JUDGMENT OF THE COURT (Third Chamber)
22 June 2016 (*)
(Failure of a Member State to fulfil obligations — Directive 91/271/EEC — Urban waste water treatment — Judgment of the Court establishing a failure to fulfil obligations — Non-compliance — Article 260(2) TFEU — Financial penalties — Lump sum payment and penalty payment)
In Case C‑557/14,
ACTION for failure to fulfil obligations under Article 260(2) TFEU, brought on 4 December 2014,
European Commission, represented by G. Braga da Cruz and E. Manhaeve, acting as Agents, with an address for service in Luxembourg,
applicant,
v
Portuguese Republic, represented by L. Inez Fernandes, J. Reis Silva and J. Brito e Silva, acting as Agents,
defendant,
THE COURT (Third Chamber),
composed of L. Bay Larsen (Rapporteur), President of the Chamber, A. Tizzano, Vice-President of the Court, acting as a Judge of the Third Chamber, D. Šváby, J. Malenovský, and M. Vilaras, Judges,
Advocate General: J. Kokott,
Registrar: M. Ferreira, Principal Administrator,
having regard to the written procedure and further to the hearing on 21 January 2016,
after hearing the Opinion of the Advocate General at the sitting on 25 February 2016,
gives the following
Judgment
1 By its application, the European Commission claims that the Court should:
– declare that, by failing to take all the measures necessary to comply with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), the Portuguese Republic has failed to fulfil its obligations under Article 260(1) TFEU;
– order the Portuguese Republic to pay the Commission a penalty payment of EUR 20 196 per day of delay in complying with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), from the day of delivery of the judgment in the present case until the date on which the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) is complied with;
– order the Portuguese Republic to pay the Commission a lump sum payment of EUR 2 244 per day, from the day of delivery of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) until the day of delivery of the judgment in the present case or until the day on which the judgment of 7 May 2009 (C‑530/07, EU:C:2009:292) is complied with in full, whichever is sooner; and
– order the Portuguese Republic to pay the costs.
Legal context
2 According to Article 1 thereof, Council Directive 91/271/EEC of 21 May 1991 concerning urban waste-water treatment (OJ 1991 L 135, p. 40) concerns the collection, treatment and discharge of urban waste water and the treatment and discharge of waste water from certain industrial sectors. It aims to protect the environment from the adverse effects of the discharge of urban waste water.
3 Article 2 of that directive defines ‘urban waste water’ as ‘domestic waste water or the mixture of domestic waste water with industrial waste water and/or run-off rain water’. That article also defines an ‘agglomeration’ as ‘an area where the population and/or economic activities are sufficiently concentrated for urban waste water to be collected and conducted to an urban waste water treatment plant or to a final discharge point’ and ‘1 p.e. (population equivalent)’ as ‘the organic biodegradable load having a five-day biochemical oxygen demand (BOD5) of 60 g of oxygen per day’.
4 Article 4 of that directive provides:
‘1. Member States shall ensure that urban waste water entering collecting systems shall before discharge be subject to secondary treatment or an equivalent treatment as follows:
– at the latest by 31 December 2000 for all discharges from agglomerations of more than 15 000 p.e.,
...
3. Discharges from urban waste water treatment plants described in paragraphs 1 and 2 shall satisfy the relevant requirements of Annex I.B. ...
4. The load expressed in p.e. shall be calculated on the basis of the maximum average weekly load entering the treatment plant during the year, excluding unusual situations such as those due to heavy rain.’
5 According to Article 6(2) and (4) of the same directive:
‘2. Urban waste water discharges from agglomerations of between 10 000 and 150 000 p.e. to coastal waters and those from agglomerations of between 2 000 and 10 000 p.e. to estuaries situated in areas described in paragraph 1 may be subjected to treatment less stringent than that prescribed in Article 4 providing that:
– such discharges receive at least primary treatment as defined in Article 2(7) in conformity with the control procedures laid down in Annex I D,
– comprehensive studies indicate that such discharges will not adversely affect the environment.
Member States shall provide the Commission with all relevant information concerning the abovementioned studies.
...
4. Member States shall ensure that the identification of less sensitive areas is reviewed at intervals of not more than four years.’
6 Article 8(5) of Directive 91/271 is worded as follows:
‘In exceptional circumstances, when it can be demonstrated that more advanced treatment will not produce any environmental benefits, discharges into less sensitive areas of waste waters from agglomerations of more than 150 000 p.e. may be subject to the treatment provided for in Article 6 for waste water from agglomerations of between 10 000 and 150 000 p.e.
In such circumstances, Member States shall submit beforehand the relevant documentation to the Commission. The Commission will examine the case and take appropriate measures in accordance with the procedure laid down in Article 18.’
7 Annex I to that directive, entitled ‘Requirements for urban waste water’, is worded as follows:
‘...
B. Discharge from urban waste water treatment plants to receiving waters ...
1. Waste water treatment plants shall be designed or modified so that representative samples of the incoming waste water and of treated effluent can be obtained before discharge to receiving waters.
2. Discharges from urban waste water treatment plants subject to treatment in accordance with Articles 4 and 5 shall meet the requirements shown in Table 1.
...’
8 Point D of Annex I to Directive 91/271, entitled ‘Reference methods for monitoring and evaluation of results’, states:
‘1. Member States shall ensure that a monitoring method is applied which corresponds at least with the level of requirements described below.
