Decision No. 3 of 21 March 2012 on Constitutional Case No. 12/2011
The action was taken by 58 Members of Parliament who challenged the constitutionality and compliance with international treaties to which Bulgaria is a signatory of Art. 13а, para 3 and Art. 54, para 2 of the Waste Management Act (WMA) (DV, No. 86/2003, last amended, DV, No. 33/26.04.2011) and Clauses 17 and 18 of the Transitional and Concluding Provisions of the Act Amending the Waste Management Act (AAWMA) (DV, No. 30/2011). The MPs claimed that the cited texts discredit the principle of the state committed to the rule of law for they infringe on legal certainty, predictability and stability and disproportionably constrict private ownership and free economic enterprise as they retroactively impact negatively private investments that, at the time when they were made, observed the legislation in force. Further, the MPs claimed that the texts in question were not compliant with the Treaty on European Union (TEU) – Art 3, and with the Treaty on the Functioning of the European Union (TFEU) – in particular with its Art. 9, Art. 11, Art. 119, Art. 145, Art. 151 and Art. 191, and that they violated European waste management directives and regulations. In addition, the MPs insisted that the texts in question were not compliant with the Charter of Fundamental Rights of the European Union – its Art. 16, Art. 17 and Art. 37, and were seen as an uncalled for and useless legislating measure which actually takes property away (expropriates) while it ignores the law-established conditions for this action: real public benefit, proportionality, fair and timely compensation for the damage caused. The MPs refer, inter alia, to a violation of the Convention for the Protection of Human Rights and Fundamental Freedoms (Protocol 1, Art. 1) as the challenged texts authorize to strip owners of landfill sites placed in spatial development areas that are not designated by master plans of the right to use their possessions and thus predetermine a “factual expropriation” against no compensation due.
The Constitutional Court partially granted the challenge on the following grounds:
1. Art. 13а, para 3 of the WMA reads thus: “The operations related to the storage and pre-treatment of metal packaging waste, waste electrical and electronic equipment, waste batteries and accumulators and end-of-life vehicles shall be pursued solely on sites placed in spatial-development areas designated by master plans for manufacturing and storage activities, at public transportation ports of national and regional importance, and at railway infrastructure facilities intended for commercial use.” Art. 54, para 2 of the WMA poses an analogous requirement to be complied with for operations related to ferrous and non-ferrous metal waste. According to § 17 and § 18 of the AAWMA Transitional and Concluding Provisions (DV, No. 30/2011) within nine months the sites licensed in compliance with the previous procedure and conditions have to adjust to the new requirements; if they fail to do so, the license shall be withdrawn (upon a request from the operator or else ex officio).
The lawmaker’s will includes reinforcement of government regulation in waste management and the amendments therefore concern both future landfills and landfills that were in operation prior to the passage of the amendments and were to be subject to relicensing in accordance with the newly codified requirements. Thus the existence of a “master plan” becomes extremely important for it is a sine qua non to issue a new license or to revalidate a license issued prior to the enactment of these new requirements. The existing Waste Management Act (WMA) provides for two types of plans: a master plan and a spatial development plan. The master plan defines the dominant purpose and the mode of organization of the individual structural units on its area and these definitions become binding on the detailed plan which is to be approved consequently. However, the Act allows for the production and approval of detailed plans for areas that are not supplied with master plans. In certain cases the detailed plan may play the role of a master plan for a definite populated area.
It should be noted right away, however, that even if a master plan is not available as a point of reference, the licensing of waste management operations should essentially meet environmental and other standards that are established by both domestic and international acts.
2. The codification of a special licensing and relicensing procedure per se is not seen as a violation of the Constitution-set requirement of equality before the law and the principle of equal legal conditions for economic activity. The fundamental rights have a mutual impact and can be curtailed by law, however, the curtailment must be a proportional vehicle to achieve a goal that is legitimized by the Constitution.
The question is whether the criterion “master plan” is correctly used in this particular context in view of the situation and development of the zoning plans legal arrangement. These plans seek to strike the balance between public and individual interest and to promote the normal development of free economic enterprise. The licensing procedure for waste activities consists of monitoring, registration and controls on multiple elements. Whatever the situation though, the requirements to entities that apply to be licensed must not go beyond their capacity and must not be made subject to the discretion of other legal entities. The Constitutional Court drew the conclusion that the text challenged does not fit into the rules of concurrence of different laws and is therefore anticonstitutional.
