Chapter IV
Function of Panels: Art. 11 of the DSU


OUTLINE


I Introduction
II Application of Art. 11 as a General Standard of Review
III Review in “neither de novo nor total defence”
IV Allegation against Panels’ Standard of Review
V Exercise of Judicial Economy





I Introduction
The function of panels is expressly defined in Art. 11 of the DSU, which reads as follows:

“The function of panels is to assist the DSB in discharging its responsibilities under this Understanding and the covered agreements. Accordingly, a panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements, and make such other findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements. Panels should consult regularly with the parties to the dispute and give them adequate opportunity to develop a mutually satisfactory solution.”

This provision suggests that the function of panels is to make an objective assessment such as to assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements. However, how do panels fulfill their functions as provided in Art. 11 of the DSU? It is the issue that we will touch on in this chapter. In this chapter, the author explores on the standard of review issue under the WTO, i.e. “an objective assessment”; as well as on the exercised judicial economy principle developed in panel’s review.
With regard to the standard of review issue, the GATT/WTO dispute settlement procedures have increasingly confronted questions concerning the degree to which an international body, under the GATT/WTO, should “second guess” a decision of a national government agency concerning economic regulations that are allegedly inconsistent with an international rule. It seems clear that the international agreement doesn’t permit a national government’s determination always to prevail, otherwise the international rules could be easily evaded or rendered ineffective. But should the international body approach the issues involved without any deference to the national government? It has been argued in the GATT/WTO proceedings that panels should respect national government determinations, up to some point. That “point” is the crucial issue that has sometimes been labelled the “standard of review”.1
Of course, this issue is not unique to the GATT/WTO. Naturally, the standard-of-review issue is one that many legal systems face. “The standard-of-review question is faced at least implicitly whenever sovereign members of a treaty yield interpretive and dispute settlement powers to international panels and tribunals. Moreover, as national economies become increasingly interdependent, and as the need for international cooperation and coordination accordingly becomes greater, the standard-of-review question will become increasingly important.” 2 And “it can be seen that the standard-of-review question is a recurring and delicate one, and one that to some extent goes to the core of an international procedure that must (in a rule-based system) assess a national government’s actions against treaty or other international norms”. 3
However, for the immediate purpose, we want to focus below on the more particular question of the proper standard of review for a WTO panel when it undertakes to examine a national government’s actions or rulings that engage the question of consistency with the various WTO agreements and are subject to the DSU procedures.

II Application of Art. 11 as a General Standard of Review
Under the WTO jurisprudence, it’s demonstrated that Art. 11 of the DSU has been applied as a general standard of review. Art. 11 suggests that the function of panels is to make “an objective assessment” so as to assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements.
For example, in US-Shirts and Blouses (DS33), the Panel rules that, “although the DSU does not contain any specific reference to standards of review, we consider that Article 11 of the DSU which describes the parameters of the function of panels, is relevant here”. 4
And the application of Art. 11 as a general standard of review under the DSU is analyzed systematically in EC-Hormones (DS26/DS48) where the Appellate Body rules that: 5
“The first point that must be made in this connection, is that the SPS Agreement itself is silent on the matter of an appropriate standard of review for panels deciding upon SPS measures of a Member. Nor are there provisions in the DSU or any of the covered agreements (other than the Anti-Dumping Agreement) prescribing a particular standard of review. Only Article 17.6(i) of the Anti-Dumping Agreement has language on the standard of review to be employed by panels engaged in the ‘assessment of the facts of the matter’. We find no indication in the SPS Agreement of an intent on the part of the Members to adopt or incorporate into that Agreement the standard set out in Article 17.6(i) of the Anti-Dumping Agreement. Textually, Article 17.6(i) is specific to the Anti-Dumping Agreement.
[…]
We do not mean, however, to suggest that there is at present no standard of review applicable to the determination and assessment of the facts in proceedings under the SPS Agreement or under other covered agreements. In our view, Article 11 of the DSU bears directly on this matter and, in effect, articulates with great succinctness but with sufficient clarity the appropriate standard of review for panels in respect of both the ascertainment of facts and the legal characterization of such facts under the relevant agreements […]”
In sum, for all but one of the covered agreements, Art. 11 of the DSU sets forth the appropriate standard of review for panels. As stated on more than one occasion, Art. 11 of the DSU, and, in particular, its requirement that “a panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements”, sets forth the appropriate standard of review for panels examining the consistency or inconsistency of alleged measures under the WTO jurisprudence. And the only exception is the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, in which a specific provision, Art. 17.6, sets out a special standard of review for disputes arising under that Agreement（to be discussed in subsequent chapter）.6

