Case C‑427/07, Commission v Ireland

>> Court interprets several provisions of Århus Directive, EIA Directive and IPPC Directive

This was an interesting case on Directive 2003/35, which, as was well known, together with Directive 2003/4/EC, implemented the first and second “pillars” of the Århus Convention on access to information, public participation in decision-making and access to justice in environmental matters.

In short, this case was based on two different pre-litigation procedures. First, the Commission complained that the EIA Directive (Directive 85/337 as amended by Directive 97/11) had not been transposed by Ireland in relation to private roads. In 2001, the Commission registered a complaint against Ireland concerning damage to a coastal wetland at Commogue Marsh, Kinsale, County Cork caused by a private road project. The Commission eventually brought the present proceedings, arguing that it appeared that no consent for the project in question had been granted and that no prior environmental impact assessment had been carried out despite the sensitivity of the site, contrary to the requirements of the EIA Directive.

The Commission considered that the construction of a private road constituted an infrastructure project that fell within point 10(e) of Annex II to the EIA Directive and that, as a consequence, the Irish authorities were bound, in accordance with Art. 2 of that amended directive, to ensure that, before consent was given, such projects were made subject to an assessment with regard to their effects on the environment if it was considered that they were likely to have significant effects on the environment.

In the second pre-litigation procedure, the Commission alleged that Ireland had not transposed (fully) the Århus Directive. The Commission inter alia argued that that no measure had been taken by Ireland to ensure transposition of the requirement of timeliness, laid down in Art. 10a of the EIA Directive, and in Art. 15a of the (first) IPPC Directive (Directive 96/61). The Commission also argued there was no applicable ceiling as regards the amount that an unsuccessful applicant would have to pay, as there was no legal provision which referred to the fact that the procedure would not be prohibitively expensive.

Lastly, the Commission criticised Ireland for not having made available to the public practical information on access to administrative and judicial review procedures, as required by Art. 10a of the EIA Directive and Art. 15a of the IPPC Directive.

Scope of EIA Directive
The Court held that although the Member States had thus been allowed a measure of discretion in specifying certain types of projects which would be subject to an assessment or to establish the criteria and/or thresholds applicable, the limits of that discretion were to be found in the obligation set out in Art. 2(1) of the EIA Directive that projects likely, by virtue inter alia of their nature, size or location, to have significant effects on the environment were to be subject to an impact assessment (see Case C‑72/95 Kraaijeveld and Others [1996]; Case C‑2/07 Abraham and Others [2008]; and Case C‑75/08 Mellor [2009]).

The Court held that, by subjecting private road construction development to an environmental impact assessment only if that development formed part of other developments coming within the scope of Directive 85/337 as amended by Directive 97/11 and themselves subject to the assessment obligation, the Irish legislation meant that any private road construction development carried out in isolation could avoid an environmental impact assessment, even if the development was likely to have significant effects on the environment.

Implementation of Århus Directive
With regard to the requirement to transpose the provisions of Art. 3(1) of Directive 2003/35, the Court reiterated that the transposition of a directive into domestic law did not necessarily require the provisions of the directive to be enacted in precisely the same words in a specific, express provision of national law and a general legal context might be sufficient if it actually ensured the full application of the directive in a sufficiently clear and precise manner (see, inter alia, Case C‑214/98 Commission v Greece [2000]; Case C‑38/99 Commission v France [2000]; and Case C‑32/05 Commission v Luxembourg [2006]).

The Court also reiterated that the provisions of a directive must be implemented with unquestionable binding force and with the specificity, precision and clarity required in order to satisfy the need for legal certainty, which required that, in the case of a directive intended to confer rights on individuals, the persons concerned must be enabled to ascertain the full extent of their rights (see, inter alia, Case C‑197/96 Commission v France [1997]; and Case C‑207/96 Commission v Italy [1997]).