Alternative methods to those mentioned in paragraphs 2, 3 and 4 may be used provided that it can be demonstrated that equivalent results are obtained.
...
2. Flow-proportional or time-based 24-hour samples shall be collected at the same well-defined point in the outlet and if necessary in the inlet of the treatment plant in order to monitor compliance with the requirements for discharged waste water laid down in this Directive.
...
3. The minimum annual number of samples shall be determined according to the size of the treatment plant and be collected at regular intervals during the year:
– ...
– 10 000 to 49 999 p.e.: 12 samples.
– ...
4. The treated waste water shall be assumed to conform to the relevant parameters if, for each relevant parameter considered individually, samples of the water show that it complies with the relevant parametric value in the following way:
(a) for the parameters specified in Table 1 and Article 2(7), a maximum number of samples which are allowed to fail the requirements, expressed in concentrations and/or percentage reductions in Table 1 and Article 2(7), is specified in Table 3;
...’
Judgment in Commission v Portugal
9 On 9 July 2004, the Commission sent the Portuguese Republic a letter of formal notice in which it stated that several agglomerations of more than 15 000 p.e. located in the territory of that Member State were not equipped with urban waste water collecting systems meeting the requirements of Article 3 of Directive 91/271, nor were they equipped with urban waste water treatment systems satisfying the requirements of Article 4 of that directive.
10 Finding that the explanations provided by the Portuguese Republic were not satisfactory for 17 of those agglomerations, on 13 July 2005 the Commission sent that Member State a reasoned opinion, asking it to comply therewith within two months of its receipt.
11 The Portuguese Republic responded to that reasoned opinion by letter of 14 October 2005.
12 Finding, following that response, that certain agglomerations had to be excluded from the infringement proceedings, while, regarding certain other agglomerations mentioned in the annex to the letter of formal notice of 9 July 2004 but not in the reasoned opinion of 13 July 2005, infringement of Articles 3 and 4 of Directive 91/271 was still ongoing, on 4 July 2006 the Commission issued an additional reasoned opinion concerning, henceforth, 32 agglomerations. By that opinion, it asked the Portuguese Republic to take the measures necessary to comply with that opinion within two months of receipt thereof.
13 Taking the view, in spite of the explanations provided by that Member State in a letter dated 14 September 2006, that the situation of several agglomerations remained unsatisfactory with regard to the provisions of that directive, the Commission decided to bring an action for failure to fulfil obligations before the Court: that action was the subject of Case C‑530/07.
14 In the course of the proceedings before the Court, the Commission withdrew its action in so far as it concerned a failure to fulfil obligations under, first, Article 3 of Directive 91/271 regarding five of those agglomerations and, second, Article 4 of that directive regarding 11 of those agglomerations. The subject matter of the action for failure to fulfil obligations was therefore restricted to the remaining agglomerations.
15 In its judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), the Court found that, by failing to provide, in accordance with the provisions of Article 3 of Directive 91/271, the agglomerations of Bacia do Rio Uima (Fiães S. Jorge), Costa de Aveiro, Covilhã, Espinho/Feira, Ponta Delgada, Póvoa de Varzim/Vila do Conde and Santa Cita with collection systems, and by failing to subject to secondary treatment or an equivalent treatment, in accordance with Article 4 of that directive, the urban waste water from the agglomerations of Alverca, Bacio do Rio Uima (Fiães S. Jorge), Carvoeiro, Costa de Aveiro, Costa Oeste, Covilhã, Lisbon, Matosinhos, Milfontes, Nazaré/Famalicão, Ponta Delgada, Póvoa de Varzim/Vila do Conde, Santa Cita, Vila Franca de Xira and Vila Real de Santo António, the Portuguese Republic had failed to fulfil its obligations under Articles 3 and 4 of that directive.
Pre-litigation procedure
16 In the course of monitoring compliance with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), the Commission, by letter of 18 June 2009, asked the Portuguese Republic for information concerning the measures taken in order to comply with that judgment.
17 By letter of 24 July 2009, that Member State informed the Commission of the measures which it had adopted.
18 On 11 December 2009, the Commission asked that Member State to provide clarifications, to which the latter responded, through several letters and additional pieces of information, that, concerning the agglomeration of Vila Real de Santo António, the new treatment plant had been operational since 2009, but that 30% of the pollutant flow collected had not yet actually been connected to the treatment plant, the completion of the necessary works being forecast for the end of 2012. As regards the agglomeration of Matosinhos, completion of construction of the new treatment plant was initially forecast for the end of 2011, but the completion of that work was eventually postponed until April 2013.
19 In several letters and during a meeting with Commission staff, the Portuguese Republic informed that institution of developments in the situation in relation to those two agglomerations.
20 It is apparent from the letter sent by that Member State on 26 November 2013 concerning the agglomeration of Vila Real de Santo António that the completion of the works necessary to ensure connection of the entirety of that agglomeration’s pollutant flow to the new treatment plant was forecast for the first quarter of 2014. As regards the agglomeration of Matosinhos, it is apparent from that letter that, due to a lack of funding, construction of the new treatment plant had not yet begun, but that a new request for funding was to be submitted in 2014.
