nama preliminary decision reply

8/9/2019 NAMA Preliminary Decision Reply

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REFERENCE: [CEI/10/05]

EUROPEAN COMMUNITIES(ACCESS TO INFORMATION ON THE ENVIRONMENT) REGULATIONS 2007

BEFORE

THE COMMISSIONER FOR ENVIRONMENTAL INFORMATION

BETWEEN

APPLICANTGAVIN SHERIDAN

and

PUBLIC AUTHORITY

THE NATIONAL ASSET MANAGEMENT AGENCY

SUBMISSION OF THE APPLICANT IN RELATION TO THE INVESTIGATORSPRELIMINARY REPORT

Introduction

1. This submission arises in connection with an appeal to the Commissioner forEnvironmental Information of a decision by the National Asset Management Agency(NAMA) to reject a request by the applicant for access to information on the

environment held by or on behalf of NAMA.

NAMA rejected the request on the basis that it was not a public authority.

2. The applicant makes this submission in response to the investigators preliminaryreport. It is the applicants position that the investigator has erred both in law and infact by:

2.1 Failing to find that NAMA is a public authority by reason of Regulation3(1)(vi) of SI 133/2007;

2.2 Failing to apply the correct test when considering whether or not NAMAsfunctions are administrative in nature;

2.3 Failing to find that NAMA is a public authority by reason of Regulation3(1)(b) of SI133/2007;

2.4 Failing to find that NAMA is a public authority by reason of Regulation3(1)(c) of SI133/2007; and


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2.5 Incorrectly finding that NAMAs powers serve no public purpose and that itis a purely commercial entity.

Procedure

3. On February 3, 2010, the applicant emailed a request (attached at Appendix 1) toNAMA under Environmental Information Regulations (the Regulations) (SI

133/2007) seeking:

1) A breakdown of all assets, loans and properties due to be transferred to

the Agency. This should include the value placed on the asset and by whom.It should include the addresses of all assets and properties.

2) A breakdown of all properties and property loans currently owned orcontrolled by the Agency.

3) Minutes of board meetings relating to the transfer of assets and propertiesto the Agency. The date range for this request is January 2009 to January

2010, inclusive.

4. On February 16, 2010, NAMA replied, stating that it did not consider itself to be apublic authority for the purposes of the Regulations. On the same day, the applicantappealed that decision for internal review. The applicant stated:

You state that you do not consider NAMA to be a "public authority" within theAIE regulations. However under the Regulations a public body is defined as:

a) government or other public administration, including public advisorybodies, at national, regional or local level,(b) any natural or legal person performing public administrative functions

under national law, including specific duties, activities or services in relation tothe environment, and(c) any natural or legal person having public responsibilities or functions,

or providing public services, relating to the environment under thecontrol of a body or person falling within paragraph (a) or (b),

and includes:

(vi) a board or other body (but not including a company under the Com-

panies Acts) established by or under statute,(vii) a company under the Companies Acts, in which all the shares areheld(I) by or on behalf of a Minister of the Government,

(II) by directors appointed by a Minister of the Government,(III) by a board or other body within the meaning of paragraph (vi), or(IV) by a company to which subparagraph (I) or (II) applies, having

public administrative functions and responsibilities, and possessing

environmental information;

The NAMA board consists of 9 members, appointed by the Minister for

Finance. The chief executives of NAMA and the NTMA (ex-officio) are


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appointed by the Minister. This alone would clearly indicate that NAMA is apublic body. (vi) would appear to be particularly relevant.

5. On March 19, 2010, NAMA replied stating that after an internal review it stillconsidered itself not to be a public authority of the purposes of the Regulations. The

applicant then appealed to the Office of the Commissioner for EnvironmentalInformation (OCEI). Copies of the relevant correspondence are attached at

Appendix 1.

The OCEI investigator issued a preliminary report on June 30, 2010. A copy of her

preliminary report is attached at Appendix 2.

Relevant legislation and Guidance

6. Directive 2003/4/EC (the Directive) provides the public with a right of access toenvironmental information held by or on behalf of a public authority. The Directive

was transposed into Irish law by way of the European Communities (Access toInformation on the Environment) Regulations 2007 (S.I. No. 133 of 2007).

Article 2(2) of the Directive defines public authority as follows:

2. Public authority shall mean:

(a) government or other public administration, including public advisory

bodies, at national, regional or local level;

(b) any natural or legal person performing public administrative functions

under national law, including specific duties, activities or services in relation tothe environment; and

(c) any natural or legal person having public responsibilities or functions, or

providing public services, relating to the environment under the control of abody or person falling within (a) or (b).

Member States may provide that this definition shall not include bodies orinstitutions when acting in a judicial or legislative capacity. If their

constitutional provisions at the date of adoption of this Directive make noprovision for a review procedure within the meaning of Article 6, MemberStates may exclude those bodies or institutions from that definition.

7. Article 3 of the Regulations mirrors the definition of public authority found in the

Directive but also elaborates on that definition by providing an unqualified and non-exhaustive list of bodies and categories of bodies which are to be considered as

public authorities for the purpose of the Regulations:

public authority means, subject to sub-article (2)(a) government or other public administration, including publicadvisory bodies, at national, regional or local level,(b) any natural or legal person performing public administrativefunctions under national law, including specific duties, activities or

services in relation to the environment, and


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(c) any natural or legal person having public responsibilities orfunctions,or providing public services, relating to the environment under thecontrol of a body or person falling within paragraph (a) or (b),

and includes(i) a Minister of the Government,(ii) the Commissioners of Public Works in Ireland,(iii) a local authority for the purposes of the Local Government Act2001(No. 37 of 2001),(iv) a harbour authority within the meaning of the Harbours Act 1946(No. 9 of 1946),(v) the Health Service Executive established under the Health Act2004(No. 42 of 2004),(vi) a board or other body (but not including a company under theCompanies Acts) established by or under statute,(vii) a company under the Companies Acts, in which all the shares are

held(I) by or on behalf of a Minister of the Government,(II) by directors appointed by a Minister of the Government,(III) by a board or other body within the meaning of paragraph

(IV) by a company to which subparagraph (I) or (II) applies,havingpublic administrative functions and responsibilities, and

possessingenvironmental information;

8. Pursuant to Article 14 of the Regulations, the Minister for the Environment,Heritage and Local Government has provided Guidance Notes which publicauthorities are obliged to take account of when performing their functions under the

Regulations. In relation to the definition of public authority the Guidance Notes1

state:

Definition of public authorityAs indicated at paragraph 3.2 above, public authority is broadly defined to

comprehend all such bodies that have public administrative functions and thathold environmental information. The definition makes it clear that certain

public bodies - such as Government Departments and local authorities - fallwithin the scope of the definition. The definition also makes it clear thatbodies established by statute and certain companies established under

the Companies Acts are comprehended by the definition. Broadly, it isintended to cover bodies that are subsidiary public bodies and would include

noncommercial and commercial semi-state bodies that perform publicadministrative functions and that hold environmental information.

Clearly the definition is broad and is designed to include a large group of State andsemi-State bodies. Bodies that fall within the scope of the Regulations include the

commercially motivated State-owned company Coillte, established under theForestry Act.

About NAMA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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http://www.environ.ie/en/AboutUs/AccesstoInformationontheEnvironment/RHLegislation/FileDownLoad,2481,en.pdf!


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9. NAMA was established pursuant to the National Asset Management Agency Act2009 (the Act) in response to a serious threat to the Irish economy and with the

purpose inter alia of stabilising the financial system, to facilitate the availability ofcredit in the economy, to facilitate the restructuring of credit institutions of systemic

importance to the economy and to remove uncertainty in relation to the valuation ofcertain assets in those institutions.

