EU faces legal storm over backroom deals water down EU law

Sarah Helm reveals hidden pacts which undermine European legislation and, below, presents a British case history

European member states are making scores of backroom deals which contradict or water down the laws they pass in public, according to a leaked report from the EU's legal experts.

The study, obtained by the Independent, will deepen fears voiced in Westminster and other national parliaments that policy-making in Brussels comes under insufficient public scrutiny. The report also throws into doubt the legality of scores of European directives, converted into national law partly on the basis of such informal understandings or protocols.

The whole basis of unpublished agreements between ministers has no legal standing and they "must absolutely not be made", says the report prepared by the legal service of the Council of Ministers. The British Government has often defended its compliance with EU measures on the grounds that side deals have been struck to soften their impact and protect the national interest. The report suggests all such deals are open to legal challenge in the European Court and could be declared meaningless.

It is well known that member states negotiate privately to reach a consensus. What this new study reveals for the first time is that deals are sometimes reached which contradict the published law. Several examples are cited where secret talks between ministers of member states have resulted in unpublished statements, watering down an EU directive or saying something different.

Under the EU's law-making process the European Commission, which is the executive arm, proposes legislation; the European Parliament has limited rights to amend or block proposals; but it is the Council of Ministers, representing all 15 member states, which has the ultimate say on new laws. The European Court of Justice is charged with ensuring that laws respect the treaty and are implemented properly in member states. EU law may come in the form of a directive, which must be translated into national law by each state. Or it may be a regulation which must be enforced directly.

The new report finds that, in many cases, these laws have been publicly agreed in one form but covertly watered down in the minutes of the Council meeting. Neither the European Parliament nor national parliaments are consulted on these agreements. The European Commission, however, is often a party to them as it has a seat, but not a vote, in the Council.

A recent example was EU regulation 3381/94, which obliged states to notify fellow member states when they were transporting potentially lethal substances. In secret the Council of Ministers agreed a statement which appeared to nullify the law. It said: "It is agreed it is clearly not necessary to consult every member state through which the goods will pass on their way out of the community." On another occasion, largely on Britain's insistence, it was agreed to soften a data protection law so that it could have almost no effect. Informal exceptions have also recently been made on TV viewing quotas and disposal of hazardous waste. Even an agreement won by Britain to allow it to keep its border controls could be exposed as null and void.

What the findings reveal is that member states have not been able to agree on the legislation at all. "Where the legislation says `have to' the statements often say `ought to' ", as one Danish diplomat put it. In order to secure approval of all 15 members it has been necessary to provide a range of secret opt-outs to take account of each country's separate interests.

The report says that recently the number of statements have grown "out of all proportion". The practice of secret deals has "developed in such a way that it now threatens to undermine legal certainty," says the document. At the Cannes summit next week, EU leaders will proclaim the need for greater openness and simple legislation. But the report says the secret agreements "run counter to the efforts made by the Council to improve openness of its proceedings".

The study has already caused uproar in Denmark, which has been pushing for EU proceedings to be made public and minutes to be published. Member states defend the practice, however. Although they may seem murky and unaccountable, such ploys, they say, help to protect national interests and reflect the diversity of nations. Any attempt to abolish the practice - as the EU legal service recommends - would, in effect, strengthen the central powers of the EU and force member states to abide by the letter of EU law.