EU Law Blog

Criminal Penalties, Environmental Law and Ship-Source Pollution: Directive 2009/123/EC

The Council and European Parliament have adopted Directive 2009/123/EC on ship-source pollution and on the introduction of penalties for infringements.

After the judgment of the Court of Justice in Case C-176/03 Commission v Council that we wrote about here and the Court's judgment in Case C-440/05 Commission v. Council ECR [2007] I-9097 annulling Council Framework Decision 2005/667/JHA of July 12th 2005 to strengthen the criminal law framework for the enforcement of the law against ship-source pollution, the Council and European Parliament have finally adopted Directive 2009/123/EC to amend Directive 2005/35/EC to include criminal penalties to buttress its substantive provisions.

The adoption of Directive 2009/123/EC brings to a conclusion the dispute between the Commission and the Council on the possibility of including provisions on harmonizing criminal penalties for breaches of EU law and environmental law in particular.

For a previous post on the follow-up to the Court of Justice's judgments, see here.

Emissions Trading, National Allocation Plans, Subsidiarity and Exceedance of Powers: Cases T-183/07 and T-263/07

The European states love to pontificate about reducing greenhouse gas emissions. Yet doing something practical to really reduce them is a different matter. The Commission tried to do something to reduce those emissions but in Case T-183/07 Poland v. Commission and T-263/07 Estonia v. Commission suffered yet another set back in the Court of First Instance. But when doing something it helps to get it right and to act legally. In fact, the judgments are really damning of the cavalier way the Commission treated the member States in question.

Directive 2003/87/EC of the European Parliament and of the Council of October 13th 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community sets up an EC wide scheme for greenhouse gas emission allowance trading within the EU. It provides that, for each five-year period, each member State should develop a national allocation plan (NAP) stating the total quantity of allowances that it intends to allocate for that period and how it proposes to allocate them. The plan should be based on objective and transparent criteria, including the criteria listed in the Directive, taking due account of comments from the public. It is to be published and notified to the Commission and to the other member States. The Commission may reject it or any aspect of it if it considers the NAP to be incompatible with the criteria listed in the Directive. The member State must not decide upon the total quantity of allowances that it is allocating for the period concerned and must not initiate the process for the allocation of those allowances to the operator of each installation, until proposed amendments are accepted by the Commission.

In 2006 Poland and Estonia notified the Commission of their NAPs for the period from 2008 to 2012. The Commission decided in 2007 that those NAPs were incompatible with the criteria in the Directive and decided that the total annual quantities of emission allowances should be reduced, respectively to 26.7% and 47.8% less than those proposed by those two member States.

Both Poland and Estonia sought annulment of the Commission decisions before the Court of First Instance on the grounds, essentially, that the Commission had exceeded its powers in rejecting their NAPS.

The Court of First Instance agreed with Poland and Estonia. It held that the Commission had exceeded its powers of review of NAPS conferred upon it by Directive 2003/87/EC.

The Court of First Instance recalled that administrative measures must be adopted in compliance with the competences attributed to various administrative bodies and that in principle, according to Article 249 EC, when the directive in question does not prescribe the form and methods for achieving a particular result, the freedom of action of the member States as to the choice of the appropriate forms and methods for achieving that result remains complete. It follows that, where there is no EC rule prescribing clearly and precisely the form and methods that must be employed by the member State, the Commission has the burden, when exercising its supervisory power, pursuant in particular to Articles 211 EC and 226 EC, of proving to the required legal standard that the instruments used by the member State in that respect are contrary to EU law (Case T‑374/04 Germany v Commission [2007] ECR II‑4431, paragraph 78) (For our post on that case, see here).

The Court made a rare reference to the principle of subsidiarity enshrined in the second paragraph of Article 5 EC and stated that such a principle binds the EU institutions in the exercise of their legislative functions. According to that principle, in areas which do not fall within its exclusive competence the EU is to take action only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community. In the case of environmental protection, which is governed by Articles 174 EC to 176 EC, where the EU and the member States share competence, the EU, that is to say the Commission in the present case, has the burden of proving to what extent the powers of the Member State and, therefore, its freedom of action, are limited in light of Article 10 and the criteria set out in the Directive (Germany v Commission, paragraph 79).