10. NAMA is established as a separate corporate body with a board appointed by theMinister for Finance under the control of the NTMA. NAMA as a corporate entity will

arrange and supervise the identification of property-backed loans on the books of thequalifying financial institutions in the State but will delegate under its control thepurchase and management of those loans to a separately created special purposevehicle (the SPV)2. 95% of the consideration for the purchase of the loans will befinanced by securities guaranteed by the government and the remainder with non-

State guaranteed debt.

11. The SPV will be a separate legal entity with a subscribed capital of!100 millionwith private investors owning 51% of the equity and the remainder owned by NAMA.Given that the SPV is 95% funded by the State however, NAMA representatives on

the board of the SPV have a veto over all decisions of the SPV board that couldaffect NAMA or the Government.

12. The SPV will seek to make a profit through the management of the acquiredassets during the lifetime of NAMA, however given that the SPV debt will be

guaranteed by the Government the distribution of the SPV profits to the privateshareholders will be capped and the remainder will accrue to the State.3 The details

of the distribution of the SPV profits are not publicly available.

Selection of qualifying institutions and assets

13. Unlike a commercial asset management firm, NAMA is not free to choose theassets that it purchases. Qualifying financial institutions will be designated by theMinister for Finance after consultation with the Governor of the Central Bank and the

Financial Regulator. Financial institutions will only qualify if the Minister considersthem to be systemically important and that the purchase of the assets is necessary toachieve the purposes of the Act.

State Aid

14. The European Commission has determined that NAMA constitutes State Aidpursuant to Article 107 of the Treaty on the Functioning of the European Union(TFEU)4 but that it is compatible with the internal market on the basis of Article107(3)(b) TFEU in order to remedy a serious disturbance in the Irish economy.

15. The Commission considers that NAMA constitutes State aid for the followingreasons:

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2 EU State Aid decision paragraph 323 EU State Aid decision paragraph 38!%!Case N725/2009!


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It is highly unlikely that a market based investor would purchase theeligible assets on such a scale and on similar terms. In other words

the measure is clearly financed by the State; Assets are purchased at above market prices; and Asset purchases are exempt from stamp duty.

Reporting, Accountability and Review

16. NAMA is subject to extensive supervision by the State. Under the Act it is obligedto submit an annual statement to the Minister in a format that the Minister directs and

the Minister must lay that statement before the houses of the Oireachtas. SimilarlyQuarterly reports must be submitted to the Minister. Indeed the Minister may direct

NAMA to report to him in any way he sees fit. Additionally NAMA is obliged to submitits annual accounts to the Comptroller and Auditor General (CAG) for audit. TheChairperson and chief executive of NAMA are also obliged to appear before thePublic Accounts Committee and any other Dil committee if so directed.

17. The operation of NAMA shall be reviewed every three years by the CAG andevery five years by the Minister. The Minister in his review shall decide whether ornot NAMA should continue to exist having regard to the purposes of the Act.

Powers

18. NAMA has been given many powers in order to carry out its functions and to fulfillits obligations in relation to achieving the purposes of the Act. Many of these powers

are normal powers necessary for asset management. However the Oireachtasdecided that NAMA would be unable to achieve its goals through the exercise of

normal commercial powers and therefore vested extraordinary powers in NAMA that

go beyond those available to a normal commercial entity trading in the propertymarket. These extra powers are an explicit acknowledgement that NAMA is notoperating on a normal commercial basis.

19. The European Commission in its State Aid decision considered these powersand stated:

(44) Some of the powers granted to NAMA are not available or go beyondthose available to traditional market players operating on the real estatefinancing market in Ireland. According to the Irish authorities, such powersare essential for the discharge by NAMA of the obligations imposed on it by

its statute. They are essential for NAMA's fundamental purpose of acquiringassets in order to address a serious threat to the economy and to thesystemic stability of credit institutions in the State.

In other words this is an explicit acknowledgement by the Irish government thatNAMA could not achieve its goals through the exercise of normal commercialpowers.

20. NAMA has the power to compulsorily acquire land if it considers it necessary todo so. This power is directly analogous to that of local authorities found in Part XIV of

the Planning and Development Act 2000. In the case of local authorities, this power

is supervised by An Bord Pleanla whereas in the case of NAMA, the High Courtcarries out this role. The supervisory role of the High Court is limited since it is


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obliged to grant a compulsory purchase order in the case where there is no objectionand only where there is an objection is the Court obliged to consider the proposedpurchase. In such a case, the Courts role is merely to ensure that the decision toacquire land by CPO is reasonable. In either case the power is exercised by NAMAunder supervision of the Court in exactly the same way that a local authority

exercises powers of CPO under supervision of An Bord Pleanla. In the applicantsview it would be exceptional if a commercial asset management agency or property

developer had such a power that is normally reserved to public authorities.

21. NAMA has been given special powers to extend the life of planning permission.

Under Section 42 of the Planning and Development Act 2000 (as amended by theAct) NAMA may apply to a planning authority to extend the period of a planningpermission. Exceptionally in the case of applications by NAMA, the planning authoritymay extend the period where development has yet to commence and on the basis of

economic and commercial considerations. This exception to planning law is onlyavailable to NAMA and is not be available to commercial developers.

22. Paragraph 127 of the EU State Aid decision summarises NAMAs exceptionalpowers that the Commission considers could distort competition. The Commissionhighlights that these powers are not available to commercial market participants:

(127) The Commission notes however that a number of powers, rights andexemptions are granted to NAMA for the management of the assets postacquisition with a view to help the agency achieve the maximum recovery

value for the assets. Such powers, in particular when they are specific toNAMA and not available to market operators are potential sources ofcompetition distortions. In its assessment, the Commission has in particularfocused on those specific powers which it considers to be potentially more

distortive.

23. Arising from the European Commissions State Aid decision, NAMA has agreed tolimit the exercise of some of those powers. However the Commission remainsconcerned that NAMAs powers are still capable of distorting competition and haveobliged Ireland to report on an annual basis in relation to the use of NAMAs powers.

Despite the limitations agreed with the Commission, NAMA maintains exceptionalpowers in relation to its activities - powers which no commercial participant in theIrish property market would have.

24. The investigator points out that NAMAs powers are discretionary. Of coursemany powers of public authorities are also discretionary. For example a localauthoritys power of CPO is also discretionary. Therefore the discretionary nature of

NAMAs powers have no relevance to NAMAs status as a public authority.

25. Whether or not NAMAs extraordinary powers are discretionary, are limited or

that NAMA is not under a duty to exercise them is irrelevant. The legislature decidedthat NAMA required these powers to perform its functions and achieve the purposeof the Act and so vested NAMA with these powers, powers that are more typical of apublic authority than a market participant.

Exemptions

26. Income accruing to NAMA is exempt from income tax, corporation tax and capitalgains tax. In addition stamp duty does not arise on the purchase of assets from


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qualifying institutions.

27. Under Section 216 of the Act, except in limited circumstances NAMA is not

considered to be providing a service or carrying out activities that would require it tobe regulated by the Central Bank.

28. Under Section 215 (1) of the Act, NAMA is exempt from the application of Parts 2

and 3 of the Competition Act 2002, which relate to anti-competitive behaviour and theregulation of mergers and acquisitions respectively.

