Australia - Measures Affecting the Importation of Apples from New Zealand (AB-2010-2 / DS367)
Opening Statement of Australia
October 11, 2010
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Thank you Madam Zhang,
- In opening, I propose to say nothing of New Zealand's other appeal and to
say nothing of ground (a) of Australia's appeal. I want to concentrate on
the real and substantial issues raised by grounds (b), (c) and (d) of Australia's
appeal, particularly in relation to fire blight, a very serious disease of
apples, of which Australia is free but which has long been endemic in New
- To aid that concentration, let me clear away some of the distractions that
emerge from New Zealand's appellee submissions.
- The first distraction lies in the allegation that Australia's IRA process
was, in some unspecified but apparently prejudicial way, tainted by what New
Zealand describes as a "highly politicised context"1
and because one of the six members of the risk assessment team was an owner
and manager of an apple production business.2
The allegation is the subject of no relevant findings of fact by the Panel.
It relies on strongly disputed inferences sought selectively to be drawn from
a manifestly incomplete evidentiary record. It was rightly ignored by the
Panel. It ought be ignored by the Appellate Body.
- The second distraction lies in the repeated assertion that Australia sought
in its IRA process to avoid its obligations under the SPS Agreement and that
Australia sought before the Panel and seeks again in this appeal to "shield"
the IRA from review.3 That assertion, too, was
rightly ignored by the Panel, and ought be ignored by the Appellate Body.
The Panel recorded uncritically that the revised methodology of the IRA was
adopted by Australia in 2004 for the express purpose of reinforcing the transparency
and objectivity of the analysis.4 Whatever other
criticisms might legitimately be levelled against it, the IRA, a very lengthy
document, leaves no doubt about: the potential biological pathways it identifies,
the scientific evidence it takes into account, the methodology it applies
and the conclusions it reaches at every step in the application of that methodology.
Those conclusions were generated in part through the application of a computer
probability distribution model given to New Zealand in 2006.5
New Zealand could, if it so chose, as part of its case before the Panel have
re-run that computer model for itself. New Zealand could, if it so chose,
have sought to demonstrate using Australia's own model the precise significance
of the errors and exaggerations it alleged. What Australia sought before the
Panel and seeks again in this appeal is nothing more than to ensure that Australia's
own obligations under the SPS Agreement are properly interpreted and applied,
that the functions of a Panel under the DSU are properly performed and that
New Zealand is properly held to its burden of proof.
- The third distraction lies in the suggestion that the IRA process involved
nothing more than a re-run by Australia, on the same old evidence, of the
same old arguments, considered and rejected by two Panels in the Japan
– Apples dispute.6 The suggestion is wrong:
the evidence was not the same and the arguments were not the same.7
- The fourth and quite significant distraction lies in the global assertion
that the scientific evidence in support of the IRA's conclusions either did
not exist or went in the opposite direction from the conclusions actually
reached in the IRA.8 The assertion is wrong. The
two fire blight experts were Dr Deckers and Dr Paulin. Thosfe experts agreed
there was a scientific basis for the proposition that there was some likelihood
of mature, symptomless apples imported into Australia being epiphytically
(externally) infested with the fire blight bacteria.9
The question was entirely one as to the degree of that likelihood. The IRA
estimated a most likely value of 3.9%.10 Dr Paulin
did not think this figure was credible.11 Dr
Deckers said that it might have been overestimated but explained later that
he saw no exaggeration at all.12 The experts
agreed and the Panel accepted that there was also scientific support for the
hypothesis that the fire blight bacteria can be transferred by browsing insects
from epiphytically-infested apples to host plants in Australia.13
They accepted that the likelihood of that occurring was incapable of experimentation
but that it was not simply theoretical; they both saw the likelihood as very
low.14The question again was one of degree:
just how low? The IRA estimated a probability range of zero to one in a million
with a uniform distribution. Dr Paulin evidently thought that was too high.15
Dr Deckers said quite directly and explicitly that he thought it was right.16
- The final distraction lies in attempts by New Zealand, throughout its appellee
submissions, to supplement the Panel's findings of fact by evidence to which
the Panel makes no reference in its analysis17
and to bolster the reasons actually given by the Panel to justify its findings
and recommendations by reference either to arguments put by New Zealand18
or to inferences sought to be drawn from questions asked by members of the
Panel that nowhere get taken up by the Panel in its report.19
The Panel had an obligation under Article 12.7 of the DSU to set out the totality
of the findings of fact it made and to set out the underlying reasoning or
justification20 behind each of its findings
and recommendations. The Panel has produced a very detailed 548-page report.
The Panel can be taken in that report to have said all that it meant and meant
all that it said.