The Court held that the Directive provides in its Article 9(1) and (3) and from Article 11(2) that the member State alone has the power, first, to draw up the national allocation plan, and, secondly, to take final decisions fixing the total quantity of allowances which it will allocate for each five-year period and the distribution of that quantity amongst economic operators. The Member State enjoys a certain room for manoeuvre in choosing the measures which it considers the most appropriate to attain, in the specific context of the national energy market, the result prescribed by the Directive (T-374/04 Germany v Commission, paragraph 80).

As to the Commission's powers to review the national NAP submitted to it, the Court held that those powers were circumscribed by Article 9(3) of the Directive. Thus the Commission is authorized to verify the conformity of the NAP notified by the member State with the criteria set out in Annex III and the provisions of Article 10 of the Directive and to reject that plan on the grounds of incompatibility with those criteria and those provisions, by reasoned decision.

The Court of First Instance went on to describe its own powers of review of the Commission's decisions. It held that the Commission has a discretion in so far as that review causes it to make its own complex economic and ecological assessments having regard to the general objective of reducing greenhouse gases by means of an economically efficient and effective system of trading allowances (Article 1 and recital 5 of the Directive). Consequently, the Court conducts a full review as to whether the Commission applied properly the relevant rules of law. On the other hand, the Court of First Instance cannot take the place of the Commission on issues where the latter must carry out complex economic and ecological assessments in this context: It must confine itself to verifying that the measure in question is not vitiated by a manifest error or a misuse of powers, that the competent authority did not clearly exceed the bounds of its discretion and that the procedural guarantees, which are of particularly fundamental importance in this context, have been fully observed (T-374/04 Germany v Commission, at paragraphs 80 and 81; Case T‑13/99 Pfizer Animal Health v Council [2002] ECR II‑3305, paragraphs 166 and 171; Case T‑70/99 Alpharma v Council [2002] ECR II‑3495, paragraphs 177 and 182; and Case T‑392/02 Solvay Pharmaceuticals v Council [2003] ECR II‑4555, paragraphs 126 and 188).

The Court held that by rejecting the NAP on the basis of reasoning which consists only in the evocation of doubts as to the reliability of the data used by Estonia and Poland, the Commission exceeded its powers. The Commission has no power under the Directive to replace the data provided by the Member States with its own data obtained from its own assessment method. If the Commission could use a single method of assessing NAPs for all the Member States it would confer upon itself a veritable power of uniformisation in the context of implementing the allowance trading system and arrogate to itself a central role in the drawing up of NAPs. The Directive, according to the Court, simply does not allow for that.

Moreover, the Court of First Instance held that by imposing in the contested decisions allowance ceilings above which the NAP would be regarded as incompatible with the assessment criteria, the Commission substituted itself, in practice, for the member States concerned. Therefore, those decisions have the effect of encroaching on the exclusive competence which the Directive confers on the member States in deciding the total quantity of allowances which they will allocate in respect of each five-year period as from 1 January 2008.

In Case T-263/07, the Court also struck down the Commission's decision for being in breach of the principle of sound administration. That happens relatively rarely.

It held that the guarantees conferred by the EU legal order in administrative proceedings include, in particular, the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case (Case T‑44/90 La Cinq v Commission [1992] ECR II‑1, paragraph 86; Case T‑7/92 Asia Motor France and Others v Commission [1993] ECR II‑669, paragraph 34; Case T‑31/99 ABB Asea Brown Boveri v Commission [2002] ECR II‑1881, paragraph 99).

The Court held that the Commission had failed to examine the Estonian NAP properly to see if it included, in the total quantity of allowances to be allocated, a ‘reserve’ of allowances. Estonia claimed its NAP did so, while the Commission claimed in the decision that it did not. The Court held that the results set out by the Commission in its decision were simply not reconcilable with the figures provided if a proper examination of them had been made.

Standing to sue, Individuals, Habitats and a Commission Decision: Case C-362/06 P

The Court of Justice has once again taken a fairly strict line on the matter of the standing to sue of individuals.

In Case C-362/06 P Markku Sahlstedt and Others v. Commission the Court of Justice dismissed an appeal against an order of the Court of First Instance declaring inadmissible an action for annulment brought by landowners against a Commission decision classifying certain areas of land as being of ecological significance.

