|Frequently Used Abbreviations and Acronyms|
|ACEC||Area of Critical Environmental Concern|
|ACHP||Advisory Council on Historic Preservation|
|APA||Administrative Procedures Act|
|APE||Area of Potential Effect|
|ARPA||Archaeological Protection Act of 1979|
|ATCC||Area of Traditional Cultural Concern|
|BLM||Bureau of Land Management|
|CAPM||Capital Asset Pricing Model|
|CDCA||California Desert Conservation Area|
|CDPA||California Desert Protection Act of 1994|
|CEQA||California Environmental Quality Act|
|CMA||California Mining Association|
|CRB||California Research Bureau|
|DOC||Department of Conservation|
|DCF||Discounted Cash Flow|
|DEIR||Draft Environmental Impact Report|
|DEIS||Draft Environmental Impact Statement|
|DOI||Department of the Interior|
|EIR||Environmental Impact Report|
|EIS||Environmental Impact Statement|
|Ex.||Exhibits submitted by Claimant|
|FA||Factual Appendices submitted by Respondent|
|FEIR||Final Environmental Impact Report|
|FEIS||Final Environmental Impact Statement|
|FLPMA||Federal Land Policy and Management Act of 1976|
|FTC||Federal Trade Commission|
|IBA||International Bar Association|
|ICPBD||Imperial County Planning and Building Department|
|ICSID||International Centre for Settlement of Investment Disputes|
|IVCDM||Imperial Valley College Desert Museum|
|LA||Legal Authorities submitted by Respondent|
|LAO||California Legislative Analyst’s Office|
|MMPA||Mining and Minerals Policy Act of 1970|
|MOA||Memorandum of Agreement|
|NAFTA||North American Free Trade Agreement|
|NAGPRA||Native American Graves Protection and Repatriation Act of 1990|
|NAHC||Native American Heritage Commission|
|NAS||National Academy of Science|
|NHPA||National Historic Preservation Act of 1966|
|NEPA||National Environmental Policy Act of 1970|
|NOI||Notice of Intent|
|NOP||Notice of Preparation|
|NRC||National Research Council|
|NRHP||National Register of Historic Places|
|OHP||Office of Historic Preservation|
|OMR||Office of Mine Reclamation, Department of Conservation|
|POO||Plan of Operations|
|ROD||Record of Decision|
|SHPO||State Historic Preservation Officer|
|SIH||Substantial Irreparable Harm|
|SMARA||Surface Mining and Reclamation Act of 1975|
|SMGB||State Mining and Geology Board|
|TCP||Traditional Cultural Property|
|Tr.||Transcripts of the Hearing on the Merits|
|THPO||Tribal Historic Preservation Officer|
|UNESCO||United Nations Educational, Scientific and Cultural Organization|
|UNCITRAL||United Nations Commission on International Trade|
|VER||Valid Existing Right|
• First, a tribunal should confine its decision to the issues presented by the dispute before it. The Tribunal is aware that the decision in this proceeding has been awaited by private and public entities concerned with environmental regulation, the interests of indigenous peoples, and the tension sometimes seen between private rights in property and the need of the State to regulate the use of property. These issues were extensively argued in this case and considered by the Tribunal. However, given the Tribunal’s holdings, the Tribunal is not required to decide many of the most controversial issues raised in this proceeding. The Tribunal observes that a few awards have made statements not required by the case before it. The Tribunal does not agree with this tendency; it believes that its case-specific mandate and the respect demanded for the difficult task faced squarely by some future tribunal instead argues for it to confine its decision to the issues presented.
• Second, inasmuch as the State Parties to the NAFTA have agreed to allow amicus filings in certain circumstances, it is the Tribunal’s view that it should address those filings explicitly in its Award to the degree that they bear on decisions that must be taken. In this case, the Tribunal appreciates the thoughtful submissions made by a varied group of interested non-parties who, in all circumstances, acted with the utmost respect for the proceedings and Parties. Given the Tribunal’s holdings, however, the Tribunal does not reach the particular issues addressed by these submissions.
• Third, it is important that a NAFTA tribunal provide particularly detailed reasons for its decisions. All tribunals are to provide reasons for their awards and this requirement is owed to private and public authorities alike. In the Tribunal’s view, however, it is particularly important that the State Parties receive reasons that are detailed and persuasive for three reasons. First, States are complex organizations composed of multiple branches of government that interact with the people of the State. An award adverse to a State requires compliance with the particular award and such compliance politically may require both governmental and public faith in the integrity of the process of arbitration. Second, while a corporate participant in arbitration may withdraw from utilizing arbitration in the future or from doing business in a particular country, the three NAFTA State Parties have made an indefinite commitment to the deepening of their economic relations. In this sense, not only compliance with a particular award, but the longterm maintenance of this commitment requires both governmental and public faith in the integrity of the process of arbitration. Third, a minimum level of faith in the system is maintained by the mechanism for the possible annulment of awards. However, the time and expense of such annulments are to be avoided. The detailing of reasons may not avoid the initiation of an annulment procedure, but it is hoped that such reasons will aid the reviewing body in a prompt resolution of such motions.5
• Fourth, a NAFTA tribunal need communicate its holding not only clearly, but also succinctly. The previous principle’s call for detailed reasons, however, likely leads to a lengthy award that does not necessarily communicate its conclusions succinctly to the various branches of government or public involved. For this reason, the Tribunal provides an executive summary of the Award in what we hope is direct yet still legally precise language, with references to the details within. This summary is to be fully understood in terms of the more detailed exposition contained in the Award.
