of either Parties’ method into account when they oﬀered a rea-
sonable basis for valuation (Judgment, para. 52). The Court declared that
in valuating environmental harm it would make an “overall assessment”
rather than attributing values to speciﬁc categories of environmental
goods and services (ibid., para. 78), guided in the absence of adequate
evidence as to the extent of material damage by equitable considerations
(ibid., para. 35), and the character of the aﬀected area — an internation-
ally protected wetland.

   10. A careful analysis of the Court’s decision makes it clear that it has
not in fact followed this approach. Moreover, the approach which the
Court has followed is unsatisfactory. In the paragraphs which follow I
will demonstrate this by, ﬁrst, explaining the submissions of the Parties,
and, secondly, critically examining the reasoning of the Court in making
its award.
   11. Costa Rica proposed an “ecosystems service approach” based on a
report by a Costa Rican non-governmental organization, Fundación
Neotrópica, which maintained that environmental damage might be cal-
culated on the basis of the reduction or loss of the ability of the environ-
ment to provide certain goods and services. Such goods and services
comprise those that may be traded on the market (such as timber) and
those that may not be traded (such as gas regulation and natural hazards
mitigation). A monetary value was attached to such environmental goods
and services by a value transfer approach which relied on values drawn
from the studies of other ecosystems with similar conditions. Costa Rica
furthermore argued that the losses sustained as a result of Nicaragua’s
actions were to be calculated over a period of 50 years, the estimated time
required for the aﬀected area to recover. This was qualiﬁed by a discount
rate of 4 per cent, the rate at which the ecosystem would recover.
Costa Rica claimed for the loss or impairment of six goods and services:
standing timber, raw materials (ﬁbre and energy), gas regulation and air
quality services such as carbon sequestration, mitigation of natural haz-
ards, soil formation and erosion control and biodiversity services.

   12. Nicaragua, for its part, proposed a less complicated method of
assessment which involved an “ecosystem service replacement cost” in
terms of which Costa Rica was only entitled to compensation to replace
environmental services that either have been or may be lost prior to the
recovery of the impacted area. This value would be calculated by refer-
ence to the price that would have been paid to farmers to preserve an
equivalent area until the services provided by the impacted area had
recovered. Nicaragua accordingly rejected both the system of value trans-
fer for attaching a monetary value to goods and services and the 50-year
recovery period.

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123               certain activities (diss. op. dugard)

   13. Nicaragua submitted a report by two experts, Payne and Unsworth,
which examined Costa Rica’s estimate of US$2,823,112 for the six goods
and services claimed to have been lost by Costa Rica as a result of Nica-
ragua’s actions. Accepting Neotrópica’s methodology for the sake of
argument only, Payne and Unsworth corrected certain mistakes which it
perceived in Neotrópica’s assessment. It concluded that, correctly apply-
ing Neotrópica’s own methodology, Costa Rica was entitled to a mere
US$84,296.
   14. The Court examined these diﬀerent methodologies, but ultimately
relied only on Nicaragua’s “corrected analysis”, with certain adjustments
made to account for the Court’s criticisms of Nicaragua’s “corrections”.
These criticisms were: ﬁrst, the Court said that Payne and Unsworth’s
corrected analysis had erred by assigning a value to raw materials of
US$1,200 (in contrast to Neotrópica’s valuation of US$17,877) that was
based on the assumption that there would be no loss in those goods and
services after the ﬁrst year; second, its valuation of biodiversity services of
US$5,144 (in contrast to Neotrópica’s valuation of US$40,730) failed to
pay suﬃcient regard to the importance of such services in an internation-
ally protected wetland and regrowth was unlikely to match, in the near
future, the pre-existing richness of diversity in the area; third, the “cor-
rected analysis” for gas regulation of US$47,778 (in contrast to Neotrópi-
ca’s valuation of US$937,509) did not take account of the loss of future
carbon sequestration as it had incorrectly valued these services as a
one-time loss. The Court made no objections to Payne and Unsworth’s
corrected valuation of felled trees of US$30,175 (in contrast to Neotrópi-
ca’s valuation of US$462,490).

   15. The Court’s apparent reliance on the “corrected analysis” is prob-
lematic for several reasons. For one, the “corrected analysis” attaches a
value to each head of damage in isolation. This runs counter to the
Court’s declared intention of not attributing values to speciﬁc species of
harm. Secondly, certain elements of the “corrected analysis” cannot legit-
imately be relied upon by the Court as providing a “reasonable basis” for
its own valuations. The methodology for the calculation of timber, for
example, relies on an assessment of the volume of timber per hectare in
the aﬀected area. Nothing in the record before the Court explains why
this method of calculation is used. The value transfer studies on which the
“corrected analysis” relies have not been assessed by the Court for their
reasonableness. Thirdly, the Court rejects Costa Rica’s argument that the
recovery period for goods and services is 50 years, observing “that diﬀer-
ent components of the ecosystem require diﬀerent periods of recovery and
that it would be incorrect to assign a single recovery time to the various
categories of goods and services identiﬁed by Costa Rica” (Judgment,
para. 76). But the Court gives no indication of what it considers to be the
appropriate recovery period for the goods and services in question. Is it

