President Rumen Radev vetoed changes to the Law on the Promotion of Investments, which threaten the protection of the environment and create a risk of harming the public interest

President Rumen Radev exercised his right of veto against certain provisions of the Investment Promotion Law, which threaten the constitutionally guaranteed right of Bulgarian citizens to a healthy environment. Without disputing the need to speed up the construction of the objects of strategic importance, the president returns for a new discussion in the National Assembly the texts, the implementation of which would lead to a decrease in the level of responsibility of the administration for the protection of people's lives and health during the implementation of large-scale projects. According to the head of state, the legislation should allow fast and high-quality construction of the important sites for Bulgaria, but at the same time be consistent with the state's obligation to protect its citizens and nature. This principled position of the president is consistently expressed when exercising his right of veto. This is the third time, after his decrees of 2017 and 2019, that Rumen Radev has objected to measures similar to those adopted in this law.

The provisions that shorten the time for the competent authorities to decide on the effects of a given project on the environment and introduce the principle of tacit consent for its implementation have been returned for a new discussion. The limitation of the possibilities for judicial control, as well as the extension of the validity of certain decisions, whose term expires or has already expired, are also disputed.

The head of state disputes the creation of prerequisites for the acquisition of property owned by public enterprises, which leads to the risk of harming the public interest.

According to the president's reasons, another discussion in the National Assembly is necessary also because these changes, introduced between the first and second reading in the procedure for adopting the law, were voted on without a public discussion, in the absence of a preliminary impact assessment, as well as financial justification.

The reasons are also published below

MOTIVES

TO RETURN FOR A NEW DISCUSSION IN THE NATIONAL ASSEMBLY THE LAW AMENDING AND SUPPLEMENTING THE INVESTMENT PROMOTION LAW PASSED BY THE 49TH NATIONAL ASSEMBLY ON APRIL 19, 2024.

Dear People's Representatives,

I share the conviction of the majority in the National Assembly that the legislation should allow for the rapid and high-quality construction of objects of strategic importance for the development of Bulgaria, but at the same time, I permanently and consistently advocate the thesis that this should be consistent with the state's obligation to protect the constitutional rights of citizens (see Decree No. 124/2019 on the return for a new discussion in the National Assembly of provisions of the Law on Amendments and Supplements to the Law on State Property).

I have also systematically pointed out that the acceleration of the procedures for the construction of the objects of strategic importance cannot be done at the expense of undermining constitutional values, such as the protection of a healthy environment and access to justice (see Decree No. 175/2017. to be returned for a new discussion in the National Assembly of the Law on Amendments and Supplements to the Law on Environmental Protection).

If there are problems in the legislation that prevent the timely implementation of projects of strategic importance, then in accordance with Art. 18b of the Law on normative acts, the bodies with a legislative initiative should proceed with a subsequent assessment of the implementation of the relevant normative acts and, based on it, propose the repeal, amendment or addition of the current normative acts. Instead, under the pretext of speeding up the construction of such objects, and contrary to the principles of transparency and publicity of the legislative process, uniform and controversial amendments are periodically pushed through the National Assembly, which infringe on the constitutional rights of citizens.

1. Regarding changes in the legal regime of public enterprises

§ 9 of the Law on Amendments and Supplements to the Law on the Promotion of Investments (ZID ZNI) provides for an amendment in Art. 22a, para. 10 of the ZNI, by means of which it is possible for all public enterprises, at the request of an investor with an investment class certificate, to sell, exchange or establish a gratuitous limited property right on properties without an auction or competition, as well as at prices lower than market prices, but not lower than the property's tax assessment. Currently, this is possible only for sole proprietorships with state or municipal participation, as well as for commercial companies whose capital is owned by sole proprietorships with state participation.

§ 12 of the ZID ZNI envisages an amendment to Art. 22g, para. 2 of the ZNI, which allows all public enterprises to become co-founders for the formation of a commercial company through direct negotiation with an investor. Currently, this possibility is provided only for sole proprietorships with state or municipal participation and for budget enterprises.

The changes in Art. 22a, para. 10 and in Art. 22g, para. 2 of the ZNI lead to a significant expansion of the scope of application of the provisions that will already affect all public enterprises within the meaning of the Law on Public Enterprises. The 2021 Annual Summary Report on State Public Enterprises includes 265 public enterprises in which the state exercises dominant influence through various ministries and holding structures. State-owned public enterprises are essential to the country's economy and are leaders in key sectors such as energy, healthcare, transport, water and sanitation and others. They have a significant number of immovable properties, but the new procedure for disposing of them under § 9 of the ZID ZNI does not provide any guarantees against the risks of abuse.

In the arguments to the proposal of the people's representatives with entry No. 49-454-04-82/04.04.2024, it is pointed out that at the moment public enterprises "cannot carry out sales without an auction or competition, respectively their investors cannot benefit from the incentive measure under Art. 22a, para. 10 of ZNI". However, neither a preliminary impact assessment nor a financial justification has been presented for the proposal, nor have opinions from the interested bodies of the executive power been presented. This prevents judgment about the necessity and reasonableness of the provisions in balancing the economic benefits of solving a particular investor problem and the risks that the change may cause in terms of other legally protected public values and legitimate private interests.