• Fifth, a NAFTA tribunal, while recognizing that there is no precedential effect given to previous decisions, should communicate its reasons for departing from major trends present in previous decisions, if it chooses to do so. As our recently departed colleague, Thomas Walde, stated in his separate opinion to International Thunderbird Gaming Corp. v. Mexico:
In international and international economic law - to which investment arbitration properly belongs - there may not be a formal ‘stare decisis’ rule as in common law countries, but precedent plays an important role. Tribunals and courts may disagree and are at full liberty to deviate from specific awards, but it is hard to maintain that they can and should not respect well-established jurisprudence. WTO, ICJ and in particular investment treaty jurisprudence shows the importance to tribunals of not ‘confronting’ established case law by divergent opinion - except if it is possible to clearly distinguish and justify in-depth such divergence. The role of precedent has been recognised de facto in the reasoning style of tribunals, but can also be formally inferred from Art. 1131 (1) of the NAFTA - which calls for application of the ‘applicable rules of international law’,...6
In terms of its case-specific mandate, a tribunal should decide the matter before it on the basis of the authorities submitted to it, and to the degree that the parties to the dispute do not raise what the tribunal regards to be a particularly relevant authority, the tribunal should bring such an authority to the attention of the parties and provide them an opportunity to comment. But, regardless of whether the particular line of reasoning was argued to the tribunal, it is our view that the tribunal should indicate its reasons for departing from a major trend of previous reasoning.7 This reasoning is partially apparent in this Award’s evidentiary approach to the requirement of fair and equitable treatment under Article 1105.
• A legal opinion by the Department of the Interior did not breach Respondent’s obligations under Article 1105, because it was not arbitrary or manifestly without reasons; was not blatantly unfair or evidently discriminatory; nor did it repudiate expectations formed by a quasi-contractual relationship or evidence a complete lack of due process.28
• The Record of Decision denying Claimant’s Plan of Operations did not breach international obligations as it was based upon the above-mentioned legal opinion which was in compliance with Respondent’s international obligations.29
• With respect to the asserted delay in the federal government’s review of Claimant’s Plan of Operations, the Tribunal finds that, prior to Claimant’s submission to arbitration, there was no delay in the processing; and Respondent’s subsequent failure to diligently pursue administrative review while also defending an arbitration with respect to the same review is not manifestly arbitrary, completely lacking in due process, exhibiting evident discrimination, or manifestly lacking in reasons.30
• The cultural review of Claimant’s Plan of Operations did not breach Article 1105, as it was undertaken by qualified professionals who provided their reasoned and substantiated opinions upon which Respondent was justified in relying, and was not harmed by bias or prejudice. In addition, the conclusion of the cultural review culminating in direct recommendation to the secretary of Interior was not manifestly arbitrary, a gross denial of justice, or exhibiting a manifest lack of reasons.31
• The complained of California legislation was of general application and did not target Claimant’s investment, though it is likely that the investment served as a triggering event.32 The legislation also did not breach Respondent’s obligations to protect investor expectations, as such expectations were not created by specific assurances;33 nor was it arbitrary in that it is clear from the record that the legislation addressed some, if not all, of the harms at issue.34
• The California regulations, and the emergency regulations that preceded them, did not upset reasonable investor expectations as such expectations were not created by specific assurances.35 The Tribunal also finds that there was a rational relationship between the regulations and their purpose and sufficient scientific study to support the Board’s conclusions.36
• With respect to Claimant’s contention that the California measures were closely related acts with the same goal of halting its investment, the Tribunal holds that, even if it were to view the measures as "working together," Claimant has not met its burden of proving to the Tribunal that either measure unfairly targeted its investment.37
[I]t is the continuing policy of the Federal Government in the national interest to foster and encourage private enterprise in (1) the development of economically sound and stable domestic mining, minerals, metal and mineral reclamation industries, (2) the orderly and economic development of domestic mineral resources, reserves, and reclamation of metals and minerals to help assure satisfaction of industrial, security, and environmental needs, (3) mining, mineral, and metallurgical research, including the use and recycling of scrap to promote the wise and efficient use of our natural and reclaimable mineral resources, and (4) the study and development of methods for the disposal, control, and reclamation of mineral waste products, and the reclamation of mined land, so as to lessen any adverse impact of mineral extraction and processing upon the physical environment that may result from mining or mineral activities.75
[T]he management of the public lands and their various resource values so that they are utilized in the combination that will best meet the present and future needs of the American people; making the most judicious use of the land for some or all of these resources or related services over areas large enough to provide sufficient latitude for periodic adjustments in use to conform to changing needs and conditions; the use of some land for less than all of the resources; a combination of balanced and diverse resource uses that takes into account the long-term needs of future generations for renewable and nonrenewable resources, including, but not limited to, recreation, range, timber, minerals, watershed, wildlife and fish, and natural scenic, scientific and historical values; and harmonious and coordinated management of the various resources without permanent impairment of the productivity of the land and the quality of the environment with consideration being given to the relative values of the resources and not necessarily to the combination of uses that will give the greatest economic return or the greatest unit output.79
In other words, ‘"[m]ultiple use management’ is a deceptively simple term that describes the enormously complicated task of striking a balance among the many competing uses to which land can be put... "80
(1) the California desert contains historical, scenic, archeological, environmental, biological, cultural, scientific, educational, recreational, and economic resources that are uniquely adjacent to an area of large population;
(2) the California desert environment is a total ecosystem that is extremely fragile, easily scarred, and slowly healed;
(3) the California desert environment and its resources, including certain rare and endangered species of wildlife, plants, and fishes, and numerous archeological and historic sites, are seriously threatened by air pollution, inadequate Federal management authority, and pressures of increased use...,84
Responding to national priority needs for resource use and development, both today and in the future, including such paramount priorities as energy development and transmission, without compromising the basic desert resources of soils, air, water, and vegetation, or public values such as wildlife, cultural resources, or magnificent desert scenery. This means, in the face of unknowns, erring on the side of conservation in order not to risk today what we cannot replace tomorrow.87
‘Unnecessary or undue degradation’ means surface disturbance greater than what would normally result when an activity is being accomplished by a prudent operator in usual, customary, and proficient operations of similar character and taking into consideration the effects of operations on other resources and land uses, including those resources and uses outside the area of operations. Failure to initiate and complete reasonable mitigation measures, including reclamation of disturbed areas or creation of a nuisance may constitute unnecessary or undue degradation. Failure to comply with applicable environmental protection statutes and regulations thereunder will constitute unnecessary or undue degradation. Where specific statutory authority requires the attainment of a stated level of protection or reclamation, such as in the California Desert Conservation Area..., that level of protection shall be met.121
It is the intent of the Legislature to create and maintain an effective and comprehensive surface mining and reclamation policy with regulation of surface mining operations so as to assure that:
(a) Adverse environmental impacts are prevented or minimized and mined lands are reclaimed to a usable condition which is readily adaptable for alternative land uses.
