Judgment of the Court in Case C-366/89
I — Facts
Council Directive 75/439/EEC of 16 June 1975 on the disposal of waste oils (OJ L 194, p. 31) is concerned with the approximation of the laws of the Member States in this field in order to prevent unequal conditions of competition and guarantee the protection of the environment against the harmful effects caused by the discharge, deposit or processing of those oils.
In particular, it provides that the Member States are to take the necessary measures to ensure the prohibition of (Article 4):
In accordance with Article 6, any undertaking which disposes of waste oils must obtain a permit and Article 12 provides that the undertakings referred to are to be inspected periodically by the competent authorities.
Article 15 requires each Member State periodically to convey to the Commission information concerning its technical expertise and the experience gained and results obtained through the application of measures taken pursuant to the Directive.
In its judgment in Joined Cases 30/81 to 34/81 Commission v Italy [1981] ECR 3379) the Court declared that by failing to adopt within the prescribed period the provisions needed in order to comply with the Directive, the Italian Republic had failed to fulfil its obligations under the EEC Treaty.
Decree No 691 of the President of the Italian Republic of 23 August 1982 subsequently implemented the Directive (Gazz. Uff. No 270 of 30 September 1982).
Nevertheless, the Commission considered that the transposition was incomplete and defective and that, furthermore, the obligation imposed by the Decree on all holders of waste oils to sell those waste oils to a mandatory used-oils consortium infringed Article 34 of the EEC Treaty. In that respect an official complaint was lodged with the Commission on 27 June 1984 in which it was claimed, in particular, that the setting up of a statutory State monopoly by the 1982 Decree blocked the movement of goods and did not ensure any real protection of the environment against damage caused by waste oils and their disposal.
By letter of 22 April 1985, the Italian Government was requested by the Commission to give its opinion on the incorrect transposition of the Directive and on the compatibility of the Italian system with Community provisions. The Italian Minister for Industry replied on 27 May 1985. In a note of 14 January 1986 he also replied to a questionnaire on the transposition and application of Directive 75/439/EEC sent by the Commission to Italy as well as to the other Member States.
The Italian Government relied upon various pieces of legislation which, in its view, ensured the transposition of the Directive into Italian law. They include, in addition to the Decree of the President of the Italian Republic mentioned above, Law No 615 of 13 July 1966 (Gazz. Uff. No 201 of 13 August 1966), measures for combatting atmospheric pollution, Law No 319 of 10 May 1976 (Gazz. Uff. No 141 of 26 May 1976), rules for the protection of water against pollution, referred to as the Merli Law, Decree No 915 of the President of the Italian Republic of 10 September 1982 (Gazz. Uff. No 343 of 15 December 1982), implementing Directives 75/442/EEC on waste, 76/403 on the disposal of poly-chlorinated biphenyls and polychlorinated terphenyls and 78/319 on toxic and dangerous waste.
However, the Commission considered that this legislation did not implement the obligations imposed by the Directive, that it did not comply with the provisions of the Directive and that it infringed Article 36 of the EEC Treaty.
By letter of 13 November 1986, the Commission informed the Italian Government of that opinion and requested it to submit its observations. The Italian Government replied by letter of 16 March 1987, concluding that the domestic legislation was in perfect agreement not only with the requirements of the EEC Treaty but also with the whole of Directive 75/439/EEC.
The Commission, not satisfied with this, sent a reasoned opinion to the Italian Government which maintained its opinion in a letter from its Permanent Representation of 22 December 1988.
II — Written procedure and forms of order sought by the parties
The Commission's application was lodged at the Court Registry on 4 December 1989.
The written procedure followed the normal course. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.
The Commission claims that the Court should:
The Italian Republic contends that the Court should:
III — Pleas in law and arguments of the parties
According to the Commission, the Italian legislation infringes Article 4 of the Directive in that it does not contain any absolute prohibition, first, on discharge of oils harmful to the soil and, secondly, on discharge of oils into waters.
