U.no.201/2008

U.no.201/2008

Вовед

On the basis of Article 110 of the Constitution of the Republic of Macedonia and Article 71 of the Book of Procedures of the Constitutional Court of the Republic of Macedonia (»Official Gazette of the Republic of Macedonia«, no.70/1992), at its session held on 13 May 2009, the Constitutional Court of the Republic of Macedonia passed the following

RESOLUTION

Текст

1. NO PROCEDURE IS INITIATED for the appraisal of the constitutionality of Article 2 paragraph 2 and Article 3 item 4 of the Law on Expropriation (»Official Gazette of the Republic of Macedonia«, nos. 33/95, 20/98, 40/99, 31/2003, 46/2005, 10/2008 and 106/2008).

2. The resolution shall be published in the “Official Gazette of the Republic of Macedonia”.

3. “Makpetrol” AD Skopje and Miroslav Grchev from Skopje submitted initiatives to the Constitutional Court of the Republic of Macedonia to instigate a procedure for the appraisal of the constitutionality of Article 1 and Article 2 of the Law on Changing and Supplementing the Law on Expropriation (“Official Gazette of the Republic of Macedonia”, no.106/2008), that is of the provisions of the entire Law on Expropriation noted in item 1 of the present resolution.

In the initiative of “Makpetrol” AD Skopje, the provisions of the Law are contested on grounds of a violation of the fundamental constitutional values: the rule of law, the principle of legality and the legal protection of property under Article 8 of the Constitution.

With regard to the contested Article 2 paragraph 2 of the Law, it is noted that according to the manner of regulation of the issues related to expropriation and given the objective it served, the provision did not belong to the system of very precise and clear norms that related to the determination of public interest for the implementation of the procedure for expropriation. The submitter of the initiative found it not to be incidental that the provision was not included in paragraph 1 of Article 2 of the Law, as it defined a new case of existence of public interest for initiation of a procedure for expropriation. Namely, in Article 2 paragraph 1 line 10 of the Law it was defined that there is public interest in the case of “construction of gas pipelines, oil pipelines, and other pipelines”.

When it comes to the contested Article 3 item 4 of the Law, the submitter of the initiative first of all notes that it is not in accordance with the provisions of the Constitution and clarifies that the crucial problem from a constitutional-legal aspect was the question about taking away and restricting property. Then, Article 30 paragraph 3 of the Constitution is cited and it is noted that from its content arose two conclusions. The first one is that the state could take away or restrict property after prior definition of public interest by law. Secondly, the Macedonian Constitution as the only means for taking away and restricting property allowed expropriation, but not nationalisation, which was unknown to the Constitution.

The further text of the initiative notes that the constitutional concept of expropriation was worked out and specified in the Law on Expropriation, whereby the Law first summarised generally what is considered to be public interest, and then enumerated the fourteen cases for which initiation and conduct of a process of expropriation is determined, with a note that a public interest for building of facilities and performing other works may also be defined by another law.

Then the submitter of the initiative provides his own view on what expropriation implies generally and notes that an absolute condition for its carrying out was the existence of a public interest which was not presupposed but was established, pursuant to law, for each concrete case. Hence, it was incidental that the Law enumerated very specifically the cases when it was considered that there was a public interest to initiate such procedure, and beyond those cases it was almost impossible which indicated to a very restrictive concept of the Macedonian law with regard to the taking away of the right to property and the rights deriving from it.

Thereby, given the subject-matter of regulation and its social function the contested provision did not belong naturally to the provisions contained in Article 2 of the Law even when they would be understood in their most extensive sense. On the contrary, the contested provision determined that expropriation may be exercised on facilities, plants and pipelines for the transmission of electricity, that is, transmission of natural gas for the performance of an activity of public interest, although the Law on Energy already proclaimed the transmission of electricity and the transmission of natural gas to be activities of public interest. However, the character of the activity should not have been confused in this way with the existence of public interest defined by law as such interest was already defined in Article 2 paragraph 1 line 10 of the Law where a condition for expropriation was prescribed to be “construction of gas pipelines, oil pipelines, and other pipelines”. Hence, the legislator obviously linked the existence of public interest with the construction of facilities and plants, and not with already built facilities and plants, as well as with pipelines for electricity and natural gas.