(b) The production and conservation of minerals are encouraged, while giving consideration to values relating to recreation, watershed, wildlife, range and forage, and aesthetic enjoyment.
(c) Residual hazards to the public health and safety are eliminated.160
[T]he combined process of land treatment that minimizes water degradation, air pollution, damage to aquatic or wildlife habitat, flooding, erosion, and other adverse effects from surface mining operations, including adverse surface effects incidental to underground mines, so that mined lands are reclaimed to a usable condition which is readily adaptable for alternate land uses and create no danger to public health or safety. The process may extend to affected lands surrounding mined lands, and may require backfilling, grading, resoiling, revegetation, soil compaction, stabilization, or other measures.164
The Quechan believe that this is a conflict between their protected right to practice religion under the First Amendment to the Constitution and the 1872 Mining Law; that by allowing the mining to occur the government will have violated their rights under the First Amendment and destroyed their ability to practice their religion where it must be practiced. What are our responsibilities to ensure that we do not violate the First Amendment? What are our responsibilities to the mining claimant to ensure that his proprietary rights are protected?322
Glamis-Imperial appears to have conducted the necessary work within the scope of the regulations, and of a ‘prudent operator in usual, customary, and proficient operations of similar character...’ (43 CFR 3809.0-5(k)). Within the scope and limitations of this review, I feel that the Imperial Project as proposed is the next logical and prudent step in the development of the Imperial deposits; however, with the performance of gold in the past 18 months yielding an uncertain forecast, under the assumptions provided, a present, positive value to the project, and hence a profit within a reasonable rate of return will not be realized.
In the conduct of any mineral investigation of the mining claims at the Imperial Project, a formal forecast of the gold price must be conducted by a qualified mineral economist. The margin of loss under my analysis is so low that small changes in the forecast gold price would render the property, under a formal mineral investigation, and all other facts being regular, profitable and valid.333
[W]e are at a phase where it has been acknowledged that the proposed mining development will have adverse effects on properties of historic significance, so we’re really at the phase of looking at whether there are ways to allow that project to go forward and minimize the impacts on historic properties, or whether there should be some other action taken by the Federal Agency.353
[approximately 9,360.74 acres in Eastern Imperial County... from further entry to protect the archaeological and Native American religious values.... The withdrawal would segregate the lands from nondiscretionary uses, i.e., mining, which could irrevocably destroy and/or negatively impact the archaeological and Native American religious values of the property. The withdrawal would be subject to valid existing rights, but would segregate from any new mineral entry to prevent additional claims from being filed.374
In addition, as discussed in the proposed Indian Pass withdrawal application, "[w]ithout a withdrawal, BLM would not have the discretion to deny authorization of a mining plan of operation if the claimant complies with applicable regulations."375
Because the ore body is of somewhat lower grade than that found at most operating mines, the ratio of metal recovered to material disturbed is lower than found in many other operations, particularly for a start-up operation.... The low grade of the ore may so affect the profit margin that the imposition of reasonable environmentally protective restrictions or mitigation measures may make the venture unprofitable.412
What limits or obligations does the First Amendment to the U.S. Constitution place on the BLM in this context?
To what extent does the Federal Land Policy and Management Act authorize or oblige the BLM to protect the cultural and historic resources of the ATCC in connection with the Glamis proposed plan of operations?416
‘Undue impairment,’ as explained above, must mean something more than the prudent operator standard currently in the BLM definition of ‘unnecessary or undue degradation,’ but it cannot mean so much as vesting the Secretary with authority to prohibit all hardrock mining in the CDCA. Plainly the ‘undue impairment’ standard would permit BLM to impose reasonable mitigation measures on a proposed plan of operations that threatens ‘undue’ harm to cultural, historic or other important resources in the CDCA. Moreover, the reasonableness of those mitigation measures ought not to be judged by whether they make the particular operation uneconomic at current market prices for the mineral commodity proposed to be mined. Beyond that, the ‘undue impairment’ standard might also permit denial of a plan of operations if the impairment of other resources is particularly ‘undue,’ and no reasonable measures are available to mitigate that harm. As stated above, the CDCA Plan clearly appears to contemplate such a result.429
[T]he Project area would remain as is, and present uses in the area, including opportunities for dispersed recreational activities, would continue. The Project area would remain available for future commercial gold processing proposals or for other proposals as permitted by BLM policy or land use designations.446
BLM came to this conclusion "[b]ased upon findings in [the] EIS/EIR, agency and public comments, the Solicitor’s Opinion on the regulation of Hardrock Mining..., and extensive consultation with the Advisory Council on Historic Preservation."447 With respect to cultural resources, the 2000 FEIS found that "[t]he Indian Pass-Running Man ATCC, including the Trail of Dreams; seven (7) multi-component archaeological sites; and twelve (12) prehistoric trail sites in the Project mine and process area, each of which are evaluated as eligible for the NRHP... would not be avoided under the Proposed Action."448
This opinion found that the unnecessary or undue degradation standard... allowed BLM to require reasonable mitigation measures to protect resources, but did not by itself give BLM the authority to prohibit mining altogether on public lands. Because the Proposed Action would be located within the... (CDCA), the opinion went on to analyze the ‘undue impairment’ standard.... The opinion found that the ‘undue impairment’ standard would permit BLM to impose reasonable mitigation measures to prevent undue impairment, and that the standard might also permit denial of a plan of operations if the impairment of other resources is particularly ‘undue,’ and no reasonable measures are available to mitigate that harm.449
After extensive analysis, public review and comment, and application of pertinent Federal laws and policies, it is the decision of the Department of the Interior, based upon the recommendation of the BLM, not to approve the plan of operations for the Imperial Project. This represents the No Action alternative as specified in the FEIS/EIR published jointly by BLM and Imperial County on November 17, 2000.460
Glamis has found minerals within the boundaries of the 187 lode mining claims and the evidence is of such a character that a person of ordinary prudence would be justified in the further expenditure of labor and means, with a reasonable prospect of success, in developing a valuable mine. The requirements of the mining laws of the United States have been satisfied for these mining claims on the critical dates of November 1998 [the date of segregation and withdrawal] and April 2002 [the date of the completion of the examination].481
Using average gold prices ranging between $325 (1998) and $296 (2002), the report determined that the Imperial Project claims "contain[ed] a gold deposit that can be mined and processed... at a profit."482 The report also concluded, after analyzing the backfilling of the East Pit, that such backfilling was not economically feasible.483
SB 483 contains narrowly-crafted language intended to prevent approval of a specific mining project proposed for an Imperial Valley location by Glamis Gold, Inc. The proposed project would impact an area known as Indian Pass, where a system of sacred trails is an important part of the Quechan Tribe’s spiritual and cultural base. The provisions in SB 483 [as amended] are identical to the SMARA provisions in SB 1828, and are intended to affect only this particular project.498
[P]rohibit a lead agency from approving a reclamation plan and financial assurance for a surface mining operation for gold, silver, copper, or other metallic minerals that [was] located on, or within one mile of any Native American sacred site, as defined, and in an area of special concern, as defined, unless the reclamation plan require [d] that all excavation be backfilled and graded to achieve the approximate original contours of the mined lands prior to mining, and the financial assurance [was] sufficient in amount to provide for that backfilling and grading.509
SB 483 needs to be made operative immediately because of provisions that establish new reclamation requirements for strip mining operations for gold, silver and other precious metals that affect Native American sacred sites in portions of the Southern California desert. These changes to statute are urgently needed to stop the Glamis Imperial mining project in Imperial county proposed by Glamis Gold, Ltd, a Canadian-based company. The project is a massive, open-pit, cyanide heap-leach gold mine on 1,500 acres of public land that would destroy sacred sites of critical religious and cultural importance to the Quechan Indian tribe....
