The Constitutional Court found no 96 / 2001 Coll.
The Constitutional Court found of 14 February 2001 on the application for annulment of Government Decree No 51 / 2000 Coll., laying down the measures and share of the State in creating the conditions for ensuring and maintaining the production of sugar and sugar and stabilising the sugar market
Valid
The Constitutional Tribunal found
Text versions:
12.03.2001
96
FIND
The Constitutional Court
On behalf of the Czech Republic
On 14 February 2001, the Constitutional Court, in plenary, decided on the proposal of the Sugar Community V., s. r. o., to repeal Government Decree No 51 / 2000 Coll., laying down the measures and share of the State in creating the conditions for ensuring and maintaining the production of sugar and sugar and stabilising the sugar market,
as follows:
Government Decree No. 51 / 2000 Coll., laying down the measures and share of the State in creating the conditions for ensuring and maintaining the production of sugar and sugar and stabilising the sugar market, shall be repealed on the date of the publication of this finding in the Collection of Laws.
Reasons
On 4 August 2000, the Constitutional Court received a constitutional complaint against the measure of the Ministry of Agriculture of 2 June 2000 No 1914 / 2000-1000 establishing a specific individual sugar quota for the 2000 / 2001 marketing year. By this measure, the Ministry established an individual sugar quota for the complainant, broken down by 7 470 tonnes for the domestic quota and by 2 490 tonnes for the export quota, when the complainant initially requested 27 000 tonnes for the domestic market and 5 000 tonnes for exports. Together with the constitutional complaint, the complainant submitted a proposal to repeal Government Decree No. 51 / 2000 Coll., laying down the measures and share of the State in creating conditions for ensuring and maintaining the production of sugar and sugar and stabilising the sugar market.
The Fourth Chamber of the Constitutional Court, by order of 20 September 2000, sp. zn. IV. ÚS 468 / 2000 pursuant to § 78 (1) of Act No 182 / 1993 Coll., on the Constitutional Court, suspended the proceedings for a constitutional complaint and referred the motion for the annulment of the Government Decree to the plenary of the Constitutional Court.
The company Cucrovar V., s. r. o., ("the appellant ') stated that the sugar mill had rented 32 000 tonnes of sugar per year from Mr O. M., which purchased the sugar from the property of the bankrupt - Union sugar, a. s., on the basis of the purchase agreement of 4 November 1999. The contracts were concluded at a time when no one could have anticipated that the contested government regulation would significantly restrict or prevent the sugar business. The company has invested considerable money in the acquisition of the sugar factory itself and in the purchase of the new technology, in order to achieve the planned annual capacity, but after the government's regulation it is placed in a situation where it is forced to ask the Ministry of Agriculture for action under this regulation, although it believes that such regulation of production is unconstitutional and illegal.
In the appellant's view, the pursuit of a certain activity, which can be considered to be the production and sale of the sugar produced, can only be restricted by law, not by government regulations. Moreover, the Government Regulation created a specific, essentially preferred category of so-called strategic sugar producers (listed in Annex 1 to the Government Regulation) by administrative means, and without the possibility of other sugar-producing companies, even if they could influence the selection of sugar producers thus classified. This gave an advantage to one group of producers, at the expense of the other group, as regards the possibility and access to business under Article 26 (1) of the Charter of Fundamental Rights and Freedoms ("the Charter '), in conjunction with Articles 1 and 3 (1) of the Charter, on equality in rights. Furthermore, the appellant stated that, according to the introductory phrase of the Decree of the Government, Article 2 (1) of Act No. 252 / 1997 Coll., on Agriculture appears to be an authorisation provision for establishing quotas. However, this provision certainly does not give rise to the right of any particular state body, namely the government, to issue or impose rights and obligations under the statutory provisions in the area of quotation and regulation of production. However the Government may issue its regulations without express authorisation, it must do so within the limits laid down by law, which is not fulfilled in the present case.
