Sappi Austria: CJEU tries to keep a common sense approach to supporting the circular economy and maintaining the objectives of EU waste law.

Case C‑629/19 Sappi Austria Produktions-GmbH & Co. KG and Wasserverband ‘Region Gratkorn-Gratwein’ v Landeshauptmann von Steiermark in which the CJEU held on Wednesday is in my off the cuff view (I did not research it in the recent case-law) the first case where the CJEU specifically mentions the objectives of the circular economy to support its interpretation of the core definition of ‘waste’ in the Waste Framework Directive 2008/98.

Sappi operate a large industrial paper and pulp production plant in Gratkorn (Austria). On that site is also a sewage treatment plant, operated jointly by Sappi and the Wasserverband, which treats waste water from paper and pulp production as well as municipal waste water. During the treatment of that waste water, which is required by national law, the sewage sludge in question in the main proceedings arises. That sludge is therefore made up of both substances from industrial waste water and substances from municipal waste water. Sewage sludge which is produced in the sewage treatment plant is then incinerated in a boiler of Sappi and in a waste incineration plant operated by the Wasserverband, and the steam reclaimed for the purposes of energy recovery is used in the production of paper and pulp.  hat authority found that, admittedly, the majority of the sewage sludge used for incineration, namely 97%, originated from a paper production process and that this proportion could be regarded as having ‘by-product’ status within the meaning of Paragraph 2(3a) of the AWG 2002. However, that does not apply to the proportion of sewage sludge arising from municipal waste water treatment. That sewage sludge remains waste. Since there is no de minimis limit for the classification of a substance as ‘waste’, the authority assumed that all the sewage sludge incinerated in the industrial plants of Sappi and of the Wasserverband must be classified as ‘waste’.

The CJEU first of all holds that there is no relevant secondary law which provides the kinds of qualitative criteria for sewage sludge to meet with the objectives of the WFD. If there were such laws, and the sludge meets their requirements, it would be exempt form the WFD. It then reminds the referring court, of course, of the extensive authority on the notion of waste (most recently C-624/17 Tronex) yet is happy to provide the national Court with input into the application in casu.

In principle, the sludge is waste, the Court holds: it is a residue from waste water treatment and it is being discarded.

However, the referring judge suggests that the sludge may meet the requirements of A6(1) WFD as being fully ‘recovered’ before it is used in the incineration process. It is there that the CJEU refers to the circular economy: at 68:

it is particularly relevant that the heat generated during the incineration of the sewage sludge is re-used in a paper and pulp production process and that such a process provides a significant benefit to the environment because of the use of recovered material in order to preserve natural resources and to enable the development of a circular economy.

Per C‑60/18 Tallinna Vesi, the recovery of sewage sludge entails certain risks for the environment and human health, particularly linked to the potential presence of hazardous substances. For the sludge at issue here not to be waste, presupposes that the treatment carried out for the purposes of recovery makes it possible to obtain sewage sludge with a high level of protection of the environment and human health, such as required by the WFD, which is, in particular, free from any dangerous substance. For that purpose, it is necessary to ensure that the sewage sludge in question in the main proceedings is harmless (at 66). The CJEU concludes, at 67

It is for the referring court to determine whether the conditions laid down in Article 6(1) of Directive 2008/98 are already met before the sewage sludge is incinerated. It must in particular be determined, as appropriate, on the basis of a scientific and technical analysis, that the sewage sludge meets the statutory limit values for pollutants and that its incineration does not lead to overall adverse environmental or human health impacts.

There are as yet no EU standards for the full recovery of sewage sludge, hence the ball of end of waste status is once again in the Member States’ court.

Geert.

(Handbook of) EU Waste law, 2nd ed. 2015, Oxford, OUP, Chapter 1, 1.149 ff.

Tanchev AG in Esso supports broad application of animal welfare to REACH chemicals registration process.

In Case C‑471/18 P in which Tanchev AG Opined last month, Germany is asking the CJEU to set aside judgment in  T‑283/15 Esso Raffinage ECHA by which the General Court annulled entitled a European Chemical Agency (‘ECHA’)  letter entitled ‘Statement of Non-Compliance following a Dossier Evaluation Decision under  [REACH]’. The letter concerned the outcome of ECHA’s compliance check of Esso Raffinage’s registration dossier for a particular chemical substance. The main thrust of its appeal is that the REACH Regulation does not provide for further examination by ECHA of the conformity of the information submitted with the first compliance check decision, and that this matter falls within the competences of the Member States pursuant to the REACH enforcement provisions. In support of its position, it argues that a registrant must conduct animal testing specified in the Evaluation Decision, and cannot submit adaptations at that stage.

