EFTA SURVEILLANCE AUTHORITY
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1 EFTA SURVEILLANCE AUTHORITY COLLEGE Brussels, 24 September 1999 Doc. No: D / Dec. No. 233/99/COL Ref. No: SEA REASONED OPINION delivered in accordance with Article 31 of the Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice regarding the Act referred to in point 1 of Annex VI to the EEA Agreement (Council Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community) A. The complaint and correspondence with the parties By a letter dated 6 June 1995 Ms. Unni Gjellesvik lodged a complaint with the EFTA Surveillance Authority against Norway alleging that the Norwegian Ministry of Health and Social Affairs refused to apply national social security legislation in her respect. Ms. Gjellesvik, a Norwegian national married to a French citizen, worked as a radio operator for Statoil A/S, an oil company fully owned by the Norwegian State, on the oil platform "Gullfaks A" on the Norwegian continental shelf. In a letter of 4 April 1995 to the National Insurance Administration (Rikstrygdeverket) she applied for coverage under the National Insurance Scheme, as her family was about to move from Denmark to France. She pointed out that neither she nor her husband were covered by the French social security scheme as they did not work in France. In its answer to the complainant the Insurance Administration stated that since there were no provisions in the National Insurance Act (Lov om folketrygd) No 12 of 17 June 1966 concerning the social security rights for persons working on the continental shelf, the Norwegian practice was based on an interpretation of other legislation on the continental shelf. As the complainant had her residence outside Norway, only the provisions of the Act concerning occupational injury applied to her. Norwegian Mission to the European Union Rue Archimede, Brussels Rue de Treves 74, B-1040 Brussels, Tel: (+32.2) , Fax: (+32 2) X400:/S=REGISTRY/0=SURV/P=EFTA/A=BT/C=BE - Internet: registry@surv.efia.be Homepage:
2 t>age2 In its letter of 29 August 1995 (Doc. No: D) the Authority informed the Norwegian Government of the complaint. The Authority referred to Council Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (hereinafter referred to as "Regulation 1408/71"), stating that according to the complainant the Norwegian authorities did not apply the Regulation to her. As the complainant had given approval to disclose her identity, a copy of the complaint was enclosed to the letter. The Government was invited to submit any information deemed useful for the examination of the complaint. In a communication of 31 October 1995, transmitting a letter from the Ministry of Health and Social Affairs of 27 October 1995, the Norwegian Government submitted the requested information. The Government's position in the matter at hand can be summarized as follows: (a) (b) (c) (d) the EEA Agreement, in accordance with its Article 126(1), only applies to the territories of the EEA States. the Norwegian sector of the continental shelf which lies beyond four nautical miles from land is not Norwegian territory, and Norway is therefore not obliged to apply Regulation 1408/71 in relation to work on installations on the continental shelf. according to information received from several EC Member States, Community regulations in the field of social security, including Regulation 1408/71, do not (de facto) apply with regard to activities or work on the continental shelf outside territorial waters. if Regulation 1408/71 did apply to the continental shelf it would not have been possible for Norway to uphold and continue, as it has done, certain bilateral conventions on social security with EC Member States. (e) any alterations in the obligations of an EFTA State under Regulation 1408/71 would require the same changes in its application to the other EEA States. (f) (g) under the National Insurance Act 1 the King may lay down rules on the application of the Act to persons gainfully occupied in exploration and exploitation of submarine natural deposits on that part of the continental shelf which is subject to Norwegian sovereignty, but however, such rules have not been adopted. the Norwegian practice is that persons working on permanent and mobile installations and devices engaged in petrol activity on the Norwegian continental shelf are subject to the National Insurance Act only in so far as they are residents in Norway or - according to reciprocal provisions of the 1992 Nordic Convention on Social Security 2 - in another Nordic State, (the provisions of the Act concerning occupational injury apply to such workers irrespective of their place of residence). 1 2 National Insurance Act of 17 June 1966 No.12, Section 1-2 (3), fourth paragraph. Article 7.
