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Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v. Nicaragua) - judgment

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On November 18, 2010, Costa Rica filed an action against Nicaragua in the International Court of Justice (ICJ), alleging an “incursion into, occupation of and use by Nicaragua’s army of Costa Rican territory as well as [alleged] breaches of Nicaragua’s obligations towards Costa Rica” under a number of international treaties and conventions.  As part of this proceeding, Costa Rica sought compensation for the loss of environmental goods and services the country sustained due to Nicaragua’s excavation of channels on its territory. Among the services for which Costa Rica sought compensation was the impaired ability of the excavated area to provide “gas regulation and air quality services, such as carbon sequestration.” On February 2, 2018, the ICJ ruled how much Nicaragua must compensate Costa Rica for the loss of environmental services. This followed a ruling on the merits from December 16, 2015 that established that Nicaragua’s activities were unlawful and violated Costa Rica's territorial sovereignty and navigational rights, as well as the Court's Order of 8 March 2011, and found that Costa Rica should be compensated for these unlawful activities.

Costa Rica argued that Nicaragua had, on two separate incidents, occupied the territory of Costa Rica in connection with the construction of a canal across Costa Rican territory from the San Juan River to Laguna los Portillos (or “Harbor Head Lagoon”) and associated acts of dredging on the San Juan River. Nicaragua removed nearly 300 trees and cleared 6.19 hectares of vegetation in excavating the Costa Rican channels.  The Costa Rican government sought compensation for the impaired ability of the excavated area to provide environmental goods and services including “gas regulation and air quality services, such as carbon sequestration.”  In ruling for Costa Rica, the ICJ reasoned that Nicaragua’s activities significantly undermined the ability of the two areas to provide environmental goods and services.  Because this loss of environmental services was a direct result of Nicaragua’s actions, the ICJ ruled that Nicaragua must compensate Costa Rica US$120,000 for the impairment or loss of the environmental goods and services of the impacted area in the period prior to recovery. Furthermore, the ICJ did “not consider that the impairment or loss” of carbon sequestration services could be valued as a one- time loss. This was the first case wherein in ICJ adjudicated a claim for compensation for environmental damage.


Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v. Nicaragua)

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Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v. Nicaragua) - judgment

Policy instrument

Risk

Fossil fuel

Economic sector

Adaptation/resilience

Finance