Judgment of the Court 7 February 1985
In Case 240/83 REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal de Grande Instance [Regional Court], Créteil, for a preliminary ruling in the proceedings pending before that court between
THE COURT composed of: Lord Mackenzie Stuart, President, G. Bosco and C. Kakouris, Presidents of Chambers, T. Koopmaņs, U. Everling, Y. Galmot and R. Joliet, Judges, Advocate General: C. O. Lenz Registrar: H. A. Rühi, Principal Administrator
gives the following
JUDGMENT
Facts and Issues
The facts of the case, the course of the procedure and the observations submitted to the Court may be summarized as follows:
1. Facts and procedure
1.1. The disposal of waste oils is the subject of Council Directive No 75/439/EEC of 16 June 1975 (Official Journal 1975 L 194, p. 31). The directive provides that Member States must take the necessary measures to ensure the safe collection and disposal of waste oils, preferably by recycling (regeneration and/or combustion) (Articles 2, 3 and 4). Article 5 of the directive provides that: ‘Where the aims defined in Articles 2, 3 and 4 cannot otherwise be achieved, Member States shall take the necessary measures to ensure that one or more undertakings carry out the collection and/or disposal of the products offered to them by holders, where appropriate in the zone assigned to them by the competent authorities’.
1.2. The French Republic implemented the directive in Decree No 79-981 of 21 November 1979 ‘laying down rules for the recovery of waste oils’ (Journal Officiel de la République Française of 23 November 1979, p. 2900), and further by the Order of 21 November 1979 on the ‘conditions for the collection of waste oils in pursuance of Decree No 79-981 of 21 November 1979 laying down rules for the recovery of waste oils’ (Journal Officiel de la République Française of 23 November 1979, p. 2901) and by the Order of 21 November 1979 on the ‘conditions for the disposal of waste oils in pursuance of Decree No 79-981 of 21 November 1979 laying down rules for the recovery of waste oils’ (Journal Officiel de la République Française of 23 November 1979, p. 2903). The French legislation provides in substance that:
‘Holders who accumulate waste oils as a result of their business activities must either deliver their waste oils to approved collectors, or, if they transport their waste oils themselves, deliver them to approved disposal undertakings, or dispose themselves of the waste oils which they produce, provided that they have been issued with an approval from the Ministry of the Environment (Article 3 of Decree No 79-981 of 21 November 1979 laying down rules for the recovery of waste oils);
In order to ensure that all waste oils are collected, the whole country is partitioned into geographical zones (generally the départements), in each of which an approved collector has been appointed by the Ministry of the Environment on the basis of an invitation to tender and the opinion of an interdepartmental committee of approval;
The approved collector is responsible for the collection of all waste oils produced in the zone for which an approval has been granted to it;
The approved collector must deliver waste oils to an approved disposal undertaking, except for clear oils which may also be reused without further treatment (Article 10 of the Annex to the Order of 21 November 1979 on the conditions under which waste oils are to be collected) ;
The disposal of waste oils is likewise subject to an approval issued by the Minister for the Environment;
Approved disposal undertakings must treat the waste oils in their own plants, or their approval may be withdrawn;
The treatment of waste oils must be carried out by recycling or regeneration in conditions which are economically viable, or if that is not possible, by industrial use as fuel in approved plants’.
