Application of the Federal Water Pollution Control Act to the Former Panama Canal Zone

Application of the Federal Water Pollution Control Act to

the Former Panama Canal Zone

T h e Panam a C anal T reaty and its im plem enting legislation m ake U.S. law s based on

territo rial jurisd ictio n , including the Federal W ater Pollution C ontrol A ct, inapplicable

to the form er P anam a Canal Z o n e. B oth the T re a ty negotiators and C ongress expected

environm ental problem s in th e form er C anal Z one to be dealt w ith jo intly by the

U nited States and Panama th ro u g h th e Joint Com m ission on the E nvironm ent.

March 17, 1981

M EM ORAN DUM O P IN IO N FO R T H E A SSISTA N T LEG A L

A D V IS E R FO R IN TER -A M ER IC A N A FFA IRS, D E PA R T M E N T

O F STA TE

This responds to your request for our opinion whether the Federal

W ater Pollution Control A ct (FW PCA), 33 U.S.C. §311 of §1321,

applies to the former Panama Canal Zone. T he several agencies that

have analyzed this question have reached contrary conclusions. We

have reviewed the memoranda prepared by these agencies and inde­

pendently reviewed the text of the Panama Canal Treaties 1 and related

documents and legislation. F or reasons set forth below, we conclude

that the FW PC A does not apply to any portion of the former Canal

Zone.

In the FW PC A , Congress declares that there should be no discharge

of oil o r hazardous substances into or upon “the navigable waters of the

United States or adjoining shorelines o r the waters o f the contiguous

zone,” and imposes a civil penalty on any owner or operator of a

vessel, on-shore facility, o r off-shore facility from which oil or a haz­

ardous substance is discharged. 33 U.S.C. § 1321(b). The President is

authorized to remove discharged oil or hazardous substances and the

party responsible for the discharge is liable for removal costs. 33 U.S.C.

§ 1321(c), (f), (g). The Adm inistrator o f the Environmental Protection

Agency, the Secretary o f the Departm ent in which the Coast Guard is

operating, the Council on Environmental Quality, and other officials

•T w o treaties between the Republic of Panama and the United States were signed on September 7,

1977: the Panama Canal Treaty 33 U.S.T. ____, T.I.A.S. No. 10030, and the Treaty Concerning the

Perm anent Neutrality and Operation of the Panama Canal. 33 U.S.T. ____, T.I.A.S. No. 10029.

Hereinafter, references to the “T reaty ” refer to the Panama Canal Treaty, unless otherwise specified.

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are given responsibilities either directly by the A ct or by delegation

from the President. Id.; Executive Order No. 11,735 38 Fed. Reg. 21243

(1973). The A ct is applicable only to navigable waters of the United

States, adjoining shorelines, and waters of the contiguous zone.2 The

Act defines “United States” to include the Canal Zone; thus, prior to

the Canal Zone’s change in status, the A ct clearly was applicable. The

question here is whether the Panama Canal Treaty and implementing

legislation render the A ct inapplicable to the former Canal Zone.

We first examine the Treaty itself. Under the original 1903 treaty

with Panama, the United States obtained the right to exercise plenary

administrative and legislative jurisdiction over the Canal Zone as if the

United States were sovereign over the Zone. 33 Stat. 2234, T.S. No.

431, (1903). The recent Treaty substantially alters this relationship.

Under the Treaty, the Canal Zone itself loses its legal identification and

Panama resumes administrative and legislative jurisdiction over the

territory lying within the former Zone. The Treaty provides in Article

XI, that “[t]he Republic of Panama shall reassume plenary jurisdiction

over the former Canal Zone upon entry into force o f this Treaty and in

accordance with its terms.” As territorial sovereign, Panama grants to

the United States for the duration of the Treaty 3 “the rights necessary

to regulate the transit of ships through the Panama Canal, and to

manage, operate, maintain, improve, protect and defend the Canal.”

Thus, Panama grants to the United States the right to use, for these

purposes, the various installations and areas including the Canal and its

waters.

