The petitioner, PAOLYTA CO., LTD. (hereinafter referred to as "Petitioner 1"), is a manufacturer of containers. The Environmental Protection Administration of the Executive Yuan (hereinafter referred to as the "EPA") commissioned an accountant on Dec 26, 2012 to audit the relevant accounting records and vouchers for the business (import) volume of Petitioner 1 during the period of November 2008 and October 2012. It was found that the products manufactured by Petitioner 1, Paolyta-B, had been using the Polyvinyl Chloride (PVC) material in the inner pad of the screw aluminum cap of the product’s glass containers, but Petitioner 1 did not report and pay the recycling, clearance and disposal fees for the glass containers (whose attachments made of PVC materials) in accordance with Article 16 of the Waste Disposal Act. On July 25, 2013. The EPA issued the Letter Huan-Shu-Chi-1020063956 of July 25, 2013, ordering Petitioner 1 to make the payment of 383,140,700 NTD within 45 days. If Petitioner 1 did not complete the payment before the deadline, the EPA would refer the case to the legal enforcement department, report to the prosecutor, and impose a penalty of one to two times of the total amount of the fees. Petitioner 1 applied for an administrative appeal but the said decision of the EPA was sustained. Petitioner 1 then filed lawsuits to the administrative courts. The Taipei High Administrative Court and the Supreme Administrative Court have rejected its claim in Judgment 103-Su-168 (2014) and Judgment 104-Pan-68 (2015) (hereinafter referred to as the "Final Judgment 1") respectively. Therefore, the case was affirmed.
Petitioner 1 brought the case to the constitutional court, arguing that laws and regulations applied by the Supreme Administrative Court in the Final Judgment 1, including Article 15 (hereinafter referred to as the "Disputed Provision 1"), and Article 16, Paragraph 1 (hereinafter referred to as the "Disputed Provision 2") and Paragraph 5 (hereinafter referred to as the "Disputed Provision 3") of the Waste Disposal Act, the Environmental Protection Administration’s Huan-Shu-Fei-0930097607 Rule of December 31, 2004 concerning the “List of Goods and Container that Shall Be Recycled, Cleared, and Disposed by Its Manufacturers and Importers and the Scope of Responsible Businesses" (hereinafter referred to as the "Disputed Rule 1"), and the Environmental Protection Administration’s Huan-Shu-Chi-0960044760 Rule of June 20, 2007 concerning “Rates of Containers’ Recycling, Clearance and Disposal fees” (hereinafter referred to as the "Disputed Rule 2"), are argued to be violating Article 7, 15, and 23 of the Constitution.
The petitioner, FU HONG QING CO., LTD. (hereinafter referred to as "Petitioner 2"), is also a manufacturer of containers. The EPA commissioned an accountant on March 1 and May 10, 2013 to audit the relevant accounting records and vouchers for Petitioner 2's business volume during the period of January 2009 to December 2012. It was found that Petitioner 2 did not report and pay the recycling, clearance and disposal fees for glass containers (whose attachment made of PVC materials) in accordance with Article 16 of the Waste Disposal Act. The EPA issued the Letter Huan-Shu-Chi- 1020093479 of October 30, 2013, ordering Petitioner 2 to make the payment of 1,188,347 NTD within 30 days. If the Petitioner 2 did not complete payment before the deadline, the EPA would refer the case to the legal enforcement department, report to the prosecutor, and impose a penalty of one to two times of the amount of the fees. Petitioner 2 filed an administrative appeal but the said decision of the EPA was sustained. Petitioner 2 then filed a lawsuit to the administrative courts. The Taipei High Administrative Court and the Supreme Administrative Court have rejected its claim in the Judgement 103-Su-920 (2014) (hereinafter referred to as the "Final Judgment 2"), and the Supreme Administrative Court's Ruling 104-Tsai-776 (2015) respectively.