The submitter of the initiative also found it important that the contested Article 2 of the Law extended the list of users of expropriation (for the needs of legal entities carrying out an activity – transmission of electricity, that is transmission of natural gas) whereby the state undoubtedly formulated its goal to expropriate the already built facilities, plants and pipelines for electricity and gas and give them to “its enterprises” be manage them.

On the basis of what has been noted above, it arose that expropriation had strictly functional character and was implemented only for the purposes of building facilities and performing works of public interest, and beyond the accomplishment of that public interest there was no justification to conduct a procedure for expropriation, and consequently there was no justification for the contested Article 2 paragraph 2 of the Law. Namely, the reasons justifying expropriation were construction of facilities and performing works of public interest envisaged in the acts for spatial planning, but the case prescribed in the contested Article 2 paragraph 2 of the Law concerned expropriation of an already built facility which functioned, such as the case with the plants and pipelines for electricity, that is, transmission of natural gas.

For these reasons, according to the submitter of the initiative, the legislator did not look for justification of expropriation as under its name nationalisation was to take place, taking away of property and the rights deriving from it, which was unfamiliar to our Constitution. In this sense, the contested Article 1 of the Law was not in accordance with Article 8 paragraph 1 line 3 and Article 30 of the Constitution.

On the basis of what has been noted it is proposed that the Court initiate a procedure for the appraising of the constitutionality, and then annul the contested provisions.

In the initiative of Miroslav Grchev from Skopje it is noted that the contested Article 2 paragraph 2 of the Law, inter alia, sets down that “expropriation may be exercised of facilities, plants and pipelines…for the performance of an activity of public interest…” which meant a change of the nature of expropriation defined by the Constitution and by all other provisions of the Law on Expropriation and instead of construction of facilities of public interest it was applied to built facilities for the performance of an activity of public interest or to facilities for the construction of which expropriation had already been made.

There were no conditions, criteria and a procedure in the Law from which it could be determined in which situation and conditions and in which procedure the ownership of already built facilities of public interest could be taken away and to continue to perform the activity with the facilities owned by and for the benefit of the proposer of expropriation. Also, there was no legal protection whatsoever for the victims of such expropriation. Hence, the challenged Article 2 paragraph 2 of the Law violated the rule of law, the constitutional protection of property and the equal position of economic subjects on the market.

The contested Article 3 item 4 of the Law literally undermined the constitutional provision of equal legal position of all economic subjects, as it “specified” that expropriation of built facilities could be made also for the needs of the legal entities carrying out an activity of transmission of electricity and power resources.

As the contested provisions of the Law violated Article 8 paragraph 1 line 3, Article 30 and Article 55 of the Constitution, it is proposed to initiate a procedure for appraising their constitutionality, and then to take a decision repealing them.

4. At its session the Court found that under the contested Article 2 paragraph 2 of the Law, expropriation may be made of facilities, plants and pipelines for the transmission of electricity, that is, transmission of natural gas for the purposes of carrying out an activity of public interest defined by law.

Under the contested Article 3 item 4 of the Law, expropriation may take place for the needs of the legal entities carrying out an activity – transmission of electricity, that is, transmission of natural gas.

5. Under Article 8 paragraph 1 lines 3, 6 and 7 of the Constitution, the rule of law, legal protection of property and freedom of the market and entrepreneurship are among the fundamental values of the constitutional order of the Republic of Macedonia.

Article 30 paragraph 1 of the Constitution guarantees the right to ownership of property and the right to inheritance. Under paragraph 2, ownership of property creates rights and obligations and should serve the wellbeing of both the individual and the community. Under paragraph 3 no person may be deprived of his/her property or be restricted from the property and the rights deriving from it, except in cases concerning a public interest defined by law, and under paragraph 4 of this article in the Constitution, if property is expropriated or restricted, rightful compensation not lower than its market value is guaranteed.

