2002/14/EC: Commission Decision of 12 July 2000 on the state aid granted by France to Scott Paper SA Kimberly-Clark (Text with EEA relevance) (notified under document number C(2000) 2183)

Article 4
This Decision is addressed to the French Republic.
Done at Brussels, 12 July 2000.
For the Commission
Mario Monti
Member of the Commission
(1) OJ C 301, 30.9.1998, p. 4.
(2) "Les interventions des collectivités territoriales en faveur des entreprises", Cour des Comptes, Paris, November 1996.
(3) OJ C 301, 30.9.1998, p. 4.
(4) Comments from Scott, 23 November 1998, point B1.
(5) Comments from Scott, 23. November 1998, point B1.
(6) Preamble to the agreement of 31 August 1987 concluded between Bouton Brochard Scott SA, Orléans City Council and Loiret County Council ("the Scott agreement"); preamble to the Agreement on the improvement of the La Saussaye and La Planche sites of 12 September 1987 concluded between Loiret County Council, Orléans City Council and Sempel ("the Sempel agreement"); extract from the minutes of the meeting of Orléans City Council of Friday, 27 May 1994 ("the city council's minutes of 1994"), p. 1.
(7) Article 3.1 of the Sempel agreement and the city council's minutes of 1994, p. 1.
(8) By letters dated 17 March and 29 May 1997, the French authorities informed the Commission that the land had been bought by the city council for 15 FRF/m2. But, according to point 2.2 of the city council's minutes of 1994, the initial value of the land was FRF 10,9 million, i.e. FRF 16/m2.
(9) According to the letter from the French authorities, 21 April 1997, p. 3.
(10) Article 4 of the Scott agreement.
(11) Point 1.1 of the city council's minutes of 1994.
(12) Sempel's statement of final account prepared for Loiret County Council and Orléans City Council on the La Saussaye and La Planche industrial estate, 26 July 1993, p. 1.
(13) Point 2.1 of the city council's minutes of 1994; letter from the French authorities, 3 June 1997, p. 2. In its letter of 23 November 1998, section B2, Scott claims, however, that it purchased the Orléans site in March 1988.
(14) Point 2.1 of the city council's minutes of 1994.
(15) Letter from the French authorities, 21 April 1997, p. 3.
(16) Letter from the French authorities, 26 November 1998, p. 1.
(17) Letter from the French authorities, 6 October 1999, p. 5.
(18) Idem.
(19) Extract from the minutes of the Orléans City Council's meeting of 16 December 1988 ("the city council's minutes of 1988"), p. 2.
(20) Decree No 77-241 of 7 March 1977.
(21) The city council's minutes of 1988 (p. 2) state that "to ensure that the 1989 initial budget for water treatment is in balance, it is necessary to increase the current rate by about 5 %, i.e. to raise it from FRF 2,40 to FRF 2,52".
(22) The city council's minutes of 1988, p. 3.
(23) The city council's minutes of 1988 (p. 2) state that "[...] to encourage water-intensive businesses to reduce their effluent, it was decided by the city council on 19 December 1980 to increase the coefficient of degressivity for the proportion in excess of 50000 m3".
(24) Business secret.
(25) According to Kimberly-Clark's water treatment bill for 1996.
(26) Business secret.
(27) According to the hospital's water treatment bill for 1996.
(28) OJ C 209, 10.7.1997, p. 3.
(29) For further details see OJ C 301, 30.9.1998, p. 4.
(30) The Commission would point out in this respect that, in their letter of 2 June 1999, the French authorities expressly stated that "(they)" are not prepared to send the Commission the documents it requests (agreement between the local authorities and Sempel, sale contracts with the other firms), as these have nothing to do with the case and some are private.
(31) Scott Paper. Local authorities overwhelmingly in favour.
(32) Scott Paper: 1000 jobs to wrap up, La Nouvelle République, 18 to 19 July 1987.
(33) Le Canard Enchaîné, 14 January 1998, US toilet paper absorbs FRF 550000 in subsidies per new employee.
(34) "Procter & Gamble Ex-Scott Paper: first clouds over the Saint-Cyr site".
(35) Les Echos, Kimberly Clark: new location in the Loiret, 22 October 1998.
(36) Seventeenth Report on Competition Policy 1987, point 220.
(37) Case C-312/90 Spain v Commission [1992] ECR p. I-4117.
(38) Case 120/73 Lorenz [1973] ECR p. 1471.
(39) Letter from the French authorities, 25 November 1998, pp. 2 and 3; letter from the French authorities, 30 April 1999, p. 1 and letter from the French authorities, 15 October 1999, pp. 1 and 2.