Esso and ECHA find themselves in an unusual alliance with animal rights activists who argue that a registrant must be able to submit adaptations in lieu of performing animal testing specified in a first compliance check decision.

The case mostly concerns the respective competences of Member States and ECHA under Reach, I highlight it here for the AG’s emphasis on the relevance of animal welfare in the Regulation: consideration of animal welfare through the reduction of animal testing is one of the objectives pursued by the REACH Regulation. At 158: ‘Viewed more broadly, as indicated by Esso Raffinage and [NGO], the promotion of animal welfare and alternative methods to animal testing in the REACH Regulation reflects Article 13 TFEU, pursuant to which, in formulating and implementing the European Union’s policies, the European Union and the Member States are to pay full regard to the welfare requirements of animals.’

Animal welfare has come a long way since Michael Rose and I submitted it in CJEU C-1/96 Compassion in World Farming.

Geert.

 

French neonicotinoids measures and administrative compliance under EU law. The CJEU takes a view protective of Member States’ room for manoeuvre.

The ‘transparency’ or ‘notification’ Directive 2015/1535 (the successor to Directive 98/34) featured twice at the CJEU yesterday. In Case C‑711/19 Admiral Sportwetten, the Court held that a national tax rule that provides for taxation of the operation of betting terminals does not constitute a ‘technical regulation’ that needs to be notified under the Directive. In Case C-514/19 Union des industries de la protection des plantes it held more directly than Kokott AG had opined, that France had validly informed the Commission of the need to take measures intended, in particular, to protect bees by banning the use of 3 active substances of the neonicotinoid family which had been authorised for use under the relevant EU procedure. That procedure is regulated by Directive 1107/2009 on plant protection products.

The complication in the case in essence is a result of the dual procedure for national safeguard measures as a result of the existence of both the PPP and the notification Directive. May a communication of a Member State under the Notification Directive, double as notification of emergency measures under the PPP Directive? The CJEU held it can, provided the notification contains a clear presentation of the evidence showing, first, that those active substances are likely to constitute a serious risk to human or animal health or to the environment and, second, that that risk cannot be controlled without the adoption, as a matter of urgency, of the measures taken by the Member State concerned, and where the Commission failed to ask that Member State whether that communication must be treated as the official provision of information under the regulation.

The Court referred to its findings in C-116/16 Fidenato, that a Member State’s power, provided by an EU act, to adopt emergency measures requires compliance with both the substantive conditions and procedural conditions laid down by that act (a requirement, I would add, which conversely also applies to the European Commission), but adds that a notification to the Commission under Article 71(1) of Regulation 1107/2009 requires only that the Member State concerned ‘officially informs’ that institution, without having to do so in a particular manner.

More generally, the Court emphasises the principle of sound administration imposed upon the EC, which explains its insistence on the EC having proactively to ensure the Member State concerned be aware of its obligations under the EU law concerned or indeed adjacent law. A certain parallel here may be made with the rules of civil procedure which require from those soliciting the courts that they approach the court with clean hands.

The Court in essence, I submit, finds that, the consequences for the Member State concerned in failing to meet the requirements for it to be able to make use of a safeguard provision in secondary law being so great, the conditions imposed on them must be met by a strict due diligence on behalf of the European Commission.

Of note is that the judgment does not entail any finding on the substantive legality of the French ban.

Geert.

 

 

Applicable law and statutes of limitation in CSR /business and human rights cases. The High Court, at least prima facie, on shipbreaking in Bangladesh in Begum v Maran.

Update 28 August 2020 permission to appeal and cross-appeal has been granted and is being additionally sought by both parties on various issues.

Hamida Begum v Maran UK [2020] EWHC 1846 (QB) engages exactly the kinds of issues that I have just posted about, in court rather than in concept. On 30th March 2018 Mr Mohammed Khalil Mollah fell to his death whilst working on the demolition of a defunct oil tanker in the Zuma Enterprise Shipyar in Chittagong (now Chattogram), Bangladesh. On 11th April 2019 the deceased’s widow issued proceedings claiming damages for negligence under the UK Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act 1976; alternatively, under Bangladeshi law. The scope of the proceedings has subsequently been broadened inasmuch as draft Amended Particulars of Claim advance a cause of action in restitution: more precisely, unjust enrichment.

