It is well known that the Lisbon Treaty has transformed the legal framework for EU energy policy. Under the terms of the Lisbon Treaty, the basic control of national energy policy is actively being transferred from Member States to the EU, which is already having a huge impact on the ability for Britain to determine its own competitive energy policy.
In February 2011, the European Council agreed that Member States should inform the Commission of “all their new and existing bilateral energy agreements with third countries” and that “the Commission will make this information available to all other Member states in an appropriate form, having regard to the need for protection of commercially sensitive information.” Consequently, the Commission proposed a draft decision setting up an information exchange mechanism with regard to intergovernmental agreements between Member States and third countries in the field of energy. The aim of such proposal is to extend and complement the notification procedure, which is already applicable to gas agreements to all forms of energy, and to transform the European Council Conclusions into an information exchange mechanism.
However, the Commission proposal was not in line with the European Council Conclusions. As part of its efforts to create a common external energy policy for the EU, the European Commission wants member states to share information on all intergovernmental agreements in the field of energy that they make with non-EU countries. Hence, under the Commission’s proposal, such exchange of information would not be voluntary but mandatory.
The Commission’s proposal is subject to the ordinary legislative procedure and the Council is required to act by a qualified majority. Energy is an issue of vital national interest and the UK is not allowed to veto damaging EU laws in this area.
But, the Government could have sought to form a blocking minority. However, the Government is broadly pleased with the compromise negotiating text agreed by Member States.
Following a first-reading agreement, the European Parliament and the Council have recently adopted a decision establishing a mechanism for the exchange of information between member states and the Commission on intergovernmental agreements in the field of energy. The Commission’s proposal as amended by the European Parliament and the Council, addresses concerns raised by the UK’s Government during the negotiations. Nevertheless, such proposal stills gives to the Commission an extensive control over UK’s energy deals. As described by
Giles Chichester MEP, the proposal is "the worst kind of meddling."
The information exchange mechanism will cover “all existing, provisionally applied and new intergovernmental agreements which are likely to have an impact on the operation or the functioning of the internal market for energy or on the security of energy supply in the Union”. The UK, and the other member states, are therefore required to submit to the European Commission, three months after the decision has come into force, all existing bilateral intergovernmental agreements between them and third countries, which would be made available to all other member states. Then, the Commission would have nine months to inform member states "if its first assessment has led to doubts on the compatibility with Union law".
It is important to mention that the Commission has in mind to influence future intergovernmental agreements towards conformity with the Union energy legislation and the Union policy on security of supply. In fact, the Commission was seeking to be granted the right to participate as an observer in the negotiations. Under the original proposal, on request of the Commission or the Member State concerned, the Commission would have been entitled to participate as an observer to the negotiations. The Government was particularly concerned over the original proposal that the Commission would have had the right to act as an observer in negotiations and that there would have been obligatory model clauses. Under, the compromise deal, member states may request the Commission's assistance in negotiations
with third countries, providing advice or suggesting non-binding clauses, and to participate as an observer. The Commission on its own initiative may also request to take part in the negotiations as an observer, but member state concerned would have to agree to this.
Under the draft proposal, once an intergovernmental agreement is ratified, member states shall send the ratified text to the Commission, including their annexes, as well as all amendments thereto.
The Commission has also proposed a mandatory ex-ante control mechanism applicable to all intergovernmental agreements in the energy field. Under the initial proposal, the Commission on its own initiative or on request from the Member State which is negotiating an intergovernmental agreement, have the right to assess the compatibility of the negotiated agreement with Union law before the agreement is signed, in order to ensure the agreement is lawful and follows the Union’s common energy policy objectives. The Member State concerned would have been required to refrain from signing the agreement for a period of four months following the submission of the draft intergovernmental agreement to the Commission. If no opinion was provided within the examination period, four months, the Commission shall be deemed not to have raised objections. Obviously, this would have been a burden on Member States and it could have delayed the conclusion of all future intergovernmental agreements.
Under the compromise deal, the provisions as regards an ex ante compatibility assessment mechanism aiming at ensuring that new
intergovernmental agreements which have an impact on the operation or the functioning of the internal market are in compliance with Union law are no longer mandatory but voluntary. Nevertheless, the Commission has stressed that it
“will closely monitor the effectiveness of the adopted legislation, reserving its Treaty rights, and make use of its review clause as appropriate.”
Under the draft decision, as agreed by the European Parliament and the Council, if a member state, which is negotiating an agreement, has doubts about its compatibility with EU law, it should submit the agreement to the Commission. The Commission would have then four weeks to inform the member state concerned of any possible doubts. If no opinion is provided, within that period, the Commission shall be deemed not to have raised objections. However, if there are doubts as to the compatibility of an agreement with EU law, the Commission would have ten weeks from receipt of the draft agreement to inform the Member State of its opinion.
The Commission would make all information received available to all the Member States in electronic form. A Member State may indicate to the Commission whether any part of the information in the agreements provided, particularly commercial information, is to be regarded as confidential. The Commission would be required to respect these requests. However, under the draft proposal “Requests for confidentiality should however not restrict access of the Commission itself to confidential information as the Commission needs to have comprehensive information for its own assessment.” Therefore, the Commission would have access to it. The Commission would be required to ensure “that access to the confidential information is strictly limited to the Commission services for which it is absolutely necessary to have the information available.” Nevertheless, the draft decision still raises concerns about Member States’ business confidentiality and has failed to address the Government concerns over the need to ensure adequate protection of confidential information.
