OCEI NAMA preliminary

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    Oifig an Choimisineara FaisneiseOffice of the Information Commissioner

    BackgroundIn a request made to the National Assets M anagement A gency (NA MA ), dated 3 February2010, the appellant sought access under the Access to Information on the Environment (AIR)Regulations 2007 to the following records:1. "A breakdown of all assets, loans and properties du e to be transferred to the Agency. Thisshould include the value placed on the asset and by whom . It should include theaddresses of all assets and properties.2. A breakdown of all properties and property loans currently owned or controlled by theAgency.3. Minutes of board m eetings relating to the transfer of assets and properties to the Agency.The date range for this request is January 2009 to January 2 010, inclusive."The request was refused by NAM A on the basis that it was not a "public authority" within themeaning of the AIE Regulations. On 19 March 2010, the appellant appealed to theCommissioner for Environmental Information against NA MA 's decision.The D efinition of "Public Authority"Article 3(1) of the AIE R egulations state that "'public authority' means, subject to sub-article(2)-

    (a) government or other public adm inistration, including p ublic advisory bodies, atnational, regional or local level,(b) any natural or legal person performing public administrative functions under n ationallaw, including specific duties, activities or services in relation to the environm ent, and(c) any natural or legal person having public responsibilities or functions, or providingpublic services, relating to the environment under the control of a body or person fallingwithin paragraph (a ) or (b ),

    and includes-(i) a Minister of the Governm ent,(ii) the C omm issioners of Public W orks in Ireland,(iii) a local authority for the purposes of the Local Government A ct 2001 (No. 37 of2001),(iv) a harbour authority w ithin the meaning of the Harbours Act 1946 (No. 9 of 1946),

    11 8 S r a i d L i o s a i n l o c h t a r a c h , B a i l e A t h a C l i a t h 2 . I 1 8 L o w e r L e e s o n S t r e e t , D u b l i n 2 .

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    http://www.oic.gov.ie/http://www.oic.gov.ie/
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    (v) the Health Service Executive established under the Health Act 2004 (No. 42 of 2004),(vi) a board or other body (but not including a company under the Com panies Acts)established by or under statute,(vii) a company under the Co mpanies A cts, in which all the shares arc held-

    (I) by or on behalf of a Minister of the G overnment,(II) by directors appointed by a M inister of the Governm ent,(III) by a board or other body within the meaning of paragraph (vi), or(IV) by a company to which subparagraphs (i) or (II) applies, having publicadministrative functions and responsibilities, and possessing environmentalinformation".

    Article 3(2) states: "Notw ithstanding an ything in sub-article (I), 'public authority' does notinclude any body when acting in a judicial or legislative capacity."The Appellant's PositionInitially, the appellant noted that the NAMA Board consists of nine mem bers, all of whom areappointed by the Minister for Finance. He stressed that the Chief Executives of NAM A andthe National Treasury Management Agency (NT MA ), both of whom are ex-officio members,are appointed by the Minister. He contended that, on this basis alone, NAMA should beconsidered to be a "public body", and he referred in particular to paragraph (a) andsubparagraph (vi) of the definition of "public authority".Subsequently, in a submission m ade on 22 A pril 2010 , the appellant refers to Decision NoticeFER0265609 (dated 17 December 2009) in which the U K Information Com missioner's Officc(ICO) found that PhonepayPlus, a consumer protection body responsible for regulating'Controlled Premium Rale Services' in the UK, w as a public authority for purposes of the UKEnvironmental Information Regulations (EIR). After summ arising the ICO's decision, theappellant states: "While NAM A m ay or may not fall within under the administrative elementof the EIR, it is important to point to the scope of bodies considered to be public in otherjurisdictions, under the administrative element." The appellant also quotes from a letter byEurostat, dated 16 October 2009, to the Central Statistics Office as follows: '"NAM A ispublicly ow ned and has as its purpose to conduct specific governm ent po licy . . . according tothe decision of 15 July 2009 . . . it is to be classified within the general government sector.'"In addition, referring to another decision of the ICO involving information relating to housingdevelop men ts, the appellant suggests that "property information could potentially beenvironmental in nature".NAMA's PositionFor its part, NAM A acknowledges, in a submission dated 7 M ay 2010, that it is a bodyestablished by statute, namely, the National Asset Management Agency Act 2009 (the Act).However, according to NAM A, it does not automatically follow that NA MA is a "public