Petitioner 2 brought the case to the constitutional court, arguing regulations applied by the Supreme Administrative Court in the Final Judgment 2, including Disputed Provision 1 and Disputed Provision 3, Disputed Announcement 2, the Environmental Protection Administration of Executive Yuan’s Huan-Shu-Fei-0990116018 Rule of December 27, 2010 (hereinafter referred to as the "Disputed Rule 3"), and the Environmental Protection Administration’s Huan-Shu-Chi-1010042211 Rule of May 21, 2012 (hereinafter referred to as the "Disputed Rule 4"), contravenes the Gesetzesvorbehalt principle, the doctrine of clear statement of legislative delegation, the right to equality, the right to property, and freedom of business protected by the Constitution.
After this Court’s review, the petitioners' applications have satisfied the requirements of Article 5, Paragraph 1, Subparagraph 2 of the Constitutional Court Procedure Act and should be granted. Given that both petitioners’ application for constitutional interpretation involves the same statutes and constitutional issues, this Court heard the two cases jointly and rendered this decision. The reasons are delivered as follows.
1. The legal nature of the recycling, clearance and disposal fee under the Waste Disposal Act and the standard of review
Article 10, Paragraph 2 of the Additional Articles of the Constitution provides that "[e]conomic and scientific and technological development shall be planned in conjunction with environmental protection and ecological preservation," according to which the state has constitutional duty to protect the environment and ecology. For the purposes of clearance and disposal of waste, improving environmental sanitary, as well as protecting health of citizens, the legislature enacted the Waste Disposal Act to fulfill the state’s constitutional duty provided by the aforementioned constitutional article (see Article 1, First Sentence the Waste Disposal Act). The first paragraph of the Disputed Provision 1 stipulates that "[f]or articles and the packaging and containers thereof that, after consumption or use, would produce wastes of any of the following characteristics and would lead to serious pollution to the environment, the manufacturer or importer of the articles and the packaging and containers thereof at issue or the manufacturer or importer of the raw materials shall bear responsibility for recycling, clearance and disposal and the vendor shall bear responsibility for recycling and clearance work: (1) difficult to clear or dispose of; (2) containing any component that does not readily decompose over a long period; (3) containing any hazardous substance; (4) having values for recycling and reuse.” The above paragraph deliberately distinguishes a certain of general wastes which possess specified characteristics from the general waste clearance and disposal system, establishing a separate recycling, clearance and disposal system for those general wastes. By doing so, the law requires responsible businesses falling within the scope of the rule announced by the central competent agency, which was delegated by Paragraph 2 of this Disputed Provision 1, to pay recycling, clearance and disposal fees. The fees collected are used to establish a Resource Recycling Management Fund, which is dedicated to recycling, clearance, and disposal related activities (see Article 17 of the Waste Disposal Act). By imposing monetary burdens on the general waste with specified characteristics, the purpose of the fee is to establish a special recycling, clearance and disposal system, as well as to promote recycling and reuse of resources and to protect the environment and ecology. This recycling, clearance and disposal fee, due to its legal nature, is a monetary burden imposed by the state to the people with specific relations for the necessity of achieving certain policy goals. The collection of such fees is limited to the use of specific policies from the outset, which is different from taxes levied on the general people and used to support the general financial needs of the state (see J.Y. Interpretation No. 593).
Despite the distinction of the legal nature of the recycling, clearance and disposal fees from that of the tax, it is still monetary burden levied by the state on the people and sets limitations on people's property right mandated by Article 15 of the Constitution. Hence, the purpose, target, rate, and uses of the recycling, clearance and disposal fees should be provided by the law. In consideration of factors, such as policy objectives pursued, impacts of waste of different materials on the environment, and techniques and costs of recycling, clearance, and disposal, involving a high level of expertise and technicality, the legislature may delegate the central competent a certain degree of discretion to regulate the subjects for the fees and rates. It is constitutionally permissible as long as the delegation is provided by statutes and is specific and clear (see J.Y. Interpretation No. 593).
2. The Disputed Provision 1, Disputed Rule 1, and Disputed Rule 3, which provide the “List of Goods and Container that Shall Pay Recycling, Clearance, and Disposal Fees by Its Manufacturers and Importers and the Scope of Responsible Businesses" do not violate the Gesetzesvorbehalt Principle and the equal protection principle.