On the first point, there is a partial prohibition limited to used oils which represent waste and which relate to public areas and private areas for public use in Article 9 of Decree No 915 of the President of the Republic of 10 September 1982. Consequently, disposal is permitted in any area if it involves used oils intended for reuse and in private areas intended for public use if it involves used oils which constitute waste.
On the second point, it appears that the Law No 319 of 10 May 1976, the so-called Merli Law, is confined to regulating the disposal of used oils into waters. However, according to the Commission, that statute, far from laying down an absolute prohibition, allows disposal under certain set limits for discharged products. Unlike the Italian Government, the Commission considers that this does not amount to excluding the possibility of disposal in fact, since it is impossible to predict, without analysis, the composition of all used oils.
The Italian Government considers that those objections are based on an incorrect interpretation of the Directive and the Italian legislation. It does not dispute that Article 4 of the Directive requires absolute prohibitions to be laid down on disposal and/or deposit in waters and on soil, but it observes that Article 5 points, as a means of attaining that objective, to the possibility of entrusting one or more undertakings with responsibility for collection and/or elimination of waste oils. Furthermore, Article 9 provides that those undertakings must carry out the operations in such a way as to avoid all risk of water, air or soil pollution. It concludes from this that Article 4 relates to conduct different from that involved in the statutorily controlled process of collection or disposal, in order to prevent such action from being carried out by persons other than authorized undertakings collecting and/or disposing of waste oils.
However, the Italian Government considers that there is a specific parallelism between the provisions of the Directive and Article 2 of Decree No 691/82 of the President of the Republic, in that the prohibition on discharge into waters, top soil and ground soil, laid down in Article 2(3) of the Decree, applies absolutely and unconditionally to all those who act outside the statutory collection and disposal activities, whilst the undertakings collecting and disposing of waste oil arc required to comply with the provisions relating to the protection of waters and soil.
The Commission points out that the Italian Republic set up a compulsory consortium for used oils and imposed an obligation on holders of oil to deliver the used oils to the consortium, subject to exemptions granted by the Ministry for Industry in certain cases. The Commission criticizes that solution in three respects.
Firstly, by setting up that system the Italian Republic has not fully discharged its obligations. In particular, the Italian State is required to impose a general and absolute prohibition on deposits harmful to the soil and on discharges into waters. According to the Commission, the setting up of undertakings for collection and disposal provided for by Article 5 is a conditional obligation which applies where the main and unconditional obligation laid down by Article 4 to prohibit generally and absolutely any discharge or deposit cannot be met by other measures.
Secondly, the Commission considers that the obligations imposed by Articles 4 and 5 are not alternative but concurrent. Accordingly, the setting up of undertakings for collection and disposal is only an auxiliary measure. Moreover, the Commission points out that under Article 7 persons holding waste oils are required to place them at the disposal of such undertakings only where delivery is necessary in order to enable them to observe the prohibitions laid down in Article 4.
Thirdly, the Commission draws attention to the case-law according to which the conferring of exclusive collection rights on the undertakings which are the subject of Article 5 of the Directive must not prevent persons holding waste oils from being able to transfer those waste oils to undertakings other than the ones which enjoy collection rights. Those undertakings, like other persons holding oils, arc subject to the prohibitions set out in Article 4 of the Directive. Contrary to the Italian Government's interpretation, they are not only bound by the general obligation to avoid harmful consequences for water, air or soil as required by Article 9 of the Directive. Such undertakings are, by means of their size and the particular regime applying to them, subject to obligations which are cumulative.
Finally, the Commission considers that the other persons holding oils are not subject to an absolute prohibition, since Article 2(3) of Italian Decree No 691 merely prohibits discharge without mentioning deposits and, furthermore, it restricts the prohibition on disposal to materials which are not governed by other internal rules concerning the protection of waters, air, top soil and ground soil against pollution.
