EU Commission

JUDGMENT OF THE COURT 4 June 2002 (1)
(Failure by a Member State to fulfil its obligations - Articles 52 of the EC Treaty (now, after amendment, Article 43 EC) and 73b of the EC Treaty (now Article 56 EC) - Rights attaching to the 'golden shares held by the Kingdom of Belgium in Soci?©t?© nationale de transport par canalisations SA and in Soci?©t?© de distribution du gaz SA)

JUDGMENT OF THE COURT 4 June 2002 (1)
(Failure by a Member State to fulfil its obligations - Articles 52 of the EC Treaty (now, after amendment, Article 43 EC) and 73b of the EC Treaty (now Article 56 EC) - Rights attaching to the 'golden shares held by the Kingdom of Belgium in Soci?©t?© nationale de transport par canalisations SA and in Soci?©t?© de distribution du gaz SA)


In Case C-503/99,


Commission of the European Communities, represented by M. Patakia, acting as Agent, with an address for service in Luxembourg,


applicant,


v


Kingdom of Belgium, represented by A. Snoecx, acting as Agent, assisted by F. de Montpellier, M. Picat and A. Theissen, avocats,



defendant,


supported by

United Kingdom of Great Britain and Northern Ireland, represented by R. Magrill, acting as Agent, with J. Crow, Barrister, and D. Wyatt QC, with an address for service in Luxembourg,


intervener,


APPLICATION for a declaration that, by maintaining in force

- the provisions of the Royal Decree of 10 June 1994 vesting in the State a 'golden share in Soci?©t?© nationale de transport par canalisations (Moniteur belge of 28 June 1994, p. 17333), which carries the following rights:


(a) advance notice of any transfer, use as security or change in the intended destination of the company's system of lines and conduits which are used or are capable of being used as major infrastructures for the domestic conveyance of energy products must be given to the Minister responsible, who shall be entitled to oppose such operations if he considers that they adversely affect the national interest in the energy sector;


(b) the Minister may appoint two representatives of the Federal Government to the board of directors of the company. Those representatives may propose to the Minister the annulment of any decision of the board of directors which they regard as contrary to the guidelines for the country's energy policy, including the Government's objectives concerning the country's energy supply;


- the provisions of the Royal Decree of 16 June 1994 vesting in the State a 'golden share in Distrigaz (Moniteur belge of 28 June 1994, p. 17347), which carries the following rights:


(a) advance notice of any transfer, use as security or change in the company's strategic assets must be given to the Minister responsible, who shall be entitled to oppose such operations if he considers that they adversely affect the national interest in the energy field;


(b) the Minister may appoint two representatives of the Federal Government to the board of directors of the company. Those representatives may propose to the Minister the annulment of any decision of the board ofdirectors or of the management committee which they regard as contrary to the guidelines for the country's energy policy,


and by failing to lay down precise, objective and stable criteria for approval of, or opposition to, the operations referred to above, the Kingdom of Belgium has failed to comply with its obligations under Articles 52 of the EC Treaty (now, after amendment, Article 43 EC) and 73b of the EC Treaty (now Article 56 EC),



THE COURT,


composed of: G.C. Rodr??guez Iglesias, President, P. Jann (Rapporteur), N. Colneric and S. von Bahr (Presidents of Chambers), C. Gulmann, D.A.O. Edward, A. La Pergola, J.-P. Puissochet, R. Schintgen, V. Skouris and J.N. Cunha Rodrigues, Judges,


Advocate General: D. Ruiz-Jarabo Colomer,


Registrar: H.A. R?ºhl, Principal Administrator,


having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 2 May 2001, at which the Commission was represented by M. Patakia and by F. de Sousa Fialho, acting as Agent, the Kingdom of Belgium by F. de Montpellier and O. Davidson, avocat, and the United Kingdom of Great Britain and Northern Ireland by R. Magrill and D. Wyatt,


after hearing the Opinion of the Advocate General at the sitting on 3 July 2001,


gives the following


Judgment

1.
By application received at the Court Registry on 22 December 1999, the Commission of the European Communities brought an action under Article 226 EC for a declaration that, by maintaining in force

- the provisions of the Royal Decree of 10 June 1994 vesting in the State a 'golden share in Soci?©t?© nationale de transport par canalisations (Moniteur belge of 28 June 1994, p. 17333, hereinafter 'the Royal Decree of 10 June 1994), which carries the following rights:


(a) advance notice of any transfer, use as security or change in the intended destination of the company's system of lines and conduits which are usedor are capable of being used as major infrastructures for the domestic conveyance of energy products must be given to the Minister responsible, who shall be entitled to oppose such operations if he considers that they adversely affect the national interest in the energy sector;


(b) the Minister may appoint two representatives of the Federal Government to the board of directors of the company. Those representatives may propose to the Minister the annulment of any decision of the board of directors which they regard as contrary to the guidelines for the country's energy policy, including the Government's objectives concerning the country's energy supply;


- the provisions of the Royal Decree of 16 June 1994 vesting in the State a 'golden share in Distrigaz (Moniteur belge of 28 June 1994, p. 17347, hereinafter 'the Royal Decree of 16 June 1994), which carries the following rights:


(a) advance notice of any transfer, use as security or change in the company's strategic assets must be given to the Minister responsible, who shall be entitled to oppose such operations if he considers that they adversely affect the national interest in the energy sector;


(b) the Minister may appoint two representatives of the Federal Government to the board of directors of the company. Those representatives may propose to the Minister the annulment of any decision of the board of directors or of the management committee which they regard as contrary to the guidelines for the country's energy policy,


and by failing to lay down precise, objective and permanent criteria for approval of, or opposition to, the operations referred to above, the Kingdom of Belgium has failed to comply with its obligations under Articles 52 of the EC Treaty (now, after amendment, Article 43 EC) and 73b of the EC Treaty (now Article 56 EC).


2.
By applications received at the Court Registry on 22 and 27 June 2000 respectively, the Kingdom of Denmark and the United Kingdom of Great Britain and Northern Ireland sought leave to intervene in the case in support of the form of order sought by the Kingdom of Belgium. By orders of the President of the Court of 12 and 13 July 2000 respectively, those Member States were granted leave to intervene. By letter of 2 October 2001, the Kingdom of Denmark withdrew its intervention.


Legal framework


Community law


3.
Article 73b(1) of the Treaty is in the following terms:

'Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited.


4.
Article 73d(1)(b) of the EC Treaty (now Article 58(1)(b) EC) provides:

'The provisions of Article 73b shall be without prejudice to the right of Member States:


...


(b) to take all requisite measures to prevent infringements of national law and regulations, in particular in the field of taxation and the prudential supervision of financial institutions, or to lay down procedures for the declaration of capital movements for purposes of administrative or statistical information, or to take measures which are justified on grounds of public policy or public security.


5.
Annex I to Council Directive 88/361/EEC of 24 June 1988 for the implementation of Article 67 of the Treaty (OJ 1988 L 178, p. 5) contains a nomenclature of the capital movements referred to in Article 1 of that directive. In particular, it lists the following movements:

'I - Direct investments


1. Establishment and extension of branches or new undertakings belonging solely to the person providing the capital, and the acquisition in full of existing undertakings.


2. Participation in new or existing undertakings with a view to establishing or maintaining lasting economic links.


...


6.
According to the explanatory notes appearing at the end of Annex I to Directive 88/361, 'direct investments means:

'Investments of all kinds by natural persons or commercial, industrial or financial undertakings, and which serve to establish or to maintain lasting and direct links between the person providing the capital and the entrepreneur to whom or the undertaking to which the capital is made available in order to carry on an economic activity. This concept must therefore be understood in its widest sense.


...


As regards those undertakings mentioned under I-2 of the Nomenclature which have the status of companies limited by shares, there is participation in the nature of directinvestment where the block of shares held by a natural person or another undertaking or any other holder enables the shareholder, either pursuant to the provisions of national laws relating to companies limited by shares or otherwise, to participate effectively in the management of the company or in its control.


...


7.
The nomenclature appearing in Annex I to Directive 88/361 also refers to the following movements:

'III - Operations in securities normally dealt in on the capital market


...