2. Regarding the shortening of the deadlines for the administration to act on certain investment projects and the introduction of the principle of tacit consent

§ 13 of the ZID ZNI provides for the creation of a new section III in chapter four of the ZNI, including two new provisions - art. 22k and Art. 22l from ZNI. By means of Art. 22k, paragraph 1 of the ZNI introduces an obligation for the central and territorial bodies of the executive power, when implementing a certain range of priority investment projects, to act within terms that are one second shorter than those provided for in the relevant normative act. With the amendments in Art. 22k, para. 2 of the ZNI, the same shortened terms apply for issuing opinions or when conducting consultations under the Environmental Protection Act (EPA) in the course of environmental assessment procedures, or when assessing the impact on the environment. It is also provided that if the competent authorities do not decide or express an opinion within the specified period, this will be considered tacit consent.

According to Art. 3 of Directive 2014/52/EU of the European Parliament and of the Council of 16 April 2014 amending Directive 2011/92/EU on the assessment of the impact of certain public and private projects on the environment, the assessment of the impact on the environment defines, describes and assesses in an appropriate way, according to the specifics of each individual case, the direct and indirect significant impacts on the environment of a given project, including its impact on the population and human health.

In this sense, the shortening of the deadlines in relation to the procedures under the Environmental Protection Act and the by-laws in the implementation of priority investment projects, which are accompanied by a large volume of information and cover significant territories, endangers the achievement and guarantee of standards in the protection of the environment and human health. Such a sharp reduction in the deadlines for adjudication, carried out without thorough research and without measures to strengthen the capacity of the administration, poses a risk to the quality of the assessments carried out, and therefore to the overall effectiveness of the preventive procedures.

Another undesirable effect of the introduced change would be that the competent authorities would find themselves objectively unable to make a decision within the new shortened period. This, combined with the introduction of the principle of tacit consent, will completely remove key bodies from the decision-making process.

The introduction of a legal presumption of tacit consent when the authority does not issue a decision within the time limit is contrary to the spirit and principles of environmental legislation, according to which the analysis of whether a certain activity damages components of the environment should always be motivated in view of the impact of the investment intention on the soil, air , waters, protected areas, protected areas and others.

It is the nature of certain sites as strategically important or those of national importance that presupposes the conduct of a preliminary and thorough study of the issues that are within the competence of the administration, as well as taking into account the point of view of the widest possible range of third parties whose rights and legitimate interests could potentially be affected. The implementation of such projects implies that at every stage of their planning and implementation there is a clear opinion or decision on the part of every competent body of the executive or local government. Only in this way can the basic principle of democratic governance - responsibility - be guaranteed.

Especially in relation to environmental protection EU law requires Member States to adopt all necessary measures to ensure that, before being approved, projects that could have a significant impact on the environment are subject to a permit requirement to carry out an assessment of their impact (Article 2, par. 1 of Directive 2011/92/EU of December 13, 2011 on the assessment of the impact of certain public and private projects on the environment).

3. Regarding the limitation of access to court

§ 19 of the ZID ZNI envisages an amendment to Art. 88, para. 4, of Art. 93, para. 10, of Art. 99, para. 9 of the ZOOS, which stipulates that for objects of national importance and of strategic importance, certain categories of legal disputes shall be resolved only in one court.

In Decree No. 175/2017, I have already had occasion to point out that care for the environment is listed among the main principles of our Constitution and through it the right to life is guaranteed and the health of Bulgarian citizens is protected. It is inadmissible precisely on this topic to introduce exceptions to the general principle of two-instance judicial control over administrative acts. In the context of the constitutional principle of the rule of law, the right to a healthy and favorable environment (Article 55 of the Constitution) is inextricably linked with the right to judicial protection (Article 56 of the Constitution). It undoubtedly includes both the ruling of an independent court on the legality of the decisions of the administrative bodies, and the possibility for the affected parties to activate judicial supervision over the legality of the issued first-instance court decisions.

4. Regarding the extension of the period of legal effect of certain decisions of the administration under the ZOOS

§ 19 of the ZID ZNI provides for amendments to Art. 93, para. 8, of Art. 99, para. 12 of the ZOOS, which increases from 5 to 10 years the period in which EIA decisions, respectively the decision not to carry out EIA, lose legal effect due to the fact that the implementation of the investment proposal has not started. At the same time, according to §20 of the ZID ZNI, the legal effect of the decisions on these texts, adopted before the entry into force of the law, is extended by up to 10 years from the date of their issuance.

Both of the provisions under consideration here are adopted in violation of the Constitution, as they are retroactive and affect the principle of separation of powers.

The prohibition of the retroactive effect of laws is a constitutional principle that is contained in the very concept of the rule of law, enshrined in the preamble and in Art. 4, para. 1 of the Constitution. At the legal level, this principle is also provided for in Art. 14 of the Law on normative acts. It allows the provision of retroactive effect of a normative act, but only as an exception and with an express provision. This presupposes that it be properly motivated and based on the protection of a higher constitutional value. From the proposal of the people's representatives to introduce the provisions considered here, it is not clear with what higher values their reverse action is justified.

