12 May 2020

Does China Really Owe the World Trillions of Dollars?

By Henning Lahmann 

In times of uncertainty and anxiety, it’s always nice for some people to have someone to blame. In times of COVID-19, the culprit seems abundantly clear: the People’s Republic of China. Ever since the virus started spreading across the globe, an increasing number of voices have argued that the country where the pandemic originated should be held legally accountable, including the payment of all damages resulting from the outbreak, amounting to sums “in the trillions” of dollars. Two weeks ago, accompanied by a bizarre open letter to the government in Beijing—written by the editor—Germany’s largest tabloid, Bild, presented China with its “Corona Bill” (quite literally a bill, including more than 700 million euros for lost revenues sustained by professional football clubs), after having been reassured by U.S. Secretary of State Mike Pompeo that “there will be a time when the people responsible will be held accountable.” The move caused quite a stir. In recent days, the Trump administration has intensified pressure on Beijing to pay “very substantial” compensation, with some officials pushing U.S. intelligence agencies to look for evidence to support the unsubstantiated theory that the virus originated in a Chinese lab. The case for China’s duty to make reparation has been made a few times over the past two months already, with one author even advocating the possible employment of countermeasures should the country be unwilling to pay.

The following post does not intend to repeat all of these various arguments or answer all remaining questions. Rather, I attempt to shed light on a few important points that—so far—have not received enough attention, in particular against the background of the 2007 International Court of Justice (ICJ) decision in Case Concerning Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro).


China’s Violation of International Law and the Duty to Make Reparation

As explained by a number of scholars, states have several duties under international law in relation to the outbreak of diseases. Most importantly, they have general obligations to prevent the spread of epidemics across borders into other countries, stemming from the customary no-harm principle, and they also have obligations under the World Health Organization (WHO) 2005 International Health Regulations (IHR), an international treaty binding 196 states including China. Pursuant to Article 6 IHR, each state party “shall notify WHO … within 24 hours of assessment of public health information, of all events which may constitute a public health emergency of international concern within its territory.” Article 7 provides that a state must share all information regarding an “unexpected or unusual public health event” with the international organization. Evidently, the Chinese authorities were still hesitating to call up the WHO when they were already well aware of the impending health crisis.

As for the obligation not to harm the rights and interests of other states, the relevant duty to prevent the transboundary spread of contagious diseases originating on its own territory is an obligation of conduct, not of result (Bosnian Genocide, 430). A state does not have to be successful in its effort to halt or mitigate an outbreak but merely has to have made its best efforts to reduce the risk of transboundary harm, from the moment it gained knowledge of the risk. The applicable standard is that of due diligence. Russell Miller and William Starshak hold that China violated the no-harm principle by not establishing sufficient standards concerning its health and food regulations, allowing for potentially hazardous sanitary conditions at the country’s wet markets. Romel Regalado Bagares argues that once the authorities in Wuhan had acquired information that a novel coronavirus had started transmitting from human to human and censored medical personnel in order to suppress disclosure, they acted in breach of the no-harm principle. Whether the scope of the duty to prevent the spread of a disease is extensive and tangible enough to include the prescription of specific regulations for markets may be debatable; that China violated its obligations as the outbreak became undeniable seems evident. Once the officials knew about the outbreak, they were obligated to act immediately and transparently in order to attempt to prevent harm to other countries, most appropriately in close cooperation with the WHO. At best, this did not happen quickly enough.

According to the 2001 ILC Articles on State Responsibility and customary international law, a state that has committed an internationally wrongful act is obligated to make full reparation for the injury caused by the act—or omission (Article 31). In the 1927 Factory at Chorzów case, the Permanent Court of International Justice asserted that a state must “wipe out all the consequences of the illegal act and reestablish the situation which would, in all probability, have existed if that act had not been committed.” If such restitutio ad integrum is impossible, as in the case of an epidemic with thousands of casualties, the appropriate form of reparation is monetary compensation. The critical issue in this context is the question of the necessary causal nexus between the wrongful act or omission and the damage. This is particularly crucial in cases that concern a violation of the duty to prevent something from happening. Strictly speaking, there is no direct causal link at all between the wrongful omission and the harmful event. The negligent behavior of the Chinese authorities did not “cause” the virus to spread. It merely allowed it to happen. In such cases, all that can be established is “normative causality.”

