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Some Institutional Aspects of the International Energy Agency*

Published online by Cambridge University Press:  07 July 2009

Richard H. Lauwaars
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On 10 December 1979 the Governing Board of the International Energy Agency (IEA) met in Paris at ministerial level. The subject of discussion was the action to be taken to meet problems in the field of oil supply, and the implementation of the “Declaration” by the Western Summit Conference in Tokyo on this matter. On the basis of the decisions adopted during this meeting, which established, inter alia, individually identifiable oil-import ceilings, it has been remarked that the IEA had arrived at a “turning-point”. “After five years of, more or less global, non-binding arrangements, 1980 is the year in which it will have to be shown whether one can indeed arrive at a clear, more obligatory approach to the oil problem”. Whatever future developments there might be, this seems to be a good time to take a closer look at the IEA. The current war between Iraq and Iran, also re-emphasises the vulnerability of Western oil-supplies, and underlines the practical importance of the IEA. This article will deal mainly with some of the remarkable institutional aspects of the Agency, and the International Energy Program (IEP) which it manages. Before this, there will be a discussion of the background of the IEA and a short description of the core of the IEP: the crisis mechanism, and the other objectives. The article will be concluded with some observations on the relationship between the IEA and the European Communities (EC).

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Netherlands Yearbook of International Law , Volume 12 , December 1981 , pp. 113 - 145
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Copyright © T.M.C. Asser Press 1981

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References

1. Bull. EC. 1979/12, para. 2.2.50.

2. Euromarkt-Nieuws, January 1980, p. 3. An “individually identifiable oil-import ceiling” is the maximum net quantity of oil which may be imported by a specific country.

3. van Ginkel, J., “Tekort aan olie of aan visie?”, 28 Internationale Spectator (1974) pp. 109-16 at 111–12 and 114–16Google Scholar. See also Akins, James E., “The Oil Crisis: This Time the Wolf is Here”, 51 Foreign Affairs (1972/1973), pp. 462–90.CrossRefGoogle Scholar

4. Communiqué of the Washington Energy Conference, 13 ILM (1974) pp. 462–64, para. 1.

5. Ibid., para. 9.

6. Ibid., para. 16.

7. Scott, R.F., “Innovation in International Organization: the International Energy Agency”, 1 Hastings International and Comparative Law Review 1977, pp. 1–56 at pp. 18–19.Google Scholar

8. Decision of the Council establishing an International Energy Agency of the Organization, 14 ILM (1975) p. 789; Trb. 1975 No. 47, pp. 106–9 (hereinafter referred to as the “Decision”).

8a. 14 ILM (1975) p. 1; Trb. 1975 No. 47 (hereinafter referred to as the “Agreement”). Articles quoted without further reference are Articles of the Agreement.

9. Agreement between the IEA and the Government of the Kingdom of Norway concerning the participation of the Government of the Kingdom of Norway in the work of the Agency, Paris, 7 February 1975, Trb. 1975 No. 74.

10. Trb. 1978 No. 6 and 1979 No. 138. See also the Decisions of the Governing Board inviting the governments of New Zealand, Australia and Greece to accede to the Agreement on an International Energy Program and Amending the Agreement on an International Energy Program, Trb. 1975 No. 47, p. 112; Trb. 1979 No. 139, p. 2 and Trb. 1980 No. 183, p. 2.

11. Trb. 1980 No. 183, pp. 1 and 2. See also the Decision of the Governing Board inviting the Government of Portugal to accede to the Agreement on an International Energy Program, Amending the Agreement on an International Energy Program and Amending the Decision on Institutional Arrangements for the Participation of Norway, Trb. 1980 No. 183, pp. 4–5.

12. Annex I contains Tables of Membership of the European Communities, the OECD and the IEA. The French motive for abstaining has already been mentioned supra. Finland is prevented from adhering by its delicate political situation; Iceland has the pleasure of its own source of energy (thermal power).

13. Trb. 1978 No. 6.

14. Trb. 1976 No. 68, p. 2; 1978 No. 6, pp. 1 and 2. Greece acceded on 15 July 1977, Italy on 3 February 1978 and Australia on 17 May 1979. Japan participates in the operation of the Agency on the basis of Article 13(b) of the Decision. Turkey and Portugal have only provisionally adhered.