- Turning to ground (b), I limit myself to issues of principle and
seek only to dispel three misconceptions about Australia's submission that
run through the submissions of New Zealand.
- Australia does not propose that a Panel reviewing a risk assessment for
compliance with Article 5.1 of the SPS Agreement must engage in de novo
review. A Panel does not engage in de novo review – does not
itself stand in the shoes of or perform the role of a risk assessor – merely
by asking whether a particular conclusion reached by a risk assessor has or
has not been shown to fall outside a legitimate range or merely by asking
whether any particular error on the part of a risk assessor has or has not
been shown to be material to the overall assessment of risk.
- Nor does Australia propose some "new test" that departs from the
third criterion articulated by the Appellate Body in Continued Suspension.
It is useful to recall precisely how that criterion was formulated. The
Appellate Body said this:21
A panel should also assess whether the reasoning articulated on the basis
of the scientific evidence is objective and coherent. In other words,
a panel should review whether the particular conclusions drawn by
the Member assessing the risk find sufficient support in the scientific
evidence relied upon.
- There are three observations to make about that criterion. The first is
that it takes as given the totality of the scientific evidence that is available
within the meaning of Article 5.2 and that comes from a respected and qualified
source as required by the second criterion in Continued Suspension. The
evidence will be what it will be: perhaps general or specific, perhaps sparse
or dense, perhaps incomplete or conflicting, perhaps capable of direct application
or perhaps capable of only indirect and analogical application. The second
observation is that there is nothing to suggest that the reasoning articulated
on the basis of the scientific evidence is to be anything other than objective
and coherent in the sense explained in EC – Hormones and endorsed
at an earlier stage of the analysis in Continued Suspension: that
is to say, it is to be the product of "systematic, disciplined and objective
inquiry and analysis".22 The third and most
important observation flows from the link between the two sentences by which
the criterion is formulated. The two sentences are expressed as different
ways of saying the same thing. The key to the first sentence lies in the restatement
that occurs in the second sentence. That restatement is directly linked to
the language of the basic obligation set out in Article 2.2 of which Article
5.1 is a specific application.23 The second sentence
makes clear that the criterion is not directed to assessing the quality
of the reasoning as an end in itself. It is directed to determining whether
the particular conclusions drawn by the Member find sufficient support
in the scientific evidence. Whatever level of specificity might be involved
in the notion of a particular conclusion, a risk assessment cannot fail at
the third criterion merely because of a perceived shortcoming in the quality
of the reasoning to a particular conclusion if the particular conclusion itself
finds sufficient support in the scientific evidence relied upon. It is not
the task of a Panel to assess whether more elaborate reasoning might have
been desirable: the task of the Panel is to assess whether the particular
conclusion finds sufficient support in the evidence. Sufficiency of support
lies in the existence of a rational or objective relationship between the
evidence and the conclusion: the question being whether the conclusion lies
inside or outside a range considered legitimate according to the standards
of the scientific community.
- Australia does not seek in any way to avoid review of particular conclusions
drawn at intermediate steps in the performance of a risk assessment.24
The point is that the nature of the inquiry into the conclusions drawn at
those intermediate steps is informed by the place of those intermediate steps
within the overall assessment of risk. If a particular intermediate conclusion
is found to be outside a range considered legitimate according to the standards
of the scientific community, the inquiry must go further to assess whether
the error is material: whether the error, alone or in combination with other
errors, is "so serious" as to undermine "reasonable confidence"
in the risk that has ultimately been assessed.25 New Zealand here appears to
have missed the point. Throughout its submission, New Zealand attempts to
demonstrate the materiality of errors found by the Panel by reference to its
own submissions before the Panel as to the significance of particular steps
in the risk assessment methodology.26 Not only does
this illegitimately seek to supplement the Panel's own reasons, but, more
fundamentally, it is not the significance of the step in the methodology that
is, for present purposes, important: what is important is the significance
of any error in the judgment or conclusion reached at that step. Even
on the most significant of steps, a minor error in the conclusion may be immaterial,
in the sense that it is not so serious as to undermine reasonable confidence
in the risk that has ultimately been assessed.27
- Ground (c) complements ground (b) in this sense. If a Panel reviewing
a risk assessment for compliance with Article 5.1 of the SPS Agreement fails
to consider or engage with relevant evidence, the failure of the Panel can
indicate one or both of two things. More probably, it indicates a failure
of the Panel properly to understand and apply the legal criterion that makes
the evidence relevant. But additionally, or alternatively, it might indicate
a failure of the Panel properly to discharge the legal obligation imposed
