Cities and rural municipalities

Municipal council elections in autumn 2017 saw the mergers and assimilations of several local authorities and other administrative reform decisions enter into force. The Chancellor received numerous enquiries concerning problems of starting the work in the new local authorities. Questions were also raised with regard to implementing the amendments introduced in the Local Government Organisation Act.

The Chancellor replied to numerous petitions concerning exercise of the rights of municipal council members; for example, enabling a vote by secret ballot and obtaining information concerning a local authority. An important remaining issue is avoidance of conflict of interest in fulfilling the functions of a public authority.

After the administrative reform, the Chancellor has had to investigate repeatedly whether merged or assimilated local authorities have observed the principles of equal treatment and legal certainty, including legitimate expectations, when harmonising their services, benefits, land tax rates, etc. The Chancellor was also often asked to assess whether local authorities fulfilled their functions to the extent and manner laid down by law. The Chancellor continues to pay close attention to provision of social services in cities and rural municipalities.

Although the Chancellor receives a lot of questions concerning local authorities’ problems, these are usually already resolved in the course of proceedings and there has been no need to have recourse to the court. An exception was an application lodged with the Supreme Court on 10 May 2018 to annul some provisions in Tallinn waste management regulations that contravene the Constitution. In the opinion of the Chancellor, no legal basis exists for setting the service fee for waste transport in Tallinn. (See also the Chapter on “Entrepreneurship, ownership, environment”.)

Organising local life, the work of municipal councils

Formation of municipal council committees

During the reporting year, the Chancellor repeatedly had to explain how to lawfully implement amendments to the Local Government Organisation Act entering into force on 16 October 2017 that regulate formation of municipal council committees. The Chancellor was asked whether the situation of people from outside the municipal council being involved in the work of the committees was compatible with the Constitution (see the Chancellor’s letters on membership, separation of powers and incompatibility of offices and forming the composition of committees of municipal councils)

According to the Chancellor’s explanations, the Constitution (including the principle of representative democracy) does not preclude having people who are not members of a municipal council sitting as members of municipal council committees. The principle of democracy already in essence assumes involvement by the public in the exercise of governmental authority (in the frame of local government administration). Forms of civic participation that do not preclude the right of the municipal council to decide, in the frame of the law, all essential local matters also do not call into question the meaning of municipal council elections or the legal status of the municipal council as local government representative body. Although municipal council committees participate in proceedings concerning council draft legislation, they do not establish legislation instead of the municipal council. A municipal council need not consent to an opinion expressed by a committee. This does not render legislation of general application or individually addressed legal acts adopted by a municipal council unlawful if those committee members who are not members of the municipal council also participated in deliberations for them.

The Chancellor also found it to be lawful for a municipal council member to be simultaneously a member or official of the same rural municipal or city government since no legal provision bars it. The fact that a rural municipality or city government member or official acts as a municipal council committee member does not place the activities of the committee or the council under the control of the rural municipal or city government, i.e. the executive.

The law does not lay down the minimum proportion of municipal council members in municipal council committees (the exception being the internal audit committee, whose chair and members are only elected from among municipal council members). This way the right of self-organisation of rural municipalities and cities is respected. A municipal council must itself decide whether and how many persons from outside the council to involve in committees and whether those committee members who are not municipal council members also have the right to vote. Persons who are not municipal council members may also be involved in the work of committees without granting them the right to vote.

The requirement under which forming the composition of a municipal council committee must take into account the share of representatives of different political parties and election coalitions in the municipal council applies to the entire composition of a committee.

All members of municipal council committees must comply with the requirements of the Anti-corruption Act.

The Chancellor also had to explain that local authority activities are based on the principle of openness to the public. Thus, places of work and positions held by all municipal council committee members are public. Such data are not deemed to be sensitive personal data.

Appointing municipal council members to serve on a city or rural municipal government committee

The Chancellor affirmed to a petitioner that municipal council members may belong to city or rural municipal government committees if the municipal council so decides. However, it is not lawful to appoint municipal council members to city or rural municipal government committees through a legal act issued by the city or rural municipal government. This would contravene the constitutional status of the municipal council as local government representative body, the statutory status of the city or rural municipal government as local government executive body, as well as their respective competence.

