Appeal by India’s Jet Airways against its inclusion in the EU ETS rejected in non-compliance stand-off
Mon 20 Apr 2015 – An appeal by India’s Jet Airways against action taken against it by the UK Environment Agency (EA) for non-compliance with the EU Emissions Trading Scheme (EU ETS) has been rejected by an independent UK legal adjudicator. The case relates to the airline’s intra-EEA flights that took place in 2012 for which the airline did not submit a report of its CO2 emissions nor surrender allowances to cover those emissions, as required by EU and UK law. In its submission, Jet Airways argued that the unilateral action of the EU on the imposition of its scheme did not accord with the global consensus reached by ICAO Assembly resolutions and that the Indian Government had prohibited it from complying. Jet Airways faces a fine of €15,000 ($16,000) to cover the 150 tonnes of CO2 emissions estimated by the EA.
According to Jet’s submission to the adjudicator, David Hart QC, appointed by the Secretary of State for Energy and Climate Change, the Indian Government decided in November 2011 there was no need for its carriers to submit data under the EU ETS and then informed them that any correspondence with EU authorities should only be done after prior consent. In April 2012, national carriers were formally prohibited from participating in the scheme, a position reiterated in May 2014 after the A38-18 climate change resolution reached at the 2013 ICAO Assembly and subsequently confirmed in letters to the European Commission and the EA. India’s other main international airline, Air India, is also meant to report to the EA on its emissions under the EU ETS but has likewise failed to do so.
However, Hart rejected the Indian Government’s view that ICAO resolutions were inconsistent with the EU ETS Directive. “In addition, the views of the Indian Government do not purport to be laws binding Jet; they are plainly political views based upon that government’s view as to the state of negotiations between the EU member states and the rest of ICAO who appear to have wanted to negotiate globally,” he said in his determination of the case.
He noted that despite EA requesting clarification of the legal status of the directions to its carriers by the Indian Government, this had not been forthcoming.
“The underlying issue is whether there is a binding international norm which is capable of trumping the EU Directive, such that Jet do not have to comply with the latter,” he continues. “If I am right in my conclusion that there is not, then the Indian Government was wrong in its conclusion that there was, and its political direction to Jet based upon its erroneous view cannot assist Jet on its appeal. The rule of law requires that the executive cannot override the law by its say-so.”
Irrespective of the Indian Government instruction, Hart argued that tribunals or national courts within EU member states do not have the jurisdiction to accept a challenge to the validity of an EU Directive, in particular one that had already been upheld by the EU’s highest court, the Court of Justice of the European Union (CJEU). However, he said, regardless of whether he had the jurisdiction to declare the Directive invalid, he found the CJEU’s judgement in the case brought by US airlines in 2011 to be persuasive.
He said the A38-18 resolution was not at odds with the EU initiative to make aviation subject to the EU ETS. “The intent within ICAO to come up with a global MBM is not inconsistent with a group of ICAO members deciding that they will resolve upon a sectoral MBM whilst ICAO members as a whole decide upon the terms of a global solution.”
Jet’s reliance on the ICAO Assembly resolution for its case was also undercut, he argued, by the fact that EU member states imposed reservations on those paragraphs that Jet and the Indian Government relied upon.
“Jet assumes a binding consensus within ICAO, but that is not what the resolution as a whole says. Even if the resolution was capable of being binding, it cannot bind the EU member states which entered a reservation in respect of it.”
He noted the CJEU ruling that similar resolutions passed at earlier Assemblies were non-binding political declarations by ICAO contracting states, which was backed up by Article 38 of the Statute of the International Court of Justice that does not list resolutions of international organisations as part of sources which it is to follow.
“Finally, Jet refers to the need to apply fair and equitable justice in the present case. If I am right in my interpretation of the Directive, and that it is unaffected by the ICAO resolutions relied upon by Jet, then there is no room for the operation of these doctrines,” he concluded.
“For all these reasons I dismiss Jet’s appeal. Given that Jet had not reported its own emissions within the timescale provided for in regulation 21, the EA was obliged to determine those emissions under regulation 22. The ICAO resolutions cannot affect that obligation, nor can the directions from the Government of India.”