The ECJ was given the power to fine Member States which fail to comply with its judgements in 1993. The power has been used only once, and that, too, was an environmental case.
In 2000, Greece was fined €20,000 per day for failing to bring waste disposal practices on Crete into line with EU standards (ENDS Report 306, pp 47-48 ). The penalties reached almost €4.8 million (£3.4 million) before Greece was finally held to be in compliance 238 days after the court hearing.
Commission v Kingdom of Spain (Case C-278/01, 25 November 2003) concerned Spain's breach of the 1976 EU Directive on bathing water quality. This should have been complied with by 1986, but twelve years later the ECJ upheld a complaint by the European Commission that Spain had failed to do so in respect of its inshore bathing waters. In 1998, only 73% of these waters complied with the Directive's mandatory standards.
A lengthy correspondence then ensued, with the Spanish authorities assuring the Commission that various studies were in hand and works were being prepared.
In 2000, Spain eventually promised to bring all of its inshore bathing waters into line with EU standards by 2005. The Commission responded with a "reasoned opinion" threatening fresh legal action unless Spain complied within two months. Following further exchanges, Spain promised to do so by 2003 - but this failed to stave off the present proceedings.
Before the ECJ, Spain argued that it had not been given long enough to comply with the earlier judgement. Several years' work was needed to identify the sources of pollution affecting bathing waters, draw up action plans and then implement projects to reduce agricultural and sewage pollution. For larger infrastructure works, the minimum periods prescribed in the EU's public procurement Directives added further delay.
The ECJ had little sympathy for those arguments. Noting that three bathing seasons expired between its 1998 judgement and the deadline set in the Commission's reasoned opinion, it said: "Even if compliance with that judgement calls for complex and long-term operations..., a period of that length must be regarded as sufficient to adopt the measures needed to comply."
However, the court was more receptive to Spain's pleas relating to the fine for non-compliance.
The Commission had asked the court to impose a fine of €45,600 (about £32,000) per day for as long as non-compliance with the Directive persisted.
The figure was derived from Commission guidelines in which the starting-point for setting a fine is a figure of €500. This is then multiplied by three factors or "coefficients" reflecting the gravity and duration of the offence and a Member State's ability to pay.
In the Spanish case, the Commission submitted that there should be a coefficient of 4 on the 20-point scale for the gravity of an offence, and one of 2 on the three-point scale for the duration of an offence. The third factor, a coefficient of 11.4, was based on Spain's gross domestic product and weighting of votes in the Council of Ministers.
Spain contended that the two discretionary factors should be revised downwards. As few bathing seasons had passed since the 1992 judgement, the duration coefficient should be cut from 2 to 1. And the gravity coefficient should be cut from 4 to 2, since 80% of inshore bathing waters were in compliance when the case was initiated, and moreover Spain had not had the 10-year period for implementing the Directive which older Member States had benefited from.
Together, these changes would have brought the daily fine down to €11,400.
However, Spain also argued that a daily fine was inappropriate in this case, on the grounds that a Member State might come into full compliance with the Directive during a particular bathing season but this would not become apparent for several months until analysis of samples had been completed and a report submitted to the Commission. This would make it likely that a Member State would be fined unfairly.
The ECJ agreed, deciding that fines in such cases should be set on an annual basis following submission of annual reports to the Commission.
The court also felt that a fixed annual fine would be inappropriate where, as in this case, it was particularly difficult to achieve full compliance with a Directive. "A penalty which does not take account of the progress which a Member State may have made in complying with its obligations is neither appropriate to the circumstances nor proportionate to the breach which has been found."
The court therefore decided that the level of fine should be varied according to the percentage of bathing waters which did not comply with the EU standards in a particular year.
The court went on to consider Spain's submissions about the coefficients used in calculating the fine. It accepted that the Commission had been too harsh in its view about the duration of the offence, and reduced the coefficient from 2 to
1.5. But Spain's other pleas were dismissed.
The net result, using the Commission's calculation guidelines, was a daily fine of €34,200, equivalent to an annual €12.48 million. This was divided by 20 in view of the fact that 20% of Spain's inshore bathing waters were in breach of the Directive in 2001, when the proceedings were initiated.
The resulting annual fine of €624,150 will be payable by Spain for each 1% of its inshore bathing waters which do not comply with the Directive from next year.
According to the latest available figures, the compliance rate reached 85% in 2002, so the fine for that year would have been €9.36 million (about £6.5 million) - considerably less than the €16.6 million which would have applied under the Commission's approach.
In view of the difficulties of achieving full compliance with the bathing water Directive, Spain could be paying fines for many years ahead. This might become a source of disaffection, since many Member States - including the UK - have also struggled to comply with the Directive despite having a decade longer to do so. In order to maintain some even-handedness, the Commission may have to consider waiving the fines after Spain's compliance rate reaches a certain threshold.
However, there is more than one way of skinning a cat. As the Commission pointed out during the present case, Spain slashed its designated inshore bathing waters from 302 in 1992 to 202 in 2000 without any justification, and seemed to be attempting to come into line with the Directive "not by improving the quality of that water but by contriving to reduce the number of bathing areas. "
The ECJ declined to take a view on this issue. But Spain's conduct underlines how unenviable the Commission's role of policing compliance with EU environmental laws often is.