Wednesday, October 12, 2011
Advocate General Opinion Charts New Ground on Extraterritorial Jurisdiction Over Environmental Issues
Continuing our discussion of last week's ECJ Advocate General Opinion upholding the EU's proposed emissions plan, today we tackle the opinion's take on extraterritoriality. To keep the legal issues distinct, we'll reserve discussions of Chicago Convention articles 12 and 15 for a future blog post and focus today on the issue of sovereignty of states over their air space embodied in Article 1 of the Chicago Convention. The Advocate General addresses the air sovereignty rule because, despite holding the EU is not bound by the Chicago Convention, the EU is bound by customary international law which recognizes the principle of air sovereignty. The Advocate General claims that the EU is not exercising extraterritorial jurisdiction, but merely exercising its rights under the territorial principle, which allows a state to regulate foreign actors operating within the state's territory. According to the Advocate General, the application of the ETS regulation to foreign carriers is based on conduct occurring within EU territory, namely the departure or arrival of foreign aircraft to or from EU airports. This by itself is uncontroversial since the EU has the clear territorial right to apply its regulations to emissions by foreign carriers within EU airspace. But the Advocate General insists that, although the emissions charges will include the portions of flights by foreign carriers prior to entering and after leaving EU airspace, this should not be considered a regulation of extraterritorial activity but rather a regulation of territorial activity that takes into account events that happen outside of the EU's territorial jurisdiction. In other words, the rule (a carrier must have sufficient emissions allowances) only applies to the activity occurring in EU airspace (taking off or landing at an airport within the EU). There is no rule applying to the extraterritorial activity (flying outside of EU airspace), that activity simply factors into the overall calculation of allowances required once the territorial activity has triggered application of the rule. This clever formulation may seem like nothing more than a creative evasion of customary limitations on extraterritorial jurisdiction, but one can conceive of analogous situations that might support the Advocate General's position. For example, if a state charges a foreign national with conspiracy for actions occurring within the state's territorial jurisdiction, can the state not take into account evidence of the conspiracy occurring outside of the state's territorial jurisdiction?
More intriguing was the Advocate General's implicit indication that she was also basing her claim of territorial jurisdiction on an effects analysis, which is a subset of territorial jurisdiction allowing a state to exercise jurisdiction over conduct occurring outside of the state's territory but intended to have or having substantial effect inside its territory. The Advocate General did not expressly cite this idea but certainly invoked its spirit by analogizing the ETS issue to antitrust law, which, as opposed to environmental law, is an area of law in which the effects test is commonly used. In addition, the opinion included the following statement, "Such an approach reflects the nature as well as the spirit and purpose of environmental protection and climate change measures. It is well known that air pollution knows no boundaries and that greenhouse gases contribute towards climate change worldwide irrespective of where they are emitted; they can have effects on the environment and climate in every State and association of States, including the European Union." This reasoning mimics the rationale behind application of the effects test in antitrust law: anticompetitive foreign conduct that negatively impacts a state's market should be subject to the state's territorial jurisdiction. The analogy between the cross-border market effects of anticompetitive behavior and the cross-border effects of emissions contributing to global climate change has some merit, but the application of the effects test in this way is still largely unprecedented. This boundary-pushing use of the effects test has wide-ranging implications for environmental law that should excite environmental activists and terrify businesses. For instance, following the Advocate General's logic, why couldn't the EU apply its emissions requirements to the production and transport of any product produced in or shipped to the EU?