Article 12.2. Scope
Except as otherwise provided for in this Chapter, this Chapter applies to measures (20) adopted or maintained by the Parties affecting trade-related and investment-related aspects of labour and environmental issues.
Article 12.3. Right to Regulate and Levels of Protection
1. Recognising the right of each Party to establish its own level of environmental and labour protection, and to adopt or modify accordingly its relevant domestic laws, policies and practices, each Party shall endeavour to ensure that its domestic laws, policies and practices provide for and encourage high levels of environmental and labour protection, consistent with standards, principles and agreements referred to in Articles 12.5 (International Labour Standards and Agreements) and 12.6 (Multilateral Environmental Agreements and Environmental Principles), and to further improve the level of protection provided for in those domestic laws, policies and practices.
2. The Parties recognise the importance, when preparing and implementing measures related to the environment and labour conditions that affect trade and investment between them, of taking account of scientific, technical and other information, and relevant international standards, guidelines and recommendations.
Article 12.4. Upholding Levels of Protection In the Application and Enforcement of Laws, Regulations or Standards
1. A Party shall not fail to effectively enforce its environmental and labour laws, regulations or standards through a sustained or recurring course of action or inaction in a manner affecting trade or investment between the Parties.
2. Without prejudice to each Party?s right to establish its own levels of environmental and labour protection, and to adopt or modify accordingly its relevant domestic laws, policies and practices, a Party shall not:
(a) weaken or reduce the level of environmental or labour protection provided by its domestic laws, regulations or standards with the sole intention to encourage investment from another Party or to seek or to enhance a competitive trade advantage of producers or service providers operating in its territory; or
(b) waive or otherwise derogate from, or offer to waive or otherwise derogate from, such domestic laws, regulations or standards with the sole intention to encourage investment from another Party or to seek or to enhance a competitive trade advantage of producers or service providers operating in its territory.
Article 12.5. International Labour Standards and Agreements
1. The Parties strive to attain full and productive employment and decent work for all as a foundation for sustainable development.
2. The Parties recall the obligations deriving from membership of the ILO in respect of the fundamental principles and rights at work as reflected in the ILO Declaration on Fundamental Principles and Rights at Work of 1998, as amended in 2022. Each Party commits to respect, promote and realise the principles concerning the fundamental rights, namely:
(a) freedom of association and the effective recognition of the right to collective bargaining;
(b) the elimination of all forms of forced or compulsory labour;
(c) the effective abolition of child labour;
(d) the elimination of discrimination in respect of employment and occupation; and
(e) a safe and healthy working environment.
3. The Parties shall effectively implement the ILO Conventions which they have ratified, and make continued and sustained efforts towards ratifying the fundamental and other ILO Conventions that are classified as ?up-to-date? by the ILO, taking into account their domestic circumstances. (21)
4. The Parties recognise the importance of the strategic objectives of the ILO Decent Work Agenda, as reflected in the Declaration on Social Justice for a Fair Globalization of 2008, as amended in 2022.
5. The Parties shall:
(a) develop and enhance measures for social protection and decent working conditions for all, including with regard to social security, occupational safety and health, wages and earnings, working time and other conditions of work;
(b) promote social dialogue and tripartism; and
(c) build and maintain a well-functioning labour inspection system.
6. Each Party shall ensure that persons with a recognised interest under its law in a particular matter have appropriate access to administrative and judicial proceedings for the enforcement of the Party?s labour laws.
7. The violation of fundamental principles and rights at work shall not be invoked or otherwise used as a legitimate comparative advantage and that labour standards shall not be used for protectionist trade purposes.
Article 12.6. Multilateral Environmental Agreements and Environmental Principles
Each Party reaffirms its commitment to the effective implementation in its laws and practices of the multilateral environmental agreements to which it is a party, and to recognise and respect environmental principles reflected in the international instruments referred to in Article 12.1 (Context and Objectives).
Article 12.7. Promotion of Trade and Investment Favouring Sustainable Development
1. The Parties shall strive to facilitate and promote foreign investment, trade in and dissemination of goods and services beneficial to the environment, including environmental technologies, sustainable renewable energy, energy efficient and ecolabelled goods and services.
2. The Parties shall strive to facilitate and promote foreign investment, trade in and dissemination of goods and services that contribute to sustainable development, including goods and services that are the subject of schemes such as fair and ethical trade.
