CELEX: 61976CC0054
Language: en
Date: 1977-03-10
Title: Opinion of Mr Advocate General Reischl delivered on 10 March 1977. # Compagnie industrielle et agricole du comté de Loheac and others v Council and Commission of the European Communities. # Joined cases 54 to 60-76.

OPINION OF MR ADVOCATE-GENERAL REISCHL
      DELIVERED ON 10 MARCH 1977 (
            1
         )
      
         Mr President,
      
         Members of the Court,
      The applicants in the present joined cases are producers of cane sugar in the French overseas departments of Martinique and Guadeloupe.
      While sugar beet is harvested in the European areas of the Community from approximately September to December every year, a period which also applies to the sugar cane harvest in the French overseas department of Reunion, the sugar cane harvest in Martinique and Guadeloupe takes place in the first four or five months of the year. The sale of the sugar harvest accordingly begins in the European areas of sugar cultivation and in Reunion every year in the autumn while in Martinique and Guadeloupe it begins in the spring.
      Regulation No 1009/67/EEC of the Council of 18 December 1967 on the common organization of the market in sugar (OJ, English Special Edition 1967, p. 304) which applied until 30 June 1975 and was replaced by Regulation No 3330/74 of the Council of 19 December 1974 (OJ L 359, p. 1) did not take into account the said variations in the growth cycle of the sugar beet on the one hand and the sugar cane in the French Antilles on the other. Article 2 (2) of Regulation No 1009/67 provided that before 1 August of each year the target price for white sugar of a standard quality was to be fixed for the marketing year beginning on 1 July of the following calendar year. Further, Article 3 (1) provided that an intervention price for white sugar of the standard quality, to which the target price also applied, was to be fixed each year for the Community area having the largest surplus and Article 3 (2) provided that derived intervention prices were to be fixed, account being taken of the regional variations in the price of sugar.
      In fact since the common organization of the market in sugar entered into force on 1 July 1968 the Council has, in the spring of each year, generally in April, fixed the price applicable for the sugar marketing year beginning on 1 July of the same year. For the French Antilles this meant that the price was fixed during its sugar marketing year in respect of the production to be sold during the following sugar marketing year. Producers in Martinique and Guadeloupe accordingly had to sell a substantial part of their production on the basis of the old intervention price whereas the European producers benefited from the new prices in respect of their whole production.
      It was not until Regulation No 3330/74 that this was changed. Although this basically retained the system of the uniform sugar marketing year and the uniform price-fixing Article 3 (6) nevertheless provided:
      The derived prices fixed for any given marketing year for the French departments of Guadeloupe and Martinique shall apply to their sugar production during the calendar year in which that marketing year begins.
      Under Article 49 (2) of Regulation No 3330/74, this special rule has applied since 1 January 1975. In the result this rule means that the sugar producers in the French Antilles can now sell their whole production on the basis of the new prices fixed during their sugar marketing year.
      In their applications lodged on 29 June 1976 the applicants claim that the Council and Commission should be held jointly liable to make compensation for the alleged damage to the applicants during the 1971/72, 1972/73, 1973/74 and 1974/75 sugar marketing years. They calculate this in detail from the difference between the intervention prices which applied to them under Regulation No 1009/67 in the sugar marketing years in question and the intervention prices which would have applied if Regulation No 3330/74 had already been in force in the relevant sugar marketing years. In support of their application they claim that the system of price-fixing under Regulation No 1009/67 was unlawful or that at any rate the Council and Commission in adopting the regulations were guilty of a wrongful act or omission and thus made the Community liable and that the applicants, even if there has been no unlawfulness or wrongful act, have suffered abnormal, direct and special damage because of the Community rules and that they are accordingly entitled to compensation.
      Allow me now to deal with these individual issues.
      