The necessary number of members required to form a faction

The Chancellor was asked whether it was constitutional that the Local Government Organisation Act did not regulate issues concerning municipal council factions. The Chancellor was also asked to check whether the provision in the Tartu City Statutes that entitles at least five municipal council members to form a faction was lawful and not contrary to the principle of equal treatment.

The Chancellor explained that issues concerning municipal council factions are internal municipal council issues covered by the right of self-organisation. It is not unconstitutional for the Local Government Organisation Act to leave the conditions for forming factions for municipal councils themselves to decide. A municipal council may restrict the right of its members to belong to factions for purposes that do not contravene the law or the Constitution while respecting the principle of a free mandate and the requirement of equal opportunities in exercising the mandate.

A municipal council may, inter alia, decide on the number of municipal council members required to form a faction. A municipal council may also impose a ban on a member leaving one faction joining another faction, and require that persons elected to the council on the same list can form one faction. The rights of municipal council members not belonging to factions may not be restricted without justification or disproportionately in comparison to those members who have aligned themselves with a faction.

A municipal council lays down the minimum number of members for a faction as well as other restrictions on forming a faction with a view to ensuring effective operation of the council. The second legitimate purpose is to ensure political responsibility based on political parties and election coalitions.

The Chancellor concluded that the rules on forming factions laid down by the Tartu City Statutes in force to 1 May 2018 were lawful and proportionate to the aim sought. The rights of aligned and non-aligned municipal council members did not differ significantly. The number of municipal council members who had no opportunity to form a faction (there were eight such members, i.e. 16.3% of the total membership of the council) was not unreasonably high, and the number of members required to form a faction had not been established to specifically discriminate against certain political forces).

The residency requirement for municipal council and city district assembly members

The Chancellor of Justice was asked whether it was admissible for persons to participate in the work of Tallinn Municipal Council and Nõmme City District Assembly if they were not actually living in the respective city or city district but had recorded themselves as residents in the population register for the sole purpose of being able to run in local elections.

The Supreme Court has repeatedly affirmed that the statutory permanent residency requirement for candidates is purposive since local matters can be decided by persons who actually live in that rural municipality or city. No other criteria for assessing the residency requirement are laid down by law.

The Chancellor acknowledged that residency data in the population register alone are not proof of a candidate’s connection with the life of a local community. Nevertheless, in a free society, relying on register data is generally the best way to check the residency requirement, and it would be difficult to find any other just and proportionate coercive measures. Fortunately, voters can remedy legal and administrative shortcomings by giving their vote in elections for a candidate who is sufficiently familiar with local concerns.

The procedure for electing a village elder

The Chancellor was contacted by inhabitants of Ihasalu village in Jõelähtme rural municipality, claiming that no written invitations had been sent to the inhabitants to participate in the election of the village elder. This violated the procedure laid down by the municipal council, and the rural municipal government failed to resolve the relevant complaints in substance.

The Chancellor of Justice found that the rural municipal government had also failed to fully comply with the principle of good administration (§ 14 Constitution) or the investigative principle (§ 6 Administrative Procedure Act). Under the borough and village elder statute approved by the rural municipal council, the rural municipality had to accept a village elder elected by village inhabitants if the election had taken place in line with the established procedure. The investigative principle requires the rural municipal government to ascertain whether the election of the village elder took place in line with requirements. The rural municipal government is tasked with checking the lawfulness of the village elder’s election and, inter alia, ascertaining whether all village inhabitants were properly informed in advance about the village meeting. Based on the Chancellor’s recommendations, Jõelähtme Rural Municipal Council adopted a new borough and village elder statute.

Merger contracts and local authority regulations

Contesting a merger contract or merger agreement

The Chancellor was asked what happens if a local authorities merger contract or agreement is not complied with. Possibilities to contest a merger contract or agreement depend on how the contract or agreement has been violated. A merger contract or agreement in itself probably does not violate anyone’s subjective rights. Thus, as a rule, an individual has no possibility to contest a merger contract or agreement in court with a view to defending their rights. If a merger contract or agreement is violated so that it leads to contravention of the law, then anyone may lodge a petition with the Chancellor of Justice.