21 The Commission, considering that there had been a failure to comply with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) for two of the 22 agglomerations concerned by that judgment, namely the agglomerations of Vila Real de Santo António and Matosinhos, brought the present action.
Failure to fulfil obligations
Arguments of the parties
22 Concerning the agglomeration of Vila Real de Santo António, the Commission submits that, in spite of the efforts expended by the Portuguese Republic since the delivery of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), on the reference date for assessing whether there had been a failure to fulfil obligations in the present case, namely 21 April 2014, the date of expiry of the period prescribed in the letter of formal notice sent to the Portuguese Republic by the Commission, that Member State had failed to subject the urban waste water from that agglomeration to secondary treatment or an equivalent treatment in accordance with Article 4 of Directive 91/271. Indeed, it is apparent from the Portuguese Republic’s letter of 23 April 2014 that the works necessary to connect the entirety of that agglomeration to the treatment plant were still ongoing at that later date.
23 Regarding the agglomeration of Matosinhos, the Commission submits that the current treatment plant only allows for primary treatment of its waste water, which is then discharged into the sea via an underwater outfall. It notes, in that regard, that, as is apparent from the Portuguese Republic’s letter of 23 April 2014, construction of a secondary treatment plant has not yet begun owing to alleged funding problems: completion of that work has been postponed until 2017.
24 Furthermore, the Commission submits that the arguments put forward by the Portuguese Republic in its statement of defence concerning the lack of effect of a primary treatment of urban waste water on the quality of the receiving waters and its assertion that such a treatment is sufficient to guarantee the quality of those waters and to avoid risks to the environment and human health, are unfounded, in so far as those arguments are in fact intended to call into question the Court’s findings in the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292).
25 The Portuguese Republic contends, generally, that it has complied with that judgment to a very large extent.
26 Regarding the agglomeration of Vila Real de Santo António, the Portuguese Republic states that three drainage network connection projects are involved. The first concerns the drainage network situated to the west of the municipality of Vila Nova de Cacela and the network for the transportation of waste water to the treatment plant: connection of those two networks was completed in November 2014. The second project relates to the connection of the drainage networks on the shores of that agglomeration to the capture system and the transportation of effluent to the waste water treatment plant, which was completed in February 2015. The third project concerns the connection of the drainage networks of the central area of the town in that agglomeration to the capture system and the transportation of effluent to the waste water treatment plant.
27 In its statement of defence, the Portuguese Republic had argued that that third project was at a highly advanced stage of fulfilment. That Member State indicated, in its rejoinder, that connection of effluent to the waste water treatment plant, in operation since 2009, was completed on 11 April 2015, a fact of which the Commission’s staff were duly informed.
28 Regarding the agglomeration of Matosinhos, first, the Portuguese Republic contends that the existing primary treatment is sufficient to guarantee the quality of the water and avoid risks to the environment and to human health, as the fact that there is no secondary treatment has no effect on the quality of the receiving waters. The waste water effluent treated in that agglomeration is discharged, not into lake or river water, but into sea water, which has high salinity and is stirred and crossed by strong sea currents.
29 That Member State maintains, in that regard, that the situation in the agglomeration of Matosinhos falls under Article 8(5) of Directive 91/271. According to that provision, in exceptional circumstances and in coastal agglomerations which are regarded as being less sensitive, discharges of urban waste water could be subject to less stringent treatment.
30 The Portuguese Republic argues that, through the existing primary treatment, the chemical oxygen demand and biochemical oxygen demand of the waste water has been reduced by, on average, 42% and 43% respectively, that is, by over twice the average rate of 20% laid down by that directive.
31 To that end, the Member State contends that the waste water treatment plant currently in operation is connected to an underwater outfall which conducts the water exiting primary treatment into the Atlantic Ocean around two kilometres from the coastline, with the result that the quality of the bathing water is not affected. There are only a few adjustments still to be made (adjustments which merely concern the installation of infrastructures) in order to guarantee that the quality of such water remains consistent.
32 The Portuguese Republic also makes reference to the analyses of bathing water regularly carried out on the territory of that agglomeration which confirm the ‘excellent’ quality of that water. In those circumstances, it argues that there is no reason to consider that there is any danger to residents’ health or to the tourism sector.
33 Second, that Member State contends that, although measures have been taken in order to comply with Article 4 of Directive 91/271, funding difficulties have hindered construction of the treatment plant. Furthermore, calls for tenders were made in 2008 and 2011 but circumstances constituting a situation of force majeure prevented continuation of the project for the construction of that plant.
34 The Portuguese Republic adds that, in any event, the conditions relating to the construction of a waste water treatment plant permitting secondary treatment of that water have now been met and that the funding required for that purpose has been made available, facts of which the Commission has been informed. In that regard, the Portuguese Republic submitted to that institution a timetable for the construction work which was due to begin in the first half of 2016: it is envisaged that the plant will become fully operational in the second half of 2019.
Findings of the Court
35 In order to ascertain whether the Portuguese Republic has adopted all the measures necessary to comply with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), it is necessary to ascertain whether that Member State has fully complied with Article 4 of Directive 91/271, more specifically by equipping the agglomerations concerned with urban waste water treatment systems satisfying the requirements of that article.
36 Concerning infringement proceedings under Article 260(2) TFEU, the reference date which must be used for assessing whether there has been a failure to fulfil obligations is that of the expiry of the period prescribed in the letter of formal notice issued under that provision (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 29 and the case-law cited).