The Court held that the scope of the new definition of “the public concerned” introduced by Directive 2003/35 could be assessed only with regard to all of the rights which that directive accords to “the public concerned’, since those two aspects were indissociable.

The Court found that the Commission did not establish to what extent “the public concerned’, understood as the public affected or likely to be affected by, or having an interest in, environmental decision‑making procedures, did not have the rights which it was deemed to enjoy under the amendments introduced by Directive 2003/35.

As regards the argument concerning the costs of proceedings, the Court argued that it was clear from Art. 10a of the EIA Directive and Art. 15a of the IPPC Directive that the procedures established in the context of those provisions must not be prohibitively expensive. That covered only the costs arising from participation in such procedures. Such a condition did not prevent the courts from making an order for costs provided that the amount of those costs complied with that requirement. This argument was therefore well founded.

The final argument of the Commission was also well founded. The Court pointed out that one of the underlying principles of Directive 2003/35 was to promote access to justice in environmental matters, along the lines of the Århus Convention on access to information, public participation in decision-making and access to justice in environmental matters. Therefore, the obligation to make available to the public practical information on access to administrative and judicial review procedures laid down in the sixth paragraph of Art. 10a of the EIA Directive and Art. 15a of the IPPC Directive, amounted to an obligation to obtain a precise result which the Member States must ensured was achieved.

The Court held that, in the absence of any specific statutory or regulatory provision concerning information on the rights thus offered to the public, the mere availability, through publications or on the internet, of rules concerning access to administrative and judicial review procedures and the possibility of access to court decisions could not be regarded as ensuring, in a sufficiently clear and precise manner, that the public concerned was in a position to be aware of its rights on access to justice in environmental matters.

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Case C‑254/08, Futura Immobiliare srl Hotel Futura

This reference for a preliminary ruling concerned the interpretation of Art. 15(a) of the Waste Framework Directive (Directive 2006/12/EC) and, in particular, the “polluter pays” principle enshrined therein.

Futura Immobiliare and Others were hotel businesses in the municipality of Casoria. On that basis, they must pay waste tax. However, under Italian tax legislation, hoteliers were taxed more heavily than individuals occupying residential premises.

Since it considered this difference in treatment to be unlawful, Futura Immobiliare srl Hotel Futura brought an action for annulment of several measures concerning the adoption of the regulations for the application of the waste tax. They submitted, in particular, that the rate of the waste tax set for hotels was disproportionate to that laid down for residential property and, in reality, was based on their revenue-earning capacity rather than their waste-production capacity.

According to these hotel businesses, the tax did not take account of room occupancy rates or of whether or not there were restaurant services, which were liable to produce more waste, nor of the seasonal nature of the hotel trade and the impact of surface areas which were used for services and consequently not occupied.

An Italian national court asked whether Art. 15(a) of Directive 2006/12 must be interpreted as precluding national legislation which, for the purposes of financing an urban waste management and disposal service, provided for a tax or charge which was calculated on the basis of an estimate of the volume of waste generated by users of that service and not on the basis of the quantity of waste which they had actually produced and presented for collection.

The Court held that, in circumstances such as those in the main proceedings, where holders of waste had it handled by a collector, Art. 15(a) of Directive 2006/12 provided that, in accordance with the “polluter pays” principle, the cost of disposing of the waste must be borne by those holders.

The Court reiterated that while the Member States as the addressees of Directive 2006/12 were bound as to this result to be achieved in terms of financial liability for the cost of disposing of waste, in accordance with Art. 249 EC they might, however, choose the form and the methods to be applied in order to attain that result (see Case C-188/07, Commune de Mesquer [2008]).

The Court stressed that, as Community law currently stood, there was no legislation adopted on the basis of Art. 175 EC imposing a specific method upon the Member States for financing the cost of the disposal of urban waste, so that the cost might, in accordance with the choice of the Member State concerned, equally well be financed by means of a tax or of a charge or in any other manner.

