Abstract
Within the framework of private climate litigation, where injured people bring civil claims concerning the liability of companies for the harmful effects of their polluting activities before domestic courts, this contribution investigates the role of authorisations to emit greenhouse gases under Directive 2003/87/ec (Emissions Directive), when they are not specifically part of the lex fori (law of the forum) and lex causae (law applicable to merits). A traditional way to consider greenhouse gas emissions permits in these disputes is via the rules of safety and conduct under the Article 17 of the Regulation (ec) No. 864/2007 (Rome ii). The author of this contribution considers that there may be a different reading of such rules, i.e. the interpretative elaboration of a unilateral conflict rule in the Emissions Directive, which would allow the authorisation issued by a State whose law is different than the lex fori and lex causae ones before the courts of EU Member States to be relied upon. Furthermore the authorisation, in circulating, carries with it the (possible) exempting effect under the civil liability rule of the State issuing the authorisation.
1 The Issue at Stake: The Role of Authorisations to Emit Greenhouse Gases in Private Climate Litigation
Private climate litigation relates to civil claims brought before domestic courts concerning the liability of companies for the harmful effects of their activities. It is typically aimed at obtaining a remedy of a compensatory nature.1 The example of litigation, which is relevant here, is that of a person who, having been allegedly injured by polluting emissions, sues the responsible company in the courts of a Member State in order to claim compensation for the damage suffered. However, the company in question may have emitted greenhouse gases on the basis of (and in accordance with) an authorisation issued by a State authority. As a result, when brought before the court, it expects to be able to rely on such an authorisation as grounds for exemption from civil liability.
Because this type of litigation is inherently cross-border in nature, the private international law analysis is required. The conflict-of-laws rules then determine the applicable law. It follows that the law governing the merits of the dispute is not necessarily the same as the law of the legal order from which the authorisation originates. Similarly, the law of the court seized is not necessarily the same as the law of the legal order from which the authorisation originates. Hence, a question arises as to the possible relevance of the authorisation in the proceeding at stake.2
As a result, the purpose of this study is to analyse authorisations to emit greenhouse gases from a conflict-of-laws perspective.
The working hypothesis is to first verify the possible (or not possible) relevance of these authorisations using the traditional method, i.e. the one based on the European instrument of private international law in the field of the law applicable to non-contractual obligations, and therefore an analysis focused on bilateral conflict-of-law rules. After identifying the difficulties and inadequacies of this traditional method, the author of this contribution will propose a possible alternative reading of the phenomenon under consideration: to combine the traditional method with an analysis of the substantial discipline of these authorisations, which in the aftermath of unilateralism would hide private international law elements. Doing so would allow such authorisations to be relevant to both in circulating within the territory of the Union and in carrying their (possible) exempting effect from civil liability.
The subsequent sections are organised as follows: in Paragraph 2 an overview of the legal framework of such authorisations is offered; in Paragraph 3 the relevant discipline on the law applicable to this specific non-contractual obligation is provided; in Paragraph 4 the traditional method for granting consideration to such authorisations is critically addressed; in Paragraph 5 the author reading is added and then completed in detail in Paragraphs 6 and 7; finally, the conclusions are presented.
2 Directive 2003/87/ec Establishing a Scheme for Greenhouse Gas Emission Allowance Trading within the European Union
The European Union has shown growing commitment in combatting climate change throughout the years, beginning with the (at the time) Community and culminating in the establishment of a true European climate policy that is crystallised in a legislative stratification.3
In this context, Directive 2003/87/ec (Emissions Directive),4 which establishes a scheme for greenhouse gas emission allowance trading within the Community, is especially significant; it is also the cornerstone of the (now) Union’s policy to tackle climate change by reducing greenhouse gas emissions in a cost-efficient and cap-and-trade manner. It operates as follows: Member States must ensure that no installation performs any of the listed activities that result in the release of specified emissions unless its operator holds a specific authorisation (permit). This authorisation is issued by the competent authority, as identified by the Member States, if it is satisfied that the operator is capable of monitoring and reporting emissions. This permit allows the installation to access the emissions trading system, requiring the authorised operator to monitor the emitted greenhouse gases and surrender allowances equal to the total emissions released by the installation based on the total quantity of allowances attributed to the installation in question for the reference period as established in the national allocation plan.5 The internal market dimension characterises the Emissions Directive where it establishes a scheme for greenhouse gas emission allowance trading within the Union. However, the contents of the European climate change policy are to be considered, which requires the maximum total emissions to be steadily reduced over time. As a result of this system, general and abstract rules, such as the provisions of the Emissions Directive and the related implementing ones under the law of the Member States, as well as specific and concrete rules, such as permits issued by competent national authorities, coexist.
The minimal degree of uniformity achieved by the Emissions Directive in terms of Member States issuing permits to release greenhouse gases makes private international law reasoning particularly noteworthy. The one criterion that is harmonised at the European level, and indeed required for the issuance of such a permit, namely the ability of the installation’s operator to monitor and report emissions, has been handled differently in the Member States while implementing the Emissions Directive. The latter ability, for instance, resulted in a substantial assessment in some Member States, requiring the operator to indicate many data in the authorisation application, such as means used, operating methods, and internal procedures; whereas in others, the assessment for issuing the authorisation resulted in a more formal and superficial one.6
3 Framework on Law Applicable to Environmental Damage in Private (and EU Private International) Law
3.1 Law Applicable to Environmental Damage Under the Rome ii Regulation (i)
Regulation (ec) No. 864/2007 (Rome ii)7 contains the conflict-of-law rules that are applicable to the matter of non-contractual obligations. Article 7 provides for a special rule on environmental damage.8 It states that the law applicable to a non-contractual obligation arising out of environmental damage, or damage sustained by persons or property as a result of such damage, shall be the law resulting from the application of the general rule laid down in Article 4(1) of that Regulation, and thus the law of the country in which the damage occurs (lex loci damni). However, the person seeking compensation for such damage may choose to base his or her claim on the law of the country in which the event giving rise to the damage occurred (lex loci actus).