37 In the present case, as noted in paragraph 22 above, since the Commission sent the Portuguese Republic a letter of formal notice in accordance with the procedure laid down in Article 260(2) TFEU, the reference date mentioned in paragraph 36 above is the date of expiry of the period prescribed in that letter, namely 21 April 2014.
38 It is common ground that, on that date, the agglomerations of Vila Real de Santo António and Matosinhos were not yet equipped with urban waste water treatment systems in accordance with Article 4 of Directive 91/271.
39 Indeed, regarding the agglomeration of Vila Real de Santo António, it can be seen from the statements made by the Portuguese Republic that, on 21 April 2014, the urban waste water treatment system was not yet in place. As regards the agglomeration of Matosinhos, by letter of 23 April 2014 the Portuguese Republic informed the Commission that work on constructing a waste water treatment plant permitting secondary treatment of that water had not yet begun.
40 The Portuguese Republic’s arguments concerning that second agglomeration, regarding the lack of effect of a purely primary treatment of urban waste water on the quality of the receiving waters and its assertion that such a treatment is sufficient to guarantee the quality of those waters and to avoid risks to the environment and human health are in fact intended to call into question the decision made by the Court at the end of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) and, accordingly, cannot be accepted.
41 Regarding the Portuguese Republic’s argument based on the difficulties which that Member State has had in complying with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), it should be borne in mind that a Member State may not plead provisions, practices or circumstances existing in its internal legal system in order to justify a failure to comply with obligations resulting from EU law, with the result that such an argument cannot succeed (see, to that effect, judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 35 and the case-law cited).
42 In those circumstances, it must be held that, by failing to take all the measures necessary to comply with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), the Portuguese Republic has failed to fulfil its obligations under Article 260(1) TFEU.
Financial penalties
Penalty payment
Arguments of the parties
43 Regarding the agglomeration of Vila Real de Santo António, the Commission claimed, during the hearing before the Court, that, contrary to the Portuguese Republic’s assertions that that Member State has taken all the measures necessary to comply with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) in full, it cannot be guaranteed that the treatment plant in that agglomeration is operating in accordance with Article 4 of Directive 91/271 until proper analyses of the waste water are carried out, over the course of a year, on the basis of samples taken before the discharge of that waste water and when those analyses show, at the end of that year, that the secondary treatment of that water complies with the requirements of that directive. According to the Commission, those discharges must satisfy the requirements of point B of Annex I to that directive. In addition, the Commission submits that the reference methods for the monitoring and evaluation of results set out in point D of that annex, which establishes the minimum annual number of samples which must be taken in order to be regarded as representative depending on the size of the treatment plant, must be complied with.
44 However, in the present case, no such measures have been taken.
45 The Commission proposes that the Court, in accordance with Article 260(2) TFEU, and on the basis of the former’s communication of 13 December 2005, entitled ‘Application of Article [260 TFEU]’ (SEC(2005) 1658) (‘the communication of 2005’), as updated by its communication of 17 September 2014, entitled ‘Updating of data used to calculate lump sum and penalty payments to be proposed by the Commission to the Court of Justice in infringement proceeding[s]’ (C(2014) 6767 final), penalise the failure to comply at issue in the present case by imposing, inter alia, a penalty payment.
46 Under paragraph 6 of the Commission’s communication of 2005, that institution is to rely on three criteria in order to determine the amount of the penalty payment, namely the seriousness of the infringement, its duration, and the need to ensure that the penalty itself is a deterrent to future infringements.
47 Regarding the seriousness of the infringement established, the Commission emphasises, in the first place, the importance of the rules of EU law which have been infringed and, in the second place, the consequences of that infringement for public and private interests such as, inter alia, protecting human health and the environment, maintaining and improving the quality of receiving waters and the aquatic ecosystems associated therewith, or practising recreational activities connected with those ecosystems. In the third place, the Commission, while noting that there are mitigating circumstances connected with the progress made by that Member State, also highlights the aggravating circumstances resulting from: the failure, upon expiry of the period prescribed by the reasoned opinion, to comply with not only Article 4 of Directive 91/271 but also the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292); the clarity of the provisions infringed; the failure to comply with the successive timetables submitted by the Portuguese authorities in the correspondence sent to the Commission; and, lastly, the repeated unlawful conduct of that Member State as regards complying with EU law in a sector where the effects on human health and the environment are particularly significant.
48 Having regard to all of the foregoing, the Commission considers that it is appropriate to apply a coefficient for seriousness of 3 on the scale of 1 to 20 established in the communication of 2005.
49 Concerning the duration of the infringement, the Commission claims that the decision to bring the present proceedings was taken on 16 October 2014, that is, 65 months after the date of delivery of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), which justifies applying the maximum coefficient of 3.
50 As regards the coefficient relating to the defendant Member State’s ability to pay, known as the ‘n’ factor, the Commission states that its communication of 2005 fixes that coefficient at 3.40 for the Portuguese Republic.
51 The Commission indicates that, according to the formula set out in that communication, the daily penalty payment is equal to the standard flat-rate amount of EUR 660 multiplied by the coefficient for seriousness, the coefficient for duration and the ‘n’ factor. Therefore, in the present case, the Commission proposes a daily penalty payment of EUR 20 196 (EUR 660 x 3 x 3 x 3.40).