A - Transactions in securities on the capital market


1. Acquisition by non-residents of domestic securities dealt in on a stock exchange


...


3. Acquisition by non-residents of domestic securities not dealt in on a stock exchange


...


8.
Article 222 of the EC Treaty (now Article 295 EC) provides:

'This Treaty shall in no way prejudice the rules in Member States governing the system of property ownership.


National law


9.
Articles 1, 3 and 4 of the Royal Decree of 10 June 1994 provide as follows:

'Article 1


On the day on which the shares currently held by the State in the capital of the Soci?©t?© nationale d'investissement are actually transferred to one or more natural or legal persons in the private sector, the Soci?©t?© nationale d'investissement shall assign one share in the capital of the public company known as Soci?©t?© nationale de transport par canalisations (hereinafter SNTC) to the State. The special rights defined in Articles 2 to 5 shall attach to that share, in addition to the information rights attaching to ordinary shares in SNTC, only for as long as that share is owned by the State, which may transfer or assign it only pursuant to prior legislative authorisation. Those rights shall be exercised by the Minister responsible for energy, hereinafter referred to as the Minister.


...


Article 3


The golden share shall confer on the Minister the right to oppose any transfer, use as security or change in the intended destination of SNTC's system of lines and conduits which are used or are capable of being used as major infrastructures for the domestic conveyance of energy products, if the Minister considers that the operation in question adversely affects the national interest in the energy sector. ...


Prior notice of the operations referred to in the above paragraph must be given to the Minister. The Minister may lay down detailed rules concerning the form and contents of the notice to be given. The Minister may exercise his right of opposition within 21 days after receiving notice of the operation in question.


Article 4


The golden share shall confer on the Minister the right to appoint two representatives of the Federal Government to the board of directors of SNTC. Those representatives of the Government shall sit on the board in a non-voting advisory capacity.


The representatives of the Government may in addition apply to the Minister, within four working days, for annulment of any decision of the board of directors of SNTC which they regard as contrary to the guidelines for the country's energy policy, including the Government's objectives concerning the country's energy supply. That time-limit of four working days shall run from the date of the meeting at which the decision in question was adopted, if the representatives of the Government were duly invited to attend that meeting, or, if they were not, from the date on which the representatives of the Government or any one of them became aware of the decision. The application to the Minister shall have suspensory effect. If the Minister does not annul the decision in question within eight working days from the date of that application, the decision shall become final.


10.
Articles 1, 3 and 4 of the Royal Decree of 16 June 1994 lay down essentially identical rules concerning Soci?©t?© de distribution du gaz SA (hereinafter 'Distrigaz).


Pre-litigation procedure


11.
By two letters of 8 July 1998 the Commission informed the Belgian Government that, in its view, the 'golden shares vested by the Royal Decrees of 10 and 16 June 1994 could be contrary to the provisions of the Treaty concerning the free movement of capital and freedom of establishment.


12.
The Belgian Government replied by two letters of 15 September 1998, in which it stated that the special rights attaching to those shares had not hitherto been exercised and that the competent authorities were willing to guarantee to the Commission that none of those rights would be exercised in a discriminatory manner to the detriment of nationals of other Member States.


13.
The Commission was not satisfied by those replies, and therefore sent two reasoned opinions to the Kingdom of Belgium on 18 December 1998, calling on it to comply with those opinions within a period of two months.


14.
The Belgian Government replied to the reasoned opinions by a single letter of 4 March 1999, in which it announced that it intended to restructure the special rights attaching to the 'golden shares in issue. Thereafter, a number of structural adaptations were made, but these did not in any way alter Articles 1, 3 and 4 of the Royal Decrees of 10 and 16 June 1994.


15.
The Commission therefore decided to bring the present action before the Court.


Pleas and arguments of the parties


16.
The Commission states, as a preliminary point, that the phenomenon of widespread intra-Community investment has prompted certain Member States to adopt measures to control that situation. Those measures, most of which have been adopted in the context of privatisations, are liable, in certain circumstances, to be incompatible with Community law. For that reason, it adopted on 19 July 1997 its Communication on certain legal aspects concerning intra-EU investment (OJ 1997 C 220, p. 15, hereinafter 'the 1997 Communication).


17.
In that communication, the Commission interpreted the relevant Treaty provisions concerning the free movement of capital and freedom of establishment, inter alia in the context of procedures for the grant of general authorisation or the exercise of a right of veto by public authorities.


18.
Point 9 of the 1997 Communication is worded as follows:

'The analysis undertaken above concerning measures having a restrictive character on intra-Community investment has concluded that discriminatory measures (i.e. those applied exclusively to investors from another EU Member State) would be considered as incompatible with Articles 73b and 52 of the Treaty governing the free movement of capital and the right of establishment unless covered by one of the exceptions of the Treaty. As regards non-discriminatory measures (i.e. those applied to nationals and other EU investors alike), they are permitted in so far as they are based on a set of objective and stable criteria which have been made public and can be justified on imperative requirements in the general interest. In all cases, the principle of proportionality has to be respected.


19.
According to the Commission, the rules vesting in the Kingdom of Belgium 'golden shares in SNTC and Distrigaz, entitling that Member State to oppose, first, any transfer, use as security or change in the intended destination of lines and conduits or of certain other strategic assets and, second, certain management decisions regarded as contrary to the guidelines for the country's energy policy, are contrary to the criteria laid down by the 1997 Communication and thus infringe Articles 52 and 73b of the Treaty.


20.
Those national rules, although applicable without distinction, create obstacles to the right of establishment of nationals of other Member States and to the free movement of capital within the Community, inasmuch as they are liable to impede, or render less attractive, the exercise of those freedoms.


21.
According to the Commission, authorisation and opposition procedures can be held to be compatible with those freedoms only if they are covered by the exceptions contained in Article 55 of the EC Treaty (now Article 45 EC), Article 56 of the EC Treaty (now, after amendment, Article 46 EC) and Article 73d of the Treaty, or if they are justified by overriding requirements of the general interest and qualified by stable, objective criteria which have been made public, in such a way as to restrict to the minimum the discretionary power of the national authorities.


22.
The provisions in issue do not meet any of those criteria. Consequently, they are liable, by reason of their opacity, indirectly to introduce an element of discrimination and legal uncertainty. Furthermore, Article 222 of the Treaty is irrelevant in the present case, since the national rules concerning the privatisation of companies must in any event respect Community law.


23.
Whilst the continuity of supplies of natural gas constitutes a matter of public concern and may in principle, like the need to maintain the infrastructures for the conveyance of energy products, fall within the scope of overriding requirements of the general interest, the measures in question must nevertheless be shown to be necessary and proportionate to the objective pursued.


24.
A negative measure such as a right of opposition cannot guarantee adequate supplies, by contrast with positive measures such as planning designed to encourage natural gas undertakings to conclude long-term supply contracts and to diversify their sources of supply, or a system of licences. By the same token, the existence of infrastructures for the conveyance of energy products could be ensured not by a general right of opposition but by rules precisely defining the standards required of the undertakings concerned. Moreover, the rights attaching to the 'golden shares in issue preclude the conclusion of long-term contracts and diversification of sources of supply. Similarly, the remedies available to contest the measures in issue are inadequate, on account of the length and cost of the procedure involved.


25.
The Commission also refers to Directive 98/30/EC of the European Parliament and of the Council of 22 June 1998 concerning common rules for the internal market in natural gas (OJ 1998 L 204, p. 1, hereinafter 'the gas directive), which lays down the rules for the organisation of the internal market in natural gas and the time-limit for transposition of which expired on 10 August 2000. That directive provides a Community framework for the exercise by Member States of powers in respect of the public service obligations imposed on undertakings in that sector. By laying down strictly defined parameters, it ensures the maintenance of a balance between, on the one hand, competition between economic operators and, on the other, the objective of security of supply.


26.
The Kingdom of Belgium denies the alleged failure to comply with its obligations. It maintains that any restrictions on freedom of establishment and the free movement of capital which may result from the legislation in issue are in any event justified, first, by the public-security exception laid down in Articles 56 and 73d(1)(b) of the Treaty and, second, by overriding requirements of the general interest. Moreover, they are proportionate and adequate in relation to the objective pursued by them.