1.3. The Association de Défense des Brûleurs d'Huiles Usagées [association for the defence of the interests of burners of waste oils, hereinafter referred to as ‘the Association’] was founded in France on 16 October 1980. According to its articles, its aim and object is to defend the interests of manufacturers, dealers and users of stoves and heating appliances which are designed to burn both fuel oil and waste oils. By an application of 21 September 1981, the Procureur de la République at the Tribunal de Grande Instance, Créteil, brought an action before that court against the Association, in the person of its officers. The Procureur de la République sought the dissolution of the Association on the ground that its principal object was unlawful inasmuch as it encouraged persons to commit the offence defined in Article 24 of Law No 75-633 of 15 July 1975 on the disposal of waste and the recovery of substances (Journal Officiel de la République Française of 16 July 1975, p. 7229), inasmuch as under the abovementioned French rules, any burning or disposal which has not been approved constitutes an offence under Article 24. For its part, the Association relied on the principle of freedom of association and maintained that the French rules on waste oils were inappropriate. However, in so far as those rules were adopted in order to implement Directive No 75/439, the Association directed its complaints against that directive. In view of the fact that Article 3 of the directive provides that Member States must take the necessary measures to ensure that, as far as possible, the disposal of waste oils is carried out by recycling (regeneration and/or combusion other than for destruction) and that Article 4 prohibits only the discharge of waste oils into waters or the soil and processing which causes too much pollution, the Association questions, in the first place, whether the directive can constitute legal grounds justifying the prohibition of burning. In addition it contests the validity of the provisions of the directive having regard to the principles of freedom of trade, the free movement of goods and free competition, which are affected respectively by the administrative procedure for approval provided for in Article 6, by the system of zones authorized by Article 5 and by the grant of ‘indemnities’ referred to in Articles 13 and 14 of Directive No 75/439.
1.4. The Tribunal de Grande Instance, Créteil, acceded to the Association's request that those questions be referred to the Court of Justice. By judgment of 23 March 1983, it stayed the proceedings ‘until the Court of Justice of the European Communities has given a preliminary ruling on the interpretation of Directive No 75/439 of 16 June 1975 and the validity thereof in regard to the Treaty of Rome, stating in particular: Whether the directive is in conformity with the principles of freedom of trade, the free movement of goods and free competition, established by the Treaty of Rome, in view of the fact that Articles 5 and 6 of the directive empower the administrative authorities of the State to draw up zones which are assigned to one or more undertakings approved by those authorities and charged by them with the collection and the disposal of waste, and the fact that Articles 13 and 14 authorize the granting of subsidies; In addition, whether the directive provides legal grounds justifying the prohibition of the burning of waste oils’.
1.5. The order making the reference was received at the Court Registry on 24 October 1983. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by the Commission of the European Communities, represented by its Legal Adviser, Jean Amphoux, by the Council of the European Communities, represented by Jill Aussant, a Principal Administrator in the Council's Legal Service, by the Government of the French Republic, represented by Jean-Paul Costes of the Secretariat General of the Comité Interministériel pour les Questions de Coopération Économique Européenne, by the Government of the Federal Republic of Germany, represented by its Agents, Martin Seidel and Ernst Roder, and by the Government of the Italian Republic, represented by Pier Giorgio Ferri, Avvocato dello Stato. 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.
2. Summary of the observations submitted to the Court
2.1. In the first part of its observations the Commission considers the provisions of Directive No 75/439 and the French rules implementing that directive. It then turns to the first question submitted by the Tribunal de Grande Instance, Créteil, and examines the validity of the directive in relation to the freedom to exercise business activities, freedom of trade, the free movement of goods and the rules on competition. The Commission considers that although Directive No 75/439 places certain restrictions on the fundamental right of freedom of trade and industry, inasmuch as it lays down rules for the disposal of waste oils and, in particular, prohibits the burning of such oils, those restrictions are justified by the objectives of general interest pursued by the Communities. In the Commission's view there can be no doubt that the protection of the environment against the risk of pollution constitutes an object of general interest which the Community may legitimately pursue. It is also quite clear that rules concerning the disposal of waste oils have become necessary because of the potential danger for the environment and human health represented by the indiscriminate discharge of such oils into the environment or their uncontrolled use. The oils in question are dangerous in particular because of the additives and heavy metals which they contain. Moreover, when