Soft Law and the Enforcement of EU Law

Soft Law and the Enforcement of EU Law

Oana Ştefan[1]

I.  Introduction

Soft law, or ‘rules of conduct which, in principle, have no legally binding force but which nevertheless may have practical effects’[2] and also legal effects,[3] is a concept that was first developed in public international law.[4] Closely connected in the literature to the challenges imposed on traditional law-making methods by globalization, it has become more relevant in the context of the growing importance of non-state actors on the international plane[5] and, in particular, with the growth of international institutions.[6] In the EU context, soft law consists of recommendations and opinions – instruments deprived of legally binding force in accordance with Article 288 TFEU. However, other instruments not mentioned in that article can be considered soft law as well - communications, notices or guidelines. Until 1968, recourse to soft law instruments was exceptional; afterwards, and especially after the accomplishment of the internal market, they became quite frequent in the activity of the European Commission.[7] Nowadays, soft law instruments should account for over 10% of EU law.[8]

It has been argued that international soft law comes in an ‘infinite variety’; EU soft law is no exception. The number of soft law instruments, as well as of the fields in which they were issued, has significantly increased since 1989, following, especially the Maastricht Treaty[9] and the construction of the second and third pillars. Senden classifies soft law in three categories, on functional and purposive criteria. The first category (preparatory/informative instruments) includes acts that put forward various proposals for future action. The second category (interpretative/decisional) includes those instruments that interpret hard law provisions, or that indicate the way in which EU institutions think appropriate to exercise their discretion.[10] The third category (steering instruments) comprises of those legal and/or political instruments with the objective of steering or guiding action in a non-legally binding way, thereby adding to existing acts.[11] In addition, whole regulatory soft mechanisms were developed on an EU level. Starting with the area of economic policy, a ‘model of soft policy coordination’[12] was institutionalized in sectors such as employment and social policy, inspired by methodologies developed at the OECD level.[13] The Lisbon Summit of March 2000 codified this model as the ‘Open Method of Co-ordination’ (OMC).[14] The OMC is a dynamic mode of governance, whose structure and objectives have been transforming over time, since the launch of the Lisbon strategy in 2000, its reshuffling in 2005 and shift into the Europe 2020 project in 2010.[15] It consists of fixing guidelines for the Union, and timetables to achieve goals in certain policy fields. It also entails establishing indicators and benchmarks for the Member States in order to compare best practices. The OMC presupposes translating the European guidelines in national policies, and involves monitoring, evaluation and peer review in order to foster mutual learning.[16]

Soft law is an essentially composite phenomenon and a single analytical narrative to categorise such instruments cannot be easily achieved. It is beyond the purpose of this chapter to delve in soft law taxonomies and their critique; [17] it suffices for now to retain that the vast variety of instruments is bound to determine a variety in enforcement mechanisms. Furthermore, as expressed in the international relations literature, the effects that soft law can produce, in the absence of legally binding force, remain rather uncertain, which makes the enforceability of such instruments problematic.[18]

At least at first sight, it appears that enforcement of soft law should be different than the enforcement of hard law. In fact, the EU legal studies literature generally contrasts soft law and hard law, arising ‘from the treaties, regulations and the Community method’[19] and taking the form of Art 288 TFEU regulations, directives and decisions.[20] Hard law is endowed with binding legal force, produces general and external effects, is adopted by the Union institutions according to specific procedures and has a legal basis in the Treaty.[21] Conversely, due to its lack of legally binding force, and the emphasis on persuasion and guidance rather than on enforcement by a coercive authority, soft law has been considered as an instrument of “governance”.[22] Governance is a new way to govern that “departs from the traditional model where collectively binding decisions are taken by elected representatives within parliaments and implemented by bureaucrats within public administrations.”[23]