(40) Letter from the French authorities, 25 November 1998, p. 3; letter from the French authorities, 30 April 1999, p. 2 and letter from the French authorities, 21 February 2000, pp. 2 to 4.
(41) In their letter of 30 April 1999, p. 2, the French authorities give the following explanation of the difference between the price per m2 paid by Scott and that paid by the other investors on the estate: "- the size of the plots, since the sale of a large plot reduces the landowner's financial carrying costs compared with a hypothetical situation involving many sales of smaller plots. [...] The costs associated with the servicing of the site are not to be taken into consideration in this particular case, since Sempel developed the 68 ha,
- the appreciation of the estate as a whole following Scott's move,
- the land was sold to Scott in 1987, the other sales took place between 1990 and 1994".
(42) Letter from the French authorities, 21 February 2000, pp. 2 to 4.
(43) Letter from the French authorities, 21 February 2000, p. 4.
(44) Letter, 6 October 1999, p. 1.
(45) Letter, 7 January 2000, p. 1.
(46) Letter, 7 January 2000, p. 1.
(47) Letter from the French authorities, 25 November 1998, p. 3 and 4, and letter from the French authorities, 6 October 1999, p. 2 and 3.
(48) Letter, 7 January 2000, p. 1.
(49) Letter from the French authorities, 25 November 1998, p. 3 and 4 and letter from the French authorities, 6 October 1999, p. 2 and 3.
(50) Letter from the French authorities, 7 January 2000, p. 4.
(51) Idem.
(52) Letter from the French authorities, 21 February 2000, Annex 1.
(53) Letter from the French authorities, 25 November 1998, p. 3; letter from the French authorities, 30 April 1999, p. 1; letter from the French authorities, 6 October 1999, p. 2 and letter from the French authorities, 7 January 2000, p. 1 and 2.
(54) Letter from the French authorities, 10 January 2000, pp. 3 to 5; Notice C 36/92 (ex NN 108/92) concerning the terms of a land purchase agreement between the city council of Friedberg/Hessen and Fresenius AG (OJ C 21, 25.1.1994, p. 4).
(55) Letter from the French authorities, 7 January 2000, p. 3.
(56) Letter from the French authorities, 25 November 1998, p. 5 and 6; letter from the French authorities, 30 April 1999, p. 2 and letter from the French authorities, 6 October 1999, p. 4.
(57) Letter from the French authorities, 10 January 2000, p. 3; see footnote 34.
(58) Letter from the French authorities, 25 November 1998, p. 5; letter from the French authorities, 30 April 1999, p. 3; letter from the French authorities, 6 October 1999, p. 5 and letter from the French authorities, 10 January 2000, p. 1 and 2.
(59) Letter from the French authorities, 6 October 1999, p. 5.
(60) Letter from the French authorities, 7 January 2000, p. 2.
(61) Letter from the French authorities, 6 October 1999, p. 6.
(62) Letter from the French authorities, 7 January 2000, p. 4.
(63) Joined Cases C-324/90 and C-342/90 Pleuger [1994] ECR p. I-1173, point 26.
(64) OJ L 83, 27.3.1999, p. 1.
(65) See footnote 35.
(66) See footnote 36.
(67) Article 11 of the Scott agreement, p. 4.
(68) See footnote 36.
(69) Letter from Scott, 23 November 1998, p. 11.
(70) Case C-312/90 Spain v Commission [1992] ECR p. I-4117.
(71) Decree No 82-809 of 22 September 1982 on aid for the purchase and leasing of buildings granted by the local authorities, their associations or the regions, Official Journal of the French Republic, 24 September 1982, (Decree No 82-809), p. 2853.
(72) Article 4 of Law No 82-6 was repealed by Law No 96-142 of 21 February 1996.
(73) Case C-295/97 Piaggio [1999] ECR p. I-3735, points 45 to 49.
(74) Official Journal of the French Republic, 8 January 1982, p. 222.
(75) L'action économique des collectivités locales, Ministry of the Interior (Local Authorities Department), Paris 1992 (report of the Ministry of the Interior), Droit administratif: L'encadrement juridique des aides des collectivités territoriales aux entreprises, Supplement No 1 to La Semaine Juridique No 5, 29 January 1998 (article in La Semaine Juridique), and Les interventions des collectivités territoriales en faveur des entreprises, special public report by the French Court of Auditors, Paris, November 1996 (report by the French Court of Auditors).
(76) Decree No 82-379 of 6 May 1982 on the land-use planning grant, (hereinafter Decree 82-379), Official Journal of the French Republic of 7 May 1982, p. 1294; see Report of French Court of Auditors, p. 16 and 62, the report by the Ministry of the Interior, p. 94.
