The power to negotiate on behalf of the EU in an International Agreement on mercury

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1 Legal Briefing The power to negotiate on behalf of the EU in an International Agreement on mercury Conclusion and Summary ClientEarth concludes that the European Commission cannot withdraw its recommendation on the international mercury negotiations and refuse to negotiate on behalf of the EU. It must follow Council negotiation decisions and directives. The Treaty s procedural rules on international negotiations and the EU principle of cooperation make this clear from a legal point of view. Issues of competence, though important, are not directly relevant to this conclusion. In relation to the issues surrounding competence, it should be noted that there are different legal interpretations, and that this briefing merely seeks to objectively set out the legal arguments on both sides, without making a judgement as to which one is correct. Because of this scope for different interpretations regarding competence and because of the urgent need to resolve this issue to enable the EU to operate effectively at an international level, we recommend that the issues surrounding competence in the negotiation, conclusion and amendment of international agreements be referred to the European Court of Justice for an opinion under Article 218(11), TFEU, either by the Commission or the Council or by both together. This judicial review would not suspend the negotiation of the International Agreement on Mercury starting on 7 th of June Introduction The European Union and its Member States will participate in the first session of the International Negotiating Committee for the adoption of an International Agreement on mercury which will take place in Stockholm from 7 to 11 June The global international agreement, to be completed by 2013, aims at banning the use of mercury covering all types of use, including its trade, at setting standards for environmentally sound management, safe storage of mercury waste and emissions. The nomination of the EU negotiator for this international convention is proving to be a source of conflict between the European Commission and the Council, particularly with regard to the procedures for the initiation of the negotiations and also the understanding on the distribution of competence between the EU and the Member States.

2 It is the purpose of this briefing to set out some of the legal rules which need to be applied when considering this conflict, particularly: the relevant EU procedural rules for negotiating and concluding international agreements; rules regarding the principle of sincere cooperation, unity of external representation and coherence; rules regarding competence. Where relevant, European Court of Justice (ECJ) cases are considered. 2. Procedural rules on international negotiations Under Article 218(2) of the TFEU 1 the Council has the duty to authorise the opening of international negotiations, adopt negotiating directives, authorise the signing of agreements and conclude them. Regarding the opening of negotiations, Article 218(3), TFEU requires the Commission (or the High Representative for issues related to Common Foreign and Security Policy (CFSP)) to submit recommendations to the Council who must adopt a decision authorising the opening of the negotiations and nominate a negotiator or the head of the Union s negotiating team. Under Article 218(4), TFEU, the Council has the power to address directives to the negotiator (in Article 218(2) of the TFEU this is expressed as a duty see above), and to designate a special committee in consultation with which the negotiations must be conducted. It authorises the signing of an agreement (on a proposal by the negotiator), in most cases by qualified majority voting and with the involvement of the European Parliament (see Article 218(5) and (6), TFEU). Because part of the international mercury treaty will probably deal with a ban of some description on international trade in mercury, i.e. a trade issue which falls within the EU s Common Commercial Policy, Article 207 of the TFEU applies too. The procedures of Article 218, TFEU apply to the Common Commercial Policy, but in addition, Article 207(3) imposes an additional express duty on the Commission to make recommendations to the Council (i.e. a Commission proposal), and a duty on the Council to authorise the Commission to open the necessary negotiations. The Commission must conduct the relevant negotiations... within the framework of such directives as the Council may issue to it (Article 207(3), TFEU), as this policy is an EU exclusive competence. In brief, under Articles 218 and 207 of the TFEU the Council has the competence to decide how and who is the negotiator of international agreements and therefore who represents the EU and the Member States in external relations. 1 Treaty on the Functioning of the European Union, amending the Treaty of the European Communities in accordance with the Lisbon Treaty. 2