Under Article 55 of the Constitution, the freedom of the market and entrepreneurship is guaranteed. The republic ensures an equal legal position to all subjects in the market. The Republic takes measures against monopolistic conduct on the market. The freedom of the market and entrepreneurship may be restricted by law only for the purposes of the defence of the Republic, protection of natural and living environment or public health.

The issues in connection with expropriation of property and the rights deriving from it on land, buildings, and other facilities (immovable property) for the purposes of constructing facilities and performing other works of public interest, the definition of public interest and the determination of the just compensation for the expropriated immovables are regulated by the Law on Expropriation (“Official Gazette of the Republic of Macedonia”, nos.33/95, 20/98, 40/99, 31/2003, 46/2005, 10/2008, and 106/2008).

Under Article 2 paragraph 3 of the Law, a public interest for the construction of facilities and performing other matters may also be defined by another law.

Accordingly, expropriation as an administrative-legal institute is carried out not only for the purposes of constructing facilities, but also for the purposes of performing other matters of public interest, from where the Court found that the statement in the initiatives that the legislator obviously linked the existence of the public interest with the construction of facilities and plants, and not with already built, already constructed facilities and plants, as well as with pipelines for electricity and natural gas, is unfounded. The expropriation for the purposes of building facilities and expropriation of already built facilities, plants and pipelines for the transmission of electricity, that is, transmission of natural gas of public interest are two different legal situations. In the first one the immovable property is expropriated for the purposes of building a new facility, and in the second one the immovable property is expropriated for the purposes of performing matters of public interest – transmission of electricity, that is, transmission of natural gas, which as activities of public interest are defined in the Law on Energy. As a matter of fact, public interest, according to the cited Article 2 paragraph 3 of the Law may also be defined by another law, as in this case. At the same time, the legislator, only in this specific case (already built facilities, plants and pipelines for transmission of electricity, that is, transmission of natural gas) has not envisaged expropriation for the purposes of building. According to the Court, the purpose is fast and unobstructed continuation of the activities of transmission of electricity and transmission of natural gas, if after a legally conducted procedure the performers of the activity are taken their licence away, and the building of a completely new system for a short period of time is practically impossible.

Accordingly, expropriation is made with a view to building facilities, but also performing other matters such as the transmission of electricity and transmission of natural gas as activities of public interest defined as such in the Law on Energy.

The provisions in the Law on Energy (“Official Gazette of the Republic of Macedonia”, nos.63/2006, 36/2007 and 106/2008) regulate the legal regime for ensuring the goals of this law which are envisaged in Article 2, with which it should be ensured to have a reliable, qualitative and efficient supply of energy to consumers and to create a financially sustainable energy sector, its development and protection of the living environment against the negative influences while performing certain activities from the field of energy.

Article 3 of the Law sets down the activities from the field of energy, and these are the transmission of electricity and the transmission of natural gas. Under Article 4 of the Law, the activities from the field of energy may be performed by domestic and foreign legal entities on the basis of a licence issued by the Regulatory Commission for Energy, under conditions and in a manner defined by this law for each of the activities of Article 3, unless otherwise regulated by this law.

The activities of Article 3 of this Law may be performed if the facilities, devices and plants for the performance of these activities meet the prescribed standards, technical norms and the norms of quality and do not endanger people, material goods, the environment and nature with their work.

Article 6 paragraph 1 of the Law stipulates that legal entities performing the said activities (in which in item 2 and item 8 are transmission of electricity and transmission of natural gas) have the obligations for public service defined by this law. Paragraph 2 of this article in the law regulates that public interest in the performance of the activities under paragraph 1 of this article is ensured by the performer of the activity by means of satisfying the obligation to provide a public service in a manner and procedure defined in the licence for performing the appropriate energy activity, and in agreement with the conditions stipulated by law or other regulation.

Under Article 50 of the Law, the licence may be taken away if the holder of the licence:

– fails to commence the performance of the activity under Article 6 of this law for which the licence has been issued, within the deadline determined in the licence,
– fails to perform the activity for which the licence has been issued in a manner and under conditions prescribed by this law and other regulations and by the licence,
– has ceased to meet the conditions for the performance of the activity of Article 3 of this Law, for which the licence has been issued, and
– fails to act upon the request of the competent authorities for removal of the deficiencies in the work, within a time limit.