27.
First of all, the safeguarding of a country's energy supplies constitutes an overriding requirement of the general interest, as the Court has previously held, with regard to electricity supplies, in Case C-393/92 Almelo [1994] ECR I-1477, paragraphs 46 to 50, and, as regards petroleum products, in Case 72/83 Campus Oil and Others [1984] ECR 2727, paragraph 34.


28.
Second, the measures in question fulfil the criteria of necessity and proportionality. SNTC and Distrigaz occupy a strategic position as regards the country's energy supplies, especially in view of Belgium's dependence on foreign energy resources. SNTC is, in particular, the owner of a system of lines and conduits that constitute major infrastructures for the domestic conveyance of energy products, whilst the strategic assets of Distrigaz comprise, inter alia, infrastructures for the domestic conveyance and storage of gas, including unloading and cross-border facilities. A degree of control of those assets by the authorities is necessary within the framework of the rules in issue. The measures provided for to that end are likewise proportionate. The prior notification procedure simply constitutes, in the absence of any suspensory effect, a means of keeping the authorities informed. Similarly, the Minister's powers in the context of that procedure are not of a general nature; instead, they relate solely to very specific matters and are extremely limited in time. As to the annulment procedure, this can be set in motion only in a very precise and clearly identified situation, namely where the national policy with regard to energy supplies is adversely affected. As in the case of the first procedure, the Minister has an extremely limited period in which to react. Consequently, it cannot be argued that there has been a failure to establish precise, objective and stable criteria.


29.
Moreover, where it is decided to exercise the rights conferred by the legislation in issue, a formal statement of reasons for that decision must be provided, setting out the considerations of fact and law on which it is based. In addition, a right of appeal liesto the Belgian Conseil D'État for the annulment or suspension of such a decision. The costs involved are very low, and there exists a procedure for obtaining interlocutory relief. There is a strict limitation in time, inasmuch as the Minister is required to act within 21 days from the date of notification.


30.
According to the Belgian Government, there is no less restrictive way of attaining the objectives pursued. For the purposes of examining the criterion of proportionality, it is for the Commission to produce evidence showing the existence of alternative, less restrictive solutions (Case C-159/94 Commission v France [1997] ECR I-5815, paragraphs 101 and 102). As it is, the Commission has merely mentioned in that regard the possibility of long-term planning, which is inappropriate given the need for rapid action, and of 'rules precisely defining the standards required of the undertakings concerned, namely a licensing system the outlines of which remain hazy. It is highly doubtful that such measures would provide investors with a level of legal certainty greater than that resulting from the legislation in issue.


31.
As to the Commission's argument founded on the gas directive, the Belgian Government considers that this is inadmissible, since it was raised for the first time in the application itself. In any event, that directive harmonises public service obligations from a material standpoint but not in procedural terms. Consequently, the Member States remain free to take such measures as they may consider appropriate.


32.
Third, the Belgian Government argues that the rights conferred by the legislation in issue are justified by the public- security exception laid down in Articles 56 and 73d(1)(b) of the Treaty. National gas supplies are a matter of public security, since the country's economy and its institutions and essential public services, and even the survival of its inhabitants, depend upon them. An interruption of supplies of natural gas, with the risks that would pose for the country's existence, could seriously affect its public security.


33.
In the alternative, the Belgian Government argues that any impediments to the freedoms enshrined in the Treaty which may result from the legislation in issue are justified by Article 90(2) of the EC Treaty (now Article 86(2) EC), according to which undertakings entrusted with the operation of services of general economic interest are subject to the Treaty rules on competition only in so far as the application of those rules does not obstruct the performance of the particular tasks assigned to them.


34.
It follows from Case C-202/88 France v Commission [1991] ECR I-1223, paragraph 12, that Article 90(2) of the Treaty expresses the general principle that the Treaty rules must be subject to derogations where there exists a threat to the interests involved in the performance of the tasks carried out by services of general interest.


35.
The United Kingdom shares, in essence, the views expressed by the Kingdom of Belgium.


Findings of the Court


Article 73b of the Treaty


36.
It must be recalled at the outset that Article 73b(1) of the Treaty gives effect to free movement of capital between Member States and between Member States and third countries. To that end it provides, within the framework of the provisions of the chapter headed 'Capital and payments, that all restrictions on the movement of capital between Member States and between Member States and third countries are prohibited.


37.
Although the Treaty does not define the terms 'movements of capital and 'payments, it is settled case-law that Directive 88/361, together with the nomenclature annexed to it, may be used for the purposes of defining what constitutes a capital movement (Case C-222/97 Trummer and Mayer [1999] ECR I-1661, paragraphs 20 and 21).


38.
Points I and III in the nomenclature set out in Annex I to Directive 88/361, and the explanatory notes appearing in that annex, indicate that direct investment in the form of participation in an undertaking by means of a shareholding or the acquisition of securities on the capital market constitute capital movements within the meaning of Article 73b of the Treaty. The explanatory notes state that direct investment is characterised, in particular, by the possibility of participating effectively in the management of a company or in its control.


39.
In the light of those considerations, it is necessary to consider whether the rules vesting in the Kingdom of Belgium 'golden shares in SNTC and Distrigaz, entitling that Member State to oppose, first, any transfer, use as security or change in the intended destination of lines and conduits or of certain other strategic assets and, second, certain management decisions regarded as contrary to the guidelines for the country's energy policy, constitute a restriction on the movement of capital between Member States.


40.
The Belgian Government does not deny, in principle, that the restrictions to which the legislation in issue gives rise fall within the scope of the free movement of capital.


41.
The United Kingdom Government likewise concedes, at least partially, that the Belgian legislation is restrictive in nature.


42.
Consequently, it is necessary to consider whether, and in what circumstances, the legislation in issue may be justified.


43.
As is also apparent from the 1997 Communication, it is undeniable that, depending on the circumstances, certain concerns may justify the retention by Member States of a degree of influence within undertakings that were initially public and subsequently privatised, where those undertakings are active in fields involving the provision of services in the public interest or strategic services (see today's judgments in Case C-367/98 Commission v Portugal, not yet published in the European Court Reports,paragraph 47, and Case C-503/99 Commission v Belgium, not yet published in the European Court Reports, paragraph 43).


44.
However, those concerns cannot entitle Member States to plead their own systems of property ownership, referred to in Article 222 of the Treaty, by way of justification for obstacles, resulting from privileges attaching to their position as shareholder in a privatised undertaking, to the exercise of the freedoms provided for by the Treaty. As is apparent from the Court's case-law (Case C-302/97 Konle [1999] ECR I-3099, paragraph 38), that article does not have the effect of exempting the Member States' systems of property ownership from the fundamental rules of the Treaty.


45.
The free movement of capital, as a fundamental principle of the Treaty, may be restricted only by national rules which are justified by reasons referred to in Article 73d(1) of the Treaty or by overriding requirements of the general interest and which are applicable to all persons and undertakings pursuing an activity in the territory of the host Member State. Furthermore, in order to be so justified, the national legislation must be suitable for securing the objective which it pursues and must not go beyond what is necessary in order to attain it, so as to accord with the principle of proportionality (see, to that effect, Joined Cases C-163/94, C-165/94 and C-250/94 Sanz de Lera and Others [1995] ECR I-4821, paragraph 23, and Case C-54/99 Église de scientologie [2000] ECR I-1335, paragraph 18).


46.
In the present case, the objective pursued by the legislation at issue, namely the safeguarding of energy supplies in the event of a crisis, falls undeniably within the ambit of a legitimate public interest. Indeed, the Court has previously recognised that the public-security considerations which may justify an obstacle to the free movement of goods include the objective of ensuring a minimum supply of petroleum products at all times (Campus Oil, cited above, paragraphs 34 and 35). The same reasoning applies to obstacles to the free movement of capital, inasmuch as public security is also one of the grounds of justification referred to in Article 73d(1)(b) of the Treaty.


