Canada-Israel Free Trade Agreement

CHAPTER ELEVEN
TRADE AND ENVIRONMENT

Article 11.1: Context

1. The Parties recognise that each Party has sovereign rights to conserve and protect its environment, and affirm their environmental obligations under their law, as well as their international obligations under multilateral environmental agreements to which they are a party.

2. The Parties recognise the mutual supportiveness between trade and environmental policies and the need to implement this Agreement in a manner consistent with environmental protection and conservation.

3. Each Party recognises that it is inappropriate to establish or use its environmental laws or other measures in a manner that would constitute a disguised restriction on trade between the Parties.

Article 11.2: Levels of Protection

Recognising  the right of each Party to set its own environmental priorities, to establish its own levels of environmental protection, and to adopt or modify its environmental laws and policies accordingly, each Party shall strive to ensure that those laws and policies provide for and encourage high levels of environmental protection and shall strive to continue to improve them and their underlying levels of protection.

Article 11.3: Compliance with and Enforcement of Environmental Laws

1. A Party shall not fail to effectively enforce its environmental laws, through a sustained or recurring course of action or inaction, in a manner that affects trade or investment between the Parties.

2. Each Party recognises that it is inappropriate to encourage trade or investment by weakening or reducing the level of protection afforded in its environmental laws. Accordingly, a Party shall not waive or otherwise derogate from, or offer to waive or otherwise derogate from, its environmental laws, in a manner that weakens or reduces the protections afforded in those laws, as an encouragement for trade or investment.

3. Each Party shall ensure that violations of its environmental laws can be remedied or sanctioned under its law through judicial, quasi-judicial or administrative proceedings.

Article 11.4: Private Access to Remedies

1. Each Party shall ensure that an interested person may request the Party’s competent authorities to investigate an alleged violation of its environmental laws and shall give such a request due consideration, in accordance with its law.

2. Each Party shall provide a person with a legally recognised interest under its laws in a particular matter appropriate access to administrative, quasi-judicial or judicial proceedings for the enforcement of the Party’s environmental laws, and to seek remedies for a violation of those laws.

Article 11.5: Procedural Guarantees

1. Each Party shall ensure that its administrative, quasi-judicial and judicial proceedings referred to in Article 11.4.2 are fair, equitable and transparent and to this end shall ensure that a proceeding:

• (a) is conducted by an impartial and independent natural person who does not have an interest in the outcome of the matter;
• (b) is open to the public, except if the law or the administration of justice requires otherwise;
• (c) entitles the parties to a proceeding to support or defend their respective positions and to present information or evidence; and
• (d) is, within the framework of its legal system, not unnecessarily complicated and does not entail an unreasonable fee or time limit or an unwarranted delay.

2. Each Party shall provide that a final decision on the merits of the case in a proceeding is:

• (a) in writing and, if appropriate, states the reasons on which the decision is based;
• (b) made available within a reasonable time period to the parties to a proceeding and, in accordance with its law, to the public; and
• (c) based on information or evidence presented by the parties to a proceeding.

3. Each Party shall also provide, as appropriate, that parties to a proceeding have the right, in accordance with its law, to seek review and, if warranted, correction or redetermination, of a final decision in a proceeding.

4. Each Party shall ensure that a tribunal that conducts or reviews a proceeding is impartial and independent, and does not have any substantial interest in the outcome of the matter.

Article 11.6: Transparency

Each Party shall promote public awareness of its environmental laws by ensuring that relevant information is available to the public regarding its environmental laws, and procedures regarding environmental law enforcement and compliance.

Article 11.7: Corporate Social Responsibility

Recognising the substantial benefits brought by international trade and investment, each Party shall encourage voluntary best practices of corporate social responsibility by enterprises operating within its territory or subject to its jurisdiction to strengthen coherence between economic and environmental objectives.

Article 11.8: Measures to Enhance Environmental Performance

1. The Parties recognise that flexible, voluntary and incentive-based mechanisms can contribute to the achievement and maintenance of a high level of environmental protection, complementing regulatory measures under environmental laws. In accordance with its law and policy, each Party shall encourage the development and use of such mechanisms.

2. In accordance with its law and policy, each Party shall encourage the development, establishment, maintenance or improvement of performance goals and standards used in measuring environmental performance.

Article 11.9: Environmental Goods and Services

1. The Parties recognise the importance of trade in environmental goods and services as a means of improving environmental and economic performance and addressing global environmental challenges.