Under the "Habitats Directive", Council Directive 92/43/EC on the conservation of natural habitats and of wild fauna and flora, each member State must propose a list of important ecological sites to the Commission. Then the Commission must publish a list of those important sites together with certain environmental information on each site listed. Finally, the member States must designate the sites in their territory as "special areas of conservation" ("SACs") and take special measures to protect the environment in those areas.

The Commission published the list of sites in the Boreal biogeographical region, mainly up in Finland. But certain landowners with land in those sites and an association of farmers and foresters brought an action before the Court of First Instance to annul that Commission Decision.

The Court of First Instance declared that the action was inadmissible in its order in Case T-150/05 Sahlstedt and Others v. Commission. It held that that the applicants were not directly concerned by the contested decision, within the meaning of Article 230 § 4 EC: The Commission decision challenged, while it binds the member State as to the result to be achieved, leaves the choice of the conservation measures to be undertaken and the authorisation procedures to be followed to the competent national authorities. Consequently, the Court of First Instance dismissed the case without examining the merits.

The Applicants then appealed to the Court of Justice.

In a interesting twist, Advocate General Bot, in his opinion of October 23rd 2008, concluded that the appeal was well-founded, that the landowners were individually concerned by the Commission decision and that the case should be sent back to the Court of First Instance so that it could rule on the merits.

The Court of Justice did not follow the Advocate General's opinion and held that the applicants were not individually concerned.

The Court recalled that persons other than addressees of a decision may claim to be individually concerned only if that decision affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of those factors distinguishes them individually just as in the case of the person addressed by such a decision (see, inter alia, Case 25/62 Plaumann v Commission at 107, and Case C‑78/03 P Commission v Aktionsgemeinschaft Recht und Eigentum, paragraph 33). It found in the present case that the contested decision is a measure of general application because it applies to all economic operators who, in whatever capacity, carry on or are likely to carry on activities in the areas concerned which could jeopardize the conservation objectives of the Habitats Directive.

The Court continued to the effect that a provision of general application inasmuch as it applies to the economic operators concerned in general can still be of individual concern to some (see, Case C‑309/89 Codorniu, paragraph 19, and Joined Cases C‑182/03 and C‑217/03 Belgium and Forum 187 v Commission, paragraph 58). Where the decision affects a group of persons who were identified or identifiable when that measure was adopted by reason of criteria specific to the members of the group, those persons may be individually concerned by that measure inasmuch as they form part of a limited class of economic operators (Case C‑125/06 P Commission v Infront WM, paragraph 71 - for our post on that case, see here). However, the fact that it is possible to determine more or less precisely the number, or even the identity, of the persons to whom a measure applies by no means implies that that measure must be regarded as being of individual concern to those persons where it is established that that application takes effect by virtue of an objective legal or factual situation defined by the measure in question (Case C‑451/98 Antillean Rice Mills v Council, paragraph 52; the order in Case C‑96/01 P Galileo and Galileo International v Council, paragraph 38; and the order in Case C‑503/07 P Saint-Gobain Glass Deutschland v Commission, paragraph 70).

The Court of Justice held that the contested decision is of concern to the appellants only in so far as they have rights in the lands covered by some of the sites of Community interest adopted by the Commission with a view to enabling the establishment of a coherent European ecological network of SACs. Thus, the decision affects them by virtue of an objective legal or factual situation defined by the measure in question and not in accordance with criteria specific to the category of landowners. Nor was the contested decision adopted in the light of the specific situation of the landowners: The Decision cannot be regarded as a group of individual decisions addressed to each landowner.

Consequently, the appellants are not individually concerned by the contested decision for the purposes of Article 230 § 4 EC.

What is interesting in this case is how the Court of Justice has substituted its reasoning for that of the Court of First Instance. The latter held that the applicants were not "directly" concerned by the contested Decision, whereas the Court of Justice dealt only with the issue as to whether they were "individually" concerned by it.

For a previous post on standing, see here.

Oil Spills, Waste, Shipwrecks and Liability: Case C-188/07

The Court of Justce handed down an important judgment today in Case C-188/07 Commune de Mesquer v. Total France SA and Total International Ltd. on whether oil accidentally spilled at sea following a shipwreck is "waste" for the purposes of Directive 75/442/EEC on waste.