47.
However, the Court has also held that the requirements of public security, as a derogation from the fundamental principle of free movement of capital, must be interpreted strictly, so that their scope cannot be determined unilaterally by each Member State without any control by the Community institutions. Thus, public security may be relied on only if there is a genuine and sufficiently serious threat to a fundamental interest of society (see, in particular, Église de scientologie, cited above, paragraph 17).


48.
It is necessary, therefore, to ascertain whether the legislation in issue enables the Member State concerned to ensure a minimum level of energy supplies in the event of a genuine and serious threat, and whether or not it goes beyond what is necessary for that purpose.


49.
First of all, it should be noted that the regime in issue is one of opposition. It is predicated on the principle of respect for the decision-making autonomy of the undertaking concerned, inasmuch as, in each individual case, the exercise of control by the minister responsible requires an initiative on the part of the Government authorities. No prior approval is required. Moreover, in order for that power of opposition to be exercised, the public authorities are obliged to adhere to strict time-limits.


50.
Next, the regime is limited to certain decisions concerning the strategic assets of the companies in question, including in particular the energy supply networks, and to such specific management decisions relating to those assets as may be called in question in any given case.


51.
Lastly, the Minister may intervene pursuant to Articles 3 and 4 of the Royal Decrees of 10 and 16 June 1994 only where there is a threat that the objectives of the energy policy may be compromised. Furthermore, as the Belgian Government has expressly stated in its written pleadings and at the hearing, without being contradicted on the point by the Commission, any such intervention must be supported by a formal statement of reasons and may be the subject of an effective review by the courts.


52.
The scheme therefore makes it possible to guarantee, on the basis of objective criteria which are subject to judicial review, the effective availability of the lines and conduits providing the main infrastructures for the domestic conveyance of energy products, as well as other infrastructures for the domestic conveyance and storage of gas, including unloading and cross-border facilities. Thus, it enables the Member State concerned to intervene with a view to ensuring, in a given situation, compliance with the public service obligations incumbent on SNTC and Distrigaz, whilst at the same time observing the requirements of legal certainty.


53.
The Commission has not shown that less restrictive measures could have been taken to attain the objective pursued. There is no certainty that planning designed to encourage natural gas undertakings to conclude long-term supply contracts, to diversify their sources of supply or to operate a system of licences would be enough, on its own, to permit a rapid reaction in any particular situation. Moreover, the introduction of rules precisely defining the standards required of undertakings in the sector concerned, as proposed by the Commission, would appear to be even more restrictive than a right of opposition limited to specific situations.


54.
As to the Commission's arguments concerning the gas directive, suffice it to note that the time-limit for transposition of that directive did not expire until 10 August 2000. Consequently, the Community framework which, according to the Commission, the directive is intended to establish as regards the exercise by Member States of powers in relation to the public service obligations imposed on undertakings in the sector concerned cannot in any event affect the present action, since the reasoned opinions were dated 18 December 1998 and the application was lodged on 22 December 1999.


55.
The legislation in issue is therefore justified by the objective of guaranteeing energy supplies in the event of a crisis.


56.
In those circumstances, there is no need to consider the alternative plea put forward by the Belgian Government, alleging the existence of a principle derived from Article 90(2) of the Treaty.


57.
Accordingly, the Commission's application must be dismissed in so far as it concerns Article 73b of the Treaty.

Article 52 of the Treaty


58.
The Commission also seeks a declaration of failure to comply with Article 52 of the Treaty, namely the Treaty rules regarding freedom of establishment, in so far as they concern undertakings.


59.
It should be noted in that regard that Article 56 of the Treaty, like Article 73d, provides for a ground of justification based on public security. Thus, even if it were assumed that the power of a Member State to oppose any transfer, use as security or change in the intended use of certain assets of an existing undertaking, or certain management decisions taken by that undertaking, may constitute a restriction on freedom of establishment, such a restriction would be justified for the reasons set out in paragraphs 43 to 55 of this judgment.


60.
It follows that the Commission's application must also be dismissed in so far as it concerns Article 52 of the Treaty.


Costs


61.
Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the Kingdom of Belgium has applied for costs and the Commission has been unsuccessful, the Commission must be ordered to pay the costs. Pursuant to the first subparagraph of Article 69(4) of those Rules, the United Kingdom, which has intervened in the dispute, must bear its own costs.

On those grounds,


THE COURT


hereby:


1. Dismisses the application;


2. Orders the Commission of the European Communities to pay the costs;


3. Orders the United Kingdom of Great Britain and Northern Ireland to bear its own costs.


Rodr??guez Iglesias
Jann
Colneric


von Bahr

Gulmann
Edward


La Pergola

Puissochet
Schintgen


Skouris

Cunha Rodrigues



Delivered in open court in Luxembourg on 4 June 2002.


R. Grass

G.C. Rodr??guez Iglesias
Registrar

President


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1: Language of the case: French.

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JUDGMENT OF THE COURT (Sixth Chamber
13 June 2002 (1)
(Failure by a Member State to fulfil its obligations - Directives 79/409/EEC and 92/43/EEC - Conservation of wild birds - Special protection areas)
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In Case C-117/00,


Commission of the European Communities, represented by R. Wainwright, acting as Agent, with an address for service in Luxembourg,


applicant,


v


Ireland, represented by D.J. O'Hagan, acting as Agent, and C. Mac Eochaidh, BL, with an address for service in Luxembourg,


defendant,


APPLICATION for a declaration that, by failing to take all the measures necessary to comply with Article 3 of Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds (OJ 1979 L 103, p. 1), in respect of the Red Grouse, and with the first sentence of Article 4(4) of that directive and Article 6(2) of Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), in respect of the Owenduff-Nephin Beg Complex special protection area, Ireland has failed to comply with those directives and has failed to fulfil its obligations under the EC Treaty,


THE COURT (Sixth Chamber),


composed of: F. Macken, President of the Chamber, C. Gulmann (Rapporteur) and V. Skouris, Judges,


Advocate General: P. L?©ger,


Registrar: L. Hewlett, Administrator,


having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 24 January 2002,


after hearing the Opinion of the Advocate General at the sitting on 7 March 2002,


gives the following


Judgment

1.
By application lodged at the Court Registry on 27 March 2000, the Commission of the European Communities brought an action under Article 226 EC for a declaration that, by failing to take all the measures necessary to comply with Article 3 of Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds (OJ 1979 L 103, p. 1, hereinafter 'the Birds Directive), in respect of the Red Grouse, and with the first sentence of Article 4(4) of that directive and Article 6(2) of Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7, hereinafter 'the Habitats Directive), in respect of the Owenduff-Nephin Beg Complex special protection area ('SPA), Ireland has failed to comply with those directives and has failed to fulfil its obligations under the EC Treaty.


Community law


2.
According to Article 1(1) thereof, the Birds Directive relates to the conservation of all species of naturally occurring birds in the wild state in the European territory of the Member States to which the Treaty applies.


3.
Under Article 2 of the Birds Directive, 'Member States shall take the requisite measures to maintain the population of the species referred to in Article 1 at a level which corresponds in particular to ecological, scientific and cultural requirements, while taking account of economic and recreational requirements, or to adapt the population of these species to that level.


4.
Article 3 of the Birds Directive provides:

'1. In the light of the requirements referred to in Article 2, Member States shall take the requisite measures to preserve, maintain or re-establish a sufficient diversity and area of habitats for all the species of birds referred to in Article 1.


2. The preservation, maintenance and re-establishment of biotopes and habitats shall include primarily the following measures:


(a) creation of protected areas;


(b) upkeep and management in accordance with the ecological needs of habitats inside and outside the protected zones;


(c) re-establishment of destroyed biotopes;


(d) creation of biotopes.


5.
Article 4 of the Birds Directive provides:

'1. The species mentioned in Annex I shall be the subject of special conservation measures concerning their habitat in order to ensure their survival and reproduction in their area of distribution.


...


Member States shall classify in particular the most suitable territories in number and size as special protection areas for the conservation of these species, taking into account their protection requirements in the geographical sea and land area where this directive applies.


