The Polisario case: Do EU fundamental rights matter for EU trade policies?

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On 10 December 2015, the General Court of the European Union (GC) rendered a judgment in the Council v. Front Polisario case that was revolutionary in many regards: not only did a national liberalization movement successfully challenge an EU trade agreement, the Court also considered the EU Charter of Fundamental Rights (CFR) applicable to non-EU citizens on a non EU-territory and in the context of trade policies (see previously, Geraldo Vidigal in EJILTalk).

A month ago and a year later, the European Court of Justice (ECJ) quashed the decision of the GC and denied legal standing for the Front Polisario. However, the door for a role of EU fundamental rights as a benchmark for EU trade policies is not yet closed. To the contrary, the ECJ’s conclusions brought to the fore an ugly truth that shows that the extraterritorial effects of EU trade policies are in urgent need of closer scrutiny.

The context and background of the case

The Front Polisario is a national liberalization movement representing the Sahrawi people in the resistance against Moroccan occupation. The Western Sahara, as a former Spanish colony, is recognized by the UN as a Non-Self-Governing Territory in accordance with Article 73 of the UN Charter. The right to self-determination for Non-Self-Governing Territories and the Western Sahara in particular, as well as, the need for an immediate transfer of powers to the Sahrawi people, has been stressed several times by the UN (here, here, here and here). However, Morocco continues to occupy large parts of the Western Sahara until today, while Polisario is controlling the remainder. The UN recognized Polisario as the legitimate representative of the Sahrawi people and in the peace negotiations with Morocco.

In February 2012, Front Polisario makes a rather unexpected move and seeks the annulment of the EU Council decision approving a Liberalisation Agreement that amends the Association Agreement between the EU and Morocco before the GC. The Liberalisation Agreement aims at progressive liberalisation of trade in agricultural and fishery products. (Later Polisario also files claims before UK Courts, which are now pending before the ECJ for preliminary ruling.)

In substance, Polisario claims the Liberalization Agreement will continue, as did the Association Agreement, to encourage economic domination by Morocco, which undermines the efforts towards the envisioned referendum on the realization of the right to self-determination (para. 143, 144). By doing so, the EU is (amongst others) infringing EU fundamental rights, the principles of coherence and the EU’s general objectives, principles and values and international law, including the right to self-determination.

The application clause in Article 94 of Association Agreement literally only speaks of the territory of Morocco. However, the agreement was de facto applied to the Western Sahara: The Commission’s Food and Veterinary Office several times physically present to control for the compliance with EU sanitary rule; numerous approved exporters on the EU list were in fact located in Western Sahara; and at the first hearing, the Commission and the Council ultimately admitted a de facto application (para. 87) and later an “application without recognition” (as the Advocate General summarized it, para 67).

The GC solved this discrepancy by qualifying these facts as subsequent practice according to Article 31 of the Vienna Convention of the Law of the Treaties (VCLT), which leads to an interpretation of the Association Agreement as applying to Western Sahara and Polisario an admissible claimant.

A duty to conduct Human Rights Impact Assessment and the extraterritorial application of the EU Charter of Fundamental Rights

The revolutionary aspects of the merits are first the confirmation of a duty of care in the context of foreign policies and more precisely of trade and second that the EU Charter of Fundamental rights should be part the necessary assessment. The GC begins by reiterating the settled case law, stating that the EU institutions enjoy a wide discretion in the field of external economic relations according (para. 164, 223). The Court reaffirms that judicial review is limited as to whether there has been has been a manifest error of assessment and adds that such review includes ‘to verify whether [the EU institution] has examined carefully and impartially all the relevant facts of the individual case, facts which support the conclusions reached’ (para 225 with reference to further case law).

Such assessment concerning the most salient issues of this case – which are the alleged human rights infringements in Western Sahara – was completely missing. The Court thus criticises the EU institutions for not having conducted a Human Rights Impact Assessment prior to adopting the Council decision. It needs to be noted, that this reasoning is in line with a previous decision by the EU Ombudsman in the FTA Vietnam case and the interpretation of extraterritorial human rights obligations by the UN Special Rapporteur on the right to food, Olivier De Schutter.

The Court also identified the circumstances that trigger an obligation to conduct an Impact Assessment in this case (for more on this, see Geraldo Vidigal). First, the fact that the Commission enjoys wide discretion which the Court found to be especially wide in this case ‘because the rules and principles of international applicable to the area [in question] are complex and imprecise’ (para. 223, 224). Second, the many incidents that point to a strategy of illegitimate annexation by Morocco of the Western Sahara and the likelihood of human rights violations occurring in that context next to the violation of the right to self-determination (para 235 – 246). Third, the Court found it important that the EU is by means of the trade agreement contributing to the human rights violations by ‘encouraging and profiting’ from the exploitation of the Western Sahara (para 231). The third argument can be explained as a response to the Council’s defence that human rights violations committed by a trade partner are always irrelevant for the EU (para. 230).