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    authority" for the purposes of the AIE Regulations. Referring to its purposes and functions asset out in the 2009 Act, NAM A states: "NAMA is not a public adm inistration body or apublic advisory nor does it perform public administrative functions including specific duties,activities or services in relation to the environment." NAM A further states:

    '"None of the purposes or functions conferred on NA MAin order to achieve the Act's purposes can properly becharacterised as either public administration or publicadvisory and specifically none of its functions relate tothe environment.While NAM A was established by statute and assignedits statutory functions in order to further the p ublicpolicy objectives of the Act, NAM A does not administerthe Act's policy, it does not provide services infurtherance of that policy and specifically it does notcarry out duties, activities or services relating to theenvironment."

    Moreover, NA MA maintains that, in order to achieve its statutory purposes: "NAMA mustmanage its acquired assets with a commercial mandate which is not administrative in nature.Ultimately, NAM A's aim is to achieve the best achievable financial return for the State andthis is not an aim that is achievable if NA MA 's functions were adm inistrative or advisory innature." Alternatively, N AM A argues that the appellant's request does not relate to"environmental information" within the meaning of the AIE Regu lations.AnalysisGeneral Description of NAMANA MA , as its full name indicates, is an asset management agency of the State. It wasestablished by the National A sset Management Act 2009, the stated objectives of which are,as set out in section 2 and sum marised by NAM A in its subm ission:(a) to address the serious threat to the economy and the stability of credit institutions in theState generally and the need for the maintenance and stabilisation of the financial system inthe State, and(b) to address the com pelling need to facilitate the availability of credit in the economy, toresolve the problem s created by the financial crisis, to protect the State's interests in respect ofthe guarantees issued to certain credit institutions, to facilitate restructuring of creditinstitutions of systemic importance to the economy and to remove uncertainty about thevaluation of certain assets of systemically important credit institutions.Under section 10(1) of the Act, NAM A's purpose is to contribute to the achievement of thegeneral purposes stated above by:(a) acquiring eligible bank assets from participating institutions(b) dealing expeditiously with acquired assets

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    (c) protecting or otherwise enhancing the value of acquired assets, in the interests of the State.Section 10(2) provid es: "So far as possible, NA MA shall, exped itiously and consistently withthe achievement of the purposes specified in subsection (1) , obtain the best achievablefinancial return for the State".NA MA 's functions and pow ers are set out in sections 11 and 12 of the A ct, respectively. Inaddition, other sections of the Act give NAM A certain special powers. For instance, undersection 147, NA MA m ay appoin t statutory receivers in certain circum stances. In addition,taken together, sections 158 and 159 allow NAM A to apply to the Court for an orderauthorising it to compulsorily acquire land in certain other circumstances.It is indisputab le that NAM A is a public sector body. As noted by the appellant, its Boardmem bers are all appointed by the Minister. I also note that it has a number of reportingrequirements, it is accountable to the Comptroller and Auditor General and also to theCommittee of Public Accounts, and it is of course publicly funded (directly in terms of suchmatters as remuneration ; indirectly at least in relation to asset acquisition ). How ever, asdiscussed more fully below, it is also beyond dispute that asset managem ent is a comm ercialactivity. I consider that the question presented by this case is whethe r, notwithstand ing its"commercial mandate", NAM A performs "public administrative functions" within themeaning of Article 3(1 )(b) of the AIE Regulations.The M eaning of "Public Administrative Functions"I take the view that Article 3(1 )(a) of the definition of "public authority" is m eant to refer to aDepartment of State or local authority or other State body within the executive branch ofgovermnent; it does not refer to a body with an economic or com mercial m andate such asNA MA . Moreover, although the appellant indicates in his submission that "propertyinformation could potentially be environmental in nature", he does not m ake the claim, nor isthere any basis for finding, that NAM A has public responsibilities or functions, or providespublic services, relating to the environment (Article 3(l )(c) refers). While its functions mayultimately entail the acquisition of pro perty, like any other property dev eloper, it is requiredto apply for planning permission in order to develop the land or minerals on land (section12(2)(z) and (aa) of the Act refers). Therefore, as the appellant appears to concede , at leastimplicitly, in his submission, the question of NA MA 's status the AIE Regulations turns onwhether it performs what are considered to be "public administrative functions" within themeaning of Article 3(1 )(b) of the AIE Regulations.PhonepayPlus (ICO Decision Notice FER0265609) in ContextI have had regard to the decision of the ICO in the PhonepayPlus case. In its decision, theICO set out a number of factors for consideration in determining whether a body exercisesfunctions that are "public in nature". In doing so, the ICO referred to the decision of the UKInformation Tribunal in Network Rail Limited v Information Commissioner (EA/2006/0061& 0062) (17 July 2007), which in turn drew upon the judgment of Lord Nicholl in PorochialChurch Counci l of the Parish of Aston Cantlow and Wilmcote with Billesley v. Wallbank andAnother [2003] UKHL 37. In light of this, I find the decision of the ICO in the PhonepayPluscase of limited usefulness in relation to NA MA for two reasons. Firstly, in the National RailLimited (NRL) case, the Tribunal applied the list of factors in determining whether the NRLwas a public sector body at all, a matter which is not for dispute in this case. As discussed