The Italian Government submits that the Commission's interpretation is illogical and contrary to common sense. Article 9 could not be formulated in more mandatory or comprehensive terms. In its opinion, the Directive uses different techniques to regulate the behaviour of holders of used oils depending on whether the person concerned is an undertaking for collection or disposal or another person not subject to control by the public authorities and, as a result, covered by the appropriate provisions of Article 4, whilst Article 9 gives the national legislature the task of defining the specific obligations of the undertaking for collection or disposal.
The Commission alleges, secondly, that there is an infringement of Article 6 of the Directive which provides, in respect of undertakings which dispose of waste, for a permit system granted by the competent authorities after examination of the installations, in the light of observance of the conditions required by the state of technical development. The disposal of waste oils is carried out by means of their regeneration or incineration. However, Presidential Decree No 691 does not, according to the Commission, include any provision concerning permits for undertakings which regenerate oil. The Italian Government would no doubt claim that permits are included in the concession granted under legislation passed in 1933 and its subsequent amendments, but the Commission has not been informed of these and points out that there is no provision for either the prior examination of the installations or the taking into account of technical progress in environmental matters. As for disposal by incineration, the Commission notes the adaptation of Italian legislation to the Directive, but points out that in that legislation the permit is not made subject to the conditions laid down in Article 6 of the Directive. As a result, according to the Commission, there has been a failure to comply with Article 12 of the Directive due to lack of inspection.
The Italian Government replies that the authorities are required to observe the conditions laid down under Article 6 in so far as they are reasonably necessary in order to comply with the objectives of the permit. It also rejects the complaint relating to the absence of the inspections required under Article 12 of the Directive as being generic and not proved.
However, the Commission considers that the Italian legislation concerning the regeneration of oils is not centred on the protection of the environment. It pursues strategic and economic policy and fiscal objectives. Furthermore, it is impossible to discern in the legislation concerning incineration any principle of compulsory adjustments to technical progress. The Commission insists on the fact that by not imposing the conditions laid down in the Directive with respect to permits, the Italian system is not in a position to impose verification of compliance with those conditions and it emphasizes that the Italian Republic does not deny that the specific inspections are neither provided for nor carried out. The Commission adds — without raising any response from the defendant — that the Italian Republic never conveyed to the Commission any report concerning the technical expertise acquired and the experience gained and results obtained through the application of measures taken pursuant to the Directive, contrary to the obligations imposed by Article 15 of the Directive.
Finally, the Commission complains that Italy has infringed Article 34 of the EEC Treaty by establishing a system under which all used oils must be delivered exclusively to a consortium set up pursuant to Decree No 691 of the President of the Republic. In this respect, it refers to the judgment in Case 173/83 Commission ν France [1985] ECR 500, in which the Court held that a system for collection and disposal of waste oils precluding the exportation of such oils by handing them over to undertakings for collection, disposal or regeneration duly authorized in another Member State was contrary to Article 34.
The Italian Government explains that it chose that system in order to act in a manner consistent with Articles 5 and 7 of the Directive. Moreover, there are no problems in Italy in this regard since there is no export trade in waste oils from Italy to other Member States.
It adds that, as worded, Article 7 of the Directive did not expressly provide for a derogation from the obligation of delivery to the domestic collector in order to safeguard the opportunities for exportation to an authorized undertaking.
The Italian Government considers that the questions raised by the Commission regarding the implementation of Articles 4, 6 and 12 of Directive 75/439/EEC will appear outdated following implementation of Directive 87/101/EEC, for which the Italian Government proposes to pass a new law concerning processing of waste oils in the very near future.
The Commission replies that the obligation of delivery to the consortium is an obstacle, or at least a potential one, to the exportation of waste oils from Italy to other Member States and it considers that the observations of the Italian Republic concerning Directive 87/101/EEC are patently unfounded.
1 Language of the case: Italian.