               I —
            
            
               I shall first deal together with the claims that Regulation No 1009/67 is unlawful and that the Council and Commission have been guilty of a wrongful act or omission in adopting the regulations.
               The Council takes the view that an action for compensation cannot be based on legal considerations which generally are the .basis of an application for annulment because an application for annulment is inadmissible as out of time in the present case and also inadmissible because it is brought by individuals against a general regulation. This view is untenable. The submission of unlawfulness on which the applicants base their action cannot be rejected a priori as inadmissible, for it is put forward as the basis of an independent and admissible action for compensation.
               The real problem is rather how far the Court has jurisdiction to assess the lawfulness of an act of the Community, in the present case a basic regulation of the Council, or to assess the circumstances in which this institution has exercised its power to adopt regulations and which the applicants allege has caused the damage they have claimed.
               In this respect it must be observed that the applicants allege an obvious infringement of the Treaty or of the legal principles which have to be observed in applying it, and in particular an infringement of the principle of the protection of the normal and legitimate expectation of interested parties that the Treaty and secondary Community law will be correctly applied. It goes without saying that interested parties may expect the Treaty to be correctly applied. Infringement of the protection merited by this expectation or delay in rectifying such infringement amounting to a wrongful act or omission are indistinguishable in their results from infringement of the rules of the Treaty and the regulations based on it.
               In our case the applicants state that the relevant principles are contained in Article 39 (1) (b) (the guarantee of a fair standard of living for the agricultural Community) and the second subparagraph of Article 40 (3) of the EEC Treaty (the exclusion of any discrimination between producers) and are moreover referred to in Regulation No 1009/67 itself.
               However, both these principles must moreover be compatible with the other objectives of the common agricultural policy laid down in Article 39 (1) and in particular with the principle of the uniformity of the market, the uniformity of the marketing year and of the principle of its validity for periods of one year (third subparagraph of Article 40 (3)) and the principle of the financial responsibility of the Member States connected therewith (Article 40 (4)).
               Article 40 (4) of the Treaty provides for the establishment of the Agricultural Guidance and Guarantee Fund. In application of this provision Regulation No 25 (OJ, English Special Edition 1959-1962, p. 126) established the principle of Community financing based on the existence of uniform prices and above all on a Community policy. This principle was confirmed in Regulation No 729/70 (OJ, English Special Edition 1970 (I), p. 218). The first subparagraph of Article 227 (2) of the Treaty expressly excludes the application of Article 40 (4) to the French overseas departments; the second subparagraph however gave the Council the power to extend the application of this provision to these departments. The Council has made no general use of this power. The area to which the Guarantee Section of the European Agricultural Guidance and Guarantee Fund applied was however extended to the French overseas departments by Article 43 (2) of Regulation No 1009/67 as from 1 July 1968. The system of uniform prices for the whole Community and all the mechanisms of the common organizations of the markets such as refunds, levies, compensatory subsidies and so forth thus undoubtedly apply to the French overseas departments and it may be said that with regard to sugar the common policy was already largely fulfilled there in 1968. The uniform marketing year and uniform prices are fundamental to this system.
               A breach in the uniformity of the marketing year would have involved the danger of serious disadvantages. The existence of a common policy and in particular uniform prices would have been jeopardized by the introduction of different marketing years for two products, namely raw cane sugar and raw beet sugar, which although obtained from plants with different growth cycles are indistinguishable and completely interchangeable in their final use.
               The choice of a system which, while basically maintaining the system of the uniform marketing year and uniform prices, seeks to resolve the problems arising from the diverse climatic conditions of the various sugar cultivation areas, is a decision of economic policy in the legislative sphere in which the institutions of the Community have a wide discretion. Here the non-contractual liability of the Community for the damage which an individual may have suffered through the effects of a legislative measure arises only where there is a sufficiently flagrant violation of a superior rule of law for the protection of the individual (cf. Judgment of 13 June 1972 in Joined Cases 9 and 11/71, Grands Moulins de Paris [1972] ECR 391).
               If we consider the provisions of the Treaty referred to by the applicants from this point of view then Article 39 (1) (b) of the EEC Treaty may immediately be disposed of as regards further examination since it does not contain a rule for the protection of the individual. Article 39 (1) fixes the objectives of the common agricultural policy and embraces a number of requirements which taken separately might appear to conflict with one another. The task of the Community institutions in their agricultural policy is to harmonize these requirements and objectives and in so doing to make cuts here and there where necessary and even, where necessary, allow temporary priority to one objective in accordance with the demands of the economic factors or conditions, as the Court has said in its Judgment of 24 October 1973 in Case 5/73, Balkan-Import-Export v Hauptzollamt Berlin-Packhof [1973] ECR 1091. It is quite obvious that such a provision by its very nature cannot be a protective rule on which the individual can rely. In addition there is the fact that Article 39 (1) (b) speaks quite generally of ensuring a fair standard of living for the agricultural Community; this can in no way be regarded as a guarantee of a particular income, as the applicants consider.
               With regard to the second subparagraph of Article 40 (3) of the EEC Treaty the Court has on several occasions recognized in its case-law that the prohibition on discrimination contained therein is a protective rule which individuals can invoke. To anticipate my conclusion however, this provision has not been infringed with regard to the applicants by Regulation No 1009/67.
               Of primary importance is first the manner in which Article 3 (4) of Regulation No 1009/67 calculates the intervention prices for the French overseas departments. These prices are derived from the Italian intervention price for white sugar, that is, the higher intervention price for an area with a marked deficit with the deduction of the transport costs to Italy. The intervention price for raw cane sugar is calculated from the intervention price for white sugar applicable to the particular department, allowance being made for a uniform processing margin and a standard yield for the standard quality (92 %). The result is that the intervention price for the French Antilles is always higher than that for the European areas apart from Italy.
               Further, a whole series of measures was adopted which were intended as far as possible to compensate for the disadvantages for the French Antilles arising from Regulation No 1009/67 as a result of the different climatic and economic conditions. I shall confine myself to mentioning the following measures adopted at a Community level:
               Regulation No 911/69 of the Council of 13 May 1969 OJ, English Special Edition 1969 (I), p. 225) recognizes that ‘economic relations between the French overseas departments and Europe make it necessary to market in Europe a minimum quantity of sugar from those departments’. Partially to compensate for the transport costs of cane sugar which the national system prior to the introduction of the common organization of the market completely refunded and in order to maintain the consumer prices in Southern France at a satisfactory level, the French Government was empowered in application of the first indent of Article 9 (7) of Regulation No 1009/67 to grant progressively smaller national subsidies until 1 July 1973 in respect of a maximum quantity of 250000 tonnes of raw sugar from the French overseas departments which was refined in French sovereign territory or more precisely in the ports of Marseilles, Bordeaux and Nantes.
               In consequence of the expansion of the Community these national aids were replaced by the grant of Community aid to all refineries which refined raw sugar from the French overseas departments: to avoid distortions in the margins between the refineries in French and Italian ports which refined cane sugar from the French overseas departments (some 400000 tonnes) on the one hand and United Kingdom refineries which refined sugar from the Commonwealth on the other, the refineries in Continental Europe received a progressively smaller Community compensatory subsidy from 1 February 1973 to 28 February 1975 (Regulation No 239/73 of the Council of 31. 1. 1973, OJ L 29 of 1. 2. 1973, p. 14).
               For the 1973/74 marketing year the sellers of raw sugar received under Article 2 of Regulation No 834/74 of the Commission of 5 April 1974 (OJ L 99 of 9. 4. 1974, p. 15) a surcharge of at least 1.25 u. a. per 100 kg of white sugar in respect of sugar produced and sold during that marketing year which was paid by the refining undertakings.
               In so far as certain slight disadvantages to the applicants may have remained in view of the particular calculation of the intervention price and the additional measures described, which I do not believe, they would have been justified by the pre-eminent public interest in maintaining as a matter of principle the essential elements of a uniform organization of the market in sugar, namely the uniformity of the marketing year and of the uniform system of prices.
               On the other hand the establishment of the system laid down in Regulation No 3330/74 in favour of the overseas producers and the time at which this change was made may be easily explained and justified. Doubtless difficulties in the disposal of sugar produced in the French overseas departments have been recognized in the past and still remain, as stated in Council Regulation No 1491/76 of 22 June 1976 (OJ L 167 of 26. 6. 1976, p. 17).
               On its accession the United Kingdom demanded as favourable treatment as possible for sugar from the countries referred to in the Commonwealth Sugar Agreement (Protocol No 17), and for the independent developing Commonwealth countries situated in Africa, the Indian Ocean, the Pacific Ocean and the Caribbean (Protocol No 22). Moreover the application of the Convention of Lome between the European Economic Community and the forty-six countries in Africa, the Caribbean and the Pacific Ocean produced the danger of additional difficulties for the French overseas departments as a result of the extensive access of agricultural products from these countries and the increasing competition to the disadvantage of the production, in particular sugar production, of these departments.
               Finally many provisions of Regulation No 1009/76 were merely in the nature of transitional provisions and it was only the definitive arrangements which under Article 22 (2) were not to involve any discrimination between Community producers.
               To summarize, it is to be observed that Regulation No 1009/67 does not infringe superior rules or principles of law for the protection of the individual. Neither its adoption nor its maintenance until the adoption of Regulation No 3330/74 is a wrongful act or omission on the part of the Council or Commission which could give rise to liability to the applicants for damages.
            
