Setting the framework
As already explained recently in this blog (by C. Burelli), and also in the REALaw Review (by this author), the ongoing reform of the State-owned maritime concessions raises several questions concerning the enforcement of EU law and its implementation. What is fully recognised is the illegitimate behaviour of the Italian legislator and its recurrent use of automatic extensions, as a trick to avoid public procedures already required by Legislative Decree 59/2010 (the legal act implementing the Directive 2006/123/CE, thereinafter the Services Directive or the Bolkestein Directive). Firstly, when a cross-border interest is recognised without any doubt, the selection procedure for these concessions must respect art. 49 TFEU on freedom of establishment (enforcement), and the authorization schemes (implementation) must comply with art. 12 of the Services Directive.
For the past year, EU law scholars have largely debated the nature of the Services Directive as a self-executing act, or of the differences between the harmonization act and liberalisation act; whereas at the national level, public law scholars have focused more on the Italian legislative framework and competences divided among States, regions and local authorities (A. Cossiri (eds.) Coste e Diritti). Recently, since the judgment n. 17 and its “twin” n. 18 of the Plenary Assembly of the Council of State at the end of 2021 (AA. VV., Diritto e Società, Special Issue n.3/2021), the debate has focused on the consequence of res judicata in the light of THE well-known EU Promoimpresa judgment. All these reflections have testified to the complexity of the context, as well as to the technicality of the subject. They have recognised the necessity to design a legislative framework which balances all interests at stake (public and private).
How to untangle the knot is, on the other hand, an entirely political matter. Therefore, the new Italian government is faced with a new mission “impossible”: to reform the sector through a dialogue with the EU Commission to avoid new infringement procedures (Mondo Balneare.it). Again, the political challenge is complemented by the need to really exploit the asset from (also) an economic point of view, since the revenues currently charged by the State are generally not proportional to the incomes earned by the concessionaires, with the result that the assets themselves do not appear to be adequately exploited at present (Corte dei Conti inquiry, 2020). Currently, according to the Italian Competition Law of August 2022, fully embracing the term indicated by the Plenary Assembly of the Council of State, all ongoing concessions will expire on 31 December 2023. On 30 December 2022, the Ministry of Infrastructure and Transport set in the measure of 25.15 %, the adjustment of the fees for State maritime concessions (here the ministerial act), and the government in the last Financial Act didn’t deal with any other aspect of the reform of the sector (Law 197/2022 and Decree Law 198/2022). They will also have to be reallocated through selective procedures in compliance with the modalities to be decided by an implementing decree, which is expected by the end of February 2023 (article 4, c.2, Law 118/2022).
A new starting point: the role of private operators (and the Services Directive)
Pending a request for a new preliminary ruling on the nature of the Services Directive, some firm points have been already clarified, as the consequence of what is already claimed in the judgment Promoimpresa. In this case, nothing was expressly said about the self-executing nature of the Service Directive, neither does the EU Court characterise Article 12 as a provision producing a direct effect, but it can reasonably be interpreted in this sense according to point 50 (see E. Canizzaro). Rather, it has affirmed the unlawfulness of the automatic extension of (existing) authorisations in the absence of any transparent selection procedure among potential applicants and where they present a clear cross-border interest that is largely in the hands of the Member State and its authorities to determine (A Monica, 73-75). Following the reasoning of the EU Court in Promoimpresa, it seems “quite bizarre” (emphasis added) that Tar Lecce (in the second question of the request) wonders if the Directive presents “objectively and abstractly” minimum requirements of sufficient detail from which (might) stem a consequent absence of discretionary room for the national legislator. In other words, assuring the direct effect of Article 12 of the Services Directive means, above all, carrying out an open and impartial selection procedure where authorization procedures face a scarcity of available natural resources (E. Canizzaro). This is for the benefit of persons who may be interested in access to the activity in question (R. Mastroianni, 113.): a potential new private operator is entitled under the EU to rely on the Services Directive against the public authorities in order to require the carrying out of a transparent and impartial selection procedure. Consequently, as far as the authorization schemes set up by public administrations are concerned, it is of secondary importance whether the act may have horizontal effectiveness or not. It follows that Article 12 of the Services Directive could well be invoked, both before the public administration and before the national court, by an economic operator wishing to impose the allocation of a State-owned maritime concession through a competitive selection procedure. Again, unarguable is the economic potential and the attractiveness of the maritime concession, because it is self-evident, without calling into question Article 49 TFEU (A. Monica, The State-owned Maritime Concessions in Italy: the Cross-border Interest Issue and the Ongoing Reform of the Sector. 51).
That being established, we must turn our attention to the administrative activity starting with the consequences triggered by the unlawful behaviour of the legislator which has jeopardised the principle of legal certainty, and proportional treatment between the operators (ongoing and aspiring ones).
Open issues for administrations and (all) operators.
