Formal adoption and final legislative act

The final legislative act was published in the Official Journal of the European Union on the 29^th of April 2004 (OJ L 127, 29.4.2004). The objective of the directive is to establish a common framework for transparent, solidarity-based, non-discriminatory security of supply policies that are consistent with the single gas market. The Member States are responsible for defining the policies within this framework. The main content of the directive is as follows:

− household customers are protected by the Member States in the event of a partial disruption of national gas supplies during a period to be determined by the Member States taking into account national circumstances, or during extremely cold temperatures, or during periods of exceptionally high gas demand during the coldest weather periods;

− the Member States may adopt and publish national emergency provisions, cooperate with another Member State by using that other Member States’ gas storage facilities to achieve security of supply standards, require the industry to establish minimum targets for future storage contribution, and extend the scope of targeted customers to small and mediums sized enterprises and other customers that are not able to switch from gas to other energy sources;

− on the basis of reports from the Member States, the Commission should monitor the situation and conditions, such as the sufficiency of long-term contracts for imports from third countries, adequate liquidity of gas supplies, the degree of interconnection of the internal market, and the capacity of storage facilities, concerning security of gas supply at Community level;

− a Gas Coordination Group, chaired by the Commission and composed of representatives from the Member States, industry representatives, and relevant consumer bodies, will facilitate the coordination of Community level measures in the event of a major supply disruption, as well as assist the coordination of measures taken at national level;

− if the measures taken at national level are inadequate, the Commission may propose the Council to consider further measures, however, any measures taken at Community level shall contain provisions of appropriate compensation;

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− finally, the Member States will report to the Commission on the impact of the Directive, the storage capacity levels, the remaining duration of long-term gas supply contracts, and the framework the Member States have established to encourage new investment.

Comparing the proposal with the final legislative act helps to answer the first hypothesis as it illustrates the difference in the level of discretion that the Council wanted to delegate to the Community level. Starting with the function of “monitoring compliance”, the comparison shows that significant parts of the proposal have been changed. The Commission is still to monitor several aspects of supply conditions, but the main difference is that in the proposal the Commission was granted the power to issue recommendations based on the findings of the monitoring, whereas in the final act, recommendations are not mentioned. Article 6, paragraph 2 states (OJ L 127, 29.4.2004):

“Where the Commission concludes that gas supplies in the Community will be insufficient to meet foreseeable gas demand in the long term, it may submit proposals in accordance with the Treaty.”

This means that instead of issuing recommendations to a single Member State to improve a certain aspect of their gas supply condition, the Commission is merely allowed to make a proposal for a new Community level legal act. To clarify that the Commission’s monitoring competences have been reduced, also the description of monitoring the conditions “closely” has been removed.

On the part of the function of “adopting credible and expert regulation” the Council adopted nearly all the amendments the Parliament had suggested. The paragraph mentioning the European Observation System was deleted completely and the hierarchy for regulative measures were set very clearly. Article 9, paragraph 3 (OJ L 127, 29.4.2004) states that the measures taken by the gas industry should be the first response to a major supply disruption. Secondly, the Member States are to exercise the emergency measures they have determined to be necessary according to each Member State’s national conditions. Lastly, the Gas Coordination Group may provide guidance and assistance to those Member States particularly affected by a major supply disruption. Again, if the measures presented here are inadequate, the Commission is merely allowed to “submit a proposal to the Council regarding further necessary measures” (OJ L 127, 29.4.2004, Art. 9(5)).

As explained earlier the matter of “procedural agenda setting” was decided when the legal base was changed from Article 95 to Article 100 of the Treaty. In addition to the procedural agenda setting that Pollack uses, I will also consider the right to propose or initiate further action as a form of internal agenda-setting function of the directive and, therefore analyse it here. In the Parliament’s opinion the function of initiating further action should be reserved completely to the Member States

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so that a crisis mechanism at European level comes into operation only in clearly defined cases and only when the Member States ask for it themselves (European Parliament, 2003a, Art. 8). The final legislative act is not as strict. It mentions that in a case of a major supply disruption “the Commission shall convene the [Gas Coordination] Group as soon as possible, at the request of a Member State or on its own initiative.” (OJ L 127, 29.4.2004, Art. 9(1)). In practice, this still does not leave the Commission much agenda-setting power, because the Gas Coordination Group is composed mainly of the representatives of Member States, who in the end make decisions. In addition, throughout the directive the emphasis is put on the measures taken by the Member States based on national conditions, not on a common Community level security of supply plan or criteria.

According to Pollack (2003, 25-26) the principle is motivated by some other concern, rather than reducing the transaction cost of cooperation, if it does not delegate the predicted functions mentioned above. I do not think this is the case here. Indeed, only a low level of discretion was delegated to the Commission, but this little delegation supports the hypothesis. The Council was looking to reduce transaction costs, but due to the conditions, low level of uncertainty and high level of conflicting opinions between the Commission and the Council and among different Member States in the Council, it also wanted to control the Commission extensively. This can be confirmed by analysing the part of the final legislative act that covers the procedural requirements constraining the Commission, as well as analysing the choice of mentioned instruments that are granted to the Commission through the act. In fact, many of these have been examined already. The procedural requirements constraining the Commission include submitting proposals in accordance with the Treaty in the case where the Commission thinks that further measures should be taken due to the results of monitoring, or due to the inadequate emergency measures taken at the national level. This means, as analysed earlier, that the Commission is not allowed to issue a recommendation to a single Member State to improve a certain aspect of its gas supply condition.

Instead it has to propose another legal act. This is a strong restraining factor as EU law making is often slow and the influence of Commission’s agenda-setting power depends greatly on the legal base of the proposed legal act. In addition, the choice of instruments that the Commission is granted does not leave much of an actual choice to the Commission. Apart from proposing another legal act, an instrument the Commission can use anytime anyhow, the final legislative act merely allows the Commission to issue recommendations regarding future measures in an assessment on the effects of the directive that it is to write after four years of the directive’s entry into force (OJ L 127, 29.4.2004, Art. 6(3)). Furthermore, the Gas Coordination Group can be said to be more of a procedural requirement than an instrument. The Commission chairs the Group but the actual

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deciding power is in the hands of its members, namely the representatives of the Member States and the industry.

Based on the above analysis, it can be concluded that the procedural requirements written in the final text of the directive were not minimal but rather extensive, and that the choice of mentioned instruments were, instead of being broad, very narrow. This confirms my statement, according to which the Council wanted to control the Commission extensively, and also answers my fourth hypothesis about the Member States’ intentions and ability to control the Commission.