2. Accordingly, the Parties shall strive to facilitate and promote the trade in environmental goods and services such as those related to renewable energy, including through addressing related non-tariff barriers.

Article 11.10: National Contact Point

Each Party shall designate an official within the following ministries to serve as its National Contact Point:

• (a) for Canada, the Department of the Environment or its successor; and
• (b) for Israel, the Ministry of Environmental Protection or its successor.

Article 11.11: Public Information

1. An interested person residing or established in either Party may submit a written question to either Party through its National Contact Point, indicating that the question is being submitted pursuant to this Article regarding a Party’s obligations under this Chapter.

2. The Party receiving the question shall acknowledge the question in writing, forward the question to the appropriate authority and provide a response in a timely manner.

3. If an interested person submits a question to a Party that relates to the obligations of the other Party, the Party that receives the question shall, in a timely manner, provide to the other Party a copy of the question and its response referring the question to the other Party.

4. Each Party shall, in a timely manner, make publicly available all of the questions it receives and its responses to those questions.

Article 11.12: Party-to-Party Information Exchange

A Party may notify the other Party of, and provide to that Party, any credible information regarding a possible violation of or failure to effectively enforce its environmental laws. This information shall be specific and sufficient to allow the other Party to inquire into the matter. The notified Party shall take appropriate steps to make inquiries, in accordance with its law, and to respond to the other Party.

Article 11.13: Cooperative Activities

1. The Parties recognise that cooperation is an effective way to achieve the objectives and fulfill the obligations of this Chapter. Accordingly, and subject to the availability of resources, the Parties may develop programs of cooperative activities based on their respective priorities.

2. The Parties shall strive to strengthen their cooperation on environmental issues in other bilateral, regional and multilateral forums in which they participate.

3. Each Party may involve the public, interested stakeholders and any other entity that the Party deems appropriate in activities undertaken pursuant to this Article.

Article 11.14: Committee on the Environment

1. The Partieshereby establish a Committee on the Environment (“Committee”) composed of senior representatives of each Party. The Committee shall:

• (a) oversee and review the implementation of this Chapter, including any cooperative activity undertaken by the Parties;
• (b) discuss any matter of common interest; and
• (c) perform any other function the Parties may decide.

2. The Committee shall meet for the first time no later than one year after the date of entry into force of this Agreement and subsequently as mutually decided.

3. Canada shall notify the Committee of any declaration provided to Israel under Article 1 of Annex 11.20.

4. The Committee shall prepare a summary record of each meeting unless the Committee decides otherwise.

5. The Committee may prepare reports and recommendations on any activity or action related to the implementation of this Chapter. A copy of these reports and recommendations shall be submitted to the Joint Commission for its consideration. These reports may include recommendations to update Annex 1.5 (Multilateral Environmental Agreements).

6. Summary records, reports and recommendations of the Committee shall be made available to the public, unless otherwise decided by the Parties.

Article 11.15: Review

1. The Committee shall consider undertaking a review of the implementation of this Chapter, with a view to improving its operation and effectiveness, within five years of the date of the entry into force of this Agreement, and periodically thereafter as mutually decided.

2. The Committee may provide for the participation of the public and independent experts in the review process.

3. The Parties shall make the results of the review available to the public.

Article 11.16: Public Engagement

1. Each Party shall inform the public of activities, including meetings of the Parties and cooperative activities, undertaken to implement this Chapter.

2. Each Party shall endeavour to engage the public in activities undertaken to implement this Chapter.

Article 11.17: Relation to Environmental Agreements

This Chapter does not affect the existing rights and obligations of either Party under international environmental agreements.

Article 11.18: Protection of Confidential Information

Each Party shall ensure that information designated by either Party for treatment as confidential information, in particular personal or commercial information, is protected.

Article 11.19: Dispute Resolution

1. The Parties shall at all times endeavour to agree on the interpretation and application of this Chapter and shall make every attempt through consultations, the exchange of information and, if appropriate, cooperation to address any matter that might affect the operation of this Chapter.

2. A Party may request consultations with the other Party through the Committee regarding any matter arising under this Chapter by delivering a written request to the National Contact Point of the other Party, with a copy to the Coordinator of the other Party. The request shall present the matter clearly, identify the question at issue and provide a brief summary of any claim under this Chapter. Consultations shall commence promptly after a Party delivers a request for consultations to the National Contact Point of the other Party.