52 That institution proposes applying a decreasing daily penalty payment, the actual amount of which would be calculated every six months, reducing the total amount relating to each of those periods by a percentage corresponding to the relationship between the p.e. of the agglomerations which have brought their plants into line with the requirements of Article 4 of Directive 91/271 and the p.e. of the agglomerations which do not have such systems in place on the day of delivery of the present judgment.
53 According to the data available to the Commission before the bringing of the present action, the total p.e. for the agglomerations which did not have treatment systems complying with Article 4 of that directive was 321 950. That total was divided between the two agglomerations concerned, as the p.e. of Vila Real de Santo António was 34 950 and that of Matosinhos was 287 000.
54 The Portuguese Republic contends that, taking into account the seriousness and duration of the infringement, the co-operation and the diligence which it has demonstrated throughout the proceedings and the progress made in complying with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), there are no grounds for imposing such a high penalty payment. That Member State thus contests the method used to calculate the amounts proposed. It considers that the penalty payment sought by the Commission is excessively high and disproportionate in relation to the seriousness of the infringement, the environmental effects of which are purely hypothetical. It refutes the Commission’s assertions concerning the seriousness of the infringement: as stated in paragraph 27 above, regarding the agglomeration of Vila Real de Santo António, it contends that the connection of effluent to the waste water treatment plant, operational since 2009, was completed on 11 April 2015, a fact of which the Commission’s staff were duly informed. Accordingly, the alleged infringement no longer exists so far as the agglomeration of Vila Real de Santo António is concerned: to that extent, the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) has been complied with in full.
55 Regarding the agglomeration of Matosinhos, according to that Member State it is necessary, given that the alleged infringement amounts to the need to complete the works necessary to enlarge the waste water treatment plant with a view to secondary treatment, to take account, during the period under consideration, extended by one year, of the progress made in carrying out those works in order to ascertain whether that plant is operating in accordance with the requirements of Article 4 of Directive 91/271. Accordingly, the period required to complete those works was four years, that is, a period of three years extended by a one-year delay connected with the occurrence of unforeseeable events. The total period of four years can be divided into eight stages, each of which was monitored in order to ascertain the progress made in the work being carried out on that plant with a view to rendering it fully operational.
56 In so far as, first, concerning the agglomeration of Vila Real de Santo António, the objectives of connecting the secondary treatment plant have now been fully achieved, second, concerning the agglomeration of Matosinhos, the actions necessary to maintain coastal waters at an excellent level of quality have been undertaken and continue to be developed and, third, of the 22 agglomerations concerned by the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), 21 agglomerations have been brought into line with that judgment, the coefficient applied should not be greater than 1 on the scale of 1 to 20 mentioned by the communication of 2005.
57 The Portuguese Republic also emphasises the efforts it has made to comply fully with the obligations arising from the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) and highlights, in addition, the continual co-operation which the Portuguese authorities have maintained with the Commission’s staff.
58 It also argues that it is necessary to take into consideration the level of compliance with that judgment which has already been achieved. Even taking into account the time which has elapsed since the delivery of that judgment, the criterion relating to the duration of the infringement is irrelevant so far as 90% of the agglomerations referred to in the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) are concerned. It is therefore right that that situation, in view of the amount of work still to be carried out in order to comply with that judgment, be taken into consideration in the weighting applied by the Court, so that that weighting does not exceed 10% of the coefficient of 3 which the Commission seeks to have applied, with the result that the weighted value of that criterion is not higher than 1.
59 Furthermore, in view of the circumstances of the present case, that penalty payment is also disproportionate as regards the Portuguese Republic’s ability to pay. In addition, the ‘n’ factor applied to it is debateable in the light of the temporary economic situation prevailing in that Member State as a result of the financial crisis of States in the Eurozone, since the completion of public works requires significant public investment. Accordingly, the Portuguese Republic leaves it to the Court to determine any reappraisal of that coefficient but considers that, since over 90% of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) has already been complied with, the Court should temporarily reduce that coefficient.
60 Consequently, if the Court were to grant that Member State’s request regarding the weighting of the coefficients for seriousness and duration and the ‘n’ factor relating to its ability to pay, the daily penalty payment would have to be calculated using the following formula: EUR 660 x 1 x 1 x 3.40 = EUR 2 244 divided by p.e. 287 000, that is, EUR 0.007 per day per unit of p.e.
Findings of the Court
61 According to settled case-law, the imposition of a penalty payment is, in principle, justified only in so far as the failure to comply with an earlier judgment of the Court continues up to the time of the Court’s examination of the facts (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 47 and the case-law cited).
62 Regarding the agglomeration of Vila Real de Santo António, it should be noted that, as recalled in paragraphs 27 and 54 above, the Portuguese Republic explained during the hearing before the Court that the necessary works concerning the treatment plant were completed on 11 April 2015 and that several samples demonstrating the effectiveness of the secondary treatment of urban waste water for the period running from April to November 2015, a period that includes the tourist season, which is characterised by heavy pollution of that water, were sent to the Commission. In that regard, that institution has not contradicted that Member State’s assertion, in particular as regards the compliance of those samples with the requirements of Article 4 of Directive 91/271.