15. Art. 67, para. 2, stipulates that “on the tenth day following the day on which at least six states holding at least 60 per cent of the Combined Voting Weights mentioned in Art. 62 have deposited a notification of consent to be bound or an instrument of accession, this Agreement shall enter into force for such States.” See also Scott, loc.cit., p. 29.

16. The Governing Board decided on 17–18 September 1975 that the emergency reserve should be raised to 70 days as from 1 January 1976. It decided on 8–9 November 1976 that by 1 January 1980 the stock level should be raised to 90 days. See Scott, loc.cit., p. 33.

16a. See for the Netherlands the Act of 4 April 1979, Stb. 1979 No. 187, on the implementation of the Agreement on an International Energy Program.

17. According to Art. 18, the term “base period” means the most recent four quarters with a delay of one quarter necessary to collect information.

18. The individual country is thus required itself to absorb the reduction in oil supplies up to a level equal to 7 per cent of its totalcomsumption. Woodliffe, J.C., “A New Dimension to International Co-operation: the OECD International Energy Agreement”, 24 ICLQ (1975) pp. 525–41 at p. 530; Scott, loc.cit., p. 36.CrossRefGoogle Scholar

19. Explanatory Memorandum to the bill of approval of the IEP Agreement, Bijl. Hand. II, 1974/75–13.515, No. 3 at pp. 11–12. According to the letter of Art. 7, para. 5, the individual emergency reserve commitment has to be divided by the total emergency reserve commitment of the group and multiplied by the group supply shortfall. The result is the same.

20. Expl. Mem., see n. 19 supra, at p. 12.

21. See n. 18, supra.

22. Expl. Mem., see n. 19 supra, at p. 12.

23. See, for a detailed time-schedule for the entire procedure, Scott, loc.cit., p. 39.

24. Expl. Mem., see n. 19 supra, at p. 14, where reference is made not only to Arts. 13 and 14, but also to Arts. 15 and 20. The latter Articles provide for specific measures if the emergency reserves have come down to 50 percent of their original level.

25. Scot, loc.cit., p. 40.

26. According to the Expl. Mem., see n. 19 supra, at p. 15, the Special Section has been provisionally activated as from 1 January 1975; a more definitive arrangement seems to have been established in May 1976 (Keohane, R.O., “The international energy agency: state influence and transgovernmental politics”, 32 International Organization (1978) pp. 929–51 at p. 938).CrossRefGoogle Scholar

27. Expl. Mem., see n. 19 supra at p. 16.

28. Ulf, Lantzke, “Energie: spanningsveld van de internationale betrekkingen”, 34 Internationale Spectator (1980) pp. 532–8 at p. 536Google Scholar (author's translation). The original German text of this passage reads as follows: “Der Schwerpunkt der Aktivitäten in der IEA hat sich inzwischen längst verlagert. Er liegt heute in der Koordinierung und allmählichen Konvergenz der Energiepolitiken der 21 Mitgliedsländer. Ziel ist die Reduzierung der Abhängigkeit vom ÖI.”

29. The LTCP has been published in Agence Europe, Documents, No. 889/890 of 24 March 1976, and in 15 ILM (1976) p. 249. It has been analysed by Barents, R., “Het Internationaal Energieagentschap”, in: Studies over internationaal economisch recht, Part 1.2 (The Hague, 1977) pp. 229–82 at pp. 242–4Google Scholar, and by Scott, loc.cit., pp. 44–6. The Decision of the Governing Board of 28 July 1975 on Guiding Principles for Co-operation in the Field of Energy Research and Development, which was published in Trb. 1976 No. 68, has been added as Annex II to the LTCP.

30. Trb. 1978: No. 6, OECD Observer No. 89, November 1977, pp. 9–13.

31. See Keohane, loc.cit., pp. 942–3. See also IEA, Energy Policies and Programmes of IEA Countries, 1979 Review (Paris, 1980).Google Scholar

32. At 1 October 1980 fifty projects had been undertaken.

33. See the report Towards an International Strategy for Energy Research and Development (IEA, OECD, Sept. 1977)Google Scholar and Keohane, loc.cit., pp. 943–5.