The Court held that it was indeed "waste". Consequently, the holder of the waste is liable for the cost of disposing of it.

What happened was this. ENEL, an Italian company, contracted with Total International Ltd for the supply of heavy fuel oil from Dunkirk (France) to Milazzo (Italy). To carry out the contract, Total raffinage distribution, now Total France SA, sold the heavy fuel oil to Total International Ltd, which chartered the oil tanker Erika, flying the Maltese flag. On December 12th 1999 the Erika sank off the coast of Brittany in France, spilling part of her cargo and oil into the sea and causing pollution of the Atlantic coastline of France.

The town of Mesquer sued the companies in the Total group for reimbursement of the cost of cleaning and anti-pollution operations on its coastal territory, relying on Directive 75/442/EEC. The town claimed that the oil accidentally spilled at sea was "waste" as defined by Directive 75/442/EEC, such that Total International Ltd and Total France should be liable for the cost of disposal, in their capacity as ‘previous holders’ or ‘producer of the product from which the waste came’ respectively. The case went up to the French supreme court, the Cour de Cassation which referred the matter to the Court of Justice.

Three main questions arose.

The first main issue was whether oil accidentally spilled at sea following a shipwreck is "waste". (In fact that was the second question addressed in the judgment).

The Court of Justice answered in the affirmative. It held that oil spilled in connection with a shipwreck, mixed with water and sediment and drifting along the coastline of a member State until being washed up on shore, must be be classified as "waste" within the meaning of Directive 75/442/EEC because it was a substance which its holder did not intend to produce and which he discards, albeit involuntarily, during transport.

The Court recalled that Annex I to Directive 75/442 provides lists of substances and objects that may be classified as waste. However, the lists are only intended as guidance, and the classification of waste is to be inferred primarily from the holder’s actions and the meaning of the term ‘discard’ (see Case C‑1/03 Van de Walle and Others, paragraph 42). The fact that Annex I to Directive 75/442, entitled ‘Categories of waste’, refers in point Q4 to ‘Materials spilled, lost or having undergone other mishap, including any materials, equipment, etc., contaminated as a result of the mishap’ thus merely indicates that such materials may fall within the scope of waste. That in itself is insufficient to classify as waste hydrocarbons accidentally spilled at sea and cause pollution of the territorial waters and then the coastline of a Member State (see, Van de Walle, paragraph 43). It is necessary to determine whether such an accidental spillage of hydrocarbons is an act by which the holder discards them within the meaning of Article 1(a) of Directive 75/442. And the Court held that it was in this case. It had already held that oil that is accidentally spilled and causes soil and groundwater contamination is not a product which can be reused without prior processing (see Van der Walle, paragraph 47). It held that the same conclusion must be reached in the case of hydrocarbons which are accidentally spilled at sea and cause pollution of the territorial waters and then the coastline of a Member State.

The second issue was whether the hydrocarbons being transported, prior to the spillage, were "waste". The Court held that they were not "waste" (that point was raised in the first question dealt with by the Court).

The Court held that during transport, before spillage, the oil in question was not waste.

It recalled that the meaning of the term ‘waste’ depends on the meaning of the term ‘discard’ (Case C‑129/96 Inter-Environnement Wallonie, paragraph 26). Consequently, it stated that those terms must be interpreted in the light of the aim of the directive (Joined Cases C‑418/97 and C‑419/97 ARCO Chemie Nederland and Others, paragraph 37), which, according to the third recital in the preamble to the directive, consists in the protection of human health and the environment against harmful effects caused by the collection, transport, treatment, storage and tipping of waste, having regard to Article 174(2) EC, which provides that Community policy on the environment is to aim at a high level of protection and is to be based, in particular, on the precautionary principle and the principle that preventive action should be taken (see Case C‑457/02 Niselli, paragraph 33).

The Court has also held that, in view of the aim pursued by Directive 75/442, the concept of waste cannot be interpreted restrictively (see ARCO Chemie Nederland, paragraph 40).

