Why was the Compact created?
The Compact’s Members are fully committed to standing behind the safety of their own products and to conserving biological diversity. Today, many State civil liability systems do not have laws and procedures in place to specifically address claims related to biological diversity. The Compact Members believed there was significant value in creating an international arbitration system that could expeditiously handle claims for damage to biological diversity, particularly in that damage transcends State boundaries. After much research, it was decided that a binding contract — voluntarily committed to by industry leaders — would be the most effective and efficient means to assure States that a Member would provide redress should the release of a living modified organism (LMO) by that Member cause damage to biological diversity.

How does the Compact work with already existing liability laws?
The Compact complements domestic and international law — and in some ways extends the scope of a Member’s responsibility beyond what may exist under those laws. States can choose to pursue legal action either through any available legal system or through the Compact, but they cannot collect redress under both. If a State prevails under the compact, then it cannot also recover for the same incident of damage under State law. But, if the State loses under the Compact, the State still has rights to file a claim for damage to biological diversity under its own legal system. Additionally, even if a Member provides redress under the Compact, that Member can still be subject to liability under otherwise applicable law for non-Compact-related damages, such as claims for personal injury.

Who are the Compact’s Members?
The plant biotechnology companies that have voluntarily become Members of the Compact are BASF, Bayer CropScience, Dow AgroSciences, DuPont, Monsanto, and Syngenta. The Compact’s goal is to encourage open and broad membership so that any entity, whether it is a private company, a public research facility, or government agency, can partner in this international effort to protect biological diversity.

Are there any requirements for Membership?
The Compact encourages Membership among businesses and public and private research organizations and others who may see benefit in joining the Compact. Membership requirements include:

  • A steadfast commitment to being an effective steward of biotechnology;
  • Rigorous risk assessments for an LMO before it is brought to market; and
  • Financial capacity to respond to damage.

Who can file a claim under the Compact? What is the process for submitting a claim?
Any State can file a claim by providing evidence that the release of an LMO by a member caused damage to biological diversity. The Compact outlines a process for the State and Member to try to resolve the claim by agreement. If the matter is not resolved, the State and the Member will submit the claim to binding arbitration, which is conducted under the auspices and modified rules of the Permanent Court of Arbitration (PCA), a long-established independent international body in The Hague that administers arbitrations.

Can individuals file claims?
No. Since States have a special responsibility to protect biological diversity of natural species and ecosystems as a public good, only they are able to file a claim. However, private citizens and non-governmental organizations are not disadvantaged by the Compact — citizens can encourage their States to take action under the Compact and can take action themselves under otherwise applicable domestic and international law.

Are there any obligations on States that file claims under the Compact?
Yes. A State filing a claim must agree to abide by the procedures in the Compact and results of the process, especially as the arbitration decision is final and enforceable and cannot be appealed. State must also protect the integrity and confidentiality of the process and not subject Members to double or multiple recovery for the same incident of damage under both the Compact and otherwise applicable law, including the State’s civil liability system.

Can States file a claim through the Compact for personal injury or property damage?
No. The Compact covers only damage to biological diversity and does not include traditional tort law damages, such as personal injury or property damage. Those types of claims can still be filed under national law.

How can States be assured that the process will be handled quickly, impartially, and accurately?
The Compact offers States with another method for asserting their claims for damage to biological diversity. Industry believes States will utilize the Compact because it will provide timely, fair, and effective resolution of a claim. The decision-making processes are grounded in science and conducted by independent and neutral parties. Additionally, arbitration is generally a quicker and more responsive and efficient process than litigation in the Courts.

Who enforces the Compact and any decision made under it?
The Compact is a binding commercial agreement enforceable against its Members. If a Member does not meet its obligation to provide a remedy under the Compact, the other Members can bring a Court action against the Member, and the State who brought the claim can also force that Member to do so through the Courts.

If a claim fails and new data comes to light, can the claim be re-filed?
Yes. If significant, material information which would prove a claim comes to light within certain time limits, the State can submit a new claim.

How is “damage to biological diversity” defined under the Compact?
Under the Compact, biological diversity includes diversity within and among all species and ecosystems. The Compact defines damage to biological diversity as a measureable, significant adverse change in biological diversity. Not all changes to biological diversity are considered damage under the Compact, especially if those changes or “normal fluctuations” would have occurred without the presence of the LMO.

What will the Compact provide to States who prove their claim?
The Compact is primarily about remedying damage to biological diversity (what the Compact calls “remediation”), and may include responding to any negative impacts on public health caused by the damage. Financial compensation is available in limited circumstances, namely where remediation is not possible, would cost more than the economic value of the damage, or is part of an equitable resolution ordered by the arbitrating Tribunal.

Is a Member’s liability open-ended?
No. All awards under the Compact are subject to financial limits, which are defined in SDRs (Special Drawing Rights), a monetary unit defined by the International Monetary Fund. Financial limits are common to many international liability systems. The limits under the Compact were established by reviewing costs for other types of environmental damage and relating those to the nature of potential damage to biological diversity. Compact Members believe these limits will prove sufficient for adequately remedying any damage caused to biological diversity and will revisit them at least every five years to evaluate whether they are or not.

What about time limitations? Is there a cut-off for when a claim must be filed?
Yes. Time limitations are central to all civil justice systems; they require timely action and provide finality for the parties. The Compact’s time limits are based on limitations in state civil justice systems and assure that States and Members have the ability to fully determine whether an LMO has caused damage to biological diversity. First, a State must file a claim within three years of when it knew or should have known, based on plausible evidence, of the damage to biological diversity. Second, any claim for damage to biological diversity related to an LMO must be filed within 20 years from the time the LMO has been authorised or released.

Is a Member’s responsbility under the Compact based on fault or strict liability?
Strict absolute liability is typically applied only to specified abnormally dangerous or ultra-hazardous activities, such as moving nuclear materials and blasting dynamite, and is not appropriate for LMOs, which have been the subject of unprecedented study and regulatory oversight and have a long and continuing environmental record of safe use.

The Compact does incorporate some aspects of strict liability — the Members are committed to accepting responsibility if their products cause damage to biological diversity that was not identified by their rigorous risk assessment. They are willing to accept responsibility for other types of damage only if they are at fault. The Compact, however, stops short of strict absolute civil liability by providing commonsense defences to assure that liability is not unfairly imposed on its Members.

The Members are willing to accept some aspects of strict liability only in the context of the Compact because (1) Members voluntarily sign this contractual mechanism; (2) the Compact precisely defines the scope, terms, and conditions of potential responsibility; and (3) they are confident in the safety of their products.