3. To this end, the Parties agree to exchange views and may consider, jointly or bilaterally, cooperation in this area.
4. The Parties shall encourage cooperation between enterprises in relation to goods, services and technologies that contribute to sustainable development and are beneficial to the environment.
Article 12.8. Women's Economic Empowerment and Trade
1. The Parties recognise that women's participation in international trade can contribute to advancing women's economic empowerment and economic independence and that enhancing their participation in national and international economies contribute to sustainable economic development.
2. The Parties reaffirm the commitments made in the Joint Declaration on Trade and Women?s Economic Empowerment at the WTO Ministerial Conference in Buenos Aires in December 2017.
3. The Parties reaffirm their commitment to implement in their laws, policies and practices the international agreements pertaining to equality of opportunity or non-discrimination to which they are a party, in particular their provisions related to eliminating discrimination against women in the economy and in the field of employment.
Article 12.9. Sustainable Forest Management and Associated Trade
1. The Parties recognise the importance of effective forest law and governance in order to ensure sustainable forest management and thereby contribute to the reduction of greenhouse gas emissions and biodiversity loss resulting from deforestation and degradation of natural forest and peat swamp forest.
2. With the aim of contributing to sustainable forest management, the Parties commit to promote trade in goods that derive from sustainably managed forests. To this end, the Parties undertake to, inter alia:
(a) promote the effective use of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) with regard to endangered timber species;
(b) promote the development and use of certification schemes for forest goods from sustainably managed forests;
(c) combat illegal logging by improving forest law enforcement and governance and by ensuring that only legally sourced timber is traded among the Parties; and
(d) cooperate on issues pertaining to sustainable forest management in the relevant multilateral fora in which they participate, such as the United Nations collaborative initiative on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD+).
Article 12.10. Trade and Climate Change
1. The Parties recognise the importance of pursuing the objectives and principles of the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement in order to address the urgent threat of climate change and the role of trade and investment in pursuing these objectives.
2. Pursuant to paragraph 1, each Party commits to:
(a) effectively implement its respective commitments under the UNFCCC and the Paris Agreement;
(b) promote the contribution of trade and investment to the transition to a low-carbon-economy and to climate-resilient development; and
(c) cooperate bilaterally, regionally and in international fora as appropriate on trade-related climate change matters.
Article 12.11. Trade and Biological Diversity
1. The Parties recognise the importance of pursuing the objectives of the Convention on Biological Diversity (CBD) and CITES, and the role of trade in achieving these objectives.
2. Pursuant to paragraph 1, the Parties commit to:
(a) adopt, maintain and implement laws, regulations and any other measures to fulfil its obligations under CITES;
(b) implement effective measures to combat transnational organised wildlife crime throughout the entire value chain;
(c) enhance efforts to assess, address and minimise, the risk and adverse impact of invasive alien species; and
(d) cooperate, where applicable, on matters concerning trade and the conservation and sustainable use of biological diversity, including initiatives to reduce demand for illegal wildlife goods.
Article 12.12. Sustainable Management of Vegetable Oils Sector and Associated Trade
1. The Parties recognise the need to take into account the economic, environmental and social opportunities and challenges associated with the production of vegetable oils and that trade between them can play an important role in promoting sustainable development, management and operation of the vegetable oils sector.
2. Accordingly, the Parties commit to:
(a) effectively implement and enforce applicable laws, policies and practices aiming at ensuring management and operation of the vegetable oils sector in an economically, environmentally and socially beneficial manner;
(b) support the dissemination and use of sustainability certifications schemes practices and guidelines for sustainably produced vegetable oils and work towards making them accessible to all producers including smallholders;
(c) cooperate on improving and strengthening national standards related to the vegetable oils sector where applicable;
(d) ensure transparency of domestic policies measures pertaining to the vegetable oils sector.
3. For the palm oil sector, the Parties commit to effectively implement and enforce applicable laws, policies and practices aiming at:
(a) protecting forests, peatlands, and related ecosystems, in particular those of high carbon stock and high conservation value, halting deforestation, peat drainage and fire clearing in land preparation, reducing soil degradation, air and water pollution; and
(b) respecting the rights of workers, including migrant workers, as well as the rights of indigenous peoples and local communities, which includes ensuring the participatory, informed, non-coercive consultation and negotiations between organisations, local communities, and indigenous people prior to developments on their customary lands.
4. The Parties shall ensure that palm oil and its derivatives traded between the Parties are produced in accordance with the sustainability commitments referred to in paragraph 3.