The Court held that recourse to criteria founded, first, on the waste-production capacity of the “holders’, calculated on the basis of the surface area of the property which they occupy and of its used , and/or, second, on the nature of the waste produced could provide a means of calculating the costs of disposing of that waste and allocating them among the various “holders’, since those two parameters were such as to have a direct impact on the amount of the costs.

Therefore, national legislation which, for the purposes of financing the management and disposal of urban waste, provided for a tax or charge calculated on the basis of an estimate of the volume of waste generated and not on the basis of the quantity of waste actually produced and presented for collection could not, according to the Court, as Community law currently stood, be considered contrary to Art. 15(a) of Directive 2006/12.

The Court also held that the “polluter pays” principle did not preclude the Member States from varying, on the basis of categories of users determined in accordance with users’ respective capacities to produce urban waste, the contribution of each of those categories to the overall cost necessary to finance the system for the management and disposal of urban waste.

While the distinction drawn for fiscal purposes must not go beyond what was necessary in order to achieve that financing objective, according to the Court, as Community law currently stood, the competent national authorities had a broad discretion when determining the manner in which such a tax or charge was calculated.

The Court held that therefore, it was incumbent upon the national court to review, on the basis of the matters of fact and law placed before it, whether the waste tax at issue in the main proceedings resulted in the allocation to certain “holders’, in the case in point hotel establishments, of costs which were manifestly disproportionate to the volumes or nature of the waste that they were liable to produce.

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Case C‑319/07 P, 3F v. Commission

This was a rather extraordinary case on state aid. On 1 July 1988, Denmark established a Danish International Register of Shipping (‘the DIS register’). That register was in addition to the ordinary Danish register of ships (‘the DAS register’). The DIS register was intended to combat the flight from Community flags to flags of convenience. The main advantage of the DIS register was that shipowners whose vessels were registered in it were allowed to employ seafarers from non-member countries on those vessels and pay them wages on the basis of their national laws.

Denmark also introduced various fiscal measures relating to seafarers employed on board vessels registered in the DIS register. In particular, those seafarers were exempted from income tax, whereas seafarers employed on board vessels registered in the DAS register were subject to that tax.

On 28 August 1998, 3F, the general trade union for workers in Denmark, lodged a complaint with the Commission against the Denmark concerning these fiscal measures, arguing that they were contrary to the Community guidelines and hence to Art. 87 EC.

In its complaint the appellant submitted that the fiscal measures at issue constituted State aid which was incompatible with the Community guidelines on State Aid to maritime transport (OJ 1997, C205), because the tax exemption was granted to all seafarers, not only Community seafarers, and because the measures had not been notified to the Commission.

In 2002 the Commission decided not to raise objections to the Danish fiscal measures. By the present appeal, 3F asked the Court to set aside the order of the Court of First Instance of April 23 2007, by which the Court dismissed its application for annulment of this Commission Decision.

In particular, the Court of First Instance held that the appellant had not showed that its own interests as a negotiator were liable to be directly affected by the aid deriving from the fiscal measures at issue. Referring to Joined Cases 67/85, 68/85 and 70/85 Van der Kooy and Others v Commission [1988] and Case C-313/90 CIRFS and Others v Commission [1993], it found that the mere fact that the appellant had made a complaint to the Commission against the aid at issue did not mean that it was distinguished individually.

Even though the appellant might have been one of the negotiators of the collective agreements for seafarers on board ships registered in one of the Danish registers and as such had played a part in the machinery for passing the aid on to shipowners, the appellant had not showed that it had negotiated the drafting of the Community guidelines on State aid to maritime transport, relied on in the present case, with the Commission or the adoption of the fiscal measures at issue with the Commission or the Danish Government.

The Court of First Instance concluded that neither the appellant nor its members were individually concerned by the contested decision, so that the application brought by the appellant was inadmissible for want of a legal interest in bringing proceedings as defined in Art. 230 EC.