The Disputed Provision 1, Paragraph 1 defines the “required recyclable waste” to be goods or their packages and containers that produce waste with specific characteristics after consumption or use and are likely to pose a serious risk of environmental pollution (see Article 18, Paragraph 1 of the Waste Disposal Act). This paragraph also stipulates respective manufacturing and import businesses responsible for recycling, clearance, and disposal, and respective vendor businesses responsible for recycling and clearance, according to which the criteria of required recyclable waste and the scope of responsible businesses have been explicitly prescribed by the law. The Disputed Provision 1, Paragraph 2 provides that "[t]he central competent agency shall officially announce the scopes for the articles and the packaging and containers thereof and the enterprises responsible for recycling, clearance and disposal in the foregoing paragraph.” This paragraph authorizes the central competent agency by statute to decide and announce the scope of required recyclable waste and the scope of respective businesses stipulated in Paragraph 1, in order to establish a mandatory recycling system for specific goods that satisfies the need of environmental protection (see the legislative reasons of Article 10-1 of the Waste Disposal Act, as amended and promulgated on October 22, 1988). Having provided guiding rules sufficiently clear for the central competent agency to follow, the Disputed Provision 1 delegates the central competent agency to regulate mandatory recycle waste and the scope of responsible businesses with administrative regulations. The purpose, content, and scope of the delegation are clear and not in violation with the principle of Gesetzesvorbehalt and the doctrine of clear statement of legislative delegation.
The Disputed Rule 1 is a revision of the Environmental Protection Administration Huan-Shu-Fei-0920042910 Rule of June 13, 2003 titled “Goods or Containers that Shall Be Recycled, Cleaned and Disposed by their Manufacturing and Import Business and the Scope of Responsible Business,” which is promulgated by the central competent agency via delegation of the Disputed Provision 1, Paragraph 2. In addition to adopting the same scope of responsible businesses under the Disputed Provision 1 as regulated in the abovementioned Rule of 2003, the Disputed Rule 1 provides the definition of the container: "a container includes the lids, handles, bases, nozzles, spray heads, labels, and other attachments of the containing products, all of which are discarded with the container after use (the major materials of labels and other attachments are not limited to categories of Point 1-1 to 1-7)," which is principally similar to the definition of the container provided in Table 2-4 of the Rule of 2003. The Disputed Rule 3, Table 2 defines the container to be that “a container includes the lids, handles, bases, nozzles, spray heads, labels, and other attachments of the containing products which are discarded with the container after use (the major materials of the label and other attachment are not limited to categories of Point 1-1 to 1-8).” The definition is nearly the same with the definition in the Disputed Rule 1 but only adds bioplastics to the scope of materials. The Disputed Provision 1, Paragraph 1 specifies “the manufacturer or importer of the goods and the packaging and containers” to be the responsible business. Even though that this paragraph does not explicitly mention the manufacturer or importer of the containing products, the term "goods" should include containing products (i.e. products filled within the containers, such as bottled drinks) and other goods (such as motor vehicles, refrigerators, air conditioners, etc.), according to the meaning of the word and the legislators’ intent. Therefore, the scope of manufacturers or importers of goods thereof contains manufacturers or importers of containing products or other articles, all of which could be responsible business for the fees. In the Disputed Rules 1 and 3, the central competent agency includes manufacturers of containing products into the scope of responsible businesses based on the facts that they are also in the chains of production which may causes pollution, and further selects them to be the responsible businesses in lieu of manufacturers of containers, given their proximity to consumers (see Point 3 to 7 of the Rule of 2003). The Disputed Rules 1 and 3 neither conflict with the legislative intent of the Disputed Provision 1 nor violate the Gesetzesvorbehalt principle.