34. Barents, loc.cit., in n. 29 supra pp. 244–6; Keohane, loc.cit., pp. 938–9.

35. Such as the IMF, Group of Ten and OECD organs outside the IEA (Expl. Mem., see n. 19 supra, at p. 18).

36. This Article was used for the creation of the CRD, see supra.

37. Scott, loc.cit., p. 49. This practice has been continued until the present day. At this moment, however, two supplementary observations have to be added. In the first place, meetings of the Governing Board are only “joint meetings” when the Board meets on the level of officials; ministerial meetings are only “Governing Board” meetings. Secondly, decisions under Art. 54, para. 2, concerning the appointment of the Chairmen and Vice-Chairmen of the Standing Groups, which have to be taken by the Management Committee as such, are adopted by “the Governing Board acting as the Management Committee.”

38. Loc.cit., at p. 56.

39. Keohane, loc.cit., p. 934. ISAG functions only in the case of an emergency situation; IAB functions on a regular basis, and is represented in every SEQ meeting (see also, Art. 37). The question whether co-operation within the IAB is compatible with US and EEC anti-trust law, will not be further examined. It seems that practical solutions for this problem have already been arrived at.

40. This is the first exception to the rule of Art. 52, that decisions are binding on the Participating Countries. The second is Art. 65, providing for special activities to be carried out by two or more Participating States.

41. Expl. Mem., see n. 19 supra, p. 20.

42. Statement by the Dutch Foreign Minister in the Second Chamber of the Dutch Parliament, 5 February 1976, Hand II, 1975/76, at p. 2673. Originally, the Dutch Government proposed excluding agreements on the basis of Art. 65 from the requirement of parliamentary approval (see Bijl. Hand. II, 1975/76–13.515, No. 7). This proposal met with strong opposition from the Parliament, and was withdrawn (see the statement of the Foreign Minister, Ibid., at p. 2673).

43. See Scott, loc.cit., pp. 48 and 49, on the Decision on the LTCP, Chapter V of which (on Legislative and Administrative Obstacles and Discriminatory Practices) is not binding on Canada.

44. Curiously enough, Art. 73 of the Dutch translation of the Agreement requires only a “majority of votes” (Trb. 1975 No. 47, p. 100). The English and French texts of Art. 73 are, however, unambiguous in this respect. Being, together with the German text, authentic (Art. 76), they are decisive.

45. Scott, loc.cit., p. 52.

46. A compete Table of IEA Voting Weights as per 1 November 1980 has been added as Annex II, infra.

47. Here again, the Dutch translation of the Agreement differs from the English and French texts to the extent that it does not contain the word “cast” (“50% des droits de vote généraux exprimés”).

48. Loc.cit., n. 29 supra, at p. 251. It may be added that, in practice, initiatives are often taken by the Governing Board itself, which subsequently refers the matter to a Standing Group for further elaboration.

49. Cf., Scott, loc.cit., p. 53.

50. See n. 24 supra.

51. Cf., Scott, loc.cit., p. 54.

52. Expl. Mem., see n. 19 supra, at p. 19.

53. It might be possible that, in this case, not only was Art. 64, para. 5, applied (on the change in voting weights as a consequence of accession), but also Art. 64, para. 6 (on the change in voting weights as a consequence of a change in a Participating Country's share in total oil consumption). Portugal received three GVW and no OVW, changing total GVW into 60 and total CVW into 160. The absolute numbers mentioned in Art. 64, para. 4 remained unchanged.

54. See n. 19, supra, at p. 20.

55. Loc.cit, p. 527.

56. This Agency was created in 1953 within the framework of the Organization for European Economic Co-operation. The OECD did not maintain it as a separate body. See Robertson, A.H., European Institutions 3rd ed. (London, New York, 1973) pp. 78 and 87.Google Scholar

57. See Art. 1 of the Decision of the Council establishing a European Nuclear Energy Agency, 5 European Yearbook, pp. 273–83 at p. 273.Google Scholar

58. Robertson, ibid., p. 79. See also Hilf, M., “Die abhängige Juristische Person des Europäischen Gemeinschaftsrechts”, ZaöRV 1976, pp. 551–85 at pp. 563–4Google Scholar, where he argues that the establishment of certain auxiliary organs “within the framework of the European Communities” means that they do not have a separate legal personality of their own.