Taking note of the inherently transnational dimension of environmental damage that crosses borders via water and air, the EU legislator has developed a composite conflict-of-laws rule under Article 7. On the one hand, Article 7 provides for the general criterion of the place where the damage occurs as a connecting factor, so as to prevent the operator’s mere location of an installation in a State with low environmental standards from allowing him to engage in massive polluting activities without related civil liability. On the other hand, it considers the opposite hypothesis, namely the situation in which it is the operator who performs activities in a State with high environmental standards and the affected person who is in a State with lower levels of protection. It resolves the latter situation by resorting to a treatment that is more favourable towards the damaged person: indeed, the person seeking compensation may choose to rely on the law of the country where the event giving rise to the damage occurred, which in this case is a more safeguarding law in terms of his or her own personal protection.
According to Article 15 of the Rome ii Regulation, the law applicable to non-contractual obligations, as identified under this Regulation, governs, inter alia, the grounds for exemption from liability, as well as any limitation thereof.
Returning to the kind of litigation that is of concern here, a claim for compensation due to environmental damage or damage resulting therefrom is brought before a Member State other than the one that issued the authorisation to release pollutants. Assume that X, a person living in France, sues Y, an Italian company, before a French court for the damage suffered by X in France as a result of Y’s emitting activity in Italy, which is carried out in conformity with the Italian authorisation under the Emissions Directive. In this scenario, the operation of Article 7 of the Rome ii Regulation entails, first and foremost, the application of French law as the law applicable to the merits of the dispute.
3.2 Emissions Permits and Third Parties in Member States’ Private Law
Such authorisation under the Emissions Directive may finally restrict or even completely exclude claims for environmental damages under private law.9 Indeed, the private law of the Member States is still not harmonised at a substantive level in the European Union; as a result, there may be differences in the discipline of civil law matters. Furthermore, precisely in the field of civil liability, the legal orders of Member States differ significantly as to the role of administrative authorisations and their relationship to third parties.10 In the French legal order, for example, which is inspired by the now-tempered principle of separation between administration activities and civil law relations, the court may order the issuing operator to pay compensation for damages caused to third parties without taking into account the fact that he may have obtained administrative authorisation to do so lawfully. Such authorisation, after all, regulates the relationship between administration and the operator, and has no effect on the position of third parties.11 On the other hand, arguably in Italy,12 and to some extent in the German legal order,13 administrative authorisation is considered a justifying fact that exempts the author of the emitting activity from liability to the extent that he has complied with the requirements of the authorisation.
In the next subparagraphs, it is necessary to deepen the prior private law points.
3.2.1 “Permit Defence” Under Directive 2004/35/ce on Environmental Liability
Directive 2004/35/ce on environmental liability,14 with the aim of approximating the relevant substantive rules of Member States, contains principles on environmental damage in the European Union. However, the litigation that is the subject of this contribution, in which the injured person brings a claim against the emitting operator, falls outside its scope of application.15 Nevertheless, it is significant to refer to Directive 2004/35/ec, insofar as Article 8(4)(a) expressly affirms the principle of the “permit defence” by providing that “the Member States may allow the operator not to bear the cost of remedial actions […] where he demonstrates that […] the environmental damage was caused by: (a) an emission or event expressly authorised by, and fully in accordance with the conditions of, an authorisation […]”. Therefore, in the following subparagraphs it will be useful to refer to the implementing legislation of Directive 2004/35/ec with the following meaning: to argue that, although the legislation implementing Directive 2004/35/ec does not apply to the dispute at hand, when read in conjunction with the general rule on non-contractual liability of the legal order in question, it is functional to highlight the (greater or lesser) propensity of the legal order under analysis towards exempting the operator from liability towards third parties for damage caused by the authorised emission activity.
3.2.2 Authorisations and Third Parties in the French Legal Order
In the French legal order, the discipline of non-contractual liability is contained in the current Article 1240 (et seq.) of the Civil Code,16 as amended by Order No. 131 of 10 February 2016,17 which provides that any human act, that causes harm to another, obliges the person through whose fault it occurred to repair it. The unlawfulness requirement is not expressly required by the provision, but French legal scholars consider it to be an implicit element under Article 1240, to be declined as a breach either of a specific legal obligation or of a general duty of care. French case law on non-contractual matters in general shows that compliance with public law is not relevant to the exclusion of liability towards third parties;18 therefore, some activities, even if carried out after the granting of an authorisation, are not protected from related claims for damages.19 This is because, to use French legal reasoning, the “chain of legality” linking public and private law (public law > individual authorisation > general lawfulness of acts conforming to the authorisation) is broken. This discipline, however, could change: indeed, the French Senate Bill No. 678 of 2019/202020 aims at reforming civil liability in general, by providing the introduction of additional grounds for exemption from liability into the French Civil Code of Article 1257, which would prescribe that “le fait dommageable ne donne pas lieu à responsabilité lorsqu’il était […] commandé ou permis par l’autorité légitime […]”. Reasoning from an interpretative point of view (as explained previously), the lack of inclination of the French legal order towards exemption from liability is also confirmed by the implementation of Directive 2004/35/ec in France with Law No. 757 of 1 August 2008 and by Decree No. 468 of 23 April 2009: France has made no provision in relation to the option provided for under Article 8(4)(a) of the Directive 2004/35/ec. Similarly, nothing is provided for on this point by Law No. 1087 of 8 August 2016, which inserted a new title devoted to repairing ecological damage into the Civil Code.