Summary

29. NAMA was established to achieve the public policy goal of reacting to the serious

threats to the Irish economy brought about by the deterioration of the balance sheetsof systemically important financial institutions through the purchase at above marketvalue of eligible assets in order to restore the balance sheets of these institutions.While NAMA is mandated to achieve the maximum return possible for the State, it

was not established to make money or to be an asset management agencycompeting in the market.

30. NAMA has been vested with extraordinary powers that no commercial entitywould have. In addition it is exempt from tax, Central Bank regulation and from mostaspects of Irish competition law. The European Commission considers that NAMAhas exceptional powers that market participants do not enjoy and it is concerned thatthe exercise of such powers may distort competition in the internal market.

Summary of Investigators preliminary report

31. In her preliminary report, the investigator frames the issue as follows:

Therefore, as the appellant appears to concede, at least implicitly, in hissubmission, the question of NAMAs status the [sic] AIE Regulations turns onwhether it performs what are considered to be public administrativefunctions within the meaning of Article 3(1)(b) of the Regulations.

The applicant strongly rejects this assertion. The applicant does not make thisconcession, either explicitly or implicitly. It is clear from the applicants submissions

to date that he is asserting that NAMA is subject to the regulations because it is aboard or other body (but not including a company under the Companies Acts)

established by or under statute. In other words NAMA falls squarely andunambiguously within Article 3(1)(vi) of the Regulations. The investigator fails to givereasons why 3(1)(vi) should not apply.

32. The investigator then goes on to analyse NAMAs functions in the context ofvarious UK decisions in relation to the UK transposition of the Directive. She seeks todraw analogies from competition law, human rights law and employment law.

33. The investigator concludes that asset management is a commercial activity andthat the purpose and function of NAMA is to maximise profits, an activity that is notnormally considered to be a governmental function. The investigator also concludesthat since NAMA does not regulate a particular area and in light of its commercialmandate it is not a public authority within the meaning of Article 3(1)(b) of theRegulations.


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Definition of public authority

34. The applicant submits that NAMA is a public authority solely by reason of Article3(1)(vi) of the Regulations. However without prejudice to that assertion he also

submits that NAMA is a public authority within the meaning of Article 3(1)(b) of theregulations because it is a public body that carries out administrative functions.

NAMA is a public authority because of Article 3(1)(vi)

35. As already submitted, NAMA falls unambiguously within the meaning of Article

3(1)(vi). Given that the legislature saw fit to provide a non-exhaustive list of types ofentity to which the Regulations apply, the Commissioner must find that NAMA is a

public authority and it should not be necessary to carry out an analysis of thefunctions of NAMA under Article 3(1)(b).

NAMA is a public authority because of Article 3(1)(b)

36. Without prejudice to the above the applicant also submits that NAMA is a publicauthority within the meaning of Article 3(1)(b) of the regulations.

The framework for an analysis of whether or not a body carries out publicadministrative functions was described in the decision of the UK InformationCommissioner in decision FER0265609 (PhonepayPlus). It is essentially a two-step

process [para 30]:

1. Does the body exercise functions that are public in nature?

2. Are these functions administrative?

The answer to both question depends on the facts of each case with no single factorbeing decisive.

37. The applicant agrees with the investigators view that there is no dispute inrelation to whether or not NAMA is a public body at all, therefore the focus of the

analysis rests on whether or not the functions of NAMA are administrative in nature.

38. The UK Commissioner in the PhonepayPlus decision characterised

administrative functions as follows:

Administration can be visualised as the managing of power within the stateapparatus and the achievement of a non legal goal through reliance onspecific legal powers.

Clearly NAMA is engaged in managing power within the State apparatus to achieve

the goal of restoring confidence in the banking sector, removing uncertainty inrelation to asset valuations, restoring the flow of credit and protecting the interests oftax payers. These are social goals taken in the public interest directed at the future

and designed to regulate certain assets of a limited number of institutions.

39. The UK Information Tribunal provided further guidance in its decision in Port ofLondon Authority v Information Commissioner (EA/2006/0083) (Port of London).


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The Tribunal considered the following factors:

1. The Authority has statutory duties. If the Authority did not fulfil those duties

Government would need to task another organisation with them.2. The Authority has to account to Parliament as well as to its shareholders.

3. The appointment of the Board is heavily influenced by the Secretary ofState.4. The Authority must report annually to Parliament on all its functions sothere is nothing to suggest that some of them are regarded as private and theauthority must give the Minister such information as he requires in relation to

the exercise of any of their powers.5. Some Ministerial approval for borrowing is required.6. Appeal of licensing decisions is to the Board of Trade.7. The Authority can act akin to a local or governmental authority.8. The Authority can regulate others in a way that is over and above the way

private companies can.

The Commissioner in PhonepayPlus recites these factors but notes [para 50]:

The determination about whether a public authority carries out administrative

functions will always be dependant on the facts of what that authority does.Therefore the numbered factors in Port of London above should not beregarded as mandatory but merely as examples of the kind of factors thatmake a function administrative.

40. Almost all of the above factors apply to NAMA:

40.1 NAMA has statutory duties and as the European Commission pointed

out it would be unlikely for a commercial entity to purchase the eligible assetson the same terms as NAMA. In other words if NAMA did not exist, the State

would need to task another government body with its tasks.

40.2 NAMA has a high degree of accountability to the executive and toparliament including to the CAG and PAC.

40.3 All appointments to the board, including ex-officio members are by theMinister for Finance.

40.4 NAMA must give regular reports on all its functions to the Minister forFinance who lays those reports before the houses of the Oireachtas.

40.5 95% of NAMAs funding is guaranteed by the State, in addition theamount of borrowing is capped by statute and can only be changed by the

legislature.

40.6 Appeal of NAMAs decisions is by way of judicial review, a remedy inpublic law. [Section 193/194 of the Act].

40.7 NAMA has CPO powers, powers to enter land, develop, alter, improve ormanage lands which are akin and analagous to public authority powers,

similarly NAMA is exempt from income tax, corporation tax and capital gains

tax in the same way that a public authority would be.


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40.8 NAMA can regulate others in a way that is over and above the wayprivate companies can. For example NAMA may purchase loans against theborrowers will.

41. Accordingly NAMA fulfills all the criteria articulated in Port of London. In the case

of PhonepayPlus, the Commissioner found that only factors 1 and 8 were decisivewhereas all eight are relevant in the case of NAMA. Unlike PhonepayPlus, NAMA

has not been tasked with regulating a particular area, however this is not decisivesince all the relevant factors must be assessed.

Commercial Aspects of NAMA

42. The investigator provides a detailed analysis of the contrast between bodies

engaged in economic activity and those exercising purely sovereign or administrativepowers. Competition law applies to the former while it does not apply to the latter.The investigator cites the recent High Court decision of McKechnie J in NurendaleLimited t/a Panda Waste Services v Dublin City Council & Ors. [2009] IEHC 588.

43. Firstly it should be pointed out that the legislature has specifically exemptedNAMA from Parts 2 and 3 of the Competition Act 2002, placing it firmly in the

category of bodies that exercise sovereign or administrative power and indicatingthat NAMA is not engaged in an economic activity.

44. Secondly in the Nurendale case the four Dublin local authorities were found to beundertakings (i.e. engaged in economic activity) and that their exercise of regulatorypower (i.e. the making of a variation to the statutory waste management plan) wasunlawful. Local authorities are clearly subject to the Regulations, yet the High Court

found that they were engaged in commercial activity through the exercise of

regulatory powers.

45. On the other hand, the Competition Authority found that the HSE was not anundertaking when it purchased drugs for supply to the Community Drugs scheme(Competition Authority Enforcement Decision ED/01/008). Again the HSE is subjectto the Regulations.

