AS TO THE ADMISSIBILITY OF
Application No. 12602/86
by Styrelsen for Jyllands-Postens Fond
against Denmark
The European Commission of Human Rights sitting in private
on 9 December 1988, the following members being present:
MM. S. TRECHSEL, Acting President
C. A. NØRGAARD
E. BUSUTTIL
A. S. GÖZÜBÜYÜK
A. WEITZEL
J.-C. SOYER
H. G. SCHERMERS
H. DANELIUS
J. CAMPINOS
H. VANDENBERGHE
Mrs. G. H. THUNE
MM. F. MARTINEZ
C. L. ROZAKIS
Mrs. J. LIDDY
Mr. H.C. KRÜGER Secretary to the Commission
Having regard to Article 25 of the Convention for the
Protection of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 7 October 1986
by Styrelsen for Jyllands-Postens Fond against Denmark and registered
on 20 November 1986 under file No. 12602/86;
Having regard to the report provided for in Rule 40 of the
Rules of Procedure of the Commission;
Having deliberated;
Decides as follows:
THE FACTS
The facts of the case, as submitted by the applicant, may be
summarised as follows:
The applicant is Styrelsen for Jyllands-Postens Fond (the
Board of Trustees of the Jyllands-Posten Trust). It is domiciled at
Viby, Denmark. Before the Commission the applicant is represented by
the chairman of the trust, Mr. Gunnar Henriksen.
Jyllands-Posten, a daily newspaper, was founded in 1871 as a
privately owned firm and was later converted into a limited liability
company (Jyllands-Posten A/S). About 1970, a group with a 50 %
shareholding went bankrupt, and at the instigation of the newspaper's
responsible editor and its managing director at that time, it was
decided to let the ownership of the newspaper pass to a trust
(Jyllands-Postens Fond). The trust was established in 1971. All the
shareholders then agreed to sell their shares to the trust, which thus
became the owner of the entire share capital. Jyllands-Posten is now a
proprietary (selvejende) institution.
In the years following the establishment of the Jyllands-
Posten Trust, its statutes were subjected to minor editorial
alterations, but its object remained the same. This also applied to
the provision concerning the fact that the trust is subject to
co-optation (selvstyrende). In 1984 the statutes read as follows:
The object of the trust is to "support the publishing of
Morgenavisen Jyllands-Posten as a liberal newspaper, independent of
private, commercial, organisational and affiliated political interests
by holding shares in Jyllands-Posten A/S. This support to
Jyllands-Posten A/S shall consist in part of the trust trying to
create the best qualified board of directors for the company through
its influence on the election of members to the board of directors of
Jyllands-Posten A/S, in order to secure to the company skilled,
responsible, business-like, technical and editorial managers, who are
independent of other interests, in part of the trust, through its
shareholding and capital, exercising a stabilising influence on the
company's capital matters and financial continuity for the promotion
of a healthy and active development of the company" (Article 1 para. 1).
In view of the commitments under paragraph 1 the object is
further to "grant support for dealing with social, cultural or other
social issues in relation to maintaining a liberal democratic society
in Denmark. Such support from the trust shall principally be granted
in areas where the public authorities have no possibility to grant
support to the extent necessary" (Article 1 para. 2).
Under Article 7 of the 1984 statutes, the trust is managed by
a board of trustees composed of 10 members. One member is appointed
by Kjøbenhavns Handelsbank and Den danske Provinsbank. This member
must be independent of Jyllands-Posten A/S and its management as well
as of the two banks. The remaining 9 members are elected by the board
of trustees itself. Until 1984 there was no Danish legislation dealing
specifically with trusts and in the period from 1871 to 1984 the
statutes of the trust did not violate any statutory provisions.
While the trust did not come under special legislation upon
its establishment and for many years thereafter, the legal position was
different for Jyllands-Posten A/S. This company has constantly been
subject to the company law provisions and has complied with their
requirements regarding capital, management, annual accounts, etc. The
composition of board and management and their duties are governed by
the provisions of the Companies Act (aktieselskabsloven).
