Assignment of Public Tasks to Private Legal Persons. Legal Bases and Limits

• Author: Kalle Merusk
• Pages: 40-48

Kalle Merusk

Assignment of Public Tasks to Private Legal Persons. Legal Bases and Limits

In the last decades, many states have started to pay serious attention to the economics of the public sector and the components of private economy. Decrease of the loads on the budgets of the public sector has become an important issue. In Estonia, these problems have become topical in the last few years. The draft of the national budget strategy for four years (2001-2004) developed by the Ministry of Finance focuses on reduction of the tax burden, decrease of the expenditures of the state and acceleration of integration into the EU. One objective of the administrative reform that is being introduced in Estonia is delegation of the functions of state government and through this decrease of expenditures, provided that the quality of fulfilment of the functions and their availability to citizens does not decrease. One important aspect here is assignment of public tasks to persons in private law. Even though this issue has mainly been discussed by politicians and economists, it also concerns lawyers. Estonia is a state of law according to its Constitution and the Constitution stipulates the general organisation of the institutions and functions of state and the most important requirements to administration. Therefore the main task of lawyers is to mark these legal limits to which the assignment of public tasks to persons in private law may proceed, and which are the risks and legal problems that may arise.

In the context of the administrative reform, the following factors may be pointed out as the objectives of assignment of public tasks to persons in private law.

1) Efficiency.

The main argument here is that the state does not have the mechanism which in the fulfilment of public tasks would increase their efficiency and productivity.
2) More extensive use of the private sector and its mechanisms in the fulfilment of public tasks (provision of services). The state simply does not have the capacity to fulfil all the tasks arising from public interests.
3) Reduction of the budget load of the state. According to the draft of the national budget strategy, the objective is to reduce the expenses of the government sector to 34 per cent of GDP by 2004. In parallel with the reduction of government costs, assignment of public tasks to persons in private law also allows to bring private investments into the relevant fields, which in the long run should improve the quality of fulfilment of the tasks.

2. The Term "Public Tasks"

Determination of the term "public tasks" is important in analysing the problem at hand proceeding from the legal aspect as well as in specifying the object of the assignment of tasks (privatisation). The Constitution of Estonia does not use the term "public tasks". But the term has been used in specific laws. In their essence, public tasks may be treated as objectively existing tasks determined by public interests, which have been sensed as such by the legislator and stipulated in laws as tasks of the state or given for fulfilment to different institutions of the society or voluntarily taken for fulfilment by the latter. In their essence, public tasks will remain public tasks even when the state assigns them - transfers them to persons in private law. Such treatment, however, is too extensive and fails to provide the exact legal criteria for determination of the legality of assignment of public tasks or for determination of the tasks themselves.

German lawyer Udo Di Fabio has determined public tasks as tasks that have been expressly acknowledged as such by law or can be derived therefrom by interpretation. ¹ He treats public tasks as the matter of administration. ² Austrian scholar Johannes Hengstschläger does not speak about public tasks within the framework of the given problem, but only about administrative tasks. In his opinion, administrative tasks are all such agenda that have been directly assigned to an administrative body by law or it has at least indirectly, proceeding from the idea and objective of the law, been made responsible for their fulfilment. ³ It is important to note here that the definitions of both authors proceed from the relevant legal norm, which gives the answer to the question what a public task is in the specific case in the legal meaning.

Subsection 3 (1) of the Constitution of Estonia stipulates the strict requirement of legality based on law and the principle of reservation of the legislature related thereto - the power of the state shall be exercised solely pursuant to the Constitution and laws which are in conformity therewith. ⁴ Therefore the requirement provided for in § 3 (1) of the Constitution must be observed in the assignment of public tasks.

On the basis of the principles of the legal order of Estonia, public tasks may legally be determined as tasks assigned to administrative institutions directly with law or pursuant to law and tasks which have been derived from the relevant legal norm by way of interpretation.

Tasks of the state are one type of public tasks mentioned in literature. ⁵ The Constitution of Estonia does not use the term "task of the state" expressly, but the term "duties of the state" has been used in § 154 of the Constitution. Pursuant to subsection 2 of the said section, the expenditure related to duties of the state imposed by law on a local government shall be funded from the state budget. ⁶ In the given case assignment of the duties (tasks) of the state to the local government is meant. In the specific provisions of the Constitution, the wording "obligation of executive power", "a citizen of Estonia is entitled to the assistance of the state", etc., "the state shall organise vocational training", etc. is also used. Regardless of the difference in wording, the tasks of the state in respective fields can and may be derived here by way of interpretation. Apart from the tasks of the state arising from the Constitution, the fulfilment of which is obligatory and done through the immediate state administration, a legislator may with formal laws consider other agenda arising from public interest also as tasks of the state, even though they can not be directly derived from the Constitution and have prescribed their fulfilment through immediate state administration. Subsection 65 (16) stipulates the universal competence of the Riigikogu (parliament) in the resolution of issues concerning the life of the state, i.e. the right to determine with formal laws what are tasks of the state and what are not.

A major part of public tasks are fulfilled through indirect administration. This also includes the tasks of local governments. Subsection 154 (1) of the Constitution stipulates the principle of the universal competence of local government - local governments shall resolve and manage all local issues, and they shall act independently pursuant to law. The determination "independently" can be specified with the term "on their own responsibility", which means the right to decide on the tasks of local governments without the directions of the state. ⁷ In Estonian legal order, the legislator has made fulfilment of some of the tasks of the local government (local issues), which are determined from heightened public interest, obligatory for the local government. In the given case, we see the so-called obligatory tasks. For example, according to the Roads Act ⁸ , the building, repair, and organisation of the use of roads belonging to local governments are their tasks. This task is a classical substantial task of local government the fulfilment of which has been made obligatory for the local government by the legislator.

Some public tasks are fulfilled by persons in private law. Bearers of the mentioned administration, independent legal subjects, fulfil the tasks assigned to them with law. Thirty-seven persons in private law have been created in Estonia by today.

The specific features of Estonia as a transformation society must be considered in case of the public tasks fulfilled by the state and the local government. A huge amount of unnecessary production and tasks, which had to be got rid of, remained with the state and local government after Estonia regained its independence. During the ownership reform, the state of Estonia has managed to quickly privatise the production and property that the state did not need. Public tasks are being revised in the course of the current administrative reform. The tasks left from the Soviet period accrued to the state pursuant to the law that existed before the Constitution. According to § 2 (1) of the Constitution Implementation Act, the legal acts that were effective before the Constitution entered into force remained effective after the enforcement of the Constitution to the extent they were not contrary to the Constitution or the Constitution Implementation Act and until they are either annulled or made to comply fully with the Constitution.

Therefore, when public tasks are assigned to persons in private law, it is important to decide which tasks should be assigned, in which volume, with which guarantees, which tasks should be fulfilled by the state and local...