That concept can cover all objects and substances discarded by their owner, even if they have a commercial value and are collected on a commercial basis for recycling, reclamation or reuse (see, Case C‑9/00 Palin Granit and Vehmassalon kansanterveystyön kuntayhtymän hallitus, paragraph 29). But, the Court went on, goods, materials or raw materials resulting from a manufacturing or extraction process which is not primarily intended to produce that item may constitute not a residue but a by-product which the undertaking does not wish to discard but intends to exploit or market on economically advantageous terms in a subsequent process without prior processing (see Palin Granit, paragraph 34, and order in Case C‑235/02 Saetti and Frediani, paragraph 35), in which case it is not waste. In tis case, the Court found that the oil transported was not intended to be discarded and was being exploited commercially.

The third issue that arose was whether in the event of the sinking of an oil tanker, the producer of the heavy fuel oil spilled at sea and/or the seller of the fuel and charterer of the ship carrying the fuel may be required to bear the cost of disposing of the waste thus generated, even though the substance spilled at sea was transported by a third party, in this case a carrier by sea.

The Court held that, in the event of a shipwreck, the owner of the ship carrying hydrocarbons has them in his possession immediately before they become waste. Thus, the shipowner may be regarded as having produced the waste and can be classified as a ‘holder’ within the meaning of the directive. However, the national court may consider that the seller of hydrocarbons and charterer of the ship carrying them has ‘produced’ waste if it finds that the seller-charterer contributed to the risk that the pollution caused by the shipwreck would occur, in particular if he failed to take measures to prevent such an occurrence, such as measures concerning the choice of ship. The Court considers in this respect that the Waste Directive does not preclude the Member States from providing, pursuant to the International Convention on Civil Liability for Oil Pollution Damage adopted at Brussels on November 29th 1969, as amended by the Protocol signed in London on November 27th 1992 and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage adopted at Brussels on 18 December 1971, as amended by the Protocol signed in London on November 27th 1992 for limitations or exemptions of liability for the benefit of the shipowner and the charterer, or from establishing a fund such as the International Oil Pollution Compensation Fund.

The Court went on that if the cost of disposing of the waste is not or cannot be borne by that fund and, in accordance with the limitations and/or exemptions of liability laid down, the national law of a member State, including the law derived from international agreements, prevents that cost from being borne by the shipowner and the charterer, even though they are to be regarded as ‘holders’, that a national law will then have to make provision for the cost to be borne by the ‘producer of the product from which the waste came’. In accordance with the ‘polluter pays’ principle, however, such a producer cannot be liable to bear that cost unless he has contributed by his conduct to the risk that the pollution caused by the shipwreck will occur.

That was long, wasn't it ?

Wild Birds, Interim Measures and Malta: Case C-76/08 R

The President of the Court of Justice granted an injunction against Malta in Case C-76/08 R Commission v. Malta preventing it from adopting measures to allow the hunting of quails and turtle doves in the 2008 spring migration.

The Commission brought proceedings based on Article 226 EC against Malta alleging the breach of Article 7 of Directive 79/409/EEC on the conservation of wild birds because it claims that Malta systematically allowed the hunting of those birds without complying with the strict conditions laid down in Article 9 of that Directive.

The Commission also requested the Court to order Malta from refraining from adopting any measures to apply Article 9 of Directive 79/409/EEC for the spring migration in 2008 and 2009 on the basis of Article 243 EC.

The President of the Court granted the injunction for 2008 but held that there was no urgency to do so for 2009.

Interim measures can be granted when three cumulative conditions are fulfilled :
The plaintiff - in this case, the Commission - makes out prima facie case;
The loss and damage likely to occur if the measures are not granted must be irreparable,
The matter must be urgent and cannot wait for judgment in the main case.

In this case, a tricky issue was the nature of the loss and damage likely to be suffered. Interestingly, the President held that EC legislation on the conservation of wild birds must be interpreted in the light of the precautionary principle, which is one of the foundations of the high level of protection pursued by EU environmental policy, in accordance with the first subparagraph of Article 174 §2 EC (see, by analogy, Case C-127/02 Waddenvereniging and Vogelbeschermingsvereniging, paragraph 44).