The relations between the trust and the company can be briefly
summarised as follows: Jyllands-Posten A/S is a business enterprise
whose objective is to publish Morgenavisen Jyllands-Posten as an
independent, liberal daily newspaper and to deal with related
activities, including printing, publishing, television and other
communications activities. The company's share capital amounts to 17
million Danish crowns and the trust owns all shares. The shares are
registered in the name of the trust, and they cannot be sold or in any
other way disposed of. In the event of any increase of capital, the
trust shall subscribe for the new capital. At the general meetings,
the members of the trust's board of trustees exercise all powers
conferred upon shareholders in a limited liability company, and they
are also subject to the same commitments as shareholders.
The board of directors of Jyllands-Posten A/S is composed
of 9 members, 6 of whom are elected by the company from among or
outside the group of shareholders. Three members of the board of
directors are elected by the company's employees for a term of four
years at a time, pursuant to Section 49 of the Companies Act.
Over the years a number of major business enterprises were
converted into trusts, one of the reasons being the special taxation
rules applying to trusts. This conversion was made either by the
business enterprise in question being transferred to a trust or -
where the business enterprise was operated in the form of a limited
liability company - by transferring a controlling shareholding to a
trust. Prior to 1985 Danish law did not, as mentioned above, contain
general provisions concerning foundations, charitable trusts or other
proprietary institutions. Common law was the legal basis for these
institutions. Irrespective of size and objectives, it was possible to
freely establish trusts, and they were not required to seek approval
of their statutes by a public authority, thus subjecting them to
public supervision.
As a result of this business trusts obtained major economic
importance and moved into business sectors where limited liability
companies previously dominated.
This development paved the way for the opinion that business
trusts should be subject to the same provisions as limited liability
companies carrying on business, and eventually for the Act on Business
Trusts (loven om erhvervsdrivende fonde). The Act is widely identical
to the Companies Act. Thus, the Act regulates registration, the size
of capital, the trust management, the annual accounts and auditing as
well as the competence of the authority supervising trusts.
The Act on Business Trusts was published in the official
Law Gazette (lovtidende) on 6 June 1984 as Act No. 286. According to
Section 65 of the Act it entered into force on 1 January 1985. Under
Section 1 of the Act, a trust is considered to be a business trust if
it carries on business activities by itself, or if the trust owns such
a large shareholding in a company that the trust represents the
majority of the votes in the company or otherwise has a "controlling
influence" on the company. With respect to the management of a trust,
Section 22 of the Act specifies:
"The provisions in the Companies Act and regulations
introduced in pursuance thereof regarding the election of
board members by employees shall apply, mutatis mutandis,
to a trust carrying on business and its subsidiaries. The
board members elected by employees take part exclusively
in matters which do not concern the business activities
where the statutes or charter so determine."
The reference to the provisions in the Companies Act on the
election of board members by employees means in brief: If the
management of a trust (the board of trustees) has so far elected 6, 8
or 10 members, employees are now entitled to elect 3, 4 or 5 members,
respectively. These members, thus constituting half the number of
members appointed, are elected by the employees' own organisations.
Boards of trustees, which have so far had 6, 8 or 10 members pursuant
to their own statutes, will now have 9, 12 or 15 members,
respectively, following election by the employees as provided for in
the new Act.
According to Section 1 sub-section 5 of the Act the competent
authority may decide, with the consent of the Minister of Industry,
that a trust, which in other ways than through the Act is subject to
public scrutiny and economic control, may be exempted from complying
with the provisions of the Act.
Prior to the enactment, the applicant trust applied for
exemption from the Act or from the requirement that the trust must
comply with the provisions of the Act. This was done in letters of 9
July 1984 to the Minister of Industry and the Minister of Justice. The
applications were based on the following grounds: that the
Jyllands-Posten Trust was not a business trust in the ordinary sense
of the word, but rather a guarantor that the shares of Jyllands-Posten
A/S were not taken over by any third party, and that the trust
could only guarantee the independence of the daily newspaper
Jyllands-Posten from organisation interests, if the organisations were
without any influence on the election of members to the board of
trustees. It was pointed out that the objective of the trust was not
to exercise a controlling influence on the commercial enterprise,
Jyllands-Posten A/S, and that it did not interfere with editorial
matters, either in its capacity as owner or as publisher.