burned, they may give off into the atmosphere considerable quantities of chlorine and hydrocarbons. The Commission joins to its observations a lengthy scientific study and tables presenting the results of analyses carried out by various institutions in different countries which show clearly that those oils may contain a very high proportion of harmful substances. The Commission further states that when oils break down in use, polycyclic aromatic hydrocarbons may form, some of which are carcinogenic. The concentration of such substances in waste oils is even greater because the oils are older. It is also necessary to take into account the potential effects on atmospheric pollution of the use of waste oils as fuel. The combustion of such oils in traditional plants can lead to considerable pollution of the immediate environment of such plants. The Commission concludes that there can therefore be no doubt that rules intended to control the use of waste oils with a view to protecting the environment correspond to an objective in the common interest. The Commission also submits that the restrictions which the directive imposes on the persons concerned are not excessive and do not represent an intolerable interference in their rights which is out of proportion to the object pursued in the common interest. As regards more specifically the burning of waste oils, which is the aspect of the problem with which the proceedings before the national court are concerned, the Commission points out that the directive does not opt for one or the other of the two possible methods of recycling, regeneration or combustion. The directive requires merely that the recycling be carried out in compliance with the requirements of Article 4 and subject to the control resulting from the requirement of prior approval by the competent authorities. There is nothing in those requirements which cannot be justified with regard to the objectives pursued. As regards combustion of waste oils, the French rules adopted for the implementation of the directive do indeed go further than the directive in the restrictions imposed on potential users of waste oils, inasmuch as they authorize only ‘industrial use’ of oils as fuel and exclude all burning of such oils for domestic purposes. Nevertheless it cannot be said that because the French rules impose those additional requirements they depart from the system provided for in the directive. According to the Commission, those requirements are justified under Directive No 75/439 inasmuch as they correspond to the necessity of preventing ‘air pollution which exceeds the level prescribed by existing provisions’ (Article 4) or ensuring ‘that there will be no avoidable risk of water, air or soil pollution’ (Article 9). The Commission points out that restrictions on the burning of waste oils in small plants or for heating purposes also exist in the Federal Republic of Germany and that a proposal for a directive, which is in the process of being drawn up by the Commission, envisages the need for prior approval for any combustion plant using such oils. As regards the compatibility with the principle of the freedom of trade of the requirement under Article 6 of the directive that any undertaking which disposes of waste oils must obtain a permit, the Commission maintains that the requirement is fully justified by the objectives it pursues in the common interest and that it in no way appears to be a disproportionate means of attaining such objectives. Moreover, the Commission observes, the only conditions envisaged by the directive for the grant of the permit are technical in nature (examination of the installations of the persons concerned). Thus the directive provides for the establishment of a system of preventive control of the disposal of waste oils. There is nothing unusual in such a control. Procedures for prior authorization are customary in the legal systems of all the Member States as safeguards on dangerous operations. Such preventive control is the only really effective and appropriate solution in view of the irremediable nature of the damage if the risks materialized and the heavy economic and social costs inherent in developing the necessary technical means to prevent such damage or even more to prevent such damage recurring. As regards the authorizations required by the French rules implementing the directive, the Commission maintains that there is nothing in the actual wording of the French Decree No 79-891, and the implementing orders adopted on the same day, to suggest that the system of permits set up under those provisions is intended to serve any aims other than those which correspond to the implementation of Directive No 75/439 in relation to the grant of approval to undertakings which dispose of waste oils. The Commission then examines the compatibility of Article 5 of Directive No 75/439 with the rules of the Treaty guaranteeing the free movement of goods in intra-Community trade. In order to ensure that all waste oils are collected and disposed of safely, Article 5 authorizes the Member States to ‘take the necessary measures to ensure that one or more undertakings carry out the collection and/or disposal of the products offered to them by holders, where appropriate in the zone assigned to them by the competent authorities’. The Commission points out that the Court has already recognized that Article 5 of the directive is compatible with the rules of the Treaty concerning the free movement of goods, in its judgment of 10 March 1983 in Case 172/82, Inter-Huiles. As regards the French rules adopted implementing the directive, the Commission maintains that in the same judgment the