The Treaty deals less clearly with the question what law shall govern

these areas. Paragraph 1 of Article IX o f the Treaty specifies that the

laws of the Republic of Panama shall apply in the areas made available

for use of the United States, although paragraph 8 prohibits Panama

from adopting any law or taking any action that would interfere with

rights granted under the Treaty to the United States. Paragraph 7 of

Article XI provides that “[t]he laws, regulations, and administrative

authority of the United States . . . shall, to the extent not inconsistent

with this Treaty, and related agreements, continue in force for the

purpose of exercise by the United States of America of law enforce­

ment and judicial jurisdiction only during the transition period.”

Treaties are to be construed “with the highest good faith” with an

eye to the “manifest meaning of the whole treaty.” Johnson v. Browne,

205 U.S. 309, 321-22 (1907). Construing these Treaty provisions consist­

ently and in keeping with the purpose of the Treaty, we conclude that

2 The “contiguous zone” is defined as “the entire zone established or to be established by the United

States under article 24 o f the Convention on the Territorial Sea and the Contiguous Zone.” 33 U.S.C.

§ 1321(a)(9)

3The Treaty terminates on December 31, 1999. Art II, U 2

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the laws o f the United States regarding water pollution are not applica­

ble in the form er zone.4

In interpreting a treaty and other international agreements, the con­

struction placed upon it by the Departm ent charged with supervision of

our foreign relations should be given much weight. Kolovrat v. Oregon,

366 U.S. 187, 194 (1961); Factor v. Laubenheimer, 290 U.S. 276, 294—95

(1933); Sullivan v. Kidd, 254 U.S. 433, 442 (1921). Here, the State

D epartm ent consistently has taken the position that the FW PCA is

inconsistent with, and thus superseded by, the Panama Canal Treaty. In

connection with the hearings on ratification o f the Treaty, the Secre­

tary of State specifically listed the FW PCA, 33 U.S.C. § 1321(a)(5), as a

statute that would be superseded by the T reaty.5 In 1980, the State

D epartm ent Legal Adviser’s Office opined that “any laws of the United

States based on territorial jurisdiction (such as the FW PCA) have

become, by virtue of the Treaty, inapplicable in Panama.” 6

This interpretation of the Treaty is consistent with the Panama Canal

A ct of 1979 (Canal Act), 22 U.S.C. § 3601, legislation passed to imple­

ment the T reaty.7 The Canal A ct provides:

Subject to the provisions of subsection (c) of this section,

for the purposes o f applying the . . . laws of the United

States and regulations issued pursuant to such . . . laws

with respect to transactions, occurrences, or status on or

after October 1, 1979—

(1) “Canal Zone” shall be deemed to refer to the areas

and installations in the Republic of Panama made

available to the United States pursuant to the

Panama Canal Treaty o f 1977 and related agree­

ments; . . .

22 U.S.C. § 3602(b)(1). Subsection (c), referred to above, provides:

Any reference set forth in subsection (b) of this section

shall apply except as otherwise provided in this chapter

or unless (1) such reference is inconsistent with the provi­

sions o f this chapter, (2) in the context in which a term is

used such reference is clearly not intended, or (3) a term

refers to a time before October 1, 1979.

4 It is true that repeals by implication are not favored and that a treaty will not be regarded as

repealing an earlier statute by implication unless the tw o are absolutely incompatible and the statute

cannot be enforced without antagonizing the treaty. Johnson v. Browne, 20S U.S. 309, 321 (1907).

W here there is such a conflict, however, it is resolved in accordance with the same rule of priority

that governs the resolution of conflicts between statutes. The later in time prevails. Cook v United

States. 288 U.S. 102, 118-19(1933).

5 Panama Canal Treaties: Hearings on Executive N Before the Committee on Foreign Relations, 95th

Cong., 1st Sess. 80-82 (1977).

6 L etter from the A cting Assistant Legal Adviser for Inter-American Affairs to an attorney with the

Federal Maritime Commission (August IS, 1980).

7T he A ct was intended by Congress to implement, and to be fully consistent with, the Panama

Canal treaties. H.R. Rep. No. 94, 96th Cong., 1st Sess. (pt. I) 7-9 (1979).

