Summary
Parties
Grounds
Decision on costs
Operative part
Keywords
1 Approximation of laws - Procedures for concluding public service contracts - Directive 92/50 - Contracting authorities - Body governed by public law - Needs in the general interest, not having an industrial or commercial character - Meaning - Existence of private undertakings capable of satisfying such needs - Not relevant
(Council Directive 92/50, Art. 1(b), second subpara.)
2 Approximation of laws - Procedures for concluding public service contracts - Directive 92/50 - Exception provided for by Article 6 of the directive - Condition - Observance of Treaty provisions
(EC Treaty, Art. 85 et seq.; Council Directive 92/50, Art. 6)
3 Approximation of laws - Procedures for concluding public service contracts - Directive 92/50 - Contracting authorities - Body governed by public law - Status not dependent on the relative importance of activities designed to satisfy needs in the general interest and of the way they are carried out
(Council Directive 92/50, Art. 1(b), second subpara.)
4 Approximation of laws - Procedures for concluding public service contracts - Directive 92/50 - Contracting authorities - Body governed by public law - Needs in the general interest, not having an industrial or commercial character - Legal form of provisions defining such needs - Not relevant
(Council Directive 92/50, Art. 1(b), second subpara.)
Summary
5 The second subparagraph of Article 1(b) of Directive 92/50 relating to the coordination of procedures for the award of public service contracts, which provides that `[b]ody governed by public law means any body ... established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character', must be interpreted as meaning that the Community legislature drew a distinction between needs in the general interest not having an industrial or commercial character and needs in the general interest having an industrial or commercial character.
The term `needs in the general interest not having an industrial or commercial character' does not exclude needs which are or can be satisfied by private undertakings as well. The fact that there is competition is not sufficient to exclude the possibility that a body financed or controlled by the State, territorial authorities or other bodies governed by public law may choose to be guided by other than economic considerations.
However, the existence of competition is not entirely irrelevant to the question whether a need in the general interest is other than industrial or commercial. The latter needs are as a general rule met otherwise than by the availability of goods or services in the marketplace. In general, needs of that kind are those for which, for reasons associated with the general interest, the State itself chooses to provide or over which it wishes to retain a decisive influence.
The removal and treatment of household refuse may be regarded as constituting a need in the general interest. Since the degree of satisfaction of that need considered necessary for reasons of public health and environmental protection cannot be achieved by using disposal services wholly or partly available to private individuals from private economic operators, that activity is one of those which the State may require to be carried out by public authorities or over which it wishes to retain a decisive influence.
6 Recourse to Article 6 of Directive 92/50 relating to the coordination of procedures for the award of public service contracts, which provides that `[t]his directive shall not apply to public service contracts awarded to an entity which is itself a contracting authority within the meaning of Article 1(b)', is subject to the condition that the laws, regulations or administrative provisions on which the exclusive right of a body governed by public law is based must be compatible with the Treaty. The protection of competitors of bodies governed by public law is thus assured by Article 85 et seq. of the Treaty.
7 The status of a body governed by public law referred to in the second subparagraph of Article 1(b) of Directive 92/50 relating to the coordination of public service contracts is not dependent on the relative importance, within its business as a whole, of the meeting of needs in the general interest not having an industrial or commercial character. It is likewise immaterial that commercial activities may be carried out by a separate legal person forming part of the same group or concern as it.
8 The second subparagraph of Article 1(b) of Directive 92/50 relating to coordination of public service contracts must be interpreted as meaning that the existence or absence of needs in the general interest not having an industrial or commercial character must be appraised objectively, the legal forms of the provisions in which those needs are mentioned being immaterial in that respect.
