Environmental protection

 

Author Definition

 

Definition

“Environmental Protection” is not a term of art in competition (or antitrust) law. In the widest sense it concerns the protection of the natural environment by individuals, organisations and governments. The “environment” means the physical surroundings common to all of us including air, space, water, land, plants, and wildlife - as well as that of future generations. The UN and OECD have defined it as “any activity to maintain or restore the quality of environmental media through preventing the emission of pollutants or reducing the presence of polluting substances in environmental media”.

 

Commentary

Although environmental protection (“EP”) is not new (the first national parks were established in the 19th century), most laws and agencies to protect the environment date from the 1960s and 70s - with the UN Conference on the Human Environment in 1972 being a particular driver. Since then there have been many international conferences and agreements with an increasing focus on climate change - notably the Kyoto Protocol of 1997 and the Paris Agreement of 2015. The next big milestone is the UN Climate Change Conference of the Parties (COP26) in Glasgow UK, in November, 2021.

From democracies to autocratic regimes (of the left or right) 100s of countries around the world have EP laws. The EU included EP in its founding treaty in 1957 and it is one of the fundamental principles of the Treaty on the Functioning of the EU (TFEU). In particular Article 11 TFEU provides that EP must be “integrated into the definition and implementation of Union policies and activities” and this is echoed in Article 37 of the EU Charter on Fundamental Rights. Furthermore, the TFEU has a whole chapter on EP (Title XX –Articles 191 to 193). EP is also at the heart of the EU’s Green Deal .

The UK has many laws on EP, most notably the Environmental Protection Act of 1974 and its ground breaking Climate Change Act 2008 committing the UK to net-zero emissions by 2050. EP is one area where UK policy may diverge from that of the EU post-Brexit.

The US set up its Environmental Protection Agency (EPA) in 1969 and its National Environmental Policy Act (NEPA) in 1970 (which has served as a model for many EP policies and laws around the world). At the other end of the political spectrum, China announced in 1983 that EP would be one of its basic national policies and it set up its National Environmental Protection Agency (NEPA) in 1984.

EP is enshrined in the laws and policies of over a hundred countries around the world with some including rights of nature in their laws and even in their constitutions (for example Ecuador, India, Bolivia, Columbia, Mexico, Pakistan, Australia, New Zealand, and several US states).

Environmental Protection and Competition Law

While EP laws are well established around the world, how EP fits into competition law/antitrust is less clear and more controversial. Writers and institutions in Europe have taken the lead in this area building on the requirement in Article 11 TFEU that EP must be taken into account in all EU policies and activities (see above)—with no carve out for competition policy.

The need to combat climate change, and the EU Green Deal, has brought this issue to the top of the competition law agenda. While in many cases regulation or unilateral action by companies will be effective, in many other cases businesses will need to cooperate if the economy is to be transformed at the speed, and on the scale, necessary to meet the existential threat of climate change. In these instances, it is important that businesses can cooperate without undue fear of competition law.

There is also increasing discussion of how EP (and sustainability issues more generally) fit into other areas of competition law (in the widest sense) including abuse of dominance, merger control, state aid and public procurement.

Reflecting this, in September 2020, the European Commission launched a consultation on ‘Competition Policy supporting the Green Deal’ and it is expected that this will lead to amendments to (at least) a number of Commission guidelines on competition policy. The issue is also being considered by international institutions, notably the OECD which held a roundtable on ‘Sustainability and Competition Policy’ in December 2020. Individual European countries are moving at different speeds on EP and competition law. The Netherlands Authority for Consumers and Markets (ACM) is the leader, publishing Draft guidelines on ‘Sustainability Agreements’ in July 2020 and February 2021. In particular, these provide for more flexible treatment of “Environmental Damage Agreements”. Other countries are less advanced with, for example, the UK Competition and Markets Authority (CMA) making climate change and the “transition to a low carbon economy” a “strategic priority” but so far only publishing very general guidelines.

Starting from a more “public interest” perspective several countries have ways to take EP into account in their competition law and enforcement practice. For example, the Australian Competition and Consumer Commission(ACCC) can authorise conduct where the public benefits (which can include EP) outweigh the public detriments. South African competition law and policy expressly take into account social objectives and many believe these (as well as economic objectives) could encompass EP and other sustainability concerns.

The US is less advanced in this area, although it is possible that this may change under the Biden administration (and with the appointment of Lina Khan as chair of the FTC). There are no general guidelines focussing specifically on sustainability agreements but there is extensive case law dealing with many types of cooperation between competitors. This includes cases on standard-setting which can be one of the building blocks for EP. The Department of Justice (DOJ) issues ‘Business Review’ letters to give business guidance on when conduct can fall outside antitrust rules. In principle, these could cover cooperation to fight climate change where regulation and unilateral action will not suffice (the Akutan Catcher Vessel Association letter being an example ).

Agreements between competitors on EP issues have been considered by a number of other competition authorities around the world with mixed results (for example, the soya bean moratorium in the Amazon and palm oil deforestation in Indonesia).

Finally, many countries have specific regimes which can take account of EP issues in merger control-either as part of the competition review or outside it. For example, an EU Merger Working Group on “Public Interest Regimes in the EU” in March 2016 found that there were 12 such jurisdictions in the EU. Most of these are capable of taking into account EP issues and some (e.g. Spain) contain express reference to EP. Several recent deals have been cleared in the light of EP considerations despite competition law concerns (e.g. Miba/Zollern where the German government approved the deal despite an earlier block by the German Federal Cartel Office (BKA)).

 

Case references

Treaty on the Functioning of the EU (TFEU). Article 11, 1957

EU Charter on Fundamental Rights, Article 37, 2000

Response to Akutan Catcher Vessel Association’s Request For Business Review Letter, US Department of Justice, Antitrust Division, 2000

Draft Guidelines ‘Sustainability Agreements’, Netherlands Authority for Consumers and Markets, 2021

 

Bibliography

Kingston, S., Greening EU Competition Law and Policy, Cambridge University Press, 2012.

Bell, S., McGillivray, Donald., Pedersen, O.W., Environmental Law, 8th edition, Oxford University Press, 2013.

European Green Deal, announced December 2019.

Holmes, S., Climate Change, ‘Sustainability and Competition Law’, Oxford Journal of Antitrust Enforcement, 2020.

OECD Competition Committee Roundtable, Sustainability and Competition, December 2020

Competition policy contributing to the EU Green Deal, Consultation & Conference, DG Competition, European Commission, February 2021.

This article is being reviewed by the Editors of the Dictionary.

Author

  • University of Oxford

Quotation

Simon Holmes, Environmental protection, Global Dictionary of Competition Law, Concurrences, Art. N° 86023

Visites 447

Publisher Concurrences

Date 1 January 1900

Number of pages 500

 

Institution Definition

In a Communication from the Commission - Guidelines on State aid for environmental protection and energy 2014-2020 - environmental protection was defined as follow : "Any action designed to remedy or prevent damage to physical surroundings or natural resources by a beneficiary’s own activities, to reduce the risk of such damage or to lead to more efficient use of natural resources, including energy-saving measures and the use of renewable sources of energy." © European Commission

 
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