On 16 November 1984, the Minister of Justice - on behalf of
the Minister of Industry as well - refused to grant the request from
the board of trustees for full or partial exemption of the Jyllands-
Posten Trust from the Act on Business Trusts.
The chairman of the trust and the chairman of the board of
directors of Jyllands-Posten A/S then tried to arrange negotiations
with the Prime Minister. A meeting took place in April 1985. The
outcome was that if Jyllands-Posten wished to proceed with the
matter - either of its own accord or together with the Danish
Newspaper Publishers' Association (Danske Dagblades Forening (DDF)) -
there was no need to submit a new application for exemption from the
Act. Instead, it was necessary to apply for an amendment of the Act to
the effect that the provisions of the Act should not extend to
newspaper trusts, etc.
Such an application for amendment of the Act was submitted to
the Prime Minister in a letter from the Jyllands-Posten Trust of 4
July 1985. The trust did not receive an official reply to this letter.
On 3 December 1985 DDF also applied for such an amendment of the Act.
It was stated that a newspaper trust cannot be considered a business
entity in the ordinary sense of the word but must be the guarantor for
the financial and editorial independence of the newspaper in question,
and thereby ensure that the fundamental concept underlying the
newspaper and its editorial profile are not being threatened by
external forces.
In May 1986, the chairman of the board of trustees received a
memorandum from the Ministry of Industry dated 3 January 1986. The
memorandum made reference to the second part of Section 22 of the Act
which, as mentioned above, provides that employee representatives take
part only in dealing with matters which do not relate to the business
activities, provided that this is so determined in the statutes.
By letter of 5 May 1986 to the Minister of Industry, the board
of trustees expressed its hesitations about this. The crucial area for
the competence of newspaper trusts was the fundamental concept
underlying the newspaper and its profile. According to the wording of
the Act and the memorandum of 3 January 1986, that area could not be
excluded from the competence of employee representatives, since the
fundamental concept underlying the newspaper did precisely and above
all relate to its business activities. For this reason, it would be
impossible to safeguard the independence of the newspaper from
organisation interests, in particular, if newspaper trusts were to be
compared with business trusts in general. Against this background, the
board of trustees requested new negotiations about the position of
newspaper trusts.
On 20 June 1986, the Minister of Industry informed the trust
that he did not find any reason for renewing the discussions
concerning the position of newspaper trusts. A further exchange of
views ensued, but on 21 July 1986 the Minister eventually declared
that he considered the case closed. The applicant did not pursue any
other remedies in Denmark.
COMPLAINTS
The Act on Business Trusts of 6 June 1984 entered into force
on 1 January 1985. Prior to the date of coming into operation, the
board of trustees applied for an exemption from the provisions which
would interfere with the trust's independence, and thus its ability to
comply with the objects clause in its statutes. After having received
a rejection of this petition on 16 November 1984, the Government - in
this case represented mainly by the Minister of Industry - were
requested to take part in negotiations with a view to including a
provision in the Act exempting newspaper trusts from the Act on
Business Trusts. After an extensive exchange of letters, the Minister
of Industry pointed out in a letter dated 21 July 1986 that he
considered the case closed. This must, in the applicant's view, be
considered the final decision, so that the time-limit referred to in
Article 26 of the Convention must start running from 21 July 1986.
As the question of obtaining exemption from the Act or the
inclusion of a statutory exemption with respect to newspaper trusts
depends on administrative or political considerations, there is no
prospect of the courts making a decision based on the facts of the
case. During a legal action, the board of trustees could claim that
the Act or elements in it violate Section 77 of the Danish
Constitution to the extent that the provisions in question are to
apply to newspaper trusts, but the Danish Supreme Court has never
before abrogated statutes as being in violation of the Danish
Constitution. Bringing an action before a court is thus not a remedy
permitting efficient and sufficient redress of the alleged injustice.