Legislators have clearly defined in the Disputed Provision 1 that any of the "manufacturers or importers of goods or their packaging, containers, or raw materials" can be responsible parties. As for containing products, the central competent agency announced manufacturers of the containing products, rather than manufacturers of containers, to be responsible businesses, out of concerns that containers of these products are usually ordered by the manufacturers of containing products. Meanwhile, the central competent agency reasoned that the type, material, size, formality and other elements of containers are also determined by the respective manufacturers of the products based on their needs. Furthermore, containers can only be consumed or used by consumers with fillings produced by respective product manufacturers, and containers often become required recyclable waste after consumption. It is therefore manifest that manufacturers of containing products are the critical businesses and the major causers for those containers turning into required recyclable waste. They are also proximate in the line of production to consumers of such containing products. Another factor taken into account by the central competent agency is the relatively small impact on the overall industry by imposing the fees of recycling, clearance and disposal on businesses of containing products (see the Environmental Protection Administration’s Huan-Shu-Chi-1080065533 Letter of September 19, 2019 in reply to the Executive Yuan, Points 2 and 4 of the explaining text in the Annexed Table). Therefore, the central competent agency designating the manufacturers of containing products rather than the manufacturers of containers as the obligors responsible for paying recycling, clearance, and disposal fees in both Disputed Rules 1 and 3 is not arbitrary but a measure reasonably connected with legislative purposes.They do not contravene with the constitutional principle of equal protection either.
3. The Disputed Provision 2, Central Part and the Disputed Provision 3, First Part, which regulate the rates of the recycling, clearance and disposal fees imposed on responsible businesses, do not violate the Gesetzesvorbehalt Principle and the doctrine of clear statement of legislative delegation, even though the regulation are delegated by law rather than provided expressly in law.
The rates of the recycling, clearance and disposal fees involves factors of highly levels of expertise and technicality, such as the classification of required recyclable waste, environmental impacts, and recycling, clearance and disposal costs, all of which are difficult to be specifically and expressly prescribed by the law. Hence, the law does not violate the Gesetzesvorbehalt principle and the doctrine of clear statement of legislative delegation, provided that the law has explicitly prescribed important matters such as the procedure for deciding the fee rates and factors to be considered, and has authorized the administrative agency to decide the specific fee rates in accordance with the legally prescribed procedure.
The Disputed Provision 2, Central Part provides: “…a manufacturer, based on the manufacturing volume for the current quarter, and an importer, based on the import volume reported to customs, shall, within fifteen days after the reporting and payment of business taxes every quarter, pay recycling, clearance and disposal fees in accordance with the fee rates approved by the central competent agency…” The Disputed Provision 3, First Part provides: “For the rates in Paragraph 1, the Resource Recycling Fee and Rate Review Committee established by the central competent agency shall perform reviews based on materials, volumes, weights, impacts on the environment, reuse values, recycling, clearance and disposal costs, recycling, clearance and disposal ratios, auditing and collection costs, fund financial conditions, monetary amounts of recycling incentives, and other relevant factors and submit its review to the central competent agency for approval and official announcement.” According to these laws, the fees are calculated with specific rates based on the manufacturing volume for the current quarter or the import volume reported to customs by responsible businesses, and the standard of rates are authorized to the central competent agency for approval and official announcement. The legislature has stipulated in the Disputed Provision 3 that the rates should be reviewed by the Resource Recycling Fee Rate Review Committee, as well as explicitly prescribes the important factors to be considered (such as materials, volumes, weights, impacts on the environment, reuse values, recycling, clearance and disposal costs, recycling, clearance and disposal ratios, auditing and collection costs, fund financial conditions, monetary amounts of recycling incentives, and other relevant factors). The law has explicitly prescribed that the central competent agency should consult the Resource Recycling Fee Rate Review Committee before deciding the rates, and the factors to be considered for decision of rates. Concerning the above matters prescribed by the law, the Disputed Provision 2, Central Part and the Disputed Provision 3, First Part are not in conflict with the Gesetzesvorbehalt principle and the doctrine of clear statement of legislative delegation.
4. The Disputed Rule 2, Footnote 2 of the Annexed Table and the Disputed Rule 4, Item 3 Levying the Recycling, Clearance and Disposal Fees with a Calculation Standard Based on "the Total Weight of the Container and the Attachment" do not violate the principle of equal protection under the constitution.
