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The Thirteenth Amendment to the Atomic Energy Act is for the most part compatible with the Basic Law

Press Release No. 88/2016 of 06 December 2016

Judgment of 06 December 2016
1 BvR 2821/11, 1 BvR 1456/12, 1 BvR 321/12

The provisions of the Thirteenth Act Amending the Atomic Energy Act of 31 July 2011 (Dreizehntes Gesetzes zur Änderung des Atomgesetzes ­– 13. AtG-Novelle – 13th AtG Amendment) largely constitute a determination of the content and limits of property that may reasonably be imposed and that adheres to the requirements of the protection of legitimate expectation and of the principle of equality. This is what the First Senate of the Federal Constitutional Court held in its judgement pronounced today. The 13th AtG Amendment does, however, violate the constitutionally guaranteed right to property (Art. 14 of the Basic Law, Grundgesetz – GG) to the extent that the introduction of fixed dates by which nuclear power plants in Germany must be shut down (§ 7 sec. 1a sentence 1 of the Atomic Energy Act, Atomgesetz – AtG in the version of the 13th AtG Amendment) does not ensure that the electricity output allowances allocated to each power plant by law in 2002 will be used up within the corporations concerned before the fixed shut down dates. This renders the possibilities to use the power plants protected by the guarantee of property untenable, and limits them in a way that violates equality. In contrast, the striking of the additional electricity output allowances granted for individual nuclear power plants in the Eleventh Act to Amend the Atomic Energy Act (Elftes Gesetz zur Änderung des Atomgesetzes, 11. AtG-Novelle – 11th AtG Amendment) of 8 December 2010 is compatible with the Basic Law. Yet it is incompatible with Art. 14 GG that the 13th AtG Amendment does not provide for any settlement with regard to investments made in legitimate expectation of the additional electricity output allowances granted in 2010 and that were devalued as a result of the striking of these allowances under the 13th AtG Amendment. § 7 sec. 1a sentence 1 of the Atomic Energy Act continues to be applicable for now; the legislature has until 30 June 2018 to draw up new provisions.

Facts of the Case:

The constitutional complaints challenge the acceleration of the phase-out of the peaceful use of nuclear energy enacted in 2011. The fundamental decision in favour of a phase-out was already taken in the Phase-Out Amendment Act (Ausstiegsnovelle) in 2002. Individual nuclear power plants were allocated a residual electricity volume that could be transferred to other, newer nuclear power plants. Once these were used up, the power plants were to be shut down. The 2002 Act on the phase-out did not contain a fixed end date. Following the 2009 parliamentary election, the new Federal Government put forth a modified energy policy in which nuclear energy should be used for a longer period of time as a “bridging technology”. Accordingly, by means of the 11th AtG Amendment, the legislature granted nuclear power plants additional residual electricity volumes, and thus pursued the aim of prolonging the operational lifetimes of German nuclear power plants by an average of 12 years. As a result of the tsunami of 11 March 2011 and of the meltdown of three reactor cores this brought about at the Fukushima nuclear power plant in Japan, the legislature, for the first time, statutorily set down fixed end dates for the operation of nuclear power plants in the 13th AtG Amendment, and at the same time struck the prolongation of the operational lifetimes of the nuclear power plants undertaken in the 11th AtG Amendment in the autumn of 2010. The nuclear energy subsidiaries of three of Germany’s four largest energy suppliers, as well as one nuclear power plant operating company, challenge this in their constitutional complaints. The fundamental decision taken in the Phase-Out Amendment Act of 2002 to end the peaceful use of nuclear power in Germany, however, is not the object of the constitutional complaints. The constitutional review of the challenged 13th AtG Amendment is thus based on a legal situation in which the end of the nuclear power plants’ power production, given their allocated volumes of electricity, was already set down. The complainants principally challenge a violation of the freedom of property (Art. 14 sec. 1 GG). 

Key Considerations of the Senate:

The constitutional complaints are admissible and, in part, well-founded.

1. The two complainants in the 1 BvR 1456/12 proceedings, as an exception, have the ability to lodge a constitutional complaint against the 13th AtG Amendment, even though the Swedish state holds 100% of the shares of the one, and 50% of the other. The considerations relevant to the denial of the ability to have legal personality with regard to fundamental rights that apply to legal persons governed by public law or by private law who are completely or for the most part held by the German state, do not apply unreservedly to domestic legal persons governed by private law who are held by a foreign state. Should they be denied the right to lodge a constitutional complaint, they would be without any possibility of redress in respect of direct legislative interference with their rights. The protection under administrative law that regular courts may provide usually has no direct effect against statutory acts. Legal persons governed by private law that are held by a foreign state also do not dispose of any domestic powers, be they direct or indirect. In particular, these persons do not have any possibility at their disposal to assert their own interests within the organisation of the state. Given the special circumstances of this case, the interpretation of Art. 19 sec. 3 GG, which is open in this regard, must also be undertaken in view of the freedom of establishment protected under EU law. Without the possibility of lodging a constitutional complaint, a justification with regard to the freedom of establishment would be required, given that the 13th AtG Amendment constitutes a significant interference for the complainant. Since in the case at hand the conditions for a justification are lacking, the complainants are entitled to lodge a constitutional complaint challenging the 13th AtG Amendment.