III Review in “neither de novo nor total defence”
In EC-Hormones (DS26/DS48), in the view of the European Communities, “the principal alternative approaches to the problem of formulating the ‘proper standard of review’ so far as panels are concerned are two-fold. The first is designated as ‘de novo review’. This standard of review would allow a panel complete freedom to come to a different view than the competent authority of the Member whose act or determination is being reviewed. A panel would have to ‘verify whether the determination by the national authority was…correct (both factually and procedurally)’. The second is described as ‘deference’. Under a ‘deference’ standard, a panel, in the submission of the European Communities, should not seek to redo the investigation conducted by the national authority but instead examine whether the ‘procedure’ required by the relevant WTO rules had been followed”.7 In this respect, the Appellate Body rules that:8
“So far as fact-finding by panels is concerned, their activities are always constrained by the mandate of Article 11 of the DSU: the applicable standard is neither de novo review as such, nor ‘total deference’, but rather the ‘objective assessment of the facts’. Many panels have in the past refused to undertake de novo review, wisely, since under current practice and systems, they are in any case poorly suited to engage in such a review. On the other hand, ‘total deference to the findings of the national authorities’, it has been well said, ‘could not ensure an 'objective assessment' as foreseen by Article 11 of the DSU’.”
The ruling is confirmed on many other occasions. For example, the Panel on US-Underwear (DS24) finds that: 9
“In our opinion, a policy of total deference to the findings of the national authorities could not ensure an ‘objective assessment’ as foreseen by Article 11 of the DSU. This conclusion is supported, in our view, by previous panel reports that have dealt with this issue, and most notably in the panel report on the ‘Transformers’ case.
The panel in the ‘Transformers’ case was confronted with the argument of New Zealand that the determination of ‘material injury’ by the competent New Zealand investigating authority could not be scrutinized by the panel. The ‘Transformers’ panel responded to this argument as follows:
‘The Panel agreed that the responsibility to make a determination of material injury caused by dumped imports rested in the first place with the authorities of the importing contracting party concerned. However, the Panel could not share the view that such a determination could not be scrutinized if it were challenged by another contracting party. On the contrary, the Panel believed that if a contracting party affected by the determination could make a case that the importation could not in itself have the effect of causing material injury to the industry in question, that contracting party was entitled, under the relevant GATT provisions and in particular Article XXIII, that its representations be given sympathetic consideration and that eventually, if no satisfactory adjustment was effected, it might refer the matter to the CONTRACTING PARTIES, as had been done by Finland in the present case. To conclude otherwise would give governments complete freedom and unrestricted discretion in deciding anti-dumping cases without any possibility to review the action taken in the GATT. This would lead to an unacceptable situation under the aspect of law and order in international trade relations as governed by the GATT’.”
In short, for the panel to adopt a policy of total deference to the findings of the national authorities could not ensure an “objective assessment” as foreseen by Art. 11 of the DSU. This conclusion is supported, in our view, by previous panel reports that have dealt with this issue. However, panels do not see their review as a substitute for the proceedings conducted by national investigating authorities, either. For example, in Argentina-Footwear (DS121), the Panel doesn’t consider that they have the mandate to conduct a de novo review: 10
“This approach is consistent with the reports of panels reviewing national investigations… The panel on United States - Anti-dumping Duties on Import of Salmon from Norway concluded that it should not engage in a de novo review of the evidence examined by the national investigating authority.
The panel on United States - Underwear followed this approach by noting, however, that it did not see its ‘review as a substitute for the proceedings conducted by national investigating authorities or by the Textiles Monitoring Body (TMB). Rather…the Panel's function should be to assess objectively the review conducted by the national investigating authority, in this case the CITA. We draw particular attention to the fact that a series of panel reports in the anti-dumping and subsidies/countervailing duties context have made it clear that it is not the role of panels to engage in a de novo review. In our view, the same is true for panels operating in the context of the ATC, since they would be called upon, as in the cases dealing with anti-dumping and/or subsidies/countervailing duties, to review the consistency of a determination by a national investigating authority imposing a restriction under the relevant provisions of the relevant WTO legal instruments, in this case the ATC. …’
Accordingly, the panel on United States - Underwear decided, ‘in accordance with Article 11 of the DSU, to make an objective assessment of the Statement issued by the US authorities … which, as the parties to the dispute agreed, constitutes the scope of the matter properly before the Panel without, however, engaging in a de novo review. … an objective assessment would entail an examination of whether the CITA had examined all relevant facts before it, whether adequate explanation had been provided of how the facts as a whole supported the determination made, and, consequently, whether the determination made was consistent with the international obligations of the United States’.
The panel on United States - Shirts and Blouses also stated that ‘[t]his is not to say that the Panel interprets the ATC as imposing on the importing Member any specific method either for collecting data or for considering and weighing all the relevant economic factors upon which the importing Member will decide whether there is need for a safeguard restraint. The relative importance of particular factors including those listed in Article 6.3 of the ATC is for each Member to assess in the light of the circumstances of each case’.
These past GATT and WTO panel reports make it clear that panels examining national investigations in the context of the application of anti-dumping and countervailing duties, as well as safeguards under the ATC, have refrained from engaging in a de novo review of the evidence examined by the national authority.”
However, as emphasized by the Appellate Body, although panels are not entitled to conduct a de novo review of the evidence, nor to substitute their own conclusions for those of the competent authorities, this does not mean that panels must simply accept the conclusions of the competent authorities. In this respect, the phrase “de novo review” should not be used loosely. If a panel concludes that the competent authorities, in a particular case, have not provided a reasoned or adequate explanation for their determination, that panel has not, thereby, engaged in a de novo review. Nor has that panel substituted its own conclusions for those of the competent authorities. Rather, the panel has, consistent with its obligations under the DSU, simply reached a conclusion that the determination made by the competent authorities is inconsistent with the specific requirements of the covered Agreement. 11
海南省人大常委会


