The constitutionality of a fine for a very serious environmental administrative offence – holding legal persons to account
Entitlement to rights
Accountability of legal persons
Environmental administrative offences
RULING No. 110/12
6 of March of 2012
It is not possible to infer from the constitutional principle that legal persons enjoy the rights and are subject to the duties which are compatible with their nature, that there is a principle that natural personality and legal personality are equivalent, or a presumption that there should be equality between the two personalities. The ordinary legislator can legitimately require that legal persons be treated differently from natural persons who possess an individual personality, on the basis that each of these two types of entity possesses a specific nature and characteristics that differentiate it from the other. This fundamental distinction is the reason why, in the law governing sanctions, and especially in the domain of the law governing mere social administrative offences, there has been a progressive increase in the accountability of legal persons – an increase that has been characterised among other things by laying down higher fines than those imposed on natural persons for the same type of infraction. It was with this in mind that the General Regime governing Administrative Offences established higher upper and lower limits for the fines applicable to legal persons, compared to those for natural persons. The norm which requires this differentiation between the limits on the environmental fines applicable to the two types of person forms part of both the logic behind the system and the legislative tradition with regard to the punishment of administrative offences. This differentiation is justified by the absence of any factual equality between the agents responsible for unlawful administrative offences when those agents are legal persons on the one hand or natural persons on the other. From the perspective of the general desire to prevent unlawful forms of behaviour, it is also explained by the need to avoid the dilution of individual liability when an infraction can be imputed to an entity with a collective personality.
The Inspectorate-General of the Environment and Territorial Administration (IGAAT) imposed a fine on the accused, which was a legal person and appealed against this decision. The fine was determined in accordance with the norms contained in the Framework Law governing Environmental Administrative Offences. The Court of Appeal refused to apply the norm that had served as the basis for the imposition of the fine, on the grounds that it was unconstitutional because it violated the principle of proportionality. As such, the Public Prosecutors’ Office brought the present mandatory appeal against the latter decision before the Constitutional Court.
The Framework Law governing Environmental Administrative Offences classifies such offences as minor, serious, or very serious, and places a given offence within each classification depending on whether the offender is a natural or a legal person, and on the degree of culpability. The fine and any accessory sanctions are determined in accordance with the severity of the administrative offence, the agent’s culpability, his/its economic situation and any benefits he/it obtained by undertaking the fact; the agent’s prior and subsequent conduct, the demands imposed by the need to prevent future occurrences and any other circumstances that are pertinent to the commission of the unlawful act can also be taken into account.
In the concrete case before the Court, as a legal person, the accused was the object of a single fine of €40,000 for a number of different acts: the operation of a facility without an environmental licence, and the use of water resources without the respective permit – facts which the law classifies as very serious administrative offences; and the implementation of a project without a prior environmental impact procedure, and failure to separate the resulting waste at source – facts which are punished autonomously.
The amount of the fine was based on the minimum possible for the first of the administrative offences attributed to the accused (€38,500), and partial fines of €2,500 and €1,500 for the third and fourth offences, while the administrative authority limited itself to issuing a warning with regard to the second infraction. These penalties were combined into a single fine of €40,000.
In its jurisprudence the Constitutional Court has repeatedly said that the legislator possesses a broad margin within which to decide the legal amount of fines, and that the Court should only criticise legislative solutions which permit sanctions that are unnecessary, inappropriate or clearly and manifestly excessive. Otherwise the Court would thereby be unduly encroaching on the sphere of a legislator that must enjoy a reasonable freedom to shape legislation. The administrative-offence-law requirement of necessity is not as demanding as that applicable to criminal penalties, where necessity is a conditio iuris sine qua non of a penalty’s legitimacy within the frameworks of a democratic social state based on the rule of law.
The fact is that the sanctions applicable to an unlawful act that constitutes a mere social administrative offence do not possess the same degree of ethical reproof as criminal penalties. What is more, when the punishment of such an act is determined, reasons of pure utility and social strategy are particularly important factors.
In the law governing mere social administrative offences, the freedom which the legislator must be recognised to enjoy when it defines limits only ends in cases of manifest, flagrant disproportionality.
The Court was of the view that it was not its place to gauge the proportionality of the amount of the fine, with any comparison to that end based on the amount of pecuniary criminal penalties. It took this position both because one must remember that the differences between criminal unlawfulness and the unlawfulness involved in mere social administrative offences preclude any simple transposition of the constitutional principles applicable to the definition of criminal penalties onto the sanctions for such administrative offences; and because there are substantial reasons which require a distinction between crimes and administrative offences – one of the main ones being the nature of the unlawfulness and of the sanction. One of the fundamental criteria for determining the amount of the fine is the loss of economic benefits which results from the unlawful act and which is designed to prevent the offender from having any incentive to repeat the unlawful conduct. As such, the purpose of this decision is one of special negative prevention.
There is nothing that would warrant gauging the just amount of these fines by the criteria that apply in the criminal domain. Inasmuch as the present case involved very serious environmental administrative offences, which are classified as such due to the special importance of the rights and interests that are violated, the fact that the norm before the Court set a minimum limit of €38,500 for the fine applicable to infractions committed by legal persons cannot be considered manifestly disproportionate; rather, it would appear to possess the dissuasive effect needed to avoid repetition of the unlawful conduct and to prevent the violated norm from being deprived of its legal efficacy.
In Ruling no. 557/11 the Constitutional Court had already decided not to hold another norm contained in the same legislative act as that before it in the present case – the legislative act governing the fines applicable to very serious environmental administrative offences – unconstitutional. The norm addressed in Ruling no. 557/11 was applicable to natural persons, and therefore laid down fines whose amounts were different to those applicable to legal persons.
See Rulings nos. 62/11 (02-02-2011), 67/11 (02-02-2011), 132/11 (03-03-2011), 360/2011 (12-07-2011), and 557/11 (16-11-2011).