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124                 certain activities (diss. op. dugard)

20 to 30 years as accepted by Nicaragua 4 or 10-20 years for biodiversity
and 1-5 years for raw materials and gas regulation as suggested by Nica-
ragua’s expert, Professor Kondolf 5? The Court’s failure to clarify the
recovery period which it considered applicable makes it impossible to
assess the impact that this factor had on the Court’s valuation.

   16. The failure of the Court to address the value to be attached to the
loss of “close to 300 trees”, many of which were over 100 years old, is
inexplicable in the light of the Court’s statement that “the most signiﬁ-
cant damage to the area, from which other harms to the environment
arise, is the removal of trees by Nicaragua” (Judgment, para. 79). More-
over the Court declared that “an overall valuation can account for the
correlation between the removal of the trees and the harm caused to other
environmental goods and services (such as other raw materials, gas regu-
lation and air quality services, and biodiversity in terms of habitat and
nursery” (ibid.). Given the central role played by trees in the quantiﬁca-
tion of environmental damage — in the opinion of the Court — it is sur-
prising that there is no indication of the valuation the Court attaches to
the close to 300 trees felled by Nicaragua in 2010 and 2013. The Court
rejects Nicaragua’s proposed total compensation to Costa Rica of
US$34,987 (ibid., para. 77) but fails to indicate its own valuation in rela-
tion to the felled trees. Presumably, despite its silence on this subject, the
Court does not accept Payne and Unsworth’s valuation of US$30,175 for
timber based on their correction of Neotrópica’s valuation of US$462,490.
Nor does the Court indicate how the felled trees are to be valued. Is the
valuation based on the average price of standing timber that accords
value to the eliminated stock and growth potential of that stock over
50 years as suggested by Costa Rica (ibid., para. 60)? Or is it based on the
value attached to each of the felled trees, and the loss of such trees over a
50-year or less recovery period. We simply do not know.

   17. We do know, however, that the Court found that the compensa-
tion due to Costa Rica was in excess of Payne and Unsworth’s valuation
of US$84,296. This means that the Court’s corrections to this valuation
and, possibly, equitable considerations, of which the only consideration
speciﬁed in the Judgment is the character of the aﬀected area as an inter-
nationally protected wetland, account for US$35,704 to bring the total of
compensation awarded for environmental damages to US$120,000.

  4   Counter-Memorial of Nicaragua on Compensation (CMNC), p. 61, para. 4.43.
  5   Ibid., Ann. 2, p. 160 (Kondolf Report, 2017).

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125              certain activities (diss. op. dugard)

   18. In my view this is a grossly inadequate valuation for environmental
damage caused to an internationally protected wetland, having regard to
the context of the harm caused. In my opinion a much higher compensa-
tion is warranted, one that takes account of an increased valuation of the
impairment to trees, raw materials, biodiversity and gas regulation; the
inclusion of a valuation for the impairment of soil formation; harm
caused to the environment; the implications of the felling of trees and
the destruction of undergrowth for climate change; and the gravity
of an intentional harm caused to the environment of a wetland by
Nicaragua.

      II. Increased Valuation of the Impairment to Environmental
                          Goods and Services

   19. The Court has made the following ﬁndings on impairment to
environmental goods and services. First, in a case of this kind involving
environmental harm the Court should make an overall assessment of dam-
ages. Second, in making this assessment the Court should be guided by
equitable considerations, including the harm caused to an internationally
protected wetland. Third, that Nicaragua’s “corrected analysis” of Neo-
trópica’s valuation of the loss suﬀered by Costa Rica for the impairment
of certain goods and services in the sum of US$84,296 underestimates the
compensation due to Costa Rica. Fourth, that Nicaragua’s “corrected
analysis” in respect of raw materials and gas regulation is to be faulted on
the ground that it values the impairment of these goods and services on a
one-oﬀ basis and takes no account of the recovery period for such goods
and services. Fifth, that Nicaragua’s valuation of biodiversity services is
defective because it fails to take account of the character of the aﬀected
area as an internationally protected wetland and the poorer nature of
regrowth when compared to the pre-existing biodiversity in the area.
Sixth, that Costa Rica is not entitled to any compensation for loss of
natural hazards mitigation or for soil formation/erosion control. Seventh,
that the felling of trees by Nicaragua is the most signiﬁcant harm caused
to the environment and the impairment to other goods and services ﬂows
from this harm. Eighth, that Nicaragua felled close to 300 trees in exca-
vating the 2010 caño and the 2013 eastern caño and not 200 as argued by
Nicaragua.