46. The investigator considers that since NAMA must apply for planning permission itis like any other property developer:

While its functions may ultimately entail the acquisition of property, like any

other property developer, it is required to apply for planning permission inorder to develop the land or minerals on land (section 12(2)(z) and (aa) of the

Act refers)

47. That NAMA must seek planning permission is not relevant. All bodies, companiesor persons in the State, whether State-owned or not, must seek planning permissionto develop lands, or minerals on lands.

48. This follows the Supreme Court judgment handed down in Howard and Ors v.

Commissioner for Public Works in May 1993. The central argument raised byapplicants related to the question whether the OPW, as a State authority, was bound

by the Local Government (Planning and Development) Act 1963 to obtain planningpermission.


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49. The court agreed with the High Court judgment of Costello J. that Stateauthorities traditional powers of development had been curtailed and that they are,

like private and commercial parties, ordinary actors in the planning process and mustobtain planning permission.

50. This issue was also canvassed in Port of London where the Tribunal held:

The PLA argue that they are subject to government control in respect ofplanning regulations and that this puts them in the same category as a privateorganisation, further that their functions are consistent with their role as an

owner and operator of a commercial port. However, we note that thefunctions of the PLA permit them to act in a way akin to a local authority or

governmental authority. Sec 11 permits the compulsory purchase of land inconnection with undertakings as if the Port Authority were a local authority..

51. That NAMA, like other actors, must obtain planning permission is not a factor inthis case. Furthermore its powers of compulsory purchase of land make NAMA more

akin to a local authority than a commercial operator.

52. The investigator relies heavily on NAMAs commercial mandate and duty to makeprofit. In doing so she draws analogy with the UK Information Tribunal Decision inNetwork Rail Limited(EA/2006/0061 and EA/2006/0062). Network Rail Limited is

entirely different to NAMA. It was established as a regulated monopoly in the contextof deregulation of the rail market in Europe, it operates on a market basis and paystax on its profits. In the absence of Network Rail, another private entity could operateits service. NAMA was established as part of a public asset relief scheme in the

context of governmental response to the global financial crisis. It operates in an area

that is overwhelmingly if not exclusively operated by the Member States of theEuropean Union. As we have pointed out no private entity would operate on the

same basis as NAMA and that NAMA is exempt from tax.

53. NAMA was established for public policy and not commercial reasons. It wascreated as part of the Irish public asset relief scheme in order to address seriousthreats to the financial system in the State. The method of achieving its public policy

goals is by way of asset management which can be a commercial activity. GivenNAMAs powers and particular exemptions, however, NAMA does not operate on the

same basis as any commercial player in the property market in Ireland.

NAMA is a public authority because of Article 3(1)(c)

54. Without prejudice to the above stated view that NAMA is a public authority byvirtue of Article 3(1)(vi) and/or by virtue of Article 3(1)(b), the applicant also submitsthat NAMA is a public authority within the meaning of Article 3(1)(c) of the

Regulations. Article 3(1)(c) states:

(c) any natural or legal person having public responsibilities or functions,or providing public services, relating to the environment under the

control of a body or person falling within paragraph (a) or (b),

NAMA clearly falls under the control of a body or person falling within paragraph (a)

or (b). It is also has clear public responsibilities or functions relating to theenvironment.


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55. According to the Memorandum of Association for one of the six companiesestablished by NAMA, National Asset Loan Management Limited (Company No480246), the objectives for which the company was established include:

(9) To purchase, take on lease, on licence, in exchange, upon option or otherwiseacquire and hold any lands, buildings, property (whether leasehold or freehold)or any rights or interests therein or in respect thereof and to develop, improve,alter or manage the same or any part thereof in any way (including, without

limitation, construction, demolition, landscaping, planting, draining andimproving).

56. According to the Directive and to the Regulations as transposed, the companyand NAMA itself have public responsibilities or functions relating to the environmentunder the control of a body or person falling within paragraph (a) or (b). The

connection to the environment is clear. The Directive and Regulations state thatenvironmental information means:

(a) the state of the elements of the environment, such as air andatmosphere, water, soil, land, landscape and natural sites includingwetlands, coastal and marine areas, biological diversity and itscomponents, including genetically modified organisms and the interaction

among these elements,

(b) factors, such as substances, energy, noise, radiation or waste, includingradioactive waste, emissions, discharges and other releases into the

environment, affecting or likely to affect the elements of theenvironment,

(c) measures (including administrative measures), such as policies,

legislation, plans, programmes, environmental agreements, and activitiesaffecting or likely to affect the elements and factors referred to in

paragraphs (a) and (b) as well as measures or activities designed to protect

those elements,

(d) reports on the implementation of environmental legislation,

(e) cost-benefit and other economic analyses and assumptions used withinthe framework of the measures and activities referred to in paragraph (c), and

(f) the state of human health and safety, including the contamination of thefood chain, where relevant, conditions of human life, cultural sites and built

structures inasmuch as they are, or may be, affected by the state of theelements of the environment referred to in paragraph (a) or, through thoseelements, by any of the matters referred to in paragraphs (b) and (c);

57. The company, in relation to lands, buildings and property, plans to develop,improve, alter or manage the same or any part thereof in any way (including, withoutlimitation, construction, demolition, landscaping, planting, draining and improving).

58. According to (c), these are measures, including administrative measures, such aspolicies, plan, programmes, environmental agreements and activities affecting or likely toaffect the elements and factors referred to in (a) the state of the elements of theenvironment.

59. Cost-benefit and other economic analyses and assumptions used within (c) wouldalso constitute environmental information, within the meaning of Article 3 (1) (c) meaning


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that the company and NAMA have public responsibilities or functions, or providing publicservices, relating to the environment under the control of a body or person falling withinparagraph (a) or (b).

Conclusion

60. NAMA is clearly a public authority. It meets all the relevant factors which

distinguish it from a commercial entity offering goods and services in the market. Itcarries out measures which are likely to alter the environment.

Environmental Information

55. The investigator has failed to deal with the issue of whether or not NAMA holdsenvironmental information. This issue has been partly dealt with in paragraphs 54-59.The amount of control exerted by the State over its functions makes NAMA not just apublic authority for the purposes of the Regulations but also a public authority withconsiderable information and also a public authority with plans likely to have a

considerable affect on the environment.

56. The applicant reserves his position in relation to what environmental informationNAMA holds, and what defines that information generally. However, the Regulationsare clear as to what can define environmental information. NAMA will own loans inrelation to land throughout the State, essentially becoming one of the largest ownersof land, or of loans or charges in relation to land, in the State. Land is an element of

the environment, and NAMA will be carrying out policies, legislation, plans,programmes and activities likely to affect that land.

57. Economic analyses and risk reports are also covered by the Regulations. NAMA

carries out analyses and reports in relation policies, plans, legislation, programmesand activities likely to affect land in the State. Therefore it holds environmentalinformation in relation to (e) of the definition of environmental information.

Conclusion

58. NAMA is a public authority for the purposes of the Regulations by virtue of Article3(1)(a) of the SI133/2007 - (vi) a board or other body (but not including a companyunder the Companies Acts) established by or under statute.

There is no need to reference further any other part of the legislation, Article 3(1)(a)

is wholly and entirely sufficient for NAMA to fall under the Regulations, as it is a bodyestablished by or under statute.

59. Without prejudice to that view, NAMA is still a public authority under Article3(1)(b) and/or Article (3)(1)(c) of the Regulations.

60. In conclusion, it is clear that NAMA is a public authority for the purposes of

SI133/2007.