3.2.3 Authorisations and Third Parties in the Italian Legal Order
In the Italian legal order, the matter of non-contractual liability is governed by Article 2043 of the Civil Code,21 according to which any wilful or negligent act, that causes unjust damage to others, obliges the person who has committed the act to compensate for the damage. Following a first interpretation (1) focused on conduct, in order for damage to qualify as “unjust” – and thus be compensable – it is necessary for the damage to be caused non iure: that is, not in the “exercise of a right” recognised by the legal order to the damaging party.22 Damage caused iure (or secundum ius) is, on the other hand, not compensable. Contra, a second interpretation (2) is focused on the damage, i.e. if the damage is the lesion of an interest, such an injury is “unjust” when that interest is considered worthy of protection by the legal order.23 Reasoning, finally, from an interpretative standpoint (as explained previously), the inclination of the Italian legal order towards exemption from liability is also confirmed by the implementation of Directive 2004/35/ec, which took place with Legislative Decree No. 152 of 3 April 2006: Article 308(5) provides that the operator is not obliged to bear the costs of the claims referred to in (the same) Paragraph 5 if it proves that the preventive action to protect the environment was caused by an emission that was expressly permitted by an authorisation. Given some drafting problems at this point, Italy made use of the option of implementing the “permit defence”.
3.2.4 Authorisations and Third Parties in the German Legal Order
In the German legal order, civil liability (“Schadensersatzpflicht”) is regulated under Section 823 of the Civil Code,24 according to which anyone who wilfully or negligently violates the life, body, health, liberty, property or any other right of another person is obliged to compensate the other person for the resulting damage. German case law, which is inconsistent in its application to non-contractual matters in general, shows that compliance with public law is not always relevant to the exclusion of liability towards third parties;25 and, where it is relevant, it does not imply total exemption from liability, but rather further effects on liability operability (e.g. on causality, on the burden of proof or on the system of presumptions). Reasoning from an interpretative point of view (as explained previously), the bivalent attitude of the German legal order is also confirmed in the implementation of Directive 2004/35/ec, which took place in Germany with the Gesetz über die Vermeidung und Sanierung von Umweltschäden (Umweltschadensgesetz – UschadG of 5 October 2007). Accordingly, the individual Länder were given the option of implementing or not implementing Article 8(4)(a) of Directive 2004/35/ec. This means that the “permit defence” can be provided at a local level.
3.3 Law Applicable to Environmental Damage Under the Rome ii Regulation (ii)
Continuing the X and Y Case, it is still a controversial question whether and, if so, which implications such preclusive effects provided for in the (Italian) authorisation have on a claim that flows from a different applicable law (French law).26 Hence, the French court seized, at this stage, placing in the perspective of the French law (understood as French legal order) referred to by the conflict-of-law rule, could not apply the Italian authorisation granted to Y; or, even if it applied it, the general private law applicable to the merits could ultimately neutralise its effect by defining the assessment rule of civil liability in a different way.
Then, under the second part of Article 7, X could choose to base his or her claim on the law of the place where the event giving rise to the damage occurred, i.e. on Italian law. However, it would not be in X’s interest to do so since it would allow for the full application of the authorisation, which would operate, under Italian law and, in particular, under the related rules on civil liability, as grounds for excluding the unlawfulness of Y’s conduct.
4 Authorisations as Rules of Safety and Conduct Under the Rome ii Regulation?
The traditional way for the greenhouse gas emissions permit to have an impact on the decision over of the dispute at hand is through Article 17 of the Rome ii Regulation.27 It provides that, once the law applicable to the non-contractual obligation has been determined, “in assessing the conduct of the person claimed to be liable, account shall be taken, as a matter of fact and in so far as is appropriate, of the rules of safety and conduct which were in force at the place and time of the event giving rise to the liability”.28 The goal is to “correct” the disadvantages that could result from the application of a law other than the one in force in the State where the alleged responsible acted, by taking into account the set of rules that the latter was required to comply with under the law of the place where the emitting activity occurred.29 However, when applied to authorisations, this provision raises a set of interpretive and applicative challenges that may be described in four sets of problems that have been disputed for some time and have still not been agreed upon.
First, a question arises as to whether this authorisation falls into the category of rules of safety and conduct. Recital 34 of the Rome ii Regulation, in providing a means of interpreting this vague and autonomous notion, relates such rules to all regulations having any relation to safety and conduct, including, for example, road safety rules in the case of an accident. The problem then is that this category of rules is well reconciled with the domestic rules implementing the Emissions Directive, which precisely regulate the issue of the release of greenhouse gases and prescribe all the necessary precautions. On the other hand, authorisations are something else, as they are particular and concrete acts that deviate from the general prohibition to engage in activities involving certain emissions. As a result, authorisations would be particular and concrete acts, different from (but derivative of) the safety and conduct rules referred to in Article 17.30
Secondly, then, if the previous points were to be answered in the affirmative, Article 17 would also be problematic in its wording, being composed of two elements that tend to conflict with each other. Indeed, while “account shall be taken” appears to impose an obligation on the part of the court to assess the rules of safety and conduct, “in so far as is appropriate” appears to temper, but not contradict, this duty, leaving the court seized with complete discretion as to the possible relevance of such rules.31 Now, the corrective element provided by Article 17 to compensate for the application of the rules of an unforeseeable law, such as the law of the authorising legal order, would require a delicate balancing with the other principles animating the Rome ii Regulation. As a result of this perspective, rather than the reverse, the interpretation of Article 17 would have to shift further in the restricted direction, thus ignoring the authorisation.
Third, even if one accepts that the foreign authorisation has some significance under Article 17, this supplementary and factual value would take place within the boundaries of the law of the place in which the damage occurred. Thus, taking account of foreign law is not the same thing as applying it: the court will apply only the law that is applicable under the conflict rule, but it must take account of another law as a point of fact, for example when assessing the seriousness of the fault or the author’s good or bad faith for the purpose of measuring damage. As a result, in the case under analysis, it would not allow the authorisation to be applied and operate as an exemption, but would only serve to mitigate its effects specifically then, in graduating the operator level of civil liability towards a minimal but still existing threshold.32 Otherwise, the applicable law, which is the law of the place of the damage, would be internally devoid of substance in favour of the law of the system from which the authorisation is obtained. At the same time, however, in doing so, it is Article 17 itself that is deprived of its corrective role.33
Finally, a more general and far-reaching issue concerns the prospect of using Article 17 to invoke the permit in the context of climate change. Indeed, the regulation of this matter is based on certain principles, under international and EU law,34 such as the favor laesi35 or the polluter pays.36 According to the former, the most favourable law for the victims is to be applied; according to the latter, whoever produces the pollution is required to bear the costs of the negative effects determined by his or her conduct, since in the absence of this principle these costs would be borne by the entire community. The application of these principles to this dispute would require not only that the polluter’s liability not be excluded, but also the form of compensatory redress to follow to be full.37 This interpretation, however, cannot go so far as to bend the relevant private international law rules upstream in the name of the even positivised necessity downstream of material protection of the injured parties.