Article 51 paragraph 1 of the Law stipulates that if the licence has been taken away, the Regulatory Commission for Energy shall post a public announcement for the selection of a new holder of a licence. The preceding holder of a licence is obliged to proceed with the performance of the activity under the supervision of the competent inspectorate until the new holder of a licence is selected.

With the changes and supplements to the Law on Energy published in the “Official Gazette of the Republic of Macedonia”, no.106/2008, nine new paragraphs are added in Article 51 after paragraph 1, which were the subject of assessment in the procedure on the case U.no.213/2008 based on the initiative of AD Makpetrol. With its resolution of 24 April 2009, the Court did not initiate a procedure for the appraisal of the constitutionality of Article 51 paragraphs 2 through 10 of the Law on Energy (“Official Gazette of the Republic of Macedonia”, nos.63/2006, 36/2007 and 106/2008).

From the contents of Article 51 of the Law it arises that the provisions refer only to the two energy activities – transmission of electricity and transmission of natural gas. Under paragraph 8 of this article, if the subjects of the preceding paragraph of this article fail to regulate, in the time limit given, their mutual rights and obligations, upon a proposal of the new holder of a licence for transmission of electricity, that is, transmission of natural gas, the system for transmission of electricity, that is transmission of natural gas shall be expropriated, pursuant to the Law on Expropriation.

From the analysis of the cited provisions of the Law on Energy, it arises that legal entities transmitting electricity that is transmitting natural gas have the obligations for a public service, and the public interest in the performance of the activities is ensured by the performer of the activity by means of meeting the obligation for providing a public service in a manner and procedure defined by the licence for performing the appropriate energy activity. In case the licence for transmission of electricity that is transmission of natural gas is taken away, the Law has envisaged measures (Article 51) in the direction of ensuring reliable, qualitative, efficient and unobstructed supply of energy to consumers. To that aim, the last of the measures envisaged in Article 51 of the Law is expropriation, which by its character is an administrative-legal institute, through the determination upon the proposal of the new holder of a licence for transmission of electricity that is transmission of natural gas to expropriate the system for transmission of electricity that is transmission of natural gas, pursuant to the Law on Expropriation.

More specifically, if the new holder of a licence pursuant to Article 51 paragraph 8 of the Law on Energy may propose expropriation but the court does not find that there is a constitutional obstacle for him as the performer of the activity of public interest to appear also as a legal entity for the needs of which expropriation is made pursuant to the contested Article 3 item 4 of the Law on Expropriation.

Hence, as a logical consequence of this legal regulation in the Law on Energy, the contested articles of the Law on Expropriation regulate that expropriation may take place of facilities, plants, and pipelines for the transmission of electricity, that is, transmission of natural gas for the performance of an activity of public interest defined by law (Article 1), that is, expropriation may take place for the needs of legal entities performing an activity – transmission of electricity, that is transmission of natural gas (Article 2).

According to the Court, one should also take into consideration the situation when the new holder of a licence does not have his own system (facilities, plants, that is, appropriate immovable property for the performance of the activity) which is not the condition for being granted a licence and in a situation when that system is not in function owing to the taking away of the licence, in order to solve that need for the need holder of a licence the legislator has envisaged a legal solution with which in addition to the right to agreement an administrative measure – expropriation in favour of the new holder of a licence is envisaged by means of regulating it in both laws, the Law on Expropriation and the Law on Energy.

Hence, the contested Article 3 item 4 of the Law determining that expropriation take place for the needs of the legal entities performing an activity – transmission of electricity that is transmission of natural gas is only a consequence of the determination in Article 51 paragraph 8 of the Law on Energy to undertake expropriation upon the proposal of the new holder of a licence for transmission of electricity that is transmission of natural gas pursuant to the Law on Expropriation. The new holder of the licence has the capacity of the user of expropriation who pursuant to Article 13 paragraph 1 of the Law on Expropriation is authorised to propose expropriation to the Administration for Property-Legal Matters (body for expropriation).