3. Interference by the State into the economy must focus on the generation of business-friendly conditions while it considers the ultimate satisfaction of public and individual needs at all levels – national and local. In the case treated here the balance required has not been struck as certain economic actors are privileged – those whose landfills were subject to an existing master plan and those whose landfills were situated in areas for which a master plan had not been approved; the latter were not on a par with the former in the enjoyment of private ownership rights. Indeed, the State may establish a specific legal procedure for activities that involve different types of waste, however, the treatment of all actors who perform their activity in keeping with the requirements that were valid so as to obtain their license (permit) must continue to be nondiscriminatory. While equality does not preclude differentiation, the differentiating feature shall not be discriminatory and inappropriate (i.e. it shall not go beyond what is objectively needed). It is true that § 17 and § 18 of the AAWMA set one deadline by which landfills and landfill-related activities shall be made compliant with the new requirements but the fact that the effort to do so is made dependent on a legal entity, the respective municipal council, has been overlooked. Practically, the constraints face operators whose sites are not placed in areas with a master plan in effect. The site owners find it objectively impossible to comply with the law-established requirements unless a master plan is in place. This unfeasibility was clearly understood and aimed at (as evident from the substantiation and the discussions of the bill) and it is this that makes the differentiated approach tendentious and inconsistent with the Constitution. This is so as the adoption of master plans is within the control of a municipal council. Though the WMA was passed to eliminate inequality, as a matter of fact it established and cemented inequality. The lawmaker has taken an inappropriate approach as seen from the failure to create preconditions to meet the requirements within the time limit that the regulations set. While the Constitutional Court found that the WMA contains no text whatsoever to deal with the municipality-landfill site owner relationship and that there exists no substantive law conditions to lawfully open and operate landfills, it came to the conclusion that the State fails to meet an obligation that Art. 19 of the Constitution assigns. In turn this leads to violation of Art. 4 of the Constitution, the more so given the fact that the WMA makes no references to pieces of legislation that deal with spatial development planning in general and to the Spatial Development Act (SPA) in particular. Such reference is needed inasmuch as the SPA prescribes the spatial development formats and plans, so the combined application of individual SPA texts should not give an outlet for divergent interpretations.
4. Given the fact that the Constitutional Court is not faced with constraints arising from the reasons for which anticonstitutionality is claimed in the challenge, the challenged WMA texts may be considered also in the light of Art. 20 of the Constitution which reads thus: “The State shall establish conditions conducive to the balanced development of the different regions of the country, and shall assist the territorial bodies and activities through its fiscal, credit and investment policies.” The drawing up of a master plan for a populated area is arranged in the SPA with detailed rules as an activity that required a certain financial resource and potential and willingness on the part of a municipal council to execute it. Sufficient funding is needed that a municipality’s budget must make available. To enable a master plan and to make it sustainable while the faults of other plans are avoided, the municipal council needs to afford the financing for the drawing up and implementation of the master plan: however, the legislating authority has not provided for any State support nor has it created the preconditions for that.
5. The Constitutional Court sees the purpose and the meaning of waste activities as treated in the challenged texts as an achievement of the need and rational balance of the interests of the State and of the waste operator: however, uncertainty is brought by making it conditional on a requirement to be met by a legal entity which is alien to the legal relationship and moreover, this is not made conditional on any text to make it binding on the municipality to comply with the requirement to provide a master plan. The specifics of relations with this trinity on the playing field dooms the licensed waste operator, respectively any applicant for a license, to be unable to meet the law-established requirements irrespective of the nature and the strength of the effort put to comply with Art. 13а, para 3 and Art. 54, para 2 of the WMA. It appears that the self-government of municipalities and its materialization disagrees with and even collides with the interest of other legal entities. The obligation of the State to support the normal course of economic activities as per Art. 19 and Art. 20 of the Constitution continues to be unachievable in the field of social relations that is discussed here.
No device has been created to make it binding on a municipality to honor a fixed time limit and thus generate a precondition to license waste management in line with the cited WMA texts. In other words, a law-established condition is a priori unachievable. This disagrees with Art. 19 of the Constitution. Further, this infringes on the law-abiding state – Art. 4 of the Constitution – inasmuch as it impacts negatively legal certainty and predictability in law enforcement. A way in which a waste operator will meet (if at all) the new requirements is not indicated though an imperative time limit is set. On the contrary, obstacles are codified that a license holder cannot overcome. Thus reregistration and licensing are practically thwarted and unreasonably go beyond the limits of the legislative discretion.