3. During the consultations, each Party shall provide the other with sufficient information in its possession to allow a full examination of the matters raised.

4. Consultations, including documents prepared specifically for the purposes of these consultations, are confidential and without prejudice to the rights of the Parties in any proceedings.

5. Consultations may be held in person or by any other means that the Parties decide. If consultations are held in person, they shall take place in the territory of the Party that has received the request, unless the Parties decide otherwise.

6. For greater certainty, if relevant, a Party may seek information or views of any person, organisation or body that may contribute to the examination of the matter at issue.

7. If the Parties fail to resolve the matter pursuant to paragraph 2, the requesting Party may request consultations with the other Party at the Ministerial level regarding any matter under this Chapter by delivering a written request to the National Contact Point of the other Party. The Party receiving the request shall respond expeditiously. The Ministerial consultations, including documents prepared specifically for the purposes of these consultations, are confidential and without prejudice to the rights of the Parties in any proceedings. Ministerial consultations shall be concluded within 120 days of a Party’s receipt of the request unless the Parties decide otherwise.

8. Following the conclusion of the Ministerial consultations, the requesting Party may request that a Review Panel be convened to examine the matter if it considers that the consultations have not satisfactorily addressed the matter by delivering a written request to the National Contact Point of the other Party. The requesting Party shall also deliver a copy of the request to the Coordinator of the other Party.

9. A Review Panel shall be established upon receipt of a request referred to in paragraph 8 by a National Contact Point. Unless the Parties decide otherwise, the terms of reference of a Review Panel shall be: “To examine, in light of the relevant provisions of Chapter 11 (Trade and Environment) of the Canada – Israel Free Trade Agreement, the matter referred to in the request for the establishment of the Review Panel, and to issue a report making recommendations for the resolution of the matter.”

10. Subject to the provisions of this Article, the Parties shall apply, as applicable and with such changes as may be necessary, Annex 19.9 (Rules of Procedure) and Annex 19.8 (Code of Conduct), unless the Parties decide otherwise. If there is an inconsistency between those Annexes and this Article, the provisions of this Article shall prevail.

11. A Review Panel shall be composed of two panellists and a chair.

12. For the purposes of selecting the panellists, the following procedures shall apply:

• (a) within 30 days of a Party’s receipt of a request to establish a Review Panel, each Party shall select one panellist; and
• (b) if one Party fails to select a panellist within the period referred to in subparagraph (a), the other Party shall select that panellist from among qualified candidates who are nationals of the Party that failed to select its panellist.

13. For the purposes of selecting the chair, the following procedures shall apply:

• (a) the Party that is the subject of the request shall provide the requesting Party with the names of three qualified candidates who are not nationals of either Party. These names shall be provided within 30 days of a Party’s receipt of the request to establish a Review Panel;
• (b) the requesting Party may choose one of the three candidates referred to in subparagraph (a) to be the chair or, if no names were provided or none of the candidates are acceptable, provide the Party that is the subject of the request with the names of three candidates who are qualified to be the chair and who are not nationals of either Party. Those names shall be provided no later than seven days after receipt of the names under subparagraph (a) or 37 days after the receipt of the request referred to in paragraph 8 for the establishment of a Review Panel, whichever is earlier; and
• (c) the Party that is the subject of the request may choose one of the three candidates to be the chair within seven days of receiving their names under subparagraph (b), failing which the chair shall be selected by the requesting Party by lot from the six candidates proposed by the Parties pursuant to subparagraphs (a) and (b) within a further seven days.

14. A Review Panel shall be composed of individuals with specialised knowledge or expertise in environmental law, issues addressed in this Chapter and, to the extent possible, the settlement of disputes arising under international agreements. Members of a Review Panel shall be independent, shall serve in their individual capacities, shall not take instructions from any organisation or government with regard to issues related to the matter at stake and shall not be affiliated with the government of any Party. A Review Panel shall be composed of individuals who are nationals of a state having diplomatic relations with both Parties.

15. Unless the Parties decide otherwise, a Review Panel shall perform its functions in accordance with Annex 19.9 (Rules of Procedure) and Annex 19.8 (Code of Conduct), with such changes as may be necessary, and shall ensure that:

• (a) each Party has the opportunity to provide written and oral submissions to the Review Panel;
• (b) at the request of either Party, or on its own initiative, the Review Panel may seek, as appropriate, information and technical advice from any person or body with relevant expertise. The Parties shall have an opportunity to comment on any information or advice so obtained;
• (c) a non-governmental person of a Party may provide written submissions to a Review Panel; and
• (d) unless the Parties decide otherwise, hearings shall be open to the public, except as necessary to protect information designated by either Party under Article 11.18 for confidential treatment.