59. Barents, R., “De Organisatie voor Economische Samenwerking en Ontwikkeling”, in Studies over internationaal economisch recht. Part 1.4 (The Hague, 1977), p. 38.Google Scholar

60. Loc.cit., at p. 19.

61. Ibid. See also p. 20 (on the Agreement with Norway) and p. 28 (on the admission of a non-Member State of OECD to the IEA); at the latter place Scott repeats that the Agency “normally depends upon” OECD for its legal personality.

62. The only difference is, that “relationships” in Art. 12 of the Decision has been replaced by “relations” in Art. 63 Agreement, which seems to be the broader term, and to stress that it is not specifically directed at legal arrangements.

63. See n. 9 supra.

64. Tenth General Report of the European Communities (1976), para. 499.Google Scholar

65. See for example Hilf, loc.cit., p. 563.

66. See Scott, loc.cit., p. 18. Supplementary Protocol No. 2 has been published in Van Panhuys, et al. , International Organisation and Integration (Deventer, Leyden, 1968) pp. 1022–23.CrossRefGoogle Scholar

67. The Agreement with Norway could be qualified as an internal agreement within the OECD framework, which is not covered by general international law (cf., Schermers, H.G.. International Institutional Law, Vol. II (Leiden, 1972) p. 712)Google Scholar. With regard to the Agreement with the EC, additional legal basis might be found in Supplementary Protocol No. 1 to the OECD Convention (infra and n. 129). The Research and Development Agreements are concluded by Agency countries and the EEC only. See Scott, loc.cit., at p. 45, n. 130, and the Implementing Agreement for the Establishment of the Coal Technical Information Service, Paris, 20 November 1975, 15 ILM (1976) pp. 48–60.

68. Cf., Kokkini-Iatridou, D. and De Waart, P.J.I.M., “Buitenlandse investeringen in ontwikkelingslanden. Rechtspersoonlijkheid van multinationals in internationaal recht”, R.M. Themis (1981) pp. 3–35 at pp. 17 and 25–29.Google Scholar

69. This legal personality has been laid down in Supplementary Protocol No. 2, n. 66 supra.

70. Loc.cit., p. 19.

71. Woodliffe, loc.cit., pp. 526–7; Barents, loc.cit., n. 29 supra, pp. 254–5, and Scott, loc.cit., p. 18.

72. See Scott, loc.cit., pp. 234.

73. See Druker, I.E., Financing the European Communities, European Aspects, Law Series No. 14 (Leyden, 1975) pp. 38–9.Google Scholar

74. Trb. 1975 No. 47, at p. 110.

75. See, for example, the Scale of Contributions attached to the Implementing Agreement, n. 67 supra, at p. 60.

76. See n. 9 supra.

77. Trb. 1975 No. 47, at p. 10. (Most recently amended by the Decision of the Governing Board on the accession of Portugal, Trb. 1980 No. 183 at p. 5).

78. Arts. 2 and 3 of the Decision of 7 March 1975. See Barents, loc.cit., n. 29 supra, p. 253.

79. Expl. Mem., see n. 19 supra, at p. 23.

80. See n. 19 supra, at p. 3.

81. Scott, loc.cit., pp. 41–42.

82. Hand. II 1975/76–2674. In the same vein: Scott, loc.cit., p. 41, who, in addition, points to the establishment of the key obligations of the Program in a “secure legal structure which is difficult but not impossible to amend” (p. 32).

82a. See the Charter of the IEA Dispute Settlement Center, Trb. 1980, No. 183, pp. 5–15.

82b. It seems that the Commission of the EC has adopted a forceful, unilateral statement regarding the measures which it will take, if “awards” were given which violated Community law.