2. Member States shall take similar measures for regularly occurring migratory species not listed in Annex I, bearing in mind their need for protection in the geographical sea and land area where this directive applies, as regards their breeding, moulting and wintering areas and staging posts along their migrationroutes. To this end, Member States shall pay particular attention to the protection of wetlands and particularly to wetlands of international importance.


...


4. In respect of the protection areas referred to in paragraphs 1 and 2 above, Member States shall take appropriate steps to avoid pollution or deterioration of habitats or any disturbances affecting the birds, in so far as these would be significant having regard to the objectives of this Article. Outside these protection areas, Member States shall also strive to avoid pollution or deterioration of habitats.


6.
Article 6(2) of the Habitats Directive reads as follows:

'Member States shall take appropriate steps to avoid, in the special areas of conservation, the deterioration of natural habitats and the habitats of species as well as disturbance of the species for which the areas have been designated, in so far as such disturbance could be significant in relation to the objectives of this directive.


7.
Under Article 7 of the Habitats Directive, obligations arising under Article 6(2), (3) and (4) of that directive are to replace any obligations arising under the first sentence of Article 4(4) of the Birds Directive in respect of areas classified pursuant to Article 4(1) or similarly recognised under Article 4(2) thereof, as from the date of implementation of the Habitats Directive or the date of classification or recognition by a Member State under the Birds Directive, where the latter date is later.


8.
Member States were required under Article 23(1) of the Habitats Directive to bring into force the laws, regulations and administrative provisions necessary to comply with the directive within two years of its notification. Since the directive was notified in June 1992, that period expired in June 1994.


The pre-litigation procedure


9.
On 9 October 1997, the Commission sent the Irish Government a letter of formal notice for failure to comply with Article 3 and the first sentence of Article 4(4) of the Birds Directive and under Article 6(2) of the Habitats Directive. In its letter the Commission emphasised the adverse effects of overgrazing on Ireland's largest SPA, the Owenduff-Nephin Beg Complex, and on the habitats of the Red Grouse, a resident wild bird covered by Article 3 of the Birds Directive. The Irish authorities failed to answer that letter.


10.
On 8 April 1998, the Commission addressed to Ireland a reasoned opinion in which it stated that, by neglecting to take all the measures necessary to comply withArticle 3 of the Birds Directive, in respect of the Red Grouse, and with the first sentence of Article 4(4) of that directive and Article 6(2) of the Habitats Directive, in respect of the Owenduff-Nephin Beg Complex SPA, Ireland had failed to comply with those directives and had failed to fulfil its obligations under the Treaty. It called upon Ireland to comply with the reasoned opinion within a period of two months from its notification.


11.
The Irish authorities replied to the reasoned opinion by letter of 1 September 1998, providing information on new measures taken to curb overgrazing both in general and with specific reference to the Owenduff-Nephin Beg Complex area.


12.
Taking the view that that information did not enable it to reach the conclusion that Ireland had made good its failure to fulfil the obligations in question, the Commission resolved to bring before the Court the present action.


Substance


The plea of infringement of Article 3 of the Birds Directive


13.
The Commission states that the habitat of the Red Grouse is hill land and bog and that its diet consists principally in common heather, on which it also relies for building its nests and for protection from predators. The range of the Red Grouse is, therefore, limited in Ireland to areas of bog and moorland where heather is plentiful. However, heather is a species of plant that is particularly vulnerable to overgrazing and in Ireland it is under serious threat from overgrazing. The Commission cites in this connection various studies which show that there has recently been a very marked decline in that Member State in Red Grouse populations and a significant reduction in the areas where the species is found, including its mating grounds. As far as declining populations are concerned, the Commission refers to a 1993 report of the Irish Wildbird Conservancy. As regards the contraction of its range, the Commission refers to two atlases of breeding birds in Great Britain and Ireland. Furthermore, the species' breeding range still lies to a significant extent within areas designated by the Irish authorities as degraded. According to the Commission, Ireland has thus failed to fulfil its duty to safeguard a sufficient diversity and area of habitats for the Red Grouse.


14.
The Irish Government maintains that the Commission has failed to establish that the facts of which it complains had the effect, whether jointly or separately, of reducing the habitat of the Red Grouse to such a degree that it is no longer sufficient for its conservation. The Irish Government states that the Red Grouse, as a subspecies of the Willow Grouse, belongs to a species that is widespread and not under threat. As regards the two atlases to which the Commission refers and which relate to the periods 1968 to 1972 and 1988 to 1991 respectively, the difference in methods used to prepare those atlases renders any comparison of thefigures and any conclusions drawn therefrom unreliable for the purpose of establishing a decline in the numbers of Red Grouse or a contraction of its range. The Irish Government also disputes that areas of heathland necessary to the Red Grouse are under serious threat from overgrazing, although it acknowledges that overgrazing has had a negative effect on the numbers of Red Grouse and on the extent of the species' habitat.


15.
Article 3 of the Birds Directive requires Member States to take the requisite measures to preserve, maintain or re-establish a sufficient diversity and area of habitats for all the species of birds covered by the directive. The case-law of the Court of Justice shows that the obligations on Member States arising under Article 3 therefore exist before any reduction is observed in the number of birds or any risk of a protected species becoming extinct has materialised (see Case C-355/90 Commission v Spain [1993] ECR I-4221, paragraph 15).


16.
The report prepared in 1993 by the Irish Wildbird Conservancy, a non-governmental organisation dedicated to the protection of birds in Ireland, identified the Red Grouse as one of the country's 12 most endangered breeding birds and indicated that the numbers of Red Grouse had diminished by more than 50% over the last 20 years.


17.
Moreover, comparison of the two scientific works, The Atlas of Breeding Birds in Britain and Ireland: 1968-1972 and The New Atlas of Breeding Birds in Britain and Ireland: 1988-1991, produced by D.W. Gibbons, J.B. Reid and R.A. Chapman, reveals a significant contraction in the range in which the species is present and in which the species breeds. It is important to emphasise in this connection that, whilst, in the second atlas, the authors discuss and acknowledge the need for caution in comparing data, they note that 'despite these difficulties, the change maps do reflect the real underlying distributional changes [of the species].


18.
It is not in dispute that the breeding range of the Red Grouse, which is given a full entry in Annex II/1 to the Birds Directive, coincides, to a large extent, with the areas designated by the Irish Heritage Council as having been degraded by overgrazing.


19.
It should also be borne in mind that, in its letter of 1 September 1998, Ireland acknowledged that, in general terms, it was reasonable to conclude that Red Grouse populations had been affected by the consequences of overgrazing on their habitats. In the same letter, Ireland stated that the Red Grouse is dependent on common heather, which is the predominant plant species on many Irish heaths, raised bogs and uplands, and that it would be designating a very large area of those types of habitat, probably in excess of 250 000 hectares, as special areas of conservation within the meaning of the Habitats Directive, and that this would provide mechanisms to control the overgrazing.


20.
Moreover, according to the Action Plan for Ireland's 12 most threatened breeding bird species prepared in 1995 by the Irish Wildbird Conservancy, it is essential that pasturelands be properly managed as part of the priority actions which consist, initially, in halting the decline in Red Grouse populations and in their areas of distribution and, subsequently, in repopulating the areas of distribution abandoned since the time of the first atlas, mentioned in paragraph 17 of the present judgment.


21.
In light of the foregoing, it must be held that Ireland has not taken all the measures necessary to safeguard a sufficient diversity and area of habitats for the Red Grouse for the purposes of Article 3 of the Birds Directive. Consequently, the Commission's action must, on this point, be upheld.

The plea alleging infringement of the first sentence of Article 4(4) of the Birds Directive and Article 6(2) of the Habitats Directive


22.
The Commission maintains that Ireland has failed to take the necessary measures to prevent the blanket bog of the Owenduff-Nephin Beg Complex SPA from being damaged by overgrazing. In particular, the Rural Environmental Protection Scheme ('REPS) adopted by the Irish authorities has been, and still is, inadequate to combat the problem of overgrazing both generally and within the Owenduff-Nephin Beg Complex. The Commission nevertheless recognises the potential of the REPS, following its revision in 1998, effectively to deal with overgrazing of commonages, provided that commonage framework plans are established, implemented and monitored. The Commission argues that the general reduction of 30% in the mountain sheep quota decided upon during the winter of 1998/1999 is inadequate, if consideration is given to all of the areas affected by overgrazing.


