Tag: Compliance

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Bank Melli Iran: How corporate social responsibility reports may act as a shield in export controls law.

A short (and late – I am in mopping-up mood it seems) post on the AG’s Opinion in Case C‑124/20 Bank Melli Iran – in which he also cites my former colleague proximus Cédric Ryngaert. Hogan AG’s Opinion addresses the rock and the hard stone, or the devil and the deep blue sea dilemma facing corporations in the light of diverging export laws /sanctions law. May a German bank refuse to do business indeed end business with an Iranian bank, under pressure from US secondary export control laws?

More on the external relations aspects of the case is ia here and of course in the Opinion itself. My interest here lies in part of the Opinion: the AG’s view that an EU undertaking seeking to terminate an otherwise valid contract with an Iranian entity subject to the US sanctions must demonstrate to the  satisfaction of the national court that it did not do so by reason of its desire to comply with those sanctions. It must show other motives, such as ethical reservations about doing business with Iran. These reservations may be documented by a genuinely rolled-out CSR compliance program: (88)

‘In order, however, to establish that the reasons given in respect of any decision to terminate a contract on this ground were in fact sincere, the person referred to in Article 11 of the EU blocking statute in question − in the present case Telekom Deutschland – would need, in my view, to demonstrate that it is actively engaged in a coherent and systematic corporate social-responsibility policy (CSR) which requires them, inter alia, to refuse to deal with any company having links with the Iranian regime.’

CSR programs have been used as carrot ia in Trafigura and as stick ia in Vedanta. The view here is very much the carrot or if one likes, the shield function: CSR policies as a defensive weapon against the rock and hard stone dilemma. That is most interesting for the EU corporations concerned and likely to draw the attention of export sanctions practitioners (both in-house and out) to part of the corporation’s blurb which they may otherwise ignore. Yet it may put too much emphasis on fairly unregulated CSR policy drafting, and compliance issues.

Geert.

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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.

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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.

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