Though soft law appears to stand in stark contradiction to (traditional) hard law, practice has nonetheless shown that the various sources of law hardly ever exist in isolation from each other and that it is difficult to determine at the outset the individual or relative impact of the hard or the soft element on policy development.[24] In a judgment concerning the Stability and Growth Pact (SGP),[25] the ECJ held that the discretion of the Council to take decisions was limited by recommendations issued by the European Commission in the framework of the system of multilateral surveillance, thus increasing the importance of SGP’s soft dimension.[26] This judgment illustrates that soft law is not simply politics and that ‘even where there is no immediate sanction other than peer pressure and the prospect of further decisions, soft law has practical and legal effects that cannot be bypassed’.[27]

Furthermore, soft law is in itself used as a tool to enforce higher norms – or hard law, to the point that distinguishing between enforcement of hard law, enforcement of soft law, and the soft law itself becomes extremely problematic. As argued by Snyder, soft law is a mechanism through which effectiveness of EU law in all its facets – compliance, enforcement, and implementation – might be ensured.[28] For instance, soft law is often used to explain the existing (hard) law in a specific sector, in order to clarify those provisions of an open and indeterminate character.[29] Thus, through its informative function, soft law plays an important role in enhancing the links between the institutions and individuals, natural or legal persons, and ultimately contributes to the proper enforcement of hard law. In fact, soft law is used itself in order to enforce a vast array of values, from transparency to legal certainty to legitimacy and involvement of the citizens in decision making.

This informative and educative role of soft law make it fit for non-judicial forms of enforcement. Soft law appears unsuitable for adjudication because court enforcement of soft law instruments might come at the expense of legal certainty.[30] Klabbers points out that use of soft law instruments in court is undesirable.[31] He argues that whenever dealing with soft law, the domestic and international courts try to ‘recast it into the more accepted sources of international law: treaties and custom,’[32] and that soft law becomes ‘completely indistinguishable from hard law’ whenever applied, complied with or violated.[33] However, the reality of judicial practice requires more nuanced views, with European Courts recognizing certain legal effects of soft law instruments. Some argue that in a ‘new governance’ context, the role of the courts needs to be redefined: courts are not enforcers of legal rules but rather ‘a source of communicating ideas and experience… without being specifically prescriptive in relation to any particular form’.[34]

This chapter aims to present several challenges raised by the process of enforcement of European soft law. Part II briefly reviews various strategies in order to determine what enforcement could mean in a soft law context. Even though soft law instruments are deprived of legally binding force, this does not mean that coercive means of enforcement are automatically excluded, as proven empirically on a number of occasions. The chapter looks at a series of examples that demonstrate how soft law is enforced through flexible (Part III), but also more coercive means (Part IV), before concluding that ensuring the enforcement of soft law is done through hybrid methods which only reflect the hybridity of regulation in Europe (Part V). The chapter will show how hybridity of regulation is reflected in the hybridity of enforcement mechanisms, with soft law becoming itself an enforcement tool for higher, binding norms, or values. Finally, Part VI reflects on whether, in the coercive enforcement of soft law, fundamental rule of law values are still preserved.

II.  Enforcement theories: between compliance and deterrence

In his seminal article on the effectiveness of European law, Snyder considered enforcement, implementation, and compliance as facets of effectiveness.[35] According to other accounts, enforcement is part of regulatory implementation. Yeung distinguishes between compliance with the ‘collective goals underpinning a regulatory scheme’ and ‘compliance with regulatory standards.’[36] The two are distinct as compliance with certain standards (which, for example, might be poorly designed) may not always lead to a more general compliance alongside the goals of regulation. For this reason, Yeung suggests implementation refers to compliance with general regulatory goals, and for this reason encompasses institutional design, standard setting and the monitoring and enforcement of regulatory standards.’[37] Enforcement can be seen as involving ‘activities pursued by third parties that are aimed at securing compliance with a set of regulatory norms.’[38] These activities can imply incentives, recourse to courts, or the threat or use of sanctions.[39] For Shavell, the fundamental dimensions of law enforcement concern the stage of legal intervention, the form of sanctions (monetary or non-monetary), and the choice between private and public law enforcement.[40] Each of these dimensions are accompanied by various factors that can contribute towards an optimal level of law enforcement. Interesting to note that in Shavell’s model the optimal level of law enforcement varies in function of the particular sector of regulation – tort, criminal law, tax, etc.

