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Constitutional Complaints against Compulsory Contributions of Members of Chambers of Commerce and Industry Unsuccessful
Press Release No. 67/2017 of 02 August 2017
Order of 12 July 2017
1 BvR 2222/12, 1 BvR 1106/13
The compulsory contribution linked to compulsory membership in Chambers of Commerce and Industry (Industrie- und Handelskammern) is not objectionable under constitutional law. The First Senate of the Constitutional Court affirmed this in its order published today. It rejected constitutional complaints of two members of such Chambers. They claimed that the compulsory membership in the Chambers and the resulting liability to pay contributions prescribed in statutory law are not compatible with the Basic Law.
Facts of the Case:
The Chambers of Commerce and Industry are organised as corporate bodies under public law. Any person who runs a business within the district of the regionally responsible Chamber of Commerce and Industry is subject to compulsory membership, based on a federal statute which also requires members to pay contributions. The two complainants unsuccessfully filed suit against the notices ordering such payment. With their constitutional complaints they challenge the contribution notices as well as the relevant provisions in the Act on the Chamber of Commerce and Industry (Gesetz über die Industrie- und Handelskammer – IHKG) concerning compulsory membership. They claim that this compulsory membership violates their right to freedom of association under Art. 9(1) of the Basic Law (Grundgesetz – GG) or, at the very least, their general right to self determination under Art. 2(1) GG.
Key Considerations of the Senate:
1. The standard of review for protection from compulsory membership in “unnecessary” corporations follows from the general right to self determination (Art. 2(1) GG) and not from the fundamental right to freedom of association (Art. 9(1) GG). While Art. 9(1) GG governs voluntary formations of associations for the purpose of pursuing freely chosen aims, a statutory integration into a corporate body under public law draws on private actors to pursue public aims.
2. Levying contributions as well as compulsory membership interfere with the general right to self determination protected under Art. 2(1) GG. Compulsory membership by itself is neither only legally favourable nor does it lack any interfering effect. Thus, the establishment of a corporate body under public law that involves compulsory membership, and which is not directly provided for by the Basic Law itself, requires a statutory basis and organisational acts that meet the requirements of the Basic Law.
a) To involve private actors in Chambers of Commerce and Industry by way of compulsory membership is justified under constitutional law. The duties standardised in § 1 IHKG reflect a combination of representation of interests, and of the promotion and administrative tasks which are characteristic of economic self-administration, and the Federal Constitutional Court has repeatedly recognised that this constitutes a legitimate purpose of compulsory membership. In particular, compulsory membership ensures that all parties concerned in one region are given the opportunity to voice their interests and to be competently represented. This is also relevant regarding the other tasks performed by the Chambers of Commerce and Industry as holding examinations and issuing certificates.
b) The statutory provisions governing compulsory membership are suitable to reach these goals and thus form a sufficient basis for levying contributions. The legislature could certainly also opt for a concept of voluntary membership while otherwise maintaining the Chambers as they are. However, the Basic Law does not prohibit to choose a concept under which compulsory membership of all business enterprises in one district allows for the identification of a common interest that in fact includes all these businesses and companies. The liability to contribution linked to compulsory membership helps to enable the Chambers to fulfil their tasks, provided that the amount of contributions is adequate and that they are appropriately used. The legislature may also opt for regional organisation of the Chambers. Its assessment that important initiatives may and in fact should be triggered at the local or regional level - even in a Europeanised and globalised economy - does not give rise to objections under constitutional law.
c) In consideration of the legislature’s wide margin of appreciation, the interference with the complainants’ general right to self determination (Art. 2(1) GG) appears necessary. It is not evident that the Chambers of Commerce and Industry were assigned tasks that cause unnecessary expenses or that other possibilities exist to collect financial means from the parties concerned in an equally reliable yet less intrusive way. Under constitutional law, voluntary membership does not constitute a clearly less burdening alternative. The legislature’s objective to identify the overall interest of the regional economy is necessarily linked to a full identification of the business enterprises and their interests, which must be taken in to consideration by assessing and balancing them in accordance with § 1(1) IHKG.
d) Compulsory membership is also a reasonable means in order to reach the legislature’s legitimate goals and justifies the liability to contribution. The burden for business enterprises caused by the contribution to be paid according to their respective earnings and based on compulsory membership in a regional Chamber of Commerce and Industry is not particularly significant. Overall, the amount of such contributions has decreased rather than increased over the last years. Apart from that, compulsory membership gives members rights of participation and cooperation with regard to the Chamber’s tasks. This advantage resulting from the membership rights alone already entitles the Chamber to levy a contribution. In particular, compulsory membership does not force members to accept a situation in which the association and its organs exceed the tasks legally assigned; in fact, each member can take action against such conduct in an administrative court.
However, the overall interest can only be safeguarded if deviating interests of individual members or fundamental conflicts of interest that are of considerable importance for individual members are taken into account in the Chambers of Commerce and Industry. § 1(1) IHKG sets out the requirement to balance interests, rather than only representing such interests. This requirement also entails a duty to protect minorities. Deviating interests or fundamental conflicts of interest may not be hidden. In that respect it may be necessary to highlight different positions in the presentation of facts to be balanced, to specifically address them in detail, or to allow for the publication of a minority vote.
3. The liability to contribution on the basis of a compulsory membership in the Chambers is also compatible with the requirements of the principle of democracy (Art. 20(1) and (2) GG).
a) Performance of the Chambers’ of Commerce and Industry tasks enjoys sufficient democratic legitimation. The Chambers independently perform public duties in a clearly defined area by representing a pool of private interests. However, they do not aim to interfere with third party rights nor do they aim to exercise powers of interference at the expense of their members, except for the levying of contributions. The competencies of the Chambers have been sufficiently defined in the interpretation of the statutory provisions by the administrative courts. Combined with the legal supervision by the state over the rules on membership contributions (Beitragsordnung), this also applies with regard to the compulsory contribution.
b) Furthermore, and also regarding the principle of democracy, there are no serious constitutional concerns as to the internal statutes (Binnenverfassung) of the Chambers of Commerce and Industry.
Pursuant to the rules in the federal statute concerning the elections to the plenary assembly of the Chambers, the affected interests are appropriately taken into account by sufficient institutional arrangements. In light of the tasks incumbent upon the Chambers, the requirement to establish electoral groups to reflect the economic structure of a Chamber district is covered by the political leeway to design the legislature enjoys. Although such a rule modifies the counting value of one vote, it serves legitimate aims. It seeks to prevent that individual interests are given preference and aims to take businesses into account according to their economic strength within the district. Furthermore, with the rule on the allocation of seats (in the plenary assembly) stipulated in § 5(3) second sentence IHKG, the legislature sufficiently regulates itself those issues that are essential in this context to safeguard fundamental rights. This is supplemented by the provision for legal supervision by the state (§ 11 IHKG). Other than that, and considering the principle of democracy, the Chambers of Commerce and Industry are required to ensure that legitimate interests of association members are not neglected arbitrarily.