Court called in question the compatibility with the Treaty of the system of zones set up in France, which went beyond the requirements of the directive and established barriers to exports. The Commission stresses that the same is true, mutatis mutandis, where national rules providing for the exclusive right within given zones to collect and dispose of waste oils form a barrier to imports. Finally, the Commission regards as unfounded the allegations that Articles 13 and 14 of the directive, under which indemnities are granted to approved collection or disposal undertakings, are incompatible with the rules on competition set out in the Treaty. The Commission states that those provisions in no way authorize the grant of subsidies in the sense of financial aid without anything being given in return. The payments in question are in fact ‘indemnities’ for services rendered ‘in return’ for the obligations which the Member States impose on collection or disposal undertakings, in accordance with the directive. Although those indemnities may be financed out of public funds, possibly, according to Article 14, by a charge imposed on products which after use are transformed into waste oils, or on waste oils, the indemnities may be regarded only as the price paid in return for services provided by the collection or disposal undertakings. Moreover, Article 13 places strict limits and conditions on the calculation and the grant of those indemnities. On the basis of the foregoing, the Commission proposes that the' following reply should be given to the questions referred to the Court:
‘(1) Consideration of the questions submitted by the national court has disclosed no factor such as to call in question the validity of the provisions of Council Directive No 75/439/EEC of 16 June 1975 on the disposal of waste oils;
2) Directive No 75/439/EEC authorizes the Member States to prohibit non-approved combustion of waste oils in so far as that prohibition corresponds to the objectives set out in the directive. ’
2.2. The Council's observations concern only the first question submitted for a preliminary ruling, namely that concerning the validity of Directive No 75/439. The Council considers in the first place that it is clear from the preamble to the directive that the objectives set out in the preamble are intended to be achieved by a system which neither creates barriers to intra-Community trade nor affects competition. In the Council's view that intention of the Community legislature has indeed been implemented by the actual provisions of the directive. In that respect the Council examines in particular (i) the system of zones set up under Article 5 of the directive, in relation to the principle of free movement of goods; (ii) the grant of subsidies, provided for under Article 13 of the directive, in relation to the rules on competition and (iii) the system of prior approval, provided for under Article 6 of that directive, in relation to freedom of trade. The system of zones is the last means of attaining the objective of the safe collection and disposal of waste oils. The Council considers that it in no way constitutes a barrier to the free movement of those products within the common market, because, as the Council interprets it, only the collection must be carried out within the zone and not the disposal, which may be carried out in the country or abroad. The Council maintains that the subsidies are not subsidies as such but ‘indemnities for services rendered’. The Council emphasizes that the undertakings which actually render their services are paid, not at the discretion of the Member States, but in accordance with criteria laid down in Article 13 of the directive, which provides that the indemnities must not exceed annual uncovered costs actually recorded by the undertakings taking into account a reasonable profit. The indemnities are intended to ensure that the undertakings concerned do not make losses and to allow them a reasonable profit such as would normally result from any commercial operation. The connection between the obligation to carry out the collection and/or disposal and the costs entailed by such operations represents a factor which prevents significant distortions of competition. The Council thus considers that the safeguards against distortions of competition referred to Article 13 are afforded by the provisions of that article concerning the conditions in which the indemnities may be granted by the Member States. The Council takes the view that the requirement of prior approval of undertakings is necessary in the general interest, in the light of the potential risks for the environment and human life entailed by the discharge, deposit or processing of those oils. It in no way represents a barrier to the freedom to provide services, provided that the permits are granted without discrimination against foreign undertakings. In conclusion the Council proposes that the Court should give the following reply to the first question submitted by the national court:
‘(a) The compatibility of the directive with the principles laid down by the Treaty of Rome should be examined with regard to the provisions of the directive which are called in question and not in relation to the system which it lays down for the disposal of waste oils;
b) The objectives of the directive as set out in the preamble are compatible with the free movement of goods, free competition and the freedom of trade (in the sense of the freedom to provide services);
c) The provisions of the directive correctly reflect its objectives and in no way offend against any of the principles of the Treaty referred to in the question submitted to the Court’.