Parties
In Case C-360/96,
REFERENCE to the Court under Article 177 of the EC Treaty by the Gerechtshof te Arnhem (Netherlands) for a preliminary ruling in the proceedings pending before that court between
Gemeente Arnhem,
Gemeente Rheden
and
BFI Holding BV,
on the interpretation of Articles 1(b) and 6 of Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1),
THE COURT,
composed of: G.C. Rodríguez Iglesias, President, P.J.G. Kapteyn, J.-P. Puissochet and P. Jann (Rapporteur) (Presidents of Chambers), G.F. Mancini, J.C. Moitinho de Almeida, D.A.O. Edward, L. Sevón, M. Wathelet, R. Schintgen and K.M. Ioannou, Judges,
Advocate General: A. La Pergola,
Registrar: D. Louterman-Hubeau, Principal Administrator,
after considering the written observations submitted on behalf of:
- Gemeente Arnhem and Gemeente Rheden, by L.H. van Lennep, of the Hague Bar,
- BFI Holding BV, by P. Glazener, of the Amsterdam Bar, and J.J.M. Essers, of the Utrecht Bar,
- the Netherlands Government, by A. Bos, Legal Adviser, Ministry of Foreign Affairs, acting as Agent,
- the Danish Government, by P. Biering, Head of Directorate, Ministry of Foreign Affairs, acting as Agent,
- the French Government, by Catherine de Salins, Head of Sub-directorate in the Legal Directorate, Ministry of Foreign Affairs, and P. Lalliot, Secretary for Foreign Affairs, in the same Directorate, acting as Agents,
- the Austrian Government, by Wolf Okresek, Ministerialrat in the Federal Chancellor's Office, acting as Agent,
- the Commission of the European Communities, by Hendrik van Lier, Legal Adviser, acting as Agent,
having regard to the Report for the Hearing,
having regard to the written answers given to the questions put by the Court:
- for Gemeente Arnhem and Gemeente Rheden, by L.H. van Lennep,
- for BFI Holding BV, by P. Glazener,
- for the Netherlands Government, by J.G. Lammers, Deputy Legal Adviser in the Ministry of Foreign Affairs, acting as Agent,
- for the Danish Government, by J. Molde, Legal Adviser and Head of Directorate, Ministry of Foreign Affairs, acting as Agent,
- for the German Government, by E. Röder, Ministerialrat in the Federal Ministry of Economic Affairs, acting as Agent,
- for the Spanish Government, by S. Ortiz Vaamonde, Abogado del Estado, acting as Agent,
- for the French Government, by K. Rispal-Bellanger, Head of Sub-directorate (International Economic Law and Community Law), in the Legal Directorate, Ministry of Foreign Affairs, acting as Agent, and P. Lalliot,
- for the Austrian Government, by W. Okresek,
- for the Finnish Government, by H. Rotkirch, Ambassador, Head of Legal Affairs in the Ministry of Foreign Affairs, acting as Agent,
- for the Swedish Government, by L. Nordling, Rättschef in the Ministry of Foreign Affairs, acting as Agent, and
- for the United Kingdom Government, by J.E. Collins, of the Treasury Solicitor's Department, acting as Agent, and K.P.E. Lasok QC and R. Williams, Barrister,
- for the Commission, by H. van Lier,
after hearing the oral observations of Gemeente Arnhem and Gemeente Rheden, represented by L.H. van Lennep; of BFI Holding BV, represented by P. Glazener and J.J.M. Essers; of the Netherlands Government, represented by J.S. van den Oosterkamp, Deputy Legal Adviser, Ministry of Foreign Affairs, acting as Agent; of the French Government, represented by P. Lalliot; of the Austrian Government, represented by M. Fruhmann, of the Federal Chancellor's Office, acting as Agent; of the United Kingdom Government, represented by J.E. Collins, K.P.E. Lasok QC and R. Williams; and of the Commission, represented by H. van Lier, at the hearing on 18 November 1997,
after hearing the Opinion of the Advocate General at the sitting on 19 February 1998,
gives the following
Judgment
Grounds
1 By judgment of 29 October 1996, received at the Court Registry on 5 November 1996, the Gerechtshof (Regional Court of Appeal), Arnhem, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty seven questions on the interpretation of Articles 1(b) and 6 of Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1).
2 Those questions were raised in proceedings brought by Gemeente Arnhem and Gemeente Rheden (Municipalities of Arnhem and Rheden, hereinafter `the municipalities') against BFI Holding BV (hereinafter `BFI'), which claims that the award of a contract for refuse collection should be subject to the procedure laid down in the abovementioned directive.
The applicable Community legislation
3 Article 1 of Directive 92/50 provides:
`For the purposes of this Directive:
...
