The Estonian chancellor of justice has found the established rates of fees for extraction rights and the right to special use of water to be not consistent with the constitutional principle of legitimate expectation and has asked the government to bring the rates into conformity with the Constitution.
The Estonian Association of Mining Enterprises, the Association of Construction Material Producers of Estonia, the Estonian Peat Association and the Federation of Estonian Chemical Industries asked the chancellor of justice to check whether the rates of the environmental fees applied starting April 2013 are consistent with the Constitution.
The chancellor of justice said in his conclusion that while he is not calling into question the right of the state to levy an environmental fee for the use of natural resources, changes in the regulation of environmental fees must be consistent with the principle of legitimate expectation arising from the Constitution.
Hent Kalmo, deputy and adviser to the chancellor of justice, said that in 2009 the government adopted a timetable for raising the rates of environmental fees based on which entrepreneurs were able to plan their costs and investments, presuming that the fees will not be changed in a direction unfavorable for businesses before 2015. "The possibility to foresee changes in extraction fees over a five-year period in advance may have influenced the decisions of holders of extraction permits and permits for special use of water as regards investments and entering into long-term agreements," Kalmo said. Because of that the chancellor of justice found that a legitimate expectation protected by the Constitution arose in entrepreneurs as regards the continuous validity of the rates set out in the 2009 regulation.
In establishing the fees for five years in advance, the government in 2009 must have reckoned that it is issuing a binding promise to entrepreneurs as regards the dynamics of the fees.
According to the chancellor of justice, this being the situation the timetable of changes to the fee rates can be changed only in a situation where extraordinary circumstances are revealed which the government could not have taken into consideration in 2009. The minister of environment found the fact that the Estonian economy is growing again post-2009, and upon continuation of economic growth also the amounts of natural resources extracted will grow, which necessitates their more efficient use, to constitute such extraordinary circumstance.
The chancellor of justice meanwhile found that no developments have taken place or are forecast to take place in Estonia's economy and extraction volumes which the government was unable to foresee in 2009. Nor does the chancellor of justice know of any sudden deterioration in Estonia's overall situation as regards stocks of natural resources since the said regulation took effect.
While the government in 2009 set out the rates of environmental fees for 2010-2015, in October last year it was decided to change the regulation and to raise the rates of extraction fees and some fees for the special use of water faster and more extensively starting from April 2013. If under the 2009 regulation the relevant environmental fees would have been raised on two occasions by approximately 5 percent in the period from April 1 this year to Jan. 1, 2015, then under the new regulation the fees would be hiked on three occasions by approximately 20 percent.