According to the author of this contribution, the four concerns described above should be resolved by reconsidering the norm, i.e. Article 7, and its temperament, i.e. Article 17, among other already mentioned principles and rules which may be relevant in the concrete circumstances. The main rule on liability for environmental damage under the law of the place of the damage as identified by Article 7 will remain the rule and its temperament under Article 17, which grants relief to the foreign authorisation, cannot go so far as to contradict it. This order cannot be subverted for a more-than-deserving interest based as a guiding light in reasoning. In fact, while the affected party, which is protected by a rather large complex and stratified body of legislation, expects to be able to have the liability of the operator effectively assessed, there is also the related position, equally deserving protection in a private international law system informed by the foreseeability of the applicable law, of the operator who expects to be able to assert exemption with respect to the exercise of his own authorised emissive activity.
It is up to the court seized to apply these combined provisions to the case before it, while always keeping in mind what the rule is and what its temperament is; moreover, if the seized court resorts to the temperament of the rule, adequate justification shall be provided. In this context, therefore, Article 17 operates “downstream” of the conflict rules directly on the level of the case’s material discipline. The combined application of Articles 7 and 17 can occur, for example, in granting factual relevance to the prescriptions of the lex loci actus for the purposes of assessing the negligence of the material perpetrator of the fact; provided, however, that the law governing the merits, as identified under Article 7, configures the liability of the damage perpetrator as a liability for negligence, rather than as a strict liability.
At the conclusion of this first part of the analysis, the author of this contribution considers that there may be a different reading of the phenomenon at stake, whose merits will be analysed in the following paragraphs.
5 A Different and Alternative Solution: The Elaboration by Means of Interpretation of a Unilateral Conflict Rule in Directive 2003/87/ec
The traditional solution, discussed above, for taking into account the authorisation in the operation of the conflict-of-laws rules of EU private international law, that is via Article 17 of the Rome ii Regulation, presents the criticality of taking into consideration the authorisation of the issuing State in the context of the civil liability assessment as governed by the lex causae. If this is the case, then, even if the authorisation under Article 17 were given factual consideration, its role would still be affected by the lex causae of certain Member States. Indeed, in the event of relevance, the individual rules of safety and conduct always operate within the framework of the general law applicable to merits. The latter, as explained in Paragraph 3, could ultimately have the power to neutralise its effect by defining the assessment rule of civil liability in a different way in case of authorised activity.
To escape this vicious circle, a different and new solution, which the author of this contribution finds directly in the Emissions Directive, is required. The following is the argument upholding such a solution.
Conflict rules, i.e. the tool by which the private international law issue of conflict between different laws can be solved, depending on the approach they take, can be of two different but coexisting types.38 On the one hand, there are unilateral conflict rules that define the scope of application of the substantive rules of the forum State law, and only that; it is therefore up to other, foreign, conflict rules to delimit the application of other legal orders’ law.39 On the other hand, there are bilateral conflict rules based on the assumption that the substantive rules of all legal orders have the vocation, as such, to regulate any case; thus, in order to define whether a given case is to be assessed according to the law of one State or another, it is only necessary to understand whether it falls, due to its characteristics, within the law of the first or the second State.40
Conflict rules serve distinct purposes based on these two approaches. The former, i.e. the unilateral conflict rules, address whether the law of the Alfa State is to be applied to regulate the case at stake; the latter, i.e. the bilateral conflict rules, address which legal order is to be regarded inherent in the situation being analysed. Article 7 of the Rome ii Regulation is an example of the bilateral type: given a case, resulting in a non-contractual obligation of environmental damage, it is established that the law to which it pertains, and whose law shall be applied to define the merits of the question, is that of the State where the damage occurred.
After this general premise, the author of this contribution thus summarises the proposal to the topic under consideration. The author considers that the Emissions Directive contains within its folds a unilateral conflict rule, an implicit one, which provides for a two-pronged outcome. On the one hand, it allows the application of the greenhouse gas emissions permit, rather than its mere factual relevance, in civil liability proceedings against the operator with two peculiarities: it is brought before the court of a Member State other than the one from which the permit is issued (thus the permit is not part of the lex fori); and the law applicable to the non-contractual obligation is a law other than the one from which the permit originates (therefore the permit is not part of the lex causae). On the other hand, this solution allows the operator’s exemption effect from civil liability to circulate and be expendable throughout the European Union according to the rule on civil liability of the State of origin (i.e. the State issuing the authorisation) because the emissions were carried out in full compliance with the authorisation of the State where it was issued.
The consideration of this unilateral conflict rule would be based on ensuring an “effect util”41 for the provisions of the Emissions Directive. Despite the disagreement on the scope of this principle,42 it would imply that each rule must be interpreted so as to most effectively achieve its objective.43 The provisions of the Emissions Directive could not achieve their overall effect, especially the internal market dimension, without circulating authorisations, and their effects, within the Union. This is compliant with the concept of Directive in EU law where the court of Justice of the European Union has derived over the years major consequences from the interpretative prism of the “useful effect”.44 This objective does not necessarily have to be explicit in the Directive, when, on the contrary, it can also be obtained by interpretation;45 to this end, the objectives set by the Treaties, such as that of the internal market, rise to principles of interpretation of EU law.46
Let us now take a closer look at this solution and its two components.