The consequences of unlawful legislation have often been addressed in the case law of the EU Court of Justice, in the context of the liability of Member States for infringement of EU law in case of its enforcement (joined case 6 and 9/90 Francovich, joined case C-46/93 e C-48/93 Brasserie du Pêcheur). Again, Italian doctrine and case law have discussed the problem of the so-called ‘Community validity of administrative acts’ (see B.G. Mattarella, Procedimenti e atti amministrativi, in M. P. Chiti, Diritto amministrativo europeo, Giappichelli, 2020, 378-381) and its effects on administrative action. Overcoming the antinomy between national law and EU law is also an expression of the primacy of EU law, for this reason affects procedural autonomy (see D-U Galetta, Procedural Autonomy of EU Member States: Paradise Lost? A Study on the “Functionalized Procedural Competence” of EU Member States, Springer, 2011; C-3/16, Aquino). Regarding State maritime concessions, the case concerns the unlawfulness of administrative acts and the applicability of existing administrative acts which comply with Italian law, but are in clear contradiction with EU law. So, a national administrative act contrary to the EU is to be withdrawn (unless the internal rule, to which it is applied, is held to be as if it did not exist).
Under current case law, the addressee of an act has the burden of challenging the measure contrary to the EU law by lodging an action before an administrative court within the prescribed time limit, on pain of its non-appealability (see, B. Mattarella, Diritto amministrativo applicato, 200-201). Meanwhile, the administration must apply the unlawful act, without prejudice to recourse to the powers of administrative self-protection (see Cons. Stato sez V, sentence 19 of May 2009, n. 3072). The act of self-protection is, in any case, discretionary even though it has to be functionally oriented towards the effet utile (D. Galetta, Autotutela decisoria e diritto comunitario, in Riv. it. Dir. pubbl. com., 2005,) as to fully comply with the principle of sincere cooperation (L. Raimondi, Atti nazionali inoppugnabili e diritto comunitario tra principio di effettività e competenze di attribuzione, in Il Diritto dell’Unione europea, 4, 788).
In any case, an administrative act adopted on the basis of an “internal rule” giving to the administration a power which is unlawful with the EU law is not valid (again, according to art. 21-octies of L. 241/90 see. R. Villata, M. Ramajoli, Il provvedimento amministrativo, Giuffrè, 2017, 463).
Against this backdrop, the (proportional) implementation by administrations of the criteria tailoring the authorization schemes is in the foreground. Here, also the role of the operator and the potential one comes in.
Tackling coastal erosion and recognising a compensation
Consequently, the role of private operators shall be valued in tailoring concessionary/authorization schemes. Public administrations, indeed, recognise a more efficient and effective way of pursuing the general interests, through entrusting private parties with the activity conducted on the granted asset. In other words, the private activity exercised by the concessionaire is required to enhance the ‘objectively public nature’ of the asset (A. Monica, 67). Therefore, it is fair to recognise a ‘compensation to be paid to the outgoing concessionaire’ by the incoming operator, as also assumed in Promoimpresa (here para 71).
In addition, Law 118/2022 (art. 4, c. 2, letter e), 4)) provides that the operator “improve the accessibility and usability of the State-owned area […], and the suitability of such interventions to ensure minimum impact on the landscape, the environment and the ecosystem” (author’s translation). If we relate this provision with the Recovery and Resilience Facility (RRF) – (PNRR -M2C4: protection of land and water resources, 147), I wonder if there is potential to reward and “privilege” those operators who really work to protect the land, also fulfilling the EU objective of sustainable development. To be precise, the EU Commission pointed out how the liberalisation of the bathing sector is not formally included in the RRF (EU news) but, due to the reality at stake, it would be possible to use that instrument to tackle high coastal erosion and to protect the environment, as well as to improve the best exploitation of public goods awarded to private operators. In addition, there would be the possibility, in situations characterised by high coastal erosion or where the damages of recent sea storms are being counted of also thinking of applying art. 12, c. 3 of the Services Directive. In fact, due to the legal uncertainty and the expiring concession set by the end of 2023, the operators are investing little in tidying up the beaches. Indeed, Member States are allowed to consider the protection of the environment, in conformity with EU law, of course. Against this backdrop, the role of local public administrations seems to be crucial. First of all, these administrations are called to update and validate the platform SICONPEB (under construction) containing data of all State-owned concessions fostering transparency and publicity, above all of the renewals and their modalities (art. 2, Law 118/2022). Secondly, they verify the factual situation, balancing interests with the goal, as mentioned above, that the entrusting of the asset to one operator, or another, must be aimed at the best enhancement of the coast (and not only of the asset). In this way, the opposition between “service activities” and “activities related to State-property” might be overcome. In concrete terms, the operator conducts its service activity through a public asset that, as such, should be enhanced and protected through precisely a better organisation of the remunerated activity. The aim is to offer an increasingly higher quality of services to users (alias consumers) and the public community as a whole, pursuing also sustainable development by setting economic policies aimed at responsible consumption of natural resources in a spirit of intergenerational solidarity patrolled by a functionalised administrative activity (see F. Fracchia, Sviluppo sostenibile e diritto delle generazioni future, 35-38). This fact will allow for filling the gap between the position of the operators and (some) legitimate expectations, as well as public interest and market rules.
Posted by Alessia Monica (researcher in Administrative Law at University of Milan)
Suggested citation: A. Monica, “State-owned maritime concessions: shaping reform in the light of Italian Next Generation EU as a way to reconcile the private operators’ interests and market freedom (of services)”, REALaw.blog available at https://realaw.blog/?p=2208
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