The mining site would irreparably harm both ends of the Quechan’s spiritual trail, the ‘Trail of Dreams.’... The tribe has not only historically used this site, but currently continues to use the site for religious, cultural and educational purposes.
... The author believes the back-filling requirements established by SB 483 make the Glamis Imperial project infeasible.520
If this mining operation and the attendant reclamation plan are approved, and the joint EIS/EIR certified and approved for the operation and reclamation plan, without the requirement to backfill and recontour the lands disturbed by the mining activities, then an open pit with a length of approximately 4,700 feet, a width of approximately 2,700 feet, and a depth in excess of 800 feet, permanently will be left as a scar on the California landscape and an endangerment to the natural environment. At the same time, the surrounding landscape will be additionally marred and the environment threatened by a waste rock pile or piles which will contain residual harmful solutions and be up to a mile or more in total length and up to 300 feet in height above the natural grades.
In order to protect the California landscape and environment by requiring the reclamation plan for the pending mining operation to comply with the standards set forth in this emergency regulation, and to establish an environmental protection standard for this and other mine operation and reclamation plan approvals which may be pending at this time, but of which the SMGB is unaware, and which might receive approvals before a permanent regulation establishing the reclamation and environmental protection standards set forth in this regulation can be established, this regulation is required to be adopted and placed into effect on an emergency basis.537
Through the measures identified above, the United States has denied Glamis Imperial the minimum standard of treatment under international law (including full protection and security and fair and equitable treatment of its investment) guaranteed by Article 1105 and has expropriated Glamis Imperial’s valuable mining property interests without providing prompt and effective compensation as guaranteed by Article 1110.547
a. the arbitral Tribunal was established without objection;
b. the president of the Tribunal could employ a legal assistant to aid the Tribunal in its work;
c. a verbatim transcript of all subsequent hearings and oral arguments would be produced and made available to the Parties and the Tribunal and such transcripts would be produced using Live Notes or some other simultaneous transcription procedure;
d. the hearings might be made available for public viewing via closed circuit television broadcast into some room other than the room in which the hearings are held (subject to confidentiality considerations); and
e. documents on which a Party relied would be submitted with the Party’s respective Memorial or Counter-Memorial, and all such documents would be submitted in complete form and numbered consecutively, starting from the last number of the previous submission, if any.
21. The Tribunal notes that even if it were to find the three mentioned federal actions to be time barred, such a finding does not eliminate the Article 1105 claim inasmuch as other federal actions are alleged by Claimant to be a basis for its claim. The potential exclusion of certain events at the merits stage to serve as independent bases of the claim will not in the circumstances of this proceeding exclude the claim in its entirety. Inasmuch as there is no jurisdictional objection to the NAFTA Article 1105 claim as based on the Record of Decision and subsequent acts, the Tribunal does not find the request for preliminary consideration of the objection to the Article 1105 to be justified in that even if the Tribunal were to grant respondent’s objection, the cost and time of that proceeding would not be justified in terms of the reduction in costs at the subsequent phase of these proceedings.
25. Considering Respondent’s request for bifurcation and preliminary consideration of the 1117(1) under Article 15(1), the Tribunal does not find the request justified and therefore denies Respondent’s request. In particular, the Tribunal finds that if it were to bifurcate its consideration of the issue identified, the Tribunal would be immediately confronted with the issue of whether California’s laws and policies resulted in an expropriation under Chapter 11 of NAFTA. Since the facts presented to answer the Article 1117(1) issue are likely to be the same facts presented on the expropriation issue, the Tribunal finds the proposed bifurcation to be impractical in that the Article 1117(1) issue identified is so intertwined with the merits that it is very unlikely that there will be any savings in time or cost. The question, therefore, of identifying ‘the point when the damage was sufficiently concrete and permanent to result in breaches’ is to be considered as a part of the merits.551
7. This arbitration is conducted under the UNCITRAL Arbitration Rules.
8. The UNCITRAL Rules in Article 24 provide:
1. Each party shall have the burden of proving the facts relied on to support his claim or defence.
2. The arbitral tribunal may, if it considers it appropriate, require a party to deliver to the tribunal and to the other party, within such a period of time as the arbitral tribunal shall decide, a summary of the documents and other evidence which that party intends to present in support of the facts in issue set out in his statement of claim or statement of defence.
3. At any time during the arbitral proceedings the arbitral tribunal may require the parties to produce documents, exhibits or other evidence within such a period of time as the tribunal shall determine.