63 In those circumstances, the Court finds that, regarding the agglomeration of Vila Real de Santo António, the Portuguese Republic provided evidence that it had taken samples at regular intervals from April 2015 onwards and that, accordingly, the discharges from the urban waste water treatment plant meet the requirements of Article 4(3) of that directive, with the result that, concerning that agglomeration, there is no need to order that Member State to pay a penalty payment intended to ensure compliance with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292).
64 Regarding the agglomeration of Matosinhos, it can be seen from the Portuguese Republic’s statements that the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) had not been fully complied with at the date of the hearing before the Court.
65 In those circumstances, the Court finds that ordering the Portuguese Republic to pay a penalty payment is an appropriate financial means of encouraging that State to take the measures necessary to put an end to the established infringement and to ensure that the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) is complied with in full.
66 Nevertheless, it cannot be ruled out a priori that, on the date of delivery of the present judgment, full compliance with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) will have taken place. Accordingly, the penalty payment must be imposed only if the failure to fulfil obligations persists on the date of delivery of the present judgment (see, by analogy, judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 50 and the case-law cited).
67 It is apparent from the settled case-law of the Court that the penalty payment must be decided upon according to the degree of persuasion needed in order for the Member State which has failed to comply with a judgment establishing a breach of obligations to alter its conduct and bring to an end the infringement established (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 51 and the case-law cited).
68 In exercising its discretion in the matter, it is for the Court to set the penalty payment so that it is both appropriate to the circumstances and proportionate to the infringement established and the ability to pay of the Member State concerned (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 52 and the case-law cited).
69 The Commission’s proposals concerning the penalty payment cannot bind the Court and constitute merely a useful point of reference. Similarly, guidelines such as those set out in the communications of the Commission are not binding on the Court but contribute to ensuring that the Commission’s own actions are transparent, foreseeable and consistent with legal certainty when that institution makes proposals to the Court. In proceedings under Article 260(2) TFEU relating to a failure to fulfil obligations on the part of a Member State that has persisted notwithstanding the fact that that same failure to fulfil obligations has already been established in a first judgment delivered under Article 226 EC or Article 258 TFEU, the Court must remain free to set the penalty payment to be imposed in an amount and in a form that the Court considers appropriate for the purposes of inducing that Member State to bring to an end its failure to comply with the obligations arising under that first judgment of the Court (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 53 and the case-law cited).
70 For the purposes of determining the amount of a penalty payment, the basic criteria which must be taken into consideration in order to ensure that that payment has coercive effect and that EU law is applied uniformly and effectively are, in principle, the seriousness of the infringement, its duration and the ability to pay of the Member State concerned. In applying those criteria, regard must be had, in particular, to the effects on public and private interests of the failure to comply and to how urgent it is for the Member State concerned to be induced to fulfil its obligations (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 54 and the case-law cited).
71 In the first place, concerning the seriousness of the infringement, it should be borne in mind that Directive 91/271 is intended to protect the environment. A lack or shortage of urban waste water treatment plants is likely to harm the environment and must be regarded as particularly serious (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 55 and the case-law cited).
72 In addition, concerning the reduction in the chemical and biochemical oxygen demand relied on by the Portuguese Republic, it should be noted that, as the Advocate General observed in point 63 of her Opinion, the indicative values specified by that directive have not yet been achieved by that Member State, given that that directive fixes, for secondary treatment, a reduction of at least 75% in the chemical oxygen demand and of 70 to 90% in the biochemical oxygen demand, whereas that Member State cites a reduction of only 20% in the chemical oxygen demand.
73 Furthermore, while it can be seen from the data provided by the Portuguese Republic that the quality of bathing water is described as ‘excellent’ in the majority of beach areas in the agglomeration of Matosinhos, the fact remains that the quality of that water in, in particular, the beach areas of ‘Azul-Conchina’, into which — according to the Commission’s unchallenged data — urban waste water which has undergone a primary treatment are discharged, and of ‘Matosinhos’, the beach area nearest to that agglomeration’s urban area, were regarded as ‘sufficient’ and ‘good’ respectively. As the Advocate General observed in point 64 of her Opinion, it can be seen from this that the inadequate treatment of urban waste water is affecting the quality of that bathing water.
74 It is also necessary to cite as an aggravating circumstance the fact that the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) will not be fully complied with, according to the statements of the Portuguese Republic, until 2019, which is equivalent to a delay of almost 20 years, in so far as the obligation to ensure that the secondary treatment of the urban waste water of the agglomeration of Matosinhos complied with EU law should have been fulfilled on 31 December 2000 at the latest. As it is, since the Portuguese Republic maintains that it will not be in a position to comply with all of its obligations under that directive until almost 20 years after that second date, the Court cannot but confirm the particularly lengthy character of an infringement which, in the light of the objective mentioned above, is also a matter of indisputable gravity (see, by analogy, judgment of 19 December 2012 in Commission v Ireland, C‑374/11, EU:C:2012:827, paragraph 38).
75 However, it should also be borne in mind that, as the Court held in paragraph 57 of its judgment of 15 October 2015 in Commission v Greece (C‑167/14, EU:C:2015:684), the extent of the harm to the environment is dependent, to a large extent, on the number of agglomerations covered by the infringement complained of. It should be noted that, in the present case, the number of agglomerations in respect of which the Portuguese Republic had not provided, on the day of the hearing before the Court, proof of existence of urban waste water treatment systems complying with that directive — just one — is clearly lower than the number of agglomerations not having such installations mentioned in the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), namely 15. Therefore, it must be found that that harm is less extensive than that resulting from the initial infringement established in that judgment. The Portuguese Republic has thus considerably reduced the additional harm to the environment resulting from the infringement established by the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292).