  20. The ﬁnding of the Court that Nicaragua’s “corrected analysis”
of US$84,296 underestimates the value to be placed on the impairment
of environmental goods and services and has “shortcomings”

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126                 certain activities (diss. op. dugard)

(Judgment, para. 82) is the starting-point for the Court’s assessment of
the overall valuation. The ﬁnishing point is the Court’s determination
that, having regard to these “shortcomings”, the overall valuation to be
placed on the environmental harm caused by Nicaragua’s illegal action is
US$120,000. Unfortunately the Court gives no indication as to how the
diﬀerence between these two ﬁgures of US$35,704 was determined. Equi-
table considerations possibly played a role in this assessment. The charac-
ter of the aﬀected area as an internationally protected wetland was
mentioned as one such consideration and presumably this was taken into
account in the assessment. We also know that the Court disagreed with
the conclusions of the “corrected analysis” of Neotrópica’s ﬁndings on
the value to be assigned to the impairment of raw materials, biodiversity
and gas regulation prior to their recovery. Presumably the Court increased
the sum due in the “corrected analysis” for the impairment to raw materi-
als for one year only to take account of such a loss for a longer recovery
period. Perhaps as long as 20 to 30 years, the recovery period accepted by
Nicaragua? Presumably, too, the Court increased the sum allocated by
the “corrected analysis” for biodiversity services to take account of the
fact that the regrowth of the area would not reach its previous richness of
diversity in the “near future”. Again, we are not told how long this
recovery is likely to take but a period of 20 years would not seem to be
unreasonable in the light of the acceptance of such a recovery period
by Nicaragua. Presumably the Court also increased the sum estimated by
the “corrected analysis” for gas regulation and air quality services which
failed to take account of the loss of future annual carbon sequestration by
characterizing “the loss of those services as a one-time loss” (Judgment,
para. 85). No recovery period is suggested by the Court, but again
20 years would not seem to be unreasonable.

   21. I ﬁnd it diﬃcult to accept that all the above factors identiﬁed by
the Court as considerations to be taken into account in reaching an over-
all valuation for the loss or impairment of environmental goods and ser-
vices have a monetary value of only US$35,704.

         III. The Inclusion of a Valuation for Soil Formation
                          and Erosion Control

  22. In recent years there has been considerable criticism of the Court’s
handling of evidence in complex factual situations and highly technical
matters 6. Much of the criticism has been directed at the lack of transpar-

   6 See L. Malintoppi, “Fact-Finding and Evidence before the International Court of
Justice (Notably in Scientiﬁc-Related Disputes)”, Journal of International Dispute Settle-

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127                  certain activities (diss. op. dugard)

ency displayed by the Court in its explanations of how it has evaluated
the evidence and how it has reached its conclusions on disputed facts. The
opaque reasoning leading to the ﬁnding of the Court that Costa Rica
failed to prove that soil formation and erosion control had been impaired
by Nicaragua’s construction of the caños in 2010 and 2013 provides a
further example 7 of unsatisfactory fact-ﬁnding. This is unfortunate as
Costa Rica’s claim in respect of this category of impairment to goods and
services was the largest: US$1,179,924. In these circumstances one might
have expected the Court to pay particular attention to providing a satis-
factory explanation for its ﬁnding.

   23. In this case Nicaragua did not dispute that 9,502.72 cubic metres of
soil was removed from the areas aﬀected by the construction of the 2010
and 2013 caños. It was agreed that the soil dredged in the caños had been
replaced by alluvial sediment. The Parties, however, disputed whether the
alluvial sediment was of poorer quality, as claimed by Costa Rica, and if
so whether it was able to control erosion and to provide the same func-
tions for the environment as the removed soil.

  24. Nicaragua argued that the material which had reﬁlled the caños did
not diﬀer in any meaningful way from the material that had been dis-
placed by Nicaragua’s works, claiming that Costa Rica had failed to pro-
duce site-speciﬁc samples to substantiate its submission that the alluvial
sediment was of poorer quality than the soil that had been dredged by
Nicaragua, making it less able to control erosion and to provide the same
functions for the environment as the dredged soil. For this reason, Nica-
ragua submitted that Costa Rica was not entitled to any award in relation
to soil.
  25. While it is true that Costa Rica failed to carry out tests to prove
that the dredged soil was superior to the alluvial sediment that had
replaced it, it did present a report on this subject from Professor Thorne.
Supported by a Ramsar Advisory Mission Report 8, Professor Thorne
maintained that
      “the properties of sediment and soil diﬀer by practically every meas-
      ure of signiﬁcance, due mainly to the relative absence of organic mat-

ment, Vol. 7 (2016), p. 421; J. Devaney, Fact-Finding before the International Court of
Justice, Cambridge University Press, 2016; and A. Riddell and B. Plant, Evidence before the
International Court of Justice, British Institute of International and Comparative Law, 2009.
   7 See the comments on fact-ﬁnding in my separate opinion in Certain Activities Carried