Article 7 of the Constitution mandates that the right to equality of the people should be protected. To decide whether the different treatment of the law fulfills the requirements of equal protection, one has to examine whether the purpose of the different treatment is coherent with the Constitution, and whether there is a certain degree of connection between the classification taken and the regulatory purpose (see J.Y. Interpretation Nos. 694, 701, 745 and 779). The imposition of the recycling, clearance and disposal fees serves the purpose of specific environmental policies and has to be used for a designated purpose (see Article 17 of the Waste Disposal Act), which involves a high level of expertise and technicality. The relevant agency should have a certain degree of discretion in determining the calculation standard and the limits of the amount and this Court adopts a lenient standard of review. As long as the purpose of levying such fees is to pursue legitimate public interests, and there is a reasonable connection between the classification and the purpose, it does not violate the principle of equal protection under the Constitution.
With regard to the use of "the total weight of the container and the attached materials" as the calculation standard in the Disputed Rule 2, Footnote 2 of the Annexed Table and the Disputed Rule 4, Item 3, Petitioners 1 and 2 alleged that under circumstances where the container body and the attachment use different materials, due to different rates applying to different materials respectively, it would lead to different fees for attachments of the same weights and the same materials by adopting the above calculation standard, simply because the materials and the weights of their body bottles are different. Further, it even causes higher fees on those container bodies and attachments comprised with less proportion of PVC (such as the glass container and its PVC attachment used by Petitioner 1) than the ones with higher proportions (such as the container bottle body and its attachment both made of PVC). Petitioners 1 and 2 contended that the application of the Disputed Rules 2 and 4 would result in detrimental different treatments.
The use of "the total weight of the container and the attachment" as the calculation standard in the Disputed Rule 2, Footnote 2 of the Annexed Table and the Disputed Rule 4, Item 3 may result in the alleged different treatment as claimed by the petitioners, which may be detrimental to the responsible business in circumstances where the rate for the attachment is lower than that for the container bottle. However, when the rate for the attachment is higher than that for the container bottle, the responsible business may benefit from the difference. Furthermore, due to the disparity of rates for different materials, the total amount of fees that the responsible business should pay by the above standard calculating the bottle and the attachment jointly might be less than that by a standard calculating separately (for instance, according to the current rates effective since July 1, 2019, the responsible business who continues to use attachments made of PVC materials may be obliged to pay more recycling, clearance and disposal fees by calculating separately rather than jointly). It is found that the alleged different treatments of Petitioners 1 and 2 do not necessarily occur whenever applying the Disputed Rules 2 and 4, nor do them constitute systematic detrimental different treatments. Those alleged different treatments are simply isolated cases that occur incidentally caused by application of multiple fee-calculating factors (such as rates for different materials and weights).
In addition, the abovementioned fee calculation standard based on the total weight of the container and the attachment was originally stipulated in Footnote 1 of the Annexed Table of the Disputed Rule 2 and the Disputed Rule 4, Item 2, which was uniformly applicable to all circumstances no matter whether the materials of the bottles and their attachments were the same or different, not a special provision for attachments made of PVC. In other words, regardless of whether or not the attachment uses PVC, the fees remain to be calculated based on the total weight of the container and its attachment, and thereby no differential treatments exist. Moreover, the central competent agency usually announces the rates of the recycling, clearance and disposal fees for the category of containers based on weight, rather than on the number of items or the ratio of specific materials. By adopting this calculation standard, the agency considers the fact that the container bottle and its attachment are usually disposed of together. Also, it would turn the calculation of fees and the collection too complicated, if the agency would calculate the container bottle body and the attachment separately or would make calculation based on the different natures of the container and attachment. This method is likely to be disproportionate to administrative costs (see the accompanying explanation of the Point 5 and 8 of the annexed table of the EPA letter in reply to this Court). By applying a lenient standard of scrutiny, this Court finds the above policy rationale to be legitimate, and the means of a joint calculation standard, which sufficiently simplifies fee calculation and collection, is reasonably connected to the legislative purpose. Therefore, the Disputed Rule 2, Footnote 2 of the Annexed Table and the Disputed Rule 4, Item 3 imposing the recycling, clearance and disposal fees based on the calculation standard of "the total weight of the container and the attachment” to responsible companies do not violate the principle of equal protection under the Constitution.