2. The 13th AtG Amendment interferes with the property of the complainants in several respects.

a) The constitutional guarantee of the right to property protects the specific assets held by the individual owners against measures by public authority. The scope of the protection only results once the content and limits of property are determined, which is a matter for the legislature. Its power to determine the content and limits is all the more broad, the stronger the social dimension of the property involved. Nuclear power plants and the various property interests related thereto constitute property with a particularly strong social dimension. This provides the legislature with particularly broad leeway to design the law relating to atomic energy, even in respect of existing property interests, without, however, completely depriving them of protection.

b) The 13th AtG Amendment interferes with the property interests of the complainants in several respects. It establishes, for the first time, fixed dates for the expiry of the entitlement to produce power in the individual nuclear power plants. Upon the expiry of the entitlement to operate, the right of use for the purposes of producing electricity by means of atomic energy that flows from the property of the sites and installations is extinguished. This interference reaches beyond the already existing burden caused by the nuclear phase-out as enacted in law in 2002, which, for that matter, is not challenged by these constitutional complaints. Because of the end dates for production that were fixed in 2011, the residual electricity volume allocated in 2002 will foreseeably not be able to be produced by two of the complainants, neither in the nuclear power plant to which it was allocated, nor in the same corporations’ other nuclear power plants. Moreover, the additional residual volumes of electricity just recently allocated to the nuclear power plants by the 11th AtG Amendment have been struck. Finally, the introduction of fixed shut-down dates as well as the striking of additional volumes of electricity can void investments entered into with a legitimate expectation as to the existing legal situation.

c) The guarantee of property is affected by this in various forms. The protection of property pursuant to Art. 14 sec. 1 sentence 1 GG encompasses the ownership of things in private law, their possession and the possibility of making use thereof. The provisions of the 13th AtG Amendment affect the ownership of the complainants’ plants, the usage of which was authorised under atomic energy law and which, by means of this authorisation, had become specific. The authorisation to construct and operate a nuclear power plant, or the authorisation to produce power (§ 7 sec. 1 and 1a AtG), is in and of itself not a protected property right under Art. 14 GG. It is not comparable with those subjective public rights to which settled constitutional case-law confers the protection given to property. The residual electricity volumes allocated in 2002 are not subject to independent protection, but benefit from the constitutional protection of property that Art. 14 GG affords for the use of the property rights in an authorised nuclear plant. The residual electricity volume allocated to the Mülheim-Kärlich nuclear power plant is exceptional in that it was allocated in the course of a settlement in return for the cessation of public liability proceedings against the Land Rhineland-Palatinate and for the withdrawal of an application for the issuing of an authorisation under atomic energy law for that nuclear power plant. The use of nuclear power plants is also covered by a corresponding protection of property as a result of the additional output allowances granted by the 11th AtG Amendment in view of the possibilities of use it opened up.

3. The challenged provisions of the 13th AtG Amendment do not result in the expropriation of the complainants’ property rights mentioned above.

a) Expropriation is directed at the complete or partial revocation of specific subjective property interests for the purpose of fulfilling certain public tasks. Expropriation within the meaning of Art. 14 sec. 3 GG further makes it a mandatory requirement that the sovereign seizing of a property right must at the same time constitute an acquisition of goods for the benefit of the public authorities or another beneficiary of the expropriation. Whether it is necessary that the goods must be acquired as a constitutive element of an expropriation has been the subject of debate until now. An argument in favour of this element is that the practical need for a mere deprivation of property not including the transfer of its ownership to the state or a third beneficiary does not arise specifically in cases where the property right is flawed in a broad sense. In such cases, the state typically does not have an inherent interest in acquiring the object in question for the public good. It corresponds to the social obligations that property entails (Art. 14 sec. 2 GG) that such cases of deprivation of property not be considered expropriations requiring compensation but rather as a determination of the content and limits of property. By limiting expropriation to cases where goods are acquired, burdens on property cannot be categorised as expropriations requiring compensation if they only consist of a deprivation by the state of specific property interests and thereby give particular weight to the interference. In such cases, the legislature must examine particularly carefully whether such a deprivation is only compatible with Art. 14 sec. 1 GG if the owner is provided with an appropriate settlement.

b) The introduction of fixed shut-down dates does not deprive the complainants of any stand-alone property rights. The residual electricity volumes granted in 2002 and 2010 do not constitute property interests that could be expropriated independently of the property in the plants. In any case, both interferences lack the element of an acquisition of goods that is indispensable for an expropriation. Neither the limiting of the operational lifetimes, nor the striking of the residual electricity volumes allocated in 2010 transfer the interests concerned to the state or to a third party.   