Out by Nicaragua in the Border Area (Costa Rica v. Nicaragua) and Construction of a Road
in Costa Rica along the San Juan River (Nicaragua v. Costa Rica), Judgment, I.C.J. Reports
2015 (II), pp. 859-860.
   8 Ramsar Secretariat, “Ramsar Advisory Mission Report No. 69: North-Eastern

Caribbean Wetland of International Importance, (Humedal Caribe Noreste), Costa Rica”,
17 December 2010, quoted in C. Thorne, Review of the report by G. M. Kondolf, Ph.D.,
25 July 2017, Reply of Costa Rica on Compensation (RCRC), Ann. 2, p. 171.

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128                    certain activities (diss. op. dugard)

       ter, humus and microbial life from the former and great abundance
       in the latter. There is literally a biological world of diﬀerence between
       a body of freshly deposited river sediment (known as alluvium) and
       a body of mature soil . . .” 9.
He further stated that other ingredients must be added to sediment to cre-
ate soil, including particularly organic matter, and that it took time for
organic matter “to rot down to produce the soil components largely
responsible for making soils fertile” 10. It would take decades, he contin-
ued, “before the organic content and fertility of soils currently forming
from caño-ﬁlling sediments can approach the values characteristic of soils
beneath the old growth/mature tree stands cleared by Nicaragua to make
way for the caños” 11. Thorne stressed that soil reinforced by roots of live
vegetation is much more erosion-resistant 12. He concluded by stating that
Nicaragua’s activities had clearly impacted soil formation and erosion
control. This was evidence presented by an expert who had proved to be
a credible witness in the hearing on the merits on what he described as
“‘classic’ soil science” 13.

  26. The Court dismissed Costa Rica’s claim for the impairment of soil
formation and erosion control, holding that

       “[t]here is some evidence that the soil which was removed by Nicara-
       gua was of a higher quality than that which has now reﬁlled the two
       caños but Costa Rica has not established that this diﬀerence has
       aﬀected erosion control and the evidence before the Court regarding
       the quality of the two types of soil is not suﬃcient to enable the Court
       to determine any loss which Costa Rica might have suﬀered.” 14

   27. This terse conclusion raises the following question. There was a
well-reasoned report by Professor Thorne on the diﬀerence regarding the
two types of soil, supported by a Ramsar Report. Was it the failure of
Professor Thorne to produce soil-speciﬁc samples in addition to his expo-
sition of classic soil science that rendered his evidence insuﬃcient to prove
the diﬀerent qualities of the two types of soil? Or was it that the Court
found Professor Kondolf’s evidence, also unaccompanied by scientiﬁc
data, more compelling. Surely, the Court is required to give some expla-

  9 RCRC, Ann. 2, p. 171.
  10 Ibid., p. 172.
  11 Ibid., p. 173.
  12 Ibid., pp. 173-174. For these arguments see ibid., pp. 13-14.

  13   Ibid., Ann. 2, p. 173.
  14   Judgment, para. 74.

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129                  certain activities (diss. op. dugard)

nation for its rejection of Professor Thorne’s evidence premised on “‘clas-
sic’ soil science”?

   28. In my view Costa Rica has suﬃciently demonstrated that fresh
alluvial sediment is necessarily of a lower nutrient value than mature soil
in a forested area. Although a site-speciﬁc study may have been the best
evidence that the new soil is of a lower quality than the old soil, this does
not mean that expert evidence which demonstrates that alluvial deposits
can be assumed to be of a lower quality than mature, organic soil is insuf-
ﬁcient to meet the burden of proof. Costa Rica’s claim of US$1,179,924
for soil formation/erosion control is inﬂated. However, on Thorne’s evi-
dence there is no doubt that substantial harm has been caused to soil
quality and that there is compensable harm that will take a long recovery
period. For this reason I believe that the Court should have attached
some valuation to the impairment of soil formation.

                         IV. Equitable Considerations

  29. The Court has suggested, without clearly asserting, the relevance of
equitable considerations in awarding compensation for damage caused 15.
When the extent of the damages cannot be established, the assessment is
at the discretion of the Court. In exercising its discretion, the Court will
be guided by the equities. In 1997 the Institut de droit international
declared:
        “Environmental regimes should provide for a broad concept of
      reparation, including cessation of the activity concerned, restitution,
      compensation and if necessary, satisfaction.