Article 24 is general in its terms, making clear the authority of the Tribunal to order the production of ‘documents, exhibits or other evidence’ but providing only skeletal guidance as to the exercise of that authority. Under Article 15(1) of the Rules, ‘the arbitral tribunal may conduct the arbitration in such manner as it considers appropriate, provided that the parties are treated with equality and that at any stage of the proceedings each party is given a full opportunity of presenting his case.’
9. The International Bar Associations Rules on the Taking of Evidence in International Commercial Arbitration (‘IBA Rules on Evidence’) are not directly applicable to this proceeding. [FN1] As a part of the exercise of its authority under Article 15(1), however, the Tribunal may look to the IBA Rules on Evidence for guidance.
FN1: See tape recording of the February [hearing] beginning at minute 35, second 45 to minute 44.
10. The Tribunal notes in particular the standards for production referenced in the IBA Rules on Evidence. Article 3(a)(ii) emphasizes that requests for documents should be of a ‘narrow and specific’ nature and of documents that ‘are reasonably believed to exist.’ Article 3(b) underscores the need for documents to be ‘relevant and material to the outcome of the case.’ On the basis of this general guidance, the Tribunal has endeavored to ensure that any documents which it compels a Party to produce should be of a ‘narrow and specific’ nature, ‘reasonably believed to exist’, and ‘likely material to the outcome of the case.’
15. In the interest of avoiding the burdens of litigation and protecting the expectations of the parties in the arbitration process, the Tribunal has endeavored to make its decisions regarding the Parties’ Objections in such a manner as to focus on the articulated materiality of a given document or category of documents. The Tribunal believes that as the document production efforts proceed the Parties will have evaluated the publicly available records and will be in a better position to articulate which additional documents will be necessary for the Parties to prepare their arguments.
a. The Tribunal denied without prejudice Claimant’s request for the following non-public documents relating to communications between the DOI and the Indian tribes; the creation and management of the Indian Pass Area of Critical Environmental Concern; the October 27, 1998 proposal to withdraw DOI lands encompassing the Imperial Project; and the October 27, 2000 withdrawal of DOI lands.556 The Tribunal believed the production of nonpublic documents was premature before Claimant had reviewed the available public documents. If, however, after the review of public documents made available by Respondent, Claimant had reason to believe that specific nonpublic documents were likely to be material, the Tribunal indicated its willingness to review renewed requests.557
b. The Tribunal denied without prejudice Claimant’s request for documents from a specified list of federal and state government offices that Claimant argued would have been active in "deciding or guiding the fate of the Imperial Project."558 The Tribunal noted the overlap of this request with Claimant’s Categories 1 and 7 requests (the latter of which Respondent was currently producing) and viewed the Category 8 request as encompassed within the production effort for Categories 1 and 7. Again, should Claimant have reason to believe that a particular source named above was not contained in the Categories 1 and 7 production effort and was likely to contain material information, the Tribunal indicated that the Claimant would have the opportunity to renew its request of a search for those particular offices.559
c. The Tribunal denied without prejudice Claimant’s request for documents dating after July 21, 2003. The Tribunal concluded that these documents were, at a minimum, premature as the public record had not yet been reviewed. The Tribunal also was not disposed at that time to regard the requested documents as material. Therefore, the Tribunal explained, any renewal request should articulate as fully as possible the likely materiality of the documents requested.560
d. The Tribunal denied without prejudice Respondent’s request that the Tribunal issue an order requiring Claimant to produce documents, wherever located, concerning complete backfilling as "contemplated, proposed or adopted by governments in foreign countries... including Mexico, Guatemala, and Honduras."561 Claimant stated it had no knowledge of "complete backfilling" requirements outside of the United States. Given this stated lack of knowledge, the Tribunal explained that such a geographically broad order would require "a more substantial nexus to be articulated between the category of requested documents and the likely materiality of such documents to the outcome of the case." The Tribunal denied with leave to renew if Respondent identified more specifically the likely material documents which should be in Claimant’s possession.562
e. Finally, the Tribunal denied without prejudice Respondent’s request that the Tribunal require Claimant to release documents concerning "the consideration, approval or review by Glamis’ board of directors or committees of the board of directors of expenditures on any expansions of existing projects or any new gold mining projects, other than the Imperial Project."563 Although the Tribunal had some appreciation that this information could assist Respondent in evaluating Claimant’s investment expectations, it was not satisfied that the proposed discovery would be in practice transferable to the evaluation of the Imperial Project. In any renewal of this request, the Tribunal thus indicated that Respondent should "articulate as fully as possible the likely materiality of the documents requested, including the methodology by which a comparative analysis [would] be made."564
17.... Article 24 makes clear the authority of the Tribunal to order the production of ‘documents, exhibits or other evidence’, but provides little guidance as to the exercise of that authority. The UNCITRAL rules are silent on the subject of the assertion of claimed privileges and provide no explicit guidance as to the Tribunal’s ruling on such claims. It is only stated under Article 15(1) of the Rules that ‘the arbitral tribunal may conduct the arbitration in such manner as it considers appropriate, provided that the parties are treated with equality and that at any stage of the proceedings each party is given a full opportunity of presenting his case.’
18. In their submissions on document production issues, both Parties cited the rules of the International Bar Association as a source of guidance for the Tribunal on production of documents. The Tribunal observes that those rules provide that documents requested should be ‘material’ to the proceeding. The Tribunal in its previous decisions has adopted the requirement of materiality.
19. The Tribunal recognizes that, in international arbitration, procedural matters such as the applicability of privileges and the form of objections to such assertions can be set out by the agreement of the Parties. The Parties in their submissions, and at the hearing, appear to agree that the privilege law of the United States should be looked to by the Tribunal for guidance as to the law of privilege to be applied in this arbitration. The Parties, however, disagree as to which jurisdiction of the United States reference should be made. Claimant points to the law of the D.C. Circuit or federal common law which it views as most reflecting the expectations of the Parties, while Respondent favors those principles that are common among the jurisdictions, noting that Claimant could have as easily filed a suit in the courts of the State of California, or in the Federal Court in Nevada.