The ICJ dealt with this specific question on the necessary causal nexus in its two landmark decisions, Corfu Channel (1947) and Tehran Hostages (1980). In the former, the court was unable to establish who had laid the mines in the eponymous strait that had damaged the British vessels but ordered Albania to make full reparation as it had negligently failed to warn the U.K. in spite of sufficient control over the strait. The court came to the same conclusion in the Tehran Hostages case. While “the initiation of the attack on the United States Embassy on 4 November 1979… cannot be considered as in itself imputable to the Iranian State[,] … its own conduct was in conflict with its international obligations.” The Iranian government had “failed altogether to take any ‘appropriate steps’ to protect the premises, staff and archives of the United States” mission against attack by the militants, and to take any steps either to prevent this attack or to stop it before it reached its completion.” Consequently, the court decided “that the Government of the Islamic Republic of Iran is under an obligation to make reparation to the Government of the United States of America for the injury caused to the latter by the events of 4 November 1979 and what followed from these events[.]” Thus, once it has been proved that a state violated its duty to prevent a certain event from occurring, all damages are ascribable in their entirety, unless the cause is too far removed from the event—as clarified by the International Law Commission (ILC) in its commentary to the Articles on State Responsibility (Article 31). This principle is applicable not only when the actual damage is caused by a third actor—another state or a non-state group, as in the two cited cases—but also when the damage is caused by “some natural event such as a flood” that the responsible state had the duty to prevent from occurring (for example, by maintaining a dam; ILC Commentary, Article 31).

Mitigation of Damage

Whereas the ascription of damages for a violation of the duty to prevent seems straightforward, there has been far less focus on another important aspect that is clearly relevant to the coronavirus pandemic: the question of mitigation of damage and the contribution of all other states. In its 1997 ruling in the Gabčíkovo-Nagymaros Project case, the ICJ held that “an injured State which has failed to take the necessary measures to limit the damage sustained would not be entitled to claim compensation for that damage which could have been avoided.” In other words, “a failure to mitigate by the injured party may preclude recovery to that extent” (ILC Commentary, Article 31).

The significance of this principle for the current situation is obvious. In a 16-page paper issued to member states on April 18, the WHO criticized governments for being ill-prepared for the outbreak of epidemics, with abundant examples of failures to mitigate the further spread of the pandemic all around the globe. President Trump blocked travel from China on Jan. 31 and then did basically nothing until well into March. In the meantime, the virus proceeded as before and made its way to New York most likely via transatlantic travel routes. In the United Kingdom, for a period of 38 days, Boris Johnson’s administration failed to take necessary measures that health experts strongly recommended. As the situation worsens in Brazil and President Jair Bolsonaro continues to send conflicting messages from other parts of the government, it is hard to see why China should bear the sole responsibility for resulting damage that could have been avoided if the country’s leader believed in the power of basic scientific facts. And how should we assess a case like Sweden, which refrained from imposing strict social-distancing measures and now has a considerably higher death rate than the other Scandinavian countries? As already noted by David Fiedler, even trying to untangle this web of failures and shortcomings in order to apportion the damage will be a tricky task.

The Strange Ruling on Reparation in Bosnian Genocide

The 2007 judgment in the case concerning the Bosnian Genocide adds another layer of complexity to the already complicated debate over reparations. Holding that the Federal Republic of Yugoslavia (FRY) had violated its duty to prevent the genocide against the Muslim population of Srebrenica—which had been carried out by the Army of the Republika Srpska, a Serb non-state armed group operating in Bosnia—the ICJ’s argument was initially in line with its previous case law. The FRY had “the means of action by which it could seek to prevent genocide” yet had “manifestly refrained from employing them[.]” To “make this finding, the Court did not have to decide whether the acts of genocide committed at Srebrenica would have occurred anyway even if the Respondent had done as it should have and employed the means available to it.”