If a merger contract is violated by an administrative act or by failure to issue an administrative act, so that a public interest is thereby interfered with, since the beginning of 2018 a person may contact the Ministry of Justice, which exercises administrative supervision over the lawfulness of administrative acts by local authorities. Initiating administrative supervision in the public interest is a discretionary decision to be made by the Minister of Justice. If violation of a merger contract interferes with the rights of a specific person, that person may have recourse to the Chancellor of Justice or an administrative court depending on the particular situation.

A former rural municipality or city that has entered into a merger contract or agreement can have recourse neither to the court, nor to the Chancellor of Justice, nor to the Ministry of Justice. In the context of a specific petition, the Chancellor of Justice has explained how an individual can defend their rights if a rural municipality decides to stop childcare activities. In the specific case, the local authority wanted to arrange the childcare service differently than had been agreed in the merger contract.

Supervision over compliance with a merger contract may also be exercised in the course of a local authority internal audit, for example, by a municipal council internal audit committee.

Harmonising the organisation of activities in merged local authorities

The Chancellor of Justice found that if the new Tartu rural municipality were to establish lower prices for services of the social centre for the inhabitants of the former Tabivere rural municipality in comparison to other rural municipality residents, this would contravene the general fundamental right to equality. By assessing the different land tax rates in different areas of Tartu rural municipality, the Chancellor found that even though this constituted interference with the general fundamental right to equality, the interference was lawful at the time of the assessment.

When harmonising the procedure for payment of social benefits, merged rural municipalities and cities must take into account the rights already granted to local people earlier. For example, in Järva rural municipality an individual was deprived of the second instalment of the childbirth allowance because the municipality established additional conditions for receiving the allowance. In the Chancellor’s opinion, the new rules on paying the childbirth allowance were not compatible with the Constitution.

Statutes of local authorities

The Chancellor made a proposal to Sillamäe Town Council to bring the town statutes into line with the Constitution and the Local Government Organisation Act. Under the law, the municipal council enjoys the sole competence for forming and terminating municipal council committees, electing their chairs and deputy-chairs and approving the composition of committees. Committee members are approved on a proposal by the committee chair. However, the procedure for forming the vote counting committee and electing its chair, as laid down by Sillamäe Town Statutes, set out that the chair of the municipal council vote counting committee was to be elected by the committee from among its own members by a majority of votes in favour. Sillamäe Town Council brought the procedure for forming the municipal council vote counting committee into line with the law. The Chancellor found that the competence of the vote counting committee and the conditions provided for voting by secret ballot must enable a vote by secret ballot to be carried out in reality. In the new version of the town statutes, Sillamäe Town Council laid down significantly more detailed rules for the procedure for voting by secret ballot (including the conditions for organising the vote). The Chancellor also drew the attention of Sillamäe Town Council to the fact that local government statutes must enable municipal council members to contest, in the council, violation of the right to exercise their mandate. Communication with the municipal council ascertained that even though the statutes did not mention an objection by a municipal council member, the provisions of the statutes nevertheless enable filing an objection and are thus lawful.

The Chancellor assessed conformity with the Public Information Act of Hiiumaa Rural Municipality Statutes, regulating the representative competence of the chair of the municipal council. The provision of rural municipality or city statutes under which the municipal council chair – within the competence conferred on them – authorises other municipal council members to represent the rural municipality or city and its municipal council, is lawful. The legal frame laid down by law is also not exceeded if the municipal council chair coordinates and decides issues during preliminary negotiations. No risk of corruption exists in that case either. The municipal council chair represents not themselves as a private individual but the municipal council or the local authority as a whole. Therefore, information on correspondence exchanged by the chair must be accessible to municipal council members.

The Chancellor explained that processing the new Draft Statutes of Tartu City must comply with the requirements of the current statutes. The Administrative Reform Act prescribes that if local authorities have not concluded a merger contract or merger agreement, the basis will be the statutes of the rural municipality or city with which a local authority not meeting the minimum size criterion (5000 residents) was merged or assimilated. Until new statutes are enacted, the current statutes must be fully observed. The law does not enable a municipal council not to apply the current statutes, or only to apply them selectively, until the new rural municipality or city statutes enter into force. Tartu City has adopted new statutes in line with the requirements of the current statutes.

