The Non-Trade Agreements Before the EU Courts: The Emergence of Judicial Avoidance Techniques in Challenges to EU Action

The Non-Trade Agreements Before the EU Courts: The Emergence of Judicial Avoidance Techniques in Challenges to EU Action

1. Introduction

This chapter assesses the case law of the EU Courts in the context of essentially challenges to domestic and EU level action involving those Agreements that do not fall into the category of the preceding two chapters. The catch-all category of ‘non-trade Agreements’ is thus potentially large given the extent of the EU’s treaty-making practice. In actual practice it has given rise to a surprisingly low number of cases before the EU Courts and, indeed, much of the case law which has arisen is of very recent vintage. That there is limited case law from the EU Courts, in what is an increasingly expansive category of treaty-making, is itself a significant finding given that the established case law would arguably have provided litigants with every reason to invoke these EU Agreements where their interests were at stake. Nevertheless, despite the paucity of rulings, there is a great deal to be gleaned from a number of the cases that have arisen and the recent growth in rulings is undoubtedly an indicator of things to come. Most significantly of all, the recent Intertanko ruling suggests a fundamental reassessment in approach to a core plank of the EU’s external relations constitution that results in a considerably less generous gateway for the use of EU Agreements as review criteria than had previously been thought possible.

This chapter is divided into two main sections assessing the two main fashions in which the case law has arisen.

2. Challenges to Domestic Action

Despite the broad treaty-making ambit of the EU, the EU Courts have only had to deal with challenges to action at the Member State level on a handful of occasions.

2.1 Preliminary rulings

The preceding chapters have illustrated that the EU Courts have been called upon to deal with over 150 preliminary rulings in which litigants have sought to challenge domestic action for its alleged incompatibility with EU trade-related Agreements. Strikingly, it was not until 2004 that the ECJ was faced with an alleged incompatibility of national action with a non-trade Agreement.1

2.1.1 The EDF ruling: the Barcelona Convention and the Mediterranean Sea Protocol

The 2004 EDF ruling concerned a judicial challenge brought by an association of fishermen against the French electricity provider EDF, because of discharges of fresh water from a hydroelectric power station into a saltwater marsh (the Étang de Berre), which communicated directly with the Mediterranean Sea. The action alleged that the discharges breached a Protocol to the Convention for the Protection of the Mediterranean Sea against Pollution (the Barcelona Convention), in particular a provision requiring that such discharges be subject to prior authorization from the competent domestic authorities which had not occurred here. The EU was a party, alongside its Member States, to both the Protocol and the Barcelona Convention. The Cour de Cassation put forth two questions: first, whether the provision in the Protocol must be held directly effective so that interested parties can rely on it before domestic courts to halt unauthorized discharges; secondly, whether it prohibited the discharges at issue.

The ECJ invoked the Demirel direct effect test and asserted it would commence by examining the wording of the provision. A single sentence followed, holding that it clearly, precisely, and unconditionally laid down a Member State obligation to subject discharges to prior authorization. This was followed by a further sentence reiterating the Commission view that the domestic authority discretion in issuing authorizations in no way diminishes the clear, precise, and unconditional nature of the discharge prohibition absent prior authorization.2 These two sentences were the extent of the direct textual analysis of the provision. The conclusion was, however, then bolstered by reference to the purpose and nature of the Protocol. It was held to be clear from its articles that its purpose was to prevent, abate, combat, and eliminate certain causes of pollution of the Mediterranean Sea and that to this end Contracting Parties were required to take all appropriate measures. One cannot demur from this exposition of purpose, nor the assertion that followed that the prior authorization requirement contributes to the elimination by Member States of pollution. Here, however, it was followed directly by the assertion that recognition of the provisions’ direct effect can only serve the Protocol’s purpose and reflect the nature of the instrument which is intended to prevent pollution resulting from the failure of public authorities to act.3 Clearly, if such reasoning were to be employed when looking to the purpose and nature of an EU Agreement in drawing conclusions as to whether particular provisions are directly effective, then it becomes difficult to conceive of provisions that should be deprived of this status. Certainly, treaties will frequently require action from public authorities and accordingly would have their purposes, ultimately ensuring that States Parties comply with the obligations enunciated therein, served by domestic courts policing compliance. To put it another way, if we operate at this level of abstraction then it would rarely be the case that a treaty will not have its purpose served by domestic judicial enforcement.4 As to the second question, the ECJ concluded that the relevant provision did, indeed, absent prior authorization, prohibit the relevant freshwater discharges.