2.3. The French Government submitted observations only on the second question for a preliminary ruling concerning the justification of the French prohibition of the burning of waste oils in relation to Directive No 75/439. It left the first question to the judgment of the Court. In the French Government's view the directive leaves Member States the choice with regard to the disposal of waste oils of adopting either a mixed solution combining the regeneration and the combustion of waste oils or of opting for one of the two possible methods provided for in the directive. If a Member State does opt for one method, it may prohibit recourse to the other. Since the directive gives no indication concerning the way in which a division between the two systems shall operate, it appears that the Member States which have chosen the combined solution are at liberty to determine such balance between burning and regeneration as they see fit. The French Government, therefore, requests the Court to interpret Article 3 of Directive No 75/439/EEC of 16 June 1975 as meaning that Member States are free to choose between the regeneration and the burning of oils but that the Member States may combine the two methods as they see fit, which may lead them to prohibit one or other of those methods in areas which they may determine at their absolute discretion.
2.4. The Government of the Federal Republic of Germany submitted observations solely in connection with the second question referred for a preliminary ruling. It maintains that Article 3 of the directive, which concerns methods of disposing of waste oils, provides Member States with three alternatives which correspond to the methods used in those States at the time of the adoption of the directive. It is certainly not possible to infer from Article 3 of the directive that Member States must authorize the destruction of waste oils by burning. The German Government points out that both in the Federal Republic of Germany and in France the principal method of disposal of the oils in question is regeneration in a manner which is efficient from the point of view of energy policy and which does not pollute the environment. In principle, burning in small incinerators is prohibited. The German Government maintains that that prohibition complies with the requirements of Articles 4 and 6 of the directive. It considers, in particular, that means of purifying the polluted air which efficaciously meet the requirements of waste oils, whose composition is constantly changing, can only be applied in large incinerators. According to the German Government, it is not possible in small incinerators with today's technology to limit harmful emissions economically and in a way which may be supervised by the authorities. The German Government produces figures concerning the emissions from the burning of waste oils, which show the harmful effect which that technique has on the environment. On those grounds, the German Government suggests that, in reply to the second question, the Court should hold that the prohibition of the burning of waste oils is in conformity with the provisions of Directive No 75/439.
2.5. As regards the first question, the Italian Government considers that, in its judgment of 10 March 1983 in Case 172/82, the Court recognized the validity of the basic principles of the system set up by the directive as means of ensuring the satisfactory management of waste oils, both from the point of view of the recovery of energy and from that of the protection of the environment. Any incompatibility of that system with the Treaty results from the introduction of barriers restricting exports of such products to other Member States. The reply to the first question should therefore be in the affirmative. As regards the second question, the Italian Government maintains that in the scheme of the directive, burning is regarded as an acceptable and effective means of disposing of waste oils, as is clear from Article 3. The parenthetic phrase ‘as far as possible’ contained in that provision must, it seems, relate to Article 2 which lays down the objective of ensuring the safe disposal of waste oils, in other words, disposal having no harmful effects on the environment. It is conceded, however, that the recycling of waste oils by combustion may be particularly harmful to the cleanliness of the air. According to the Italian Government, the burning of waste oils is an activity which should be regulated with controls on the persons who are authorized to exercise it. In consequence, the Italian Government proposes that, in reply to the second question, the Court should state that:
‘Directive No 75/439/EEC may constitute legal grounds justifying the prohibition of the burning of waste oils inasmuch as that prohibition represents, in pursuance of the national legislation, a measure necessary for the implementation of Articles 2, 4 and 5 of the directive in question.’
3. Oral Procedure
At the sitting on 4 October 1984 oral argument was presented by the following: Association de Défense des Brûleurs d'Huiles Usagées, represented by Maître Mauro; the Government of the French Republic, represented by G. Boivineau; the Government of the Italian Republic, represented by P.G. Ferri; the Commission, represented by J. Amphoux; and the Council of the European Communities, represented by J. Aussant.