83. Bull. E.C., Suppl. 4/74.

84. O.J. 1975, C 153/1 resp. 2.

85. Loc.cit., n. 29 supra, at pp. 263–5.

86. See Council Dir. 68/414/EEC of 19 December 1968, J.O. 1968, L 308/14; O.J. Special Edition 1968-II, p. 586, imposing an obligation on Member States of the EEC to maintain minimum stocks of crude oil and/or petroleum products.

87. See Council Dir. 72/425/EEC of 19 December 1972, J.O. 1972, L 291/154, O.J. Special Edition 1972 (28–30 December) p. 69, amending the Council Dir. of 20 December 1968.

88. Council Dir. 75/339/EEC of 20 May 1975, O.J. 1975, L 153/35, obliging the Member States to maintain stocks of fossil fuel at thermal power stations.

89. Council Dir. 73/238/EEC of 24 July 1973, O.J. 1973, L 228/1, on measures to mitigate the effects of difficulties in the supply of crude oil and petroleum products.

90. Council Dir. 75/404/EEC of 13 February 1975, O.J. 1975, L 178/24, on the restriction of the use of natural gas in power stations, and Council Dir. 75/405/EEC of 13 February 1975, O.J. 1975, L 178/26, concerning the restriction of the use of petroleum products in power stations.

91. See Council Dec. 77/186/EEC, OJ. 1977, L 61/23, on the exporting of crude oil and petroleum products from one Member State to another in the event of supply difficulties (amended by Council Dec. 79/879/EEC of 22 October 1979, O.J. 1979, L 270/58).

92. Comm. Dec. 78/890/EEC of 28 August 1978, O.J. 1978, L 311/13.

93. O.J. 1977, L 292/9.

94. O.J. 1979, L 183/1.

95. Evans, A., “The Development of a Community Policy on Oil”, 17 CML Rev. (1980) pp. 371–94 at p. 386Google Scholar. Another factor which played a role was the general instability of the oil market, caused by the fact that the elasticities of oil supply and demand are practically nil (Axel Mittelstädt, “International Transfer of Inflation”, unpublished lecture held on 16 October 1980).

96. See n. 91 supra.

97. See Decisions 79/126/EEC of 29 January 1979, OJ. 1979, L 30/19 (Belgium, France and the Netherlands); 79/135/EEC of 6 February 1979 OJ. 1979, L 32/39 (Luxembourg) and 79/589/EEC of 15 June 1979, O.J. 1979, L 160/41 (Italy).

98. See Comm. Decisions 80/124/EEC of 21 December 1979, O.J. 1980, L 29/29; 80/375/EEC of 31 March 1980, O.J. 1980, L 90/46 and 80/374/EEC of 31 March 1980, O.J. 1980, L 90/47.

99. Yearbook of the Dutch Ministry of Foreign Affairs 1979/1980, p. 114.Google Scholar

100. J.O. 1972, L 120/7; O.J. Special Edition 1972 (II) p. 466, (amended by Council Reg. No. 1215/76 of 4 May 1976, O.J. 1976, L 140/1).

101. O.J. 1976, L 140/4.

102. O.J. 1977, L 61/34 (amended by Comm. Dec. 80/983/EEC of 4 September 1980, O.J. 1980, L 281/26).

103. O.J. 1976, L 198/1.

104. See Reg. No. 1893/79, O.J. 1979, L 220/1, introducing registration for crude oil and/or petroleum product imports into the Community (amended by Council Reg. No. 1149/80, O.J. 1980, L 118/1) and Reg. No. 2592/79, O.J. 1979, L 297/1, laying down rules for carrying out the registration of crude oil imports in the Community provided for in Regulation No. 1893/79.

105. Comm. Reg. No. 2729/79, O.J. 1979, L 314/1.

106. O.J. 1980, L 73/1.

107. O.J. 1980, L 81/15.

108. O.J. 1975, L 45/1.

109. O.J. 1975, L 275/8.

110. See n. 84 supra.

111. See n. 84 supra.

112. O.J. 1975, C 153/6.

113. Most recently on the occasion of its meeting at Strasbourg on 21 and 22 June 1979, Bull. E.C. 1979/6, paras. 1.1.6 to 1.1.12.