Article 12.13. Responsible Business Conduct
Each Party shall promote responsible business conduct, by encouraging relevant practices, such as responsible management of supply chains by businesses. In this regard, the Parties acknowledge the importance of internationally recognised principles and guidelines (22), that have been endorsed or are supported by that Party.
Article 12.14. Cooperation on Trade and Sustainable Development
1. The Parties may, subject to national priorities, circumstances and available resources, cooperate on trade and investment related labour and environmental issues of mutual interest referred to in this Chapter bilaterally as well as in the international fora in which they participate.
2. Each Party may, as appropriate, invite the participation of relevant stakeholders in identifying possible areas of cooperation.
Article 12.15. Implementation and General Principles
1. The Parties shall designate the administrative entities which shall serve as contact point(s) for the purpose of implementing this Chapter.
2. Each Party may request consultations at the technical level regarding any matter arising under this Chapter. The Parties shall make every attempt to arrive at a mutually satisfactory resolution of the matter.
3. If a Party considers that a problem persists after consultations in accordance with paragraph 2 have taken place, it may request consultations in the Joint Committee with a view to facilitating a resolution of the matter.
4. With regard to paragraphs 2 and 3, the Parties concerned may agree to seek advice from relevant international organisations or bodies.
5. The Parties may at any time agree to good offices, conciliation and mediation procedures. Such procedures may begin and be terminated at any time. Proceedings involving good offices, conciliation and mediation, shall be confidential and without prejudice to the rights of the Parties involved in any other procedures provided for in this Chapter. If the Parties involved so agree, good offices, conciliation and mediation procedures may continue while other proceedings referred to in Articles 12.16 (Consultations) and 12.17 (Panel of Experts) are in progress.
6. No Party shall have recourse to Chapter 15 (Dispute Settlement) of this Agreement for matters arising under this Chapter.
7. The Parties shall provide their stakeholders with the opportunity to share comments and make recommendations regarding the implementation of this Chapter.
Article 12.16. Consultations
1. A Party (the requesting Party) may request in writing consultations with another Party (the responding Party) regarding any matter arising under this Chapter. Such a request shall be submitted to the responding Party?s contact point referred to in Article 12.15 (Implementation and General Principles). The request shall set out the reasons for requesting consultations, including sufficient information to enable a full examination of the matter to identify the provisions of this Chapter considered to be applicable, to enable the responding Party to respond.
The requesting Party shall simultaneously provide a copy of the notification to the other Parties through the contact points referred to in Article 12.15 (Implementation and General Principles).
2. The responding Party shall reply to the request within 20 days from the date of receipt. If the parties making and receiving the request for consultation agree, the consultations may take place in the Joint Committee.
3. Whenever a Party, other than the consulting Parties, considers that it has substantial interest in the matter under consultation, such a Party may notify the consulting Parties no later than 14 days after the date of receipt of the copy of the request for consultations referred to in paragraph 2, of its desire to be joined in the consultations. The notifying Party shall simultaneously provide a copy of the notification to the other Parties. The notifying Party shall include in its notice an explanation of its substantial interest in the matter under consultation.
4. Consultations may be held in person or by any technological means available to the consulting Parties. Consultations shall be confidential and without prejudice to the rights of any Party in any other proceedings.
5. Consultations shall commence within 45 days from the date of receipt of the request for consultations.
6. The consulting Parties shall provide sufficient information to enable a full examination of whether the measure is inconsistent with this Chapter and treat as confidential any information designated as such by the Party providing the information.
7. The Parties involved in the consultations may agree to seek advice from experts or bodies they deem appropriate to assist them in the consultations.
8. The consulting Parties shall inform the other Parties of any mutually agreed resolution of the matter. Any mutually agreed resolution shall be made publicly available, unless the consulting Parties agree otherwise.
9. Consultations shall be deemed terminated no later than 150 days from the date of receipt of the request for consultations pursuant to paragraph 1 unless otherwise agreed by the consulting Parties.
Article 12.17. Panel of Experts
1. If the Parties concerned fail to reach a mutually satisfactory resolution of a matter arising under this Chapter through consultations in accordance with Article 12.16 (Consultations): the requesting Party may request the establishment of a panel of experts by means of a written request to the responding Party, if:
(a) the Party to which the request is made does not reply within 20 days in accordance with paragraph 2 of Article 12.16 (Consultations).