The Advocate General delivered his opinion at the sitting on 22 November 1984.
Decision
1. By judgment of 23 March 1983, which was received at the Court on 24 October 1983, the Tribunal de Grande Instance [Regional Court], Créteil, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation and validity of Council Directive No 75/439/EEC of 16 June 1975 on the disposal of waste oils (Official Journal 1975 L 194, p. 23), in order to ascertain whether French Decree No 79-981 of 21 November 1979 laying down rules for the recovery of waste oil (Journal Officiel de la République Française of 23 November 1979, p. 2900) and its implementing orders were compatible with Community legislation inasmuch as they contained provisions prohibiting the use of such oils as fuel.
2. On the basis of those French provisions the Procureur de la République [Public Prosecutor] applied to the Tribunal de grande instance, Créteil, for the dissolution of the Association de défense des brûleurs d'huiles usagées [Association for the defence of the interests of burners of waste oils, hereinafter referred to as ‘the Association’], on the ground that its aim and objects were unlawful. The Association's object is to defend the interests of manufacturers, dealers and users of stoves and heating appliances which burn both fuel oil and waste oil, such burning being prohibited by the French legislation.
3. Articles 2 to 4 of Directive No 75/439/EEC require Member States to take the necessary measures to ensure the safe collection and disposal of waste oils, preferably by recycling. Article 5 of the Directive provides as follows: ‘Where the aims defined in Articles 2, 3 and 4 cannot otherwise be achieved, Member States shall take the necessary measures to ensure that one or more undertakings carry out the collection and/or disposal of the products offered to them by the holders, where appropriate in the zone assigned to them by the competent authorities.’ Article 6 (1) thereof further provides that ‘any undertaking which disposes of waste oils must obtain a permit’. In addition, Articles 13 and 14 provide that an indemnity, financed in accordance with the ‘polluter pays’ principle and not exceeding the actual yearly costs, may be granted to undertakings collecting and/or disposing of waste oils, as compensation for the obligations imposed on them under Article 5.
4. In pursuance of the directive, on 21 November 1979 the French Government adopted Decree No 79-981 laying down rules for the recovery of waste oils, together with the two abovementioned implementing orders of the same date. Under those provisions French territory was divided into zones and a system was established for the approval both of waste-oil collectors and of the undertakings responsible for disposing of waste oils. Under Article 3 of Decree No 79-981, holders of waste oils must either deliver them to collectors approved pursuant to Article 4 thereof, or make them directly available to a disposal undertaking which has obtained the approval required by Article 8, or else perform the disposal themselves if they have been granted such an approval. Article 6 of the decree requires collectors to surrender the oils collected to approved disposal undertakings. Article 7 lays down that ‘the only permitted methods for disposing of waste oils... are recycling or regeneration under economically acceptable conditions, or else industrial use as fuel’. With respect to such industrial use, the second paragraph of Article 2 of the implementing order on the conditions for the disposal of waste oils provides that disposal by burning must take place ‘in a plant which has been approved for the purposes of environmental protection’.
5. Since the legislation in question was adopted pursuant to Directive No 75/439, the Association raised before the national court the question whether that directive could constitute a legal basis for the prohibition of the burning of waste oils. Furthermore, doubts were expressed as to the validity of the directive in the light of certain fundamental principles of Community law.
6. In those circumstances, the Tribunal de Grande Instance, Créteil, stayed the proceedings and submitted to the Court a request for a preliminary ruling on the interpretation and validity of Directive No 75/439/EEC, in the following terms:
‘Is the directive in conformity with the principles of freedom of trade, free movement of goods and freedom of competition, established by the Treaty of Rome, in view of the fact that Articles 5 and 6 of the directive empower the administrative authorities of the States to draw up zones which are assigned to one or more undertakings approved by those authorities and charged by them with the collection and the disposal of waste, and the fact that Articles 13 and 14 authorize the granting of subsidies?