Thus, when assessing urgency, the protection of birds covered by Directive 79/409 is regarded as being a matter where management of the common heritage is entrusted to the member States in relation to their respective territories (see Case C-60/05 WWF Italia and Others, paragraph 24). The President recalled that any hunting activity is liable to disturb wild fauna and it may in many cases affect the conservation status of the species concerned, irrespective of the extent to which it depletes numbers. The regular elimination of individual animals keeps the hunted populations in a permanent state of alert which has harmful consequences for numerous aspects of their living conditions (Case C-435/92 Association pour la protection des animaux sauvages and Others, paragraph 16, and order of the President of the Court of 19 December 2006 in Case C‑503/06 R Commission v Italy, paragraph 17, published in summary form).

We haven't made a proper statistical study but it seems that the number of interim measures actions brought by the Commission against member States is on the increase.

Emissions Trading, Greenhouse Gas Emissions, National Allocation Plans : Case T-374/04

The Court of First Instance has annulled yet again a Commission decision that sought to oblige a member State to stick to the total amount of allowances of greenhouse gas emissions. In Case T-374/04 Germany v. Commission it held that the Commission was wrong to prevent Germany from foreseeing the possibility of ex post reductions in greenhouse gas emissions once it national allocation plan ("NAP") had been notified pursuant to Directive 2003/87/EC.

Directive 2003/87/EC of the European Parliament and of the Council of October 13th, 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC sets up a Community scheme for greenhouse gas emission allowance trading in order to reduce such emissions. Each Member State must develop a national plan for the allocation of greenhouse gas emission allowances (‘NAP’), in accordance with certain criteria set out in the directive. The NAP must state the total quantity of allowances that the Member State intends to allocate and how it proposes to allocate them. The first NAP, for the three-year period beginning on January 1st, 2005, had to be published and notified to the Commission by March 31st 2004 at the latest. Under the directive, the Commission has three months to reject a NAP, in whole or in part, if it is incompatible with the criteria laid down by the directive. All amendments made to the NAP by the member State must be approved by the Commission.

Germany duly notified its NAP for the period 2005-2007 to the Commission. Its NAP allowed, in certain specified cases, a reduction in the amount of allowances allocated to an installation in the course of an allocation period. The Commission adopted its decision declaring that the ex post adjustments/reductions in the German NAP were incompatible with the criteria laid down in Annex III to Directive 2003/87/EC. Germany then asked the Court of First Instance to annul that decision.

The Court of First Instance agreed with Germany that the ex post reductions in emissions in the NAP were compatible with Directive 2003/87/EC.

The judgment is quite a complex one but in essence the Court of First Instance held that nothing in Directive 2003/87/EC prevented ex post adjustments of allocations given to installations and that it was possible for member States to change the allocations given to new entrants during the course of the emission trading period.

It seems clear that the German system would not have increased the overall quantities of allowances. It would have led however to changes in the total allowances during a given trading period which would perhaps not have been conducive to creating a robust emission trading market. The question remains whether Directive 2003/87/EC lays down the right rules to set up a proper and effective emissions trading market or whether it should be modified.

For a previous post on emissions trading, see here.

For those interested in the more general aspects of judicial review, the Court of First Instance repeated its classic statement of the standard of review of measures taken consequent upon complex economic and policy assessments. The Court stated at paragraph 81 that Community judicature conducts a full review as to whether the Commission applied properly the relevant rules of law, whose meaning must be determined in accordance with the methods of interpretation recognized by the case-law. On the other hand, the Court of First Instance cannot take the place of the Commission where the latter must carry out complex economic and ecological assessments in this context. Thus, the Court must confine itself to verifying that the measure in question is not vitiated by a manifest error or a misuse of powers, that the competent authority did not clearly exceed the bounds of its discretion and that the procedural guarantees, which are of particularly fundamental importance in this context, have been fully observed (see, Case T-13/99 Pfizer Animal Health v Council, paragraphs 166 and 171; Case T-70/99 Alpharma v Council, paragraphs 177 and 182; and Case T-392/02 Solvay Pharmaceuticals v. Council, paragraph 126).

One of the elements the Court of First Instance took into account to judge the legality of the Commission's decision in this case was some guidance on the application of Directive 2003/87 which the Commission itself had issued and published. Thus, the Court was led to examine whether the decision in question complied with the guidance that the Commission had previously adopted. The Court repeated that in certain circumstances such guidance could have legal effects.