In order to obtain an answer to the question whether the contested provisions violate the guaranteed right to property under Article 30 of the Constitution and whether this case concerns taking away of property without the existence of matters of public interest, the Court took into consideration that expropriation is not the only legal instrument for resolving property-legal relations and taking away of property, that is, its transfer from one to another owner or its use only is applied only in case when the owner of the system and the new holder of the licence fail to regulate their mutual relations within the legally defined time limit, and thereby there is a serious danger of interruption or absence of performance of activities of vital significance for the state – transmission of electricity that is transmission of natural gas. Accordingly, the property is undoubtedly taken away owing to the existence of matters of public interest after exhausting all available measures under Article 51 of the Law on Energy, in which case the common good – unobstructed supply of energy to all – prevails over the individual right to property.

Also, the Court took into consideration that under Article 10 of the Law on Expropriation, rightful compensation not lower than its market value in case of expropriation of the immovable property, whereby in the determination of the just compensation the market value of the immovable property is established on the basis of the criteria defined by this Law at the moment of submitting the proposal for expropriation or upon the request of the owner, that is the holder of other property right, at the moment when the compensation is determined, which is a provision in the function of operationalising Article 30 paragraph 4 of the Constitution, under which in case of expropriation or in case of restriction of the property the owner is guaranteed just compensation that may not be lower than its market value.

In a situation when the Law on Expropriation regulates the issue for just compensation for the expropriated good, the statements in the initiative that the contested provisions carried out nationalisation that is unfamiliar to the Constitution are unfounded.

On the basis of the said norms of the Constitution, the provisions of the Law on Expropriation and the Law on Energy it arises that the performance of the energy activities is a significant national interest owing to which the state is obliged to enable unobstructed continuity in these public services, but also is obliged to establish the balance of the relations of state and private activity and their regulation in the Republic of Macedonia within the frameworks of the infrastructure, which certainly differs from other states.

The Republic of Macedonia, along with other states on the one hand, and the European Community on the other hand, on 19 May 2005 concluded an Agreement for the establishment of Energy Community, while the Assembly of the Republic of Macedonia ratified this agreement with a law on 3 May 2006 (“Official Gazette of the Republic of Macedonia”, no.59/2006).

The task of the Energy Community is to organise the relations between the parties and to create legal and economic framework for network energy with a view to creating, inter alia, a stable regulatory and market framework able to attract investments in gas pipelines networks, the production of electricity and its transmission and distribution, so that all parties will have a stable and continuous supply of energy, then reliability in the supply and stable investment climate, and to improve the living environment, the development of market competition and network energy includes the sectors for electricity and gas that fall within the field of implementation of the European Community Directives 2003/54/EC and 2003/55/EC.

Directive 2003/54/EC of the European Parliament and Council, of 26 June 2003, defines the general rules of internal market for electricity, while Directive 2003/55/EC also of 26 June 2003 defines the joint rules of internal market for natural gas.

They set measures that the states should take at national level in order to achieve high standards of public services, from the aspect of criteria for technical security and rules and form other aspects that relate to the maintenance and development of the transmission system and interconnection capacity. The Directives does not provide legal regulation or directive for property relations, their solution and the relation of the state and enterprises, but they dictate other criteria, and the manner of their meeting is a matter for national regulation.

It is important that the Agreement defines the harmonisation with the “generally applicable standards of the European Community” relating to the technical systems that are applied within the frameworks of the European Community for safe and efficient work with networked systems including aspects for transmission, crossborder connections, modulation and general security standards for technical systems according to the rules and business practices.

The Directives define that system operators in their legal form, organisation and process of decision-making are separate from other activities, and are independent, irrespective of whether they are part of a vertically-integrated entity, and these rules shall not create an obligation to separate the ownership of the property of the transmission system from the vertically-integrated entity (Article 9 and Article 15).