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Appendix 1

National Asset Management AgencyTreasury Building

Grand Canal StreetDublin 2

February 3, 2010

Request for access to environmental information under EuropeanCommunities (Access to Information on the Environment) Regulations2007

Dear Sir/Madam,

In accordance with the above mentioned regulations, I wish to request

the following records which I believe to be held by the National AssetManagement Agency ("the Agency"):

1) A breakdown of all assets, loans and properties due to betransferred to the Agency. This should include the value placed on theasset and by whom. It should include the addresses of all assets andproperties.

2) A breakdown of all properties and property loans currently owned orcontrolled by the Agency.

3) Minutes of board meetings relating to the transfer of assets andproperties to the Agency. The date range for this request is January

2009 to January 2010, inclusive.

I wish to obtain all information in electronic format via email.

Below are a number of paragraghs from the guidelines supplied topublic authorities on the AIE Regulations which I wish to highlight:

Definition of environmental information:The definition of environmental information (as set out in Article3(1)) is fundamental in that it determines what environmental

information comes within the remit of the AIE regulations. Thedefinition is deliberately wide in scope and comprehends an extensive

range of information. It makes it clear that information may be heldin any material form (including written, visual, aural or electronic),and the definition includes not just the environmental informationproduced or received by a public authority, but also comprehends such

information held on behalf of the authority.

In general, public authorities should:- consistent with other provisions of these Regulations, maintain apresumption in favour of the disclosure of environmental information,and seek to respond positively and promptly to requests,- offer assistance to members of the public to enable them to

formulate requests in accordance with Article 6 of the Regulations,

with particular regard to individuals who may have literacy or otherrelevant difficulties or disabilities,


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- in the event that the environmental information sought is held byanother public authority, transfer the application to that body. In

this event, the applicant should be informed accordingly or besupplied with details of where the information is held and to whom therequest should properly be made,

- identify the environmental information they hold and actively

disseminate it to the public, particularly by electronic means,- update their available information regularly to ensure that it isaccurate and comparable and that it includes, at a minimum, theinformation specified in Article 7.2 of the Directive,- retain environmental information in a manner that is easily accessible,- designate Information Officers and establish systems and structures

to register and process all requests within the relevant time limits,- ensure that their staff are aware of the provisions of the AIE Regulations.

The fact that the release of information (for example, in relation toa pollution incident) might damage the reputation of a company is notof itself adequate reason for withholding it.

Article 9(2)(d):Article 9(2)(d) provides that information included in the internalcommunications of a public authority may be protected from release.

This could include internal minutes or other communications, betweenofficials or different public authorities, or between officials andMinisters. Public authorities should bear in mind that the use of this

exception is discretionary. It should not be resorted to as a simpleexpedient to protect all internal communications in circumstanceswhere it would be unreasonable to do so (see also sub-articles 10(3)

and 10(4)). Normally, public authorities would not be expected toinvoke this protection for information unless there are good and 25

substantial reasons not otherwise available in Articles 8 and 9 for doing so.

Please contact me by email to discuss any problems which may occur

with this request.

Sincerely

Gavin Sheridan

--------------------------------------------------------------------------------------------------------

Dear Mr. Sheridan

I refer to your email to the National Asset Management Agency of 3February 2010.

Upon due consideration of your request and the AIE Regulations, we donot propose to accede to your request as we do not consider that theNational Asset Management Agency is a "public authority" within thedefinition set out in the AIE Regulations.

Best regards,David Proctor

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March 19, 2010

Dear Mr Sheridan,

I refer to your email of the 16th of February 2010.

I have conferred on this issue with the Head of Legal and Tax within the NationalAsset Management Agency. Under her advice our response to this issue still remainsthe same. I trust this answers your query.

Best regards,David Proctor--------------------------------------------------------------------------------------------------------

March 19, 2010

Dear Mr Proctor,

I wish to appeal your decision for internal review to a more senior member of staff, asis my right under the Directive.

You state that you do not consider NAMA to be a "public authority" within the AIEregulations. However under the Regulations a public body is defined as:

(a) government or other public administration, including public advisorybodies, at national, regional or local level,(b) any natural or legal person performing public administrative functionsunder national law, including specific duties, activities or services in

relation to the environment, and(c) any natural or legal person having public responsibilities or functions,

or providing public services, relating to the environment under thecontrol of a body or person falling within paragraph (a) or (b),

In addition:

(vi) a board or other body (but not including a company under the Com-panies Acts) established by or under statute,

(vii) a company under the Companies Acts, in which all the shares areheld(I) by or on behalf of a Minister of the Government,(II) by directors appointed by a Minister of the Government,(III) by a board or other body within the meaning of paragraph (vi), or

(IV) by a company to which subparagraph (I) or (II) applies, havingpublic administrative functions and responsibilities, and pos-

sessing environmental information;

The NAMA board consists of 9 members, appointed by the Minister for Finance. Thechief executives of NAMA and the NTMA (ex-officio) are appointed by the Minister.This alone would clearly indicate that NAMA is a public body. (vi) would appear to beparticularly relevant.

Kind regards

Gavin Sheridan

Appendix 2


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Oifig an Choimisineara FaisneiseOffice of the Information Commissioner

BackgroundIn a request made to the National Assets Management Agency (NAMA), dated 3 February2010, the appellant sought access under the Access to Information on the Environment (AIR)Regulations 2007 to the following records:1. "A breakdown of all assets, loans and properties due to be transferred to the Agency. Thisshould include the value placed on the asset and by whom. It should include theaddresses of all assets and properties.2. A breakdown of all properties and property loans currently ow ned or controlled by theAgency.3. Minutes of board meetings relating to the transfer of assets and properties to the Agency.The date range for this request is January 2009 to January 2010, inclusive."The request was refused by NAM A on the basis that it was not a "public authority" within themeaning of the AIE Regulations. On 19 March 2010, the appellant appealed to theCommissioner for Environmental Information against NA MA 's decision.The D efinition of "Public Authority"Article 3(1) of the AIE R egulations state that "'public authority' means, subject to sub-article(2)-

(a) government or other public adm inistration, including public advisory bodies, atnational, regional or local level,(b) any natural or legal person performing public adm inistrative functions under nationallaw, including specific duties, activities or services in relation to the environment, and(c) any natural or legal person having public responsibilities or functions, or providingpublic services, relating to the environment under the control of a body or person fallingwithin paragraph (a ) or (b ),

and includes-(i) a Minister of the G overnment,(ii) the C omm issioners of Public W orks in Ireland,(iii) a local authority for the purposes of the Local Government Act 2001 (No. 37 of2001),(iv) a harbour authority w ithin the meaning of the Harbours Act 1946 (No. 9 of 1946),

11 8 S ra i d L i o s a i n l o c h t a ra c h , B a i l e A t h a Cl iath 2 . I 1 8 L o w e r L e e s o n S t r e e t , D u b l i n 2 .

T el : + 3 5 3 1 6 3 9 5 6 8 9 F a x : + 3 5 3 1 6 3 9 5 6 7 4 W e b : w w w . o i c . g o v . i e
http://www.oic.gov.ie/


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(v) the Health Service Executive established under the Health Act 2004 (No. 42 of 2004),(vi) a board or other body (but not including a company under the Companies Acts)established by or under statute,(vii) a company under the Co mpanies A cts, in which all the shares arc held-

(I) by or on behalf of a Minister of the G overnment,(II) by directors appointed by a Minister of the G overnment,(III) by a board or other body within the meaning of paragraph (vi), or(IV) by a company to w hich subparagraphs (i) or (II) applies, having publicadministrative functions and responsibilities, and po ssessing environmentalinformation".