(77) Report by the French Court of Auditors, p. 19, 31. 37 and 62; article in La Semaine Juridique, p. 24 and report by the Ministry of the Interior, p. 94.
(78) Report by the French Court of Auditors, p. 16, 62 and 126, article in La Semaine Juridique, p. 41 and 42 and report by the Ministry of the Interior, p. 14 and 94. The latter states (p. 94) that: "Since indirect aid, apart from aid for industrial buildings, is unconditional, it has not been subject to specific rules. It does not, therefore, fall within the scope of schemes notified, or to be notified, to the Commission, since it makes general action affecting the economic environment of the region concerned possible and is not therefore caught by Article 92".
(79) OJ L 11, 12.1.1985, p. 28.
(80) Contrary to what is stated in Commission Decision 93/193/EEC of 23 December 1992 on the aid granted for the creation of industrial enterprises in Modane, Savoie (OJ L 85, 6.4.1993, p. 22), "local authorities can provide assistance in Modane under Article 1 of Order No 82-809 of 22 September 1982, which was approved by the Commission at the same time as the PAT (regional development premium)"; the said decree was never notified to the Commission.
(81) Letter from the French authorities, 6 October 1999, p. 5.
(82) City council minutes of 1988, p. 2.
(83) Decree 77-241, 7 March 1977.
(84) Case 323/82 Intermills [1984] ECR p. 3809 and Case 248/84 Germany v Commission [1987] ECR p. 4013.
(85) Case 290/83 Commission v France [1985] ECR p. 439; Joined Cases 67, 68 and 70/85 Van der Kooy [1988] p. 219 and Case C-305/89 Italy v Commission [1991] ECR p. I-1603.
(86) Case 82/77 Van Tiggele [1978] ECR p. 25 and joined Cases C-72/91 and C-73/91 Sloman Neptun [1993] ECR p. I-887.
(87) Article 2 states that "the local authorities, through a specialist company, Sempel (Société d'economie mixte pour l'equipement du Loiret), in which the local authorities are majority shareholders, will carry out the necessary improvements, as defined: parking space, roads, miscellaneous networks, site development etc. ..., in accordance with Scott's specifications for the processing plant and warehouse (30000 m2 on the site of about 25 ha)".
(88) Point 3.1 of the Agreement on the development of the La Saussaye and La Planche sites states that "the city council undertakes to sell to Sempel the sites which are to be developed, in accordance with the attached plans and references, for the sum of FRF 1 (one franc)".
(89) Letter from the French authorities, 17 April 1997, p. 1.
(90) Article 4(2) of the agreement states that "initially these development works are estimated at FRF 50 million, it being understood that Scott will build, under the conditions referred to at Article 2 above, a factory (processing plant and warehouse) of about 30000 m2 which will be bought from Sempel for FRF 31 million [...]".
(91) Point 12.3 of the agreement states that "[...] the price for the sale of the factory warehouse and the site on which it stands to the Scott Paper Company [is] FRF 31 million inclusive of tax".
(92) Point 12.1 of the agreement provides that "the local authorities undertake to give financial assistance to Sempel in the form of an overall amount of FRF 20 million inclusive of tax in the case of Loiret County Council and FRF 30 million in the case of Orléans City Council."
These sums will be paid in annual amounts by the local authorities to Sempel to ensure payment of the annual instalments on the loans required for the performance of the operations contracted for by Sempel, up to a ceiling of FRF 50 million, and in accordance with their respective liabilities.
(93) See footnote 26.
(94) Communication, II Principles, 1 Sale through an unconditional bidding procedure, point (a) concerning the definition of the term "sufficiently well-publicised".
(95) Letter from the French authorities, 7 January 2000, Annex I.
(96) Article 2 of the agreement between Scott and the local authorities states: "The local authorities, through a specialist company, Sempel (Société d'economie mixte pour l'équipement du Loiret), in which the local authorities are majority shareholders, will carry out the necessary improvements, as defined: parking space, roads, miscellaneous networks, site improvements, etc., in accordance with Scott's specifications, for the processing plant and warehouse 30000 m2 on the site of about 25 ha)".
(97) Same principle as that established by the Court of Justice in Case 40/85 Belgium v Commission (Boch) [1986] ECR p. 2321.
(98) Commission Decision of 17 July 1996 concerning State aid that the City of Mainz has granted to Grundstücksverwaltungsgesellschaft Fort Malakoff Mainz mbH & Co. KG, OJ L 283, 5.11.1996, p. 43, point IV: "When assessing whether in the present case the state acted in line with a normal market investor's behaviour, the future possibility of tax receipts cannot be taken into account. Also in cases where the state sells its own property the terms and conditions should be in line with the normal behaviour of a private investor that does not have the particular position of the state with its responsibilities regarding public interest and its corresponding right to collect taxes".