Furthermore, the appellant disagreed that the conditions for price stabilization of the agricultural commodity market could be interpreted as meaning that the government is entitled to exclude certain entities from the possibility of freely doing business in a particular field without having the power to do so in the law. Indeed, the fact that questions about the quotation and regulation of the production of agricultural commodities cannot be regulated by a government regulation suggests that, following the contested regulation, the Ministry of Agriculture submitted a draft law to the Government, and then to Parliament, which allows such action. In oral proceedings, the appellant stated that it had in the meantime in mind the adopted Act No. 256 / 2000 Coll., on the State Agricultural Intervention Fund and on the amendment of certain other laws (Act on the State Agricultural Intervention Fund). In fact, it was confirmed that the regulation implemented by the contested regulation would not stand up to the form. In the appellant's view, the contested government regulation infringes the right to do everything which is not prohibited by law and the right not to be forced to do what the law does not impose [Article 2 (4) of the Constitution of the Czech Republic (hereinafter referred to as the Constitution) and Article 2 (3) of the Charter]. Should the appellant accept the measures taken by the Ministry of Agriculture, the sugar plant will be used at about 30%, and this will in fact force economic pressure to liquidate the operation at great loss. This will also infringe Article 11 of the Charter, which guarantees the protection of ownership and provides that ownership has the same legal content and protection. The appellant is de facto prohibited from marketing the sugar produced in the Czech Republic by decision of the State and without refund. At the same time, the appellant stated that there could be a similar elimination and discrimination against producers and other food commodities.
In its observations at the request of the Constitutional Court, the Government stated that Decree No. 51 / 2000 Coll. was issued for the implementation of § 2 (1) of Act No. 252 / 1997 Coll., on Agriculture. Although that provision does not contain explicit authorisation to issue a government regulation, Article 78 The Government is entitled to implement the law and, within its limits, to issue regulations - so it can implement the law by its regulations without express authorisation. The list of measures in that provision of the Agriculture Act to be used to achieve the purpose of the Act is merely a demonstration. The Government therefore considers it possible for the executive authority to apply other measures in the implementation of this provision if it leads to the achievement of the legal objective of creating the conditions for maintaining the production potential of agriculture, in the specific case of sugar beet and sugar production, and for stabilising the sugar market as one of the basic agricultural commodities. Such measures are not subject to the approval of Parliament's Chamber of Deputies, unlike support programmes and indirect support. The Government is therefore of the opinion that the contested regulation does not go beyond and does not infringe Article 78 of the Constitution because it does not depart from the limits of the law which it is intended to implement.
The Government also pointed out that the contested regulation did not affect the appellant's right to do business freely. By this regulation, the Government has decided in some way to motivate sugar producers - both strategic and other producers - to reduce production by setting up domestic and export sugar quotas, offering them various compensatory forms of state aid (provision of expert advice, survey of the sugar market, provision of export options, assistance in ensuring the purchase of sugar). Paragraph 10 of the Government Regulation needs to be interpreted in the context of the whole legislation. In particular, it is clear from Paragraph 11 that compliance with the quotas is based on the voluntary and favourable nature of the producers who, on the basis of the desired behaviour, are entitled to the compensatory forms of State aid. There are no penalties for producers exceeding the quotas provided for, but they do not qualify for the measures provided for in Sections 6 to 8. The Government Regulation does not impose obligations other than those laid down in the Act and therefore does not restrict the right of access to business under Article 26 (1) of the Charter. On the contrary, the Government itself undertakes to take certain positive measures in favour of producers which behave in the desired manner, which is clear from Article 1 of the Government Regulation, according to which this Regulation regulates the State's participation in the creation of conditions for ensuring and maintaining the production of sugar and sugar and stabilising the sugar market in the Czech Republic. Therefore, access to the market is neither closed nor limited.
The Government has yet to state that the allegation of a breach of the guarantee of equal rights and discrimination against non-strategic sugar producers will not stand up because, on the contrary, the government's contested regulation took into account the actual differences in production capacity between entities. The Institute of Strategic Producers was created in view of the expected production in the marketing year and was certainly not carried out at random or on a discretionary basis, but on the basis of clearly defined criteria - objective characteristics of individual producers based on the production volume of individual sugar factories in the last five years, thus taking into account their long-term activities. It would be discriminatory to ignore these objective differences, as it would put at a disadvantage the large producers who have invested promising significant resources in their development. In view of the limited capacity of the sugar market, the government has tried and tried to stabilise the situation and is therefore forced to limit the extent of its assistance to sugar growers or sugar producers. However, there are no restrictions on the possibility of producing and marketing sugar.