6 The ‘pan-European’ Expendability of the Authorisation Issued from a Different State than that of the Lex Fori and Lex Causae
Let us consider a conflict rule of State A that poses that the law of the State specified by the connecting factor shall apply in a determined situation. Such a rule is referred to as bilateral in nature. When, however, the law of State A is to be applied, the court seized might realise that, because the case is integrated with B not through the connecting factor X (contained in a bilateral rule) that exists in the example in favour of A, but through the connecting factor Y (contained in a unilateral rule), there are certain provisions of B, that are among those that would have been effective if the connecting factor X had been realised in B, which have effect anyway, given the integration of the case with B expressed by the connecting factor Y.47 Thus, the single rules of State B, referred to by the unilateral rule, are to be integrated (and simultaneously applied) into the general applicable law of State A.
Unilateral conflict rules that stand alongside a bilateral conflict rule, thus derogating from it, are most frequently found in the implied variant. From a theoretical point of view, the unilateral conflict rule can be deducted by interpretation, i.e. from the ratio of the substantive rules referred to, their nature, object, purpose, tenor, content, and purpose.48 If the unilateral conflict rule is implicit, the interpreter’s thinking is centred on the material rules and their study and analysis. Therefore, a hermeneutic and interpretative activity that leads to the elaboration of law occurs: the legislator has not stated here, and it is up to the interpreter to fill the gap left by the former in the way in which the former would have likely filled it. The reasoning, then, revolves around the material rule, which draws the interpreter’s attention while being the sole explicit one: it invokes, or better yet, gives birth to the unilateral rule, thus intertwining with it in a mutual sustaining connection. If, indeed, it seemed that the unilateral conflict rule prescribed the application of the material rule, now it seems that it is precisely the material rule that prescribes to be applied.
It seems reasonable, then, to demonstrate these assumptions in the concrete case by conducting such an analysis on the material rule that, for the purposes of this study, is contained in the Emissions Directive.49 More specifically, the national provisions implementing it would need to be explored; nevertheless, in order to undertake a speedier study, their matrix in the Directive is analysed. Furthermore, the interplay between different conflict rules in this matter is expressly disciplined under the Rome ii Regulation, which contains a rule in Article 27 on the relationship with other provisions of EU law. It states that this Regulation shall not prejudice the application of provisions of the (at the time) Community law which, in relation to particular matters, lay down conflict-of-law rules relating to non-contractual obligations. Hence, in the presence of other special conflict rules in other instruments of (current) EU law, the Rome ii Regulation declares itself to be submitting to them.
Bearing this in mind, and in light of the bilateral nature of the conflict rule in Article 7 of the Rome ii Regulation, the Emissions Directive is framed in the context of the European integration process. When it comes to the issuance of greenhouse gas emission permits by the competent national authorities, the framework it uses as a reference is an integrated model between the Member States, where mutual trust is a founding principle for the creation and maintenance of a unified European judicial area.50 This implies a related obligation to recognise authorisations granted by one Member State in another Member State.
The material rule of the Emissions Directive, of federal aspiration, which provides the Member State with the power to authorise an operator to release emissions, also includes a corresponding obligation on the part of Member States to mutually recognise the authorisations in question.51 The will of application that gives rise to an implicit conflict rule, that unilaterally defines its own scope of application52 in parallel to the substantive law as identified by the relevant bilateral conflict rule, is thus manifested here.
Moreover, this implicit unilateral rule finds its textual basis in EU primary law. Indeed, Article 81 of the Treaty on the Functioning of the European Union,53 in conferring the competence to approximate the provisions of the Member States in judicial cooperation in civil matters with cross-border implications onto the Union, has resulted in the adoption of numerous regulatory instruments based on the bilateralist approach. However, cooperation with regard to judicial and extrajudicial decisions is founded on the principle of mutual recognition, to which the implicit unilateral rule described here applies.
Therefore, the Member States, in relying on each other for the operation of this conflict rule, are required to recognise the authorisations of others in their own legal orders. This way of reasoning, which is originally proposed by the author of this contribution, as well as this way of viewing and resolving the problem, frames the issue entirely within EU law, or rather within the domestic law of the concerned Member State as being in accordance with the Emissions Directive, thus removing the emphasis on (and resolving the underlying issue of) the discretion of the court seized.
In the example considered, the French court seized will have to interpret the Emissions Directive by checking for the presence of special conflict rules. It will identify a unilateral conflict rule, implicit in the text, that also allows the application of the Italian authorisation in the French proceeding on the civil liability of the defendant operator.
Thus, the circulation regime of the authorisation has been justified. Now, let us continue our examination concerning the circulation of the (possible) exempting effect according to the rule on civil liability of the State issuing the authorisation.
7 The Circulation of the (Possible) Exempting Effect According to the Rule on Civil Liability of the State Issuing the Authorisation
The derogation made by the implied unilateral rule from the bilateral rule is mostly, though not always, partial. The relationship of speciality is established both spatially, between the used connecting factors, and materially, between the concerned legal categories. This is carried out in the sense that the unilateral rule underlying the application of the material rule of interest does not discipline all the issues covered by the general bilateral rule, but just some of them; the others remain governed by the substantive rules that are identified by the general bilateral rule.54
The consequence would be as follows: by pursuing the unilateralist approach, not only the authorisation of the State that issued it is to be applied to the case, but this authorisation also brings the application of the related rule on the law governing civil liability regarding that point with it. This is a truly surgical intervention: in parallel with the general application of the law identified by the bilateral rule, the unilateral rule allows the application of both the authorisation and the rule of the issuing State that possibly regulates exemption from civil liability in relation to the performance of an authorised activity.
The relevant part of this alternative interpretation is precisely the one that has just been explored. Indeed, even the application of the principle of sincere cooperation and mutual recognition in the EU would be enough to circulate the authorisation among Member States, as in the case of administrative acts, especially if their matrix is European in origin.55 However, as already mentioned, even in circulating, the authorisation effects could be hindered by the applicable private law as to the role exempting or not from the liability of an authorised activity. As a result, only this alternative reading allows this final obstacle to be overcome.
Continuing the example considered, the French court seized will have to note that the identified unilateral conflict rule in the Emissions Directive not only allows the Italian authorisation to be applied to the pending case, but also brings the Italian rule with it to be applied to the dispute, as possibly interpreted in exempting from civil liability on the occasion of damage caused by authorised conduct.