(b) contracting authorities shall mean the State, regional or local authorities, bodies governed by public law, associations formed by one or more of such authorities or bodies governed by public law.
Body governed by public law means any body:
- established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, and
- having legal personality and
- financed, for the most part, by the State, or regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities or by other bodies governed by public law.
The lists of bodies or of categories of such bodies governed by public law which fulfil the criteria referred to in the second subparagraph of this point are set out in Annex I to Directive 71/305/EEC. These lists shall be as exhaustive as possible and may be reviewed in accordance with the procedure laid down in Article 30b of that Directive;
...'
4 Article 6 of Directive 92/50 provides:
`This Directive shall not apply to public service contracts awarded to an entity which is itself a contracting authority within the meaning of Article 1(b) on the basis of an exclusive right which it enjoys pursuant to a published law, regulation or administrative provision which is compatible with the Treaty.'
The Netherlands provisions
5 Directive 92/50 was transposed into Netherlands law by a framework law of 31 March 1993 (Stbl. 12) relating to the Community rules for the award of public contracts for the supply of goods, the execution of works and the supply of services, combined with Article 13 of the order of 4 June 1993 (Stbl. 305), as amended by the order of 30 May 1994 (Stbl. 379).
6 Articles 10.10 and 10.11 of the Wet Milieubeheer (Law on the Environment) require municipalities to ensure that, at least weekly, household refuse is collected from all properties in their districts where waste may regularly accumulate. The municipalities must designate an authority to undertake responsibility for such collection.
7 Under Article 2 of the Afvalstoffenverordening (Regulation on Waste) of Gemeente Rheden, as amended on 21 December 1993, the collecting authority is the Dienst Openbare Werken en Woningzaken, Afdeling Wegen en Reiniging, or such independent service as may replace it. Article 2 of the Regulation on Waste of Gemeente Arnhem, as amended on 4 July 1994, designates as the collecting authority the Dienst Milieu en Openbare Werken. It also states that `[a]s from 1 July 1994, that service shall be provided by the company ARA, an independent municipal cleaning service'.
The dispute in the main proceedings
8 In 1993 the municipalities planned merging the municipal refuse collection services and entrusting them to a new legal entity. By decisions of 6 and 28 June 1994 the Municipalities of Arnhem and Rheden decided to establish ARA, a public limited company, and to entrust to it a series of tasks defined by law in the field of waste collection and, in the case of Gemeente Arnhem, cleaning of the municipal road network.
9 ARA was incorporated on 1 July 1994. Article 2 of its statutes provides:
`1. The objects of the company shall be:
(a) the performance of all economic operations aimed at collecting (or having collected and, so far as possible, recycling or having recycled), in an efficient, effective and environmentally responsible manner, waste such as household refuse, industrial waste and separable parts thereof to be specified, together with activities relating to the cleaning of highways, the elimination of vermin and disinfection;
(b) the (joint) setting up, cooperation with, participation in, the (joint) provision of management and supervision for, as well as the taking over and financing of, other undertakings whose activities have any connection with the objects set out under (a);
(c) the performance of all economic operations which are connected with the foregoing or may be conducive to the operations, activities and action defined above (provided that needs in the general interest are thereby met).
2. The company shall carry out such activities in a socially acceptable manner.'
10 Under Article 6 of its statutes, the shareholders of ARA may only be legal persons governed by public law or companies at least 90% of whose shares are held by such entities and, in addition, the company itself. Under Article 13(2) of the statutes, the municipalities are to appoint at least five of the minimum seven and maximum nine of the members of the supervisory board.
11 The framework agreements which the municipalities concluded with ARA specify, in particular in their preambles, that the municipalities wish to have the tasks in question carried out exclusively by ARA, and accordingly they grant it concessions for that purpose.
12 As far as ARA's remuneration is concerned, Article 8 of the framework agreement between Gemeente Rheden and ARA provides, in particular:
`8.1 Rheden shall pay ARA remuneration for services rendered, at a rate to be specified.
8.2 The remuneration for services referred to in the preceding paragraph shall be defined in a financial clause to be added to the specifications and quality standards for each operation contained in the partial contracts.
8.3 The actual remuneration for services rendered will be fixed:
(a) either on the basis of the unit prices agreed beforehand for each