76 In the second place, regarding the duration of the infringement, that duration must be assessed by reference to the date on which the Court assesses the facts and not the date on which proceedings are brought before it by the Commission. In the present case, the duration of the infringement — over seven years from the date of delivery of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) — is considerable.
77 Although Article 260(1) TFEU does not specify the period within which a judgment must be complied with, it follows from settled case-law that the importance of immediate and uniform application of EU law means that the process of compliance must be initiated at once and completed as soon as possible (see judgment of 17 September 2015 in Commission v Italy, C‑367/14, EU:C:2015:611, paragraph 95 and the case-law cited).
78 In the third place, concerning the ability to pay of the Member State concerned, it is apparent from the case-law of the Court that it is necessary to take account of recent trends in a Member State’s gross domestic product (GDP) at the time of the Court’s examination of the facts (see, to that effect, judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 60). In that regard, account should be taken of the Portuguese Republic’s assertions that its GDP decreased by 7.4% between 2009 and 2013.
79 As regards the Commission’s proposal that a decreasing penalty payment be applied and the arguments put forward by the Portuguese Republic in support of progressively reducing the amount of the penalty payment, it should be borne in mind that neither progress made in complying with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) nor progress made in complying with Article 4 of Directive 91/271 can be ascertained until it can be established, in respect of the agglomeration concerned, that there has been an increase in the proportion of its p.e. which is treated in accordance with the provisions of that directive. As the Advocate General observed in point 76 of her Opinion, the mere fact that construction works are progressing, however advanced they may be, does not entail any reduction in the threat to the environment, as such a reduction may be established only after the secondary treatment plant is put into operation: only this will enable the agglomeration concerned to treat a higher proportion of its p.e. than previously in a way which complies with Directive 91/271.
80 Since the Portuguese Republic claims to be unable, so far as the agglomeration of Matosinhos is concerned, to increase the proportion of its p.e. which is treated in a way which complies with that directive and, hence, to reduce the threat to the environment, it is necessary to apply a fixed penalty payment.
81 Having regard to all of the foregoing, the Court considers it appropriate to impose a penalty payment of EUR 8 000 per day.
82 Consequently, the Portuguese Republic must be ordered to pay the Commission, into the ‘European Union own resources’ account, a penalty payment of EUR 8 000 for each day of delay in implementing the measures necessary to comply with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), from the date of delivery of the present judgment until the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) has been complied with in full.
Lump sum payment
Arguments of the parties
83 The Commission claims that the Court should order the Portuguese Republic to pay a daily lump sum payment of EUR 2 244 — an amount reached by multiplying the standard flat rate, fixed at EUR 220, by the same coefficient for seriousness as that applied for the penalty payment (3) and by the ‘n’ factor of 3.40 — from the date of delivery of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) until the date of delivery of the present judgment or until the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) is complied with, whichever is sooner.
84 The Commission states that, when calculating the daily amount for determining the lump sum, it is necessary to assess whether, having regard to the minimum fixed lump sum, it is more appropriate to propose that the Court set a daily amount or a fixed amount. To that end, it is necessary to compare, on the one hand, the cumulative total of the daily amount for determining the lump sum as calculated up until the date of the Commission’s decision to bring an action under Article 260 TFEU and, on the other hand, the minimum fixed lump sum set for the Member State concerned.
85 In the present case, the date of delivery of the judgment under Article 258 TFEU is 7 May 2009. The date of the Commission’s decision to bring an action under Article 260 TFEU is 16 October 2014. 1 987 days have elapsed between those two dates. Consequently, on the date of that decision by the Commission, the cumulative total of the daily amount for determining the lump sum is equal to the daily amount for determining the lump sum multiplied by the number of days, namely: EUR 2 244 x 1 987 days = EUR 4 458 828.
86 According to the communication of 2005, the minimum fixed lump sum for the Portuguese Republic is currently set at EUR 1 875 000.
87 Accordingly, given that, on 16 October 2014, the cumulative total of the daily amount for determining the lump sum payment exceeds the minimum fixed lump sum set for the Portuguese Republic, the Commission proposes that the Court order the Portuguese Republic to pay the daily amount for determining the lump sum payment, namely EUR 2 244 per day from the date of delivery of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) until the date of delivery of the present judgment, or until that Member State complies in full with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), whichever is sooner.
88 The Portuguese Republic challenges that method of calculation. It argues that, if the Court were to follow the proposal to weigh the coefficients applied by the Commission in the manner suggested by that Member State, it would be necessary to order the latter to pay a daily lump sum, not of EUR 2 244, but of EUR 748. That second amount is obtained by multiplying the standard flat rate, fixed at EUR 220, by the coefficient for seriousness (1) and by the ‘n’ factor of 3.40.
89 The Portuguese Republic maintains that the two-month period prescribed by the Commission in its letter of formal notice of 21 February 2014 expired on 21 April 2014. Accordingly, 1 810 days have elapsed between the date of delivery of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) and the expiry of the period prescribed by the Commission in its letter of formal notice.