Application in the current case is for strike-out and /or summary judgment (denying liability) hence the legal issues are dealt with at prima facie instead of full throttle level. One or two of the decisions deserve full assessment at trial. Trial will indeed follow for the application was dismissed.

The case engages with the exact issues in exchanges I had at the w-e.

Proceedings have not been brought against the owner of the yard and/or the deceased’s employer. Both are Bangladeshi entities. Maran (UK) Ltd,  defendant, is a company registered in the UK and, it is alleged, was both factually and legally responsible for the vessel ending up in Bangladesh where working conditions were known to be highly dangerous.

Focus of the oral argument has been whether claim discloses viable claims in English law on the basis of tort of negligence (answer: yes) and in unjust enrichment (answer: no).

The issue of liability in tort is discussed on the basis of English law, which is odd at first sight given Rome II might suggest as a starting point Bangladeshi law as the lex causae ; Justice Jay himself says so much, but only at 76 ff when he discusses Rome II viz the issue of limitation. In applications for summary judgment however, reasoning and order of argument may take odd form as a result of the prima facie nature of the proceedings and the conversations between bench and parties at case management stage.

On the tort of neglicence claimant argues under English law, with direct relevance to the current debate on environmental and human rights due diligence, that a duty of care required the defendant to take all reasonable steps to ensure that its negotiated and agreed end of life sale and the consequent disposal of the Vessel for demolition would not and did not endanger human health, damage the environment and/or breach international regulations for the protection of human health and the environment. The EU Ship Recycling Regulation 1257/2013 was suggested as playing a role, which is dismissed by Justice Jay at 24 for the Regulation was not applicable ratione temporis.

At 30, claimant’s case on negligence is summarised:

First, the vessel had reached the end of its operating life and a decision was taken (perforce) to dispose of it. Secondly, end-of-life vessels are difficult to dispose of safely. Aside from the evident difficulties inherent in dismantling a large metal structure, a process replete with potential danger, an oil tanker such as this contains numerous hazardous substances such as asbestos, mercury and radio-active components. Although these were listed for Basel Convention purposes and for the attention of the buyer, and the deceased was not injured as a result of exposure to any hazardous substance, the only reasonable inference is that waste such as asbestos is not disposed of safely in Chattogram. Thirdly, the defendant had a choice as to whether to entrust the vessel to a buyer who would convey it to a yard which was either safe or unsafe. Fourthly, the defendant had control and full autonomy over the sale. Fifthly, the defendant knew in all the circumstances that the vessel would end up on Chattogram beach. Sixthly, the defendant knew that the modus operandi at that location entailed scant regard for human life.

The gist of the argument under tort therefore is a classic Donoghue v Stevenson type case of liability arising from a known source of danger.

At 42 ff Justice Jay discusses what to my mind is of great relevance in particular under Article 7 Rome II, should it be engaged, giving claimant a choice between lex locus delicti commissi and lex locus damni for environmental damage, in particular, the issue of ‘control’. One may be aware from my earlier writings (for an overview see my chapter in the 2019 OUP Handbook of Comparative environmental law) that the determination of the lex causae for that issue of control has not been properly discussed by either the CJEU or national courts. This being a prima facie review, the issue is not settled definitively of course however Justice Jay ends by holding that there is no reason to dismiss the case on this issue first hand. This will therefore go to trial.

As noted Rome II is only discussed towards the end, when the issue of limitation surfaces (logically, it would have come first). Claimant does not convince the judge that the case is manifestly more closely connected with England than with Bangladesh under A4(3) Rome II. Then follows the discussion whether this might be ‘environmental damage’ under Article 7 Rome II, which Justice J at 83 ff holds preliminarily and prima facie, it is. Analysis of Article 7 is bound to be of great importance at trial and /or appeal.

At 85 a further issue for debate is trial is announced, namely whether the one-year statute of limitation under Bangladeshi law, should be extended under Article 26 Rome II’s allowance for ordre public (compare Roberts and CJEU C-149/18 Martins v DEKRA – that case concerning lois de police and statutes of limitation. 

Plenty of issues to be discussed thoroughly at trial.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.

 

 

Jurisdiction, applicable law and the Draft Business and Human Rights Treaty. Some serious conflicts material in CSR /business and human rights laws.