Yet, what is more extraordinary was what the GC defined as the substantive content of such an assessment: The full catalogue of the EU fundamental rights (para.228) – without any discussion.

The Advocate General Wathelet (AG) in his opinion delivered on 13 September 2016 agrees with the duty to conduct an impact assessment but limits the scope drastically (although in the alternative since he denies legal standing). First, citing the ATAA case and others, the AG reminds that human rights compliance and the strict observance of international law is a requirement for all external action and refutes the Council’s objection that human rights in a third country are only a political matter (para. 256). However, according to the AG, such an assessment should only cover jus cogens and erga omnes norms (para. 259, 276). Siding with the Commission and the Council, he criticises the GC for misinterpreting Article 51 of the Charter, which he understands as prescribing an in principle territorial application of the Charter.

Applying by analogy and without further explanation the case law of the European Court of Human Rights (ECHR), the AG concludes that extraterritorial application is only relevant when an activity is governed by EU law or carried out under the effective control of the EU and/or a Member State (paras. 270 – 272).

It is indeed surprising for everyone concerned with the extraterritorial application of human rights that the GC did not discuss the prevailing ‘effective control’ paradigm of international human rights law and/or approaches that are challenging the former, such as the Maastricht Principles.

On the other hand, it is noteworthy that the GC did not apply the Charter directly qua Article 51 of the Charter but rather in the context of Article 2 TEU, Article 3(5) TEU, Article 21 TEU and Article 205 TFEU (para. 159). The Court was thus giving a content to the vague reference of human rights as a principle, objective and value of EU external action. Interestingly, it is the same content that the Commission assigned to Article 21 TEU in its self-imposed guidelines on human rights impact assessment for trade related measures. In these guidelines, the Commission explicitly committed itself take into account the most relevant international human rights instruments including EU fundamental rights. Further, in the context of a HRIA of a trade measure, a test for ‘effective control’ seems misplaced.

In any case, understanding the principles and objective of Article 21 TEU as only requiring compliance of jus cogens and erga omnes norms is too restrictive. Such a reading would empty the several references to human rights in the constitutional framework of EU foreign policies. Jus cogens and erga omnes norms are without any doubt covered by international law and the references to peace and security.

A further question that remains is whether the case-law on the duty of care which has previously only been applied in the context of internal policies can be transposed to external policies and treaty making. The AG Wathelet – although relying on different case law that he finds more suitable – was maybe making matters to easy when stating that ‘the principles applicable in administrative procedures are applicable mutatis mutandis to legislative procedures’ (para. 223, 229). However, also here Article 21 TEU might help to reaffirm a duty to put human rights on the agenda precisely in the context of foreign policies.

No plaintiff, no judge or too illegal to be true

The ECJ, in its decision on the appeal denies standing of the Front Polisario, but leaves the door open for a role of EU fundamental rights in trade policies.

For the ECJ the determination of whether Polisario fulfils the direct and individual concern criteria of Article 263 (4) TFEU hinges on the scope of application of the Liberalization Agreement and the Association Agreement.

According to the ECJ’s application of the principle of the relative effect of treaties (pacta tertiis nec nocent nec prosunt) of Article 34 of VCLT, the Association Agreement cannot have been applied to a territory distinct from Morocco without the formers consent (for a commentary on this, see also Markus W. Gehring in EU Law Analysis). Such an interpretation would be contrary to the right to self-determination, which is an erga omnes rule of international law (para. 92). For the intention of breaching one of the most fundamental rules of international law, a higher threshold is apparently warranted. Subsequent practice or tacit agreement is not enough.

The ECJ did not really have another choice. In other words, the admissibility test of the ECJ gives a name to the involvement of the EU in the economic annexation of Western Sahara by Morocco and at the same time saved the EU from officially being complicit in – if the presented facts are true –an over a decade long infringement of the right to self-determination.

However, it is even more concerning that this is exactly what was de facto done.

This case uncovers the unawareness amongst the EU institutions as to their human rights and fundamental rights obligations. A methodology for implementing human and fundamental rights compliance in trade policies and a clear framework for their judicial review would therefore be helpful. With the EU Charter, the GC presented a valuable proposal for a normative framework that should not be dismissed too easily. The ECJ left the door open for a fundamental rights assessment, although it not repeat what the GC and the AG said, that is that such a duty is require in every case in which the institutions enjoy a particular wide discretion (para. 47). However, for now, the uncertainty of the role for EU fundamental rights in EU trade policy should lead EU policy makers to be better safe than sorry and get inspired by what EU conditional law has to offer.