Admittedly, the risk of this way of proceeding consists in the fact that a lower level of protection for the injured party is achieved from a material point of view. The solution, however, is in the compliance with EU law: therefore it is EU law, and the mutual recognition that comes from it, that requires such ‘pan-European’ expendability of both the authorisation and the underlying rule on civil liability.
8 Conclusions
In concluding, the example formulated at the outset is referred to by summarising the entire legal process in the light of the devised solution.
A person domiciled in France claims for damages before the French court after being allegedly injured by the consequences of environmental damage caused by an Italian company. The Italian company operated in Italy in compliance with the greenhouse gas emissions permit referred to in the Emissions Directive and issued by the competent Italian authority. The French court seized, pursuant to the bilateral rule under Article 7 of the Rome ii Regulation, in the absence of a different choice by the claimant, shall apply the law of the place of the damage in order to define the merits of the dispute: thus, it shall apply French law. Nevertheless, pursuant to Article 27 of the Rome ii Regulation, it shall have to investigate the presence of further provisions of EU law that, with respect to civil liability for environmental damage, regulate the conflict-of-laws. It will then have to interpret the Emissions Directive by checking for the presence of conflict rules within it. As a result, it will identify a unilateral conflict rule, implicit in the text, that allows the application of the Italian authorisation throughout the territory of the European Union and, therefore, also its enforceability in the French civil proceeding pending before it. Similarly, that unilateral rule, in entailing the application of the Italian authorisation, allows the authorisation that circulates to also carry the Italian rule with it, as eventually interpreted in exempting from civil liability on the occasion of damage caused by authorised and compliant conduct. To discipline all other issues, the court shall apply French law.
A traditional solution based on Article 17 of the Rome ii Regulation would be difficult to deal with and address in this litigation case. The legitimate aim of Article 17 is only to accord due weight to binding local regulations within the liability rules of the applicable law. In road traffic, where this conflict rule has been conceived, the rules of safety and conduct, i.e. binding local traffic regulations (speed limits, traffic signs, and so on) are expected to be observed and generally applied. Therefore, there is no question that the prescriptive or prohibitive rules of the place of acting have to be taken into account by the court when applying the law that governs the claim as such. However, the relevance of local regulations at the cost of the otherwise applicable law must be carefully limited to rules such as local traffic ones that prohibit or prescribe a certain conduct. This is especially true when it comes to authorisations or permissive regulations and their extraterritorial consequences.
As a result, the overall alternative reading presented above, which moves directly within the framework of the Emissions Directive, provides for an alternative to these issues. The unilateral conflict rule, indeed, which allows the circulation of the authorisation and of the (possible) exempting rule under the civil liability of the authorising State, bypasses Article 17. The combination, then, on the one hand of bilateralism and, on the other, of unilateralism, including its facets, allows the Emissions Directive to finally achieve a useful effect while not being hampered by the Member States’ variegated private law in terms of grounds of exemption from civil liability. In light of this interpretive option, legislative changes to the relevant current EU rules are not deemed to be essential.
In general, on the private climate litigation, see marino, “La climate change litigation nella prospettiva del diritto internazionale privato e processuale”, rdipp, 2021, p. 898 ff.
This is a classical and long-debated topic.: see von bar, “Environmental Damage in Private International Law”, rcadi, 1997, Vol. 268, p. 384 ff.; wandt, “Deliktsstatut und internationales Umwelthaftungsrecht”, szier, 1997, p. 172 ff.; bornheim, Haftung für grenzüberschreitende Umweltbeeinträchtigungen im Völkerrecht und im Internationalen Privatrecht, Frankfurt am Main, 1995, p. 227; wolf, Deliktsstatut und internationales Umweltrecht, Berlin, 1995, p. 199; roßbach, “Die international-privatrechtlichen Probleme der grenzüberschreitenden Rheinverschmutzung”, njw, 1988, p. 590 ff.
See schiano di pepe, Cambiamenti climatici e diritto dell’Unione europea, Torino, 2012, p. 43.
Directive 2003/87/ec of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/ec, oj l 275 of 25 October 2003, p. 32. See schiano di pepe, cit. supra note 3, p. 56; delvaux, EU Law and the Development of a Sustainable Competitive and Secure Energy Policy, Cambridge, 2013, p. 73; sadeleer, EU Environmental Law and the Internal Market, Oxford, 2014, p. 185.
lolli, L’amministrazione attraverso strumenti economici, Bologna, 2008, p. 89.
For an overview of the domestic legislation implementing the Emissions Directive by Member States, see the report available at https://eur-lex.europa.eu/legal-content/EN/NIM/?uri=CELEX%3A32003L0087.
Regulation (ec) No. 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome ii), oj l 199 of 31 July 2007, p. 40.
See bogdan and hellner, “Article 7”, in magnus and mankowski (eds.), Rome ii Regulation, Köln, 2019, p. 287 ff.; von hein, “Article 7”, in calliess and renner (eds.), Rome ii Regulation, Alphen aan den Rijn, 2020, p. 649 ff.; franzina, “Il regolamento n. 864/2007/ce sulla legge applicabile alle obbligazioni extracontrattuali (‘Roma ii’)”, nlcc, 2008, p. 971 ff., pp. 1010–1013; ivaldi, “Unione europea, tutela ambientale e diritto internazionale privato: l’art. 7 del regolamento Roma ii”, rdipp, 2013, p. 861 ff.
buschbaum, Privatrechtsgestaltende Anspruchspräklusion im internationalen Privatrecht, Hamburg, 2008, pp. 104–111.
ballarino, “Azioni di diritto privato per il risarcimento danni da inquinamento transfrontaliero”, rdi, 1990, p. 849 ff., p. 865. As of today, see masieri, “The Permit Defence between the EU Environmental Liability Directive and National Private Law: Some Comparative Remarks”, in pozzo and jacometti (eds.), Environmental Loss and Damage in a Comparative Law Perspective, Cambridge, 2021, p. 39.
ballarino, cit. supra note 10, p. 865.
Ibid.
Ibid.
Directive 2004/35/ce of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, oj l 143 of 30 April 2004, p. 56.
