DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 8
Dispute Settlement without recourse to Panels and the Appellate Body
Sometimes, the involvement of an outside, independent person unrelated to the parties of a dispute can help the parties find a mutually agreed solution. To allow such assistance, the DSU provides for good offices, conciliation and mediation on a voluntary basis if the parties to the dispute agree (Article 5.1 of the DSU). Good offices normally consist primarily of providing logistical support to help the parties negotiate in a productive atmosphere. Conciliation additionally involves the direct participation of an outside person in the discussions and negotiations between the parties. In a mediation process, the mediator does not only participate in and contribute to the discussions and negotiations, but may also propose a solution to the parties. The parties would not be obliged to accept this proposal.
Good offices, conciliation and mediation may begin at any time (Article 5.3 of the DSU), but not prior to a request for consultations because that request is necessary to trigger the application of the procedures of the DSU, including Article 5 (Article 1.1 of the DSU). For example, the parties can enter into these procedures during their consultations. If this happens within 60 days after the date of the request for consultations, the complainant must not request a panel before this 60-day period has expired, unless the parties jointly consider that the good offices, conciliation or mediation process has failed to settle the dispute (Article 5.4 of the DSU). However, these procedures can be terminated at any time (Article 5.3 of the DSU). If the parties so agree, these procedures may continue while the panel proceeds with an examination of the matter (Article 5.5 of the DSU).
The proceedings of good offices, conciliation and mediation are strictly confidential, and do not diminish the position of either party in any following dispute settlement procedure (Article 5.2 of the DSU). This is important because, during such negotiations, a party may offer a compromise solution, admit certain facts or divulge to the mediator the outer limit of the terms on which it would be prepared to settle. If no mutually agreed solution emerges from the negotiations and the dispute goes to adjudication, this constructive kind of flexibility and openness must not be detrimental to the parties.
As regards the independent person to be involved, the DSU states that the Director-General of the (WTO) may offer good offices, conciliation or mediation with a view to assisting Members to settle their dispute (Article 5.6 of the DSU). Due to the absence of recourse to the procedures of Article 5 of the DSU, the Director-General issued a formal communication to the Members of the WTO.1 In this communication, the Director-General called the Members’ attention to his readiness to assist them as contemplated in Article 5.6 of the DSU, with a view to helping settle disputes without recourse to panels and the Appellate Body. The communication also details the procedures to be followed when Members request the Director-General’s assistance for good offices, conciliation or mediation.
The communication contemplates that the Director-General or, with the concurrence of the parties, a designated Deputy Director-General would handle the proceedings. Unlike panel and Appellate Body proceedings, the process of good offices, conciliation or mediation should not result in legal conclusions, but assist in reaching a mutually agreed solution. The Director-General may involve Secretariat staff to support the process, but these staff members must be insulated from subsequent dispute settlement procedures (i.e. at the panel stage).2 A request to the Director-General must also identify whether it is for good offices, conciliation and/or mediation, even though the Director-General’s role may change during the Article 5 procedure. Finally, the communication stipulates that ex parte communications (between one party and the Director-General to the exclusion of the other party) would be permitted, that all communications during the process would remain confidential and that no third party may participate in the process, except if the parties agree.
As already stated, the procedures of Article 5 have so far not been used in WTO dispute settlement. In one instance, three WTO Members jointly requested the Director-General (or a person designated by the Director-General with the requesting Members’ agreement) to mediate. The mediator was requested to examine the extent to which a preferential tariff treatment granted to other Members unduly impaired legitimate export interests of two of the requesting Members. The task of the mediator was also to possibly to propose a solution.
The requesting Members considered the matter not to be a “dispute” within the terms of the DSU, but agreed that the mediator could be guided by procedures similar to those envisaged for mediation under Article 5 of the DSU. The Director-General nominated a Deputy Director-General to be the mediator3, whose conclusions it was agreed by the parties would remain confidential upon completion of the procedure.4
The DSU specifically foresees good offices, conciliation and mediation for disputes involving a least-developed country Member. Where the consultations have not resulted in a satisfactory solution and the least-developed country Member so requests, the Director-General or the Chairman of the DSB must offer their good offices, conciliation and mediation. Here as well, the aim is to assist the parties to settle the dispute before the establishment of a panel (Article 24.2 of the DSU).