3 ''PageS B. The letter of formal notice and further developments After having assessed the above-mentioned information, the Authority, on 10 June 1997, issued a letter of formal notice to the Norwegian Government concluding that Norway is in breach of Article 13(2)(a) of Regulation 1408/71 by not applying the National Insurance Act in the same manner to a Norwegian citizen who works on the Norwegian continental shelf for a Norwegian employer established in Norway, but resides in France, as it applies the Act to workers who are otherwise in the same situation, but reside in Norway or in another Nordic State. Article 13(2)(a) states that a person employed in the territory of one Member State shall be subject to the legislation of that State even if he resides in the territory of another Member State or if the registered office or place of business of the undertaking of individual employing him is situated in the territory of another Member State. In its reply of 15 December 1997, the Norwegian Government stated that the Authority's considerations "appear to be based on the view that the scope of application of Article 126(1) of the EEA Agreement and Article 227 (now, after amendment, Article 299; text added by the Authority) of the EC Treaty are identical". The Government's opinion is that there are several characteristics that clearly distinguish the scope of application of Article 126 of the EEA Agreement from Article 299 (ex Article 227) of the EC Treaty, and therefore, the Government disagrees with the Authority's assessment with regard to the scope of application of Article 126 of the EEA Agreement. The Government did not go into further detail about these characteristics. However, the Government informed the Authority that it was considering "whether the Regulation on other merits should be applied to persons employed on the Norwegian continental shelf". Due to the complexity of the issue and to the fact that a change of the legal situation would necessitate amendments to the National Insurance Act and probably other acts as well, further work was still needed before the Government could have a sufficient basis for taking a decision on whether to present a proposal on the matter to the Parliament. During 1998 the subject matter was subject to discussions between the competent Norwegian authorities and the Authority, but the Authority has so far not been notified of any decision by the Norwegian Government regarding amendments to the national legislation in order to apply Regulation 1408/71 to persons working on the Norwegian continental shelf. The legal situation concerning workers on the Norwegian continental shelf has been subject to a change of principle as of 1 May 1997, but the factual situation remains unchanged. As explained above under A(f), the former legislation did not contain any substantial provision concerning social security affiliation for workers on the Norwegian continental shelf, but only a possibility to lay down such rules. Those workers who were residents in Norway were compulsorily insured under the Norwegian Insurance Scheme, but according to the Norwegian Government this was only due to their status as residents in Norway.
4 '"Page 4 As stated by the Norwegian Government 3 the new provision, Section 2-4 of the National Insurance Act (Lov om folketrygd) of 28 February 1997 No 19, entails that all workers who are involved in activities related to exploration for or exploitation of petroleum resources, gas resources or other natural resources are compulsorily insured under the National Insurance Scheme provided that the workers in question are residents in Norway. Those workers, who do not have residence in Norway, will have a limited membership in so far as only the provisions of the National Insurance Act concerning occupational injury apply to them as the situation was before the amendment of the National Insurance Act. The membership of the National Insurance Scheme is now linked directly to the working activities on the Norwegian continental shelf. C. The Authority' assessment First it has to be determined whether the EEA Agreement and Regulation 1408/71 apply to an EEA national who works on a permanent oil platform attached to the seabed in an area on the continental shelf belonging to Norway. In other words, it has to be considered whether the complainant's situation falls within the sphere of application of the EEA Agreement. Article 126(1) of the EEA Agreement states that the Agreement applies to the territories to which the EC Treaty is applied and under the conditions laid down in that Treaty, and to the territories of the EFTA States parties to the EEA Agreement. A strictly limited geographical definition of territory in accordance with international law would not include the continental shelf belonging to an EC or EFTA State. The Authority is of the opinion that the wording of Article 126(1) does not exclude the present case from falling within the scope of the Agreement as the sphere of application of Regulation 1408/71 is to be defined in a functional manner, and in the light of the object and purpose of the EEA Agreement, notably its aim to promote the respect of the same rules with a view to creating a homogeneous European Economic Area. When considering whether to incorporate the Licensing Directive (94/22/EC) into the EEA Agreement the Norwegian Government stated that the sphere of application of Community legislation is to be defined in a functional manner, and that the Licensing Directive has been considered in relation to the functional sphere of application of the EEA Agreement. Furthermore, the Government stated that the Licensing Directive covers trade activities falling within the scope of the EFTA States' participation in the EC internal market and thus, within the reciprocal agreement of the EEA. Both the petroleum activities as such and markets and trade generated from these activities constitute essential sectors of the economic activity in relation to EU and EEA 4. The Authority supports the Norwegian view, and also shares the opinion that the petroleum activities as such and markets and trade generated from these activities constitute economic activities which fall within the scope of the EEA Agreement. It follows that persons performing these activities cannot be excluded from the scope of application of the EEA Agreement. 3 Ot.prp.nr ,5.1.2, first paragraph. 4 St.prp.nr page 4.