3 We understand that in the context of the international mercury negotiations, the European Commission has withdrawn its recommendation to the Council due to the lack of agreement on the distribution of competences and on the negotiator to be nominated. We also understand that there is a view that, as a consequence of the Commission s withdrawal of their proposal, the EU will not be able to actively negotiate in the international proceedings in June, maybe because it is thought that it now impossible for the Council to act on the proposal of the Commission and authorise the opening of the negotiations and the nomination of the negotiator (as required by Article 218(3), TFEU). Relevant considerations: 1. Both Article 217 and Article 207 of the TFEU make clear that it is the Council s overriding duty to decide on the opening of international negotiations and to adopt/issue negotiating directives to the Commission or any other negotiator it has designated. This duty is expressed independently from the Commission proposal procedure (see Article 217(2), TFEU). The procedures requiring a Commission proposal do not negate this duty. 2. The Commission is not entitled under any legal basis to withdraw its proposal. The procedures described in Article 218 and 207 of the TFEU impose a clear and unambiguous express duty on the Commission to submit proposals in international negotiations. In addition, such a withdrawal certainly goes against the principle of sincere cooperation as set out in Article 4(3) of the TEU which we develop below. 3. If the Commission is the negotiator in the relevant international agreement negotiations, there is an equally clear and unambiguous duty to comply with the Council s negotiating directives. There is absolutely no legal basis allowing for the Commission to withdraw a proposal and to refuse negotiating on behalf of the EU. This is in complete contravention of Article 207(3), TFEU and Article 218(2) and (4), TFEU. The Commission must follow the Council s instructions. 4. As there is no legislative basis for withdrawing a Commission proposal from a formal, legal point of view, the Commission proposal must therefore still stand, whatever the Commission may desire. Since the Council holds the competence to open the negotiations, the illegal withdrawal of the Commission recommendation should not have effect and the Council could still decide to open the negotiations and dictate the Commission to act as the negotiator on behalf of the EU for the whole international agreement or for specific areas. 5. In addition, even if there is no formal Commission proposal, the European Court of Justice has declared that the EU can negotiate on the basis of an informal position (as long as there is a concerted EU position based on clear legal standards (see cases discussed below in relation to the principle of cooperation). Legally, the adoption of the Council decision without the Commission recommendation is not considered an essential procedural requirement that could eventually justify an action against the legality of the international agreement. 3

4 6. If the Commission (or indeed the European Parliament or a Member State) does not agree with the Council decision regarding the negotiator and the participation of Member States, it can request a judicial review according to article 218(11), TFEU which states A Member State, the European Parliament, the Council or the Commission may obtain the opinion of the Court of Justice as to whether an agreement envisaged is compatible with the Treaties. Where the opinion of the Court is adverse, the agreement envisaged may not enter into force unless it is amended or the Treaties are revised. This judicial review by the Court of Justice takes place before the conclusion of the agreement and is in the form on an opinion which is legally binding. However, the application does not have suppressive character so the negotiations of the international agreement could continue. If the opinion from the Court of Justice would be adverse to the Council decision, the agreement could not enter into force unless the Treaty were amended which is not likely to happen - or the agreement was revised in accordance with the Court s judgement. In the Natural Rubber Agreement case 2 the Commission applied for judicial review in similar circumstances under Article 228 (6) (which is article 300 (6) of the TEC and which is similar to current Article 218 (11) of the TFEU) and the Court declared the case admissible stating that the review procedure could be used for the purpose of deciding on the participation or not of the Member States in the international negotiations. Conclusion on the procedural rules on negotiation Under Articles 218 (2) (5), TFEU and Article 207(3), TFEU the Council has the competence to open the negotiations, to instruct the Commission to negotiate (under Article 207, TFEU) or to nominate a negotiator (under Article 218(3), TFEU), which could be the Commission. This means that the Council can (and in relation to relevant trade issues falling within the Common Commercial Policy should) now instruct the Commission to open negotiations on the international mercury negotiations, and if it does so, the Commission must follow the Council s instructions and open negotiations, as it must follow Council s instructions on how to negotiate (including in accordance with its own proposals). In such situations of conflict between different EU Institutions, the Court of Justice has called the Council and the Commission to agree on appropriate methods of cooperation to ensure the most effective way of defending the Community interests 3 (ERTA case). 2 Opinion 1/78 of 4 October 1979 [1979] ECR Case 22/70 Commission v. Council, ERTA [1971] ECR