         Compensation under such regimes should include amounts cover-
      ing both economic loss and the costs of environmental reinstatement
      and rehabilitation. In this context, equitable assessment and other
      criteria developed under international conventions and by the deci-
      sions of tribunals should also be considered.” 16

   15 Judgment, para. 35. In referring to its decision in Ahmadou Sadio Diallo (Republic

of Guinea v. Democratic Republic of the Congo), Compensation, Judgment, I.C.J. Reports
2012 (I), p. 337, para. 33, in which the Court established the amount of compensation due
on the basis of equitable considerations, the Court suggested that equitable considerations
would be taken into account in the present case in the absence of adequate evidence as to
the extent of material damage.
   16 Session of Strasbourg, 1997, Resolution III, “Responsibility and Liability under

International Law for Environmental Damage”, Article 24; emphasis added.

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130                 certain activities (diss. op. dugard)

In the present case there are a number of equitable considerations that
the Court might, and in my judgment, should have taken into account in
its quantiﬁcation of damages. These include the protection of the envi-
ronment, the importance attached to measures to combat climate change
in today’s world, and the gravity of the respondent State’s actions. Unfor-
tunately, the Court appears to have had regard only to the character of
the aﬀected area as an internationally protected wetland.

                     V. Protection of the Environment

   30. It is not necessary to describe the importance attached to the pro-
tection of the environment in the contemporary international legal order.
The protection of the environment has been proclaimed by the Declara-
tions of Stockholm (1972) and Rio (1992) and recognized as a human
right by the African Charter on Human and Peoples’ Rights (Art. 24).
The destruction of the environment is both an internationally wrongful
act and an international crime 17. In the present case Nicaragua intention-
ally caused damage to the environment of another State in an interna-
tionally protected wetland.
   31. Wetlands are highly sensitive ecosystems of particular importance.
The report of Professor Thorne relied upon by Costa Rica sets out the
reasons why the Humedal Caribe Noreste, which includes the aﬀected
area, was designated a wetland of international importance in 1996 18.
These include the facts that it is highly valued as a stronghold of the
region’s genetic and ecological diversity and that it is a stopover for
migratory ﬁsh and birds 19. Harm to this environment should to be treated
with a high degree of seriousness and this should be reﬂected in the
amount of compensation awarded.

  32. It seems that the Court took the fact that Nicaragua’s actions
caused damage to the Humedal Caribe Noreste wetland into account in its
quantiﬁcation of damages. It declared (Judgment, para. 80):
       “[a]n overall valuation approach is dictated by the speciﬁc character-
       istics of the area aﬀected by the activities of Nicaragua, which is sit-
       uated in the Northeast Caribbean Wetland, a wetland protected
       under the Ramsar Convention, where there are various environmen-
       tal goods and services that are closely interlinked. Wetlands are
       among the most diverse and productive ecosystems in the world. The
       interaction of the physical, biological and chemical components of a
       wetland enable it to perform many vital functions, including support-

  17 See Article 8 (2) (b) (iv) of the Rome Statute of the International Criminal Court.
  18 RCRC, Ann. 2 (Thorne Report), p. 169.
  19 Ibid.

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131                 certain activities (diss. op. dugard)

       ing rich biological diversity, regulating water régimes, and acting as
       a sink for sediments and pollutants.”

However, the Court gave no indication of the monetary value it attached
to this consideration. As it was only one of a number of factors consid-
ered by the Court in extending the sum proposed by Payne and Unsworth’s
“corrected analysis” from US$84,296 to US$120,000 it appears that this
could not have been a substantial sum. The paucity of this award will do
little to emphasize the importance of the protection of a Ramsar wetland
site.

                              VI. Climate Change

   33. The correlation between deforestation and climate change is clear.
Although this branch of science is still developing there is no doubt that
the destruction of trees exacerbates climate change. Mature forests store
quantities of carbon in the trees themselves and in the soil surrounding
trees in the form of decaying plant matter. When trees are destroyed car-
bon is released into the atmosphere, increasing the amount of carbon
dioxide and other greenhouse gases which accelerate global warming and
climate change.

   34. Nicaragua destroyed close to 300 trees in 6.19 hectares of the “dis-
puted territory”. Costa Rica claimed US$937,509 for loss of gas regula-
tion services arising out of this action. Again, the sum is inﬂated but a
substantial portion of it should have been allowed.

   35. Nicaragua argued that the cost of lost carbon sequestration reﬂects
the value to the world population of this ecological service and that
Costa Rica was therefore not entitled to claim for the full amount of
harm done 20. Undoubtedly this is a matter of concern to the international
community as a whole. The obligation not to engage in wrongful defores-
tation that results in the release of carbon into the atmosphere and the
loss of gas sequestration services is certainly an obligation erga omnes.
Nevertheless it is common knowledge that third States hardly ever, if
ever, assert their rights arising from the violation of obligations
erga omnes. In these circumstances it is the State most immediately
aﬀected that is most likely to assert these rights on behalf of both itself
and the global community. Costa Rica should therefore have been
allowed to recover compensation in full for this harm. In making this

  20   CMNC, Ann. 1, p. 131 (Payne and Unsworth Report, 2017).

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132                certain activities (diss. op. dugard)

claim Costa Rica asserted an interest owed both to itself and to the inter-
national community as a whole.