82

22 U.S.C. § 3602(c). If subsection (b) were not qualified by subsection

(c), one could interpret subsection (b) to require that the term “Canal

.Zone” in the FW PCA be read to refer to areas and installations in

Panama made available to the United States pursuant to the Treaty and

related agreements. These areas include the land and water areas

encompassing a “continuous area generally following the course of the

Panama Canal and generally contiguous to it . . . 8 and thus the

FW PCA would apply to the navigable waters of the Canal. Subsection

(c), however, precludes application of this definition of “Canal Zone” if

such reference is inconsistent with the Canal Act or if such reference

clearly is not intended. Just as enforcement of the FW PCA in the

Canal area would be inconsistent with the Treaty, so would it be

inconsistent with the Canal Act. In our opinion, such a reference was

not intended and the subsection (c) exception must be invoked.

As does the Treaty, the Act contains provisions which indicate it was

not intended that the FW PCA would apply to the former Zone. The

Panama Canal Commission, for example, was created as an agency of

the Executive Branch to maintain and operate the Canal. Treaty, Art.

Ill, 1J3; 22 U.S.C. §3611. The Commission comprises both United

States nationals and Panamanian nationals, with the Panamanians as­

suming increasing management responsibilities throughout the treaty

period. The Annex to the Treaty specifically provides that “[i]t is

understood that the Panama Canal Commission . . . may perform func­

tions such as . . . protection of the environment by preventing and

controlling the spillage of oil and substances harmful to human or

animal life and of the ecological equilibrium in areas used in operation

of the Canal and the anchorages.” Treaty Annex, U 3n. The authors

thus contemplated that the Commission would be performing this func­

tion, not the Administrator of the Environmental Protection Agency or

other United States officials. To draw these United States officials into

the decisionmaking process by applying United States law could under­

cut the participation of Panamanian nationals and undermine the goal of

having Panamanian policymakers, managers, and employees in place

and fully prepared to assume the responsibilities that will devolve upon

Panama when the Treaty terminates. See H.R. Rep. No. 94, 96th Cong.,

1st Sess. (pt. IV) 13 (1979).

Another indication that both the treaty negotiators and Congress

expected environmental problems to be dealt with jointly by the United

States and Panama is the creation of a Joint Commission on the Envi­

ronment. Treaty, Art. VI, 1) 2; 22 U.S.C. § 3616. This Commission,

established with equal representation from the United States and

Panama, recommends to the two governments ways to avoid or to

8Treaty, Art. Ill, 2(a); Treaty, Agreement in Implementation of Article III (Sept. 7, 1977), 33

U.S.T ____, T.I A.S. No. 10031, Art. Ill, I and annex A, fl l(a)(i).

83

mitigate adverse environmental impacts. Article VI, H 1 of the Treaty

explains the underlying policy:

T he United States . . . [and] Panama commit themselves

to implement this Treaty in a manner consistent with the

protection of the natural environment o f the Republic of

Panama. T o this end, they shall consult and cooperate

with each other in all appropriate ways to ensure that

they shall give due regard to the protection and conserva­

tion of the environment.

In authorizing the establishment of the Joint Commission on the Envi­

ronment, the House Committee on Foreign Affairs stated its intent that

“the [Commission] be broad enough to deal with the entire range of

environmental issues which might arise anywhere within the Panama

Canal W atershed region.” H.R. Rep. No. 94, 96th Cong., 1st Sess. (pt.

I) 12-13 (1979).

Attem pting to apply the FW PCA to the Canal area after passage of

the Canal A ct also would raise jurisdictional problems. The FW PCA

provides that in cases under the A ct arising in the Canal Zone, actions

may be brought in the United States District Court for the District of

the Canal Zone. 33 U.S.C. § 1321(n). Yet under the Canal Act and the

Treaty, jurisdiction of the courts of the United States functioning in the

former Canal Zone is severely restricted and would not include juris­

diction over new suits arising out of the FW PCA. See Treaty, Art. XI,

n 5; 22 U.S.C. § 3841(a).9

Throughout the legislative history o f the Canal Act, there are refer­

ences to the fact that United States territorial jurisdiction over the

Panama Canal area has ceased. With respect to the redefinition of the

Canal Zone quoted above,10 the House Committee on Foreign Affairs

wrote:

Notwithstanding section 2(c)(1)(A) of the bill, as reported,

which establishes the general rule that laws of the United

States presently applicable in the Canal Zone will con­

tinue to apply to areas and installations made available to

the United States pursuant to the Panama Canal Treaty,

laws which are presently applied to the Canal Zone on

the basis of territorial jurisdiction of the United States

9W e note also that the Treaty Concerning Permanant Neutrality and Operation of ihe Panama

