Mandatory Exnovation Measures and the Freedom to Conduct a Business

By R. Feltkamp
Published on December 20, 2023

A transition towards a more sustainable society, requires departing from production methods, products, services or activities that are considered unsustainable.

Where this is not done on a voluntary basis public authorities are taking or intend taking so-called “exnovation” measures to ensure that these unsustainable production methods, services or activities are restrained or banned. These measures are urgently needed in light of the climate, ecological and environmental disruptions our society is facing and which jeopardize life and our wellbeing on our planet.

Nevertheless, these measures highly impact both businesses and individuals since they are obliged to comply with these measures. For business this implies that they are obliged to adapt their business organisation and production methods. For individuals this implies that they must adapt their consumption pattern.

In this context, the questions arises to what extent a public authority is entitled to interfere with the private interests of individuals and impose such measures in light of the basic freedom of self-determination.

The paper "Mandatory Exnovation Measures and the Freedom to Conduct a Business" of March 2023 assesses this question from the standpoint of businesses, whose freedom of self-determination is expressed in the freedom to conduct a business. The assessment is made in the context of the research project Gosete conducted by the VUB-ULB financed by Innovirs. That is why the assessment takes some measures of the Brussels Capital Region as example.

The conclusion of the assessment is that the freedom to conduct a business is not absolute. It can be limited in the context of exnovation measures, particularly where such measures aim at limiting the violation of fundamental rights and freedoms of others (such as the right to life, to good health, to private life, … that are being compromised by the unsustainable activities of others).

Such restrictions must however comply with different conditions. These conditions differ from the perspective of EU law and Belgian law. However, we defend that restrictions to the freedom to conduct a business are likely to always be governed by the conditions of the EU law (either the Charter of Fundamental Rights of the European Union or the European Convention on Human Rights). This implies that limitations must i) be set by a sufficiently precise law, ii) that the essence of the freedom to conduct a business may not as such be ruled out, iii) be justifiable by an objective of general interest (including balancing of conflicting fundamental rights or freedoms), iv) that the measure must be necessary in a democratic society, and iv) be proportionate to the objective to be reached.