(b) the Party to which the request is made does not enter into consultations within 45 days from the date of receipt of the request for consultations in accordance with paragraph 5 of Article 12.16 (Consultations).
(c) the consultations referred to in Article 12.16 (Consultations) fail to settle a dispute within 150 days from the date of receipt of the request for consultations by the responding Party.
2. The request for the establishment of a panel of expert made pursuant to paragraph 1 shall identify the specific measure at issue and provide a brief summary of the legal and factual basis of the complaint sufficient to present the problem clearly. A copy of this request shall be communicated to the other Parties.
3. Unless the Parties concerned otherwise agree within 20 days from the receipt of the request for the establishment of the panel of experts, the terms of reference for the panel of experts shall be:
"To examine, in the light of the relevant provisions of this Chapter, the matter referred to in the request for the establishment of a panel of experts and issue a written report, to make findings of law and fact together with the reasons, as well as recommendations, if any, for the resolution of the matter."
4. The recommendations of the panel of experts cannot add to or diminish the rights and obligations of the Parties concerned provided in this Agreement.
5. The panel of experts shall consist of three members. The requesting Party shall appoint one panellist. Within 30 days of the date of the receipt of the request, the responding Party to which it was addressed shall appoint another panellist.
6. The Parties concerned shall designate by common agreement the third panellist who shall chair the panel of experts. If the Parties concerned have not reached the agreement on the third panellist within 30 days from the appointment of the second panellist, the two panellists appointed in accordance with paragraph 5 shall, within 15 days, designate the third panellist. If any panellist of the panel of experts has not been appointed within 75 days of receipt of the request referred to in paragraph 1, either party concerned may request the Secretary-General of the Permanent Court of Arbitration ( "PCA") to make the necessary appointments. In the event where the Secretary-General of the PCA is not able to appoint the third expert panellist or is a national or permanent resident of a party concerned, any party concerned may request the Deputy Secretary-General of the PCA or the next person in line who is not a national or permanent resident of a party concerned to make the necessary appointments.
7. The panellists shall have relevant expertise, including in international trade law and international labour law or environmental law. They shall be independent, serve in their individual capacities and shall not take instructions from any organisation or government with regard to issues related to the disagreement, or be affiliated with the government of a Party.
8. The date of establishment of the panel of experts shall be the date on which the chair is appointed.
9. The chair of the panel of experts shall not be a national, permanent resident nor have his or her usual place of residence in a party to the matter.
10. Any panellist may be challenged if circumstances give rise to justifiable doubts as to the panellist?s impartiality, or independence. If a Party concerned does not agree with the challenge or the challenged panellist does not withdraw, the party making the challenge may request the Secretary-General of the PCA to decide on the challenge. If the Secretary-General is unable to act or is a national or permanent resident of a concerned, the party making the challenge may request the Deputy Secretary-General of the PCA or the next person in line who is not a national or permanent resident of a Party concerned to make a decision on the challenge.
11. If a panellist resigns, is removed or becomes unable to act, a successor shall be appointed in the same manner as prescribed for the appointment of that original panellist. The work of the panel of experts shall be suspended pending appointment of the successor.
12. Where more than one Party requests the establishment of a panel of experts relating to the same matter or where the request involves more than one responding Party, and whenever feasible, a single panel of experts should be established to examine requests relating to the same matter.
13. A Party which is not involved in the matter shall be entitled, on delivery of a written notice to the Parties concerned, to make written submissions to the panel of experts, receive written submissions, including annexes, from the Parties concerned, attend hearings and make oral statements.
14. Unless the Parties concerned agree otherwise, the Panel of Experts shall adopt its rules of procedures within 30 days of its establishment.
15. The panel of experts shall examine the matter referred to it in the request for the establishment of a panel of experts in the light of the relevant provisions of this Chapter which the panel of experts shall interpret in accordance with customary rules of interpretation of public international law.
16. The hearings of the panel of experts shall be confidential.
17. There shall be no ex parte communications with the panel of experts concerning matters under its consideration.
18. The panel of experts may hire up to three assistants, unless otherwise required by the panel of experts or agreed by the Parties concerned.
19. All information or documents submitted by a Party concerned to the panel of experts, shall, at the same time as it is submitted to the panel of experts, be transmitted by that party to the other party concerned.
20. The Parties and the panel of experts shall treat as confidential information and documents submitted to the panel of experts which has been designated as confidential by the submitting Party. Any Party may make public statements as to its own position or submissions regarding the matter.
