Monday, April 23, 2012

Emissions Trading & Airlines (1)

Since I'm spending my day thinking about air transport, I thought I'd spend some time blogging about a topic that is long overdue: the application of the European Emmissions Trading Scheme to airlines. (NB: given that the event is organised under Chatham rules, my conversations with the other forum participants won't come back in this post, at least not with attribution.)

My main obsession with this case is the potential conflict between the ETS as presently constituted and the rule of national sovereignty over airspace. Everything else seems fine, at least legally. Last week, again, I looked at what the Court did with that in the key case here: Air Transport Association of America et al. v. Secretary of State for Energy and Climate Change. It is useful to ask the question that I asked then: did the Court properly explain what they were doing? (I'm doing a bit of writing on the reasoning of European courts.) Let's start with the Advocate-General, Juliane Kokott:
109. However, the case-law of the Courts of the European Union has not given rise to any clear criteria for the determination of whether and to what extent a principle of customary international law can serve as a benchmark against which the validity of EU legislation can be reviewed. It would appear that the Courts of the European Union have not in the past had occasion to undertake such a review of validity; customary international law has, up to now, been called upon only in relation to the interpretation of provisions and principles of EU law. (104)
113. In line with the case-law on international agreements discussed above, (106) I therefore propose that the Court of Justice should not recognise principles of customary international law as a benchmark against which the lawfulness of EU acts can be reviewed unless two conditions are satisfied:
– First, there must exist a principle of customary international law that is binding on the European Union.
– Secondly, the nature and broad logic of that particular principle of customary international law must not preclude such a review of validity; the principle in question must also appear, as regards its content, to be unconditional and sufficiently precise.
b) As to whether the principles of customary international law at issue are suitable as a benchmark against which to review validity in proceedings brought by natural or legal persons
135. The common feature of the three principles of customary international law at issue in Question 1(a) to (c) in the High Court’s request for a preliminary ruling is that they determine the scope of sovereignty of States and limit their jurisdiction.

136. Principles such as these are, by their very nature and broad logic, by no means capable of having an effect on the legal status of individuals. (128) The institutions involved in the present proceedings and the majority of the governments involved have correctly pointed this out.

137. In legal proceedings brought by natural or legal persons, therefore, such principles cannot be relied upon as a benchmark against which the validity of EU acts can be reviewed. (129)
Essentially, she's hiding the ball. Obviously it is not the first time - my personal favourite is the holding in Van Parys saying that WTO infringements, even violations of rulings by dispute settlement boards, are not directly enforceable by individuals because WTO remedies are based on political negotiating - but this one is particularly poorly motivated. The AG makes a big hooplah of evaluating whether the various rules actually exist (that's in the cropped paragraphs 115-134), but the actual key section is little more than ipse dixit. The accompanying footnote 128 refers to par. 84 of AG Jacobs's opinion in Racke. What we find there is actually a lot better:
84 In the light of those principles, there must also be limits to the effect of rules of customary international law relating to treaties. The overall nature and purpose of the law of treaties is to lay down rules applying in the relations between States (and international organisations). The law of treaties is clearly not intended to create rights for individuals. It is true that its application may have the effect of creating such rights, namely in those cases where a domestic legal system accepts that international agreements concluded in conformity with the law of treaties are capable of conferring rights on individuals. However, that is but an indirect effect, by no means intended at the level of international law. It is the provision of the agreement (lawfully concluded) which has direct effect. The overall nature and purpose of the law of treaties would therefore seem not to be conducive to direct effect. (It may be noted in passing that there may be other types of rules of customary international law which do intend to confer rights on individuals, for example rules of international humanitarian law.) 
But then, we already knew that AG Jacobs is one of the greatest AGs ever.

So the AG denies individuals the right to rely on the principle of sovereignty over the national airspace for reasons that are essentially not explained. For treaties you can focus, like AG Jacobs does, on the intentions of the authors of the treaty,  but how do you engage in teleological interpretation with a rule of customary law? The Court has an answer:
110 However, since a principle of customary international law does not have the same degree of precision as a provision of an international agreement, judicial review must necessarily be limited to the question whether, in adopting the act in question, the institutions of the European Union made manifest errors of assessment concerning the conditions for applying those principles (see, to this effect, Racke, paragraph 52).
52 However, because of the complexity of the rules in question and the imprecision of some of the concepts to which they refer, judicial review must necessarily, and in particular in the context of a preliminary reference for an assessment of validity, be limited to the question whether, by adopting the suspending regulation, the Council made manifest errors of assessment concerning the conditions for applying those rules.
Interesting, huh? "We don't know what the law is, so we're going to be modest testing." If you're wondering what that whizzing sound is, that's the sound of Justice Marshall spinning in his grave. Let's say it again: "It is emphatically the province and duty of the Judicial Department [the judicial branch] to say what the law is." More generally, we may refer to art. 4 CC, which is repeated in art. 13 Wet AB in the Netherlands: "Le juge qui refusera de juger, sous prétexte du silence, de l'obscurité ou de l'insuffisance de la loi, pourra être poursuivi comme coupable de déni de justice." So forgive me if I think this solution is unsatisfactory. In that regard, the AG's approach is already better, but I think it is still flawed.

Given that we are told time and again that the EU legal order has "a complete system of legal remedies" (cf. par. 23 of Les Verts), the general rule should be that individuals can rely on all rules of law that are sufficiently precise to be applied to the conflict in question. Situations where individuals are denied the right of access to a rule of international law should very much be the exception. I would limit this to cases where, as in Van Parys, there is a strong policy reason for denying access. If necessary, we could add to this cases where there is clear evidence that the Council, in ratifying the treaty in question, did not intend for individuals to be able to claim under the treaty, i.e. the US approach. When it comes to sovereignty over national airspace, I don't see either argument applying, although I would like to do some more research on the treaty version of that rule: art. 1 of the Chicago Convention, which doesn't apply to the EU directly because the EU is not a party to that treaty. Do the states parties of the Chicago Convention allow individuals to rely on art. 1 in Court?

P.S. This post takes it as given that applying the ETS to an airplane taxiing in San Francisco or flying over the Gobi desert violates the sovereignty of the US and China, respectively. Readers should feel free to explain why I'm wrong on this in the comments. A fellow participant in today's European Air Transport Regulation Forum in Florence offered that it should always be possible to read the possible "justifications" into the rule, allowing exceptions for the purposes of promoting the environment, etc.

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