Bringing this ambiguity to the fore and ending the de facto application of the Association Agreement (for the EU’s reaction after the first hearing, see here) is a success, also without a victory in court, for the Polisario liberalization movement and extraterritorial human rights protection.

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Lorand Bartels says

February 3, 2017

Vivian, nice post on an interesting case. Anyone interested in a discussion of why art 21 is the right approach - because it contains legal requirements, not just objectives - and fundamental rights the wrong approach (i.e. the CJEU right, the GC wrong) might be interested in my article in EJIL (2014) here:

Arnaud Louwette says

February 3, 2017

Dear Vivian,

Thanks for this very interesting post. I’m afraid, however, that I do not share the view that this decision would amount to a success for the Polisario…

Granted, the Court admits that Western Sahara is a territory entitled to self-determination and that implies that the agreement with Morocco cannot apply to it. But then, the Court goes on with an absurd reading of the VCLT, one that ends up denying standing to the Polisario and safeguarding the agreement… The reasoning held by the Court is the following:

1. For the ECJ, the GC should not have looked at the practice of the parties to construe the agreement because that “would necessarily have entailed conceding that the European Union intended to implement those agreements in a manner incompatible with the principles of self-determination and of the relative effect of treaties” (para 123)
2. Rather, what the GC should have done, is take the word of the Commission that it did not want to breach this principle. Why? Well, there comes the magic … Because of the principle of good faith… For the Court, as treaty obligations must be performed in good faith, one cannot conclude that EU did not perform it in good faith. Well, if that’s not the proverbial snake that bites its own tail… I’m no expert on the VCLT, but that looks like quite a novel use for the principle of good faith to me…
3. Now, in the paragraph I quoted above, you might have noticed the reference to the principle of relative effect of treaties. For the Court, the principle means that a treaty between Morocco and the EU cannot have effects on a third party, that is Western Sahara. From that, the Court deduces that in the absence of consent by Western Sahara we must conclude that the agreement does not apply to that territory. But, there comes the trick… Rather than being used to safeguard the rights of a third party, the principle of relative effect of treaties is used to deny that party standing before the Court as the treaty would not be “of direct concern” to it, even though the agreement has de facto applied to it for years… Doing so, the ECJ mixes up its own standing requirements with a principle of the law of treaties which has, frankly, nothing to do with these…
4. Then, having conveniently denied standing to the Polisario, the Court actually closes the door on human rights assessment in trade agreements. It does not leave it open... Sure, it does not criticize the reasoning of the GC or the formalistic view of the AG on the issue. But, it certainly makes sure that no one will ever have standing to discuss the issue…

Now, true, the decision has prompted some reaction from the EU as it now realizes its prior behavior was unlawful (which, btw, was already the case anyway if we believe the Commission’s arguments… ). Yet, it remains to be seen whether those measures are anything but tokenistic. Problem is, no one will have standing to make sure… And so, goes away any debate by the Court on what judicial review of compliance of EU trade policies with human rights should be…

Vivian Kube says

February 7, 2017

Dear Arnaud

Thank you for your thoughtful comments. Yes, I agree, the ECJ’s interpretation of the application clause of the agreement leads to an unsatisfactory result. Because an application to the Western Sahara would be illegal under international law (it would breach the right to self-determination and the principle of relative effect of treaties), the application clause cannot be interpreted in that way – although this was what was de facto done and what was more or less acknowledged by the Council and the Commission. The result of this interpretation, however, is that the applicants cannot challenge the application because it de jure did not happen.

I do see, however, that for interpreting an agreement diverging from its wording and in a way that it breaches fundamental principles of international law, the Court better applies a higher threshold. There has to be more convincing evidence like continuous practice from both parties pointing to a mutual understanding that the agreement in question applies contrary to its wording and knowingly in breach of jus cogens.

Obviously, the EU should have put a safeguard in place and unfortunately, the case now never reached the stage to make substantive things clear.

Nevertheless, there will be cases in which the territorial application of a trade agreement is not a question. Could the citizens of a trade partner challenge an EU trade agreement when human rights violations are prevalent? Could they challenge the failure to conduct a proper human rights impact assessment, if the assessment did not properly take into accounts ‘all revenant factors’, e.g. the impact of the trade agreement to the human rights violations? These questions remain open.

The GC did not limit the duty to conduct a human rights impact assessment to cases of ‘disputed territories’. It was much broader applying this duty to all cases of wide executive discretion and of known or likely human rights issues.