5 3. The principle of sincere cooperation an unity of external representation Both the principle of sincere cooperation and the requirement of unity in the external representation of the EU are general principles of EU law 4 and apply irrespective of whether an area is subject to shared or exclusive competence or whether Member States have a right to enter into international obligations. 5 Under the Treaty, the principle of sincere cooperation is expressed in a number of Articles but its basic expression is found in Article 4(3), TEU, which states that the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties. It then goes on to impose an obligation on Member States to: take appropriate measures to ensure fulfilment of EU law obligations; take appropriate measures to ensure fulfilment of obligations resulting from acts of EU institutions; facilitate the achievement of the Union s tasks; and refrain from any measures which could jeopardise the attainment of the Union s objectives. Other relevant provisions are: under Article 24(3), TEU, Member States are under a duty to support the Union s external policy... in a spirit of mutual solidarity and shall comply with the Union s action in this area ; under Article 13(2), TEU, the institutions shall practise mutual sincere cooperation and shall act within the limits of EU law; and under Article 21(3), TEU the Union itself is under a duty to ensure consistency between the different areas of its external action and between these and its other policies. In addition, EU case law in relation to the principle of sincere cooperation holds that Member States are under a duty of close cooperation 6 with EU institutions... in order to facilitate the achievement of the Community tasks and to ensure the coherence and consistency of the action and its international representation. 7 Relevant considerations 1. The first point to emphasise here is that EU institutions, as well as the Member States must comply with the principles of sincere cooperation, unity of external representation and coherence (i.e. consistency between external action and other policies). 4 See Opinion 1/78, paragraphs 34, 35 and 36, Opinion 2/91 [1993] ECR I-1061, paragraph 36, Opinion 1/94, [1994] ECR I-5267, paragraph 108, Opinion 2/00, paragraph See Case C-266/03 Commission v Luxembourg ECR [2005] I-04805, at para 58; and case 433/03 Commission v Germany ECR [2005] I-6985, at para Case C-246/07 Commission v Sweden ECR [2010] 0000, at para See for example, Commission v Luxembourg, at para 60. 5