114. Council Reg. No. 3056/73 of 9 November 1973, O.J. 1973, L 312/1, on the support of Community projects in the hydrocarbon sector.

115. Council Regulations Nos. 1302/78, O.J. 1978, L 158/3, on the granting of financial support for projects to exploit alternative energy sources, and 1303/78, O.J. 1978, L 158/6, on the granting of financial support for demonstration projects in the field of energy-saving.

116. Bull. E.C. 1980/5, paras. 1.4.1 to 1.4.5.

117. Doc. COM. (79) 527 def., Energy programme of the European Community, para. 77.

118. Barents, loc.cit., n. 29 supra, at p. 265.

119. 1979 ECR pp. 2871–2921.

120. Ibid., at pp. 2913 and 2917.

121. Case 22/70 (Commission v. Council), 31 March 1971, 1971 ECR, p. 263 at p. 274 (para. 16). See also Joint Cases 3, 4 and 6/76 (Kramer), 14 July 1976, 1976 ECR p. 1279 at p. 1309 (para. 20).

122. Ibid., (para. 17).

123. Ibid., at p. 283 (para. 95).

124. 1977 ECR pp. 741–62.

125. Ibid., at p. 755 (para. 4).

126. Ibid., at pp. 755–6 (para. 5).

127. In the same vein: Barents, loc.cit., n. 29 supra, at p. 267. These powers may, in particular, be derived from Arts. 113 (common commercial policy), 163 (conjunctural policy) and 235 (providing for additional powers in case the necessary explicit or implied powers have not been granted elsewhere in the Treaty).

128. Art. 72, para. 2 provides that the “Agreement shall not in any way impede the further implementation of the treaties establishing the European Communities.”

129. Van Panhuys, et al. , International Organisation and Integration (Deventer, Leyden, 1968) p. 1021.CrossRefGoogle Scholar

130. Cf., Kapteyn, P.J.G. and van Themaat, P. VerLoren, Inleiding tot het recht van de Europese Gemeenschappen, 3rd ed. (Deventer, 1980) p. 462.Google Scholar

131. See Opinion 1/75 of the Court of Justice of 11 November 1975 (OECD Understanding on a Local Cost Standard), 1975 ECR p. 1355; Case 40/76 (Donckerwolcke), 15 December 1976, 1976 ECR p. 1921 at p. 1938, and Opinion 1/78, n. 119 supra. See also Kapteyn and VerLoren van Themaat, op.cit., p. 469.

132. Cf., Kapteyn and VerLoien van Themaat, op.cit., p. 463. See also Lauwaars, , “Auxiliary Organs and Agencies in the EEC”, 16 CML Rev. 1979, pp. 365–387 at p. 382.Google Scholar

133. Case 22/70, n. 121 supra, at p. 282 (para. 90).

134. Kapteyn and VerLoren van Themaat, op.cit., p. 466

135. Ibid. According to the Commission “(i)t could be incompatible with the Community Treaties for a Member State to sign the Agreement made within the Group of Twelve (the Energy Co-ordinating Group), unless the Community shared in it, or the Member States established a system which respects the provisions of the Treaties” (Bull. EC 1974/10, para. 2272).

136. Loc.cit., n. 58 supra, at p. 556. Other examples of this, development which he mentions are UNCTAD and UNIDO and the European Nuclear Energy Agency, referred to above; the main topics of his article are, however, the European Monetary Co-opeiation Fund, the European Centre for the Development of Vocational Training and the European Foundation for the Improvement of Living and Working Conditions, all of which were created by the EEC.

137. Schemers, op.cit, Vol. II (Leiden, 1972), p. 529.

138. See, for example, Art. 15 of the European Convention for the Protection of Human Rights, and Art. 224 of the EEC Treaty.

139. Cf., Scott, loc.cit., at p. 56.

140. During the debate in the Second Chamber of the Dutch Parliament on the bill of approval of the IEP, the Foreign Minister declared that important developments within the framework of the Agency might be the subject of debate in Parliament or the Standing Committee involved. However, he added that some negotiations would be of a secret nature and that the Government would not ask for approval by the parliamentary committee before a specific formula was accepted (Hand. II 1975/76, at resp. pp. 2673 and 2686).