On the basis of the above, the Government considered that the content of the Government's regulation in question was balanced in such a way that it did not discriminate against any of the sugar growers or sugar producers, in any event it was not aimed at reducing their number and therefore proposed rejecting the proposal.
The Ministry of Agriculture, in its observations, which had been requested before the interruption of the procedure for a constitutional complaint, stated that the contested government regulation was not intended to approximate the law of the European Communities even if it took over certain principles applied in the Member States of the European Union. It shall be based in particular on the following principles:
- transposition of the obligations of Articles 69 and 70 of the European Association Agreement through Act No. 252 / 1997 Coll., on Agriculture,
- fulfilment of commitments to the EU and the WTO - to establish a so-called sugar policy,
- the temporary validity of the Government Regulation (limited to the 2000 / 2001 marketing year only, i.e. 1 August 2000 to 30 September 2001),
- setting individual quotas for strategic sugar producers (11 sugar factories in 8 bodies which have produced and marketed at least 10 000 tonnes of sugar per year over the last five years),
- setting the minimum price for sugar, the minimum price for sugar and the maximum price for sugar based on Article 1 (6) of Act No. 526 / 1990 Coll., on prices, to address an exceptional market situation,
- the openness of the whole system for other sugar producers on the basis of their application for a specific individual quota,
- self-financing of export aid with the aid of individual producers' own financial reserve of CZK 1,950 per tonne of sugar produced,
- compensatory forms of State aid (provision of expert advice, research into the sugar market, provision of export options, assistance in ensuring the purchase of sugar).
Furthermore, the Ministry stated that the State only expressed support in this Regulation in maintaining the stability of the sugar and sugar sector, mainly by sugar growers and sugar producers. The Government's proposal for a regulation was submitted after several months of professional discussion, at a time corresponding to the start of agrotechnical periods for sugar beet. The failure to resolve the situation in the sugar commodity - diabetes could lead to overproduction and the collapse of the whole sugar market and the failure of the Czech Government to meet its commitments to the EU. The Government Regulation is another systemic step towards resolving the critical situation on the sugar market in the Czech Republic and follows on from the protective measures taken in August 1999 on imports of sugar into the Czech Republic (Government Regulation No. 212 / 1999 Coll., laying down protective measures on the import of sugar).
According to the Ministry, the organisation of the sugar market is a standard rule in the EU for more than 30 years. The regulation was followed by a collective interest in ensuring the stabilisation of sugar production and sugar production in the Czech Republic, without preference for natural or legal persons, as the quotation affected all existing sugar producers without exception. However, the regulation does not prohibit anyone from producing sugar.
In its reply to the Government's observations, the appellant stated that it continued to maintain the view that the Government had, in many ways, exceeded the limits of the provisions of § 2 (1) of Act No. 252 / 1997 Coll. In its view, the government could only adopt regulations on its own in the area of "creating conditions for price stabilization of the agricultural commodity market," but such conditions cannot be regarded as such as the designation of so-called strategic sugar producers. Granting such freedom to interpret what is meant by creating conditions for price stabilization would mean that everything in Article 2 of the Agriculture Act would be completely unnecessary. In the appellant's view, sugar production is not agriculture, since the law itself recognises the terms' agriculture 'and' food ', while Article 2 makes it clear that it is only aimed at promoting agriculture.
Furthermore, the appellant stated that the Government's statement did not fully imply how the Government motivated other producers (non-strategic) to reduce sugar production. Unlike the Government, the appellant is convinced that Paragraph 10 of the contested regulation has a penalty, in conjunction with Paragraph 11, because if someone produces even one kilo of sugar in excess of the quota allocated to him, then the State aid granted under paragraphs 6 to 8 of the Government's regulation is withdrawn as a penalty. The appellant also does not share the view expressed by the Government that obligations other than those laid down in the law are not laid down by the regulation in question. In this context, it pointed out the obligation to provide an extensive amount of information to the Ministry of Agriculture each month (Section 9) and the obligation to create and apply the financial reserve (Section 4). It further claimed that the government in fact admitted that the choice made favoured large producers who invested significant funds in their development. However, the appellant added that the information on which the government relied was quite insufficient, as, for example, no research of intentions and investments was carried out for the appellant. However, once the appellant had applied for a specific individual quota, it had to undergo a comic tour of the sugar factory, answer a significant number of questions to the Commission and provide evidence of the amount of data ordered by the Ministry of Agriculture, although the contested government regulation does not state anything about such a procedure.