Consequently, the condition set forth in Article 26 of the Convention
to the effect that all domestic remedies must have been exhausted
according to the generally recognised rules of international law, has
been fulfilled.
The main objective of the Jyllands-Posten trust is "to support
the publishing of the newspaper Morgenavisen Jyllands-Posten as a
liberal newspaper, independent of private, organisation and
affiliated political interests by holding shares in Jyllands-Posten
A/S". A number of the other provisions in the statutes serve to
safeguard the independence of the trust. The most important of these
is to the effect that nine out of ten members of the board of trustees
are appointed by co-optation (selvsupplering), which provides
efficient guarantees against external influence. The Act on Business
Trusts weakens this guarantee, in particular through a provision to
the effect that one third of the members of the board of trustees are
to be elected by bodies other than the board. Pursuant to the Act,
such members are to be elected by the employees of the company
according to electoral rules, which will secure seats on the board of
trustees for the largest staff groups. Due to the close ties of such
groups with labour market organisations, the board of trustees can no
longer comply with the objects clause to support the company in
publishing Morgenavisen Jyllands-Posten as a liberal newspaper,
independent of organisation interests, among others.
In this connection, it should be pointed out that the board of
trustees is not a board in the sense defined in company law. The trust
owns Jyllands-Posten A/S, and the members of the board of trustees
have a status as owners of the company. They exercise their most
important functions at the general meeting just as shareholders do in
a limited liability company which is not owned by a trust. Thus, the
said Act interferes with the ownership of Jyllands-Posten A/S and
restricts the competence of the current owners.
Such interference on the part of the Government in newspaper
ownership constitutes a clear violation of Article 10 para. 1 of the
Convention. Article 10 para. 1 of the Convention must be taken to mean
that any citizen or group of citizens can start publishing a newspaper
without having to submit to orders from the Government to the effect
that public authorities, labour market organisations or others must be
represented among the "owners" to a greater or smaller extent. In the
present case, non-compliance with the Convention seems particularly
flagrant, because the Act interferes retroactively with existing
ownership. The first statutes of the Jyllands-Posten Trust were signed
on 30 June 1971. The Act on Business Trusts violates the objects
clause and the provisions on ownership of the trust and the
composition of the board of trustees by co-optation. If it had not
been for the special consideration in the present case given to the
freedom of expression as protected under Article 10 of the Convention,
the application might have been lodged under Article 1 of Protocol
No. 1 to the Convention, under which every natural person or legal
person is entitled to the peaceful enjoyment of his possessions.
The crucial point in this case is that the board of trustees
has been denied exemption from the Act on Business Trusts. The Act
calls for a specific composition of the management of a trust holding
all shares or even a substantial portion of the shares in a limited
liability company, which carries on business activities. If these
provisions are also to extend to the Jyllands-Posten Trust, this is
tantamount to the legislative power having interfered with the
ownership of the periodical press. This constitutes a violation of the
guarantees of freedom of expression generally found in the
constitutions of democratic countries, and moreover a violation of
Article 10 para. 1 of the Convention.
It is important that business enterprises, whose main
objective is the publishing of informative, opinion-making and
entertaining publications, are managed according to healthy financial
and business-like principles. They hold, however, a special position
in that their main objective can only be fulfilled where there is
extensive editorial independence from private, commercial,
organisation, and public interests. Nothing can prevent e.g. a
periodical from being published for the purpose of safeguarding the
interests of a trade union, a political party, the farming sector or
industry. In that case as well as in others, editorial independence
will consist in guarantees for the editors' freedom of action in
keeping with previously determined, general guidelines, ensuring that
third parties cannot interfere by some sort of pressure or threats
with the competence of the editors to decide what to print and
publish. The necessity for editorial independence in this sense has
long been recognised and accepted in the area of printed matter, be it
the publishing of non-periodical matters or the publishing of
periodicals (daily papers, magazines, etc.).