(99) See footnote 34.
(100) The Seventeenth Report on Competition Policy states that "Contrary to the initial plan, Daimler-Benz AG will now be acquiring agricultural land unsuitable for industrial use and the company will bear site-preparation costs, currently estimated at DM 132 million (ECU 63,6 million)". The decision itself states (section 2, Assessment) that the firm alone will now bear all the site-preparation costs.
(101) The decision itself states (section 2, Assessment) that, as owners of the site, the Land and the local authorities will also have to bear the normal cost of demolition, in accordance with usual practice before land is sold.
(102) Commission communication to the Member States, OJ C 307, 13.11.1993, p. 3, point 28.
(103) Extract from the Tribune Desfossés, 20 January 1998, "Kimberly closes its doors": "[...] the factory, which had been occupied by 175 workers for several days, was liberated at the end of yesterday. The overproduction of household paper in France and the huge losses accumulated by the factory since it opened, more than FRF 500 million, made this decision apparently inevitable".
(104) Extract from Le Monde, 9 January 1998: "As part of its worldwide restructuring, Kimberly Clark is closing its Orléans factory": "[...] Although the market is growing very slowly (2 % to 3 % a year), excess capacity has increased and now stands at more than 90000 tonnes in Europe".
(105) Extract from Le Figaro, 9 January 1998: "As part of its worldwide restructuring, Kimberly Clark is closing its Orléans factory": "[...] The closure of the site is part of a global restructuring of the household paper giant (handkerchiefs, toilet paper, kitchen towels). In France, Kimberley is a victim of the stagnant household paper market (+ 2 % a year) and has excess capacity of 50000 tonnes a year and cumulative losses of nearly FRF 4 billion in ten years [...]".
Extract from the Courrier Val de Loire-Sologne (16 to 22 January 1998) "The Chairman of Loiret County Council, Eric Doligé, reacts to the announcement of the proposed closure of the Kimberly-Clark Site at Saint-Cyr-en-Val": "[...] This development is justified by the group on the grounds of excess production capacity, which in France is about 49 %".
(106) See footnote 61 (Pleuger, paragraph 26). The rule was consolidated later by Article 13(1) of the Procedural Regulation.
(107) Commission Decision C 20/94 (NN 27/94) concerning state aid for the development of the site occupied by Kimberly-Clark-Industries at Toul/Villey-Saint-Etienne (Meurthe-et-Moselle), communication published in OJ C 283, 27.10.1995.
(108) Point 2.1 of the Sempel agreement refers in particular to "the formation level for receiving the factory warehouse and its superstructure, these structures to be built under contract with the developer, the Scott Paper Company".
(109) The present value is then calculated, taking the years 1987 and 2000.
(110) See website http://europa.eu.int/comm/dg04/aid/tauxref.htm.
(111) Case 730/79 Philip Morris v Commission [1980] ECR p. 2671, point 11.
(112) Scott Paper Company Annual Report 1987, p. 1.
(113) Panorama of Community Industry 1990, section 19-18.
(114) Case 102/87 France v Commission [1988] ECR p. 4067, point 19.
(115) Idem.
(116) See footnote 111.
(117) See footnote 84.
(118) Case C-241/94 France v Commission (Kimberly Clark) [1996] ECR p. I-4551, points 23 and 24.
(119) See footnote 61. Rule consolidated by Article 13(1) of the Procedural Regulation.
(120) Case T-67/94 Ladbroke Racing v Commission [1998] ECR p. II-1, point 187.
(121) See footnote 111.
(122) See Case 70/72 Commission v Germany [1973] ECR p. 813; Case 310/85 Deufil v Commission [1987] ECR p. 901 and Case C-5/89 Commission v Germany (BUG-Alutechnik) [1990] ECR p. I-3437.
(123) Procedural Regulation, recital 13.
(124) Procedural Regulation, recital 14.
(125) Case C-5/89 Commission v Germany (BUG-Alutechnik) [1990] ECR p. I-3437, point 14 and Case C-24/95 Land Rheinland-Pfalz v Alcan [1997] ECR p. I-1591, point 25.
(126) Case C-305/89 Italy v Commission (Alfa Romeo and Finmeccanica) [1991] ECR p. I-1603.
(127) Case C-5/89 Commission v Germany (BUG-Alutechnik) [1990] ECR p. I-3437, point 14.
(128) Commission letter to Member States SG(91) D/4577 of 4 March 1991. See also Case C-142/87 Belgium v Commission [1990] ECR p. I-959. Rule consolidated by Article 14 of the Procedural Regulation.
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