The European Union's legal integration: a case study of living up to the Denver Summit of Eight.

Author:Sohar, Christine Juliet
Position:Recent Rulings of the European Court of Justice

    In Denver, Colorado the Twenty-Third Annual Summit of the Eight convened and hosted issues of global importance in 1997.(1) The seven leading industrial democracies plus Russia discussed international, regional, and domestic steps to promote economic, political, and global prosperity and integration and environmental reforms to foster a healthy global ecosystem.(2) The national delegates determined:

    [t]he process of globalization [is] a major factor underlying the growth of world prosperity.... The increasing openness and interdependence of our economies means that problems in one country can spill over more easily to affect the rest. We must cooperate to promote global growth and prosperity....(3) This is a pivotal year for efforts to promote sustainable development and protect the environment. We are determined to address the environmental challenges that will affect the quality of life of future generations....(4) We must all take advantage of the possibilities for growth to address ... economic insecurity [and] sound economic policies and structural reforms necessary to allow markets to function properly....(5) The above statement begs the question, what has the world done to implement the ideas of the 1997 Denver Summit of the Eight? Has any part of the world demonstrated that the idealistic language of the eigheen-page final communique is much more than a mere wish-list for the world? Perhaps one of the best examples of effectuating the ideals of the final communique of the Denver Summit of Eight is the legal development within the European Union. The European Union continues to modify its laws to ensure international, regional, and domestic integration and prosperity. In particular, within the civil legal system, the European Union has found a way to use laws to harmonize multinational legislation in order to reach the ideal ends. The European Union's legal reformation in the area of competition law, environmental regulations, and monetary union poignantly demonstrate the successful and persistent steps the European Union has taken toward the Denver Summit's objective of promoting global harmonization. Through these three areas of legal reform, the European Union has reached both a broader and deeper legal harmony within the European Union, the region, and the entire world. The European Union's broad interpretation of EU competition and environmental laws exemplify the flexibility of existing laws, which uniformly apply to the more diverse sovereign Member States. This broad interpretation of EU laws is especially important as additional Central and Eastern European nations transform their laws in harmony with EU laws in hopes of joining the Union. In comparison, however, the deepening of the European Union's legal integration demonstrates a different means to accomplish the Denver Summit's ends. The EU deepens this legal integration through such plans as the recent monetary union of eligible states, where the new laws are bringing the current EU members even closer.

    It is in light of these two legal movements in the EU, the broadening and deepening of integrated laws, that the European Union epitomizes the successful reality of the Denver Summit of Eight ideals within its own region of the world.


    The Diego Cali & Figli Srl v. Servici Econogici Porto di Genova SpA decision, delivered in March, 1997, demonstrates the expansive new legal concept for the European Union (EU) was well underway even before the meeting of the Denver Summit.(6) In this decision, the European Court of Justice (ECJ) broadened the flexibility of Union laws by declaring that competition rules do not apply to the private companies monitoring and executing the anti-pollution surveillance schemes hired by public authorities.(7) In general, the court held that Servici Econogici Porto di Genova's (SEPG's) environmental protections, which are public interest activities, do not present an economic impact warranting application of competition laws.(8)

    Traditionally, the ECJ narrowly considered competition and environmental laws as distinctly separate areas of law. The Cali case, however, uniquely and broadly integrates both competition law, ensuring a free market economy, and environmental law, preventing marine pollution.(9) The ECJ analyzed whether a private limited company, established and empowered by a national port authority, violated the competition rules of the Treaty of Rome of the European Communities (EC Traeaty) by levying charges on behalf of Italy.(10) The Court questioned SEPG's private business right to enforce national and regional antipollution standards.(11) However, pursuant EU competition laws, Articles 86 and 90 of the EC Treaty, the ECJ ruled that SEPG did not abuse their dominant market power.(12) The ECJ further held that when a private company receives its authority from the state government, the environmental protection of a public interest does not violate EU competition laws.(13) Therefore, the preventative anti-pollution services performed by SEPG in the oil port of Genova, as authorized by the Italian government, were not abusive anti-competitive acts according to EU competition law; and Call, who violated the environmental standards, was required to pay the port fees.(14)

    The result of the Cali decision exemplifies the broadening flexibility of EU legislation. The decision suggests that pollution prevention is not a strictly private industrial or commercial activity, even if monitored and enforced by a private business. SEPG was not simply a private business seeking a profit.(15) Therefore, the private anti-pollution surveillance and prevention with the proper State or EU authorization is loosely interpreted as an essential function of the State.(16) This dual approach of classifying private and public activities when enforcing environmental standards according to competition law provides a general, definitional framework for applying the EU laws. It also allows Member States to place a high importance on public, environmental interests, even if the services are achieved through unfair competition by private businesses.(17) In addition and of even greater importance, the broad interpretation of EU law by the ECJ allows more sovereign nations within Europe to enthusiastically, efficiently, and uniformly apply the flexible EU legislation. In contrast, the broad interpretation of EU law does present difficulties and uncertainties when specifically determining how or what EU regional law applies to private business activities for both the current members of the EU and aspiring future members.(18)

    In recognition of this evolving problem and potentially confusing legal approach of the Cali case, the first part of this article analyzes the development and reasons for the legal evolution of integrating competition and environmental EU law as an example of broadening international legal integration. The expansive legal integration is examined in three distinct sections: EU Competition and Environmental Laws, Integration of EU Environmental and Competition Law, and Impact of Legal Integration on the EU Expansion.

    Sections A and B of Part II explain the histories of EU competition and environmental laws, respectively. They present a brief foundation and developmental explanation of both EU laws. Historically, for example, when the European Community (EC) originated in 1957, under the EC Treaty of Rome, Europe's main legal concerns focused upon economic coordination and free market competition.(19) Thus, the EC Treaty contains specific laws, such as Articles 85, 86, and 90, which ensure fair economic competition.(20) In comparison, however, the EC did not specifically regulate the environment until the early 1970s.(21) In fact, the original EC Treaty never even mentioned the word "environment."(22) Rather, EU environmental law evolved more slowly through several conventions, programs, directives, and eventually resulted in a revision of the EC Treaty, including Articles 100a and 130r-t.(23)

    Part II, Section C focuses on the current status of coordinating environmental and competition law. This section presents in detail the choice of law issues that challenge the environmental businesses in the EU when attempting to apply the proper environmental law. For instance, current environmental law applied by businesses integrates international, regional, and national regulations based on governmental authority.(24) This is especially true in the environmental area at issue in the Cali case, marine pollution prevention. However, as private companies continue to acquire the responsibility of enforcing government standards, they must simultaneously balance the natural, capitalistic objective of earning a competitive profit. Due to this conflicting balance of interests, the defining line of public and private activities as a legal basis becomes less distinct and more ambiguously integrated.(25)

    Finally, the unique issue presented by the Cali case of integrating EU competition and environmental laws affects not only the current Member States of the EU,(26) but also future members, and/or current associate members of the EU.(27) In order for the Central and Eastern European countries to earn membership to the EU, they must first harmonize their legal systems with the EU standards.(28) For this reason, Part II, Section D of this article discusses the effect of integrating competition and environmental laws on the prospect of eastward EU expansion.

    The four Sections of Part II of this article regarding the Cali case present an opportunity to better understand the ramifications of the broadening EU laws and the relevant factors for determining the specific effects of integrating environmental and competition laws.

    1. European Union Competition and Environmental Law

      Economic integration and the creation of a common market established the goals of forming the...

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