23.
Whilst it acknowledges that there has been an increasing problem of overgrazing in the Owenduff-Nephin Beg Complex, the Irish Government contends that the Commission has produced insufficient evidence to establish that Ireland has failed to fulfil its obligations under Article 6(2) of the Habitats Directive and the first sentence of Article 4(4) of the Birds Directive. It points out first of all that, since 1996, farmers participating in the REPS have had to comply with grazing strategies for commonages. Next, it refers to the conditions for the conservation of blanket bogs, heaths and upland grasslands designated as National Heritage Areas under the REPS as in force from 1 January 1999. Furthermore, Ireland purchased 10 000 of the 25 255 hectares of land in the Owenduff-Nephin Beg Complex SPA and has granted licences for only six cattle and 150 sheep on this land. In 2000 Ireland adopted a framework plan for the other commonages in the SPA. The remaining 5 000 hectares in the Complex are not in commonage and are unaffected by the problem of overgrazing. In addition, the Irish Government states that the Commission approved, by decision of 6 August 1998 taken pursuant to Council Regulation (EEC) No 2078/92 of 30 June 1992 on agricultural production methods compatible with the requirements of the protection of the environment and themaintenance of the countryside (OJ 1992 L 215, p. 85), amendments to the REPS notified to the Commission in or after June 1997. Lastly, the Irish Government points out that implementation of the Conservation Management Plan for the Owenduff-Nephin Beg Complex has been delayed by the need to engage in detailed public consultations with the persons affected.


24.
First of all, it should be recalled that, according to settled case-law, the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in that State at the end of the period laid down in the reasoned opinion (see, inter alia, Case C-166/97 Commission v France [1999] ECR I-1719, paragraph 18, and Case C-374/98 Commission v France [2000] ECR I-10799, paragraph 14). Thus, in the present case, measures adopted by Ireland after 8 June 1998 cannot be taken into account.


25.
Secondly, it is important to note that it is undisputed that the Owenduff-Nephin Beg Complex has been classified as an SPA since October 1996. In so far as concerns land classified as an SPA, Article 7 of the Habitats Directive provides that the obligations arising under the first sentence of Article 4(4) of the Birds Directive are replaced, inter alia, by the obligations arising under Article 6(2) of the Habitats Directive as from the date of implementation of the Habitats Directive or the date of classification under the Birds Directive, where the latter date is later. It follows that, in the present case, Article 6(2) of the Habitats Directive, rather than the first sentence of Article 4(4) of the Birds Directive, has applied to the Owenduff-Nephin Beg Complex SPA since October 1996. That being so, the Commission's plea must be dismissed in so far as it is based on infringement of the first sentence of Article 4(4) of the Birds Directive and the Court must confine itself to considering whether there has been an infringement of Article 6(2) of the Habitats Directive.


26.
Article 6(2) of the Habitats Directive, like the first sentence of Article 4(4) of the Birds Directive, requires Member States to take appropriate steps to avoid, inter alia, deterioration of habitats in the SPAs classified pursuant to Article 4(1) (see Case C-96/98 Commission v France [1999] ECR I-8531, paragraph 35).


27.
Whilst the Commission pursues no claim of infringement against Ireland in relation to the 10 000 hectares in State ownership and upon which grazing will now be very light, it is clear from the documents before the Court that other parts of the Owenduff-Nephin Beg Complex SPA have been seriously damaged.


28.
The Conservation Plan for this SPA, completed on 22 August 2000 by D??chas, the heritage service of the Department of Arts, Heritage, Gaeltacht and the Islands, states that '[s]ome blanket bog and heath areas within the site are heavily eroded caused by the excessive numbers of sheep. In places there is mobile peat with associated haggs and gullies that have eroded to the underlying bedrock. On the higher ground, the heath is severely degraded due to the grazing pressure on ericaceous (heath) species. In the recent past large tracts of the peatland systemadjacent to the site have been planted with conifers, resulting in the destruction of vast tracts of both lowland and upland blanket bog.


29.
In their correspondence with the Commission preceding the issue of the Commission's reasoned opinion the Irish authorities had already recognised that the Owenduff-Nephin Beg Complex was heavily stocked with sheep which were penetrating into the uninhabited valleys and mountain slopes. They had also acknowledged that damage caused by overgrazing was particularly severe on the slopes west of Lough Feeagh and that this had contributed to the recent decline in the numbers of Greenland White-fronted Geese which feed there.


30.
According to the Conservation Plan mentioned in paragraph 28 of the present judgment, it will be necessary to keep grazing at a sustainable level in order to achieve objectives such as the maintenance and, where possible, the enhancement of the ecological value of both the priority habitat of the Owenduff-Nephin Beg Complex, that is to say blanket bog, and other habitats characteristic of the site and the maintenance and, where possible, increase of populations of birds mentioned in Annex I to the Birds Directive which frequent the site, including in particular the Greenland White-fronted Goose and the Golden Plover, species which provided justification for the classification of the site as an SPA. Overgrazing by sheep is in fact causing severe damage in places and is the greatest single threat to the site.


31.
Furthermore, the Irish Government itself recognises in its rejoinder that it is necessary for the Irish authorities not only to take measures to stabilise the problem of overgrazing, but also to ensure that damaged habitats are allowed to recover. The Irish Government indicates that implementation of the Conservation Management Plan for the Owenduff-Nephin Beg Complex SPA, of the framework plans for the commonages situated in the SPA and of individual farm management plans will achieve this end.


32.
It follows from the foregoing that Ireland has not adopted the measures needed to prevent deterioration, in the Owenduff-Nephin Beg Complex SPA, of the habitats of the species for which the SPA was designated.


33.
Consequently, Ireland has failed to fulfil its obligations under Article 6(2) of the Habitats Directive and it follows that the Commission's action must be upheld on this point also, subject to the limitation mentioned in paragraph 25 of the present judgment.


34.
It must, therefore, be held that, by failing to take the measures necessary to safeguard a sufficient diversity and area of habitats for the Red Grouse and by failing to take appropriate steps to avoid, in the Owenduff-Nephin Beg Complex SPA, the deterioration of the habitats of the species for which the SPA was designated, Ireland has failed to fulfil its obligations under Article 3 of the Birds Directive and Article 6(2) of the Habitats Directive.


Costs


35.
Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the Commission has applied for costs and Ireland has been unsuccessful, the latter must be ordered to pay the costs.

On those grounds,


THE COURT (Sixth Chamber)


hereby:


1. Declares that, by failing to take the measures necessary to safeguard a sufficient diversity and area of habitats for the Red Grouse and by failing to take appropriate steps to avoid, in the Owenduff-Nephin Beg Complex special protection area, the deterioration of the habitats of the species for which the special protection area was designated, Ireland has failed to fulfil its obligations under Article 3 of Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds and Article 6(2) of Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora;


2. Orders Ireland to pay the costs.



Macken

Gulmann
Skouris



Delivered in open court in Luxembourg on 13 June 2002.




R. Grass

F. Macken
Registrar

President of the Sixth Chamber


--------------------------------------------------------------------------------

1: Language of the case: English.



REQUEST FOR SUPPLEMENTARY INFORMATION
(For Site Related Aspects of Nature Conservation Complaints)
This form is available on the European Commission's Natura 2000 website

For the Commission
Complaint n¬? Member State:

REQUEST FOR SUPPLEMENTARY INFORMATION
(For Site Related Aspects of Nature Conservation Complaints)

Further to the registration of your complaint (cf. box above), I would be grateful if you would complete this request for supplementary information. The purpose of this request is to help the Commission to more fully and accurately identify and evaluate the essential site-based nature conservation issues raised by your complaint.
The provision of the requested information may be decisive for a proper handling of your complaint, and, where appropriate, the making of representations to the national authorities.
I look forward to hearing from you within the next month.


