Plain packaging – One battle might be over, plenty to follow

I reported earlier that the plain packaging dispute is fought on many fronts. As has been widely reported, the domestic challenge to the Australian regime would seem to have been won by the Government (we have a small wait for the full ruling to be delivered).

However, this dispute is fought on many fronts. Over at the international economic law blog, Simon Lester gives an excellent summary of the status quo on the various issues, and links to academic thought on chances of success. Evidently the plain packaging rules are not home and dry yet.

As often, one should be careful what one asks for: Tasmania is reported to be pondering a gradual ban on smoking, allowing those adults who have picked up the habit to peter it out, while banning tobacco consumption to all others. This may be in response to an often heard argument: if smoking is that bad for you, why not ban it rather than happily cashing in on the coinciding taxation. In legal terms: given the cited health issues related to tobacco consumption, may a ban be the only proportionate action? (and what does that mean in consistency terms for other health issues such as obesity, high adrenaline sports, alcohol…).

Geert.

The European concept of waste and reverse logistics /off-spec products. Reference in CJEU Shell.

In (soon to be) joined Cases C-241/12 and C-242/12, the Court of Justice is being asked to clarify the application of the Waste Framework Directive‘s concept of ‘waste’ in the context of reverse logistics /off-spec (or ‘off specification’) products. These are products which after shipment, turn out not to meet the agreed specifications (because they are defective, or even if in working order, do not meet the agreed parameters). In the logistics chain, such products are often sent back upstream (whence ‘reverse logistics’) and sold to other customers, whether or not after modification or repair.

The facts as reported are included below.

At stake is in particular the extent of relevance of the contractual context. Under the terms of the contract (and indeed under general contract and warranty law), off-spec products are routinely sent back to the wholesaler or brought back to the point of sale. Any finding of such goods meeting the waste concept, may turn an important part of daily logistics operations into waste transport operations.

[Declaration of involvement: I act as court witness in the national proceedings.]

Geert.

 

Reference for a preliminary ruling – Rechtbank te Rotterdam – Netherlands – Interpretation of Council Regulation (EEC) No 259/93 of 1 February 1993 on the supervision and control of shipments of waste within, into and out of the European Community (OJ 1993 L 30, p. 1) and Regulation (EC) No 1013/2006 of the European Parliament and of the Council of 14 June 2006 on shipments of waste (OJ 2006 L 190, p. 1) – Concept of ‘waste’ – Shipment of Ultra Light Sulphur Diesel (ULSD) by vessel from the Netherlands to Belgium – ULSD mixed accidentally, when the vessel was being loaded, with Methyl Tertiary Butyl Ether (MTBE) – Product no longer corresponding to the specifications agreed upon by the buyer and the vendor – Buyer who became aware of that fact at the time of delivery in Belgium – Diesel taken back by the vendor and shipped to the Netherlands – Purchase price refunded to the buyer – Vendor having the intention of placing the diesel back on the market, whether or not after mixing it with another product – Inclusion or noninclusion in the concept of waste

Aarhus Convention trumps narrow EU provisions on access to justice – Court of Justice in Stichting Natuur en Milieu

International environmental law is often said to be toothless. The Aarhus Convention, too, is typically equated with fluffiness and the type of language (inter alia because of the high degree of deference to national law) typical of soft-law. Yet in Case T-338/08, the General Court at the Court of Justice of the EU (effectively a first instance court in cases such as these), annulled relevant decisions of the European Commission (‘EC’), finding them to be based on an improper implementation of the Aarhus Convention.

Stichting Natuur en Milieu and Pesticide Action Network Europe, had applied for internal EC review of the relevant Regulation which specifies maximum residue levels of pesticides for relevant food and feed products (the maximum levels being too lenient according to these NGOs). The argument upon which the applicants were successful (victory was not universal), concerned the narrow interpretation which EU law gives in relevant part to ‘acts’ which under Article 9 of the Aarhus Convention, must be subject to review by interested parties, to establish whether they infringe the environmental laws of the Aarhus Party concerned. EU law effectively restricts access to justice to those cases where interested parties take issue with measures of an individual scope (‘administrative acts’), as opposed to those of general application (‘acts’ full stop).