Local referendum

The Chancellor was asked whether establishing a local referendum by a local authority legal act was lawful. Laying down a local referendum with a legally binding result by a local authority legal act is not compatible with either the Local Government Organisation Act or the Constitution. Although the Constitution does not directly prohibit a referendum with a legally binding result, the laws do not stipulate it. Therefore, neither a city nor a rural municipality may itself establish a local referendum. A rural municipality or city may hold opinion polls on local issues. A referendum and an opinion poll (poll of residents) are concepts with different legal substance. The result of an opinion poll is not legally binding either on local authority bodies or state bodies but only aims to find out the opinion of respondents in the poll.

At least one per cent of a rural municipality or city residents with the right to vote may also make proposals by popular initiative to adopt, amend or repeal rural municipal or city council or government legislation on local matters.

Prevention of corruption and conflict of interest

In September 2017, the Chancellor of Justice sent a letter to the Riigikogu Constitutional Affairs Committee, drawing attention to how legislation might better contribute to preventing corruption in local authorities.

The Chancellor submitted the following proposals for consideration:

to establish regulation ensuring recovery of pecuniary loss caused through an intentional offence committed by a local authority official;

to preclude a local authority from entering into any form of working relationship with a person convicted of intentionally committing certain criminal offences, during the period when the sentence imposed on that person is still valid;

to establish legal clarity preventing conflict of interest in a situation where a municipal council member works as head of an agency administered by the local authority or is a member of the board or supervisory council of an entity in which the local authority has an interest and over which they must exercise supervision as a municipal council member;

to specify the delegating norms regulating official travel and other personal entitlements of city and rural municipal government members;

to establish requirements for independent auditing of local authorities.

The Chancellor’s proposals were based on problems observed over a long period. It is for the Riigikogu to decide whether to establish more rules to prevent corruption or to regulate less and deal with the consequences on a case-by-case basis. The parliamentary Constitutional Affairs Committee initiated a Draft Act (574 SE) on amending the Local Government Organisation Act and other related Acts.

The Chancellor made a proposal to Valga Rural Municipal Council to bring their decisions “Granting compensation to the rural municipal council chair” and “The procedure for payment of compensation and remuneration for participation in the work of Valga Rural Municipal Council” into line with the Constitution and the law. The municipal council chair had been granted the right to pay members of the municipal council “other remuneration or compensation” if budgetary resources allow. Such a solution is not in conformity with the Local Government Organisation Act, which prescribes that “a municipal council may pay remuneration to its members for participating in the work of the municipal council and compensation for expenses incurred in performing tasks assigned to them by the municipal council on the basis of the documents submitted and pursuant to the rates and procedure laid down by the municipal council”. Both municipal council legal acts had been drawn up in the form of individual acts, i.e. decisions. Valga Rural Municipal Council complied with the Chancellor’s proposal and enacted a regulation, i.e. a legislative act of general application, which does not contain the unlawful provision on the right of the municipal council chair to pay other remuneration or compensation if budgetary resources allow.

Supervision over financing of political parties

Under the legislation regulating the activities of political parties, the Chancellor of Justice may appoint her representative to the Political Parties Financing Surveillance Committee. Chancellor of Justice Ülle Madise extended the mandate of the representative (Kaarel Tarand) appointed by her predecessor, Indrek Teder. The committee and its members are independent and need not account for their activities to the institutions or persons who appointed them.

During the reporting period, the committee mostly dealt with problems that had arisen during municipal council elections held in October 2017. Members of the committee reviewed the use in political activities of newsletters and other communication channels financed from local authority budgets. The year was filled with colourful individual cases but the committee also provided a wider picture of the situation of these information channels, relying on extensive data from monitoring surveys and their analysis (in cooperation with researchers from the University of Tartu).

Despite preventive explanatory work and recommendations, those in power in local authorities are still unable to use the municipal media in a balanced and impartial manner. Almost everywhere, be it in large cities or small rural municipalities, the municipal media mostly covers the activities of those in power. The Political Parties Financing Surveillance Committee analysed the pre-election situation in newsletters by means of the market concentration index used in the economy. It was found that, in almost all the over 200 publications analysed, the ruling political party or election coalition enjoyed a dominant or even monopolistic market position. To change the situation, interference by the Riigikogu is not strictly necessary; self-regulation by local authorities and best practice rules and customs would also suffice. Advice and assistance from professional organisations (such as the Estonian Newspaper Association) could also be used for this.