4. The challenged provisions of the 13th AtG Amendment largely satisfy the requirements for the determination of the content and limits of property.

a) In determining the content and limits of property, the legislature must find a fair balance between the owner’s interests worthy of protection and the public good. If the legislature determines the content and limits of corporately held property by changing the legal situation, it must adhere to the principles of proportionality, legitimate expectation and equality. With regard to the protection of corporate investments, Art. 14 GG provides the same guarantees as to other owners. The legislature must respect company assets and the investments undertaken in reliance on the legal situation in an appropriate manner.

b) The legislature is pursuing a legitimate regulatory objective in accelerating the nuclear phase-out with the underlying intent of thus minimising, in time and scope, the residual risk associated with nuclear energy, and thereby protecting the life and health of the people as well as the natural foundations of life. The setting down of fixed shut-down dates and the striking of the residual electricity volumes allocated in 2010 are also suitable means for ensuring that the final termination of the use of nuclear power is reached faster than it would have been under the previous legal situation.

c) The striking of the residual electricity volume allocated in 2010 is proportional. Yet the interference with Art. 14 GG is, from a quantitative perspective, very extensive: the legislature struck an electrical output of on average 12 years’ worth of production per nuclear power plant. The property interests concerned are limited in several ways in their worthiness for protection, so that the interference, in the overall balance with the public good – which favours the interference –, is proportionate. Beyond the already strong social aspect of the ownership of nuclear power plants, the protection of property with regard to the use of the nuclear plants, insofar as it relates to the additional electricity output allowances allocated by the 11th AtG Amendment, is further limited against state influence since the allocation of electricity output allowances is not based on any act accomplished by the affected company itself. These electricity output allowances, in contrast with the residual electricity volume allocated in 2002, do not constitute compensation for further limitations to the complainants’ property. Instead, they result from an energy, climate and economic policy decision by the Federal Government and the legislature. As a politically motivated granting by the legislature, the allowances only benefit to a small degree from the protection of property. Moroever, the period of time between the 11th AtG Amendment and the 13th AtG Amendment is too short to justify the general assumption that the nuclear power plant operators had already lastingly adapted to the on average twelve-year prolongation of the operational lifetimes.

In contrast, the public interests (life and health of the people, protection of the natural foundations of life) pursued by the 13th AtG Amendment are of high value and, in the specific implementation of the 2010 striking of the prolongation of the operational lifetimes, they carry great weight. The legislature wished to accelerate the phase-out, decided in 2002, of the peaceful use of atomic energy by introducing fixed shut-down dates and by striking the prolongation of operational lifetimes from late 2010. In doing so, a very considerable risk reduction is achieved. It is also not objectionable that the legislature was reacting to the events in Fukushima even though no new finding as to dangers could be derived from them. To what extent a change in political values or increased public concerns or fears can also sustain measures that – like the acceleration of the nuclear phase-out – significantly interfere with the fundamental rights of the persons concerned and what weight is to be attributed to them cannot be generally established. In any event, the evaluation of a high-risk technology that is particularly dependent on political assessment and the public acceptance of the risks of damage may also ascribe a weight to events that only change the public’s awareness of the risks without bringing to light new dangers.

d) The determination of the content and limits of property through the 13th AtG Amendment cannot, however, reasonably be imposed insofar as it leads to two complainants not being able to use up substantial parts of the residual electricity volumes of 2002 in their plants due to the statutorily fixed operational lifetimes. To be sure, the complainants, the Federal Government and also other parties involved all have different assumptions with regard to what utilisation levels of the individual nuclear power plants can realistically be expected, and upon which they found their prognoses of whether and to what extent the residual electricity volumes could be used up within the now fixed operational lifetimes. There was, however, consensus as to the outcome that two complainants would not be able to completely or almost completely use up the residual electricity volumes in nuclear power plants owned by the corporations concerned within the remaining operational lifetimes. However, it is exactly the possibility of producing electricity within the corporation that is key, since a transfer of residual electricity volumes to other corporations is, for the complainants, a possibility of use that cannot reasonably be imposed.