by Article 11 of the DSU to make an objective assessment of the facts. The
second is not lightly to be inferred.28 But nor
is it to be treated lightly where it occurs. In Continued Suspension,
the Appellate Body found to be irreconcilable with the duty to conduct
an objective assessment the Panel's mere reproduction of testimony without
assessment of its significance.29
- In the present case, Australia complains of even more serious failures by
the Panel: in some cases, complete oversight of, and, in other cases, bare
references in footnotes, in peremptory and dismissive terms, to significant
evidence favourable to Australia's case.30
- The failure is most serious when regard is had to the way in which the Panel
dealt – or, more correctly, failed to deal – with the evidence of Dr Deckers,
one of the two fire blight experts. When the written and oral testimony of
Dr Deckers is fairly read as a whole, the conclusion – if not inescapable
– is at least very strongly open that, notwithstanding some criticism of matters
of detail: Dr Deckers agreed with the conclusion reached in the IRA as to
the quantitative likelihood of importation of the fire blight bacteria;31
he agreed with the conclusion reached in the IRA as to the quantitative likelihood
of exposure;32 he agreed with the conclusion
reached in the IRA as to the qualitative label to be attached to the potential
consequences;33 and he considered that restricting
imports to mature symptomless apples would be incapable of meeting Australia's
appropriate level of protection.34 None of the
testimony in this respect has been properly or fairly addressed and the thrust
of what he truly had to say has been substantially ignored by the Panel.35
- The failure is most stark when it comes to Dr Deckers' agreement with the
conclusion reached in the IRA as to the quantitative likelihood of transfer
of the fire blight bacteria from mature apple fruit imported from New Zealand
to a host plant in Australia. In written answers to the Panel's written questions
Dr Deckers repeatedly gave evidence to the effect that the likelihood of this
epiphytic population being transferred to a host plant was "very small",
or "very low", or "rather small", or "rather exceptional",
or "rather low"36, terminology which
he used deliberately (in contrast to an "extremely low" likelihood
if measures were applied37).
- When it came to the Panel's meeting with the experts, Dr Deckers was asked
a very direct question:38
Dr Deckers: In your response to Question 35 you state that "The chance
that the epiphytic bacteria will be transmitted to the susceptible organs
of a host plant on the appropriate moment to realise an infection is rather
small". How does this compare to the conclusion in the IRA which states
that the exposure value for an individual apple should be in the range from
0 to 1 in a million?
He gave a very direct answer:39
This value between zero and ten to the sixth is also very low, so I think this
- Together with Dr Paulin, Dr Deckers was ultimately asked another
fairly direct question on the same general topic:40
Do you think that the IRA reaches a rational logical inference that the probability
of transmission via trade in apple fruit is not zero? [That question is important
because Australia defines its appropriate level of protection as "very
low but not zero".] In other words, on the basis of what evidence we have,
is it rational to conclude that transmission via apple fruit could occur, albeit
as a rare event?
He gave another direct and consistent answer:41
Here I would say yes, there is indeed a risk for the importation of infected
fruits. It is clear.
- In the report of the Panel, both of those answers of Dr Deckers
are ignored entirely.42 The omission is stark.
And the omission becomes even more stark when it is recognised that the Panel
in its report places a great deal of weight on the quite different answer
to the second of those questions that was given by Dr Paulin.43
- The point in ground (d) of the appeal can be stated quite simply:
to find a breach of Article 5.6, the Panel was required to find as a fact
that the alternative measures New Zealand proposed would achieve Australia's
appropriate level of protection.
- The Panel failed to find that fact for either fire blight or apple leafcurling
midge. In stark contrast to its findings in respect of Article 5.1, which
it expressed simply and properly as "findings",44
the Panel in dealing with Article 5.6 eschewed the language of "findings",
avoided even stating as a matter of substance what it considered the facts
to be and retreated instead to expressing itself in terms of New Zealand having
raised a "sufficiently convincing presumption, not successfully rebutted
by Australia".45 In relation to apple leafcurling
midge, the Panel went so far as to explain that it was making a "legal,
not a scientific finding" in the sense that "subject to an objectively
justifiable analysis [Australia] may conclude that the ALCM risk exceeds Australia's
ALOP".46 The Panel was not required to make
a legal finding or a scientific finding: it was required to make a factual
finding, which it failed to do.
- In so far as the Panel made any finding at all it manifestly failed properly
to address the question of whether the alternative measures proposed by New
Zealand would achieve Australia's ALOP. Given that consequences are an integral
part of Australia's ALOP, the question cannot be addressed at all without
analysis of consequences: there was none. And the Panel expressed such findings
as it made in terms that the alternative measures "could" or "might"
achieve Australia's appropriate level of protection: that is a significantly
lower standard than the correct legal standard, expressed in the text of Article
5.6, that the alternative measure "would" achieve Australia's appropriate
level of protection.
