Volume 9 Number 4

Fall 2000

Constitutional Watch
     A country-by-country update on constitutional politics in Eastern Europe and the ex-USSR

Estonia - As Estonia was settling into its summer holidays, President Lennart Meri touched off a major controversy by deciding to dismiss armed forces’ chief of staff, Lieutenant General Johannes Kert. Although acting in response to a recent conflict between the general and Defense Minister Juri Luik, Meri dismissed Kert by taking advantage of an open-ended letter of resignation the general had submitted a year earlier.

On June 30, barely a week after Kert had returned from a year-long period of study in the United States, President Meri summoned him to his office and announced that he was "accepting" the general’s letter of resignation, from May 18, 1999, in which the general had offered to leave after members of a secret special-forces unit were caught in an extortion scandal. (See Estonia Update, EECR, Vol. 8, No. 3, Summer 1999.) At the time, Meri had refused to accept the resignation but retained the letter. Now, more than a year later, he countersigned the letter.

The controversy between the general and Defense Minister Luik had been brewing since the beginning of this year over the minister’s plans to reorganize the military in advance of Estonia’s bid to enter NATO in 2002. While Kert favored a long-term development plan lasting till 2005, Luik argued for faster reform so that Estonia’s candidacy could be considered at the upcoming Madrid summit. (Before becoming defense minister, in 1999, Luik had served as the country’s ambassador to NATO.) The conflict remained unresolved, since constitutionally, the chief of staff is subordinated to the president and the Riigikogu, or parliament (Art. 127), and Kert resisted the minister’s calls to yield. With the support of Prime Minister Mart Laar, Luik thus turned to President Meri, who dusted off Kert’s year-old letter of resignation.

The dismissal prompted consternation among parliamentarians—both from the right-of-center coalition (the Pro Patria Union [PPU], the Reform Party [RP], and the Moderate Party [MP]) and the left-wing opposition (led by the Center Party [CP] and the People’s Union [PU])—since both Luik and Meri remained tight-lipped about the reasons behind the conflict. In addition to doubts about the ethics of using a year-old resignation letter, a number of deputies and lawyers claimed the president had violated the Constitution by unilaterally removing Kert before parliament had been allowed to vote on the dismissal. (According to Art. 78.11 of the Constitution, the president can appoint and dismiss the chief of staff with parliament’s approval.) Moreover, parliament had just begun its recess and would be unable to consider the issue for nearly two months.

The problem highlights a fundamental flaw in Estonia’s constitutional structure. Because the defense minister and chief of staff are each accountable to different people (the first to the prime minister and the second to the president), there has been no clear hierarchy of authority to resolve policy conflicts. In 1995–96, then–defense minister Andrus Oovel found himself in a similar stalemate with Estonia’s first chief of staff, Aleksander Einseln. After months of acrimony, Einseln agreed to leave voluntarily. Kert, however, was intent on taking the issue to parliament.

To quell the controversy, Meri agreed to hold a meeting on July 5 of the National Defense Council—a constitutionally mandated (Art. 127) advisory group consisting of the speaker of parliament, the armed forces chief of staff, the prime minister, the defense minister, the interior minister, the foreign minister, and the chairman of the parliament’s defense commission. After the meeting, council members supported the president although they reiterated that it was ultimately parliament’s decision. Many members also objected to the president’s desire to appoint a relatively inexperienced brigadier general as the new chief of staff, preferring instead the longtime commander of Estonia’s border patrol, Rear Admiral Tarmo Kouts.

On August 28, when parliament convened in special session, all three players involved—Meri, Luik, and Kert—took the floor. While Meri and Luik repeated their calls for Kert to be removed, Kert countered that the attempt to remove him through an old letter of resignation was illegal, and that he was ready to stay on as chief of staff if parliament so decided. The standoff placed the right-of-center coalition in a tight spot, since many deputies were miffed at the defense minister’s heavy-handed actions and threatened to vote against the general’s dismissal. But given Kert’s refusal to go quietly, many members of parliament also felt that Kert had endangered the principle of civilian authority over the military. The opposition defended Kert, inspired as much by a desire to tweak the president and government as out of respect for Kert.