That means that the ownership of the system does not have essential influence with regard to the work of the operator which is a legal subject with a licence, since the operator has an independent form towards the others both when he is part of an entity with its own system and when he it not part of such entity with its own system, but is actually directly responsible for the functioning based on rules and standards established by domestic and international regulations and acts. The ownership of the system is not subject to regulation with the Directives and with the Agreement, but it is referred to a business practice according to which the country will enable an unobstructed functioning of the energy activities for the transmission of electricity and gas, and the ownership of the systems are questions of capital and the profits from that based on the shareholder’s shares, so that the unobstructed functioning of the systems would be possible. All this makes sense also with the provision in Article 30 paragraph 2 of the Constitution of the Republic of Macedonia, under which ownership of property creates rights and obligations and should serve the wellbeing of both the individual and the community.

The procedures of the holders of the ownership of systems doe not influence on and do not affect others. The public service of the activity brings down ownership beyond the frameworks of personal and private needs and interests of the owner. In this case, ownership should necessarily function also for the needs of the community, and the private and collective are mutually dependant as a result of which the relations should be appropriately regulated, as a responsibility of the state and a responsibility of the private owners of the capital in energy field, that is, shared responsibility in this specific economic matter.

From what has been noted above, the constitutionally guaranteed rights of ownership of property, freedom of the market and entrepreneurship, and property and labour are the basis for management and participation in the decision-making. They are not freedoms and rights abstractly set by the Constitution, but are only part of the constitutional concept which should generally provide a basis for the realisation of the fundamental values of the constitutional order of the Republic of Macedonia.

Therefore, the contested provisions of the Law are a form of a state regime about the manner and conditions for the transmission of electricity and transmission of natural gas in the Republic of Macedonia, specifically regulated by the contested provisions of the Law on Expropriation and the Law on Energy which uses the administrative-legal institute expropriation, irrespective of the suitability of such solution from a legislative-legal aspect, which is not an issue dealt with by the Court in the appraisal of the constitutionality.

First of all given that what is in question is unobstructed, continuous performance of the energy activities as a significant national interest, owing to which there is a need for the state to enable unobstructed continuity of the taking place of these public services which is also its obligation in the sense of Article 2 of the Law on Energy, the Court assessed that the contested provisions of the Law on Expropriation could not be problematic from a constitutional point of view.

On the basis of what has been noted, the Court assessed that the contested Article 2 paragraph 3 and the contested Article 3 item 4 of the Law are in accordance with Article 8 paragraph 1 lines 3, 6 and 7, Article 30 and Article 55 of the Constitution.

6. On the basis of what has been stated, the Court decided as in item 1 of the present Resolution.

7. The Court passed the present resolution with a majority vote in the following composition: the President of the Court Dr Trendafil Ivanovski, and the judges: Dr Natasha Gaber-Damjanovska, Mr Ismail Darlishta, Mrs Liljana Ingilizova-Ristova, Mrs Vera Markova, Mr Branko Numoski, Mr Igor Spirovski, Dr Gzime Starova and Dr Zoran Sulejmanov.

On the basis of Article 25 paragraph 6 of the Rules of Procedure of the Constitutional Court of the Republic of Macedonia (“Official Gazette of the Republic of Macedonia”, no.70/1992) upon my voting against the Resolution U.no.201/2008 of 13 May 2009, I separate and explain in writing my

S E P A R A T E O P I N I O N

With the Resolution U.no.201/2008 of 13 May 2009, the majority of the judges did not initiate a procedure for the appraisal of the constitutionality of Article 2 paragraph 2 and Article 3 item 4 of the Law on Expropriation (“Official Gazette of the Republic of Macedonia”, nos.33/1995, 20/1998, 40/1999, 31/2003, 46/2005, 10/2008 and 106/2008).

Article 2 paragraph 2 of the Law envisages that expropriation may take place of facilities, plants and pipelines for the transmission of electricity, that is, transmission of natural gas for the performance of an activity of public interest defined by law.

Under Article 3 item 4 of the Law, expropriation may be made for the needs of legal entities performing an activity – transmission of electricity that is transmission of natural gas.