   36. The Court failed to make any ﬁnding on which States might bring
a claim despite the fact that it was central to Nicaragua’s argument on the
valuation of the impairment of carbon sequestration and gas regulation.
Nor did it answer the question of whether harm to gas regulation services
is ever capable of recovery in full by a single State. In so doing it missed
an opportunity to contribute to the progressive development of custom-
ary international law on the mitigation of climate change 21.

   37. The Court cannot ignore the relevance of the Paris Agreement on
climate change 22 of 4 November 2016 to its decision in this case. Over
170 States parties, which include Nicaragua and Costa Rica 23, have com-
mitted themselves to the aim of reducing greenhouse gas emissions and
have therefore recognized a link between greenhouse gas emissions and
climate change 24. The Parties have also recognized the importance of the
conservation and enhancement of sinks and reservoirs of greenhouse
gases 25.
   38. The Court should have had regard to Article 4 of the Paris Agree-
ment, in terms of which parties aim to reach a “global peaking of green-
house gas emissions” as soon as possible. To this end, parties determine
individual targets for themselves and are under the obligation to make
eﬀorts to achieve those targets. Each party is required to “prepare, com-
municate and maintain successive nationally determined contributions
(NDCs) that it intends to achieve” and “shall pursue domestic mitigation
measures, with the aim of achieving” these NDCs 26. This demonstrates
that, although it remains true that at a practical level the world as a whole
beneﬁts from clean air and from a reduction in each individual State’s
carbon emissions, the global community has purposefully adopted an
approach to gas regulation that individualizes States’ obligations. As a
corollary to this approach, gas regulation services are perceived as accru-
ing primarily as a beneﬁt to individual States. Indeed, if the costs and
beneﬁts associated with the management of gas regulation services were
not individualized in this way, there would be no mechanism for holding
individual states to account for eﬀorts to reduce their carbon emissions

  21  See further below the section on climate change.
  22  The Paris Agreement under the United Nations Framework Convention on Climate
Change, 22 April 2016, entry into force 4 November 2016.
   23 The Paris Agreement entered into force for Nicaragua on 22 November 2017. It

entered into force for Costa Rica on 12 November 2016.
   24 Paris Agreement, Arts. 4 and 10.
   25 Ibid., Art. 5.
   26 Ibid., Art. 4 (2).

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133                  certain activities (diss. op. dugard)

under Article 4 of the Paris Agreement. (Costa Rica submitted its NDC
in 2015, listing the enhancement of carbon sinks through land-use and
reforestation as one of the four mitigation options being considered 27.)

  39. This is the ﬁrst occasion that the International Court of Justice has
addressed this issue. In an age of serious debate about the means to be
employed to combat climate change it is inevitable that close attention
will be paid to the pronouncement of the Court on this subject. The fail-
ure of the Court to address this matter will be interpreted as an unwilling-
ness on its part to join the global consensus determined to combat climate
change.

          VII. The Gravity of the Respondent State’s Actions

   40. Nicaragua’s conduct in these proceedings has been characterized
by bad faith and a determination to deliberately ﬂout international law
and the Court’s authority. At the same time this conduct has shown a
complete disregard for the environment of an internationally protected
wetland. The construction of the ﬁrst caño in 2010 was an attempt to
stealthily change the course of the San Juan River in order to expand
Nicaragua’s territory. It was not a good faith misinterpretation of the
limits of an international frontier. Inevitably this attempt to alter the
boundary was accompanied by environmental harm resulting from the
destruction of trees, vegetation and organic soil. The bad faith of Nicara-
gua was demonstrated by its untrue statements relating to the presence of
Nicaraguan military personnel in the disputed territory, which continued
up to the start of legal proceedings on 19 January 2011 28. Nicaragua’s
contempt for the environment and the Court’s Order was further demon-
strated by its support for the presence of several thousand nationalistic
students — the Guardabarranco Environmental Movement — masquer-
ading as environmental activists in the disputed territory 29. The ﬁnal
straw was the deliberate and purposeful violation in September 2013 of
the Court Order on provisional measures of 2011 30. This violation which
was initially denied by Nicaragua is further evidence of bad faith. It

   27 Ministry of Environment and Energy of Costa Rica, “Costa Rica’s Intended Natio-

nally Determined Contribution”, San José, September 2015, App. 1, p. 12.
   28 See the separate opinion of Judge Robinson in Certain Activities Carried Out by

Nicaragua in the Border Area (Costa Rica v. Nicaragua) and Construction of a Road
in Costa Rica along the San Juan (Nicaragua v. Costa Rica), Judgment, I.C.J. Reports
2015 (II), pp. 811–812.
   29 See my dissenting opinion in Certain Activities Carried Out by Nicaragua in the

Border Area (Costa Rica v. Nicaragua) and Construction of a Road in Costa Rica along
the San Juan (Nicaragua v. Costa Rica), Provisional Measures, Order of 16 July 2013,
I.C.J. Reports 2013, p. 271.
   30 Joint declaration of Judges Tomka, Greenwood, Sebutinde and Judge ad hoc Dugard

in Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v. Nicaragua)

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134                 certain activities (diss. op. dugard)

demonstrated contempt for the authority of the Court and a total disre-
gard for the environment.

