The PPP contract is an agreement within public sector bodies enter into long-term contractual agreements with private sector entities for the construction or management of public sector infrastructure facilities by the private sector entity, or the provision of services by the private sector entity to the community on behalf of a public sector entity. Almost all states recognize the fundamental right to a health environment and new constitutional tools, exemplified by the principle of sustainable development, gain recognition, on international scale. The PPP contract model influences the constitutional right to the environment and is compatible even with the sensitive legal good of heritage.
Environment, Public – Private Partnership (PPP), Sustainable development
Introduction: PPP and constitutionalism on the environment
Public – Private Partnership (PPP) is a modern tool of the contracting out phenomenon. The PPP contract is an agreement within public sector bodies enter into long-term contractual agreements with private sector entities for the construction or management of public sector infrastructure facilities by the private sector entity, or the provision of services by the private sector entity to the community on behalf of a public sector entity.
It would be useful to correlate this legal and managerial tool, exemplifying the neoliberal School of Thought of New Public Management, to various aspects of the constitutional right to protect the natural and cultural environment, let alone to the sustainability innovation.
The first formal recognition of the right to a healthy environment came in the Stockholm Declaration, which emerged from the pioneering global eco-summit in 1972. In the four decades since the Declaration, the right to a healthy environment rapidly migrated around the globe. As of 2012, 177 of the world’s 193 UN member nations recognize this right through their constitution, environmental legislation, court decisions, or ratification of an international agreement. In 2001, Greece explicitly consecrated the sustainability principle within article 24, specialized in the environmental goods.
In 2005, the French Congress approved the Charter for the Environment by a landslide vote of 531-23. The Charter, referring inter alia to the preservation principle, is influencing legislation, government policy, court decisions, and the French education system. In 20111, France cited the Charter for the Environment in becoming the first nation in the world to ban hydraulic fracturing, or fracking, the environmentally destructive method of extracting natural gas from underground rock formations. In 2012 the Council of State had based more than a dozen decisions on the Charter, on issues ranging from nuclear power to the protection of mountain lakes. While it was anticipated that this text would increase the prominence of environmental issues in French law, Professor David Marrani asserts that ‘’it has developed beyond all predictions’’.
Besides, as the United States illustrates, a national constitution that is devoid of provisions dealing specifically with environmental protection does not necessarily mean the jurisdiction will lack an effective national environmental policy.
The first part of this paper takes a juridical approach to cultural heritage. The second part treats the PPP contracts law and the principle of sustainable development. The third part presents a case study of a PPP relevant to the Castle in Versailles Castle. The next part focuses on PPP, environment and nuclear energy.
- Cultural heritage public law
Heritage is a formal term for inheritance, namely the property that has been or may be inherited by an heir, in the field of Private Law. Fortunately, legal culture has enriched the term and developed it in the field of Public Law. Indeed, heritage signifies things, such as works of art, and immaterial cultural goods, like cooking recipes, and folklore that have been passed on from earlier generations. It is to underline that the notion of heritage is a dynamic one and the cultural law has the tendency to broaden it. For instance, the Convention on the protection of the world cultural and natural heritage, adopted by UNESCO in 1972, protects not only cultural heritage but also the natural one, namely formations and landscapes made by nature without human intervention. There is also an actual trend of codification on the matter, exemplified by the French legal order. Indeed, in 2004 France adopted a heritage code, the creation of which the Council of Europe encouraged. Codification is particularly useful as, on the one hand, it presents the dispositions (archives, libraries, archaeology, museums or even the historical monuments) in a single set and, on the other hand, it facilitates the access to these dispositions.
Heritage is an actual challenge for decision-makers, as it is the case of rural heritage. Considering the interest generated in several countries by the ‘’European Rural Heritage Observation Guide – CEMAT’’, of which they already took note at their 13th Ministerial Conference, the ministers responsible for spatial/regional planning of the member states of the Council of Europe adopted at their 15th Session a Resolution on a ‘’Pan-European Charter for the rural heritage: promoting sustainable spatial development: ‘Rural heritage as a factor of territorial cohesion’. The Charter aims at making rural heritage, the intangible one included, a real asset to its territory, a factor and a driving force for sustainable spatial development, and to play in making rural areas more attractive and in the town-country balance.
- PPP contracts law and the principle of sustainable development
The first known case of concession from the public sector to the private one has to do with a great civil engineering project for the people of Eretria, in Greece, in the 4th century BC. They hired a foreign engineer, Chairephanes, in an attempt to drain a marshy area, situated rather far from the city, at the heart of their territory. This project exemplifies the “Build – Οperate – Τransfer (Β.Ο.Τ.)” model, whose financing was undertaken by the contractor and his partners, who would take advantage of the land for ten years.