Article 3(2) states: "Notw ithstanding any thing in sub-article (I), 'public authority' does notinclude any body when acting in a judicial or legislative capacity."The Appellant's PositionInitially, the appellant noted that the NAM A Board consists of nine members, all of whom areappointed by the Minister for Finance. He stressed that the Chief Executives of NAM A andthe National Treasury Management Agency (NT MA ), both of whom are ex-officio members,are appointed by the Minister. He contended that, on this basis alone, NAM A should beconsidered to be a "public body", and he referred in particular to paragraph (a) andsubparagraph (vi) of the definition of "public authority".Subsequently, in a submission m ade on 22 April 2010, the appellant refers to Decision NoticeFER0265 609 (dated 17 December 2009) in which the UK Information Comm issioner's Officc(ICO) found that PhonepayPlus, a consumer protection body responsible for regulating'Controlled Premium Rale Services' in the UK, was a public authority for purposes of the UKEnvironmental Information Regulations (EIR). After sum marising the ICO's decision, theappellant states: "While NAM A m ay or may not fall within under the administrative elementof the EIR, it is important to point to the scope of bodies considered to be public in otherjurisdictions, under the adm inistrative element." The appellant also quotes from a letter byEurostat, dated 16 October 2009, to the Central Statistics Office as follows: '"NAMA ispublicly owned and has as its purpose to conduct specific government policy . . . according tothe decision of 15 July 2009 . . . it is to be classified within the general government sector.'"In addition, referring to another decision of the ICO involving information relating to housingdevelopments, the appellant suggests that "property information could potentially beenvironmental in nature".NAMA's PositionFor its part, NAM A acknowledges, in a submission dated 7 May 2010, that it is a bodyestablished by statute, namely, the National Asset M anagement Agency Act 2009 (the Act).However, according to NAM A, it does not automatically follow that NA MA is a "public

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authority" for the purposes of the AIE Regulations. Referring to its purposes and functions asset out in the 2009 Act, NAM A states: "NAMA is not a public administration body or apublic advisory nor does it perform public administrative functions including specific duties,activities or services in relation to the environment." NAM A further states:

'"None of the purposes or functions conferred on NAM Ain order to achieve the Act's purposes can properly becharacterised as either public administration or publicadvisory and specifically none of its functions relate tothe environment.While NAMA was established by statute and assignedits statutory functions in order to further the publicpolicy objectives of the Act, NAM A does not administerthe Act's policy, it does not provide services infurtherance of that policy and specifically it does notcarry out duties, activities or services relating to theenvironment."

Moreover, NA MA maintains that, in order to achieve its statutory purposes: "NAMA mustmanage its acquired assets with a commercial mandate which is not administrative in nature.Ultimately, N AM A's aim is to achieve the best achievable financial return for the State andthis is not an aim that is achievable if NA MA 's functions were administrative or advisory innature." Alternatively, NAM A argues that the appellant's request does not relate to"environmental information" within the meaning of the A IE Regulations.AnalysisGeneral Description of NAMANA MA , as its full name indicates, is an asset management agency of the State. It wasestablished by the National Asset M anagement Act 2009, the stated o bjectives of which are,as set out in section 2 and summarised by NAMA in its submission:(a) to address the serious threat to the economy and the stability of credit institutions in theState generally and the need for the maintenance and stabilisation of the financial system inthe State, and(b) to address the compelling need to facilitate the availability of credit in the economy, toresolve the p roblems created by the financial crisis, to protect the State's interests in respect ofthe guarantees issued to certain credit institutions, to facilitate restructuring of creditinstitutions of systemic importance to the economy and to remove uncertainty about thevaluation of certain assets of systemically important credit institutions.Under section 10(1) of the Act, NAM A's purpose is to contribute to the achievement of thegeneral purposes stated above by:(a) acquiring eligible bank assets from participating institutions(b) dealing expeditiously with acquired assets

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(c) protecting or otherwise enhancing the value of acquired assets, in the interests of the State.Section 10(2) provides: "So far as possible, NAM A shall, expeditiously and consistently w iththe achievement of the purposes specified in subsection (1) , obtain the best achievablefinancial return for the State".NA MA 's functions and pow ers are set out in sections 11 and 12 of the Act, respectively. Inaddition, other sections of the Act give NAM A certain special powers. For instance, undersection 147, NA MA m ay appoin t statutory receivers in certain circumstances. In addition,taken together, sections 158 and 159 allow NAM A to apply to the Court for an orderauthorising it to compulsorily acquire land in certain other circumstances.It is indisputab le that NA MA is a public sector body. As noted by the appellant, its Boardmemb ers are all appointed by the Minister. I also note that it has a number of reportingrequirements, it is accountable to the Comptroller and Auditor General and also to theCommittee of Public Accounts, and it is of course publicly funded (directly in terms of suchmatters as remuneration ; indirectly at least in relation to asset acquisition ). How ever, asdiscussed more fully below, it is also beyond dispute that asset management is a commercialactivity. I consider that the question presented by this case is whethe r, notwithstand ing its"commercial m andate", NAM A performs "public administrative functions" within themeaning of Article 3(1 )(b) of the AIE Regulations.The M eaning of "Public Adm inistrative Functions"I take the view that Article 3(1 )(a) of the definition of "public authority" is meant to refer to aDepartment of State or local authority or other State body within the executive branch ofgovermnent; it does not refer to a body with an economic or comm ercial m andate such asNA MA . Moreover, although the appellant indicates in his submission that "propertyinformation could potentially be environmental in nature", he does not m ake the claim, nor isthere any basis for finding, that NAM A has public responsibilities or functions, or providespublic services, relating to the environment (Article 3(l)( c) refers). While its functions mayultimately entail the acquisition of property, like any other property developer, it is requiredto apply for planning permission in order to develop the land or minerals on land (section12(2)(z) and (aa) of the Act refers). Therefore, as the appellant appears to concede, at leastimplicitly, in his submission, the question of NA MA 's status the AIE Regulations turns onwhether it performs what are considered to be "public adm inistrative functions" within themeaning of Article 3(1 )(b) of the AIE Regulations.PhonepayPlus (ICO Decision Notice FER0265609) in ContextI have had regard to the decision of the ICO in the PhonepayPlus case. In its decision, theICO set out a number of factors for consideration in determining whether a body exercisesfunctions that are "public in nature". In doing so, the ICO referred to the decision of the UKInformation Tribunal in Network Rail Limited v Information Commissioner (EA/2006/0061& 0062) (17 July 2007), which in turn drew upon the judgment of Lord Nicholl in PorochialChurch Counci l o f the Parish o f Aston Cantlow and Wilmcote with Billesley v. Wallbank andAnother [2003] UKHL 37. In light of this, I find the decision of the ICO in the PhonepayPluscase of limited usefulness in relation to NA MA for two reasons. Firstly, in the National RailLimited (NRL) case, the Tribunal applied the list of factors in determining whether the NRLwas a public sector body at all, a matter which is not for dispute in this case. As discussed