6. The Constitutional Court believes that infringement on the Constitution on the basis of one reason is sufficient justification to apply Art. 149, para 1, item 2 of the Constitution without any need to pronounce judgments on all that is seen as unconstitutional in the MPs’ challenge. It should be noted though that nothing can support a claim of non-consistency with Art. 55 of the Constitution. The conditions to enable the materialization of a fundamental right – the protection of human health – are provided if the waste activities are taken away from residential areas and moved to zones intended for industrial and business activities. Moreover, Art. 13а, para 3, sentence 2 and Art. 54, para 2, sentence 2 of the WMA explicitly provide that “Each site must meet the legal requirements for the protection of human health and the environment.”
Art. 17, para 3 of the Constitution is not infringed upon either. It is a Constitution-bound duty of the Legislature to protect the inviolability of private property. The challenge sees the constraint as inefficient and excessive but the State protects property by means of regulation that must take public interest into account, too. The Act is not retroactive as in future it will regulate legal relationships that existed prior to its enactment. The WMA texts on municipalities’ blame for damage were not challenged in the motion to the Constitutional Court. The matter of possible damage and future earnings suffered by waste operators is not part of the case in question.
7. The substance, meaning and goals of the waste-related legislation conform to the international treaty acts to which the Republic of Bulgaria is a signatory. The Constitutional Court did not find Art. 13а, para 3 and Art. 54, para 2 of the WMA and § 17 and § 18 of the AAWMA to be inconsistent with these acts.
The general meaning and purpose of a Community Act, including a Community directive, is the understanding of fully nondiscriminatory and efficient application of Community law by the member states. All national laws and all international acts that are cited by the challenging party are intended to improve waste management by the regulation of activities in this sector of social relations. They aim at a broader goal – the conservation, protection and enhancement of the environment, protection of human health and rational and prudent utilization of natural resources. Therefore waste disposal and treatment should conform to differentiated waste-specific technology requirements. Discrepancies (if any) of the challenged WMA texts with these requirements will be manifest at national level where they call for a licensing mode for the landfill installation and operation and related activities conformant with the reality and for compliance with the Constitution imperative to generate objective conditions that will meet Art. 19 of the Constitution.
Directives don’t contain texts of direct legislative effect. Directives make it binding on member states to achieve a definite result by domestic legal measures. The rights of individuals derive from domestic pieces of legislation that are subject to supervision for constitutional validity. The addressee of directives (the member state) must follow the instructions (the so called vertical effect). In the particular case the national Legislature remained confined within the directive-drawn borders of free judgment and refrained from measures that might seriously jeopardize the result that the respective directive prescribes.
Art. 5, para 4, sentence 2 of the Constitution reads that once an international treaty has been ratified in accordance with the constitutional procedure, promulgated and having come into force, it shall have primacy over the domestic legislation. The same holds true of Community law acts (Art. 249, § 2 TEU; Art. 288, § 2 TFEU) in addition to Community regulations. Primacy acts automatically and there is no need whatsoever to resort to a special device to ascertain or announce it. The challenge does not cite concrete international norms that the Act is not consistent with. The challenge enumerates general principles but this is not sufficient and that part of the challenge should be dismissed accordingly. A conclusion even may be drawn to the contrary given the binding force of the international acts that are cited in the challenge. Sentence 2, para 3 of Art. 13а of the WMA states explicitly: “Each site must meet the legal requirements for the protection of human health and the environment.” Concern for public health and for the environment has been codified as an imperative requirement to obtain a license and furthermore, this concern is the underlying principle in the overall arrangement of the licensing of scrap operators. The same imperative is codified in Art. 54, para 2, sentence 2 of the WMA while obligations are detailed in compliance with Art. 9 and Art. 11 of the TFEU. Free competition is not thwarted as all economic actors are bound to hold a license.
8. In conclusion, to make the issuing of a license under Art. 13а, para 3 and the performance of an activity under Art. 54, para 2 of the WMA contingent upon a condition that is beyond the control of stakeholders who engage in the respective activity is discordant with Art. 19, paras 1 and 2 and Art. 4, para 1 of the Constitution. There exist various options and measures that are not as drastic as the withdrawal of license. The legislation opts for the severest resolution – the prohibition to proceed whenever a master plan is not available despite the other existing options of arrangement. These options, if applied, may balance the interests of the operators of sites intended for the disposal, pre-treatment and trade in waste and the public interest that calls for the protection of human health and of the environment.
Председател: Евгени Танчев