The EDF case was clearly of considerable import for it indicated that it was by no means only the predominantly bilateral trade agreements that would receive a receptive hearing before the EU Courts. The direct effect finding was not a foregone conclusion. Admittedly, it had been supported by France, and the Commission, but the counter-argument advanced by EDF was not without merit.5 EDF emphasized the interdependence of various provisions of the Protocol. The requirement, in the provision held directly effective, to take due account of provisions in an Annex to the Protocol, was considered vague. A provision concerning the formulation of common standards, not yet defined vis-à-vis the discharge at issue, before a prior authorization system was put in place was also invoked. Moreover, it was argued that this being an EU Agreement those standards could principally be at EU level and, as yet, no relevant Directive existed and accordingly the Commission would also have failed to fulfil its obligations.

2.1.2 The Aarhus Convention and access to justice

The EU became a party in 2005 to the UN Economic Commission for Europe Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (commonly known as the Aarhus Convention). In LZ VLK the ECJ addressed an express question from the Slovakian Supreme Court as to the direct effect of Article 9 and in particular subsection (3) requiring that each Contracting Party ensures that members of the public, meeting the criteria, if any, laid down in national law, have access to administrative or judicial procedures to challenge acts and omissions by private persons and public authorities which contravene national environmental law provisions.6 The Grand Chamber found that the dispute fell within the scope of EU law. It emphasized that the dispute concerned whether an environmental association could be a party to administrative proceedings concerning the grant of derogations to the protection for a species mentioned in the Habitats Directive (92/43/EEC). The Court acknowledged the existence of the EU’s declaration of competence under the Aarhus Convention that clearly stated that the Article 9(3) obligations, with the exception of their applicability to EU institutions, were the responsibility of the Member States until the EU adopted provisions to implement the obligations. However, for the Court even if a specific issue had not yet been the subject of EU legislation it may fall within the scope of EU law if it is related to a field covered in large measure by it. It underscored in this respect that it was irrelevant that the Aarhus Convention implementing Regulation (1367/2006) only concerned the EU institutions, for where a provision could apply both to situations falling within the scope of EU law, it was in the interest of EU law that, to forestall future differences of interpretation it should be interpreted uniformly.7

The ECJ followed the Advocate General in rejecting the direct effect of Article 9(3).8 For the Court, Article 9(3) did ‘not contain any clear and precise obligation capable of directly regulating the legal position of individuals. Since only members of the public who meet the criteria, if any, laid down by national law are entitled to exercise the rights provided for in Article 9(3), that provision is subject in its implementation or effects, to the adoption of a subsequent measure.’ Once the jurisdiction hurdle was surmounted, the direct effect conclusion was wholly foreseeable given the express wording of Article 9(3) for even the ECJ’s traditionally generous approach to the direct effect of provisions of EU Agreements would struggle where a provision expressly cross-references national legal criteria for its applicability.9 However, it was far from predictable that it would require domestic courts nonetheless to interpret their domestic procedural law in such a way as to enable an environmental organization, such as the one in the proceedings (LZ), judicially to challenge an administrative decision liable to be contrary to EU environmental law. It reached this conclusion by first emphasizing that Article 9(3) was intended to ensure environmental protection and that, in the absence of EU rules, it was for the domestic legal system of each Member State to lay down the detailed procedural rules governing actions for safeguarding individual rights derived from EU law. For the ECJ it was inconceivable that Article 9(3) could be interpreted in such a way as to make it, in practice, impossible or excessively difficult to exercise EU law rights. It was for the national courts, insofar as concerned species protected by EU law and particularly the Habitats Directive, and in order to ensure effective judicial protection in fields covered by EU environmental law, to interpret its national law to the fullest extent possible consistently with the objectives of Article 9(3). Put simply, then, the ECJ reached a conclusion that combined reliance on its effective judicial protection case law with a particularly demanding manifestation of the principle of consistent interpretation, in all but name, essentially to dictate the outcome of the domestic proceedings,10 and potentially to impact significantly on all manner of domestic proceedings throughout the EU.11

Clearly, then, the LZ VLK ruling is of considerable significance. The Court was extremely generous in according itself jurisdiction as to the direct effect determination. The declaration of competence combined with the absence of EU implementing legislation for Article 9(3) other than vis-à-vis the EU institutions would surely have led most to conclude, as it did the Advocate General, that the dispute did not fall within the scope of EU law and that it was accordingly for national courts to make the direct effect determination.12 By reaching the contrary conclusion the Court was able, notwithstanding its rejection of direct effect, substantially to bolster the impact Article 9(3) will be accorded across the EU Member States in a manner that, as one commentator suggested, blurred the distinction between direct effect and consistent interpretation.13 Furthermore, the broad reading on jurisdiction can be viewed as encouraging the Commission to monitor Member State compliance with Article 9(3), and encourage potential non-compliance to be drawn to its attention, for without this ruling the declaration of competence combined with the absence of EU legislative activity would have sowed strong doubt as to the Court’s willingness to entertain infringement proceedings for non-compliance with those provisions.14