As regards both publishing and the function of the periodical
press, editorial independence is based on the same ideals and wishes
as are the actual background to the freedom of expression laid down in
the Danish Constitution. It follows from Section 77 of the Danish
Constitution that "everyone shall be entitled to make public his views
in print, in writing and in speech, provided that he may be held
responsible in a court of justice. Censorship and other preventive
measures shall never again be introduced". These words only acquire
meaning if all kinds of publishing enjoy extensive freedom in a
political, religious, organisational and economic respect.
It is probably due to a "technical mishap" that newspaper
trusts have come under the Act on Business Trusts. A newspaper trust
is not established with a view to obtaining a controlling influence on
a newspaper operating as a limited liability company. Its objective is
to prevent others from gaining a controlling influence on the
publishing activities.
When a newspaper trust becomes subject to the Act on Business
Trusts, the consequence is that in certain respects the authority
supervising trusts takes over some of the powers of the general
meeting. It must be considered unfortunate that public authorities
have such powers in relation to newspaper trusts. The powers are
closely tied to the overall aim of the Act, viz. to lay down
provisions for trusts which have a controlling influence on companies
carrying on business, similar to those applying to limited liability
companies. However, a newspaper trust does not carry on business
activities by itself, and as a result of the Press Act (presseloven)
and considerations of editorial independence, it has limited
influence on the business activities. Thus, newspaper trusts are
atypical compared with trusts otherwise covered by the Act on Business
Trusts. They should therefore be protected against becoming dependent
on public authorities and should not become subject to provisions
obliging them to exercise stronger influence on the business
activities.
In particular Section 22 of the Act on Business Trusts may
have regrettable consequences for a newspaper trust. Under this
section the provisions of the Companies Act and regulations
introduced under it regarding the election of board members by
employees apply mutatis mutandis to a business trust.
Section 22 of the Act on Business Trusts demands that one
third of the owners of a publishing enterprise are to be elected by
employees (in fact by their organisations) outside the group of
owners. This violates both the constitutional guarantees in democratic
countries and Article 10 of the Convention.
The board of trustees of the Jyllands-Posten Trust finds that
employees in the publishing enterprise should be represented on the
board of trustees. However, it finds it vitally important that the
employee representatives also be elected to the board of trustees by
co-optation. At the election, the board of trustees can fulfil the
objects clause of the trust and appoint employee representatives,
who meet the qualifying conditions set forth in the statutes.
Section 22 of the Act on Business Trusts is, however, based on the
wish that the organisation to which a majority of the employees are
attached must be represented on the board of trustees. But if the
representatives of the employees on the board of a newspaper trust are
to be elected on the basis of organisation considerations, the board
of trustees cannot meet its commitment to guarantee the newspaper's
independence from organisation and other similar interests.
For newspaper enterprises, which have been converted into
trusts, it is extremely important to be able to ensure stability and
continuity of development, so that the independent status of the
newspaper cannot be jeopardised by forces wishing to change the
political and editorial profile of the newspaper. The application of
Section 22 of the Act on Business Trusts can bring the employee
representatives on the board of trustees into unpleasant conflict
situations, when there is a conflict between organisation interests
and the consideration for the newspaper's independence and profile.
In this connection reference should be made to German
legislation, where the 1972 Act on Work Councils exempts opinion-
making enterprises, i.e. newspapers, book publishers and other similar
enterprises. The German 1976 Act on Co-determination also exempts the
press. There is no actual Common Market legislation in the area, but
the 5th Company Directive on Employee Representation on the Boards of
Directors etc. of Commercial and Industrial Enterprises does not
include newspaper publishing for precisely the same reasons as stated
above.
THE LAW
The applicant trust has complained that the provisions of the
Act on Business Trusts interfere with its right to freedom of
expression as secured by Article 10 (Art. 10) of the Convention which
reads as follows:
"1. Everyone has the right to freedom of expression. This
right shall include freedom to hold opinions and to receive
and impart information and ideas without interference by
public authority and regardless of frontiers...