It held in particular that by adopting rules of administrative conduct designed to produce external effects and announcing by publishing them that it will henceforth apply them to the cases to which they relate, an institution limits the exercise of its own discretion and cannot depart from those rules. Should it do so, the institution in question may commit a breach of general principles of law, such as the principles of equal treatment, of legal certainty or of the protection of legitimate expectations. As a result, such rules of conduct of general application may produce legal effects and that, in particular, the administration may not depart from them in an individual case without giving reasons that are compatible with the principle of equal treatment (interestingly, the Court referred to the position of the Commission guidelines on the method of setting fines in competition matters, Joined Cases C-189/02 P, C‑202/02 P, C‑205/02 P, C-208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission , paragraphs 209 to 211; see also, with regard to guidelines adopted by the Commission on State aid, Case T-16/96 Cityflyer Express v Commission, paragraph 57), provided that such an approach is not contrary to other superior rules of EC law. Specifically in the fields of agriculture, health and the environment, the Court has recognized that the EC institutions may lay down for themselves guidelines for the exercise of their discretion by way of measures not provided for in Article 249 EC, in particular by communications, provided that they contain an indication as to the approach to be followed by those Community institutions and do not depart from the Treaty rules (see Pfizer Animal Health v Council, paragraph 119, Alpharma v Council, paragraph 140).

Environmental Law and the EC Legal Order

Here's some more intellectual nourishment for you. Pavlos Eleftheriadis of the Faculty of Law, Oxford University, has written a stimulating article on the development of environmental law in the EC legal order. Its title is, oddly enough, "Environmental Rights in the EC Legal Order".

This is what the abstract says:

This article attempts to offer a general framework for the protection of environmental rights in the European Union's legal order. The article discusses the Aarhus Convention, which follows the international trend for procedural protection of environmental rights. The European Commission proposes to give effect to its 'access to justice' dimension of the Aarhus Convention in a way that endorses uniformtity as a goal. I argue that this goal is mistaken. The guiding constitutional principle in this area should be that unless there are strong reasons to the contrary, EC law will only supplement the public law of the Member States by providing minimum standards. Under the scheme of environmental rights established by the Aarhus Convention each applicant or environmental activist may have slightly different rights depending on the country where he or she starts their actions or launches their campaigns. The public law of the EC, of which environmental law is now a major part, is not an attempt at harmonization nor is it a simple deduction from the principles of direct effect and supremacy.

You can download it here.

Highly recommended.

Chevron Doctrine in the CFI ? Case T-216/05

Has the Court of First Instance embraced the "Chevron Doctrine" or some avatar of it ?

The "Chevron Doctrine" in the US takes its name from the case of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) in which the US Supreme Court held it would defer to an administrative agency's interpretation of the statute that grants it powers if that interpretation is permissible and reasonable. Consequently, the US Supreme Court will not examine whether there are other, competing interpretations that may be better than the one put forward by the administrative agency.

Now look at the Court of First Instance's judgment in Case T-216/05 Mebrom v. Commission.

In that case, Mebrom, a trader of a pesticide called methyl bromide, sued the Commission because it did not receive quotas for import licenses after January 1st, 2005. Under the Montreal Protocol the use of methyl bromide was to be phased out from January 1st, 2005 except for certain strictly defined uses because it depletes the ozone layer. The Montreal Protocol was implemented in the EC by Regulation 2037/2000 of the European Parliament and of the Council of June 29th, 2000 on substances that deplete the ozone layer. That Regulation was applied by the Commission in such a way that before January 1st, 2005 registered traders received a quota for import licenses of methyl bromide based on their historical import quantities. But from January 1st, 2005 the Commission did not grant quota for licenses to traders at all but gave them in very limited circumstances to fumigators who actually used the product to dust crops. The fumigators with quota then contacted traders to effect the importation of the quantity of methyl bromide required. The result of the change was that traders were no longer assured of a given volume of trade and they had to compete between themselves for the business of the fumigators.

The plaintiff claimed that Regulation 2037/2000 entitled traders to receive quotas after January 1st 2005 and that the Commission was under a legal obligation to give quotas.

The Court of First Instance disagreed and dismissed the action.