Last but not least, the appellant added that, in the meantime, the declared milk quotation merely confirms the severity of the problem and points out the dangerous trend of restricting the right to do business freely.
At the oral hearing on 14 February 2001, the representative of the Government presented a procedural statement which was served on the Constitutional Court the day before the hearing. In particular, he argued that, formally, the constitutional complaint should have been rejected as inadmissible under § 75 (1) of Act No 182 / 1993 Coll., since the appellant did not use up the procedural means to protect its rights. The contested act of the Ministry of Agriculture is considered by the Government to be an administrative decision which could and should have been challenged by the breakdown provided for in Section 61 of the Administrative Code or, where appropriate, by an administrative action. If the appellant did not do so, the Judge-Rapporteur should have rejected the complaint. If he did not do so, such a decision should be made in plenary. As far as the matter is concerned, the representative of the Government stated that this was a fundamental decision. The Czech Republic has committed itself in the Association Agreement to creating a level playing field for all investors from the 15 countries and is therefore obliged to adapt to the commitments resulting from the so-called common agricultural policy. In EU countries, the commitments resulting from Article 39 of the Treaty on European Community are mainly covered by sugar and milk quotas. He therefore opposed the appellant's argument that quotas interfere with property rights and referred to the case law of the European Court of Human Rights on these issues. He also stated that the Government is convinced that Law No 252 / 1997 Coll. can be interpreted in a way that suggests that the Government acted within the limits of that law when issuing Decree No 51 / 2000 Coll..
At the hearing, the Minister of Agriculture stated that, at the time when the government decided by its regulation, it could only take into account the sugar factories that produced white sugar at that time and the reference to the allocation of quotas was taken into account for the last five years of their production. Similarly, EU countries have done so in the past. The appellant is one of the companies that wanted to enter the system only after its creation and therefore believes that the accepted system of sugar policy is fair. Should the Constitutional Court nevertheless decide to repeal the contested regulation, it would be desirable, from the point of view of market stability, to do so only with effect from 1 October 2001, since until then a new government regulation building on the new Act on the State Agricultural Intervention Fund will be prepared.
The appellant's representative responded to that additional statement by questioning the view that a letter from the Minister of Agriculture on two sentences, which does not have any formal formalities for an administrative act, could be regarded as an administrative decision which would first have to be challenged in the manner indicated by the Government. He stressed that the purpose of the proposal is not to combat quotas as such, but to ensure that access to the market for all producers is equal and under pre-specified conditions. However, where the Annex to the contested Regulation has identified 8 producers and their quotas, this part is not a normative act, but an individual act, since it is not intended for an indefinite number of entities and is therefore also unconstitutional in this regard. Only a very small part of the quota was left for unnamed entities and no conditions were laid down for its distribution. It therefore remained in full on the submitted proposal.
The Constitutional Court considered the proposal as follows:
As regards the additional claim raised that the constitutional complaint and, therefore, the proposal lodged with it had to be rejected on the grounds of inadmissibility, i.e. for non-use of the procedural means, the following should be mentioned.
In the finding published under No 243 / 1999 Coll., the Constitutional Court expressed the principle that any objection that the complainant did not use up all the procedural means provided by the law to protect his right cannot be accepted by the Constitutional Court if it is a complaint that is significantly beyond the complainant's own interests. There is no dispute that this is the case, which is also demonstrated by the parties' comments on the seriousness of the issue. It is therefore clear that the conditions of § 75 (2) (a) of Act No 182 / 1993 Coll. Therefore, the Constitutional Court merely notes that it does not share the view of the parties on the possibility of an appeal in administrative proceedings, or the possibility of an administrative action in the present case, without considering that it is necessary to further distribute and justify this opposition, since it is clear that the case would be entitled to act under that provision of the Constitutional Court Law, even in the event that the non-recovery of the procedural funds would actually take place.