2. The exercise of these freedoms, since it carries with it
duties and responsibilities, may be subject to such
formalities, conditions, restrictions or penalties as are
prescribed by law and are necessary in a democratic society,
in the interests of national security, territorial integrity
or public safety, for the prevention of disorder or crime,
for the protection of health or morals, for the protection
of the reputation or rights of others, for preventing the
disclosure of information received in confidence, or for
maintaining the authority and impartiality of the judiciary."
The Commission recalls that it is only required to decide
whether or not the facts submitted by an applicant disclose any
appearance of a violation of this provision if the requirements under
Article 26 (Art. 26) of the Convention, to exhaust domestic remedies
according to the generally recognised rules of international law and
to lodge the application with the Commission within a period of six
months from the date of the final decision, have been complied with.
In this respect the applicant trust has submitted that the
time-limit referred to in Article 26 (Art. 26) of the Convention must
start running from 21 July 1986 when the Minister of Industry pointed
out that he considered the case closed. Furthermore it maintains that
bringing an action before the Danish courts would not be a remedy
permitting efficient and sufficient redress of the alleged injustice.
The Commission does not consider it necessary for the purposes
of the present case to examine whether the applicant trust's
allegations in this respect are correct and whether, therefore, it has
fulfilled the requirements set forth in Article 26 (Art. 26) of the
Convention. Even assuming that this is the case, the Commission is of
the opinion that the present application is manifestly ill-founded for
the following reasons.
It is clear from the Commission's case-law that it is
competent to examine the compatibility of domestic legislation with
the Convention only with respect to its application in a concrete
case, while the Commission is not competent to examine in abstracto
its compatibility with the Convention (cf. for example No. 11045/84,
Dec. 8.3.85, D.R. 42 p. 247). Accordingly the Commission will only
examine the applicant trust's complaint insofar as the legislation in
question affects the trust itself.
In this respect the applicant trust alleges an unjustified
interference with its right to freedom of expression as secured by
Article 10 (Art. 10) of the Convention, in particular since the Act on
Business Trusts provides for employee representatives to be elected to
the board of trustees. In such circumstances the applicant trust is
of the opinion that its independence is lost and that it can no longer
guarantee, in accordance with its statutes, the independence of the
newspaper Jyllands-Posten from outside interests.
The Commission has first considered whether the introduction
of the Act on Business Trusts interfered with the applicant trust's
rights under Article 10 (Art. 10) of the Convention, and recalls in
this respect that the interference allegedly lies in the fact that the
new legislation provides for the election of board members by the
employees. It does not, however, appear from the applicant trust's
submissions that the object of the trust, to "support the publishing
of Jyllands-Posten as a liberal newspaper, independent of private,
commercial, organisational and affiliated political interests by
holding shares in Jyllands-Posten A/S", has undergone any changes or
that the new members do not have to comply with the trust's statutes.
Furthermore, the Commission has not found any information which could
lead it to conclude, even prima facie, that the applicant trust has
been restricted in expressing or supporting any particular view. In
particular the Commission has not found any evidence which could
uphold the applicant trust's allegation that "due to the clear ties of
such (staff) groups with labour market organisations, the board of
trustees can no longer comply with the objects clause to support the
company in publishing Morgenavisen Jyllands-Posten as a liberal
newspaper".
Under Article 10 (Art. 10) of the Convention it is not the
Commission's task to consider whether or not the applicant trust is to
be considered a business trust under the relevant domestic legislation
and the Commission does not consider the composition of a trust as
such to interfere with Article 10 (Art. 10) of the Convention. The
alleged victim remains the trust and not the individual members of the
board of trustees. As pointed out above, however, the Commission has
not found evidence which could lead to the conclusion that the
applicant trust's rights and freedoms under Article 10 (Art. 10) of
the Convention have been interfered with.
In such circumstances it follows that the application is
manifestly ill-founded within the meaning of Article 27 para. 2
(Art. 27-2) of the Convention.
For these reasons, the Commission
DECLARES THE APPLICATION INADMISSIBLE
Secretary to the Commission Acting President of the Commission
(H. C. KRUGER) (S. TRECHSEL)