16. A Review Panel shall issue to the Parties an interim report and a final report, each setting out the findings of fact, its determinations as to whether the responding Party has complied with its obligations under this Chapter and the rationale behind any findings, determinations and recommendations that it makes.

17. A Review Panel shall submit the interim report to the Parties within 120 days of the selection of the last panellist or within another time period decided by the Parties. The Parties may provide comments to the Review Panel on the interim report within 45 days of its submission. After considering these comments, the Review Panel may reconsider its report or make any further examination it considers appropriate.

18. A Review Panel shall submit the final report to the Parties within 60 days of the submission of the interim report. Unless the Parties decide otherwise, the final report of a Review Panel may be published by either Party 30 days after it is submitted to the Parties.

19. If in the final report a Review Panel determines that a Party has not complied with its obligations under this Chapter, the Parties shall, within three months of the submission of that final report and taking into account that report, endeavour to consent to a mutually satisfactory action plan to address the matter. Any action plan developed by the Parties shall be made public within 30 days of its development, unless otherwise decided by the Parties. The Party undertaking the action plan shall submit a copy of it to the Coordinator of the other Party.

20. If the Parties reach a mutually agreed solution to a matter at any point after a Review Panel has been established, they shall notify the Review Panel of the solution. Upon the Review Panel’s receipt of this notification, the panel procedure shall be terminated.

21. At any time, the Parties may have recourse to means of alternative dispute resolution to resolve a matter, including good offices, conciliation or mediation.

22. Proceedings involving good offices, conciliation and mediation, including documents prepared specifically for the purposes of these proceedings, are confidential and without prejudice to the rights of the Parties in any proceedings.

23. Unless the Parties decide otherwise, the expenses of a Review Panel, including the remuneration of the panellists, shall be borne in equal shares by the Parties, in accordance with Annex 19.9 (Rules of Procedure).

Article 11.20: Extent of Obligations

1. For Canada, the application of this Chapter to the provinces of Canada is subject to Article 1 of Annex 11.20.

2. For Israel, the application of this Chapter is subject to Article 2 of Annex 11.20.

Article 11.21: Definitions

1. For the purposes of this Chapter:

environmental laws means any law or statutory or regulatory provision, or other legally binding measure of a Party, the primary purpose of which is the protection of the environment, or the prevention of a danger to human life or health, through:

• (a) the prevention, abatement or control of the release, discharge or emission of pollutants or environmental contaminants;
• (b) the management of chemicals and waste and the dissemination of information related thereto; or
• (c) the conservation and protection of wild flora or wild fauna, including endangered species, their habitat and protected natural areas,

but does not include any measure directly related to worker health and safety, nor any measure of which the primary purpose is managing the commercial harvest or exploitation, or subsistence or aboriginal harvesting, of natural resources;

province means a province of Canada and includes Yukon, the Northwest Territories and Nunavut, and their successors; and

Review Panel means a panel established pursuant to Article 11.19.8.

2. For the purposes of this Chapter, a Party has not failed to “effectively enforce its environmental laws” in a particular case if the action or inaction in question by an agency or an official of that Party:

• (a) reflects a reasonable exercise of discretion in respect of investigatory, prosecutorial, regulatory or compliance matters; or
• (b) results from a bona fidedecision to allocate resources to enforcement in respect of other environmental matters determined to have higher priority.

ANNEX 11.20
EXTENT OF OBLIGATIONS

Article 1: Application to the Provinces of Canada

1. Following the entry into force of this Agreement, Canada shall provide to Israel through diplomatic channels a written declaration indicating the provinces for which Canada is to be bound by this Chapter in respect of matters within their jurisdiction. The declaration shall become effective on its date of receipt by Israel.

2. Canada shall use its best efforts to make this Chapter applicable to as many provinces as possible.

3. Canada shall notify Israel six months in advance of any modification to its declaration.

Article 2: Application to Israel

For the State of Israel, this Chapter applies to the State of Israel and when used in a geographical sense includes the territorial sea as well as the exclusive economic zone and the continental shelf over which the State of Israel, in accordance with international law and the laws of the State of Israel, exercises its sovereign rights or jurisdiction.