The concession model is compatible with cultural scopes, even museums that are by definition non-lucrative organizations, in spite of the fact that, as a general rule, concessions are used for reciprocal projects. For instance, before the introduction of the legal framework on PPPs in France, delegations of public service and concessions were used in the cultural domain, as it was the case of the museum Jacquemart – André. In 1995 this museum, situated in Paris, had 20.000 visitors and an operation deficit of 458.000 euros. Since the adoption of the concession model, annually it has acquired 180.000 – 240.000 visitors and perceived 137.000 – 150.000 euros. It is not about an abandon of responsibilities but an allocation of them, within which the state prefers to concentrate its efforts to the collection and the rehabilitation of the works of art, in view of the fundamental legal principle of sustainable development.
The United Kingdom is considered as the homeland of PPP through the institutionalization of Private Finance Initiative (P.F.I.) in 1992 for non-reciprocal scopes, such as schools, hospitals and jails. However, it was inspired by both concession model and legislation on public constructions in the French legal order, through the comparative method. The adoption of a legislative framework on PPP contracts has recently been very frequent, in comparative law. For instance, this institution has been introduced into the Greek legal order in virtue of Law 3389/2005 but it has not been tested yet in the cultural domain.
It is also to signalize the services of digitalization of pieces of French cultural heritage, offered to the National Library of France.
Editorial critiques often mention that PPPs liberate government finances, therefore increasing the set of infrastructure development projects that government can undertake, like the beneficial intervention of sponsors. However, recent empirical research supports the rather negative opinion that there is no prima facie economic reason to desire PPPs over Public Sector Provision (PSP) of infrastructure and PPPs hardly ever free public finances!
Anyway, the legally required ‘’Special Purpose Company’’, created by the private winner of the competition procedure in the pre-contract stage, for the implementation of a PPP contract, matches well to the fundamental contemporary economics of infrastructure development projects. Lastly, it is anticipated that PPP modification will continue to advance in the future, when more detailed and specialized academic research has been adequately conducted. So, the legal concept is as a general rule positive but the economic crash test, although restricted at least in terms of quantity, proves to be apprehensive against the traditional way of constructing and managing public works.
- A case study on the PPP relevant to the Castle in Versailles
The case of the Castle in Versailles constitutes the first failed PPP contract in France instead of being an exemplary success, according to the expectations of the government. In 28 May 2008 the direction of the competent public entity made the decision to get rid of the contract, signed with a company providing Informatics services. It was about the normal end of an abnormal partnership, given that during the 15 months since the signing of the contract, the PPP had been marked by many imperfections by the private partner’s side. Among the defaults there were that the software of the tickets editing was unstable, extremely slow and unsatisfactory, by causing problems such as the enhancement of the queue of waiting visitors. It is to underline that PPP would have as a window display the sight-seeing of Versailles, whose gardens constitute an example of cultural (along with natural elements) heritage included in the “World Heritage List” according to the aforementioned Convention on protection of world cultural and natural heritage. More concretely, the Palace and the park have been listed in 1979 and constituted a part of the initial set of monuments of France in this important list. So, in principle the political choice to use this sight-seeing of worldwide prestige was correct.
Upon the competent public service for PPPs (called in French ‘’MAPPP’’), besides the incapacity of new technological tools management, the failure of the contract is due to the decision of the Ministry involved to delay the execution of the contract and to the fact that the acquisition of the company ‘’Unilog’’ by another private company, ‘’Logica’’, caused a climate of uncertainty to its employees and, as a result, some of them left their workplace in the critical moment. ‘’MAPPP’’ concludes that this case enhances its managerial position that the assigning authority should interfere as less as possible as for the contractual obligation, unless a dysfunction emerges.
After ending the contract, the public foundation of the museum and the national domain of Versailles took on again the internal management of the tickets reservation through the new systems of technology. Up the end of 2008 the problems had been fully resolved and the system of reservation functioned regularly. Moreover, the foundation noticed in its 2008 annual report that the ending of the PPP contract caused the need in recomposing the team of Informatics maintenance of the tickets system in order to face the development of the new tools of this system and that this activity should be externalized within a PPP contract. However, no use of this comparative-law tool would be made.
Besides, in December 1993, a PFI contract was signed, of sixty-year duration, between the Royal Armouries and the private company “Royal Armouries International plc (RAI)” for the construction, operation and guardianship of the new museum of the United Kingdom, in Leeds. The failure of the PPP contract is due to the very restricted demand, in comparison with the pre-evaluated one (approximately 60% of the expected levels in the first year of operation and 35% in 1999), and to the very restricted capacity of the building (pre-evaluation consisting in 1.300.000 visitors per year with an average visit duration of 2,5 hours while in reality the number of visitors was 600.000 – 650.000, with a real average visit duration of 4 hours) and also to the policy of high pricing (up to 18 dollars per individual) in spite of the counsellors’ warning on the matter.