The General Court first of all established that the EC in the case at issue did not act in a legislative capacity (which would have made Article 9 Aarhus inoperable) but rather used its executive authority. Furthermore, notwithstanding the absence of definition of ‘act’ in the Aarhus Convention, the Court held that it cannot have limited itself to measures of individual scope only.

The EC may appeal with the Court of Justice; should it not do so, or should the Court confirm the General Court’s view, the EC first of all will have to reconsider the relevant Regulations, setting the maximum levels concerned. Moreover, it must surely take the initiative to amend the underlying Aarhus Regulation, so as to expand the notion of ‘act’ which is subject to internal review.

The judgment is a cautious step, for the access to justice provisions of the EU are generally said to infringe the Aarhus Convention on more than this issue alone.

Geert.

Use of Fair Trade labels in procurement decisions – Court of Justice of the EU in Max Havelaar

The Court of Justice of the EU has further completed its views on the use of criteria linked to sustainable development. These are criteria which do not simply refer to environmental characteristics of the product itself. Rather, they convey a message as to the overall ‘process and production methods’, known in jargon as ‘PPMs’, of a particular product or service.

In Max Havelaar, Case C-368/10, the Court had to decide on the use of specific labels in decisions awarding government purchases (‘procurement’) to a particular supplier.The province of North Holland had

–        inserted in the technical specifications a condition requiring the Max Havelaar and EKO labels or in any event labels based on similar or the same criteria;

–        included, for appraising the ability of operators, criteria and evidence concerning sustainable purchasing and socially responsible business, and

–        included, when formulating award criteria, a reference to the Max Havelaar and/or EKO labels, or in any event labels based on the same criteria.

The judgment is quite complex for those unfamiliar with (EU) procurement law In particular, the Court distinguishes in the exact room for manoeuvre between various stages of a procurement decision. Leaving detailed breakdown aside (reference is made to the judgment), the Court’s finding is basically that authorities must make use of descriptive conditions for such criteria, rather than solely referring to specific labels. However they may identify certain labels as leading to a presumption of these criteria having been met, provided of course they allow other proof to be submitted.

For WTO lawyers, judgments like these are not irrelevant. Arguably, adoption of private labels in procurement decisions, may well bring these labels within WTO, in particular, TBT (Agreement on Technical Barriers to Trade), discipline.

Geert.

Maritime pollution: France’s highest court to annul Court of appeal ‘Erika’ judgment on the basis of absence of jurisdiction?

‘Avocat général’ Didier Boccon-Gibod at the French Cour de cassation, issued his opinion on 24  May, in the Erika case. On 12 December 1999 the Erika broke in half 40 miles off the coast of Brittany. More than 10 000 tonnes of heavy fuel oil were spilt, evidently leading to an ecological disaster of serious proportions. As is not unusual in cases with so much at stake, litigation is still ongoing.

Of some relevance in the case at issue (thank you to prof Philippe Delebecque at Sorbonne for pointing that out to me), the injured parties decided to hinge their wagon unto the criminal prosecution. This saves resources, as the bulk of the procedure is left to the prosecution service to pursue. However it has the obvious disadvantage that the injured parties lose some of their hold on the course of the arguments run, and, even more importantly, that the case in the main turns into a criminal prosecution, with an accidental (no pun intended) civil angle to it. Criminal law determines the outcome.

The ‘Avocat général’, to I understand loud criticism, advises the Court to annul the Court of Appeal’s conviction of the defendants (including Total and the classification society, Rina). His grounds for doing so are based on his analysis of relevant international treaties, leading him to conclude that France has no jurisdiction criminally to prosecute oil spills occurring in its exclusive economic zone (even if the consequences were felt firmly on French soil). The ship having Malta as its flag State, Malta should have taking the helm.

It has been pointed out over at the UK human rights blog that it seems awkward that the result of the Opinion, if followed, would be that ‘France cannot prosecute a French-controlled company for devastating French beaches via an oil spill in the French EEZ.’

An excellent summary of the consequences and reasoning may be found here, in French. I do not have a weblink to the Opinion however I do have an E-copy in French – interested readers, just send me a mail.

Geert.