What is particularly intriguing is paragraph 83 of the judgment in which the Court of First Instance held :

"In the light of the foregoing, it must be held that the Commission was not obliged under [Regulation 2037/2000] to award an import quota in 2005 to the applicant as an importer and that the new system established by the Commission from 1 January 2005 constitutes a lawful application of Articles 3, 4, 6 and 7 of the Regulation that is compatible with those provisions. In those circumstances, it is not necessary to examine whether the Commission could have done otherwise and continued after 31 December 2004 to award import quotas to importers."

Now then, that last sentence of paragraph 83 looks like a rudimentary form of the Chevron doctrine.

The Court of First Instance also handed down a judgment in another case - Case T-198/05 Mebrom v. Commission - covering a different aspect of the problem.

Escaped sewage and waste: Case C-252/05

The Court of Justice has handed down an interesting judgment in an absolutely delectable case. Just don't read this just before eating...

The issue came up in Case C-252/05 Thames Water Utilities whether sewage that "escapes" from the sewerage network and seeps onto land is "waste" within the meaning of Directive 75/442/EC on waste.

The Court of Justice held in its judgment that escaped sewage was indeed waste. In particular, it held that waste water which leaks accidentally falls within the ambit of Directive 75/442. The fact that waste water escapes from a sewerage network does not affect its character as ‘waste’ within the meaning of Directive 75/442. The escape of waste water from a sewerage network constitutes an event by which the sewerage undertaker, the holder of that waste water, ‘discards’ it. The fact that the waste water is spilled accidentally does not alter the outcome.

The Court has held previously that accidental spillage of hydrocarbons onto land may be characterized as an action by which the holder of those hydrocarbons ‘discards’ them (see, see Case C-1/03 Van de Walle and others, paragraph 47). The Court also held that Directive 75/442 would be made redundant in part if hydrocarbons which cause contamination were not considered waste on the sole ground that they were spilled by accident (Case C-1/03 Van de Walle and others, at paragraph 48). The same reasoning applied, according to the Court, to waste water which leaks accidentally.

French Conseil d'Etat and EC law rights

The French Conseil d'Etat, the supreme administrative court, has handed down a significant judgment on the enforcement of EC law rights and obligations in national courts. The judgment represents a significant departure from its previous practice and entails reconciliation of the recognition of the supremacy of EC law with the requirement of safeguarding the constitutionality of national measures implementing EC law.

The case in n° 287110 Arcelor, decided on February 8th 2007. Unfortunately, it has not yet been translated into English on this site.

In order to implement the Kyoto Protocol, the EC adopted Directive 2003/87/EC. That Directive was in turn implemented in France by ordinance of April 15th 2004 and decree n° 2004-832 of August 19th 2004.

Arcelor and the other plaintiffs requested the President, the Prime Minister and other competent ministers to repeal the decree n° 2004-832 of August 19th 2004. They received no response and so they brought an action before the Conseil d'Etat to annul the implicit rejection of their request. They alleged that decree n° 2004-832 of August 19th 2004 was illegal because it applied to steel producers and infringed the principles of the right to property and to trade freely and the principle of equality guaranteed by the French Constitution.

The Conseil d'Etat noted that decree n° 2004-832 of August 19th 2004 applied to steel producers because that is exactly what was required by Directive 2003/87/EC. Thus, if it declared decree n° 2004-832 of August 19th 2004 to be unconstitutional, it would in effect be declaring invalid a measure adopted by an EC institution. But it did not have jurisdiction to do that.

The Conseil d'Etat found that the right to property and to trade freely as well as the principle of non-dsicrimination were general principles upheld by EC law in the same way as they were protected by the French Constitution. Therefore, in order to give full effect to the supremacy of EC law, the Conseil d'Etat decided to refer a question to the Court of Justice under Article 234 EC on the validity of Directive 2003/87/EC.

The Conseil d'Etat made a press release that explains the importance of this judgment available here.

That marks a significant departure from the Conseil d'Etat's previous practice: Previously, it would simply have ruled on the constitutionality of the French decree without worrying whether the decree was a measure implementing a superior rule of EC law.

Those who consider that direct actions for annulment before the Court of First Instance represent a superior way of protecting individual rights would do well to note that Arcelor did bring an action to annul Directive 2003/87/EC. But that action, Case T-16/04 Arcelor has been pending before the Court of First Instance for over three years.

For a previous post on emissions trading, see here.