Posts Tagged European union

Not on my soil! The Council of the EU compromise on national vetoes to GMO cultivation.

The Council has published its first-reading position on a draft directive granting member states more flexibility to decide whether or not they wish to cultivate genetically modified organisms(GMOs) on their territory – I had flagged it here before I had an opportunity chance to look at the text. My initial reaction is confirmed however.

Under the text, the possibility would be provided for a Member State to request the Commission to present to the notifier/applicant its demand to adjust the geographical scope of its notification/application to the effect that all or part of the territory of that Member State be excluded from cultivation. The Commission shall facilitate the procedure by presenting the request of the Member State to the notifier/applicant without delay and the notifier/applicant should respond to that request within an established time-limit. In the event of refusal, the Member State may block cultivation on its territory for reasons other than the scientific assessment which will have been carried out by the relevant authorities. (And note that the EC may after refusal also proceed to adjusting geographically the request for authorisation for scientific reasons).

The list of ‘compelling reasons’ which may lead a Member State to refuse cultivation, is non-exhaustively listed as

(a) environmental policy objectives distinct from the elements assessed according to the Directive and to Regulation 1829/2003;  (since those environmental objectives will have been considered in the scientific assessment);

(b) town and country planning;

(c) land use;

(d) socio-economic impacts;

(e) cross-contamination with other products;

(f) agricultural policy objectives; and

(g) public policy.

Those grounds may be invoked individually or in combination, with the exception of the public policy exception (which awkwardly needs to be coupled with one of the other grounds). An authorisation procedure will apply (with no need to apply the transparency Directive, 98/34, concurrently).

An important point to note is that the Directive only applies to growing (‘cultivation’) of GMOs in situ: not to the import, marketing etc. of GMO containing products, food, feed etc. I would not be surprised that in practice this will mean a continuation of industry practice to leave the EU altogether for growing GMOs, focusing its efforts instead on securing authorisation to market. (This regime does not feature the much wider leeway for non-science driven objections).

Today is the Saint’s Day of Saint Ignatius Loyola, founder of the Jesuits. A suitable day to ponder a proposal heavy with risk analysis, regulatory theory,  and trade law implications.

Geert.

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Beggars can’t be choosers: has the EU’s GMO compromise outsourced moral reservation?

The compromise (official minutes of the Meeting concerned reveal very little detail; more is available here) between the EU Member States on the market authorisation for GMOs has been condemned by opponents and proponents of the technology alike. Market authorisation for GMOs has a long and troublesome history in the EU, with most recently the spat over Pioneer 1507.

I would love to get my hands on any kind of legal formulation for the apparent deal which as been struck. As is common knowledge, some Member States object categorically to GMOs on a mix of scientific (precautionary), moral, sustainability grounds. The EU have for some time been trying to find a way to accommodate moral objections in particular. (Where there are serious indications of scientific uncertainty vis-a-vis a particular application, these are picked up by EFSA and authorisation will be refused for the EU as a whole: this is not problematic per se – lest of course per the US arguments at the WTO in EC Biotech, one does not accept that there is scientific uncertainty). The suggested way out is now, apparently, for the Member States concerned to request the applicant companies, via the European Commission, to exclude their territory from the application.

This raises all sorts of questions. (Including exam questions). It near-effectively outsources regulatory autonomy to the applicant companies. The suggested regime reminds me of the Voluntary Export Restraints which were popular(ish) in the 1980s – and highly controversial under GATT. Under the WTO, they are all but blacklisted. Especially after SEAL pups I believe it would be much better for the EU regime itself to allow opt-out, even of individual Member States, on moral or ethical grounds (again, the scientific debate is different) and to take any WTO fight into open field.

Should anyone out there have the actual text which is being tabled (in the UK English sense of the word) – and the liberty to share it, I would love to hear from you. (Postscript 31 July 2014: see later post with link to text).

Geert.

 

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Be careful what you ask for. A first review of the WTO EU seals Panel.

After leaks, the Panel’s ruling in EU Seals is finally out. As it was only released this afternoon, I have not as yet had time to read it thoroughly. However diagonal reading reveals that by and large the regime was found to qualify for the public morals exception under the GATT Agreement (and not to be more trade restrictive than necessary to protect same under the TBT Agreement) however the pro Inuit exceptions have proven to be the Regulation’s Achiless heel. As I have suggested in the past in other areas, this may well mean that the EU has no choice but to resort to stricter rules, leaving out the exceptions.

Further analysis and post later in the week hopefully.

Geert.

 

 

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Is something fishy in the State of Denmark? Faroe Islands WTO and UNCLOS litigation provides a honey pot to trade and EU lawyers

POSTSCRIPT 11 June 2014: An understanding reached today (11 June) means the case will now not reach the WTO. Pitty in many ways.  See EC press release  and WTO database.