Turning to the subsequent question of reparation for the damage, however, the court then proceeded with a strange twist:

The Court cannot however leave it at that. Since it now has to rule on the claim for reparation, it must ascertain whether, and to what extent, the injury asserted by the Applicant is the consequence of wrongful conduct by the Respondent with the consequence that the Respondent should be required to make reparation for it, in accordance with the principle of customary international law stated above. In this context, the question just mentioned, whether the genocide at Srebrenica would have taken place even if the Respondent had attempted to prevent it by employing all means in its possession, becomes directly relevant, for the definition of the extent of the obligation of reparation borne by the Respondent as a result of its wrongful conduct. The question is whether there is a sufficiently direct and certain causal nexus between the wrongful act, the Respondent’s breach of the obligation to prevent genocide, and the injury suffered by the Applicant, consisting of all damage of any type, material or moral, caused by the acts of genocide. Such a nexus could be considered established only if the Court were able to conclude from the case as a whole and with a sufficient degree of certainty that the genocide at Srebrenica would in fact have been averted if the Respondent had acted in compliance with its legal obligations.

It comes as no surprise that the court found itself unable to do so, as this would have required establishing a purely counterfactual scenario—the nonoccurrence of the genocide—“with a sufficient degree of certainty.” As remarked by Marko Milanovic, “proving such a type of causality is impossible in practice.” As mentioned, absent an act—which could set another reference point in the causal chain—there is no causality as such; omissions may create situations that enable harmful events, but they do not cause them. This part of the judgment—which curiously resulted in the FRY’s legal responsibility for its failure to prevent the genocide without a duty to make reparation as it could not be established that the harmful event could have been averted anyway—stands in stark contrast to the ICJ’s past jurisprudence. In Tehran Hostages, the court did not consider it necessary to ask whether the attacks on the U.S. diplomatic mission would have taken place had the Iranian authorities complied with their due diligence obligations under the Vienna Convention on Diplomatic Relations. For this reason, a number of legal scholars harshly criticized the decision at the time for leaving “an impression of arbitrariness.”

To avoid the glaring contradiction, it might have been possible to simply distinguish the duty to prevent genocide from other duties to prevent under international law, but the court never attempted to do so. It is also noteworthy that although individual judges submitted no fewer than three dissenting and four separate opinions, as well as four additional declarations to the judgment, not one tackled the issue. Considering all this, Milanovic’s verdict still stands that it “would have been far, far better for the Court to provide no explanation at all as to why it was not awarding compensation in this concrete case than for it to give the particular justification that it did.”

Implications for China’s Duty to Make Reparation

Regarding the current issue of whether China has to make reparation for the coronavirus pandemic, the decision in Bosnian Genocide is potentially momentous. Given the facts about the virus available today, it will be extremely difficult to prove, “with a sufficient degree of certainty,” that the epidemic would not have spread beyond the Hubei province and China as a whole had Beijing acted faster and with more transparency. According to the Associated Press, Chinese officials were instructed on Jan. 13—after the first case outside of China had been reported—to “begin temperature checks at transportation hubs and to cut down on large public gatherings.” In hindsight, it seems obvious that the authorities in Wuhan acted too slowly and negligently at the onset of the epidemic in late December and early January. The larger problem, however, is that such measures to detect the spread of the virus appear insufficient in this particular case. If what we think we know about the pathogen at this point in time holds true—in particular regarding asymptomatic transmission—then the only airtight measure to prevent the virus from spreading beyond Wuhan in December or early January would had been a complete and immediate lockdown of the city, with no travel internationally or even to other parts of China, at the exact moment when the first, likely small cluster of infections within the city had become known. In this context, we should remind ourselves that even when China finally started rigorous lockdown and quarantine measures a few weeks later, as pointed out by Alonso Gurmendi, they were initially criticized in Western media as typically authoritarian and disproportionate—not as the silver bullet that came too late.