The Political Parties Financing Surveillance Committee issues on average ten precepts a year. The number of precepts has been growing, rather than decreasing, year by year. Proof of the quality of the committee’s work is the fact that in all cases where a precept was contested the courts were satisfied with the committee’s opinions and the evidence provided, and enforced the committee’s decisions. The biggest bundle of problems in the committee’s work originates from checking the legality of, and conducting proceedings in connection with, financing transactions carried out years ago. The sums regarding which precepts have been issued to date have only increased over time, and now political parties enter into court disputes with the committee not just about thousands but hundreds of thousands, even millions, of euros. Considering the proportion that the potential sums to be recovered under the precepts make up in political parties’ budgets, we could even speak of a threat to the stability of the system of political parties.

Several issues facilitating the work of the committee are yet to be resolved, for example the right of the committee to fully disclose their precepts before the end of court disputes. It should also be considered justified that the committee be given the right to also ask for information from non-profit associations, which participate in the election campaign as so-called outsiders. Lack of clarity provides additional work for the judicial system.

Regional disparities

The Chancellor has also been asked to assess whether uneven economic development in different regions of Estonia, the regionally varying amount of investments, and faster development in Harju County violates the constitutional provision under which Estonia is a unitary state in terms of the organisation of its government.

The Chancellor explained that the Chancellor of Justice has no competence to assess regional policy choices, but uneven development of different regions is not contrary to the principle of the unitary state. Under the Constitution, the state authority must ensure everyone’s rights and freedoms. The Chancellor monitors, for example, whether statutory social services are provided by all local authorities, so that respect for human dignity and the basic principles of a social state are ensured regardless of geographical location. Regional investments to promote economic development are not a constitutionally protected benefit.

In its activities, the Estonian government has actually often preferred regions outside Harju County.

Social services

During the 2017–2018 reporting period, the Chancellor closely monitored how local authorities provide social services. In autumn 2017, the Chancellor once again reminded the heads of rural municipalities and cities of the duties of local authorities as regards organising social services. Petitions sent to the Chancellor allow for the conclusion that, unfortunately, people are often deprived of the necessary social services.

Therefore, the Chancellor also closely scrutinises local authority regulations on social services. Local legislation mostly reveals the same shortcomings – local authorities restrict provision of services and fail to give people enough financial assistance to pay for services. For example, the purpose and scope of services or the range of beneficiaries has been restricted and unlawful additional conditions imposed.

Local authorities often also justify refusal to provide assistance by the fact that a person in need of assistance has maintenance providers. On that basis, a rural municipality or city finds that the person does not need to be provided assistance or the local authority need not pay for it. Such an approach is wrong. Maintenance providers may provide care to their next of kin but they are not obliged to do so. Every rural municipality and city must organise appropriate social services for those in need. Local authorities must also ascertain whether and how much a person in need (together with their maintenance providers) is able to pay for a service. A person may be charged for a social service but the payment should be affordable for them. Supporting a person in need should also not undermine the day-to-day life of maintenance providers themselves. The Chancellor’s advisers have explained to local authority officials the organisation of social services and the most frequent shortcomings in local authority regulations. They have also written several articles on the same topic (in the magazines Sotsiaaltöö and Perearst).

During the reporting period, the Chancellor also assessed how rural municipalities and cities present social services on their websites and other information channels. The Chancellor has observed that information published on websites is not complete or easily understandable, and it is also difficult for people to find the necessary information.

Petitions sent to the Chancellor have revealed that people do not receive the services promised or that the quality of services is lacking. For example, rural municipalities and cities have delayed with resolving an application and providing the appropriate assistance. In one case, it was found that the local authority had not carried out an all-round assessment of a person’s need for assistance so that the person was simultaneously granted the right to housing as well as the general care service. The Chancellor had to remind the local authority that it is the local authority’s duty to assess whether and how much a specific person in need is able to pay for the service. The Chancellor also affirmed that a single pensioner allowance is not meant for paying for social services, including the general care service. The Chancellor explained once again when the burden of assistance resting on family members living together with a person in need might be deemed to have become as heavy as essentially amounting to provision of the social service. In that case, the opinion of family members should be heard to ascertain the person’s integrated need for assistance and the appropriate social service.