Waste not want not – Dr Caroline Jackson’s ideas for EU waste law compliance

I have often thought that the collective memory lost in Members of the European Parliament leaving the Institution, is both a policy and a legal pity. A policy pity, as one assumes politicians, too, learn though trial and error, therefore improving the quality of their regulatory output over the years. A legal pity, for when applying statutory law such as EU Directives, the object and purpose of what is written in Gazettes (in the case of the EU, the Official Journal), can only assist to a certain degree. The preparatory works of EU law are readily accessible via Oeil and Prelex, yet these do not tell the whole story. One often needs the view of the fly on the wall to appreciate what the law really means.

I expressed this thought specifically at a conference in Brussels some years ago, where Dr Jackson, then MEP (for 25 years!) and close to retire from Parliament, also spoke. She displayed exactly the qualities which are apparent in a recent paper for the IEEP, co-authored with Emma Watkins: a keen eye for legal detail and a genuine concern for the quality of the legislative process a the EU.  In ‘EU Waste Law: The Challenge of Better Compliance‘, the pair review the problems associated with waste law compliance, and suggest ways of improvement.I will not even attempt to summarise, the genuine article does a much better job at that.

One of the concerns expressed in the paper, is the trend of intransparency surrounding both first reading agreements between Parliament and Council, and conciliation agreements. That is of concern to those of us who like to dig deep into EU travaux préparatoires. I for one certainly hope that Dr Jackson will continue to write on her long experience as a European lawmaker.

Geert.

Once more unto the breach – German action against Commission Decision on the Toy safety Directive provides a master class in EU law

Pre-script: this case is now known as Case T-198/12, and on 15 May 2013 the Court by way of interim measure ordered the Commission to grant approval to the German measures in full, at least until such time as a judgment on the substance has been issued. It made specific reference to the precautionary principle. The ECJ eventually held in May 2014.

 

I have always thought of legislation on, and trade in, toys, as a perfect illustration for many regulatory mechanisms worldwide. Prof Francis Snyder’s work (see e.g. here) is a perfect illustration of same.

This is no different for the general workings, and finer mechanics, of EU law. Once more, the sector hands teachers and practitioners of EU law a perfect illustration of harmonisation techniques, exhaustion (pre-emption) arguments, and judicial review.

On 1 March 2012, the European Commission only partially (and temporally) granted Germany approval for upholding stricter limits on limit values for lead, barium, arsenic, antimony, mercury, nitrosamines and nitrosatable substances in toys (for the decision, see here)  [As an aside, it is often said that one should never watch laws and sausages being made. Reading that list of substances, prima facie (only) one might want to add toys to that list]. Germany has announced it will appeal that decision with the Court of Justice of the EU.

I can think of one or two areas for discussion: risk management and migration limits v bioavailability (or the cheese and chalk argument); limits to pre-emption; application of the ‘environmental and health guarantee’ of Article 114 TFEU, including the principle of proportionality. Expect that future judgment to feature in core readers of EU law.

Geert.

Exam questions, anyone? Plain packaging regulations and domestic regulatory autonomy in WTO law

Update 10 June 2020 a lot has happened of course since this post – for the latest on the WTO front see the AB report confirming the legality of the measures under World Trade Organisation (TBT) rules.

Postscript January 2016 Reportedly the Permanent Court of Arbitration under UNCITRAL rules, has declined jurisdiction. The award is to be made public here once it has been cleared of confidential data.

Postscript June 2015: I have many other posts on the issue however I thought I”d here that in June 2015, Ukraine suspended its complaint against Australia. Simon Lester collates why. And end of May 2015, Norway Norway TBT plain packaing notification its plain packaging plans to the WTO TBT Committee, with extensive pre-emption of legal arguments against it.

Postscript 22 10 2013:  on the BIT front, see the interesting defence by the European Commission of BITs in October 2013 here. Reference is made ia to the ongoing Philip Morris and Vatenfall (Nuclear energy) issues.

Faculty everywhere have been handed a treasure trove of exam questions, courtesy of ‘plain packaging’ (students please look away now).  A variety of States are in the process of introducing ‘plain packaging’ requirements on tobacco products. Although they of course vary in detail, they generally require tobacco manufacturers to strip packaging of all tailored corporate content, resorting instead to prescribed generic packaging. The ‘plain’ packaging required is generally limited to brand name in standardised fashion (font size and lettering, colour…), joined by a number of health warnings (including, sometimes, images), excise duties requirements and ingredients listings.