The LZ VLK ruling was rapidly followed by the Trianel ruling in which the ECJ invoked the Aarhus Convention in offering an interpretation of the Environmental Impact Assessment (EIA) Directive.15 That Directive, as amended by Directive 2003/35 EC with a view to giving effect to Aarhus Convention obligations, transposes nearly verbatim Article 9(2) of the Aarhus Convention which requires States to permit certain members of the public access to review procedures to challenge administrative decisions, acts, or omissions. An environmental NGO sought to challenge an administrative decision but a court found that it did not have locus standi as it was not relying on the impairment of a substantive individual right as required by German law. That German Administrative Court effectively asked whether the amended EIA Directive, and the Aarhus Convention according to the Advocate General’s Opinion,16 precluded the applicability of that German standing rule to environmental NGOs. Essentially, both the Advocate General and ECJ concluded that the Directive precluded the applicability of that German standing rule to environmental NGOs and invoked the Aarhus Convention in doing so. The ECJ made two specific references to the Aarhus Convention in this respect. First, in asserting that the relevant EU ‘provisions must be interpreted in the light of, and having regard to, the objectives of the Aarhus Convention, with which—as is stated in [the EIA Directive]—EU law should be properly “aligned”.’ And, secondly, in concluding that while Member States determine which infringed rights can give rise to an environmental action they cannot deprive environmental protection organizations which fulfil the conditions laid down in Article 1(2) of the EIA Directive—which the Advocate General noted mirrored Article 2(5) of the Convention—of playing the role granted to them both by the EIA Directive and the Aarhus Convention.

The ECJ could surely have reached precisely the same substantive conclusion without expressly referring to the Convention but both the Advocate General and Court references to it in the substantive parts of their opinion and judgment suggest that their conclusions were directly influenced by it.17 It is perhaps not wholly coincidental that this express reliance on the Aarhus Convention appeared in a ruling concerning the same rule of national law before the Aarhus Convention Compliance Committee in a complaint that had been stayed pending the outcome of the EU ruling.18

2.2 Infringement proceedings: the Étang de Berre ruling

The Étang de Berre case saw the ECJ address its first, and thus far only, infringement case alleging non-compliance with a non-trade Agreement.19 In and of itself this was therefore a significant moment, for the Commission had long been chided by one of its own officials for not pursuing Member State infringements of environmental agreements,20 the very type of Agreement at issue. The case arose out of the same factual background as the EDF ruling. The Commission brought infringement proceedings against France for allegedly failing to reduce pollution from land-based sources, as required by provisions of the Barcelona Convention and, in addition, for breaching the Mediterranean Sea Protocol provision at issue in the EDF ruling by not instituting a compatible prior authorization system for discharges. France which had argued in favour of direct effect in EDF, and thus by definition accepted ECJ jurisdiction over the prior authorization provision, was now disingenuously arguing that there was no jurisdiction over the provisions being invoked because they did not fall within the scope of EU law; there being no EU Directive regulating the discharges of fresh water and alluvia, the argument ran, resulted in the Convention and Protocol provisions covering such discharges not falling within EU competence.21

The French argument was dispensed with employing reasoning of considerable significance to the use of the EU institutional machinery for policing compliance with mixed agreements. The ECJ underscored that the Protocol had been concluded under shared competence and that mixed agreements have the same status in the EU as pure EU Agreements insofar as the provisions fall within the scope of EU competence. The Court continued that from this it had inferred that in ensuring compliance with commitments in EU Agreements the Member States fulfil an obligation to the EU, which assumes responsibility for their due performance.

The ECJ then held that the provisions of the Convention and Protocol covered a field that fell in large measure within EU competence. This was supported by reference to environmental protection, the subject matter of the Convention and Protocol, being in the main regulated by EU legislation, with three water pollution protection Directives being invoked in support. As the Convention and Protocol created rights and obligations in a field covered in large measure by EU legislation, it followed that there was an EU interest in both EU and Member State compliance.22 This finding, the ECJ held, could not be called into question by the fact that the discharges at issue had not yet been the subject of EU legislation.