  41. In assessing compensation in this case, the Court should have had
regard to the gravity of Nicaragua’s unlawful activities. The amount of
compensation should be assessed so as to ﬁt the wrongful conduct 31. This
was made clear by the International Law Commission in its Commentary
on the Draft Articles on the Responsibility of States for Internationally
Wrongful Acts when it declared:
           “As to the appropriate heads of compensable damage and the prin-
        ciples of assessment to be applied in quantiﬁcation, these will vary,
        depending upon the content of particular primary obligations, an
        evaluation of the respective behaviour of the parties and, more gener-
        ally, a concern to reach an equitable and acceptable outcome.” 32
  42. The Institut de droit international has echoed this view. In its
ﬁnal report on Responsibility and Liability under International Law for
Environmental Damage of 1997, the Institut stated:
       “Full reparation of environmental damage should not result in the
    assessment of excessive, exorbitant, exemplary or punitive damages.
    Punitive damages are not usually accepted under international law,
    but where it would be equitable for compensation to exceed actual
    loss or some other alternative measurement punitive damages might
    be envisaged. Deliberate environmental damage might be a case in
    point.” 33

  43. Given the gravity of Nicaragua’s violations of international law,
the scale of compensation should be higher than it would otherwise be for
lawful conduct that caused environmental damage 34. International courts
and tribunals have often — at least implicitly — taken into account the

and Construction of a Road in Costa Rica along the San Juan (Nicaragua v. Costa Rica),
Judgment, I.C.J. Reports 2015 (II), p. 754.
   31 J. Crawford, Brownlie’s Principles of Public International Law, 8th ed., 2012,
Oxford University Press, p. 573: Crawford remarks in relation to LG & E v. Argentina,
a United Nations Framework Convention on Climate Change (ICSID) arbitration and
the Eritrea-Ethiopia Claims Commission that “[b]oth tribunals seem to have had in mind
the need to adjust the amount of compensation in such a way that it ﬁts the wrongful
conduct”.
   32 Yearbook of the International Law Commission, 2001, Vol. II (Part Two), p. 100;

emphasis added.
   33 Annuaire de l’Institut de droit international, Final Report, December 1996, Paris,

Pedone, p. 339.
   34 See J. Crawford, Brownlie’s Principles of Public International Law, 8th ed., 2012,

Oxford University Press, p. 573: “The scale of compensation in cases of lawful activities
may be less ambitious than that applicable to activity unlawful at birth, such as unpro-
voked attacks or unlawful expropriation.”

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135                  certain activities (diss. op. dugard)

conduct of the Parties and the gravity of the violation in the assessment
of compensation 35. The British Commissioner (Cockburn) in the
Alabama Claims said that reparation sought must be reasonably pro-
portionate, not only to the loss which is the consequence of the fault
(the act or omission), but also to the gravity of the fault itself 36. (Cock-
burn’s opinion in the Alabama Claims drew support in the dissenting
opinion of Judge Azevedo in the Corfu Channel Case (United Kingdom v.
Albania) 37.)

   44. Other examples include the I’m Alone case (1933-1935), in which a
sum of money was awarded as “material amend” for the intentional
unlawful sinking of a ship and The Rainbow Warrior arbitration (1990) in
which the recommendation was that France pay US$2 million for con-
tempt of an earlier agreement with New Zealand 38. The conduct of the
parties was taken into account in the assessment of compensation by the
Eritrea-Ethiopia Claims Commission. The Commission stressed the need
to achieve “a measure of proportion between the character of a delict and
the compensation due” 39 and commented that it had been informed by
the “gravity” and “seriousness” of the violations in making its determina-
tion in respect of compensation 40.