Plain packaging ticks all the boxes of a classic ‘domestic regulatory autonomy’ dispute. It pitches the freedom of a sovereign State to pursue ‘regulatory’ interests (environment, public health, consumer protection, stability of the economy etc.) against the free trade commitments which the same State has voluntarily committed to. These trade commitments take the form of multilateral (such as the WTO, the EU’s Internal Market, or NAFTA) or bilateral (such as bilateral free trade agreements and customs unions) agreements. They most often do not, but sometimes do include procedural rights for private parties (as opposed to simply the States which have concluded the agreement) to launch legal proceedings should free trade (arguably) have been infringed. Such standing for private parties is the case in many BITs, i.e. Bilateral Investment Treaties, as well as for instance (subject to a number of whistles and bells), NAFTA.

Free trade agreements are not generally oblivious to the continuing desire of participating States to regulate the interests referred to above. Consequently they include room for ‘domestic regulatory autonomy’ to continue after the conclusion of the agreement, subject of course to checks and balances.

This fragile balance between free trade and regulatory autonomy is exactly what the current debate on plain packaging is all about. The issue is being fought on many fronts: At the World Trade Organisation, Ukraine have filed a complaint in March 2012 against Australia’s plain packaging laws on the basis of the TRIPS (intellectual property) and TBT (technical barriers to trade; product regulations) Agreements. Ukraine’s complaint is supported by a number of WTO Members with tobacco manufacturing interests.

Australia’s position is eagerly anticipated by other jurisdictions thinking of doing something similar.See e.g. here and here.

At a constitutional level, issues include free (commercial) speech (see here for the related issue of graphic warnings), expropriation (of the trademark), non-discrimination (why no plain packaging on alcohol, for instance).

At a level of BITs, the issue has rejuvinated the ‘regulatory takings’ debate (do new regulatory requriements of host States amount to a ‘regulatory taking’ (as compared to a straightforward expropriation) that may be incompatible with investment protection requirements. The Uruguay-Switserland (see here and enter search term ‘ICSID Case No. ARB/10/7’) and Australia-Hong Kong BITs are among those affected. One imagines that the necessity of the measure will be hotly contested, as the actual health impact of the measure is not entirely certain. See the (controversial) ruling of the European Free Trade Association’s Court on the related issue of display bans here and the excellent analysis of prof Alemanno.

One will have gathered: all of this is excellent material for those of us teaching Trade and regulatory law. Geert.

Corporate Social Resonsibility used as stick and carrot – Court Amsterdam

End 2011, the Gerechtshof Amsterdam issued a further ruling in the long-running Trafigura case (exports of wastes, Ivory coast). I am restricted from commenting on the waste law merits of the case however it is interesting to note that the court employed CSR both as carrot and stick in determining punishment. As a stick: companies with a level of sophistication as Trafigura ought to organise themselves to be aware of the legal implications of their production process. As a carrot: the foundation created by the company supports global CSR projects, which merits a certain amount of leniency. As far as I am aware, this was the first time that CSR was used in such specific manner in court.

Geert.

Court of Justice rules on priority of ‘substantial’ v ‘procedural’ EU environmental law

28 February: Third ECJ judgment in the Terre Wallonne trilogy: can a national court temporarily uphold the effects of a national measure which, following an ECJ judgment, has been found to be illegal under the EIA Directive, with a view to avoiding the Member State being found to have violated the nitrates Directive? Those with a sense of drama pitched this as a battle between ‘procedural’ (EIA) and ‘substantial’ (Nitrates) EU environmental law (it is in this sense that this judgment is likely to have most precedent value).

Answer of the Court in Case C-41/11: YES, subject of course to conditions (including, which is a tricky assessment for the national court to make, having to find that complete annulment of the illegal measure would make the environment worse off.

One can imagine many other scenarios in almost all areas of EU law where this judgment will be called upon by those wanting to derive rights from illegal (under EU law) national measures which arguably uphold ‘higher’ ranking EU law.

Geert.

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