As regards the matter itself, the Constitutional Court considered as follows:
First of all, he noted that the contested government regulation was derived and intended to implement § 2 (1) of Act No. 252 / 1997 Coll. This Act has the purpose of:
(a) creating conditions to ensure the ability of Czech agriculture to provide basic nutrition for the population, food safety and the necessary non-food raw materials;
(b) the creation of assumptions to promote the non-production functions of agriculture, which contribute to the protection of environmental compartments such as soil, water and air and to the maintenance of populated and cultural landscapes;
(c) establish an obligation of compensation for persons damaged by the approved management schemes resulting from statutory restrictions.
Paragraph 2 (1) provides that the State is to contribute to the creation of conditions for maintaining the production potential of agriculture through indirect aid, direct support for support programmes and the creation of conditions for price stabilization of the agricultural commodity market, in particular through warehouse vouchers, fixed-term shops, certification of public crop warehouses and the promotion of the functioning of commodity exchanges. The following paragraph 2 provides that support programmes and indirect support are approved by the Chamber of Deputies at the same time as the State Budget Act.
According to Article 2 (3), the State supports support programmes and non-production functions for agriculture, consisting of the protection of environmental components such as soil, water, air and the activities involved in maintaining the landscape. According to paragraph 4, the State creates conditions to promote less favourable areas and accepts aid programmes. Paragraph 5 provides that support programmes to support the said measures and the criteria for their assessment shall be laid down by a regulation.
Government Decree No 51 / 2000 Coll. in § 1 states that the purpose of this regulation is to adjust the state's share of the state's share in the creation of conditions for ensuring and maintaining the production of sugar and sugar and stabilising the sugar market in the Czech Republic. Of the other provisions, Section 10, which provides that sugar produced in excess of an individual or special individual quota may not be marketed in the Czech Republic or in countries where imports of sugar from the Czech Republic are not allowed or is limited by an international treaty binding the Czech Republic. Annex 1 to this Regulation provides indirectly for individual quotas for "strategic sugar producers' (a total of 8 companies).
The Constitutional Court found that it had no reason to deviate from its relevant case-law when examining the application.
First of all, it is the finding of Pl. ÚS 17 / 95, published under No 271 / 1995 Coll., in which he stated that, pursuant to Article 78 of the Treaty, The government is entitled to issue regulations for the implementation of the law and within its limits, so it does not need an express delegation in the relevant law, but the regulation cannot deviate from the legal limits - so it cannot be a praeter legem. In other words, they must remain within the limits of the law, which is either expressly defined or resulting from the meaning and purpose of the law. Furthermore, the Constitutional Court stated that, in general, it could be said that it never has the full discretion of an executive because it is always limited by the Constitution, international treaties and general legal principles.
In the finding Pl. ÚS 32 / 95 published under No 112 / 1996 Coll. The Constitutional Court stated that the rights referred to in Title Four of the Charter entitled "Economic, Social and Cultural Rights' are expressly specified by the relevant law and can be invoked within its limits. The Constitutional Court has yet to state that these rights do not function directly (unlike those directly from human beings such as the right to life, the integrity of a person, personal freedoms, etc.), but require other factors to work together to implement them. These rights, which are stated in a finding, may be invoked in accordance with Article 41 (1) of the Charter only within the limits of the laws implementing those provisions. According to the same principles, the Constitutional Court decided in the Pl. ÚS 35 / 95, published under No 206 / 1996 Coll., that the obligations of the legal definition of the content, scope and method of granting the fundamental right (in this case the right to free health care) could not be waived by the legislator by the authority responsible for issuing standards of lower legal force than the law which would determine, instead of the law, the limits of those fundamental rights or freedoms.
From a constitutional point of view, legislative authorities are entitled and obliged to issue legislation in the form intended for them. The form prescribed by the Government is in accordance with Article 78 of the Constitution of the Regulation. Under this provision, the Government may issue regulations for the implementation of the law and within its limits. The existence of a law is sufficient, but there must be room for legislative action by the government. This does not change the fact that, in some cases, the legislator expressly authorises the government to issue a regulation. The government must then move "secundum et intra legem," not "praeter legem." Simply put, if X is to be the law, it is for the government to determine that it should be X1, X2, X3... not that it should be Y.