20. The Tribunal observes that the law of the United States, both as to production of documents or to the privilege enjoyed by some set of documents, is not directly applicable to this arbitration. Rather document production in this arbitration is governed by Article 24 of the UNCITRAL Arbitration Rules and guided by the Parties’ own agreements to production as evidenced in their February 24, 2005 letters. Moreover, the Tribunal observes that it is unlikely in any event that the expectations of the United States as a party to the NAFTA as to privileges that it might enjoy in the NAFTA chapter 11 arbitrations would vary proceeding to proceeding depending on the jurisdictions in which a particular claimant might field an action. Thus the Tribunal has reviewed the case law of numerous United States jurisdictions—including California and the District of Columbia, neither of which were found to be outliers—and attempted to identify general consensus between courts that might be helpful in defining what the Parties would reasonably expect to apply in this situation. The Tribunal then used this information, combined with its knowledge of and appreciation for the differences between court proceedings and international arbitration [FN1], to craft standards that can assist the Parties in assessing their claims of privilege and their objections to such claims.
FN1. With respect to the differences between domestic litigation and international arbitration, the Tribunal recognizes that it is generally understood that one reason parties choose arbitration is to avoid the relatively extensive document production practices of courts generally and United States courts in particular. It feels that this expectation is not generally different in the context of NAFTA Chapter 11 arbitration, although the Tribunal notes that the investment arbitration context in which there may not be a contractual relationship between the parties does distinguish such proceedings from international commercial arbitration and thus militates in favor of some greater receptiveness on the part of the Tribunal for document production requests.
23. The Tribunal notes that the party asserting the privilege has the burden of proving that such privilege applies to each document [FN7] but, after that showing is made, the burden shifts to the other party to contest the privilege. The Tribunal recognizes that, when asserting this privilege, it is important to make clear that the attorney is indeed acting as such and providing legal advice, and is not acting as a policy-maker or corporate officer. [FN8] Therefore, it is critical that, when invoking the privilege, the invoking party explain with sufficient specificity the role the attorney is taking.
FN7. See Coastal States Gas Corp. v. Dep’t of Energy, 617 F.2d 845, 861 (D.C. Cir. 1980); Cobell v. Norton, 212 F.R.D. 24, 27 (D.D.C. 2002).
FN8. See Burlington Indus, v. Exxon Corp., 65 F.R.D. 26 (D. Md. 1974); Coastal Corp. v. Duncan, 86 F.R.D. 514, 521 (D.Del. 1980).
24. With respect to government attorneys, the Tribunal finds a general consensus among courts that the attorney-client privilege applies equally to government agencies: ‘In the governmental context, the ‘client’ may be the agency and the attorney may be an agency lawyer.’ [FN9] The Tribunal finds the application of this consensus rule is appropriate to this Arbitration. Furthermore, the Tribunal recognizes that an important prerequisite to assertion of the attorney-client privilege is the confidentiality of the information. The Tribunal understands, however, that in the government context, where the client is by nature a group, the privilege is not defeated by circulation beyond the attorney and the person within the group requesting or providing the information. [FN10] Communications between different government agencies should remain privileged to the extent that there is a ‘substantial identity of legal interests’ within the different agencies in the particular subject matter of the communications. [FN11]
FN9. Tax Analysts v. I.R.S., 117 F.3d 607, 618 (D.C. Cir. 1997).
FN10. Coastal States, supra, at 863.
FN11. U.S. v. American Tel. & Tel. Co., 86 F.R.D. 603, 616-17 (D.D.C. 1979).
Confidential _ (Communication/Email/Memo/etc.) dated _ between Attomey/Attomey’s Representative_, who was at the time acting as legal counsel and not primarily as a policymaker or corporate decision-maker, and Client/Client Affiliate_concerning legal advice on the subject of_,566
Depending on the objection raised by the Claimant, the Respondent also may have been required to state that:
To the extent that this document was circulated to_, (a colleague from a different agency), such circulation is protected because there was substantial identity of legal interests between the two agencies with respect to the particular subject matter of the communication.567
Should this explanation fail to satisfy Claimant, it was to respond with a detailed explanation as to why it believed this assertion was incorrect or why it failed based on the standards listed above. Finally, should these objections not serve to compel production of the disputed documents, and further discussions with Respondent did not resolve the matter, the Tribunal explained that it would, if requested by January 3, 2006, decide upon such objections on a document-by-document basis.568
31. Most courts recognize that the test for when a document is prepared ‘in anticipation of litigation’ [FN2l] turns on the function of the documents rather than merely the timing of their creation. [FN22] Thus, the content of the documents must relate to preparation for litigation; this includes ‘[s]ubject matter that relates to the preparation, strategy, and appraisal of the strengths and weaknesses of an action, or to the activities of the attorneys involved, rather than to the underlying evidence....’ [FN23] Based on this understanding of the subject matter, work product usually encompasses ‘interviews, statements, memoranda, correspondence, [and] briefs’ of lawyers. [FN24] With these themes within domestic case law in mind and recognizing how litigious society currently is and that there is therefore often the possibility that many actions could lead to litigation, the Tribunal observes that it is important, when claiming the work product privilege, that the withholding Party explain how the subject matter of the document relates to a likely lawsuit by an identifiable adversary in respect of a specific dispute.
FN21. See Hickman, supra at 511-12; see also Fed.Rule.Civ.Proc. 26(b)(3).
FN22. See Delaney, Migdail & Young, Chartered v. I.R.S., 826 F.2d 124, 127 (D.C. Cir. 1987).
FN23. In re Air Crash Disaster at Sioux City, 133 F.R.D. 515, 519 (D. III. 1990) quoting 4 Moore’s Federal Practice, para. 26.64[l] at 26-349- 350 (1980).
FN24. Heger, supra at 76, citing Hickman, supra at 393-94.