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    below, the focus of its analysis in relation to whether the NRL performed "functions of publicadm inistration" was quite different.Secondly, the Porochial Church Council (PCC) case involved the definition of "publicauthority" in the context of the European C onvention on H uman Rights (ECH R) as it relatedto a parochial church council that had certain enforcement powers, but where such powerswere only of an ecclesiastical reach. In the circum stances, the House of Lords did not acccptthat the PCC carried out "functions of a public nature" notwithstanding its limitedenforcement powers. However, Lord Hope observed: "The word 'authority' suggests that theperson has regulatory or coercive powers given to it by statute or by the comm on law." Hesubseque ntly stated: "The phrase 'public functions' in this context [the context of defining'governmental organisations' within the m eaning of the ECHR] is thus clearly linked to thefunctions and powers, w hether centralised or distributed, of government."Moreover, in his judgm ent, Lord Rodger also referred to the significance of the exercise ofgovernmental powers in ECHR case law before observing: "In light of these decisions whatmatters is that the PCC's general function is to carry out the religious mission of the Churchin the parish, rather than to exercise any governmen tal pow er." He also had regard to thesemantic differences in the German language, where the "public power" exercised bychurche s is described as "offentliche Gew alt" as comp ared to "staatliche G ewalt" or "statepow er". He concluded: "The PCC may be acting in the pub lic interest, in a general sense,but it is still carrying out a church rather than a governmental function."Based on my examination of relevant European and UK case law, including the NRL and thePCC cases, it is my understanding that the exercise of some such "public" or go vernmentalpower is in fact an essential component of a "public administrative function"; i.e, without theexercise of such governmental pow er, functions are not of a public adm inistrative natureregardless of whether they have a statutory basis or whether they serve a general publicinterest. The typical exam ple is that of a regulatory function, but it would also includefunctions involving the power to issue licenses, powers of inspection or investigation or otherpolicing powers, and powers of taxation. Moreover, under EU law, where a distinction isdrawn between functions which are "public" on the one hand and functions which arecomm ercial or economic on the other, the exercise of public or governmental authority seemsto be implicit in the term "public function" alone.The Irish Guidance Notes and the Aarhus GuideIn Ireland, the starting po int for interpreting any of the provisions of the AIE Regulationsshould be the Guidance Notes published by the Irish Department of the Environm ent,Heritage and Local Government. However, the Guidance Notes do not expand upon themeaning of "public administrative functions" beyond stating that it is "self-evident". Wh ilethis guidance may not be very descriptive, it does suggest, nevertheless, that a multifacetedapproach to the definition was not envisioned.The Guidance No tes also explain that EU Directive 200 3/4/EC (the AIE Directive), uponwhich the AIE Regulations are based, was adopted to give effect to one part of what is knownas the Aarhus Co nvention . In the circumstances, it is appropriate to consider theImplementation Guide to the Aarhus Convention (the Aarhus Guide). The Aarhus Guidedescribes a "public administrative function" as "a function normally performed bygovernmental authorities as determined according to national law". (A section of the A arhus