海南省人民代表大会常务委员会关于加强重点景区、沿海重点区域规划管理的决定
（2006年3月30日海南省第三届人民代表大会常务委员会第二十二次会议通过）

为了加强重点景区、沿海重点区域的规划管理，根据有关法律法规，结合本省实际，特作如下决定：
　　一、本决定所称重点景区，是指经国家或者省人民政府批准的风景名胜区、旅游度假区，以及具有较高游览、观赏、科研价值和旅游开发价值的地域、海域。所称沿海重点区域，是指经国家或者省人民政府批准的沿海岸设置的各类开发区、工业区、港区，以及具有较大开发价值的沿海区域。
　　二、重点景区、沿海重点区域实行名录管理制度。省城乡规划行政主管部门应当根据全省经济、社会和环境协调发展的需要，会同有关部门和市、县、自治县人民政府分批拟定需要加强管理的重点景区、沿海重点区域的名录，报省人民政府批准并予以公布。重点景区、沿海重点区域应当确定范围和界线，并标明区界。
　　三、重点景区、沿海重点区域范围内，面临海岸的建筑物规划管理应当遵循低建筑容积率、低建筑密度的原则，严格控制高层建筑。
　　四、重点景区、沿海重点区域规划的编制和审批，按照下列规定执行：
　　（一）重点景区、沿海重点区域的总体规划由市、县、自治县人民政府组织编制。跨市、县、自治县行政区域的重点景区、沿海重点区域的总体规划由省城乡规划行政主管部门会同有关市、县、自治县人民政府组织编制。城市规划区范围内的重点景区、沿海重点区域的总体规划，应当符合城市总体规划。城市规划区范围外的重点景区、沿海重点区域的总体规划，应当与城市总体规划相协调。重点景区、沿海重点区域的总体规划应当与城乡总体规划、土地利用总体规划、海洋功能区划、旅游总体规划等相衔接。
　　（二）重点景区、沿海重点区域的总体规划由省城乡规划行政主管部门会同有关部门和市、县、自治县人民政府组织专家评审，报省人民政府审批。法律、行政法规另有规定的，依照其规定办理。
　　（三）重点景区、沿海重点区域的控制性详细规划由市、县、自治县人民政府城乡规划行政主管部门在总体规划的基础上组织编制，经市、县、自治县人民政府审查同意后，报省城乡规划行政主管部门审批。
　　（四）重点景区、沿海重点区域的修建性详细规划，由市、县、自治县人民政府城乡规划行政主管部门根据控制性详细规划的实施需要组织编制，其中省级重点工程、省人民政府指定的其他大型工程和标志性建筑等建设项目修建性详细规划，经市、县、自治县人民政府审查同意后，报省城乡规划行政主管部门审批；其他建设项目修建性详细规划，报市、县、自治县人民政府审批。
　　（五）对重点景区、沿海重点区域的总体规划、控制性详细规划和修建性详细规划进行修订或者调整的，应当报原批准机关审批。
　　五、为了保护重点景区、沿海重点区域的生态环境和风景资源，防治台风、海啸、暴潮、海岸塌陷、海水倒灌等自然灾害，自平均大潮高潮线起向陆地延伸最少100米至200米的范围内，不得新建、扩建、改建建筑物；具体界线由省人民政府确定；因重大建设项目需要新建、扩建、改建建筑物的，应当报省人民政府审批。