Even if these details might have been known at that point had China been more transparent and proactive in December, consider how long it took virtually every other country to decide on and implement lockdowns even a month or two later, when many more facts about the virus were already widely shared and accepted within the global scientific community. The first confirmed person to contract COVID-19 in the United States flew to Seattle from Wuhan on Jan. 15. That case was confirmed by the Centers for Disease Control and Prevention six days later, yet the city did not go into lockdown until March. By early March, Washington state reported a mere 18 cases, yet today researchers estimate that at that date between 500 and 600 people had likely already been infected there, as reported by evolutionary biologist Katherine S. Xue.

Given the importance of Wuhan for global supply chains and China’s thorough integration into the architecture of global capitalism, how can we know for certain asymptomatic businesspeople carrying the virus from the city had traveled to the U.S. and other countries in the weeks before that, spreading the virus without anyone noticing? If what we believe about the infectiousness of the coronavirus is correct, then it would have been extremely difficult for any administration to contain the virus in the earliest stages of the pandemic. This does not necessarily imply that it would not have been possible at all. But what is important is that this factual assumption operates independently of the question of whether China violated its international obligation to prevent the outbreak. If the ICJ is taken at its word and a proven causal nexus between failure to prevent and the outbreak itself is a requirement for the responsible state’s duty to make reparation, then this will be a tough case to make. The same goes for the second main argument for China’s culpability, the failure to regulate sanitary conditions at wet markets. Even if we are willing to ignore the thinly veiled racist tropes about “their backward culture,” I would argue that it will be just as hard to show “with a sufficient degree of certainty” that this would have prevented the pandemic.

Conclusion

I am not suggesting that China did not act recklessly in the early days of the COVID-19 outbreak in Wuhan, making consequential mistakes that the leaders in Beijing will need to answer for eventually and assume responsibility for under international law, at least for their failure to adhere to the reporting obligations under the IHR. It is clear that the Chinese Communist Party’s actions contributed to a faster spread of the virus, and these failures stem from the serious structural deficiencies of an authoritarian regime that—at least initially—was more concerned about its global reputation and the country’s economy than the health of its citizens and everyone else on this planet. But subsequently, so did the authorities in a significant number of other countries—authorities that already had more, and more reliable, information about the virus.

It will take time for all relevant evidence to surface in order to produce a more complete picture of the early days of the virus, including where it originated and when and how it first started spreading between humans. In light of the Bosnian Genocide decision, however, the amount of evidence and its conclusiveness will probably be the essential piece in answering the question of reparation. The judgment may be an outlier at odds with past practice of courts and states, yet should it come to pass that the People’s Republic is held responsible before an international forum, its baffling line of argumentation will surely resurface in China’s defense.

For the time being, there is ample reason to put blame on the government in Beijing; there is not, it sadly seems necessary to add, blame to be assigned to the Chinese people and their culture, let alone any person with an ostensibly Asian background you encounter on the street. There is little doubt that China violated its international obligation to prevent the disaster. The idea that once all of this is over, China will simply have to pay for “all of this” may be a comforting thought for German tabloids, but it likely will not be that simple. Legal issues aside, whether it would be wise to demand China to foot the whole bill is another question worth asking. First, the timing seems off. As Amy Davidson Sorkin succinctly pointed out, the struggle to control the pandemic has to be a joint project. Whatever else has happened, we cannot afford to proceed without China’s continuing will to cooperate in order to mitigate the consequences of COVID-19. Second, history tells us that massive reparations claims that are perceived as unjust by the debtor’s population—with or without good reason—have a tendency to turn into excellent propagandistic tools ready to be exploited for the worst totalitarian impulses.

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