Yummie. That’s how Trade lawyers and EU lawyers receive news of the Danish request for consultations  with the EU, over at the WTO, on behalf of the Faroe Islands. A separate action is underway with UNCLOS (although the docket there shows no sign as yet of the case). Disagreement over herring stock lies at the root of the offending EU Regulation, with sanctions imposed by the EU disallowing Faroese fishermen to land mackerel or herring in EU harbours or export such fish to the EU.

The EU justify their action on stock conservation grounds, thus bringing GATT Article XX into play. Action at the WTO is exciting both because it joins a growing list of actions related to domestic regulatory authority, and because it is unheard of for one EU Member to take another to the WTO (Faroe’s specific status under EU law explains this, however even in EU law this terrain is quite uncharted).

As sources at the WTO say: ‘it’s a really interesting case’: that quote must be in the running for understatement of the year. Sources at the EU suggest no one had expected Denmark’s WTO filing to actually materialise.

Geert.

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The ‘compact’ – A new phase in international regulatory co-operation or a way around GSP+ accusations?

Update 25 October 2017. The PCIA has accepted to review the complaint brought under a related instrument, the Bangladesh Accord between trade unions and fashion chains.

wIn response to the tragedy at the Rana Plaza factory, the EU, Bangladesh and the International Labour Organisation together launched the ‘Global Sustainability Compact’ early July. The full title of the Initiative is the “Compact for Continuous Improvements in Labour Rights and Factory Safety in the Ready-Made Garment and Knitwear Industry in Bangladesh”. According to the official EU statement upon release of the initiative, key considerations are:

  • Reforming the Bangladesh Labour Law to strengthen workers’ rights, in particular regarding freedom of association and the right to collective bargaining, and to improve occupational health and safety. A new Labour Law should be in place by the end of 2013. The ILO will monitor the effective enforcement of the new legislation.
  • Recruiting 200 additional inspectors by the end of 2013, as part of the efforts to ensure regular visits to factories and assess them in terms of working conditions, including occupational safety and health, and compliance with labour laws.
  • Improving building and fire safety, especially structural safety of buildings and fire safety in ready-made garment factories, by June 2014. The ILO will help to coordinate efforts and mobilise technical resources.

The initiative is said to be ‘non-binding’, whence presumably the countries resorted to the name ‘Compact’ – a new entry I believe in the dictionary of international law (policy?) instruments [there is of course the UN Global Compact, however that does not have State involvement]. The use of co-operation and partnership is said to be the ‘carrot’ as an alternative to the ‘stick’: the latter would be to remove GSP and GSP+ treatment to Bangladeshi import into the EU. GSP and GSP+ require developing countries to sign up to, and implement, a number of international conventions in a variety of areas, so as to enjoy preferential access to the EU (the US and other countries employ similar instruments).  Its use is not uncontroversial.

I would have thought that withdrawal of GSP treatment by the EU would have been a little bit crass, given the role of companies (and consumers) here in seeking cheap garments, the price of which, frankly, just cannot be right.

As often, follow-up of this new partnership will be of the essence.

Geert.

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Fracking litigation in France – Reference to the Constitutional Court

It has been reported that the challenge to the French moratorium on shale gas exploration, by US firm Schuepbach Energy, has been referred to the Constitutional Court. Schuepbach had initially challenged the freezing effect of the 2011 ban on the permits which the firm had been granted erlier in 2011, before the lower administrative court at Cergy Pontoise. This court referred for judicial review to the Conseil d’Etat, which now has passed the file on to the Constitutional Court.

I have difficulty getting hold of the official court documents. Reports suggest that the challenge is based on Articles 16 and 17 of the French Déclaration des droits de l’homme et du citoyen, dealing cq with the separation of powers and the right to property.

The French challenge comes amidst the imminent publication of the report commissioned by the European Commission into the suitability, or not, of the current legal framework in the EU and the Member States for regulating shale gas. A little bird tells me (ok, it’s a PhD student of mine, Leonie Reins, who co-authored the report) that the report will be published just after the summer.

In a related, more technical but not therefore less effective manner, Poland’s roll-out of fracking licences arguably received considerable setback following the ECJ’s end of June ruling in Case C-569/10, Commission v Poland: the court held that Poland should have put the licences out to open tender, in accordance with Directive 94/22 on hydrocarbons exploration.  The case does not concern fracking licences alone, and the impact on licences that have already been issued is uncertain (although surely these licences cannot be held to be entirely kosher and free of challenge by competitors or NGOs, following the judgment).

Watch this space.  I need not tell you that fracking is very controversial in the EU. See in particular this tour d’horizon /overview of contentious issues by Kathleen Garnett over at EU perspectives.

Geert.

