Compliance, Enforcement and Dispute Settlement in CARICOM: A Preliminary Review

• Author: Joseph Farier
• Pages: 119-152

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Compliance, Enforcement and Dispute Settlement in CARICOM

Introduction

In recent years the issue of the slow pace of decision implementation has

come to the fore. After two decades of creativity and innovation reflected in

the creation of a wide range of regional institutions, the integration process

is perceived to be coming to a standstill. A typical statement at the popular

level is “CARICOM, CARI-GONE!” At the diplomatic level, another way

of expressing disenchantment is the statement “decision implementation is

the Achilles heel of the integration movement.” No project has been more

lamented than the CSME, whose original date of decision was 1989.1 In

more recent times, the fishing dispute between Barbados and Trinidad &

Tobago, and the maritime boundary dispute between Guyana and Suriname

have questioned the existence of processes of dispute settlement in the

Community as well as enforcement generally.

Enforcement Authority of Key CARICOM Organs, Institutions

The Revised CARICOM Treaty2 provides for the establishment of a range

of organs and institutions, among them being the Community Council, the

Council for Finance and Planning (COFAP), the Council for Trade and

Economic Development (COTED), the Council for Foreign and Community

Relations (COFCOR) and the Council for Human and Social Development

(COHSOD). The scope of their mandates differs in terms of capacity for

enforcement. A brief review will reveal some of the key features of their

mandates.

COMPLIANCE, ENFORCEMENT AND

DISPUTE SETTLEMENT IN CARICOM:

A Preliminary Review

Joseph Farier

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120 CARICOM: Appropriate Adaptation to a Changing Global Environment

The Community Council is empowered to consider allegations of breaches

of Treaty obligations. In its collective consideration of such allegations, the

Council may issue directives3 to organs of the Community and to the

Secretariat. It is not empowered to issue directives to Member States. In its

responsibility for the orderly development of the Community, it approves the

Annual Work Programme and budget of the Secretariat, coordinates proposals

from other Councils and may request those Councils to develop programmes

to further the objectives of the Community. The Community Council has a

primary role in the strategic orientation of Community programmes as

described in Article 13 of the Revised Treaty.

COFAP, under Article 43, has a principal role in disciplining the

application of balance-of-payments safeguards by Member States. This role

is important because it controls the extent to which the safeguard mechanism

can be used as a diplomatic tool and a means of pressure to settle differences

with other Member States other than those genuinely arising out of economic

hardships. COFAP must be notified within three working days of the adopted

or intended restrictive State measures. To this effect the State must immediately

consult with the competent Community organs (COFAP and COTED) if and

when requested.

COFAP must, under Article 43, seek to ensure that restrictions for balance-

of-payment purposes:

(a) do not discriminate among Member States or against Member States

in favour of third States;

(b) at all times seek to minimize damage to commercial, economic or

financial interests of any other Member State;

(c) do not exceed those necessary to deal with the serious balance-of-

payments and external financial difficulties or threat thereof;

(d) are temporary but in any event, not longer than a period of eighteen

months, and are phased out progressively as the situation improves.

COFAP has a critical role to play in the fiscal management of regional

economies. It seeks to promote economic policy convergence but has no

power to enforce decisions. COFAP recommends fiscal disciplinary measures

and may recommend measures and set criteria to facilitate free convertibility

of currency. Although it operates within the Treaty’s long-term objective of

monetary union, it has set itself a graduated approach to this objective.

Indeed, it has taken a position that monetary union is a long-term objective.

COFAP does not appear to possess any power to enforce decisions.

COTED has a central role in managing the trade regime of CARICOM.

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Compliance, Enforcement and Dispute Settlement in CARICOM

One of the primary areas of concern is the removal of restrictions to trade in

goods and services. Under Article 34, COTED appears to have unique powers

of enforcement for the over-arching trade liberalization programme. The

Programme builds obligations of self- restraint into governmental policy and

provides for a lock-in of State policy and practice in relation to specific

restrictions. But its powers go further, because COTED can require the removal

of administrative practices, and the removal of restrictions to the movement

of management/technical and supervisory staff. COTED can also require

Member States to ensure that nationals of other Member States have access

to land, buildings and property to give effect to their rights.

Under Article 47, COTED has the power to enforce a special discipline

in the event a State claims serious hardships or the threat of serious injury

arising in trade. COTED can enforce a two-step approach. This includes:

(i) Notification of a State’s intention to impose restrictions and the nature

of the restrictions (Article 47(2)(a)); alternatively, notification

immediately after application of the restrictions.

(ii) Establishment by COTED of a programme for the alleviation of the

hardships experienced.

It is COTED (and COFAP, where necessary) that makes a determination

of the appropriateness and adequacy of the measures, and the period of

continuation. Under Article 48 (5)(a) and (b), COTED can review the extent

to which State action is in accord with the principle of proportionality, and

whether State actions were confined to measures necessary to resolve

difficulties in affected sectors. The ‘economic’ hardship envisaged must be

related to a particular sector.

COTED has the power to ensure that a Member State avoids

“unreasonable exercise” of its right to mitigate economic hardships and that

any damage to the commercial interest of any other Member State is

minimized. COTED can apply the test of whether the action would impair

the development of the CSME.

Under its mandate, a bilateral dispute is discharged by a multilateral

procedure. Under Article 48(7)9, a State may not take the type of action that

deliberately selects and discriminates against another Member State. Also,

the State is obliged to “progressively relax” its restrictions and be subject to

a programme of monitoring. Restrictions may be maintained only to the

extent they are justified. And a case must be made to the satisfaction of

COTED and COFAP. The bodies may recommend alternative arrangements