32. With respect to the Parties’ arguments regarding the threshold of need and unavailability that must be crossed in order to override a claim of work product privilege, the Tribunal observes that the Parties are actually not wholly in disagreement. Both Parties recognize that there is ‘core’ work product, including litigation strategies and attorney mental impressions, among other things, that will not be released without a showing of extraordinary justification. The Parties appear to disagree therefore only on documents, or portions of documents, that do not constitute ‘core’ work product. The Tribunal holds that, with respect to documents not rising to the level of attorney personal thought and strategy, the privilege is qualified and can be overruled by a sufficient showing of need and unavailability and a weighing of the importance of the claimed privilege versus the importance of production, (internal citations omitted)
This _ (Document/Draft/Report/etc.), dated _, was prepared by Attomey/Attomey’s Representative_because of anticipated litigation and would not have been prepared in substantially the same form in the absence of such anticipated litigation.571
The Tribunal additionally noted that it would be important for the withholding Party to note whether the document itself identified a specific pending or potential dispute or litigation and/or identified the likely adverse party or parties. Finally, the withholding Party was to specify whether factual information that could be segregated had been so removed and produced. Should these explanations not satisfy Claimant, it was to respond with a detailed explanation as to either: (i) why it believed this assertion was incorrect or failed based on the standards listed above; or (ii) why it believed that its need was so great and the document so unavailable that the document must be produced regardless of the assertion of the privilege. With respect to the latter argument, Claimant also was requested to explain how the document was likely to provide material evidence to support a factual contention, which the Tribunal might otherwise conclude lacked clearly probative support. Finally, should the Parties be unable to come to resolution on the disputed documents, they were requested to submit their objections to the Tribunal for review, as discussed above.
36. As the Parties do not disagree on the general definition of the scope of the privilege or the requirement that documents withheld under it be both pre-decisional and deliberative, the Tribunal adopts these interpretations. To elaborate on these definitions, and possibly to clear any disagreements between the parties, the Tribunal finds that the privilege shall encompass documents generated before the adoption of an agency policy or decision that contain opinions, recommendations or analyses of specific policies or decisions. [FN37] The Tribunal agrees that factual information should generally be segregated and produced, [FN38] but also recognizes that there may be situations in which the factual information is either so inextricably intertwined with policy information that it cannot be appropriately segregated or the factual information itself would reveal too much of the deliberative process to be disclosed. The opposite situation could also occur where deliberative materials are so benign as to reveal nothing of the deliberative process and should be produced. [FN39] As there is thus no black line on which to require production, the Parties and the Tribunal must evaluate the assertions of the officials who request the privilege.
FN37. See FTC v. Warner Communications, supra at 1161, citing Coastal States, supra at 866.
FN39. See Mead Data Central, Inc. v. United States Dep’t of the Air Force, 533 F.2d 242, 257 (D.C. Cir. 1977).
37. With respect to the burden of assertion and the formal requirements cited by Claimant for proper assertion, the Tribunal recognizes a general consensus in the case law that the head of the agency controlling the information must assert the privilege after review and analysis of the document. [FN4O] Recognizing the conflicting goals of this burden—that a sufficiently senior official perform the analysis and weighing of the assertion of the privilege, but that such official must devote substantial time and effort to gain personal knowledge of each document—and given that the formalities of U.S. practice are neither directly applicable or necessarily appropriate to arbitration, the Tribunal, absent extraordinary circumstances, will accept an assertion of the privilege from an official, at the assistant secretary or deputy secretary level, controlling the information if he/she is equally or more familiar with the information, rather than an agency head.
FN40. See Branch v. Phillips Petroleum Company v. E.E.O.C., 638 F.2d 873, 882 (5th Cir. 1981); see also Walker v. NCNB National Bank of Florida, 810 F.Supp. 11, 13 (D.D.C. 1993).
The document, dated_, was prepared in order to assist an agency decisionmaker, _ (name), _ (position) in arriving at a _ (a specific decision)."573
The certifying official also was to state that: (i) the basis of assertion of the privilege had not been incorporated into a final agency decision, and (ii) he/she believed, in good faith, that the harm of disclosure would overcome the value of production of the document to Arbitration. Finally, Respondent was to specify if factual information that could be segregated had been so removed and produced.
8(iii).... [W]here the analysis of an asserted privilege requires the Tribunal to balance Claimant’s need for the documents against Respondent’s interest in maintenance of the privilege, the Tribunal in several instances has deferred that decision until a later date. The Tribunal wishes to be clear as to the limits of these deferrals. In the Tribunal’s view, the phase of this proceeding concerned with party driven requests for production of documents is closed. In deferring any particular decision on such requests, the Tribunal defers its decision only as to the particular document or documents requested. The decision of the Tribunal to defer some decisions until a later time is driven by two factors. The starting point for the Tribunal is that it should not override privileges unnecessarily. Simultaneously, the question of Claimant’s need for a particular document cannot be assessed with accuracy at this early point in the arbitration. This is particularly the case given the fact that Claimant in many instances has other documents, or entirely different means of proof, available to it to establish a proposition. In deferring a decision, the Tribunal anticipates that such decision will not be made until, or following, the hearing on the merits of the claim. The Tribunal acknowledges that any later decision to order production would result in a limited extension of the proceedings.
13. After analysis of California Government Code §6254(1) and relevant case law, the Tribunal finds that §6254(1) does not protect the particular documents in question. In a similar situation in which a California agency was not a party to the litigation, but was very involved in the facts of the dispute, a California Court of Appeals held that the information was critical to a party to the litigation and thus §6254(1) did not protect the agency’s records. [FN8] The Tribunal finds that the rights of Claimant (in effect a litigant here) are affected by the documents requested and, in addition, the State of California has been similarly involved intimately in the events that culminated in this dispute. Therefore, the Tribunal finds that the absolute protection of California Government Code §6254(1) does not protect the documents at issue.
FN8. See Marylander v. Superior Court, 81 Cal.App.4th 1119, 1125 (2000).
14. The Tribunal turns then to the other privileges asserted by Respondent over these documents, namely California’s official information privilege and the deliberative process privilege. As the two are similar, the Tribunal thinks it appropriate to apply the principles of the deliberative process privilege to the analysis of both privileges. The Tribunal recognizes that ‘[t]he deliberative process privilege is a qualified one. A litigant may obtain deliberative materials if his or her need for the materials and the need for accurate factfinding override the government’s interest in non-disclosure.’ [FN9] In this situation, although the Tribunal recognizes the assertion of and interests in the deliberative process privilege, it finds the statement of Claimant’s need, particularly given the apparent absence of other documents or other means of proof available to the Claimant, to be sufficiently great to override those interests. Therefore, the Tribunal requests Respondent to produce the ten documents at issue, at its earliest opportunity.
FN9. Federal Trade Commission v. Warner Communications, Inc., 742 F.2d 1156, 1161 (9th Cir. 1984).