I thought I should post briefly, including for archiving purposes, on one or two developments and recommendations viz the draft UN Business and Human Rights Treaty. This also follows exchanges I had at the w-e on the issue.

See Nadia Bernaz here for an introduction and see here for a document portal. The overview of statements made, shows some attention being paid to forum non conveniens, universal jurisdiction, and applicable law – a summary of those comments re applicable law is here at 84. That same document in Annex II contains the list of experts and further in the Annexes, their views on jurisdiction etc. (incl. forum necessitatis) which anyone wishing to write on the subject (that would include me had I not a basket already thrice full) should consult.

Claire Bright at BIICL also posted her views on the applicable law issues last week, including a proposal to exclude renvoi from the applicable law Article.

Things, they are moving. Including in case-law. That will be my next posting.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 8, Heading 8.3.

 

 

Precaution and standard of proof. The General Court in Agrochem-Maks.

In T‑574/18 Agrochem-Maks the General Court at the end of May upheld the Commission Regulation not extending market authorisation for the active substance oxasulfuron, a pesticide. The EC Regulation noted that EFSA, the European Food Safety Authority, had identified a large number of data gaps resulting in the inability to finalise the risk assessment in several areas and that ‘in particular, the available information on oxasulfuron and its metabolites did not allow finalising the assessment of the overall consumer exposure, the groundwater exposure, the risk to aquatic organisms, earthworms, soil macro and microorganisms and non-target terrestrial plants’. Since  ‘it has not been established with respect to one or more representative uses of at least one plant protection product that the approval criteria provided for in Article 4 of Regulation … No 1107/2009 [on plant protection products; see here, GAVC] [were] satisfied’, authorisation was not renewed.

The case at issue is brought by a small Croatian, family-owned company. That is a change from the classic pattern in this kind of cases, with large bio-agricultural industry routinely taking cases to the CJEU in laser-shoot fashion, hoping they might hit the target once or twice.

The General Court extensively outlines the procedure foreseen in the relevant EU laws, thereby identifying the core issue in near all of these cases held under the precautionary principle: the EU courts do not carry out a merits review; rather, they assess whether holes have emerged in the preparation of a decision, which could mean that the Institutions could not reasonably have come to the decision they came to.

That is no different here: at 62: ‘the EU Courts must verify that the relevant procedural rules have been complied with, that the facts admitted by the Commission have been accurately stated and that there has been no manifest error of appraisal or misuse of powers’. At 65, per CJEU T-13/99 Pfizer: ‘a scientific risk assessment carried out as thoroughly as possible on the basis of scientific advice founded on the principles of excellence, transparency and independence is an important procedural guarantee whose purpose is to ensure the scientific objectivity of the measures adopted and preclude any arbitrary measures.’

Specifically for current Regulation: at 66: ‘the burden of proving that the conditions for approval or renewal under Article 4 of Regulation No 1107/2009 are met lies, in principle, with the notifier.’ At 67 per CJEU T-584/13 BASF Agro: ‘it is the person seeking approval who must prove that the conditions of such approval are met in order to obtain it, and not the Commission which must prove that the conditions of approval are not met in order to be able to refuse it’.

The General Court then at length considers the procedure followed, including the reasons for the identified gaps, and then assesses the application of the precautionary principle to same: at 109 ff with reference to the 2000 Communication on the Precautionary Principle, COM(2000)1. Crucially, at 121, as noted ‘(u)nder Regulation 1107/2009 when the applicant words its renewal application, it bears the burden of proving the efficacy and safety of the substance in question.’ ‘Since it did not discharge that burden, the approval of the active substance could not be renewed.’

The case highlights once again the crucial nature of administrative compliance with the rulebooks under EU regulatory law. Many of us will have sat through presentations by EFSA or EC officials outlining the rules in excruciating and yes, not very sexy detail. Yet to follow procedure to a tee is crucial to ensure defence against corporations taking issue with the findings at the CJEU.

The case also emphasises the importance of burden of proof, as specified in the secondary law at issue and, preferably, the ‘no data, no market’ rule in EU regulatory law.

There might of course still be an appeal with the Court.

Geert.

EU environmental law (with Leonie Reins), Edward Elgar, 2018, p.28 ff.

Our scoping study on a principle of ‘essential use’ in international and European regulatory (particularly chemicals) law.

Update 15 May 2020 see the ECHA consultation on PFAS regulation launched this very week.