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How ‘trade related’ is the Agreement on Trade-Related Aspects of Intellectual Property Rights? The ECJ in Daiichi Sankyo v Demo

In  Daiichi Sankyo v Demo (most likely ‘Demo’ in shorthand), the Court of Justice held last Thursday, 18 July. One of the main issues was the extent of Article 207 TFEU on the EU’s common commercial policy, vis-a-vis the TRIPS Agreement. Article 207 grants the EU exclusive competence (and the European Commission a very strong hand) in ‘common commercial policy’.

By its first question, the referring Greek court asked essentially whether Article 27 of the TRIPs Agreement falls within a field for which the Member States have primary competence and, if so, whether the national courts may accord that provision direct effect subject to the conditions laid down by national law. The TRIPs Agreement was concluded by the Community and its Member States by virtue of shared competence. At the time, for the EU to be able to exercise exclusive jurisdiction pre Lisbon, under the in foro interno, in foro externo principle, it would have had to have exercised its powers in the field of patents, or, more precisely, of patentability: roll-out of its internal powers on patentability, would have als led to exclusive power externally. The European Commission however suggested that the mixed agreement discussion (and the exercise, or not, of its internal powers), was no longer relevant, given that the Lisbon Treaty has now given it exclusive competence in the entire common commercial policy, including for intellectual property rights. Under the old Article 113 EC Treaty (later updated to Article 133 – many of us still speak of the ‘Article 113 Committee, which surely dates us!), intellectual property rights did not feature in the common commercial policy.

The ECJ conceded that of the rules adopted by the European Union in the field of intellectual property, only those with a specific link to international trade are capable of falling within the concept of ‘commercial aspects of intellectual property’ in Article 207(1) TFEU and hence the field of the common commercial policy. However it emphatically [and contrary to the view of Cruz Villalon AG] held that such is indeed the case for the TRIPS Agreement: ‘Although those rules do not relate to the details, as regards customs or otherwise, of operations of international trade as such, they have a specific link with international trade. The TRIPs Agreement is an integral part of the WTO system and is one of the principal multilateral agreements on which that system is based.’ (para 53).

Member States cannot therefore grant direct effect to the provisions of TRIPS, in accordance with national law. It is up to the ECJ to hold on such direct effect – or not, and in the absence of such direct effect, to interpret the provisions of EU law in line with the provisions of the TRIPS Agreement.

The judgment also reviews a number of substantial aspects of intellectual property law which I feel less entitled to comment on, I fear.

Geert.

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WTO compatibility of biofuels sustainability criteria: The Argentinian complaint

Argentina has requested consultations, the first step in the WTO’s dispute settlement procedure, with respect to the EU’s biofuels sustainability criteria, contained in RED, its renewable energy Directive. The development of biofuels criteria per se is full of pitfalls. For starters, the EU’s Directive has effectively skirted the issue of sustainability. As all students of environmental law and policy have been told ad nauseam, sustainable development has three pillars (ecological, economic, social), not just the one (ecological /environment) which the Directive has quantified. On social and economic impact of the EU’s regime, the European Commission is merely to report. Evidently, quantifying all three is not straightforward: witness also the demise of the Clean Development Mechanism, CDM,  one of the flexible mechanisms under the Kyoto Protocol to the United Nations Framework Convention on Climate Change.

With respect to the environmental pillar, RED employs a standard value of CO2 emission reduction which for soybean biodiesel (the main export of Argentinian biofuel) is 31%. This falls short of the 35% required for renewable energy to count towards Member States’ renewable energy targets (and co-inciding fiscal and other incentives).  In other words, fuel not meeting the standard can still be imported into the EU: but it will not be very popular (one can sense a de facto /de iure discrimination debate). One way of getting around the issue, is for individual shipments to show that they meet the 35% threshold with all the extra costs this implies (arguably imposing a measure equivalent to a quantitative restriction), or for the European Commission to recognise relevant voluntary schemes meeting the higher threshold through certification. An Argentinian scheme presented to the EC was not accepted by it.

The Argentinian request includes a long list of GATT and WTO obligations which it argues are infringed by the EU (and by relevant Member States implementing measures).

Having a Panel and Appellate Body express some rules of thumb for sustainability criteria (which Argentina explicitly says it does support in principle) would be very useful indeed.

Geert.

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EU Seal product ban upheld by the ECJ – (unsubstantiated) Inuit and traders’ arguments fall on deaf ears

Postscript: the ECJ equally dismissed, on 3 October 2013, the Inuit’s action against the basic Regulation: see case C-583/11P.

Postscript 2, 19 March 2015: Kokott AG suggests the appeal against the judgment in the posting below, be equally dismissed.