The ECJ thus asserted jurisdiction over mixed agreement provisions despite the fact that the EU had not actually legislated for the specific type of water pollution at issue. Certainly, it may have been only a matter of time before such legislation appeared and it does raise its own problems to adopt a stance on jurisdiction over mixed agreements that is dependent, at least where a declaration of competence does not exist, on the emergence of EU legislation directly on point.23 Nevertheless, it is clear that the less expansive approach to jurisdiction sought by France could have been adopted.24 The Court’s willingness to expand its jurisdictional reach to the provisions at issue arguably owed something to the possibility of the EU’s international responsibility.25 Thus, although the ECJ did not expressly refer to this, the fact was that it was dealing here with a Convention and Protocol concluded without any declaration of competence and therefore raising the possibility of the EU being jointly liable for any breaches by the Member States.26 Indeed, this is one reason why the expansive approach to jurisdiction adopted in the later LZ VLK ruling, which relied on the Étang de Berre ruling, was surprising. For if the Étang de Berre ruling was implicitly shaped by potential EU responsibility, in LZ VLK we had a declaration of competence that seemed expressly intended to negate the EU’s joint responsibility for non-compliance with Article 9(3) at the Member State level. In short, if the extent of jurisdiction sanctioned in Étang de Berre was being shaped, if only implicitly, by international responsibility, then LZ VLK could be viewed as severing that link.

The ECJ also rejected the French argument that it was only under an obligation of means, effectively an obligation to prove that it had created sufficient legal means to limit the pollution resulting from the discharges. The Commission went for the broadest possible reading, namely, that it was under an obligation to achieve a particular result. The ECJ did not explicitly adopt that approach but found it to be a ‘ “particularly rigorous obligation”… to “strictly limit” pollution … and to do so by “appropriate measures”.’ France was found wanting, essentially because the pre-litigation procedure attested to large quantities of harmful discharges from the hydroelectric power station and, in addition, there was no prior authorization system in place. In short, France was held to have failed to fulfil its obligations under the Barcelona Convention, the Mediterranean Sea Protocol, and accordingly also Article 216(2) TFEU.

3. Challenges to EU Action

This section is structured around the small number of cases that have arisen. It first touches upon a miscellaneous array of unsuccessful challenges. The subsection that follows engages briefly with the increasingly controversial tension between the EU standing requirements and Aarhus Convention obligations. The final subsection focuses on three cases that can be viewed as representing opposing approaches to the legal effects of EU Agreements in the EU legal order.

3.1 Miscellaneous unsuccessful challenges

Some five cases fall into this category including the very first occasion when the ECJ was required to address the validity of an EU measure because of its alleged incompatibility with an EU Agreement outside the purely trade sphere.27 In the 1998 Compassion in World Farming (CIWF) ruling, CIWF had brought a challenge, referred by a UK court, to the Calves Protection Directive alleging it was incompatible with the European Convention on the Protection of Animals Kept for Farming Purposes and a Recommendation adopted thereunder.28 This aspect of the case was uncontroversially dispensed with, a position supported by the Council, Commission, and the two intervening Member States. The Court emphasized that the Convention did not define standards in the relevant area, indeed, the provisions were indicative only and were limited to providing for the elaboration of recommendations to the Contracting Parties to apply the principles. As to the Recommendation, it expressly provided that it was not directly applicable and was to ‘be implemented according to the method that each Party considers adequate, that is through legislation or through administrative practice’ and accordingly was held not to contain legally binding obligations. The same Convention arose in a preliminary ruling several years later, where a national court had rejected reliance on it in challenging a Directive by relying on the reasoning in the CIWF ruling.29 Before the ECJ the relevant party did not rely on this claim but did invoke the Convention in seeking recognition of a general principle of EU law on animal welfare that could invalidate a provision of an EU Directive. The Court held that it was not possible to infer any such principle from the Convention, which ‘does not impose any clear, precisely defined and unqualified obligation’.

The other three cases share a common trait in that in none did the EU Courts invoke the mantra of EU Agreements being an integral part of EU law or refer to Article 216(2) TFEU. In the first to arise, Spain challenged an implementing Regulation as being in breach of both its parent Regulation, which implemented a programme adopted under the EU-concluded North-West Atlantic Fisheries Organization (NAFO) Convention, and a bilateral EU-Canada Agreement concluded within the NAFO framework.30 Having upheld the validity of the implementing Regulation vis-à-vis its Parent Regulation, the ECJ held that as the relevant EU-Canada Agreement provision was framed in virtually identical terms to those of the parent Regulation, the plea must be rejected, the logic clearly being that it had already passed muster under the virtually identically phrased parent Regulation.

The second case saw several companies bring annulment and damages actions against the Commission due to it reducing aid granted to a project within the framework of an EU-Argentina Fisheries Agreement.31

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