Does an incorporation plan for a wind farm allocate scarce public rights?
On 16 February 2017, the President of the Administrative Division of the Council of State requested an opinion [conclusie] from State Councillor Advocate General Widdershoven. Such an opinion provides the Council of State with information, but is not binding. The President wished to know whether a spatial plan (for example a zoning plan or an environmental permit) “allocates scarce public rights”.
Allocation of scarce permits must take account of the principle of equal opportunity
On 25 May 2016 , the Advocate General already found that when allocating scarce permits, public authorities must take account of the formal principle of equality, i.e. the principle of equal opportunity. Although that principle does not rule out any allocation procedure – including allocation in order of receipt – the authority in question must guarantee “an appropriate degree of public access” so as to ensure equal opportunity. For example, information about the allocation procedure, the application period, and the criteria to be applied must be properly disclosed before the start of the application period. The criteria must also be formulated clearly, precisely, and unambiguously. When permits are allocated, the criteria must be applied equally to all applications. It is then no longer possible to switch to a different allocation procedure. Furthermore, scarce permits can basically not be allocated for an indefinite period of time. The Administrative Division endorsed the Advocate General’s opinion in a ruling that it rendered on 2 November 2016.
Zeewolde wind farm: does the incorporation plan concern the allocation of scarce rights?
An opinion has now been requested in a procedure regarding the government’s incorporation plan for the Zeewolde wind farm, which provides for the removal of 221 existing wind turbines and the construction of 91 new ones. The intention is for the wind farm to be constructed by only a single party, with Windpark Zeewolde B.V. being the company chosen to implement the project. Neighbouring landowners and the owners of existing wind turbines disagree with this. In their view, the procedure is not transparent and there should have been a public call for tenders. That would have made them eligible for carrying out part of the project themselves.
The Advocate General was asked, first of all, to investigate whether a spatial planning decision – such as in this case a government incorporation plan and/or the associated environmental permit – could involve a situation in which scarce public rights are being allocated. If so, the question is then under what circumstances that is the case. Is the ownership situation relevant, for example, or is it relevant whether the spatial planning decision makes an economic service possible or not? Secondly, the Administrative Division wished the Advocate General to indicate the requirements that the procedure must meet when spatial planning decisions are taken that allocate scarce public rights. Are there then requirements, for example, concerning the allocation of planning possibilities and the period during which decisions continue to apply?
These questions are extremely important for the development of Dutch law and can create a conflict with earlier case law, for example (i) that ownership relationships are not decisive from the point of view of good spatial planning (ABRvS 27 January 2016, ECLI:NL:RVS:2016:148); (ii) that a zoning plan does not serve to regulate relationships between competitors (ABRvS 27 November 2017, ECLI:NL:RVS:2017:3210); that (iii) a permit for construction of a wind turbine on privately owned land is not, in principle, suitable for imposition of the requirement that a scarce permit be granted only temporarily; and that (iv) there is no question of a service (ABRvS 30 August 2017, ECLI:NL:RVS:2017:2331). Given the ruling rendered by the Grand Chamber of the Court of Justice of the European Union (ECJ) on 30 January 2018 – in connection with definition of the term “service” in the Services Directive – one can question whether the previous judgment or the previous reasoning of the Division to the effect that there is no question of a service is still tenable. In addition, the view that the construction of a wind turbine on privately owned land is not, in principle, suitable for imposition of the requirement that a scarce permit be granted only temporarily requires further substantiation, an issue which one hopes the Advocate General will also examine.
Scarcity arises because of a maximum and a demand that exceeds that maximum
As regards scarce public rights, it is interesting to note the difference between the situation concerned in the aforementioned judgment of 30 August 2017 and the current situation in which an opinion was requested. In the first case, a maximum had been set by the province of Noord-Holland (i.e. a maximum for wind energy). In the present case, which concerns the province of Flevoland, there is in fact no such maximum. The Advocate General had earlier given his opinion to the effect that scarcity only arises when a maximum is set, because a maximum may mean that more applications from potential candidates will follow than can ultimately be granted. One may wonder at what level such a maximum should be set. Is a policy document sufficient for that purpose or is it relevant that the maximum has a legal basis in a generally binding regulation (as in the case of the province of Noord-Holland in its provincial regulations)? The latter seems more plausible for reasons of legal certainty, but on the other hand the policy should not have been drawn up in such a way that only a single party remains, which may mean that the same opportunities are not open to all parties.
If we assume that scarcity can also be created by means of a zoning plan or an incorporation plan, this raises a very large number of thorny questions regarding Dutch legal practice and, more specifically, its practical implementation. How pervasive is the effect of the principle of transparency? The Administrative Division previously accepted – when a strong connection was established between a town’s General Municipal By-Laws [APV] with a maximum on the one hand (an operating permit for a gaming machines business) and an environmental permit – that the environmental permit was declared void (ABRvS 27 September 2017, ECLI:NL:RVS:2017:2611). It also follows from the aforementioned ruling that the obligation to in some way offer potential candidates scope to compete for the only available permit or permits can be limited by the legal provision that itself provides for the scarce permit. How does this affect actual practice if scarce public rights can also be allocated via a zoning plan? The Advocate General will undoubtedly consider this issue.
It is also interesting to what extent it is still relevant that the initiative apparently comes to be owned by residents, agricultural businesses, and turbine owners via a central means. One may wonder, in so far as there is a scarce public right, what this means as regards scope for competition. According to the explanation of the plan, an important element of the agreement with the initiator was ensuring that construction of the new turbines would be subject to the condition that the existing turbines be removed. Is that element still significant in the context of the scarcity discussion?
A new wave of formative case law in the pipeline?
Whereas in recent years the Division was confronted by a wave of appeals focusing on alleged conflict with, for example, the sustainable urbanisation ladder, it is now the “scarce rights and therefore transparency” argument that would seem to have become the new brain-teaser for the Division for the next few years. We are monitoring closely how this works out and, of course, the related legal issues, such as the extent to which the principle of relativity – as with said ladder – will also be the subject of legal debate. After all, it is only competitors that will basically be able to legitimately invoke it (cf. ABRvS 2 November 2016, ECLI:NL:RVS:2016:2927).
The Administrative Division will deal with the case and the aforementioned questions at a hearing of the full-bench division on 9 April 2018. The Advocate General will provide his opinion within six weeks after that hearing, so presumably in May 2018. Please don’t hesitate to contact us if you too are confronted by the (possible) allocation of scarce public rights or if you want to ensure the fair and transparent allocation of such rights. We will be only too happy to provide you with our input.