A quick note to tickle the interest of the BIT community out there: I have come across a suggestion that recent initiatives on supply chain liability (for the notion see my earlier reblog of Penelope Bergkamp’s piece) may run counter the protection of foreign investment under Bilateral investment treaties. The analysis at issue is directed at Queensland’s chain of responsibility laws. While it is clearly a law firm’s marketing pitch (heyho, we all have to make rain somehow), the issue is real: supply chain liability laws can I suppose under circumstances qualify as regulatory takings just as any other new law.
Or can they?
Update 12 april 2017: the UK Supreme Court refused permission to appeal [the decision should appear here in due course], hence the Court of Appeal’s ruling is now final.
Isn’t it just a perfect exam question for a graduate course, nay this question involves so many issues it could arguably serve as one single exam for a whole law degree: such is the intensity of legal areas at issue: constitutional law, international law, international trade, regulatory law and risk analysis, intellectual property law…
Discuss why the Court of Appeal for England and Wales denied Government wrongdoing in plain packaging, while the German Bundesverfassungsgericht rejected an argument of expropriation in Energiewende yet held that German Government must nevertheless pay compensation to the energy companies involved (E.ON, RWE and Vatenfall).
Source tip: you may want to consult my former student Dr Catherine Banet’s excellent analysis on the Vatenfall issue.
Issues tip: a good way to go about it would be to draft a table of issues that both cases have in common and those which they do not (eg the Court of Appeal’s review of intellectual property). A discussion of the precautionary principle would not go amiss (in the plain packaging case: specifically whether precaution applies to uncertainty as to efficiency of remedies rather than uncertainty as to a phenomenon). A point of discussion may also be why the CA refers profusely to European precedent while the Bundesverfassungsgericht does not. Finally, any consideration of the link between the latter proceedings and the concurrent ISDS procedure, will gain you brownie points.
To fellow faculty out there: if you do use this exam Q, please do share good student answer copies.
In Lone Pine Resoures v Canada, the company involved has filed a claim under NAFTA’s Chapter 11, which protects investors against ‘regulatory takings’. Quebec has placed a moratorium on fracking (shale gas exploration) by revoking all permits pertaining to oil and gas resources under the St Lawrence river.
I shall be reporting tomorrow on the rejection by the French Constitutional Court of the challenge to the French moratorium. In a related (not to fracking but to regulatory takings) development, the European Commission has posted an interesting defence of Biltateral Investment Treaties here. Reference is made ia to the ongoing Philip Morris and Vatenfall (Nuclear energy) issues, both high profile cases of alleged regulatory taking.
In Koontz, the United States Supreme Court further specified the limitations applicable to agencies when they impose limitations to the use of private property. In Koontz, under the New York State Environmental Quality Review Act (SEQRA), the owner of the land was denied wetland related permits. The relevant agency had demanded that Koontz either reduce the scope of the project and accept limiting conditions of use over the remainder, or finance conservation-related improvements to publicly held land some distance away.
The Supreme Court had earlier held in Nolan per the regulatory taking doctrine, that there must be an “essential nexus” between a “legitimate state interest” and the condition that the reviewing agency seeks to impose. In Koontz, it applies this limitation not just to the restrictions which the owner of the land has to accept vis-a-vis his own property, but also to any other government measure which imposed a financial burden on said owner. The lower courts had argued that the Nolan criteria do not apply to demands for money. The Supreme Court held that they do.
The finer details may escape me (see for excellent analysis Daniel Richmond and in Jeremy Kozin in the New York Law Journal) however it would seem that there is excellent comparative analysis to be made re the laws on regulatory takings and compensation measures in nature conservation.
Geert (thank you to Ludo Veuchelen for alerting me to the judgment).
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.