90 That Member State contends that, if that number of days is multiplied by EUR 748, the result obtained is EUR 1 339 000. Since 90% of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) has already been complied with, this should be reflected in the percentage by which the sum of EUR 1 875 000 is reduced, with the result that the fixed lump sum which is to be paid by the Portuguese Republic may not exceed EUR 187 500.
Findings of the Court
91 As a preliminary point, it should be borne in mind that the Court is empowered, in exercising the discretion conferred on it in such matters, to impose a penalty payment and a lump sum payment cumulatively (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 72).
92 The imposition of a lump sum payment and the fixing of that sum must depend in each individual case on all the relevant factors relating both to the characteristics of the failure to fulfil obligations established and to the conduct of the Member State involved in the procedure initiated under Article 260 TFEU. That provision confers a wide discretion on the Court in deciding whether to impose such a penalty and, if it decides to do so, in determining the amount thereof (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 73).
93 In the present case, all of the factual and legal elements which have led to the establishment of the infringement under consideration, in particular, the fact that other judgments, namely the judgments delivered on 8 May 2008 in Commission v Portugal (C‑233/07, EU:C:2008:271), 8 September 2011 in Commission v Portugal (C‑220/10, EU:C:2011:558) and 28 January 2016 in Commission v Portugal (C‑398/14, EU:C:2016:61), establishing the failure of the Portuguese Republic to fulfil its obligations concerning the treatment of urban waste water, indicate that effective prevention of future repetition of similar infringements of EU law may require the adoption of a dissuasive measure, such as an order to make a lump sum payment (see, by analogy, judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 74).
94 In those circumstances, it is for the Court, in the exercise of its discretion, to fix the lump sum in an amount appropriate to the circumstances and proportionate to the infringement (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 75).
95 Relevant considerations in this respect include factors such as the seriousness of the infringement and the length of time for which the infringement has persisted since the delivery of the judgment establishing it (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 76).
96 The circumstances of the present case which must be taken into account are apparent from the considerations set out in paragraphs 71 to 78 above regarding the seriousness and the duration of the infringement and the ability to pay of the Member State concerned.
97 Regarding the seriousness of the infringement in question, it should however be noted that, at the date of the hearing before the Court, it was established that only one agglomeration — the agglomeration of Matosinhos — did not have the proper systems in place for the treatment of the urban waste water which was the subject matter of the infringement complained of, whereas, for most of the period between the date of delivery of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) and the date of delivery of the present judgment, two agglomerations did not have such systems in place. Therefore, in accordance with the considerations set out in paragraph 75 above, by virtue of which the extent of the harm to the environment is dependent, to a large extent, on the number of agglomerations covered by the infringement complained of, it is necessary to regard that infringement as being more serious for the purposes of calculating the lump sum payment than for the purposes of determining the penalty payment.
98 In addition, for the purposes of determining the lump sum payment, it is necessary to take account of the fact that the Portuguese Republic, although it has co-operated systematically with the Commission’s staff, has not complied with its own timetables concerning the treatment plant for the urban waste water of the agglomeration of Matosinhos. Indeed, it is apparent from that Member State’s rejoinder that, concerning that agglomeration, the necessary plant will not be operational until 2019.
99 Lastly, as the Commission has argued, regard must be had to the large number of judgments, referred to in paragraph 93 above, which have established failures by the Portuguese Republic to fulfil its obligations in relation to the treatment of urban waste water. Repetition of unlawful conduct by a Member State is all the more unacceptable where it takes place in a sector in which the effects on human health and the environment are particularly significant. In that regard, as the Advocate General observed in point 89 of her Opinion, where a Member State repeatedly engages in unlawful conduct in a specific sector, this may be an indication that effective prevention of future repetition of similar infringements of EU law may require the adoption of a dissuasive measure, such as a lump sum payment (see, to that effect, judgment of 19 December 2012 in Commission v Ireland, C‑279/11, EU:C:2012:834, paragraph 70).
100 Having regard to all of the foregoing, the Court considers it a fair assessment of the circumstances of the case to fix the amount of the lump sum payment which the Portuguese Republic will have to pay at EUR 3 000 000.
101 Consequently, the Portuguese Republic must be ordered to pay the Commission, into the ‘European Union own resources’ account, a lump sum payment of EUR 3 000 000.
Costs
102 Under Article 138(1) of the Rules of Procedure of the Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. As the Commission has applied for costs and the Portuguese Republic’s failure to fulfil its obligations has been established, the Portuguese Republic must be ordered to pay the costs.
On those grounds, the Court (Third Chamber) hereby:
1. Declares that, by failing to take all the measures necessary to comply with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), the Portuguese Republic has failed to fulfil its obligations under Article 260(1) TFEU;
2. If the failure to fulfil obligations established in point 1 has continued until the day of delivery of the present judgment, orders the Portuguese Republic to pay the European Commission, into the ‘European Union own resources’ account, a penalty payment of EUR 8 000 for each day of delay in implementing the measures necessary to comply with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), from the date of delivery of the present judgment until the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) has been complied with in full;
3. Orders the Portuguese Republic to pay the European Commission, into the ‘European Union own resources’ account, a lump sum payment of EUR 3 000 000;
4. Orders the Portuguese Republic to pay the costs.
[Signatures]