In addition, the National Assembly unjustifiably interferes with the powers of the executive, since EIA is within its exclusive competence, and thus the principle of separation of powers is violated (Article 8 of the Constitution).

Extending the validity period of already expired or expiring environmental decisions will undoubtedly have an impact on the implementation and speed of development of the investment process, but the stake remains the guarantee of the citizens' constitutional right to a healthy and favorable environment. In the absence of in-depth public discussion and expert assessment of the impact, the danger of the disputed provision concealing hidden motives for the "revival" of projects that have already repeatedly caused public dissatisfaction and tension cannot be ruled out.

5. Regarding the expansion of the definition of "site of strategic importance"

§ 19 of the ZID ZNI envisages an amendment to the definition of "object of strategic importance". According to the current text of § 1, item 76 of the Additional provisions of the Environmental Protection Agency, these are objects that are included in the Energy Strategy of the Republic of Bulgaria until 2020 for reliable, efficient and cleaner energy or in the Integrated Transport Strategy until 2030. The words "as well as a project for the implementation of which a decision of the National Assembly has been adopted" are added to this definition, which allows the determination of objects of strategic importance to take place outside the process of developing and adopting the cited strategies.

Determining the objects of strategic importance is a political issue that requires a competent approach and a careful balance between a wide range of different interests and values. According to Art. 105, para. 1 of the Constitution, the Council of Ministers is charged with the responsibility of leading and implementing the country's internal and external policy. This includes the development and adoption of long-term strategies for the development of individual economic sectors and the determination of objects of strategic importance. The development of the strategies, as well as the entire activity of the government, develops under parliamentary control. However, the Council of Ministers and the National Assembly have their own clearly defined powers.

By means of the contested provision here, the law assigns to the National Assembly a competence which is constitutionally reserved for the government.

The parliamentary practice of recent years shows that in more than one or two cases the power of the National Assembly to rule on certain issues with decisions is used to relieve the government of responsibility, and this is impermissible from the point of view of the constitutional principles of separation of powers, for a legal and democratic state.

In its Decision No. 15 of 28.11.2022 under the Criminal Code No. 10/2022, the Constitutional Court notes that it "consistently upholds the necessary and appropriate separation of powers of state bodies for the implementation of assigned state functions." According to his long-standing practice, "the seizure by the National Assembly of constitutional functions that belong to the Council of Ministers is a violation of the principle of separation of powers, the principle of the rule of law and the supremacy of the Constitution" (Decision No. 4 of 2008 under k.d. No. 4/2008).

6. From the point of view of the rules of legislative procedure

The ZID ZNI considered here was adopted on the basis of a bill developed by the Council of Ministers and submitted to the National Assembly on February 9, 2024. The subject of this bill concerns the adaptation of national legislation to the latest amendments and additions to Regulation (EU) No. 651/2014 on declaring certain categories of aid compatible with the EU internal market.

The provisions of § 19, § 21 and § 22 of the ZID ZNI were adopted on the basis of proposals of people's representatives who entered the National Assembly after the adoption of the draft law by the Council of Ministers in the first reading (entry no. 49-454-04-83 from 04/04/2024). They regulate separate elements of the legal regime of priority investment projects of national or regional importance and of investment proposals that are defined as national objects, introducing significant amendments to three different laws - the ZOOS, the Law on Territorial Planning (ZUT) and the Law for energy from renewable sources (RES). In terms of their subject, the proposals of the people's representatives submitted after the first vote differ significantly from the subject of the bill of the Council of Ministers.

The amendments to the ZOOS, ZUT and ZEVI, which are contained in § 19, § 21 and § 22 of the ZID ZNI, were voted by the National Assembly only once, which contradicts the imperative requirement of the Constitution that the laws be discussed and adopted with two votes, which are carried out in separate meetings (Article 88, Paragraph 1 of the Constitution).

Moreover, they are outside the scope and reasons of the bill adopted in the first reading and from this point of view, they were adopted in violation of Art. 83, para. 1 and 2 of the Rules for the Organization and Activities of the National Assembly.

No public discussion was held on the proposals of the people's representatives, there is no preliminary impact assessment, proper justification of all aspects of the proposals, as well as financial justification.

For these reasons, I consider that § 19, § 21 and § 22 of the ZID ZNI deviate to a significant extent from those established in Art. 26, para. 1 of the Law on Normative Acts standards for necessity, reasonableness, predictability, openness, coherence and stability of the drafts of normative acts, which are also essential guarantees for legal certainty.

The same applies to § 9, § 12, § 13 and § 20 of the ZID ZNI contested above on various grounds.

Dear People's Representatives,

For the stated reasons, I exercise my right under Art. 101, para. 1 of the Constitution of the Republic of Bulgaria to return for a new discussion in the National Assembly § 9, § 12, § 13, § 19, § 20, § 21 and § 22 of the Law on Amendments and Supplements to the Law on the Promotion of Investments, adopted by the National meeting on April 19, 2024.

RUMEN RADEV

PRESIDENT OF THE REPUBLIC OF BULGARIA