The interference with property is quantitatively significant and weighs heavily in particular because of the legislative context of the residual electricity volumes allocated in 2002. The residual electricity volumes allocated in 2002 are part of a transitional arrangement, which as a result of the development, reasons, and design of the Phase-Out Amendment Act of 2002 gave rise to a particular legitimate expectation. The Act, in particular with its electricity output allowance concept, was to provide a reliable basis for owners and operators of nuclear power plants for the remaining operational lifetime of the plants. The reliance on the possibility of using up the residual electricity volumes of 2002, in a manner generally not limited in time and essentially undiminished, is also particularly worthy of protection given its compensational nature. These residual electricity volumes were intended to settle the loss, brought about by the Phase-Out Amendment Act, of the possibilities of use of the nuclear power plants which until then had been unlimited, and also to help maintain the proportionality of the decision to phase out. The fact that a part of the residual electricity volumes of 2002 can no longer be converted into electricity within the same corporation due to the fixed shut-down dates also constitutes an interference for two complainants because they are also at a disadvantage compared to competing corporations that are able to completely use up their residual electricity volumes within the operational lifetime of their power plants. There is no sufficient reason justifying this. The burden for the complainants stands to be balanced with significant public interests. These interests, however, would only be burdened to a relatively small extent by a provision that avoids deficits in the capacity to produce electricity. By means of the sum of operational lifetimes in the 13th AtG Amendment, the legislature itself set down a framework for the public interest objective it had targeted. Given the staggered operational lifetimes and the still remaining residual electricity volumes within the corporations, certain plants will foreseeably be left with an unused electricity production capacity. These deficits in the production of electricity could have been avoided, even without calling into question the targeted date of the complete phase-out, by means of a different staggering of the end dates for the nuclear power plants.

e) Furthermore, the 13th AtG Amendment violates Art. 14 sec. 1 GG insofar as it does not provide for any transitional periods, compensation clauses or other settlement provisions for cases in which investments in nuclear power plants were devalued through the striking of the additional electricity output allowances allocated in 2010.

aa) The fundamental right to property can, under certain conditions, provide protection in cases known as “frustrated investments” It also protects the legitimate expectation in the stability of a legal situation as a basis for investments in property and its use; whether and to what extent such expectations are legitimate depends on the circumstances of each individual case. There is no guarantee for the fulfilment of all expectations with regard to an investment. In particular, Art. 14 sec. 1 GG generally does not protect against changes to the general regulatory framework with regard to economic activity and their effect on market opportunities. However, those investments in property undertaken in legitimate reliance on a legal situation require that the questions of both whether and how a settlement should be reached must be considered in light of the principle of proportionality in cases where the legislature limits the further use of the property directly or to a significant extent. The legislature has broad leeway to design transitional legal situations, authorisations and legal relationships. In particular, the legislature is not bound by the Constitution to spare the parties concerned every burden nor to meet every additional burden with a transitional provision in case of system changes or transitions to a new legal situation. In any case, a settlement with regard to devalued investments in property is not required if the legislature balances the limitation of the use of property in another way; double compensation is ruled out.  

bb) Measured against this standard, the 13th AtG Amendment is unconstitutional insofar as it does not provide for any settlement with regard to frustrated investments which were undertaken in the short period of time between the Bundestag resolution on the 11th AtG Amendment on 8 December 2010 and the notice from the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety of 16 March 2011 on the Nuclear Energy Moratorium. The basis for the 11th AtG Amendment was the political decision on the part of the legislature to continue to use atomic energy as a bridging technology for a longer period of time. The power plant operators were entitled to feel encouraged to undertake investments in their plants and did not have to expect that within the same legislative period, the legislature would again distance itself from its fundamental decision in energy policy matters. Even the paramount public interest grounds for an accelerated nuclear phase-out cannot absolve the legislature of the consequences of those investments undertaken in the short period of validity of the 11th AtG Amendment and in the legitimate expectation that the legislature itself had brought about with view of the prolongation of the operational lifetimes. 

In contrast, no settlement provisions with regard to frustrated investments had to be provided with regard to the 2002 residual electricity volumes. Insofar, the legislature must already provide adequate compensation, a prolongation of operational lifetimes or some other settlement in regard to the deficit in electricity production.

5. The constitutional violations found here result in the ascertainment of the incompatibility of § 7 sec. 1a sentence 1 AtG with the Basic Law, together with the order that it continue to be valid until new provisions are enacted. This is appropriate, as the legislature has various options at its disposal for remediating the constitutional violations. The large-scale striking in late 2010 of the allocated residual electricity volumes, the introduction of fixed end dates for the operation of the individual nuclear power plants and the staggering of the shut-down dates have been found, in principle, to be compatible with the Basic Law. The constitutionally objectionable shortcomings may not be insignificant for the complainants, yet in view of the overall regulatory scheme of the 13th AtG Amendment, they affect only marginal parts.