Article 2 paragraph 1 in fourteen lines establishes what public interest is defined by the Law on Expropriation. These are:

– the arrangement, rational use and humanisation of space and protection and arrangement of living environment and nature by constructing facilities and performing works envisaged in the acts for spatial planning, such as:
– construction of railways, roads, bridges, airports, and accompanying facilities and plants;
– construction of plants for the production of electricity, facilities, plants and pipelines for transmission and distribution of the energy;
– construction of facilities and plants for postal, telephone and cable traffic, plants for radio and television connections and information systems;
– construction of facilities for defence and civil protection;
– construction of border crossing points;
– construction of facilities and plants for research and exploitation of mineral and other natural wealth;
– construction of water supply facilities and plants;
– construction of streets, squares, parking lots, parks and small parks;
– construction of garbage depots, filtering stations and other facilities for the protection of nature and living environment;
– construction of gas pipelines, oil pipelines and other pipelines;
– construction of water supply system, sewage system, heating system, cemetery and other public utilities;
– construction of facilities for education, upbringing, science, culture, health, social security and sports when the activity is performed as a public service; and
– construction of settlements in case of huge natural disasters (earthquakes, floods, fires, and land sliding) and moving of settlements (sinkage, ecological reasons and construction of complex facilities).

The construction of new transmission and distribution energy facilities for the transmission and distribution of electricity, that is, transmission of natural gas may be performed by the holder of the licence (Articles 60 and 61 of the Law on Energy).

Under Article 2 paragraph 2 and Article 3 line 4, expropriation is not made to construct new transmission and distribution energy facilities for the transmission and distribution of electricity or natural gas, but the already built facilities, plants and pipelines are “expropriated” from the one who has built them pursuant to the licence for the activity and all the required building documentation. All this “expropriation” of already built transmission and distribution energy facilities and pipelines is made for the needs of some other legal entities which will later be granted a licence for an activity – transmission of electricity, that is, natural gas.

Unlike the majority of the judges who passed the Resolution for non-initiation of a procedure for appraising the constitutionality of these two legal provisions, I am deeply convinced that they violate the guaranteed fundamental values of the Constitution of the Republic of Macedonia:
– the rule of law and legal protection of ownership of property – Article 8 paragraph 1 lines 3 and 6, given that the right to ownership of property is made of the right to govern, use and dispose with the thing.
– the guaranteed right to ownership of property – Article 30; and
– freedom of the market and entrepreneurship and ensuring equal legal position of the subjects on the market – Article 55 of the Constitution.

It is obvious that with the two provisions of the Law the state involves itself in the resolution of property-legal relations between the owner of the transmission and distribution energy facilities for the transmission and distribution of electricity and natural gas and the new legal entity-holder of the licence, but practically from the very beginning the nee holder of the licence for the activity already governs and uses the property (the system) which is the property of another entity.

Expropriation is used as a legal instrument only to change the title of ownership of the already existing system with classical taking away of built facilities and plants with a view to transferring them to another legal entity to be the title of the right to ownership of property with the aid of state intervention. The new legal entity that has been granted the licence is in a privileged position on the energy market (electricity or natural gas), it does not need to invest and build transmission and distribution systems, and with the intervention of the state it will obtain them in its ownership and will run them.

In my opinion, there is a violation of the guaranteed right to ownership of property, especially since the intervention of the state between two legal subjects in the concrete provisions overcomes the frameworks of what is the essence of expropriation, since continued work of the energy system between the two legal entities (the former holder of the licence and owner of the energy system for the transmission and distribution and the new holder of the licence) may be ensured also through the existing legal instruments for obligation relations, where both sides will determine their economic interest, and at the same time the public interest would be ensured expressed through continued supply of both types of energy.

The ownership of the built transmission-distribution systems may not be restricted with the intervention of the state, with the acceptance of the state to be a partner of a legal subject on the energy market, by granting it the licence for work for provide it also with conditions for work by taking the ownership of the distribution system away from the former holder of the licence for transmission and distribution of energy.

Such legal solutions, which unfortunately the majority of the judges failed to remove from the legal order as contrary to and in disagreement with the constitutional principles and rights cited above and as such not in the interest of the economic and energy development of the state, do not contribute to the investment in new energy transmission and distribution systems and eventually to liberalisation of the energy market.

Skopje, 20 May 2009

Liljana Ingilizova-Ristova
Judge
to the Constitutional Court
of the Republic of Macedonia

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