5 "Page 5 By the time the EEA Agreement was negotiated it was already settled case law that the sphere of application of the Treaty is not restricted to Member States' territories, but can stretch beyond such territory - in so far as the Member States exercise sovereign rights under general international law 5. The view mentioned above has also been confirmed by more recent case law from after the signing of the EEA Agreement. In Case C-214/94 Ingrid Boukhalfa v Bundesrepublik Deutschland 6 the European Court of Justice recalls that Article 299 (ex Article 227) of the EC Treaty does not preclude Community rules from having effects outside the territory of the Community as long as the employment relationship retains a sufficiently close link with the Community. The Court expressly declares that this principle must be deemed to extend also to cases in which there is a sufficiently close link between the employment relationship, on the one hand, and the law of a Member State and thus the relevant rales of Community law, on the other. According to international public law a coastal State exercises sovereign rights over its continental shelf for the purpose of exploring it and exploiting its natural resources 7. The Authority's opinion is that the Norwegian legislation on social security on the continental shelf, both the former and the current one, is sufficient evidence that Norway exercises sovereign rights with respect to the workers involved in petroleum activities on the Norwegian continental shelf. In the Authority's view the complainant's employment relationship is closely linked with Norway's territory and its continental shelf, both formally - the employer Statoil A/S is a Norwegian company having its head office in Norway and the activity carried out is subject to Norwegian jurisdiction - and functionally - the work now in question is performed on the Norwegian sector of the continental shelf. There appear to be no factors linking the complainant's employment relationship in any manner with another State. Another objective of the Agreement is to strengthen trade and economic relations between the Contracting Parties with equal conditions of competition. According to Article 3 EEA the Contracting Parties shall abstain from any measure which could jeopardise the attainment of the objectives of the EEA Agreement. A situation where the EC Member States would apply the EC rules on social security with regard to their continental shelves when at the same time the EFTA States would not apply the same rules may jeopardise the competition between the undertakings carrying out activities on the continental shelves. The European Court has ruled 8 that as institutional acts adopted on the basis of the Treaty, regulations apply in principle to the same geographical area as the Treaty itself. The Court has also observed 9 that Regulation 1408/71 must be interpreted in the light of the spirit and of the objective of the EC Treaty 10 and of Articles 39 to 42 (ex Articles 48 to 51) of the Treaty. 5 See Cases 3/76, 4/76 and 6/76 Kramer etal. [1976] ECR 1279 p [1996] ECR , paragraph See Article 77(1) and (3) of the Convention on the Law of the Sea of 10 December Case 61/77 Commission v Ireland [1978] ECR 417, paragraph Case 50/75 Caisse de Pension des Employes Prives v Massonet [1975] ECR 1473, paragraph Case 17/76 Brack v Insurance Officer [1976] ECR 1429, paragraph 19.
6 " Page 6 In view of what has been said above, the Authority considers that the EEA Agreement and Regulation 1408/71 apply to EEA nationals who work on a permanent oil platform attached to the seabed in an area on the continental shelf belonging to Norway. Title n of Regulation 1408/71, which lays down the rules on the determination of the national legislation applicable to persons subject to the Regulation, constitutes a complete and uniform system of conflict rules, as stated by consistent case-law of the European Court of Justice 11, and those provisions are intended also to ensure that the persons covered by Regulation 1408/71 are not left without social security cover because there is no legislation applicable to them. Under Article 13(1) of the Regulation persons to whom the Regulation applies shall be subject to the legislation of a single EEA State only, and under Article 13(2)(a), the general rule, a person employed in the territory of one EEA State shall be subject to the legislation of that State even if he resides in the territory of another EEA State. The European Court of Justice 12 has observed that Article 13(2)(a) would have no practical effect if the residence condition laid down by the legislation of the EC Member State in whose territory the person is employed for affiliation to the insurance scheme which it establishes could be relied on against the persons referred to in Article 13(2)(a); with regard to those persons, the effect of Article 13(2)(a) is to replace the residency condition with a condition based on employment in the territory of the Member State concerned. The Authority considers that the residence condition required under Section 2-4 of the Norwegian National Insurance Act prevents EEA nationals, who perform occupational activities in relation to exploration for or exploitation of petroleum resources or other natural resources on the Norwegian continental shelf, from being affiliated with the Norwegian National Insurance Scheme as long as they do not reside in Norway or in another Nordic State. The Authority must therefore conclude that Norway, in doing so, is in breach of Article 13(2)(a) of Regulation 1408/71. FOR THE ABOVE REASONS, THE EFTA SURVEILLANCE AUTHORTTY, Pursuant to the first paragraph of Article 31 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice, and after having given the Norwegian Government the opportunity of submitting its observations, DECLARES AS ITS REASONED OPINION that Norway, by requiring EEA nationals, who perform occupational activities in relation to exploration for or exploitation of petroleum resources or other natural resources on the Norwegian continental shelf, to reside in Norway in order to obtain affiliation with the Norwegian National Insurance Scheme, Norway has failed to fulfil its obligations under Article 13(2)(a) of the Act, referred to in point 1 of Annex VI to the Agreement, on the application of social security schemes to employed persons, to self-employed persons and 11 Case C-2/89 Kits van Heijningen [1990[ ECR1-1755, paragraph Kits van Heijningen, paragraph 21.
7 "Page 7 to members of their families moving within the Community (Council Regulation (EEC) No 1408/71). Pursuant to the second paragraph of Article 31 of the Surveillance and Court Agreement, the EFTA Surveillance Authority requests the Norwegian Government to take the necessary measures to comply with this Reasoned Opinion within two months following notification thereof. Done at Brussels, 24 September 1999 For the EFTA Surveillance Authority Bernd Hammermann College Member Petef Dyrberg Director
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