Bird flu gives European Commission a late headache – The ECJ emphasises the discipline of the precautionary principle in Animal Trading Company

The General Court (the court in first instance) of the European Court of Justice has held against the Commission in Case T-333/10 Animal Trading Company. The English version of the judgment was not yet available at the time of writing.

The applicants seek compensation for the harm which they have suffered as a result of, first, the European Commission ban on the importation of birds caught in the wild, which entered into effect in October 2005 in the light of the avian flu phenomenon, second, the extensions of that ban, and, third, the restrictions which have been in force since 1 July 2007 on the importation of birds and which, de facto, continue the prohibition of the importation of birds caught in the wild.

Applicants’ arguments centered on firstly the executive power of the Commission  – with the General Court holding however that the Commission’s action was not ultra vires. The Court subsequently re-iterated its case-law that in looking after human and animal life and health, the European Institutions enjoy a large discretion in light of the precautionary principle. However it also held that in pursuing this wide remit, the Commission diligently has to take account of all available information, and has to follow due process in acquiring such information.

The Court held that the general import ban (and subsequent extensions) had cast the net too wide, given that no assessment was made of the risks presented by imports of birds other than in regions where avian flu had been present. The Commission had not diligently chased relevant information.

The Case is perhaps a relief from the findings in Gowan, however the judgment may be appealed to the ECJ on a point of law – which may not be that obvious for the European Commission to find.

Geert.

Visionary or the ultimate hindsight? The European Environment Agency’s second ‘late lessons from early warnings’

The European Environment Agency published its first volume of ‘late lessons’ in 2001. Just over ten years later, the second volume covers a staggering amount of new analysis, including PCE, lead in petrol, tobacco, DBCP, nanotechnology, alien species etc. That we already need a second volume fairly soon after the first, is explained by the fact that warnings from the first volume arguably have not been heeded, and that new technologies are rolled out at staggering speed.

It is impossible to argue for or against specific chapters in the volume on scientific grounds – no doubt others will do it (included vested interests). I flag the report on the blog, for it is a treasure trove for risk management teaching and research. Indeed arguably one could teach an entire course using just the report: for the Agency does not only summarise and report on the science, it also infers risk management choices from the ‘late lessons’ learned. Particularly insightful is the review of 88 cases of ‘false positives’: in contrast with the first volume (which had been criticised for this), the second volume does look into 88 case-studies where precautionary action was alleged to have led to greater actual occurrence of harm, rather than prevent it. The EEA concludes that in only 4 cases, this was indeed the case.

Critics argue that the 88 cases are inevitably selective. They also argue that going back in time, there are many more such examples (which I must say undermines their cause somewhat, for some of the examples quoted effectively go back to the times of witchcraft – or suspicion thereof). One could also argue of course that many developments which never raised suspicion and which have changed human life for the better, are not reported on either. However there is of course no reason why humanity should not be able to adopt an and /and approach: one which encourages harmless technologies as well as protect us from harmful ones. This is not a zero sum game (compensate the misses with the hits): it surely ought to be overwhelmingly positive.

The EEA today, incidentally, in a press release feels vindicated in its stance on neonicotinoids. The European Commission, as a result of a comitology (dont’ ask; this is EU administrative procedure; very very relevant but I shall not explain it here) quirkiness banned three neonicotinoid insecticides from use in the EU, after Member States failed to agree to either adopt or reject the proposal.

Geert.

Plain packaging and the Australian Constitutional debate: the Act does not amount to ‘acquisition’

Update 25 May 2015 BAT and PMI now have also launched in the High Court in the UK .with BAT putting aside the Australian ruling, reported below, as distinguishable, and PMI focusing on EU trade mark laws.

As reported earlier, the High Court of Australia held in the summer that the Australian Plain Packaging regulations are not unconstitutional. It has now also released its reasons for finding so. The relevant Commonwealth constitutional provision is Section 51(xxxi) which confers upon the Commonwealth Parliament the power to make laws with respect to:

“[t]he acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws”.

‘Just terms’ (including compensation) are only due if there is an ‘acquisition’; this, the High Court held, is not the case here. It notes (per French CJ)

‘Taking involves deprivation of property seen from the perspective of its owner. Acquisition involves receipt of something seen from the perspective of the acquirer. Acquisition is therefore not made out by mere extinguishment of rights.‘ (footnotes omitted).

And further

‘Importantly, the interest or benefit accruing to the Commonwealth or another person must be proprietary in character. On no view can it be said that the Commonwealth as a polity or by any authority or instrumentality, has acquired any benefit of a proprietary character by reason of the operation of the TPP Act on the plaintiffs’ property rights.’

There is plenty of scope for distinguishing the Australian constitutional arguments from other jurisdictions (indeed the judgment itself refers to distinctions with the US Constitution). Moreover, as I have already flagged in an earlier posting, the legal fronts on which this battle is fought are very wide. Immediate reactions during the summer (along the lines of ‘with this judgment there is no stopping plain packaging regulations’) seemed a bit premature to me –  they do all the more now that we have had a chance to read the actual judgment.

Geert.

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.

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.

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