See Article 3(3), as well as Recitals 14 and 29, of Directive 2004/35/ce. On this point, see munari and schiano di pepe, “Liability for Environmental Torts in Europe: Choice of Forum, Choice of Law and the Case for Pursuing Effective Legal Uniformity”, in malatesta (ed.), The Unification of Choice of Law Rules on Torts and Other Non-Contractual Obligations in Europe, Padova, 2006, p. 173 ff., p. 188.
The text is available at https://www.legifrance.gouv.fr/.
Order No. 131 of 10 February 2016, nor jusc1522466R.
See courtieu, “Art.1382 à 1386–Fasc.265-10: Régimes Divers–Troubles de voisinage”, JCl. Civil Code, 2017, para. 84.
Cour de Cassation, Case No. 92-21.801, JurisData 1994-001365, 3rd civ., 20 July 1994; Cour de Cassation, Case No. 02-15.176, JurisData: 2004-024670, 1st civ., 13 July 2004; contra, Conseil Constitutionnel, M. Michel Z. and others, Case No. 2011-116 qpc, 8 April 2011.
Available at https://www.senat.fr/.
Royal Decree No. 262 of 16 March 1942, oj No. 79 of 4 April 1942, p. 3.
See Corte di Cassazione, Università Studi La Sapienza v. C.I. and others, Order No. 15588, 14 June 2018, available in the OneLegal database at https://onelegale.wolterskluwer.it.
See Corte di Cassazione, S. Energia S.P.A., S. Immobiliare S.R.L. v. A.A. and others, Order No. 8092, Joint Sections, 23 April 2020, available in Onelegale, cit. supra note 22, which seems to adhere to it when, by saying “l’eventualità che l’attività nociva sia svolta in conformità a provvedimenti autorizzativi della P.A.”, it adds then “atteso che ai predetti provvedimenti non può riconoscersi l’effetto di affievolire diritti fondamentali dei terzi” (free translation into English, “considering that the aforementioned authorisations cannot be regarded as having the effect of weakening the fundamental rights of third parties”).
The text is available at https://www.gesetze-im-internet.de.
Federal Court of Justice (Germany), 27 May 1959 – V zr 78/58 (kg), in njw 1959, p. 2013; Federal Court of Justice (Germany), 20 April 1990 – V zr 282/88 (Stuttgart), in njw 1990, p. 1910; contra, the possible litigation related to the Wasserhaushaltsgesetz (whg) of 27 July 1957, which in Article 16 deals with the exclusion of civil claims for compensation in the presence of authorised water activities.
junker, “Die Rom ii-Verordnung: Neues Internationales Deliktsrecht auf europäischer Grundlage”, njw, 2007, p. 3675 ff., p. 3680.
See kadner graziano, “The law applicable to cross-border damage to the environment”, in bonomi and volken (eds.), Yearbook of Private International Law, Munich, 2007, p. 71 ff., pp. 78–80; alvarez-armas, “Le contentieux international privé en matière de changement climatique à l’épreuve de l’article 17 du règlement Rome ii: enjeux et perspectives”, rdia, 2021, p. 109 ff.; lima pinheiro, “Choice of law on non-contractual obligations between communitarization and globalization. A first assessment of ec Regulation Rome ii”, rdipp, 2008, p. 5 ff., pp. 31–35. Ratione temporis, before the Rome ii Regulation, see bernasconi and betlem, “Cross-border pollution: private international law analysis of administrative authorisations as regulatory compliance defence (a view from Europe)”, Int. law (Bogota), 2003, p. 301 ff., pp. 309–317; poli and biagioni, “Recenti sviluppi in materia di danno ambientale nell’Unione europea: profili di diritto sostanziale e diritto internazionale privato”, rdipp, 2005, p. 643 ff., pp. 666–669.
See wautelet, “Article 17”, in magnus and mankowski, cit. supra note 8, p. 566 ff.; von hein, “Article 17,” in calliess and renner, cit. supra note 8, p. 792 ff.; feraci, L’ordine pubblico nel diritto dell’Unione europea, Milano, 2012, pp. 258–261; malatesta, “Il nuovo diritto internazionale privato in materia di obbligazioni non-contrattuali: il regolamento (ce) ‘Roma ii’ entra in vigore”, D&R, 2008, p. 1206 ff., pp. 1211–1212; marongiu buonaiuti, Le obbligazioni non contrattuali nel diritto internazionale privato, Milano, 2013, pp. 166–167.
calvo caravaca and carrascosa gonzález, Las obligaciones extracontractuales en derecho internacional privado. El Reglamento Roma ii, Granada, 2008, p. 87 ff.; muir watt, “Rome ii et les ‘intérêts gouvernementaux’: pour une lecture fonctionnaliste du nouveau règlement du conflit de lois en matière délictuelle”, in joubert and corneloup (eds.), Le règlement communautaire “Rome ii” sur la loi applicable aux obligations non contractuelles, Litec, 2008, p. 139 ff.; sandrini, “Risarcimento del danno da sinistri stradali: è già tempo di riforma per il regolamento Roma ii?”, rdipp, 2013, p. 677 ff., pp. 708.709. On the rules of safety and conduct, more dating, see davì, La responsabilità extracontrattuale nel nuovo diritto internazionale privato italiano, Torino, 1997 p. 41.
freigang, Grenzüberschreitende Grundstücksimmissionen: eine kollisionsrechts vergleichende Untersuchung zum deutschen und englischen internationalen Sachenrecht und der Rom ii-Verordnung, Berlin, 2008, p. 268; contra, siems, “Die Harmonisierung des Internationalen Deliktsrechts und die Einheit der Rechtsordnung”, riw, 2004, p. 662 ff., pp. 666–667.
dicey, Dicey, Morris and Collins on the Conflict of Laws, 15th ed., London, 2012, p. 223; symeonides, “Rome ii and Tort Conflicts: A Missed Opportunity”, Am. J. Comp. L., 2008, p. 173 ff., p. 212; contra, lehmann, “Art. 17 Rome ii”, in hüßtege and mansel (eds.), NomosKommentar bgb, Baden-Baden, 2008, par. 80.