6 A withdrawal of a proposal for EU action by the Commission in international negotiations, resulting in the inability of the EU to act internationally would clearly jeopardise the fulfilment of the Union s objectives, prevent unity of external representation and prevent coherence and consistency. Therefore, the Commission would be acting unlawfully in withdrawing its opinion. However, even if the Commission did withdraw its proposal, this would not necessarily mean that the EU was without the ability to act externally, not only in view of the provisions of Article 218(3), TFEU, already discussed, but also because of the application of the principle of cooperation. A number of EU cases have applied the principle of sincere cooperation when they have found there to be a concerted EU strategy (even if not a formal one) in a particular area. 8 Normally, such a concerted EU strategy consists of a Council decision that authorises the Commission to negotiate or conclude international agreements, but it can also be a less formal decision, as long as it sets clear legal standards. 9. Under these cases, a Commission proposal to the Council is merely regarded as the point of departure for concerted Community action The principle of sincere cooperation is an obligation of conduct, not an obligation of result 11, which cannot override obligations flowing from basic Treaty law, for example as regards shared/exclusive competence, or voting rules under Article 218, TFEU. Therefore, it is clear that procedural obligations under Article 218, TFEU and Article 207, TFEU, for example, must be complied with and the principle of sincere cooperation cannot be used to undermine them. 3. Similarly, the Council should not jeopardise the negotiations and ensure that the EU is represented in order to better defend the EU interest. Several negotiators depending on the areas of responsibility make negotiations very inefficient and confusing for the other parties. The Council could decide to open the negotiations and nominate one single negotiator in order to ensure that the EU has a stronger position in external relations and defend the EU interest. However the Council should give detailed directives to the negotiator and may appoint a special committee to be consulted during the negotiations. In cases of EU exclusive competence the Council should nominate the Commission as the one single negotiator ensuring an EU stronger position in external relations and defend the EU interest. However in areas where the EU is not competent to act at all, i.e. areas falling solely within Member State competence, then the Member States would be required to negotiate themselves on such issues individually or collectively if they reached a common agreement. In areas of shared EU and Member State competence, it would still make 8 See for example Commission v Sweden at para 75, Commission v Luxembourg, at para 60 and Commission v Germany at para Case 25/94 Commission v Council ECR [1996] I-1469, at para 49, and Commission v Sweden at para Commission v Sweden, at para 74, Case 804/79, Commission v UK [1981] ECR I-1045, at para 28, Commission v Luxembourg, para 59, Commission v Germany at para See para 28, p. 6 of George-Dian Balan, The Common Commercial Policy under the Lisbon Treaty, Jean Monnet seminar, Advanced Issues of European Law, 6 th Session, April 20-27, 2007, Dubrovnik, Re-thinking the European Constitution in an Enlarged European Union. 6

7 sense to instruct the Commission to negotiate, as that would ensure the unity of the EU s external representation, and as it might be very complicated from a legal point of view to separate the areas where the EU has made rules and the areas where it has not. Legally, it is the Commission s role to promote the general interest of the Union... and to ensure the Union s external representation (with the exception of the Common Foreign and Security Policy) (see Article 17, TEU). Conclusion on principle of cooperation It is the duty of all EU institutions, including the European Commission and the Council to act to ensure the unity of the EU external representation and to act in accordance with the principle of cooperation. This means that the Commission cannot withdraw its proposal and refuse to negotiate on behalf of the EU. It also means that the Council must ensure that the EU is in a strong international negotiating position by providing clarity in relation to who is to be the negotiator. Several negotiators depending on the areas of responsibility make negotiations very inefficient and confusing for the other parties. In this context, it would make sense legally and politically to instruct the Commission to negotiate on behalf of the EU. 4. Shared competence The proposed international agreement on mercury falls, at least in part, within the EU Environmental policy which is subject to shared competence under Articles 2 and 4 of the TFEU. Article 2 defines shared competence: The Member States shall exercise their competence to the extent that the Union has not exercised its competence. The Member States shall again exercise their competence to the extent that the Union has decided to cease exercising its competence. This means that Member States can legislate/act only where the EU has not exercised its powers or has decided to stop exercising them. Although this could make it appear as if Member States only had residual competence left in areas shared competence, Protocol 25 to the Lisbon Treaty on the exercise of shared competence further explains that when the Union has taken action in a certain area, the scope of this exercise of competence only covers those elements governed by the Union act in question and therefore does not cover the whole area. This means that just because the Union has legislated on a particular issue within a broader field, the broader field is not automatically also subject to Union competence in areas of shared competence. It is only the specific regulation which is subject to EU competence. In this sense, ERTA 12 jurisprudence itself has been qualified by the ECJ, which has held that only areas where there is an express 12 See footnote 3. 7