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    Guide relating to the EU, or the European Comm unity as the relevant pillar was known then,explains that a reference to national law should encom pass EU law.) The Aarhus G uidefurther states: "Any person authorized by law to perform a public function of any kind fallsunder the definition of'public authority'".The NRL Case and Other Relevant UK GuidanceIn the NRL case, the Tribunal had regard to the Aarhus Guide and similar U K-based guidancein finding that the NRL was not a body which carried out public adm inistrative functions.The determ inative factor w as that it was not a regulator; rather, its functions were that of anycomm ercial operator. The Tribunal also observed: "Wh atever the position in 1947, running arailway is not seen nowadays in the United Kingdom as a function normally performed by agovernment authority." The Tribunal underscored the distinction between p ublicadministrative functions and comm ercial activities, even with respect to railways w hichreceive public funds or remain in public ow nership, by referencing the relevant CouncilDirective on the development of the European Com munity's railways: "To summarise, theDirective which gave birth in large measure to the 1993 Act adopts the principle that runningrailways is an activity for independent bodies, how ever created and funded, operating ascompetitive, comm ercial concerns according to the dictates of the market. Such an approachis the antithesis of the proposition that running railways is a function of governmentalauthorities."Following the Tribunal's lead, the ICO found in Decision Notice FER 0265609 thatPhon epayP lus carried out adm inistrative functions on the basis that it "is a regulator of aspecified area". Reference was also made to the distinction between comm ercial activitiesand administrative functions: "In this case the organ isation is not [a] profit mak ing entity andis not an organisation that is com petitively invo lved in any business. Instead it has a specificfunction to regulate a specific area, overseeing an industry, which it is independent of. Asexplained above the organisation conducts functions that can be correctly explained asadm inistrative." How ever, as indicated above, the ICO also had regard to num erous factorsother factors which I consider to be ancillary for the purposes of this case.The connection between g overnmental pow er and public adm inistrative functions, and thecorresponding distinction between p ublic administrative functions and comm ercial oreconomic activities, are also highlighted in the case of Law Society of England and Wales v.Secretary o f S ta te for Justice & Anor [2010] EWHC 352 (QB) in which the England andWales H igh Court addressed the question of whether the Law Society w as a publicadministrative body in the context of the Transfer of Undertakings (Protection ofEmp loyment) R egulations 2006, which is based on EU Directive 2001/23/EC. Article 1(1) ofthe Directive states that:

    "(a) This directive shall apply to any transfer of anundertaking, business, or part of an undertaking orbusiness to another employer as a result of a legaltransfer or merger.

    (c) This directive shall apply to public and privateundertakings engaged in economic activities whether or

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    not they are operating for gain. An administrativereorganisation of public adm inistrative authorities, or thetransfer of administrative functions between publicadministrative authorities, is not a transfer within themeaning of this directive."

    Following the creation of the Office for Legal Complaints, the Law Society attempted tosecure certain em ployment rights for its staff in its Legal Complaints Service unit by arguingthat the Transfer of Undertakings R egulations applied notwithstanding the exclusion from itsscope of a transfer of administrative functions between pub lic administrative authorities.Referring to European C ourt of Justice (EC J) Case C-298/94 Annette Henke v. GemeindeSchierke and Verwaltungsgemeinschaft Brocken , the High Court noted that Paragraph 17 ofthe judgm ent "provides a pointer to what a public adm inistrative body m ight be considered tobe: a body which exercises public authority". The High Court also quoted from the decisionof the Em ployment Appeal Tribunal in Adult Learning Lnspectorate v Beloff (30 January2008): '"In our judgm ent, a public body whose functions involve the exercise of publicauthority would be a public administrative authority for the purposes of [the Transfer ofUndertakings Regulations]." On the basis of the House of Lords case of Institute ofChartered Accountants v. Commissioners for Customs & Excise [1991] 1 WLR 701, whichin turn referred to ECJ Case C-364/92 SATFluggesellschaft mbHv. Eurocontrol , the HighCourt conclud ed that: "[RJegulatory functions can (and should here) be distinguished fromecono mic activity." As the transfer in question involve d the regulatory functions of the LegalCom plaints Service, the High Court found that the Transfer of Undertakings Regulations didnot apply.Neurendale (Irish High Court) and EU Com petition LawMoreover, in Neurendale Ltd t/a Panda Waste Services v. Dublin City Council & Ors [2009]IEHC 588, the Irish High Court (M cKechnie J.) provided a very helpful overview of EUcompetition law as it applies to public authorities, which again illustrates the connectionbetween governmental pow er and public adm inistrative functions, and the correspondingdistinction between public adm inistrative functions and comm ercial or economic activities.The focus of the overview was on the question of w hen, and in what circumstances, a publicauthority is considered to be an "undertaking", which M cKechnie J. defined as "any body,regardless of how it is established or how it is funded, or of its legal status, which is engagedin an economic activity, or to have the same meaning, in a comm ercial activity". Aneconomic activity, in turn, consists of "offering goods or services on a market, usuallyalthough not necessarily for a fee or charge". Observing that "[i]t is possible for a body to beboth an undertaking, and not be so, depending on the activity in question", M cKechnie J.stated: "Conseq uently, the fact that a body exercises regulatory or public powers will notautomatically exclude all of its activities from being considered econom ic in nature." As theexercise of "purely sovereign or administrative pow ers" falls ou tside the scope of EUcompetition law, each activity of a public entity is scrutinised separately to determine whetherthe entity concerned should be treated as an undertaking or as a public body. McK echnie J.quoted from the Opinion of the Advocate G eneral in Case C-49/07, known as the MOTOEcase, in which it is explained:

    "It is true that the exercise of public p owers does not fallwithin the scope of the competition rules in the ECTreaty, and an organisation which exercises public

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    powers is not an undertaking within the meaning ofcompetition law. However, the distinction betweenpublic and econom ic activities must be drawn separatelyin relation to each activity carried on by an organisation.The organisation in question may therefore operate inpart as a public body and in part as an economic agent."

    Significantly, a public entity may be considered to be an undertaking even where it operatesin the public interest: "[W jhere the organisation concerncd b egins to market its services, itmoves away from the sphere of exclusively social or pub lic interest activity; the mere fact thatit continues at the same time to pursue an aim in the general inte rest. . . and does not seek tomak e a profit is no longer sufficient for it to be denied the status of undertaking within themeaning of competition law." (.MOTOE , quoted by McKechnie J.) In other words, a publicentity, including a body w ith public or governmental pow ers and which generally operates inthe public interest, may act commercially, and when it does so, it is no longer acting in itspublic or governm ental capacity; rather, it becomes an econom ic agent, an undertaking.The crucial question for this case, however, is when, and in what circumstances, a publicentity is considered to be carrying out public adm inistrative functions which are connectedwith the exercise of public or governmental powers, as opposed to comm ercial or econom icor activities which are not. I believe the answer is provided by contrasting the Eurocontrolcase referred to above with Case T-196/04 Ryanair v. Commission of the EuropeanCommunities , both of which are discussed at some length by McKechnie J. Eurocontrol isthe European Organisation for the Safety of Air Navigation. Its function is to establish andcollect charges levied on users of air navigation services. In determining whether Eurocontrolwas an undertaking or whether its activities fell within the exe rcise of sovereign oradministrative pow ers, and thus outside the scope of the comp etition rules, ECJ examined itsactivities and noted, among other things, that "Eurocontrol is required to provide navigationcontrol in that air space for the benefit of any aircraft travelling through it, even w here theowner of the aircraft has not paid the route charges owed to Eurocontrol". The ECJconclude d: "Taken as a wh ole, Eurocon trol's activities, by their nature, their aim and therules to which they are subject, are connected with the exercise of powers relating to thecontrol and supervision of air space which are typically those of a public authority. They areno t of an economic nature justifying the application of the Treaty rules of competition."In contrast, in the Ryanair case, the ECJ found that "[t]he fixing of the amount of landingcharges and the accompanying indemnity is an activity directly connected with themanagement of airport infrastructure, which is an economic activity". The ECJ explained:"[A]lthough such activities are carried out in the public sector, they cannot, for that reasonalone, be categorised as the exercise of public authority pow ers. Those activities are not, byreason of their nature, their purpose or the rules to which they are subject, connected with theexercise of powers w hich are typically those of a public authority".In addition, I have had regard to the O pinion of the Advocate General in Case C -3 90/98 H.J.Banks & Company Ltd v. The Coal Authority and the Secretary o f S ta te for Trade andIndustry , a case involving issues regarding State aid. The backgroun d to the case iscomplicated, but it is sufficient to note for the purposes of this case that a distinction wasmade between the "public functions" of the Coal Autho rity, i.e. its licensing functions, andthe private, commercial nature of its leasing functions, though both types of functions were