lima pinheiro, cit. supra note 27, p. 33; dicey, cit. supra note 31, p. 2238 ff.; garcímartín alférez, “The Rome ii Regulation: On the way towards a European Private International Law Code”, EuLF, 2007, p. I-77, p. I-90.
von hein, cit. supra note 28, pp. 758–759.
davì, “I principi generali nel diritto internazionale privato europeo”, in palchetti (ed.), L’incidenza del diritto non scritto sul diritto internazionale ed europeo, Napoli, 2016, p. 207. This contribution is a test area relating to principles of law on which the EU private international law system relies; specifically, the interactions among principles of public and private international law, principles of EU law and general principles of law which may find application in this context.
bogdan and hellner, cit. supra note 8, p. 294; arístegui, sierra, “Competencia judicial y ley aplicable en materia de responsabilidad por daños al ambiente transfronterizos”, Rev. der. priv., 2011, p. 45 ff., p. 58; alvarez-armas, cit. supra note 27, p. 130.
For the introduction of this principle in international law, see Organisation for Economic Cooperation and Development, Recommendation of the Council on Guiding Principles concerning International Economic Aspects of Environmental Policies, 1972, A(a), and Recommendation on the Implementation of the Polluter-Pays Principle, 1974. For EU law, today, see Article 191(2) of the Treaty on the Functioning of the European Union, oj c 326 of 26 October 2012, p. 47 (consolidated version). See rehbinder, “Climate damages and the ‘Polluter Pays’ Principle”, in kahl and weller (eds.), Climate Change Litigation – a handbook, London, 2021, p. 45 ff., pp. 59–60; de sadeleer, Les principes du pollueur-payeur, de prévention et de précaution – Essai sur la genèse et la portée juridique de quelques principes du Droit de l’Environnement, Bruxelles 1999, p. 91.
alvarez-armas, cit. supra note 27, pp. 136–138.
francq, “Unilatéralisme versus bilatéralisme: une opposition ontologique ou un débat dépassé? Quelques considérations de droit européen sur un couple en crise perpétuelle”, in azzi and boskovic (eds.), Quel avenir pour la théorie générale des conflits de lois?, Bruxelles, 2015, p. 49 ff.
ferrari and francq, “Unilateralism”, in ruhl and ferrari and asensio and basedow, Encyclopedia of private international law, Cheltenham, 2017, p. 1779 ff.; quadri, Lezioni di diritto internazionale privato, Napoli, 1969, p. 244 ff.
For the traditional Savignian approach, see picone, Studi di diritto internazionale privato, Fuorigrotta, 2003, p. 317 ff.
ingravallo, L’effetto utile nell’interpretazione del diritto dell’Unione europea, Bari, 2017, p. 63.
See da cruz vilaça, Le principe de l’effet utile du droit de l’Union dans la jurisprudence de la Cour, in The Court of Justice and the Construction of Europe: Analyses and Perspectives on Sixty Years of Case-law, The Hague, 2013, p. 279: “ce qui rend le recours à l’effet utile indispensable comme principe directeur dans l’interprétation et l’application du droit de l’Union est exactement l’absence d’une solution expresse dans le texte du traité”.
villani, Istituzioni di Diritto dell’Unione europea, 5th ed., Bari, 2017, p. 272.
ingravallo, cit. supra note 41, p. 107 ff.
See Case C-8/55, Fédération Charbonnière de Belgique v. High Authority of the European Coal and Steel Community, Judgment, 29 November 1956: “the rules laid down by an international treaty or a law presuppose the rules without which that treaty or law would have no meaning or could not be reasonably and usefully applied”; Case C-20/59, Government of the Italian Republic v. High Authority of the European Coal and Steel Community, Judgement, 15 July 1960 and Case C-25/59, Kingdom of the Netherlands v. High Authority of the European Coal and Steel Community, Order, 19 February 1960, where, in case of primary law, to be transposed to secondary law, it is stated that “writers and case-law agree in recognizing that the rules established by a treaty imply the principles without which these rules cannot effectively or reasonably be applied”.
pescatore, “Les objectifs de la Communauté européenne comme principes d’interprétation dans la jurisprudence de la Cour de justice”, in ganshof van der meersch (eds.), Studia ab discipulis amicisque in honorem egregii professoris edita, Bruxelles, 1972, vol. ii, p. 325 ff.
romano, L’unilateralismo nel diritto internazionale privato moderno, Zurigo, 2014, p. 428.
Ibid., p. 428 ff.
On a general and critical assessment on conflict-of-laws rules contained in EU directives, see wilke, “The Silent Death of Conflict-of-Law Provisions in EU Directives?”, eapil blog post, 6 December 2022, available at https://eapil.org/2022/12/06/the-silent-death-of-conflict-of-law-provisions-in-eu-directives/.
See basedow, EU Private Law, Cambridge, 2021, p. 387.
The proposal made is compatible with the principle of mutual recognition: see rossolillo, Mutuo riconoscimento e tecniche conflittuali, Pavia, 2002, p. 223.
See francq, L’applicabilité du droit communautaire dérivé au regard des méthodes du droit international privé, Bruxelles, 2005, p. 417 ff.; Case C-381/98, Ingmar v. Eaton Leonard Technologies, Judgement, 9 November 2000.
See courtieu cit. supra note 18.
romano, cit. supra note 47, p. 436.
bassi, Mutuo riconoscimento e tutela giurisdizionale, Milano, 2008, p. 7; nicolin, Il mutuo riconoscimento tra mercato interno e sussidiarietà, Padova, 2005, p. 209; rossolillo, cit. supra note 51, p. 5. In general, pamboukis, L’acte public étranger en droit international privé, Paris, 1993, p. 97; biscottini, “L’efficacité des actes administratifs étrangers”, rcadi, 1961-iii, Vol. 104, p. 365 ff.; fedozzi, “De l’efficacité extra-territoriale des lois et des actes de droit public”, rcadi, 1929-ii, Vol. 27, p. 165 ff.