8 provision for the EU to negotiate, or where the EU has achieved complete harmonisation fall within the ERTA rules. 13 Under EU law, Regulation EC 1102/2008 of 22 October 2008 bans the export of mercury in the EU and regulates the safe storage of metallic mercury that is considered waste. This Regulation is based mostly on Article 175, TEC on environmental policy (which is, as already mentioned, subject to shared competence between the EU and its Member States). In addition, and only in relation to its ban on trade in mercury in Article 1 of the Regulation, it is also based on Article 133, TEC on trade policy, which is subject to exclusive EU competence. There are also other measures at EU level related to the use of mercury and its emissions which are subject to different legal bases (e.g. the IPPC Directive 14, the Landfill Directive 15, the ROHS Directive 16 the WEEE Directive 17 or the REACH Regulation 18 whose Annex XVII restricts the use and placing on the market of mercury in measuring devices (18a) and in certain biocidal uses. In addition, Directive 2006/66/EC 19 prohibits the use and marketing of batteries that contain more than 0,0005 % of Mercury. Thus the EU legal framework is quite wide and fragmented. Clearly, the EU has exercised its competence in relation to mercury, so an international agreement on mercury would fall within EU competence. However, other issues such as financial commitments fall within EU Member States competence. It is unlikely, however that an International Agreement would include specific financial provisions requiring EU Member States negotiating participation but rather it would refer to the need for some of the Parties to provide financial assistance to other Parties to the Convention. Relevant considerations We understand that the Council s view is that the proposed international agreement on mercury is an area partially covered by the EU law and therefore EU competence, but is also partially covered by areas of Member States competence. Therefore, we understand, Council intends to instruct the Commission to negotiate on behalf of the EU in the relevant areas of EU competence, but requires the EU presidency to negotiate in areas of Member State competence. This approach would be confirmed by an interpretation of the competence issue which argues that the significance of Protocol 25 and the cases which have developed the European Court of Justice s jurisprudence on the application of external EU competence 13 See Commission v Luxemburg at paras 40 45, particularly para 45, and also paras 49-52, and Commission v Germany at para Directive 2008/1/EC of the European Parliament and of the Council of 15 January 2008 concerning integrated pollution prevention and control, L 24/8, Directive 1999/31/EC of 26 April 1999 on the landfill of waste. 16 Directive 2002/95/EC on the restriction of the use of certain hazardous substances in electrical and electronic equipment 17 Directive 2002/96/EC on waste electrical and electronic equipment. 18 Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) 19 Directive 2006/66/EC of the European Parliament and of the Council of 6 September 2006 on batteries and accumulators and waste batteries and accumulators and repealing Directive 8

9 (after the ERTA judgement) indicate that the proposed international agreement on mercury is not automatically entirely subject to the exclusive competence of the EU. In this sense, the Council approach is that the proposed international agreement is a mixed agreement. Mixed agreements require a division of responsibilities in the negotiation and implementation of an international convention. Issues which fall within EU competence are (generally) negotiated by the Commission as representative of the EU and issues of Member States competence are negotiated by the Council representing the EU Member States. If one or more Member States are parties to a Convention, the EU and the Member States have to decide on the respective responsibilities under the Convention. They must declare the extent of their competence to the other Parties to the Convention. An example of how this works is Article 31 of the CBD which provides that regional economic integration organisations, in matters within their competence, shall exercise their right to vote with a number of votes equal to the number of their Member States which are Parties to the Convention. However the Community may not exercise its right to vote if the Member States exercise theirs, and vice versa. A further point to note is that in relation to environmental matters, Article 191(4), TFEU provides that the Union s rights in relation to international agreements (on the environment) are to be without prejudice to Member States competence to negotiate in international bodies and to conclude international agreements. 5. Exclusive competence Under Article 4(1), TFEU the concept of shared competence is also defined as an area where the EU has competence, and which does not fall within the list of areas of exclusive competence provided for in Article 3,TFEU. A mixed agreement is concluded because neither the EU nor the Member States have exclusive competence in relation to all of the relevant agreement. In the context of mercury, it is important to note that the EU has exclusive competence on trade issues, which is one of the legal bases of Regulation 1102/2008 and is also expected to form part of the Convention. The most relevant legal basis in this case is Article 3(2) TFEU which states The Union shall also have exclusive competence for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence or in so far its conclusion may affect common rules or alter their scope. 9