 

The European Court of Justice has dismissed an application by Inuit community group, Inuit Tapiriit Kanatami (ITK), and the Fur Institute of Canada, for the Commission’s Implementing legislation of the EU’s ‘Seal Pups Regulation‘ [seal products Regulation somehow has not made it into mainstream language] to be held illegal. The Regulation effectively bans all seal products from being placed on the EU market, with limited exceptions, and it does so on the basis of animal welfare considerations:

Article 3 - Conditions for placing on the market
1. The placing on the market of seal products shall be allowed only where the seal products result from hunts traditionally conducted by Inuit and other indigenous communities and contribute to their subsistence. These conditions shall apply at the time or point of import for imported products.
2. By way of derogation from paragraph 1:
(a) the import of seal products shall also be allowed where it is of an occasional nature and consists exclusively of goods for the personal use of travellers or their families. The nature and quantity of such goods shall not be such as to indicate that they are being imported for commercial reasons;
(b) the placing on the market of seal products shall also be allowed where the seal products result from by-products of hunting that is regulated by national law and conducted for the sole purpose of the sustainable management of marine resources. Such placing on the market shall be allowed only on a non-profit basis. The nature and quantity of the seal products shall not be such as to indicate that they are being placed on the market for commercial reasons.
The application of this paragraph shall not undermine the achievement of the objective of this Regulation. (...)'

Further detail for the application of the exceptions was provided by the Commission in follow-up regulation . It is the follow-up (implementing) Regulation which was the subject of current action. The applicants in this case argued as follows:

1. The basic Regulation lacks legal basis (i.e. Heads of power), for it was adopted on the basis of the Internal Market article of the EU Treaties, while in fact it was animal welfare considerations which led to the initiative. The Court disagreed: Member States had differing regulations in place with respect to seal products, or were planning them. This threatened a clear EU view on the matter and hence disruption of that internal market, whence justifying Article 114 TFEU (at the time: Article 95 EC). Watertight conclusion under EU law – even if paradoxically in order to safeguard the Internal Market, the EU effectively resorted to scrapping that very market.

2. Failing argument 1, the Regulation at any rate is disproportionate and incompatible with the principle of subsidiarity. The latter was dismissed on similar grounds as the review of the legal basis, referred to above. The former seems to have not been helped by the vagueness of the claims of applicants. In particular, they had put forward the view that the Inuit exemption is dead letter, for the communities concerned have to rely on commercial outlets to market their products, not having any such outlets themselves. The Court rejected this argument as too vague and unsubstantiated. It also rejected labelling (testifying to the killing having been done ‘humanely’) as an alternative, for the feasibility of such an option was examined and rejected in the run-up to the legislation.

3. Human rights. Right to property arguments were rejected by the Court, for viz the Inuit, they could still trade in the products concerned and the Court had already established that the ‘dead letter’ argument was unsubstantiated. Viz the applicants which are commercial operations, the Court referred to its earlier case-law the guarantees accorded by the right to property cannot be extended to protect mere commercial interests or opportunities, the uncertainties of which are part of the very essence of economic activity.

4. Ultra vires. The arguments that the Commission implementing Regulation exceeded what the Commission was entitled to regulate, in particular, that its enforcement measures were such as to make trade in Inuit seal products effectively impossible, even if it was instructed to lay down rules leading to a viable Inuit trade, were swiftly rejected by the Court. Again, it referred to a complete lack of data in the file substantiating the claim that all such trade would effectively be impossible.

The actions at the ECJ cannot of course be seen completely detached from the ongoing litigation against the EU over at the World Trade Organisation, on which Robert Howse has posted near-complete records of the hearings which this week finished in Geneva: that Panel report is one to look forward to (although judging by the sounds coming out of Geneva, the Panel would not exactly seem on top of things).

Geert.

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Looks like regulation to me – Commission draft guidance consultation on the ‘Corporate Responsibility to Respect’

The UN Guiding principles on business and human rights were adopted in 2011, after having been developed by prof John Ruggie and team. The aim of the principles effectively (and in my view) is to create a halfway house between full duties (and rights?) of multinational corporations under public international law (especially in the human rights and environmental field), on the one hand, and complete lack of accountability of those MNCs under the same law, on the other.

CSR originally was firmly meant as a market-based instrument for sustainable development. Ignoring the alleged mistakes of a command and control approach to sustainable development, CSR would allow companies voluntarily to gain a proactive sustainable development profile, thus gaining consumer appreciation, whence serving the three P’s: People, Planet, Profit. As so often, though, these market-based instruments gradually look ever more like the command and control approach which they profess to despise.

Exactly this is happening to the UN Guiding Principles, at least as further developed by the European Commission. It is in the process of formulating sector-specific guidance [for employment and recruitment agencies; ICT; and oil and gas] for companies to implement the UN Guiding principles. This may mean either that command and control approaches to sustainable development are not half as bad as they are made out to be; and /or that in the end, voluntarism in sustainable development will never be enough to help achieve it.

Geert.

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