In addition, does the directive provide legal grounds justifying the prohibition of the burning of waste oils?’
Validity of the directive
7. The wording of the first question raises doubts as to the validity of the directive as a whole but the reason for those doubts relate more particularly to the provisions which envisage the possibility of exclusive zones being assigned to waste-oil collectors, the prior approval of undertakings responsible for disposal and the possibility of indemnities being granted to undertakings which collect and dispose of waste oils.
8. In those circumstances it is appropriate to consider, first, the provisions of the directive relating to the system for the assignment of zones (Article 5) and for the prior issuing of permits to disposal undertakings (Article 6) and, secondly, the system for granting indemnities (Articles 13 and 14).
Articles 5 and 6 of the directive
9. The national court asks whether the system of permits is compatible with the principles of free trade, free movement of goods and freedom of competition, but does not elaborate further. In that connection it should be borne in mind that the principles of free movement of goods and freedom of competition, together with freedom of trade as a fundamental right, are general principles of Community law of which the Court ensures observance. The abovementioned provisions of the directive should therefore be reviewed in the light of those principles.
10. As to whether the system of granting approvals by zones for the collection of waste oils is consistent with the principle of free movement of goods, the Commission and the Council, and also the Italian Government, emphasize in their observations that, in the first place, Article 5 of the directive permits the creation of zones only in exceptional circumstances, in particular in cases where no other, less restrictive, system seems to be feasible. They go on to argue that, in conformity with the Treaty, the directive as a whole does not obstruct the free movement of waste oils.
11. Whilst conceding that a system of approvals is bound to have a restrictive effect on freedom of trade, the Council and the Commission argue that the measure envisaged by Article 6 of the directive pursues an aim which is of general interest, by seeking to ensure that the disposal of waste oils is carried out in a way which avoids harm to the environment.
12. In the first place it should be observed that the principle of freedom of trade is not to be viewed in absolute terms but is subject to certain limits justified by the objectives of general interest pursued by the Community provided that the rights in question are not substantively impaired.
13. There is no reason to conclude that the directive has exceeded those limits. The directive must be seen in the perspective of environmental protection, which is one of the Community's essential objectives. It is evident, particularly from the third and seventh recitals in the preamble to the directive, that any legislation dealing with the disposal of waste oils must be designed to protect the environment from the harmful effects caused by the discharge, deposit or treatment of such products. It is also evident from the provisions of the directive as a whole that care has been taken to ensure that the principles of proportionality and nondiscrimination will be observed if certain restrictions should prove necessary. In particular, Article 5 of the directive permits the creation of a system of zoning ‘where the aims defined in Articles 2, 3 and 4 cannot otherwise be achieved’.
14. In the second place, as far as the free movement of goods is concerned, it should be stressed that the directive must be construed in the light of the seventh recital in the preamble thereto, which states that the treatment of waste oils must not create barriers to intra-Community trade. As the Court has already ruled in its judgment of 10 March 1983 (Case 172/82, Fabricants Raffineurs d'Huile de Graissage v Inter-Huiles, [1983] ECR 555) dealing with the same zoning scheme, an exclusive right of that kind does not automatically authorize the Governments of the Member States to establish barriers to experts. Indeed, such a partitioning of the markets is not provided for in the Council Directive and would be contrary to the objectives laid down therein.
15. It follows from the foregoing that the measures prescribed by the directive do not create barriers to intra-Community trade, and that in so far as such measures, in particular the requirement that permits must be obtained in advance, have a restrictive effect on the freedom of trade and of competition, they must nevertheless neither be discriminatory nor go beyond the inevitable restrictions which are justified by the pursuit of the objective of environmental protection, which is in the general interest. That being so, Articles 5 and 6 cannot be regarded as incompatible with the fundamental principles of Community law mentioned above.
Articles 13 and 14 of the directive
16. The articles in question provide for the possibility of undertakings being granted indemnities for the services which they perform in collecting and/or disposing of waste oils.