5. The Disputed Rule 2, Footnote 2 of the Annexed Table and the Disputed Rule 4, Item 3 imposing an additional 100% fee on PVC materials used on attachments other than the container bottle do not unconstitutionally intervene with the right to property and the freedom of business of the responsible business and do not violate the principle of proportionality under Article 23 of the Constitution.
The Disputed Rule 2, Footnote 2 of the Annexed Table and the Disputed Rule 4, Item 3 provide a calculation formula for the attached materials which are made of PVC shall include an 100% additional rate on top of the container body’s basic rate. The cumulative rate should also multiply the total weight of the container bottle and its attachment. The "additional 100% rate" does interfere with the right to property and the freedom of business enjoyed by the responsible business (such as the choice of the materials of attachments). However, the imposition of the recycling, clearance, and disposal fees serves specific policy goals and involves issues of environmental protection and resource recycling, which demand expertise and are complicated. In regard to the institutional competence of agency, this Court adopts a lenient scrutiny of review. If the purpose is legitimate and there is a reasonable connection between the means and the purpose, the law or regulations would not violate the principle of proportionality under Article 23 of the Constitution.
In terms of the regulatory purpose, the central competent agency alleged the rationale for the additional fee as follows: "... during the process of producing and processing PVC materials, it is likely to produce harmful substances that cause impairments to the environment and human bodies (factors influencing the environment), therefore the regulation adds the extra charge if the attachments other than the container bottle body are made of PVC materials ... This agency is delegated by the legislature to announce the imposition of an additional fee on attachments made of PVC materials, for the purpose of reducing the quantity of PVC-related products and using more environmentally-conscious materials...." (see the accompanying explanation of the Point 5 and 8 of the annexed table of the EPA letter in reply to this Court). The environmental impact cause by PVC materials concerned by the central competent agency has been on the list of factors required to be considered when deciding rates stipulated in the Dispute Provision 3. The purpose is legitimate and of compelling public interest. The means of imposing an additional 100% fee intends to guide the responsible business to reduce the use of PVC-related materials with greater environmental hazards, or to use other alternative materials that are more environmentally conscious. The central competent agency originally required an additional 30% fee in 2004 (see the Environmental Protection Administration Huan-Shu-Fei-0930097607C Rule of December 31, 2004). However, due to the measure’s ineffectiveness, the central competent agency later raised the additional fee up to 100% in the Disputed Rule 2, Footnote 2 of the Annexed Table, and maintained an additional 100% fee in the Disputed Rule 4, Item 3. All of these measures are appropriate means that may be adopted by central competent agency for achieving regulatory purposes, and they are indeed helpful for incentivizing the responsible businesses to reduce the use of PVC-related materials. Therefore, the means of additional fees is reasonably connected with the purpose. The Disputed Rule 2, Footnote 2 of the Annexed Table and the Disputed Rule 4, Item 3 imposing an additional 100% fee on PVC materials used in attachments other than the container bottle body do not violate the proportionality principle under Article 23 of the Constitution.
6. The Dismissed Part:
Regarding Petitioner 1’s claims on the unconstitutionality of Article 17, and Article 18, Paragraphs 5 and 6 of the Waste Disposal Law, this Court finds those provisions was not applied by the original court in the Final Judgement 1 and not eligible to be the matter petitioned for constitutional interpretation. With regards to Petitioner 2’s claim for supplementary interpretation to J.Y. Interpretation No. 426, it was also found that the original court of the Final Judgment 2 did not apply the interpretation and could not be the matter petitioned for supplementary interpretation. This Court hereby stated that these parts of petition are not in compliance with Article 5, Paragraph 1, Subparagraph 2 of the Constitutional Court Procedure Act and should be dismissed in accordance with Paragraph 3 of the same article.
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*Translated by Chao-Tien Chang