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below, the focus of its analysis in relation to whether the NRL performed "functions of publicadministration" was quite different.Secondly, the Porochial Church Council (PCC) case involved the definition of "publicauthority" in the context of the European Co nvention on Hum an Rights (EC HR) as it relatedto a parochial church council that had certain enforcement powers, but w here such pow erswere only of an ecclesiastical reach. In the circumstances, the House of Lords did not acccptthat the PCC carried out "functions of a public nature" notwithstanding its limitedenforcement powers. However, Lord Hope observed: "The word 'authority' suggests that theperson has regulatory or coercive powers given to it by statute or by the comm on law." Hesubsequently stated: "The phrase 'pub lic functions' in this context [the context of defining'governmental organisations' w ithin the m eaning of the ECHR] is thus clearly linked to thefunctions and powers, whether centralised or distributed, of government."Moreover, in his judgm ent, Lord Rodger also referred to the significance of the exercise ofgovernmental powers in ECHR case law before observing: "In light of these decisions whatmatters is that the PCC's general function is to carry out the religious mission of the Churchin the parish, rather than to exercise any governm ental pow er." He also had regard to thesemantic differences in the German language, where the "public power" exercised bychurches is described as "offentliche Gewalt" as compared to "staatliche G ewalt" or "statepower". He concluded: "The PCC may be acting in the public interest, in a general sense,but it is still carrying out a church rather than a governmental function."Based on my exam ination of relevant European and UK case law, including the NRL and thePCC cases, it is my understanding that the exercise of some such "public" or go vernmentalpower is in fact an essential com ponent of a "public administrative function"; i.e, w ithout theexercise of such governmental pow er, functions are not of a public administrative natureregardless of whether they have a statutory basis or whether they serve a general publicinterest. The typical example is that of a regulatory function, but it would also includefunctions involving the pow er to issue licenses, powers of inspection or investigation or otherpolicing powers, and powers of taxation. Moreover, under EU law, where a distinction isdrawn between functions which are "public" on the one hand and functions which arecommercial or economic on the other, the exercise of public or governmental authority seemsto be imp licit in the term "public function" alone.The Irish Guidance Notes and the Aarhus GuideIn Ireland, the starting point for interpreting any of the provisions of the AIE Regulationsshould be the Guidance Notes published by the Irish D epartment of the Environm ent,Heritage and Local Government. However, the Guidance Notes do not expand upon themeaning of "public admin istrative functions" beyond stating that it is "self-evident". Whilethis guidance may not be very descriptive, it does suggest, nevertheless, that a multifacetedapproach to the definition was not envisioned.The Guidance No tes also explain that EU Directive 2003/4/EC (the AIE Directive), uponwhich the AIE R egulations are based, was adopted to give effect to one part of what is knownas the Aarhus Convention. In the circumstances, it is appropriate to consider theImplementation Guide to the Aarhus Convention (the Aarhus Guide). The Aarhus Guidedescribes a "public administrative function" as "a function normally performed bygovernmental authorities as determined according to national law". (A section of the A arhus

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Guide relating to the EU, or the European Comm unity as the relevant pillar was know n then,explains that a reference to national law should encompass EU law.) The Aarhus G uidefurther states: "Any person authorized by law to perform a public function of any kind fallsunder the definition of'public authority'".Th e NRL Case and Other Relevant UK GuidanceIn the NRL case, the Tribunal had regard to the Aarhus Guide and similar UK -based guidancein finding that the NRL was not a body which carried out public administrative functions.The determinative factor was that it was not a regulator; rather, its functions were that of anycomm ercial operator. The Tribunal also observed: "Whatever the position in 1947, running arailway is not seen nowadays in the United Kingdom as a function normally performed by agovernment authority." The Tribunal underscored the distinction between p ublicadministrative functions and commercial activities, even with respect to railways whichreceive public funds or remain in public ownership, by referencing the relevant CouncilDirective on the development of the European Comm unity's railways: "To summarise, theDirective which gave birth in large measure to the 1993 Act adopts the principle that runningrailways is an activity for independent bodies, however created and funded, operating ascompetitive, comm ercial concerns according to the dictates of the market. Such an approachis the antithesis of the proposition that running railways is a function of governmentalauthorities."Following the Tribunal's lead, the ICO found in Decision Notice FE R0265609 thatPhonepayPlus carried out administrative functions on the basis that it "is a regulator of aspecified area". Reference was also made to the distinction between comm ercial activitiesand administrative functions: "In this case the organisation is not [a] profit mak ing entity andis not an organisation that is competitively involved in any business. Instead it has a specificfunction to regulate a specific area, overseeing an industry, w hich it is independent of. Asexplained above the organisation conducts functions that can be correctly explained asadministrative." How ever, as indicated above, the ICO also had regard to num erous factorsother factors which I consider to be ancillary for the purposes of this case.The connection between g overnmental power and public adm inistrative functions, and thecorresponding distinction between public administrative functions and commercial oreconomic activities, are also highlighted in the case of Law Society of England and Wales v.Secretary o f S ta te for Justice & Anor [2010] EWHC 352 (QB) in which the England andWales H igh Court addressed the question of whether the Law Society was a publicadministrative body in the context of the Transfer of Undertakings (Protection ofEmploym ent) Regulations 2006, which is based on EU Directive 2001/23/EC . Article 1(1) ofthe Directive states that:

"(a) This directive shall apply to any transfer of anundertaking, business, or part of an undertaking orbusiness to another em ployer as a result of a legaltransfer or merger.

(c) This directive shall apply to public and privateundertakings engaged in economic activities whether or

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not they are operating for gain. An administrativereorganisation of public adm inistrative authorities, or thetransfer of administrative functions betw een publicadministrative authorities, is not a transfer within themeaning of this directive."

Following the creation of the Office for Legal Complaints, the Law Society attempted tosecure certain employment rights for its staff in its Legal Complaints Service unit by arguingthat the Transfer of Undertakings R egulations applied notwithstanding the exclusion from itsscope of a transfer of administrative functions between public adm inistrative authorities.Referring to European C ourt of Justice (ECJ) Case C-298/94 Annette Henke v. GemeindeSchierke an d Verwaltungsgemeinschaft Brocken , the High Court noted that Paragraph 17 ofthe judgm ent "provides a pointer to what a public adm inistrative body m ight be considered tobe: a body which exercises public authority". The High Court also quoted from the decisionof the Employm ent Appeal Tribunal in Adult Learning Lnspectorate v Beloff (30 January2008): '"In our judgm ent, a public body whose functions involve the exercise of publicauthority would be a public administrative authority for the purposes of [the Transfer ofUndertakings Regulations]." On the basis of the House of Lords case of Institute ofChartered Accountants v. Commissioners for Customs & Excise [1991] 1 WLR 701, whichin turn referred to ECJ Case C-364 /92 SATFluggesellschaft mbHv. Eurocontrol , the HighCourt concluded that: "[RJegulatory functions can (and should here) be distinguished fromeconomic activity." As the transfer in question involved the regulatory functions of the LegalCom plaints Service, the H igh Court found that the Transfer of Undertakings Regulations didnot apply.Neurendale (Irish High Court) and EU Competition LawMoreover, in Neurendale Ltd t/a Panda Waste Services v. Dublin City Council & Ors [2009]IEHC 588, the Irish High Court (McKechnie J.) provided a very helpful overview of EUcompetition law as it applies to public authorities, which again illustrates the connectionbetween governmental po wer and public administrative functions, and the correspondingdistinction between public adm inistrative functions and commercial or econom ic activities.The focus of the overview was on the question of when, and in what circumstances, a publicauthority is considered to be an "undertaking", w hich M cKechnie J. defined as "any body,regardless of how it is established or how it is funded, or of its legal status, which is engagedin an economic activity, or to have the same meaning, in a commercial activity". Aneconomic activity, in turn, consists of "offering goods or services on a market, usuallyalthough not necessarily for a fee or charge". Observing that "[i]t is poss ible for a body to beboth an undertaking, and not be so, depending on the activity in question", M cKechnie J.stated: "Consequently, the fact that a body exercises regulatory or public pow ers will notautomatically exclude all of its activities from being considered econom ic in nature." As theexercise of "purely sovereign or administrative pow ers" falls outside the scope of EUcompetition law, each activity of a public entity is scrutinised separately to determine whetherthe entity concerned should be treated as an undertaking or as a public body. McK echnie J.quoted from the Opinion of the Advocate G eneral in Case C-49/07, known as the MOTOEcase, in which it is explained:

"It is true that the exercise of public powers does not fallwithin the scope of the competition rules in the ECTreaty, and an organisation which exercises public

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powers is not an undertaking within the meaning ofcompetition law. How ever, the distinction betweenpublic and econom ic activities must be drawn separatelyin relation to each activity carried on by an organisation.The organisation in question may therefore operate inpart as a public body and in part as an economic agent."