17. It is apparent from the request for a preliminary ruling that the question to be answered is whether those indemnities are consistent with the requirements of free competition, and in particular with Articles 92 to 94 of the Treaty, which prohibit the granting of aid by Member States.
18. In that respect the Commission and the Council, in their observations, rightly argue that the indemnities do not constitute aid within the meaning of Articles 92 et seq of the EEC Treaty, but rather consideration for the services performed by the collection or disposal undertakings.
19. It is also important to note that according to the second paragraph of Article 13 of the directive ‘The amount of these indemnities must be such as not to cause any significant distortion of competition or to give rise to artificial patterns of trade in the products.’
20. Articles 13 and 14 of the directive cannot therefore be considered to be contrary to the principle of free competition.
21. In those circumstances, the reply to be given to the first part of the question is that consideration of Articles 5, 6, 13 and 14 of Council Directive No 75/439/EEC of 16 June 1975 has disclosed no factor of such a kind as to affect their validity.
Interpretation of the directive
22. It is apparent from the request for a preliminary ruling and from the documents before the Court that the French legislation permits the burning of waste oils only in industrial installations, thereby prohibiting any other form of burning.
23. In the second part of the question the national court enquires whether Directive No 75/439, in implementation of which the French legislation was adopted, justifies the prohibition of the burning of waste oils.
24. The German, French and Italian Governments and the Commission advocate an affirmative reply. They argue that the uncontrolled burning of waste oils contributes significantly to air pollution and, consequently, that a prohibition of oil-burning in any plant which does not incorporate adequate safeguards is in conformity with the objectives of the directive. The Italian Government adds that the disposal of waste oil by burning carried out by persons authorized for that purpose must be the subject of rules and inspections.
25. As has already been emphasized, the main aim of the directive is the disposal of waste oil in a manner which is safe for the environment, and Article 2 makes it incumbent upon the Member States to pursue that aim.
26. Article 3 of the directive provides that ‘Member States shall take the necessary measures to ensure that, as far as possible, the disposal of waste oils is carried out by recycling (regeneration and/or combustion other than for destruction)’ and Article 4 provides that Member States must prohibit any deposit, discharge or processing of waste oils in such a way as to cause harmful effects on water, soil or air.
27. In order to ensure compliance with those measures, Article 6 provides that any undertaking which disposes of waste oils must obtain a permit granted by the competent national authority, if necessary after an inspection of the installations, with a view to imposing the conditions required by the state of technical development.
28. In addition to that prior inspection, subsequent checks are provided for by Articles 11 and 12, by virtue of which undertakings are required on the one hand to provide information concerning the disposal or deposit of waste oils or residues thereof, and, on the other, to be inspected periodically, particularly as regards their compliance with the conditions of their permits.
29. It follows from those provisions that the directive requires Member States to prohibit any form of waste-oil disposal which has harmful effects on the environment. It is to that end that the directive compels Member States to set up an effective system of prior approval and subsequent inspections.
30. The reply to be given to the second question must therefore be that the prohibition of the burning of waste oils in conditions other than those permitted under legislation such as the French legislation is not inconsistent with Directive No 75/439/EEC.
Costs
31. The costs incurred by the German, French and Italian Governments, and by the Commission and the Council of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.
On those grounds, THE COURT in answer to the questions referred to it by the Tribunal de Grande Instance, Créteil, by a judgment of 23 March 1983, hereby rules as follows:
(1) Consideration of Articles 5, 6, 13 and 14 of Council Directive No 75/439/EEC of 16 June 1975 has disclosed no factor of such a kind as to affect their validity.
(2) The prohibition of the burning of waste oils in conditions other than those permitted under legislation such as the French legislation is not inconsistent with Directive No 75/439/EEC.
1 Language of the Case: French.
2 Translator's note: the order of the French court in fact referred to ‘14 and 14’ but ‘13 and 14’ would appear to be meant.