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  • Real Estate
  • 06-03-2018

On 16 February 2018, the President of the Netherlands’ highest administrative court, the Administrative Jurisdiction Division of the Council of State, asked Advocate-General Widdershoven, also a member of the Council of State, for an opinion. An opinion gives information to, but is not binding on the Council of State. The President wanted to know whether a land use plan (such as a zoning plan or an all-in-one environmental permit) involved “allocating scarce public rights.”

On 25 May 2016 the Advocate-General already opined that local authorities, when allocating scarce permits, must take into consideration the formal equality principle, that is to say, the principle of equal opportunities for all. Although this principle did not rule out any kind of distribution process, even a "first come first serve” process, the authorities must nonetheless ensure an "appropriate degree of transparency" so as to create equal opportunities. For example, information about the allocation process, the window for submitting applications, and the criteria to be applied must be publicised properly prior to the start date of the application period. Similarly, the criteria must be set out in clear, precise, and unambiguous terms. When awarding the permit, local authorities must apply these criteria to all applications in the same manner. Switching to using a different allocation procedure should no longer be allowed. Moreover, scarce permits should no longer be awarded for an indefinite period of time. In its ruling of 2 November 2016, the Administrative Jurisdiction Division (“the Division”) endorsed this opinion.

An opinion has now been sought in proceedings brought over the national government’s intervening land use plan for the “Zeewolde Wind Farm”, which provides for the construction of 91 new wind turbines and the upgrading of 221 existing wind turbines. The intention is for the wind farm to be constructed by just one of the applicants involved in the initiative . It was eventually decided to award the project to Windpark Zeewolde B.V. The owners of adjacent land and owners of existing wind turbines appealed the decision, saying that the procedure had not been transparent and the project should have been put out to public tender. That would have given them the chance of being awarded all (or some of) the project.

The Advocate-General has been asked, first of all, to examine whether a land use decision, such as in this case an intervening land use plan imposed by central government and/or the related all-in-one environmental permit, can involve a situation where scarce public rights are being allocated. If so, what then are the criteria for deciding that scarce public rights are being allocated. Is the ownership situation relevant for example? Or the question of whether or not the land use decision enables the provision of an economic service? Secondly, the Division would like to know what requirements the procedure must meet if land use decisions are issued where scarce public rights are allocated. Should there be requirements in terms of the distribution of planning opportunities and the term of validity of the decision?

These questions are exceptionally important to the creation of law and could conflict with earlier rulings, for example where the Division held that (i) ownership structures are not decisive from the perspective of proper spatial planning (ABRvS 27 January 2016, ECLI:NL:RVS:2016:148), and that (ii) a permit to construct a wind turbine on privately owned land does not, as a matter of principle, lend itself to applying the requirement that a scarce permit must be awarded on a temporary basis only, and (iii) does not involve a service (ABRvS 30 August 2017, ECLI:NL:RVS:2017:2331). In the light of the judgment of the Grand Chamber of the Court of Justice of the European Union of 30 January 2018 – and the definition of a “service” given in the Services Directive – the question arises as to whether the Division’s earlier ruling that no service is involved will hold up. It is also interesting to note the difference between the situation covered by the Division’s 30 August 2017 ruling and the case currently pending. In the former case, the Noord-Holland provincial authorities put in place a cap (maximum) on wind power. In the case at hand, involving the Flevoland provincial authorities, there is no such cap. It is also interesting to know to what extent any meaning should be given to the fact that the initiative will apparently come into the ownership of local residents, farmers, and turbine owners through a central vehicle. One could argue that this would ensure adequate competitive conditions, assuming of course that a scarce public right is involved.

The Division’s three-judge chamber will hear the case and these questions at a hearing on 9 April 2018. The Advocate-General will issue his opinion within six weeks of the hearing, presumably in May 2018. We will be following these developments closely. If you yourself are faced with the (possible) allocation of scarce public rights, or want to provide for a fair and transparent allocation of such rights, please do not hesitate to contact us. We would be happy to help you.

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