- Those are the main issues before the Appellate Body in this appeal. Australia
looks forward to answering the Appellate Body's questions.
- 1 Appelle Submission of New Zealand at [1.5].
- 2 Appelle Submission of New Zealand at [1.7], [1.24], [2.78].
3 Appelle Submission of New Zealand at [1.14], [1.17], [1.18],
[1.20], [1.22], [1.26], [2.12], [2.34], [2.40], [2.44], [2.45], [2.47], [2.49],
- 4 Panel Report at [2.62].
- 5 See Australia's First Written Submission in the Panel phase, at .
- 6 Appellee Submission of New Zealand at [1.26].
7 See Australia's First Written Submission to the Panel, at , -, ,
-, -, -, -.
- 8 Appellee Submission of New Zealand at [1.26].
- 9 Panel Report, Annex B-2 at , , .
- 10;IRA Part B, p 80.
- 11 Panel Report, Annex B-1 at .
- 12Panel Report, Annex B-1 at  and Annex B-2 at .
- 13 Panel Report at [7.400], [7.403], Annex B-2 at , .
14 Panel Report, Annex B-1 at , , , , ;
Annex B-2 at , , , , , , .
- 15 Panel Report, Annex B-1 at .
- 16 Panel Report, Annex B-2, at .
17 See, e.g., Appellee Submission of New Zealand at [2.171]. In its Appellee Submission,
New Zealand refers to [7.454] of the Panel Report, which is a summary of Australia's
submission, not part of the Panel's own analysis.
18 See, e.g., Appellee Submission of New Zealand at [2.87],
[2.88], [2.89], [2.116], [2.124], [2.127], [2.128].
19 See, e.g., Appellee Submission of New Zealand at [2.177]. It may further be
noted that contrary to New Zealand's submission at [2.177], Panel Member Ehlers'
question (Transcript of meeting with experts at ) did not refer
to the remarks of Dr Deckers and Dr Paulin that the consequences would be "high".
20 Appellate Body Report, Mexico – Corn Syrup (Article
21.5 – US) at .
- 21 Appellate Body Report, US/Canada – Continued Suspension at .
22 Appellate Body Report, EC – Hormones at
; Appellate Body Report, US/Canada – Continued Suspension at .
23 Appellate Body Report, EC – Hormones at ; Appellate Body Report,
US/Canada – Continued Suspension at .
- 24 Appelle Submission of New Zealand at [2.57].
- 25 Panel Report, Australia - Salmon (Article 21.5 - Canada) at [7.57].
26 See, e.g., Appellee Submission of New Zealand at [2.87],
[2.88], [2.89], [2.116], [2.124], [2.127].
27 Cf. Panel Report at [7.355]: "if the estimations of one or more of the
individual likelihoods are questionable, because those estimations are either
not supported by adequate scientific evidence or not based on a coherent and
objective reasoning, the overall figure necessarily becomes questionable."
28 Appellate Body Report, US – Steel Safeguards at
29 The Appellate Body said at : "By merely reproducing testimony of
some experts that would appear to be favourable to the European Communities'
position, without addressing its significance, the Panel effectively disregarded
evidence that was potentially relevant for the European Communities' case. This
cannot be reconciled with the Panel's duty to make an 'objective assessment
of the facts of the case' pursuant to Article 11 of the DSU."
- 30 Appellant Submission of Australia at -.
31 Panel Report, Annex B-2 at , ; Appellant Submission of Australia
32 Panel Report, Annex B-1 at , Annex B-2 at -; Appellant Submission
of Australia at -.
- 33 Panel Report, Annex B-1 at ; Appellant Submission of Australia at -.
- 34 Panel Report, Annex B-1 at ; Appellant Submission of Australia at -.
- 35 Appellant Submission of Australia at -.
- 36 Panel Report, Annex B-1 at , , , , , .
- 37 Panel Report, Annex B-1 at .
- 38 Panel Report, Annex B-2 at .
- 39 Panel Report, Annex B02 at .
- 40 Panel Report, Annex B-2 at .
- 41 Panel Report, Annex B-2 at .
42 Indeed, this relevant testimony is excised from the references made by the
Panel to Dr Deckers' response: Panel Report, [7.444] and [7.1185].
- 43 Panel Report at [7.443]-[7.445].
- 44 Panel Report at [7.471]-[7.472], [7.510].
- 45 Panel Report at [7.1153], [7.1197].
- 46 Panel Report at [7.1331].