The relationship between compliance, implementation, enforcement, and effectiveness has relevance for our discussion, especially as enforcement has a specific coercive meaning in European studies while ‘compliance’ is the generic term.[41] Alternatively, by definition and in accordance with Article 288 TFEU, soft law instruments are deprived of legally binding force, making any type of coercion rather problematic, at least in principle. Thus, it is hard to conceive soft law being enforced as hard law, through traditional mechanisms laid down in the EU Treaties, such as infringement proceedings brought by the Commission. In fact, as we learn from international relations literature that courts cannot get too involved in this enforcement process and should instead look for other ‘soft means of enforcement’ such as negotiations, monitoring, or follow-up agencies.[42] The generic term of ‘compliance’ appears a more useful term for this discussion.[43]

Some authors consider that instead of focusing on enforcement, a better perspective will be obtained by looking at the bigger picture of compliance, including deterrent means of enforcing the law, as well as normative and social motivations as well as awareness of rules.[44] It is thus useful to understand enforcement strategies in a wide sense, including two main streams: a deterrence and a compliance strategy. The deterrence strategy relies on coercion, putting forward a ‘confrontational style of enforcement and the sanctioning of the rule-breaking behaviour.’ [45] It occurs through monitoring and sanctioning in order to increase the costs of defecting. [46] This increase in costs is achieved either by imposing duties on those who breach the law, on third parties, or by denying rights to violators and/or grant rights to others.[47] On the other hand, enforcement through compliance focuses on cooperation, persuasion and advice.[48] Compliance is achieved because states undertake commitments in the interests of efficiency and norms, and occurs through clear and transparent norms, economic and political capacity building, and rules interpretation.[49]

It is of course commonplace that different, hybrid combinations of these two strategies are needed, depending on the context, in order to ensure efficient and effective regulation.[50] A sophisticated, flexible, and business-friendly approach to enforcement has been proven in certain cases to be more conducive to compliance than a strict enforcement strategy.[51] Formality of enforcement has been occasionally considered to have a positive effect on compliance with regulatory norms, whereas coercive enforcement has been generally assessed as counterproductive.[52] Similarly, enforcement agencies can be differentiated alongside the deterrence/compliance dimensions – some focus on correcting behaviour or punishment while other the use of a legalistic or cooperative approach to enforcement.[53] The regulatory strategies adopted by agencies can vary between formal (or systematic) and cooperative (or facilitative) with flexibility being generally induced by political circumstances, and with agencies adopting blurred strategies in order to respond to conflicting external requirements.[54] Ayres and Braithwaite combined the deterrence and the compliance strategies within the ‘enforcement pyramid’, showing how if softer strategies fail, more constraining (or deterring) strategies can be put in place by the enforcers.[55]

These two different enforcement methodologies are combined in the European Union as well, on a multi level plane, at the EU and the national level.[56] While with soft law the expectations might be that flexible compliance strategies would be the norm, empirical evidence shows that deterrence is sometimes very relevant as well, with the European Commission, EU Courts, and national authorities using a wide range of mechanisms to give full effects to soft law.

III.  Compliance mechanisms

As argued by Cremona, the basis of compliance procedures is the principle of loyal cooperation enshrined in Art 4(3) TEU.[57] The cooperation between Member States and European institutions in the achievement of the goals of the Treaty is considered a constitutional principle of EU law, and a cornerstone of European integration.[58] Cooperation between national authorities and institutions of international organisations is frequent in drafting or implementing policies and is a general principle of international public authority.[59] Observance of soft law instruments is an expression of the voluntary nature of the cooperation between the Member States and the Commission. The Court reached this conclusion while corroborating former Article 211 EC (now Article 17(1) TEU) with Article 288 TFEU. Article 211 EC provided that the Commission could formulate recommendations and deliver opinions on matters dealt with in the EC Treaty. The Court considered that ‘express conferral of the power to adopt acts having no binding legal effect shows that voluntary compliance with the rules of the Treaty and non-binding acts of the institutions is an essential element in the achievement of the goals of the Treaty’.[60]