         
               II —
            
            
               It remains to be considered whether even in the absence of unlawfulness or any fault the application can be based on any liability of the Community on the grounds of exceptionally serious, direct and special damage suffered by the applicants by virtue of Regulation No 1009/76. Assuming there were such a general principle common to the legal systems of the Member States, then it would still be necessary to prove and assess the severity of the damage and to show that it was a special loss and that there was a direct causal link between the adoption of the contested provisions of the regulations and this damage.
               In the sphere of the just reparation or fair compensation for an exceptionally heavy loss it is necessary to compare the advantages and disadvantages of the regulation laid down in Community law for the overseas producers and also to have regard to currency depreciation which the Community does not have the means fully to control. Regard must also be had to the domestic context and the local taxation system.
               We know of the disadvantages, but there are also advantages which the applicants naturally do not mention. Although from a certain point of view the stipulation of the periods for the Community price-fixing meant an ‘infringement of the principle of equal distribution of public advantages’ for the applicants, nevertheless such stipulation was accompanied by a whole series of measures intended to compensate for the situation of relative inequality in which they possibly found themselves. I have described in detail these measures, in so far as they are at a Community level, in the discussion of the question of any discrimination against the applicants and I refer thereto.
               I am therefore of the opinion that no exceptionally heavy damage as a result of the belated regard for the interests of the sugar producers of Guadeloupe and Martinique in fixing the Community prices has been shown. In view of this finding I need not consider whether there is a ‘sufficient causal link’ between the Community regulation and the alleged damage.
            
         
               III —
            
            
               Since in every respect the applications are thus shown to be unfounded, I can only propose that they should be dismissed and that the applicants should be ordered to bear the costs.
            
         (
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         )	Translated from the German.