From a theoretical point of view, a regulation is required to be general and therefore to affect an indefinite group of addressees, as the Constitution empowers legislation, not an individual administrative act. The limits of things reserved for regulation are protected from executive excesses of power only (so-called law reservation).
It can therefore be summarised that the constitutional definition of the derived standard of execution is based on the following principles:
- the regulation must be issued by an authorised body,
- the regulation cannot interfere in matters reserved for the law (it cannot therefore lay down primary rights and obligations),
- the legislator's will to regulate above the legal standard must be evident (therefore the scope for the scope of the regulation must be opened).
Article 26 (1) The Charter is guaranteed to each person the right to engage in other economic activities, provided that paragraph 2 provides that the law may lay down conditions and restrictions for the pursuit of certain professions or activities. It is therefore clear that this is a fundamental right which, although not directly operating within the meaning of the above findings, can only be invoked within the limits of the law, on the other hand, there is a rule of law for any limits to such business or activity.
There is no dispute that the regulation in question contains a number of provisions which interfere in the field of free enterprise. If the Government derives its authority to do so under Act No. 252 / 1997 Coll., in particular the contested regulation provides as an implementing provision for Paragraph 2 (1) of that Act, however much the Constitutional Court respects the principle of a more open relationship between the law and the regulation, when it considers that it is a priority of the constitutionality of the regulation to comply with the meaning and purpose of the law as a whole, it is bound to state that the grammatical, systematic or logical interpretation, even if the extent of an extensive approach, does not suggest that it would be possible to deduct from that provision of the regulation of production which follows agriculture or restrict the application of manufactured goods on a particular market.
If the Constitutional Court, in a finding published under No 206 / 1996 Coll., has stated that the legislator cannot delegate the scope of the regulation of the relations provided for by the law to the power of executive power and thus, in fact, resign from its legislative obligation, all the more so, the executive authority cannot entrust the right to such regulation itself to the law, which clearly has a different purpose and purpose. The Agriculture Act is clearly heading into the area of so-called primary production and, if it empowers the government to issue regulations, it is clear that it is an adjustment aimed at other areas. If the legislature wanted to empower an executive to regulate business by means of production quotas, it would undoubtedly do so explicitly, as it did in the provisions of § 2 (5), § 3 (3) and (4), respectively, and § 5 (3).
It can be summarised that the contested government regulation infringes the reservation of law provided for in Article 26 (1) of the Charter and limits free enterprise by means of a regulation in a way which neither presupposes nor provides for a framework regulation. In other words, if the Constitutional Court has opted for the repeal of the statutory rules on the ground that the limits established by the legislator for the legislative activity of the executive are vague, all the more so must be done in an area where the legislative initiative of the government does not foresee the law at all. This exces constitutes sufficient grounds for the annulment of the contested legislation without further consideration being given to other objections and arguments put forward by the appellant and the party.
The Constitutional Court is aware, of course, that, in the meantime, Act No. 256 / 2000 Coll., on the State Agricultural Intervention Fund and on the amendment of certain other laws (the Law on the State Agricultural Intervention Fund), which regulates, inter alia, the so-called production quotas, and empowers the Government, in Article 12 (3), to issue a regulation laying down these quotas and their conditions. However, this can not change the fact that the Decree of Government No. 51 / 2000 Coll. was issued outside the limits of the law when, in the original Act No. 472 / 1992 Coll., on the State Fund for Market Regulation in Agriculture (repealed by Act No. 256 / 2000 Coll.), there was no support for establishing production quotas.
For all these reasons, the plenary of the Constitutional Court decided to repeal Decree No 51 / 2000 Coll. for its contradiction with Article 4 (1) and (2) and Article 26 (1) and (2) of the Charter, as well as with Article 2 (4). The Constitution on the day of the declaration of the finding in the Collection of Laws, when it found no grounds to postpone the enforceability of its decision.
President of the Constitutional Court:
JUDr. Kessler v. r.
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Regulation Information
| Citation | The Constitutional Court found No 96 / 2001 Coll., on the application for annulment of Government Decree No 51 / 2000 Coll., laying down the measures and share of the State in creating the conditions for ensuring and maintaining the production of sugar and sugar and stabilising the sugar market |
|---|---|
| Regulation Type | The Constitutional Tribunal found |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 12.03.2001 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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