　　六、重点景区、沿海重点区域范围内，严格限制开挖 山体、填海等改变地形地貌和海域自然属性的活动；因重大建设项目需要的，应当进行环境影响评价，并报省人民政府审批。
　　七、出让重点景区、沿海重点区域内建设用地的，应当先由市、县、自治县人民政府城乡规划行政主管部门依据经批准的控制性详细规划提供建设用地的规划设计条件；未取得规划设计条件的建设用地，不得出让。规划设计条件应当作为国有土地使用权出让合同的组成部分。
　　八、重点景区、沿海重点区域内的省级重点工程、省人民政府指定的其他大型工程和标志性建筑等建设项目的选址申请、建设用地规划设计方案、建设工程规划设计方案，应当由市、县、自治县人民政府城乡规划行政主管部门提出初审意见，经省城乡规划行政主管部门审查同意后，按照规定权限核发选址意见书、建设用地规划许可证、建设工程规划许可证。其他建设项目由市、县、自治县人民政府城乡规划行政主管部门直接核发有关规划许可证书。
　　九、在重点景区、沿海重点区域内建设广告牌、商业招牌、报刊零售亭、室外雕塑等建筑物、构筑物，应当纳入规划统一管理，按规定的程序办理规划报建手续。
　　十、省城乡规划行政主管部门应当加强重点景区、沿海重点区域规划实施情况的监督检查。市、县、自治县城乡规划行政主管部门应当在每年第一季度将上年度重点景区、沿海重点区域的规划执行情况向省城乡规划行政主管部门报告。
　　十一、重点景区、沿海重点区域规划编制经费应当纳入省、市、县级财政预算。
　　十二、对在重点景区、沿海重点区域内违法建设的，依照下列规定予以处罚：
　　（一）未取得建设用地规划许可证或者擅自改变建设用地规划许可证规定的内容而取得建设用地批准文件、占用土地的，批准文件无效，占用的土地由县级以上人民政府责令退回。
　　（二）未取得建设工程规划许可证或者违反建设工程规划许可证的规定进行建设的，由县级以上城乡规划行政主管部门责令停止建设，限期改正，并处违法建筑工程造价20%以上50%以下的罚款；严重影响规划的，由县级以上城乡规划行政主管部门限期拆除或者没收违法建筑物、构筑物或者其他设施。
　　（三）对使用期届满未自行拆除的临时建筑或者建设基地内的临时设施，由县级以上城乡规划行政主管部门责令限期拆除，并从逾期之日起处建筑面积每日每平方米10元以上50元以下的罚款。
　　（四）违反本决定第五条规定进行建设的，由县级以上城乡规划行政主管部门责令停止建设，限期拆除违法建筑物，并处违法建筑工程造价20%以上50%以下的罚款。
　　（五）违反本决定第六条规定进行建设的，由有关部门依照国家和本省的有关规定进行处罚。
　　十三、当事人对行政处罚决定不服的，可以依法申请复议或者提起诉讼；逾期不申请复议也不起诉，又不履行处罚决定的，由作出处罚决定的机关依法申请人民法院强制执行。
　　十四、省城乡规划行政主管部门，市、县、自治县人民政府及其部门违反本决定的，由其上一级行政机关责令限期改正，对其主要负责人和直接责任人给予行政处分，并依照《海南省行政首长问责暂行规定》予以问责。
　　十五、本省行政区域内的任何单位和个人均应当遵守本决定，服从重点景区、沿海重点区域的规划管理。
　　十六、本决定自2006年6月1日起施行。