10 This provision codifies the jurisprudence of the ECJ regarding the division of competences between the Union and Member States in external relations. The ERTA case 20 sets out the fundamental principle now underlined in Article 3(2), TFEU in paras 17 and 19: In particular, each time the Community, with a view to implementing a common policy envisaged by the Treaty, adopts provisions laying down common rules, whatever form there may take, the Member States no longer have the right, acting individually or even collectively, to undertake obligations with third countries which affect those rules. With regard to the implementation of the provisions of the Treaty the system of internal Community measures may not therefore be separated from that of external relations. Relevant considerations We understand that the Commission argues that the convention on mercury would affect common rules and even would affect the content or scope of Regulation 1102/2008 and the other relevant EU measures mentioned above under point 4 of this legal briefing. Article 3(2), TFEU states that the Union has exclusive competence for the conclusion of an international agreement if its conclusion may affect common rules or alter their scope. As we understand it, the Commission s view is that when common rules can be affected, the negotiation of the whole agreement would be subject to exclusive competence, and not only those areas covered by the common rules. On this basis, the whole international agreement would fall within the exclusive competence of the EU. The ERTA principle has subsequently been applied by the ECJ in a number of other cases. Indeed, the Court has also said that this principle holds true in relation to areas already largely covered by EU rules. Those rules would be affected by the International Agreement. This interpretation of the competence issue would indicate that competence in relation to the proposed international agreement on mercury should be exclusive EU competence, because there are a number of different EU laws which deal with mercury, and the proposed international agreement on mercury would affect them since it would include provisions regulating the total or partial ban of the use of mercury and its export, the management of mercury waste as well as regulate its emissions. Under any interpretation of competence, it seems necessary to assess the content and specific provisions of Regulation EC 1102/2008 and the other above mentioned EU legislative acts in order to determine whether the provisions of the international agreement could affect the current common rules and might alter their scope. We understand the European Commission also argues that the International Agreement is necessary to enable the Union to exercise its powers. However this is unlikely since these powers have already been exercised by adopting the relevant EU legislation already mentioned above. 20 See footnote 3. 10

11 As already seen above, Article 17 of the TEU requires the Commission to ensure the Union s external representation, with the exception of the CFSP and other cases provided for in the Treaties. It also states that the Commission shall promote the general interest of the Union. We understand that the European Commission and the Council both have interpreted Article 17, TFEU, read in conjunction of Article 218, TFEU to mean that where the Union has exclusive competence, the Commission is entitled to claim the right to represent the Union in international negotiations on its own, provided it is authorised to do so by the Council and it respects the Council s negotiating directives. We understand that in the opinion of the legal services of both EU Institutions, the Council could not legally deny the Commission such a prerogative by appointing somebody else to act as negotiator on behalf of the Union in such a case. The Natural Rubber Agreement case 21 is a similar case to the current situation and to ERTA case. It referred to the negotiation of the International Agreement on Natural Rubber under the auspices of UNCTAD and the Commission the Commission considered that the Community had exclusive competence as it has covered by Article 133 on trade and the Member States should not participate in the negotiations. However the Court of Justice held that Member States could be parties in the International negotiations if it was agreed that the scheme would be financed out of national funds. Until this question was decided, the Member States could continue to participate in the negotiations. However in the current case, Article 3(2), TFEU is interpreted as providing exclusive competence to the EU to negotiate the international agreement as a whole because it affects common rules but not only in relation to the issues where the common rules are adopted. This approach makes sense to ensure that in international negotiations there is a single voice representing the EU. ClientEarth 25 May 2010 Contact details: Marta Ballesteros, Senior Lawyer, Director of the ClientEarth Brussels Office t. +32(0) m. +32 (0) e. mballesteros@clientearth.org Sandy Luk, Senior Lawyer, Marine Programme, ClientEarth t +44 (0) m +44 (0) e sluk@clientearth.org 21 Opinion 1/78. 11