17. The Tribunal acknowledges Respondent’s assertion that the documentary evidence that Claimant seeks does not in fact exist. Independent of the document’s existence, the Tribunal notes that the attorney-client privilege is an absolute one. Moreover, as regards Claimant’s argument that the privilege was waived, the Tribunal understands that subject matter waiver is intended to prevent a privilege-holder’s selective disclosure of documents during litigation. However, a mere ‘extrajudicial disclosure of an attorney-client communication—one not subsequently used by the client in a judicial proceeding to his adversary’s prejudice—does not waive the privilege as to the undisclosed portions of the communication.’ [FN12] Thus, the Tribunal does not find subject matter waiver in this situation and deems this document protected by the attorney-client privilege.
FN12. In re von Bulow, 828 F.2d 94, 102 (2d Cir. 1987).
30.... [T]he Tribunal recognizes the qualified nature of the deliberative process privilege and that the interests in protection can be outweighed by a sufficient statement of need from the challenger. The Tribunal views Claimant’s argument that a challenge to the integrity of the decision-making process vitiates any assertions of the deliberative process privilege as an extreme variation of the generally applicable analysis of whether need outweighs interest in protection. The question of Claimant’s need, however, cannot be decided at this early point in the arbitration. The Tribunal therefore cannot compel production of these documents at this time, a holding that is demanded by the fact that the Tribunal does not override privilege unnecessarily and will not order production without restriction. If, at the point at which the Tribunal begins to make determinations on the merits of the claims, however, it becomes apparent that a particular decision is essential to such determinations and other documents, witnesses or evidence lead the Tribunal to believe that the documents currently requested may assist the Tribunal in such a decision, the Tribunal will revisit the requests for production of these particular documents.
48. Without determining the precise contours of the deliberative process privilege, the Tribunal is nevertheless mindful and respectful of the Government’s need for the free and open exchange of communications. The Tribunal therefore believes that when the privilege is asserted, it should not be overridden lightly. At the same time, the Tribunal is cognizant that fairness to the party whose interest is affected and who is therefore challenging the assertion of privilege is also important. Balancing these interests, the Tribunal holds that there must be a sufficient enough showing of need to ensure that the governmental process is protected. The Tribunal has not found a sufficient statement of need in the arguments presented at this point, but as the proceedings develop and evidence and witnesses are presented that show these documents to be both relevant and necessary, the Tribunal will reconsider the challenges to assertions of the deliberative process privilege over the documents in this section.
51. The Tribunal is assured that a proper attorney-client relationship did exist at the times of the communications and thus the privilege would ordinarily apply. Whether such privilege was waived by the inadvertent release of several documents must be determined by examining Respondent’s actions surrounding the release. The Tribunal notes that a U.S. judicial decision lists five factors to consider in determining whether an inadvertent production should amount to waiver: (1) the reasonableness of the precautions taken to prevent inadvertent disclosure in view of the extent of the document production; (2) the number of inadvertent disclosures; (3) the extent of the disclosure; (4) any delay and measures taken to rectify the disclosure; and (5) whether the overriding interests of justice would or would not be served by relieving the party of its error. [FN5O] The Tribunal finds these five factors to reflect considerations generally applicable to the analysis of waiver of privilege on the grounds of partial disclosure.
FN50. Koch Materials Co. v. Shore Slurry Seal, Inc., 208 F.R.D. 109, 118 (D.N.J. 2002) (citations omitted).
52. Applying these factors, the Tribunal finds the following. First, the Tribunal recognizes the great care with which Respondent conducted its document production, not only in the logging of the numerous privileged documents, but also in the production of thousands of pages of non-protected documents. Second, the number of privileged documents produced (four) is small in comparison to the overall production by Respondent. Third, the Respondent’s partial disclosure does not appear to be particularly extensive. Fourth, although Respondent has done little to promptly request the return of the documents or take other measures to rectify its apparently inadvertent disclosure, the Tribunal understands that, in a complex arbitration with large scale document production, a party may only become aware of an inadvertent disclosure after such is pointed out or made use of by the opposing party. Therefore, the Tribunal does not find this single factor dispositive. Fifth, the Tribunal finds that there are no overriding interests of justice that would compel it to not relieve Respondent of its error. Therefore, the Tribunal finds that the documents claimed as protected by the attorney-client privilege in this section D are indeed so protected. [FN5l] As the attorney-client privilege is an absolute privilege, no further challenge may be made to the withholding of these documents in this proceeding.
FN51. As mentioned, the Tribunal discovered numerous discrepancies in Claimant’s summary logs and especially in Section D. Therefore, the Tribunal addresses the argument in general and to which documents the argument actually applies will be determined upon further clarification of the privilege logs.
61. With respect to the four documents remaining at issue, the Tribunal believes that, based on the further clarifications provided by Claimant, the attorney-client and/or work product privileges do indeed protect these documents. Therefore, the challenges to the assertions of privilege with respect to these documents are denied. If, however, Respondent wishes to make additional arguments based on these further explanations of the documents, the Tribunal is willing to hear such arguments.
11. The Tribunal recognizes the diligent efforts of both Parties to comply with the numerous and difficult requirements of the pre-hearing submission schedule. At the request of the Parties, the Tribunal has attempted to maintain a very tight timeline so as to facilitate a final arbitral hearing at the earliest date possible. This, however, has continually challenged the Parties and left no room for unexpected circumstances.
12. The Tribunal is aware of its dual responsibility to keep the arbitration schedule moving effectively forward and to ensure that both parties have the opportunity to develop and present reasoned and supported arguments. The Tribunal believes that the circumstances described by Claimant impair its ability to effectively prepare its case and thus an extension is required, though this necessitates adjustment to the hearing dates. In granting an extension to the Claimant, an equal extension of time has been granted to the Respondent....
8. This arbitration is conducted under the UNCITRAL Arbitration Rules.
9. The Tribunal need not now decide whether the discretion to accept substantive materials from non-parties is within the discretion of the Tribunal under Article 15(1) of the UNCITRAL Rules. The Free Trade Commission’s Statement on nondisputing party participation indicates that the three states in NAFTA accept such statements. More particularly, the parties in this proceeding do not object to such statements, at least where consideration of the material is in accordance with the Free Trade Commission’s Statement.