Canal contains a provision (hat as a pre-condition o f transit, vessels may be required to establish the

financial responsibility and guarantees for payment o f damages resulting from acts or omissions of such

vessels when passing through the Canal, "consistent with international practices and standards/'

T reaty Concerning Permanent Neutrality, supra. Art. Ill, 1(d) If the FW PCA applied to the Canal

area during the period o f management by the United States, the Treaty provision referred to above

would conflict with 33 US.C § 1321(p), which requires large vessels carrying oil or hazardous

substances to establish and maintain, under applicable federal regulations, evidence of financial respon­

sibility in set amounts.

1022 U S .C . §§ 3602(b), (c)

84

over the zone will continue to apply in these areas and

installations only for the purpose of exercising authority

vested in the United States by the Treaty and related

agreements. This limited application of the U.S. law is

necessitated by the termination of the U.S. territorial juris­

diction effected by the Treaty.

H.R. Rep. 94, 96th Cong., 1st Sess. (pt. I) 12 (1979). The House

Committee on Merchant Marine and Fisheries also emphasized that the

laws of the United States, insofar as they are applicable by virtue of

territorial jurisdiction of the United States in the Canal Zone prior to

the Treaty, continue in force only for the purposes of exercising the

authority vested in the United States by the Treaty. H.R. Rep. No. 98,

96th Cong., 1st Sess. (pt. I) 41 (1979). The specific phrase that referred

to territorial jurisdiction was dropped from the final version of the bill,

but there is no indication that Congress intended by this deletion to

assert territorial jurisdiction over the canal areas. Certainly such an

attempt would have provoked much debate.11

We note that at least one other agency, whose jurisdiction included

the Canal Zone pursuant to a statutory provision similar to the

FW PCA, has concluded that the law it administers no longer applies in

the former Zone. The Zone was eligible for assistance under the Disas­

ter Relief Act because § 102(4) of that Act, 42 U.S.C. § 5122(4), defines

“State” to include the Canal Zone. The Federal Emergency Manage­

ment Agency has determined, however, that the area formerly known

as the Canal Zone is no longer eligible for disaster assistance: “W ith the

ratification of the Panama Canal treaties this area became territory

within the Republic of Panama on October 1, 1979, and is, therefore,

excluded from assistance under the Disaster Relief Act of 1974.” 44

Fed. Reg. 66,062 (1979).12 The principle of harmony in statutory law

dictates that, wherever possible, statutes should be construed consist­

ently and harmoniously. Hyrup v. Kleppe, 406 F. Supp. 214, 217 (D.

Colo. 1976); Sutherland Statutory Construction § 53.01 (Sands ed., 1973

& Supp. 1980).

" T h e General Counsel’s office of the Federal Maritime Commission has asserted that the FW PCA

is not based solely on territorial jurisdiction and may be applied in areas that are not strictly part of

the United States' territorial jurisdiction Cited in support of this assertion is § 311(b)(1), 33 U.S.C.

§ 1321(b)(1), in which Congress declares that it is the policy of the United States that there should be

no discharges.

into or upon the navigable waters of the United States, adjoining shorelines, or into or

upon the waters o f the contiguous zone, or in connection with activities under the Outer

Continental Shelf Lands Act or the Deepwater Port Act or which may affect natural

resources belonging to, appertaining to, or under the exclusive management authority of

the United States . .

(Emphasis added, citations omitted.) The former Canal Zone fits into none of these categories,

however. Given the unique nature of the responsibilities o f the United States in operating the Canal

under the treaty terms, and the participation of Panamanian nationals both on the Panama Canal

Commission and the Joint Commission on the Environment, the waters of the Canal cannot accurately

be said to be under the exclusive management authority of the United States

12 The Panama Canal Act of 1979 authorizes the Panama Canal Commission to expend appropriated

funds to deal with emergencies. 22 U S.C. § 3753.

85

F or these reasons, we conclude that the FW PCA does not apply to

any part of the former Canal Zone.

L arry L . S im m s

Acting Assistant Attorney General

Office o f Legal Counsel

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