Significantly, a public entity may be considered to be an undertaking even where it operatesin the public interest: "[W jhere the organisation concerncd begins to market its services, itmoves away from the sphere of exclusively social or pub lic interest activity; the mere fact thatit continues at the same time to pursue an aim in the general inte rest. . . and does not seek tomake a profit is no longer sufficient for it to be denied the status of undertaking within themeaning of competition law." (.MOTOE , quoted by McKechnie J.) In other words, a publicentity, including a body w ith public or governmental pow ers and w hich generally operates inthe public interest, may act commercially, and when it does so, it is no longer acting in itspublic or governmental capacity; rather, it becomes an economic agent, an undertaking.The crucial question for this case, however, is when, and in what circumstances, a publicentity is considered to be carrying out public adm inistrative functions which are connectedwith the exercise of public or governmental pow ers, as opposed to commercial or econom icor activities which are not. I believe the answer is provided by contrasting the Eurocontrolcase referred to above with Case T-19 6/04 Ryanair v. Commission of the EuropeanCommunities , both of which are discussed at some length by McK echnie J. Eurocontrol isthe European Organisation for the Safety of Air Navigation. Its function is to establish andcollect charges levied on users of air navigation services. In determining whether Eurocontrolwas an undertaking or whether its activities fell within the exercise of sovereign oradministrative pow ers, and thus outside the scope of the competition rules, ECJ examined itsactivities and noted, among other things, that "Eurocontrol is required to provide navigationcontrol in that air space for the benefit of any aircraft travelling through it, even where theowner of the aircraft has not paid the route charges owed to Eurocontrol". The ECJconcluded: "Taken as a whole, Eurocon trol's activities, by their nature, their aim and therules to which they are subject, are connected with the exercise of powers relating to thecontrol and supervision of air space which are typically those of a public authority. They arenot of an economic nature justifying the application of the Treaty rules of competition."In contrast, in the Ryanair case, the ECJ found that "[t]he fixing of the amount of landingcharges and the accompanying indemnity is an activity directly connected with themanagement of airport infrastructure, which is an economic activity". The ECJ explained:"[A]lthough such activities are carried out in the public sector, they cannot, for that reasonalone, be categorised as the exercise of public authority pow ers. Those activities are not, byreason of their nature, their purpose or the rules to which they are subject, connected with theexercise of powers w hich are typically those of a public authority".In addition, I have had regard to the O pinion of the Advocate General in Case C -3 90/98 H.J.Banks & Company Ltd v. The Coal Authority and the Secretary o f S ta te for Trade andIndustry , a case involving issues regarding State aid. The background to the case iscomplicated, but it is sufficient to note for the purposes of this case that a distinction wasmade between the "public functions" of the Coal Authority, i.e. its licensing functions, andthe private, commercial nature of its leasing functions, though both types of functions were

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statute-based. Moreover, the fields of public investment and public disposal of assets wereexpressly described as "State commercial activity".ConclusionI conclude that public adm inistrative functions are activities connected with the exercise ofpub lic or sovereign powers, i.e. activities which are typically governmental in nature. Theyare activities which, "by their nature, their aim and the rules to which they are subject, areconnected with the exercise of powers . . . which are typically those of public authority."Such functions generally involve the exercise of supervision and control, with the typicalexample being regulatory functions. Public administrative functions are distinct fromactivities which are economic or com mercial in nature, even if the economic or commercialactivities are performed by a public sector body on a statutory bas is and in the public interest.In my view, this interpretation is also consistent with the Aarhus Guide.Conclusion Regarding the Status of NAMAAs the European Central Bank found in its opinion of 31 August 2009 on the establishment ofNA MA , available at ww w.nam a.ie, NAM A qualifies as a "public undertaking". Its functionis asset management w ith the aim of securing the best achievable financial return for theState, which is undoubtedly comm ercial in nature. Asset management is certainly notconsidered to be a typical governmental function; i.e., it is not one that, under normalcircumstances, any public authority would normally be expected to perform. Participation bycredit institutions in the asset management scheme is voluntary and in fact selective; thus,NAMA is not exercising powers of supervision and control over a general area of thefinancial system. On the contrary, relevant regulatory powers remain w ith the Central Bankand Irish Financial Services Regulatory A uthority (section 3 of the Act refers).NAMA has been granted certain special powers which, as the European Commission hasobserved , are not available to "traditional market players". How ever, the pow ers are entirelydiscretionary and in fact subject to certain com mitments which have been agreed between theMinister and the Commission. In other words, NAM A is under no duty to exercise thesepowers, as is the case in relation to regulatory powers, for instance. Moreover, the pow ers arenot typically those of a governmental authority. The power which most resembles a power ofa governmental authority is the power to compulsorily acquire land (section 158 of the Actrefers). However, unlike a local authority, NA MA 's power is subject to court order (section159 of the Act refers). Also, NAMA's powers serve no public purpose, such asimplementation of a Development Plan, apart from enabling NAM A to obtain the bestachievable return for the State as efficiently as possible. The Com mission itself described thepurpose of the powers, and other special rights and exemptions granted to NAMA, as "to helpthe agency achieve the maximum recovery value for the assets". In other words, they arecommercial powers.I further note that, in its decision dated 26 February 2010, available at www .nama.ie, theCom mission found that the asset relief scheme constitutes State aid under Article 107(1) ofthe Treaty on the Functioning of the European Union (TFEU), but, sub ject to thecomm itments referred to above, the aid is considered permissible under Article 107(3)(b) inorder "to remedy a serious disturbance in the Irish economy". Arguably, NAM A could beviewed as "administering" the aid in the sense that it manages the asset relief scheme.How ever, the scheme qualifies as State aid because of the favourable financial arrangementsin place, not because of any public or special powers or rights conferred on NAM A in

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violation of Article 106 of the TFEU. Moreover, while the financial arrangements includeState guaranteed bonds, it is the M inister, not NAM A, w ho issues the guarantee (sections48(3) and 50(2) of the Act refer). It is also the Minister, not NAM A, who m ay draw from theCentral Fund (section 47 of the Act refers). Moreover, it is relevant to note that the p rovisionof State aid itself is no longer a normal governmental function for EU Member States,because it is "incompatible with the internal market" (A rticle 107(1) of the TF EU refers).Hence, even where it is considered to be "comp atible" because of exceptional circumstances,as is the case with the asset relief scheme, it is subject to "constant review" by theCom missioner (Article 108(1) of the TFEU refers).I conclude that NAMA is an economic agent for the State, but not one that performs publicadministrative functions. NA MA therefore is not a public authority for purposes of the AIERegulations. In the circumstances, it is not necessaiy to consider w hether it holds, or maypotentially hold, environmental information.

Melanie CampbellInvestigator29 June 2010

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