[Dr Nadia Bernaz is Senior Lecturer in Law and Dr Elvira Dominguez Redondo is Associate Professor of International Law, both at Middlesex University, London UK.]

The 10th of December 2015, International Human Rights Day, was marked by the European Union General Court (EGC) quashing a free trade agreement between the European Union and Morocco, to the extent that it was to apply to the disputed territory of Western Sahara. The judgement is available in French only for the moment.

For the background of this case before UK courts, see the blog posts by David Hart here and Geraldo Vidigal here. The claim was brought by Frente Polisario (the internationally recognised interlocutor of the Saharawi people) against Council Decision 2012/497/UE of 8 March 2012. The original Council decision concerned an agreement between the EU and Morocco over reciprocal liberalisation measures on agricultural products, processed agricultural products, fish and fishery products.

The judgement is important for two main reasons. First, the Court found the case admissible, taking a stance on the issue of the legal personality of Frente Polisario. Second, on the merits, the Court considered that while the Council had wide discretion with regard to the conclusion of agreements with third countries, it should have ensured that the EU was not at the risk of indirectly encouraging human rights violations or benefiting from such violations. The Council’s failure to do so, the Court stated, constituted a manifest error of appreciation which justifies quashing the decision. While the Court avoided basing its decision on the right to self-determination, (it did not evaluate the validity of agreements contrary to customary international law) the decision may nonetheless have important implications for the concern of business with human rights.

1. Misunderstanding the difference between ‘recognition’ of legal status and respect for self-determination

In determining admissibility of the case the Court considered two specific points: (1) the capacity of the Frente Polisario to bring a claim (34-60); and (2) whether the disputed agreement directly and individually affected the Polisario Front.

Geraldo Vidigals in an earlier post claims that

As regards standing, the most striking aspect of the judgment is that the Court accepted the Frente’s entitlement to plead as a ‘moral person’, with the ‘necessary autonomy’ to challenge a decision of the EU legislator (paras. 50-53), without reference to the sui generis character of Frente Polisario or to the unique situation of Western Sahara. This would seem to open the door for other ‘autonomous entities’, even those with no claim to international legal personality, to challenge EU decisions under Article 263 TFEU.

It is unlikely that this case will ‘open the door to other autonomous entities’. The situation of Western Sahara is clear under current international law. It is true that the Court avoids the issue of the legal personality of Frente Polisario, by focusing on whether it is ‘directly affected’ and therefore can bring a claim before the Court (spec. paragraph 46, but also its recognition of UN interlocutor in para. 113). More disappointingly the Court limits its analysis to possible violations of human rights under the EU Charter of Fundamental Rights, with a cursory denial of the relevance of the right to self-determination (paragraphs 202, 203).

As cited in the case under review (paragraph 180) and the Air Transport Association of America and Others v Secretary of State for Energy and Climate Change, (Case C-366/10, 2011, paras 101-111) the European Union is bound by international law, including customary international law. However, to consider customary international law as a benchmark against which the lawfulness of EU acts can be reviewed, the rule should be binding on the European Union, with its content sufficiently precise.

Nonetheless, in this case, the Court fails to apply international law since it does not seem to understand the distinction between the –largely political- problem of recognition of a contested territory, and the respect for the right to self-determination. The Court was satisfied that an agreement with Morocco did not imply EU recognition of title to disputed areas of territory. While the Court makes appropriate references to the relevant UN General Assembly, Security Council resolutions and ICJ decision concerning the Western Sahara, even making explicit reference to obligations under article 73 of the UN Charter, it stops short of discussing self-determination of the Saharawi people under international law.

The Court cites a 2002 opinion of the UN Office of the Legal Counsel stating that signature of contracts concerning exploitation of resources by administering powers of non-self governing territories may have international legality, only if such resources are exploited for the benefit of people on these territories, in their name, and in consultation with them. In other words, in accordance with the principle of permanent sovereignty over natural resources, an integral part of self-determination.

The Saharawi claim is not akin to any ambiguous case of ‘contested territory’. The Western Sahara remains the only African territory on the list of the United Nations Decolonisation Committee. In our view, the kind of agreement under review directly impinges on the right to Saharawi self-determination. As recognised by the International Court of Justice, such a right creates obligations erga omnes (see the ICJ East Timor case, para 102 and Construction of a Wall, paras 88 and 156) and, has arguably acquired jus cogens status (see for instance, commentary here). Therefore, any treaty contravening the right to self-determination of the Saharawi should be considered void in accordance with article 53 of the Vienna Convention on the Law of Treaties.As a consequence other States would be required to refrain from recognising the illegal situation, avoid rendering aid or assistance to the wrongdoing state, and ensuring compliance with international law (all of this again, as contemplated in the ICJ Construction of a Wall case, para 159).

2. Implications of the case for the field of business and human rights

While avoiding the issue of self-determination and broader international legal frameworks, the Court noted that the protection of fundamental rights of the people of a territory is important enough for the Council to examine it prior to approving an international agreement (para 227). According to the Court (para 228), the Council ought to have studied the implications of the agreement to ensure that it did not violate fundamental rights. The Council contended that having concluded an agreement with a third country, the EU could not become responsible for actions committed by that country, whether or not these actions constitute human rights violations (para 230).

This argument was accepted by the Court, but it highlighted that if the EU allowed the import of products made or sourced in ways that do not respect the local population’s fundamental rights, the EU would run the risk of indirectly encouraging such violations while benefitting from them (para 231). In essence, the Court concluded that the Council implicitly accepted the fact that Morocco’s entry into the agreement also applied to Western Sahara, despite its occupation of that territory remaining disputed under international law, leaving doubt about whether Morocco had the best interests of the Saharawi population in mind (see para. 235, and 244-246).

The judgement impacts situations where trade may violate human rights, raising implications for businesses that engage in such activities, by requiring EU institutions to consider the human rights implications of the EU’s external trade relations. This is in line with the EU Commission’s recognition of the 2011 UN Guiding Principles on Business and Human Rights as the “authoritative policy framework” for the EU. The Guiding Principles are addressed to states and corporations and outline their duties and responsibilities respectively. While these Principles do not apply to international organisations as such, the EU is planning to implement the Guiding Principles, having examined their implications for the EU’s external relations. This is backed by an April 2015 Communication on the EU’s new Action Plan on Human Rights and Democracy.

In conclusion, the EGC judgement is exceptional in terms of acknowledging the rights of the Saharawi people and their implications for third States and International Organisations within an adjudicatory judicial forum. However the EGC missed the opportunity of being the first international tribunal to date, to strike down a treaty on this basis.