Interfering with electricity meters is a matter of EU law – although not in the way you think

25 September 2012 by Rosalind English

   Valeri Hariev Belov [2012] EUECJ Case C-394/11 20 September 2012 – read opinion

For the first time the European Court of Justice (CJEU) has been asked to address the issue of indirect discrimination based on ethnic origin and the possible justifications for such discrimination.

The question, put before it as a reference on a preliminary issue from the Bulgarian Commission for Protection against Discrimination (the “KZD”), is this:

 Is it discriminatory if, in districts which are inhabited predominantly by a people belonging to a certain ethnic minority, electricity meters are suspended much higher than elsewhere?

The Court has thus been given an opportunity to refine its case-law on the ‘anti-discrimination directives’ – in the present case the Directive 2000/43/EC (the “race directive”).

Background facts

What led to this dispute was the practice in two districts of the Bulgarian city of Montana, of attaching electricity meters to electricity poles at a height of 7 m, whilst elsewhere electricity meters are installed at a maximum height of 1.70 m, such that they are accessible for consumers. The districts in question are inhabited primarily by people belonging to the Roma community, and the question therefore arises whether this practice constitutes discrimination based on ethnic origin.

As the electricity authority’s written observations to the court explained, the measure was taken because of the increasing incidence of unpaid bills in the two urban districts and the frequent offences committed by consumers which impair or threaten the safety, quality and continuous and secure operation of the electrical installations. The AG  succinctly  describes of the problem, and the solution to it:

Manipulation and unauthorised electricity extraction are undoubtedly made more difficult if electricity meters and distribution boxes are placed at a height of 7 m, which is normally inaccessible for consumers

Directive 2009/72 (the electricity directive) contains common rules for the transmission and supply of electricity in Member States. Directive 2006/32 seeks to increase energy end-use efficiency in the Member States through various measures, including accessible meters so that individuals can make better-informed decisions as regards their individual energy consumption. In order to get around this provision, as implemented in Bulgarian legislation, the electricity suppliers allow consumers at least to make an indirect visual check of electricity meters placed at a height of 7 m, by making available (within three days of a written request by the consumer) a special vehicle with a lifting platform, using which the company’s employees would read the electricity meters. No-one in the district had availed themselves of this service.

Direct or indirect discrimination?

Before getting to this argument on justification, the key question to be put to the CJEU was whether this treatment qualified either as direct or indirect discrimination under the Directive; in other words, is it absolutely essential for the treatment to be more unfavourable and for it to infringe, directly or indirectly, rights or interests explicitly defined in law, or is it to be understood as any form of behaviour (relationship) in the wider sense of the word which is less advantageous than behaviour in a similar situation?

If the former, then are the “rights explicitly defined in law” to be found in Article 38 of the Charter of Fundamental Rights of the European Union, and the relevant provisions of the Electricity Directive?

If the latter, ie should the race directive not require any infringement of rights or interests defined in law, the subsequent question arose, whether national legislation which provides for such a requirement is compatible with the directive.

Qualification to make a reference

But before deciding even this, the AG had to consider whether BZD – one of a myriad of anti-discrimination bodies proliferating across the EU – constituted a “court” or a “tribunal” which are the only bodies permitted to make a reference to the CJEU for the purposes of Article 267 TFEU. The electricity authorities contended that the KZD does not perform a judicial activity. In their submission, the KDZ was not an organ of the judiciary, but an administrative authority. AG Kokott disagreed, observing that the independent decision-making body of the KZD had made this reference in a complaint procedure in which a presumed victim of discrimination was asking the KZD to examine the compatibility of the contested measures with the Bulgarian laws implementing the race directive. That activity could therefore be regarded as judicial activity. Therefore (amongst other reasons) the Court considered that the KZD should be regarded as a court or tribunal within the meaning of Article 267 TFEU in the case at issue.

The AG’s opinion

On the main question, the Bulgarian authorities contested the relevance of the race discrimination directive.  In their view, only the creation of an internal market in electricity and the improvement of the operation of that market fall within the scope of EU law. The provision of electricity meters is not a measure which is necessary to that end, with the result that the present case is not covered by that directive.

But AG Kokott did not agree that the electricity supply and the provision of a meter could be separated in this way.

It cannot be convincingly claimed that only the electricity supply per se must be provided without discrimination and everything else, in particular the precise organisation of the conditions of supply [such as access to meters], is not covered by the scope of the directive.

…Ultimately, Directive 2000/43 is a particular expression of the general principle of equal treatment, which is one of the general principles of European Union law and is protected as a fundamental right under Articles 20 and 21 of the Charter of Fundamental Rights of the European Union. For this reason too, its scope cannot be defined restrictively.

The AG deals quite summarily with the question on what sort of interests have to be infringed to amount to discrimination under the race directive.

1. If this directive required an infringement of explicit rights, it would have made express provision to that effect.  And since the directive does not require any infringement of rights or interests defined in law, it is immaterial whether consumers have an entitlement or a right to access free electricity meters, be it under national law or under EU law. Therefore, in turn, national rules which make such infringement of rights or interests defined in law a requirement for the existence of discrimination are not consistent with EU law.

2. On the other hand, if it is not possible to interpret and apply Bulgarian law in conformity with the directive, the claimant could not derive rights vis-à-vis the third party electricity companies directly from the race directive;  a directive cannot of itself impose obligations on an individual and cannot therefore be relied on as such against an individual.

3. However, the prohibition of discrimination based on racial and ethnic origin is a general principle of EU law, which is enshrined in primary law in Article 21 of the Charter of Fundamental Rights and is merely fleshed out in the race directive.

4. Quite clearly, this was a matter of indirect rather than direct discrimination. The race directive contains the usual definition for “indirect discrimination” which covers to situations where an apparently neutral provision, criterion or practice would put persons of a racial or ethnic origin at a particular disadvantage compared with other persons. The directive bites on the provision of goods and services which are available to the public, including housing.  The 7 metre arrangement for electricity meters in the two affected districts affects consumers there, as far as can be seen, solely by reason of their status as local residents. Consequently, this did not amount to direct discrimination based on ethnic origin, but was indirect, and therefore stood to be justified (there is no justification for direct discrimination).

5. As to the proportionality of the 7m practice, the AG acknowledged that there were other means available to the electricity company to combat criminal activity; by prosecuting the offenders, or by placing those meters that had been interfered with even higher. But neither of these were viable alternatives; in other words he was satisfied that the companies did not have recourse, at financially reasonable cost,  to other, equally suitable means which had less detrimental effects on the population in the districts concerned.

The AG recommends the ultimate question concerning the proportionality of the measure and its effect on the community, be returned to the referring KZD. The assessment of proportionality must address the question whether the measure taken does not produce “undue adverse effects” on the inhabitants of the districts concerned, due account being taken of the risk of an ethnic group being stigmatised.
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