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    statute-based. Moreover, the fields of pub lic investment and public disposal of assets wereexpressly described as "State commercial activity".ConclusionI conclude that public administrative functions are activities connected w ith the exercise ofpub lic or sovereign pow ers, i.e. activities wh ich are typically governm ental in nature. Theyare activities which, "by their nature, their aim and the rules to which they are subject, areconnected with the exercise of po wers . . . which are typically those of public authority."Such functions generally involve the exercise of supervision and control, with the typicalexample being regulatory functions. Public ad ministrative functions are distinct fromactivities which are economic or com mercial in nature, even if the economic or commercialactivities are performed by a public sector body on a statutory b asis and in the public interest.In my view, this interpretation is also consistent with the Aarhus Guide.Conclusion Regarding the Status of NAMAAs the European Central Bank found in its opinion of 31 August 2009 on the establishment ofNAMA, available at www.nama.ie, NA MA qualifies as a "public undertaking". Its functionis asset managem ent w ith the aim of securing the best achievable financial return for theState, which is undoubtedly comm ercial in nature. Asset managem ent is certainly notconsidered to be a typical governm ental function; i.e., it is not one that, under normalcircumstances, any public authority w ould normally be expected to perform. Participation bycredit institutions in the asset ma nagem ent schem e is voluntary and in fact selective; thus,NAMA is not exercising powers of supervision and control over a general area of thefinancial system. On the contrary, relevant regulatory pow ers remain w ith the Central Bankand Irish Financial S ervices Regulatory A uthority (section 3 of the Act refers).NAMA has been granted certain special powers which, as the European Commission hasobserved , are not available to "traditional market players". How ever, the pow ers are entirelydiscretionary and in fact subject to certain comm itments which have been agreed between theMinister and the Comm ission. In other words, NAM A is under no duty to exercise thesepowers, as is the case in relation to regulatory powers, for instance. Moreover, the pow ers arenot typically those of a governmental authority. The power which most resembles a power ofa governmental authority is the power to compulsorily acquire land (section 158 of the Actrefers). However, unlike a local authority, NAM A's power is subject to court order (section159 of the Act refers). Also, NAM A's powers serve no public purpose, such asimplementation of a Developm ent Plan, apart from enabling NAM A to obtain the bestachievable return for the State as efficiently as possible. The Com mission itself described thepurpose of the powers, and other special rights and exemp tions granted to NAM A, as "to helpthe agency achieve the maximu m recovery value for the assets". In other words, they arecommercial powers.I further note that, in its decision dated 26 February 201 0, available at www.nama.ie, theCom mission found that the asset relief scheme constitutes State aid under Article 107(1) ofthe Treaty on the Functioning of the European Union (TFEU), but, subject to thecomm itments referred to above, the aid is considered perm issible under Article 107(3)(b) inorder "to remedy a serious disturbance in the Irish economy". Arguably, NAM A could beviewed as "administering" the aid in the sense that it manages the asset relief scheme.How ever, the scheme qualifies as State aid because of the favourable financial arrangementsin place, not because of any public or special powers or rights conferred on NAM A in

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    violation of Article 106 of the TFEU. Moreover, while the financial arrangements includeState guaranteed bond s, it is the M inister, not NAM A, w ho issues the guarantee (sections48(3) and 50(2) of the Act refer). It is also the Minister, not NAM A, who m ay draw from theCentral Fund (section 47 of the Act refers). Moreover, it is relevant to note that the provisionof State aid itself is no longer a normal governmental function for EU Member States,because it is "incom patible with the internal market" (Article 107(1) of the TFEU refers).Hence, even where it is considered to be "compatible" because of exceptional circumstances,as is the case with the asset relief scheme, it is subject to "constant review" by theCom missioner (A rticle 108(1) of the TFEU refers).I conclude that NA MA is an economic agent for the State, but not one that performs publicadministrative functions. NA MA therefore is not a public authority for purposes of the AIERegu lations. In the circumstan ces, it is not necessaiy to consider whether it holds, or maypotentially hold, environmental information.

    Melanie CampbellInvestigator29 June 2010

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