Contact person: Tel. E-mail

Member States concerned:

Regions concerned :

1) Does the case have any direct link to Community nature conservation legislation?

Yes  No 

2) If yes to which directive ?
79/409 (the Birds Directive)
92/43 (the Habitats Directive)
Or which other legislation ?


3) Give a clear description of the subject of the complaint (max. 1/2 page)









4)
Have you already contacted the responsible authorities of your Member
State concerning your complaint case
 No ?î Please explain why you have not contacted your national authorities before addressing the European Commission :
 Yes ?î Which one :

Answer / Results in brief













Please add if possible copies of the correspondence.

5)
5.1. Are you aware if any EC financing is directly involved (e.g. structural funds, Life, etc.) :
Yes  No 

5.2. If yes please give details :






6) Location

6.1. GENERAL DESCRIPTION OF THE SITE(S) AFFECTED

Name of Site(s):...........................................................................................................................................Next big city close by : .............................................Surface area (ha) : ..............................................Special Protection Area : Yes  No  Name :Proposed site of community importance2 : Yes  No  NATURA 2000 Code : ..........................Is the area already under national protection  No  Yes : ............................................................... (which one)Scientific description :



6.2. MAP OF THE SITE OR SITES AFFECTED

MAPS ARE A VALUABLE AID TO UNDERSTANDING AND EVALUATING A COMPLAINT. WHERE POSSIBLE PLEASE THEREFORE SUBMIT A MAP OF GOOD QUALITY (I.E. WITH A SCALE OF 1:100000 OR LESS). The map should show the location of the plan /project referred to in the complaint, and, if known, the boundaries of any designated or proposed nature conservation site (e.g. special protection area under Directive 79/409/EEC (wild birds)or proposed site on national list under Directive 92/43/EEC (habitats)).Colours and symbols are helpful means of clearly indicating and describing key information such as site boundaries and the location of any plan or project.A clear legend giving the scale and explaining any colours or symbols used is also helpful.F Maps can be presented on a format larger than A4, if necessary.


7. PRINCIPAL HABITATS DIRECTIVE ANNEX I HABITAT TYPES DIRECTLY AFFECTED

* : Tick if the habitat type is a priority one according to Annex I of the Habitats Directive
Code : Refer to the Habitats Directive
Name : Name of the habitat type according to the Habitats Directive


* Code Name Surface area for the siteha













Comments (conservation status if known, significant effects of the plan/project referred to in the complaint, bibliographic references used)

8. HABITATS DIRECTIVE ANNEX II SPECIES DIRECTLY AFFECTED


G¬? : GROUP: M=Mammals, A=Amphibians, R=Reptiles, F= Fish, I=Invertebrates, P=Plants

* : Tick if the species is a priority one according to Annex II of the Habitats Directive

G¬? * SCIENTIFIC NAME(IN LATIN) POPULATION SIZE FOR THE SITE(S)
RESIDENT MIGRATORY
BREED WINTER STAGE












Comments (conservation status if known, significant effects of the plan/project referred to in the complaint, bibliographic references used)



9. BIRDS SPECIES DIRECTLY AFFECTED

* SCIENTIFIC NAME(IN LATIN) POPULATION SIZE FOR THE SITE(S)
RESIDENT MIGRATORY
BREED WINTER STAGE
ANNEX I SPECIES OF THE BIRDS DIRECTIVE






OTHER MIGRATORY SPECIES






COMMENTS (conservation status if known, significant effects of the plan/project referred to in the complaint, bibliographic references used)

10)

10.1 The plan project has already been approved by the competent authorities :
Yes  No 

10.2 If yes, by which act ?

10.3 and which authority ?

10.4 If the plan or project has not yet been approved, please indicate the administrative procedure being followed and the stage reached:



11)
11.1 Has any Environmental Impact Assessment (EIA) or environmental impact study
been done or is one in progress? Yes  No 

11.2. If yes, give a brief description of its results (max. 1/2 page)

















12) a) Describe any alternative solution(s) to the plan or project which have been considered by the authorities (indicate on the maps if relevant)
(max. 1/2 page)







b) Describe any other alternative solution(s) to the plan or project which you believe are feasible and which have not been considered by the national authorities (indicate on the maps if relevant) (max.1/2 page)












13) a) Describe any mitigation measures which have been proposed or considered by the national authorities (indicate in the maps if relevant)
(max. 1/2 page)








b) Describe any mitigation measures which you consider feasible and which have not been considered or proposed by the national authorities (max.1/2 page)











14) a) Describe any compensatory measures for nature conservation damage caused by the plan or project which have been proposed or considered by the national authorities (indicate in the maps if relevant)
(max 1/2 page)






b) Describe any compensatory measures which you believe are feasible and which have not been considered or proposed by the national authorities (indicate on the maps if relevant) (max.1/2 page)








15) Other information (max. 1/2 page). Copies of relevant studies and publications may be annexed.









Place Signature

Date
Re: De-watering of the mid-Kildare Aquifer and its effects on Pollardstown Fen, a proposed Irish Special Area of Conservation (Site Code 000396)
An Taisce, The National Trust for Ireland
c/o Tony Lowes, Chairman,
Natural Environment Group
Allihies, County Cork
Tel 353 +27 + 73025 Fax 353 + 27 + 73131


Mr. G. Kremlis,
European Commission,
Directorate General XI
B.3 Legal Affairs,
Rue de la Loi 200,
B-1049 Bruxelles,
BELGIUM
20 April, 1998

Re: De-watering of the mid-Kildare Aquifer and its effects on Pollardstown Fen, a proposed Irish Special Area of Conservation (Site Code 000396)

Dear Sir;

The Commission has been notified of the Irish Government's designation of Pollardstown Fen in County Kildare as a Special Area of Conservation.

The integrity of this site is threatened by the design of the Kildare By-Pass, approved by the Minister for the Environment on 22 January, 1996, as this involves a three kilometer cutting into the mid-Kildare aquifer, the largest and most important gravel aquifer in Ireland and the major source of water for Pollardstown Fen.

The Environmental Impact Assessment prepared for this development did not properly assess the impact on the aquifer of this de-watering and was inadequate in considering the problems involved in mitigating proposals.

These contentions are more than substantiated in the report from the Office of Public Works we have sent you.

You will have received two documents from our organization to substantiate the fact that community funding is to be used to the detriment of the natural environment at a site now protected under the Habitats Directive as well as the Ramsar Convention.

1) Assessment of the Environmental Impact Study on the Kildare By-Pass, in particular an Assessment of the County Council's Proposal to De-water the Mid-Kildare Aquifer and the impact on the Pollardstown Fen and the Grand Canal, David Ball and others, Office of Public Works, November, 1993. [By registered post.]

2) Environmental Impact Assessment - Kildare By-Pass Motorway: Town Planning Aspects by Philip Jones, Kildare Senior Planner. See: Amenity, 3.A Impact on the Curragh. [By fax with the Government Order of 19 January and the letter of authorization to Kildare County Council of 23 January, 1996]

It is alleged in these documents that the design of the proposed motorway was cut into the mid-Kildare aquifer to ensure the amenities of private interests at the expense of the environmental balance and we found nothing to disprove this contention. However, we feel obliged to bring to the attention of the Commission that our own investigations lead us to believe that a further imperative in the proposed excavation was the desire of the Irish authorities to obtain sufficient aggregate without further expense to provide material to raise the road over the national railway line south of Kildare as the right to tunnel under the line was refused by the national railway on the grounds of safety and disruption.

(1) Office of Public Works Report

The simple cross section drawing prepared by the Office of Public works and included in their Report as part of Section 2.7 shows clearly the effects of the lowering of the water table consequent on the proposed development and its effect on the fen. It further indicates the insignificance of the Minister's decision to lessen the depth of the cut by two meters.

There will be both a diminution in the supply of water and a lowering of the water level. This is because the gradient of flow has been reduced and because the groundwater divide would be moved 2 to 3 kilometers closer to the Fen, severely reducing the catchment zone supplying the fen.

The scope of the EIA which was completed was restricted to determination of the impact of the proposed preferred route and design. And even given that potentially fatal limitation, the Terms of Reference were not met by the work programme and insufficient work was done to obtain the necessary data.