In support of its application for annulment of the contested decision, the appellant raised three pleas in law: first, infringement of Art. 88(2) EC and the principle of sound administration, in that the Commission had not initiated the review procedure laid down by that provision; second, infringement of Art. 87(3) EC, interpreted in the light of the Community guidelines and the principle of the protection of legitimate expectations; and third, manifest error of assessment.

Since this was lengthy judgment, I will only focus on some of the most interesting aspects of the case.

Standing
The Court of Justice first of all stressed that the appellant was an organisation representing workers, which was by definition established to promote the collective interests of its members. It was an economic operator which negotiated the terms and conditions on which labour was provided to undertakings. It said that the aid resulting from the fiscal measures at issue affected the ability of its members to compete with non-Community seafarers in seeking employment with shipping companies, in other words the recipients of the aid, and the appellant’s market position as such was therefore affected as regards its ability to compete in the market for the supply of labour to those companies, and consequently its ability to recruit members.

The Court held that to exclude a priori the possibility, in a case such as the present, that a trade union could show that it was a party concerned within the meaning of Art. 88(2) EC, by relying on its role in collective negotiations and the effects on that role of national tax measures regarded by the Commission as aid compatible with the common market, would be liable to undermine the social policy objectives of the European Community.

According to the Court, that conclusion was supported by the fact that, since the Community had not only an economic but also a social purpose, the rights under the provisions of the Treaty on State aid and competition must be balanced, where appropriate, against the objectives pursued by social policy, which included, as was clear from the first paragraph of Art. 136 EC, inter alia improved living and working conditions, so as to make possible their harmonisation while improvement was being maintained, proper social protection and dialogue between management and labour (see also Case C-438/05 International Transport Workers’ Federation and Finnish Seamen’s Union [2007]).

The Court held that since the Court of First Instance failed to address the appellant’s argument relating to its competitive position in relation to other trade unions in the negotiation of collective agreements for seafarers, the order under appeal had to be set aside on this point.

State aid
The Court furthermore argued that, when assessing the compatibility of State aid in the maritime transport sector such as the aid at issue in the present case, the social aspects of the Community guidelines might be taken into account by the Commission as part of an overall assessment which included a large number of considerations of various kinds, linked in particular to the protection of competition, the Community’s maritime policy, the promotion of Community maritime transport, or the promotion of employment (see also: Case C-106/98 P Comité d’entreprise de la Société française de production and Others v Commission [2000]).

The Court pointed out it was not disputed that the DIS register did not itself constitute State aid. The Court reiterated that a system such as that established by the DIS register, which enabled contracts of employment concluded with seafarers who were nationals of non-member countries and had no permanent abode or residence in the Member State concerned to be subjected to working conditions and rates of pay which were not covered by the law of that Member State and were considerably less favourable than those applicable to seafarers who were nationals of that Member State, did not constitute State aid within the meaning of Art. 87(1) EC (see also Joined Cases C-72/91 and C-73/91 Sloman Neptun [1993]).

The Court held that the Court of First Instance had failed to examine the social aspects of the fiscal measures at issue with regard to the Community guidelines – which contained the legal conditions for assessing the compatibility of the Danish tax system, as the appellant submitted – in order to assess whether the appellant’s arguments based on those guidelines sufficed to establish its status of a party concerned within the meaning of Art. 88(2) EC.

The Court held that since the appellant had explained how the fiscal measures at issue could affect its position and that of its members in collective negotiations with shipowners whose vessels were registered in the DIS register, and since the Community guidelines acknowledged the part played by trade unions such as the appellant in those negotiations, it must be concluded that the appellant had showed, to the requisite legal standard, that its interests and those of its members could be affected by the granting of the aid.

The Court concluded that the appellant might, in the particular circumstances of the case, be regarded as a party concerned within the meaning of Art. 88(2) EC, and its action must consequently be declared admissible. The Court found that in those circumstances, the case should be remitted to the Court of First Instance to rule on the appellant’s claim that the contested decision should be annulled.

Text of Judgment