21. The panel of experts may seek information or advice from relevant international organisations or bodies. Any information obtained shall be submitted to the Parties concerned for their comments.
22. The deliberations of the panel of experts shall be kept confidential. The panel of experts shall take its decisions by consensus. In the event where the panel of experts is unable to reach a consensus, it may take its decisions by majority vote. Any member may furnish separate opinions on matters not unanimously agreed. The panel of experts shall not disclose which members are associated with majority or minority opinions. The reports of the panel of experts shall be drafted without the presence of the Parties concerned.
23. The panel of experts shall submit an initial report containing its findings and recommendations to the Parties concerned within 90 days from the date of establishment of the panel of experts. A Party concerned may submit written comments to the panel of experts on its initial report within 14 days from the date of receipt of the report. After considering any such written comments, the panel of experts may modify the initial report and make any further examination it considers appropriate. The panel of experts shall present to the Parties concerned a final report within 30 days from the date of receipt of the initial report. The final report shall be made public.
24. The Parties concerned shall discuss appropriate measures and come to a mutually acceptable solution to implement the recommendation of the panel of experts contained in the Final Report.
Such measures shall be communicated to the other Parties within three months from the date of issuance of the final report and shall be monitored by the Joint Committee.
25. The recommendations in the final report by the panel of experts do not prejudice the rights of the Party concerned in implementing the appropriate measures to remedy the matter.
26. Any time period for the purposes of this Article may be modified by mutual agreement of the Parties concerned.
27. When a panel of experts considers that it cannot comply with a timeframe imposed on it for the purposes of this Article, it shall inform the Parties concerned in writing and provide an estimate of the additional time required. Any additional time should not exceed 30 days.
28. The Parties concerned may agree that a panel of experts suspends its work at any time for a period not exceeding 12 months from the date of such agreement. In the event of such a suspension, the timeframes regarding the work of the panel of experts shall be extended by the amount of time that the work was suspended. If the work of a panel of experts has been suspended for more than 12 months, the authority for the establishment of the panel of experts shall lapse unless the Parties concerned agree otherwise. This shall not prejudice the rights of the requesting Party to request at a later stage, the establishment of a panel of experts on the same matter.
29. The requesting Party may withdraw its request for the establishment of a panel of experts at any time before the initial report has been issued. Such withdrawal is without prejudice to its right to introduce a new request for the establishment of a panel of experts regarding the same issue at a later point in time, no earlier than 12 months from the date of withdrawal.
30. The Parties concerned may agree to terminate the proceedings of the panel of experts by jointly so notifying the chair of the panel of experts at any time before the issuance of the final report to the Parties concerned.
Article 12.18. Review
The Parties shall periodically review, in the Joint Committee, progress achieved in pursuing the objectives set out in this Chapter, and consider relevant international developments to identify areas where further action could promote these objectives.
Chapter 13. COOPERATION AND CAPACITY BUILDING
Article 13.1. Objectives and Principles
1. This Chapter sets out a framework to facilitate and coordinate cooperation and capacity building relevant to this Agreement for the benefit of the Parties in accordance with their laws, regulations and policies.
2. The Parties declare their readiness to foster trade and economic cooperation in order to facilitate the implementation of the overall objectives of this Agreement, in particular to enhance trade and investment opportunities arising from this Agreement and to contribute to sustainable development.
3. The Parties also recognise that the involvement of the private sector, including SMEs, plays an important role in enhancing the trade and investment opportunities arising from this Agreement.
Article 13.2. Scope
1. Cooperation may cover any fields jointly identified by the Parties that may serve to enhance the Parties' and their economic operators' capacities to benefit from increased international trade and investment opportunities arising from this Agreement.
2. Cooperation may include trade and investment related aspects of activities such as:
(a) promotion and facilitation of exports of goods and services to the other Parties, and promotion of market opportunities;
(b) activities to facilitate the participation of SMEs in international trade and investment;
(c) customs and origin matters, including vocational training in the customs field;
(d) technical regulations and sanitary and phytosanitary measures, including standardisation and certification;
(e) regulatory assistance in areas such as intellectual property rights and public procurement;
(f) investment, trade and industry related aspects of sustainable development including promotion of a resource efficient, circular and green economy and labour and employment issues;
(g) sustainable agriculture and food systems;
(h) engineering, science, technology and innovation;
(i) green mobility and transport;