S.I. No. 221 of 1988 European Communities (Environmental Impact Assessment) (Motorways) Regulations, Regulation 4 subsection 3A states: An environmental impact study under section 3 shall contain "an outline of the main alternative motorway alignments (if any) studied and an indication of the main reasons for selecting the proposed alignment, taking into account the environmental effects." This does not appear to have been done in relation to groundwater.

Further, the volume of water which will be extracted is given as 5,500,000 gallons per day (mgd). This would be sufficient for a town of 126,000 people at 200 liters per day per person. Under Irish SI 349 1989 Schedule 1 if this was a proposed drilled water supply the EIA threshold would be 1,100,000 gallons per day (mgd). As the OPW Report notes: "the proposed rate of groundwater removal from the aquifer to keep the cutting dry is five times the threshold above which an EIS is required for a public water supply."

The OPW did not have confidence that "the drilling and testing programme that has been carried out provides sufficient or adequate information to formulate the conceptual model and provide an input into the mathematical model used to predict the impact of the proposed de-watering on the groundwater flow feeding Pollardstown Fen."

The authors of the report suggest that the mathematical model itself contains a fundamental fatal flaw that renders it invalid regardless of the research undertaken. They point out that the model was designed to prevent any serious impact on Pollardstown bring derived from running the model. The design of the model creates a 'No Flow' boundary along the fen's perimeter, in effect isolating the fen from the model. By mathematically fixing this boundary the edge of the fen acts like a hinge in the model: no matter how much water is drained from the Curragh aquifer the water level in this model of the fen will not be affected. Water levels elsewhere can go up or down but the water table remains at a predetermined fixed level along the edge of the fen. This fails to reflect the realities of the hydrology of the aquifer.

In regard to the mitigation measures proposed the Report notes that a permanent groundwater injection or recharge scheme of this scale and precision has not been attempted in Ireland before, and experience elsewhere suggests such a scheme will be expensive and fraught with technical difficulties. No attempt has been made to assess the environmental impact of such amelioration measures on either the Fen or the Curragh. The Report calls these proposals "inadequate in terms of concept, design, construction, maintenance, monitoring, management, and costs".

Their Report concluded that it would be "imprudent to base a mathematical model on such sparse and inadequately supported aquifer discharge data - particularly when the predictions of this model are used to give assurances about only small changes in the groundwater flow to a Fen of International importance."

"The OPW, whilst sympathetic to the need for a By-Pass and the predicament in which the Kildare County Council now find themselves, never the less cannot accept the EIS because its predictions about the impact on Pollardstown Fen, are in our view, unreliable."

The OPW Report Conclusions & Recommendations offers two alternative solutions:

1. Withdraw the EIS, rescope the groundwater, geotechnical and ecological investigations and carry out new, comprehensive environmental impact studies. These would take several years.

2 Retain the preferred route but change the design so that no significant groundwater de-watering is required.

(2) Kildare Senior Planners report

In the words of the Kildare Senior Planner:

"The necessity to de-water part of the Curragh Aquifer as a result of making this cut could seriously effect Pollardstown Fen, an Area of National Amenity Importance and listed for protection in the County Development Plan.

"Serious consideration should be given to the redesign option. If the redesign is not favored solely because of the fact that the motorway would be less in cut as it traverses the National Stud and the South of the town, then the balance as between this and the amenity of the Curragh (and the Fen) should be weighed. It this regard, it can be stated that the Curragh and the Fen (both of which are unique and can not be replicated) must be regarded as of much greater importance than the stud (which is man made, and could be relocated)."

Conclusion

An Taisce urges your Department to investigate this matter and assure that the protection offered sites under the Habitats Directive is given to Pollardstown Fen and that no community funding is used for this proposal unless the design of the motorway is changed or the full and comprehensive studies recommended by the Office or Public Works are completed.

Yours, etc.,

Tony Lowes
At the end of my visit to Dublin in late January this year, I undertook to write to you publicly setting put the impressions I had brought back to Brussels with me after the visit, not least as a result of my meetings with the public and the Non-governmental organisations. Having reflected on the issues raised during the visit - I am now writing to you to set out some views that I formed as a result of my visit to Ireland.

Brussels 22.3.2002-
PMA/Ir/D:3164
Mr Noel Dempsey
Minister for the Environment and Local Government,
Department of the Environment,
Customs House,
Dublin 1
IRELAND

Dear Minister;

At the end of my visit to Dublin in late January this year, I undertook to write to you publicly setting put the impressions I had brought back to Brussels with me after the visit, not least as a result of my meetings with the public and the Non-governmental organisations. Having reflected on the issues raised during the visit - I am now writing to you to set out some views that I formed as a result of my visit to Ireland.

At the outset let me thank you again for all your hospitality and efforts which greatly contributed to ensuring that I had a very good first official visit to Ireland in my capacity as EU Commissioner for the Environment. I was certainly given a warm welcome by Ministers, parliamentarians, officials and all the people I met.

The comprehensive programme for the visit provided me with an excellent opportunity to learn more about the challenges that Ireland faces in implementing EU environmental legislation and policy, and to meet with different bodies and individuals who are concerned about, and working to address these issues.

I would like to acknowledge your personal commitment and efforts to deal with the different issues of environmental concern and to recognise the progress achieved since you became Minister of the Environment in Ireland.

A wide range of environmental concerns were brought to my attention during the visit. In fact I was faced with the unusual experience of receiving a considerable number of written submissions from participants in the meetings, with others indicating they would express their concerns in writing to to me after the visit. A number of questions were raised including Natura 2000, aquaculture issues, the environment/health interlinkage, and the Environmental Impact Assessment Directive. However, the two main issues which arose over and over during my discussions were access to environmental justice and waste management.

On the former, I have to report that I was struck during the meetings with the general public and the NGOs by a strong sense of frustration. Many of those who spoke conveyed the message that they were not being heard, seen or fully respected. They complained about a lack of access to information and justice. While there is a recognition that agreed environmental legislation is largely in place, many feel frustrated at the local level when they seek to have this legislation applied. This may partly explain why the Commission at present receives a higher number of complaints from Ireland than other Member States.

I fully appreciate that there will be other views in relation to the feelings which were conveyed during these meetings. I recall that you yourself explained to me some of the meetings that you and your service held with the NGOs. Many of these complaints will therefore already be familiar to you and your services. It would be inappropriate
for me to comment on the substance of any of these in this correspondence, some of which are already the subject of formal complaints received by the European Commission.

AS you know, however, enforcement is essential for an effective EU environmental policy. Different legal regimes, economic concerns, degrees of public concern, and levels of political interest among Member States have contributed to uneven implementation throughout Europe. We are all faced with the challenge of effect governance. My own view is that we need to strengthen the processes to address these concerns at national level. This is in fact an issue, which I believe should be discussed in the context of the Convention on the Future of the European Union. One idea, which we should explore further, is the scope for the creation of an ombudsman office in each Member State to which citizens can turn when they believe that European environmental law is being breached. I would encourage you to reflect on how to strengthen such environmental governance and access to environmental justice within Ireland.

Turning to the question of waste management, this is clearly at the top of the agenda for Irish citizens and NGOs. As I told you when we met, I welcome the fact that regional waste management plans have now been submitted for Ireland. You are now in the phase of turning these plans into action, and I could feel the sense of unease this is creating in Irish Citizens. There is considerable position to either final disposal option of landfill or incineration. Ireland is not alone in wrestling with the issues of how to move away from an over-reliance on landfill.

The goal of a "zero waste option" was raised several times during my meetings. While this is a goal we could all subscribe to, we will not get there overnight. I would nevertheless encourage you toset a high level of ambition and to maintain close contacts with the groups and most concerned as you turn waste management plans into actions. To the extent that my service can help in explaining the provision of our waste management policy and highlighting experiences elsewhere, I will ensure that they work in close cooperation with the Irish authorities.

I look forward to our continuing cooperation and further opportunities to discus these issues with you.

Yours sincerely,
Margot Wallstrom