With Kathleen Garnett I have co-authored a paper where we scope the ‘essential uses’ approach to product regulation, particularly in chemicals.

Could calls for the stricter regulation of one particular type of chemical herald the introduction of a new (or not) ‘principle’ in international and EU regulatory law, namely that of ‘essential use’ as a precondition for market authorisation?

The concept of ‘essential use’ or ‘non-essential use’ has been referenced in a number of EU policy papers. Kathleen and I focus on Per- and polyfluoroalkyl substances (‘PFAS’)  in chemicals legislation and firstly, map the concept of ‘essential use’ in international and EU law; further, discuss its limited application in the case-law of the European Court of Justice; and, before we conclude, carry out a preliminary investigation as to (if it does not currently exist in EU law), whether it might be so included de lege ferenda.

Happy reading. We are submitting to journal.

Geert, Kathleen.

Attempt in the Austrian courts to repeal air traffic tax breaks puts polluter pays and CJEU Deutsche Bahn judgment in the spotlights.

A late-ish flag to keep an eye on Greenpeace’s class-action suit filed in the Austrian courts to have the Austrian tax breaks on air traffic (tax exemption on kerosene fuel for domestic flights and a VAT exemption on international flights) lifted. It is certain to engage the Chicago Convention and the European implementation of same. The argument is inter alia that the non-exemption for rail is a form of State Aid to the airlines. I wrote on the issues in 2016, featuring T-351/02 Deutsche Bahh, arguing that the CJEU could have forced the issue then. What would be most excellent would be for the Austrian courts to refer to Luxembourg so as the CJEU may revisit the issue 14 years on from the judgment of the then Court of First Instance, in a world were many look a lot less forgivingly at the exemptions’ implications for internalising negative environmental externalities.

Geert.

EU environmental law (with Leonie Reins), Edward Elgar, 2018.

 

 

Kenyon: Court of Appeal emphasises again the discipline of the precautionary principle (here: in EIA proceedings).

Update 24 March 2020 thank you Gordon Nardell QC for pointing me to R (Merricks) v Secretary of State for Trade and Industry [2006] EWHC 2698 (Admin), most probably the first case to consider the standard of review when an administrative authority applies the precautionary principle.

A quick note on Kenyon v Secretary of State for Housing Communities & Local Government et al [2020] EWCA Civ 302 in which Coulson J checks planning consent ia against the requirements of the EU Environmental Impact Assessment- EIA Directive 2011/92. Of particular interest is his application of the Wednesbury judicial review test.

At 12: ‘A decision as to whether a proposed development is or is not likely to have significant effects on the environment can only be struck down on Wednesbury grounds’. ‘Wednesbury unreasonableness‘ is akin to CJEU standard of judicial review. Diplock J formulate it later as an administrative decision being annulled only if it was ‘So outrageous in its defiance of logic or accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it.’ The grounds in Wednesbury are very akin to the CJEU grounds: annulment will follow only if (well summarised by Wiki):

  • in making the decision, the defendant took into account factors that ought not to have been taken into account, or
  • the defendant failed to take into account factors that ought to have been taken into account, or
  • the decision was so unreasonable that no reasonable authority would ever consider imposing it.

Applied at issue at 63 ff to the precautionary principle, applicant’s argument that ‘inevitable air pollution caused by the development’ must be taken into account, fails. at 67: ‘In circumstances where there was no doubt in the mind of the relevant decision-maker, there is no room for the precautionary principle to operate.’ (Clearly and in applying all Wednesbury principles, that absence of doubt must have followed from the right information having been taken into account).

Geert.

EU environmental law (with Leonie Reins), Edward Elgar, 2018, p.28 ff.

 

Confédération Paysanne, precaution and GMOs. French High Court issues its final ruling taking CJEU findings to their logical conclusion.

A short post to flag the French Conseil d’Etat’s final ruling in which on 7 February it held that organisms obtained via in-vitro mutagenesis techniques should be subject to GMO regulation and that consequently as EurActiv summarise the French authorities must update regulation to include such crops within six months, which includes identifying the agricultural plant varieties which have been obtained by these techniques and subjecting them to the assessments applicable to GMOs.

The ruling follows the CJEU’s mutagenesis finding in C-528/16, reviewed at the time on Steve Peers’ blog here and subsequently by KJ Garnett in RECIEL here. The ruling put agro-bio industry narrators in a spin but in essence is an utterly logical consequence of EU law.

Geert.