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On the grounds for revoking the validity of a licence for organising waste management

The ruling of the Constitutional Court of the Republic of Lithuania of 30 May 2017

ON THE GROUNDS FOR REVOKING THE VALIDITY OF A LICENCE FOR ORGANISING WASTE MANAGEMENT

Summary

By this ruling, having considered the case subsequent to the petition of a group of members of the Seimas, the Constitutional Court declared constitutional Item 6 of Paragraph 19 of Article 3423 (wording of 22 December 2011) of the Law on Waste Management, insofar as it provides for one of the grounds for revoking the validity of a licence for organising waste management. Under the said item of the Law on Waste Management, the validity of a licence for organising the management of product and/or packaging waste is revoked where the licence holder has been warned of the possible suspension of the validity of the licence three times in the last two years.

According to the petitioner, the activity of a licence holder under this legal regulation may be limited more than necessary in order to secure the public interest: even where a violation for which a warning was issued is eliminated within the time limit specified, the warning is withdrawn, and the activity of the licence holder meets the applicable requirements, the validity of the licence must, nevertheless, be revoked upon the receipt of three warnings in the last two years. Moreover, the provision in question may be imposed for any violations identified in relation to the licensed activity (even for those that have no impact on public health or security or on the public interest). Therefore, the petitioner argued that the established measure was disproportionate to the violations of law; in the opinion of the petitioner, there was no fair balance (proportionality) between the measure in question and the pursued objective to penalise the violators of law (licence holders) and ensure the prevention of violations.

The Constitutional Court noted that, in regulating the economic activity of organising waste management, to ensure which is in the public interest under the Constitution, the state must balance different constitutional values, including those protected under Articles 46, 53, and 54 of the Constitution: freedom of individual economic activity and economic initiative; freedom of fair competition; and the protection of human health and the environment from harmful effects; the state must also ensure that the constitutional imperative to regulate economic activity so that it serves the general welfare of the nation is observed. Taking account of this, the legislature is obliged to lay down such conditions for the activity of organising waste management and such effective control measures (among them, the licensing of this activity) that would prevent damage caused by inappropriately managed waste to the environment and human health.

Thus, under the Constitution, in regulating the licensed economic activity in the area of organising waste management, the legislature must establish not only the necessary requirements that must be complied with by economic operators that seek to obtain licences to engage in the said activity, but also the requirements that must be followed by persons who hold such licences, as well as the grounds and procedure for revoking the validity of issued licences. The freedom of economic activity of an operator that has violated the rules of the licensed economic activity not only may but, as a rule, must be limited with due regard being given to the principle of proportionality (stemming from the constitutional principle of a state under the rule of law), according to which freedom of economic activity may not be limited more than necessary in order to achieve the constitutionally significant objectives of protecting human health and the environment; as such, these limitations may not deny freedom of economic activity, guaranteed under Paragraph 1 of Article 46 of the Constitution, or the support by the state for economic efforts and initiative that are useful to society, ensured under Paragraph 2 of the same article. One of such measures applied to limit the economic activity of organising waste management may be the revocation of the validity of the licence for those operators that grossly and/or repeatedly (systematically) violate the conditions established for this activity under the laws.

As noted in the ruling, the impugned legal regulation, under which the validity of a licence is revoked after a warning of the possible suspension of the validity of the licence has been issued for the third time in the last two years, should be regarded as an effective measure aimed to prevent the possible damage by inappropriately managed waste to the environment and human health; this measure is applied to those economic operators who have repeatedly (systematically) (three times in the last two years) violated the conditions of the activity of organising waste management as established by laws and, as a result, have been issued warnings of the possible suspension of the validity of their licence. Having established this legal regulation, the legislature implemented its duty, stemming from Paragraph 3 of Article 46, Paragraphs 1 and 3 of Article 53, and Article 54 of the Constitution, while establishing the conditions and effective control measures applicable to the economic activity of organising waste management, to regulate this economic activity so that it serves the general welfare of the nation and creates the conditions for protecting human health and the environment from the possible harmful effects.

The Constitutional Court emphasised that, under the impugned legal regulation, the validity of a licence may be revoked only in those cases where the preceding two warnings are legitimate and reasonable, i.e. they have not been annulled by a court decision. Only if the impugned and related legal regulation is interpreted in this way (i.e. if a warning of the possible suspension of the validity of a licence is understood as an independent measure, which may be appealed against in a court and must not be imposed for minor infringements), can the impugned provision be considered not in conflict with the principle of proportionality, which stems from the constitutional principle of a state under the rule of law, i.e. not limiting the freedom of economic activity of economic operators more than necessary in order to achieve the constitutionally significant objectives of protecting human health and the environment and, thus, not denying freedom of economic activity, guaranteed under Paragraph 1 of Article 46 of the Constitution, or the support by the state for economic efforts and initiative that are useful to society, as ensured under Paragraph 2 of the same article.

In view of this, the impugned provision was ruled not in conflict with Paragraphs 1, 2, and 3 of Article 46 of the Constitution and the constitutional principle of a state under the rule of law.

The Constitutional Court also drew attention to the fact that the interpretation of the provisions of the Law on Waste Management and the Law on Public Administration in relation to warnings of the possible suspension of the validity of a licence, including the right to file a complaint against such a warning with a court, in this ruling differs from the one developed in the case-law of the Supreme Administrative Court of Lithuania. At the same time, it was noted that the impugned provision of the Law on Waste Management is not clear and may lead to ambiguity in interpretation; therefore, it should be modified to lay down clear grounds for revoking the validity of a licence.