   45. Jennings and Watts state that in the assessment of damages a great
diﬀerence would be likely to be made “between acts of reparation for
international wrongs deliberately and maliciously committed, and for
those which arise merely from culpable negligence” 41. They argue:

          “It is sometimes maintained that, having regard to the sovereignty
        of states, their responsibility for international wrongs is limited to
        such reparation for wrongs committed by them as does not exceed
        the limits of restitution, and that damages in excess of those limits
        (often referred to as penal or punitive damages) are excluded. This

   35 R. Jennings and A. Watts (eds.), Oppenheim’s International Law: Peace, Vol. I,

9th ed., London, Longman, 1992, p. 533.
   36 J. Personnaz, La réparation du préjudice en droit international public, 1939, p. 107.
   37 Corfu Channel (United Kingdom v. Albania), Merits, Judgment, I.C.J. Reports 1949,

p. 96. See T. Bingham, “Alabama Arbitration”, in Max Planck Encyclopaedia of Interna-
tional Public Law, para. 10.
   38 See R. Kolb, “Legal eﬀects of responsibility” in The International Law of State

Responsibility — An Introduction (2017), pp. 166-167. Kolb opines that “there may well also
be some exemplary or punitive element in this recommendation [In Rainbow Warrior]”.
   39Eritrea-Ethiopia Claims Commission, Final Award, Ethiopia’s Damages Claims
(17 Aug. 2009), in International Law Reports, Vol. 140, 2011, para. 312.
   40 Ibid., para. 103. See also paras. 310 and 311.
   41 R. Jennings and A. Watts (eds.), Oppenheim’s International Law: Peace, Vol. I,
9th ed., London, Longman, 1992, p. 532.

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136                    certain activities (diss. op. dugard)

        view hardly accords either with principle or with practice . . . inter-
        national tribunals have in numerous cases awarded damages which
        must, upon analysis, be regarded as penal . . .” 42.

   46. Without advocating the imposition of punitive damages, it is pos-
sible to take account of the gravity of Nicaragua’s conduct in seeking to
fully restore Costa Rica to the position which it enjoyed prior to Nicara-
gua’s violation taking place.

                                       Conclusion

  47. Precise quantiﬁcation of the harm caused by Nicaragua to Costa
Rica’s environment is impossible. The dictum in the Trail Smelter case 43
does, however, provide some guidance in the search for a reasonable and
equitable award. In this case the tribunal declared:

           “Where the tort itself is of such a nature as to preclude the ascer-
        tainment of the amount of damages with certainty, it would be a
        perversion of fundamental principles of justice to deny all relief to the
        injured person, and thereby relieve the wrongdoer from making any
        amends for his acts. In such [a] case, while the damages may not be
        determined by mere speculation or guess, it will be enough if the
        evidence shows the extent of the damages as a matter of just and
        reasonable inference, although the result be only approximate.”

  48. Costa Rica has claimed what appears to be an inﬂated sum for the
environmental damages it has suﬀered at the hands of Nicaragua —
US$2,880,745.82. The extravagance of this claim is compounded by the
quality of the reasoning Costa Rica employed to advance this claim.
These factors should not, however, conceal the fact that Costa Rica suf-

   42
    See op. cit. supra note 41, p. 533. After careful reappraisal of the question of punitive
damages in international law, Professor Nina Jorgensen concludes that
        “[i]t is often diﬃcult to draw a line between damages designed to punish the wrong-
        doing State, and purely compensatory damages which nevertheless reﬂect the State’s
        degree of misconduct. In this regard, a certain quantum of the damages or the entire
        sum awarded in a given case may be designed to cater for various forms of non-pecu-
        niary loss or moral damage, but the purpose is still compensatory.” (“A Reappraisal
        of Punitive Damages in International Law” (1997), British Yearbook of International
        Law, Vol. 68, Issue 1, p. 260.)

   43 Trail Smelter Case (United States, Canada), United Nations, Reports of Interna-

tional Arbitral Awards, Vol. III, p. 1920, quoting the United States Supreme Court in Story
Parchment Co. v. Paterson Parchment Paper Co. (1931), United States Reports, Vol. 282,
p. 555.

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137              certain activities (diss. op. dugard)

fered serious environmental harm and that this was not the result of a
negligent misinterpretation of a historical boundary but of a wilful and
deliberate strategy to extend the territory of Nicaragua by damaging and
re-shaping the environment of an internationally protected wetland. In
the course of this action Nicaragua caused serious harm to the trees, veg-
etation, and soil of Costa Rica. It irresponsibly disturbed the biodiversity
of the wetland and contributed, albeit minimally, to global warming by
damaging carbon sequestration. These are serious violations. In making
its award the Court should have reﬂected that seriousness by placing a
higher monetary sum on the valuation of the environmental goods and
services impaired by Nicaragua and the impact of Nicaragua’s actions on
an internationally protected wetland. Nicaragua’s destruction of close to
300 trees over 100 years old provided the Court with an opportunity to
pronounce on the implications of this conduct for climate change and to
attach a monetary value to this factor. Unfortunately this opportunity
was missed. Finally, the conduct of Nicaragua in the course of its inva-
sion, occupation and excavation of the wetland should not have been
overlooked in the quantiﬁcation of damages. For these reasons I believe
that the award of compensation for the impairment of environmental
goods and services made by the Court in the sum of US$120,000 fails to
meet the standards of fairness and equity propounded by the tribunal in
the Trail Smelter case.

                                               (Signed) John Dugard.

126