- PPP, natural and built environment and nuclear energy
The PPP contracts model may be proved compatible with natural environment and the constructions of the current era. The aforementioned Greek PPP Law 3389/2005 consecrates explicitly the principle on the protection of the environment and on the sustainable development. Therefore, in the stages of planning and execution of the PPP contracts, it is to take account of the natural and man-made environment that constitutes a legal good that is protected in an autonomous way, to ensure the ecologic balance and to safeguard the natural resources in favor of the forthcoming generations. This synthetic principle reflects the jurisprudence of the Greek Council of State (prior to the adoption of the PPP model in the correspondent legal order).
As far as France is concerned, the innovative dynamic for the construction of museums has already been signalized. For example, the Nautical Museum of Biarritz has been constructed through a PPP contract of the municipality of Biarritz as a public partner and comprises the Museum of the Sea and the City of the Ocean and of the Surf. The City of the Ocean was inaugurated in December 2011 and constitutes a scientific attempt of approach to the oceanography through experiments, spectacles and images. It is to pay special attention to the fact that the building has ensured temperature balance, so it acquires no heating in winter and no air condition in summer. The Museum of the Sea was inaugurated in June of the same year and includes new various aquariums of 1.920 cubic meters.
Last but not least, it is particularly interesting that the PPP mechanism has not been used yet for nuclear energy technical works in France, although this country is intensively related to this non-renewable form of energy. After the very serious accident in the nuclear stations of Fukushima, in Japan, in March 2011, France did not decide to put an end to its traditional dependence on this ambivalent energy for its own needs. However, in 2006 it had already evolved the national legal framework towards the modern principle of transparency, as severe criticism had been raised against the opacity of this environmental danger.
A great architect can and must help to answer all questions in relation
Cwith the way of living in a morelthy and fair-minded world, between social responsibility and Conclusion: PPP and public law
The failure relevant to the museum of Versailles should not cause misconceptions on the suitability of the PPP model as PPPs, being themselves an innovation, have proved to be a vehicle conducive to other relevant innovations and to success, in managerial and legal aspects. Moreover, the failures in the United Kingdom should not lead to generalizations but to a more attentive application.
From the current analysis the following major findings result:
- Public law has been drastically enriched by a new good, heritage, that needs correlation to the modern constitutional principle of sustainable development. Heritage should be promoted by various modern legal tools, such as cultural sponsorship contracts and PPP contracts, both exemplifying the neoliberal movement of New Public Management on international scale.
- The PPP approach to the cultural domain of the public policy should be particularly flexible and attentive. If monuments need protection and are considered as more important against the rest cultural goods, museums, at least the heritage ones, are more sensitive because, on the one hand, they need technical service often expensive and, on the other hand, they seem to be rather unattractive for the public as they have to do with the past, let alone of anachronistic character. Anyway, PPPs are suitable for non-lucrative scopes, such as museums, given that even concession, that is traditionally used almost only to reciprocal projects, has conducted the French museums management to success. It is to pay special attention to the fact that PPPs, already in their initial form (PFI) in the United Kingdom, were orientated to non-reciprocal scopes of the public policy related to the crucial social fundamental rights of citizens (schools, hospitals), instead of reciprocal scopes. This means that capitalism had already a very drastic and successful alternative against the common way of constructing public infrastructure, the concession contracts. Concession has been fully adaptable to new technologies of each era and intrinsically connected with reciprocal charges of end-users, particularly in the domain of transports. In this socioeconomic context, PPP were conceived by New Public Management formally as a variation of the concession model, which keeps its traditional use mainly for transports, and operationally as an alternative against the traditional-type public works contracts, not the concession ones. So, the prejudice that PPPs are a neoliberal mechanism similar to concessions is legally accurate but is not usually confirmed in managerial terms.
- PPPs in general are open to further scientific research and no fixed relevant assessment has resulted to date, on international scale. So, although they may be suitable for various scopes, such as the heritage ones, it is not sure that they are preferable to PSP of infrastructure.
- PPPs for cultural scopes are characterized by an important particularity that still remains out of scientific discussion, namely their similarity to another diachronic institution of funding, the sponsorship. If kings have become a point of reference for PPPs due to some cases of failure of royal heritage management, a significant and non-elaborated question has to do with kings as a potential point of inspiration, enacting the role of Maecenas generally for PPPs. This development may be facilitated through the recommendable correlation of the PPP law to the cultural sponsorship one, as this proposal has been recently formulated.
- Constitutional law is significantly promoted by both contract law tools and environmental law principles, exemplified by sustainable development and preservation.
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