In the end, parliament dismissed Kert by the slimmest of margins, 47–46, thanks in part to the surprise vote of one deputy from the opposition CP, who later claimed that he had voted "yes" by accident. Kouts was confirmed as the new chief of staff on September 21. Discussion of whether to amend the Constitution to avoid further conflicts of this sort was passed on to parliament’s constitutional-affairs committee, which is slated to prepare a list of amendments for consideration next year.vThe tensions that surfaced between the ruling coalition and the opposition during the Kert incident were indicative of deeper and more serious strains. Relations had already deteriorated over the government’s midsummer push to finalize, after five years of negotiations, a privatization deal with an American company, NRG Energy, to sell 49 percent of Estonia’s two main electricity plants for approximately $50 million. The contract terms contained important concessions to NRG, such as a guarantee that the Estonian electricity-distribution company, Eesti Energia, would purchase a fixed amount of electricity from NRG at a fixed price each year for the next 15 years, regardless of whether a cheaper source could be found. The stipulation represented NRG’s way of recouping its pledge to invest some $220 million in the two plants over the next several years.

In July, a number of opposition parties (led by PU) launched a petition drive to force the government to halt the talks. Over the next several weeks, the parties claimed to have gathered over 160,000 signatures against the deal. In addition, opinion polls showed that a majority of the public was opposed to the sale. In fact, there was considerable opposition even among members of Eesti Energia’s executive board (which had to approve the deal).

The opposition tried to contest the government’s preliminary decision, on June 27, to go ahead with the NRG deal by citing a parliamentary resolution from December 1998 calling on the government to submit all contracts involving the sale to parliament for approval. Nevertheless, intensive negotiations between the Minister of Economics, Mihkel Parnoja, and NRG finally led to a deal on August 25. Although the contract was not final (certain details remain open), a basic agreement was reached, and the controversy subsided.

In October, the opposition turned its attention to two other issues; first, President Meri’s nomination of a 28-year-old lawyer to be the country’s next legal chancellor (or ombudsman), and, second, an attempt to topple the ruling right-of-center coalition from power in Tallinn’s local government.

The post of legal chancellor had been vacant since midsummer, after the seven-year term of the first officeholder, Eerik-Juhan Truuvali, had expired. According to Art. 140 of the Constitution, the legal chancellor is nominated by the president and confirmed by parliament. However, after Truuvali’s departure and facing a shortage of acceptable candidates, President Meri delayed nominating a replacement until mid-September. Finally, he opted for a young deputy chancellor at the Ministry of Justice, Priit Kama, a rising star in the legal profession. But Kama lacked a master’s degree in law and was viewed as too partisan for the sensitive legal post, having been a member of the right-wing PPU. On October 10, parliament rejected Kama, again by a one-vote margin, 50–49. On October 19, the opposition had a bigger victory when Edgar Savisaar (CP) engineered a no-confidence resolution in the Tallinn City Council against Mayor Juri Mois (PPU) and council chairman Rein Voog (RP). Ever since the municipal elections in October 1999, the same three-party coalition in power nationally had been ruling in the capital, together with the help of some independent deputies. After two deputies from the small Coalition Party decided to leave the alliance, the group began to teeter. Shortly thereafter, Savisaar succeeded in luring another three deputies, which brought the total number of signatures for his no-confidence motion to 33, just enough to form a new majority in the 64-seat council. The attack came as a surprise to the ruling coalition, which immediately began scrambling to restore its base. The outcome remained uncertain until the very morning of the final vote on November 2, when People’s Choice, a seven-member Russian faction in the council, suddenly announced it was abandoning its cooperation with Savisaar’s Center Party and joining the ruling coalition. In exchange, Mois had promised the faction a number of posts in the city government. As a result, the no-confidence ballot failed with just 24 votes.

Many commentators saw the episode as a major defeat for Savisaar. In addition to the shift in Tallinn politics, the Russians’ move was expected to add support to the ruling coalition in the national parliament. Because Juri Mois and his allies were able to cling to power only by making promises to other parties (including the arbitrary creation of posts in the city government), however, the outcome was commonly viewed as another example of cynical political horse-trading. vBetween late spring and early fall 2000, Estonia’s Constitutional Review Chamber (CRC) considered three cases, all submitted by lower courts for mandatory review. Under Estonia’s constitutional-review procedures, when a lower court invalidates a law, it must suspend the case and request a ruling from the five-member CRC. In June, the CRC heard a case submitted by the Tallinn Administrative Court that involved a set of regulations for registering buildings adopted by the director of the Estonian Housing Board in June 1995. The case originated with a woman from Tallinn, who had been refused an ownership certificate by the Tallinn buildings registry because her apartment allegedly had outstanding financial obligations. She took the local-housing board to court demanding the registry issue her a certificate. In the course of reviewing the case, the Tallinn court ruled that the regulations themselves were unconstitutional because they had been adopted by the director of the housing board, when, according to law, he had no lawmaking authority.

Under Art. 87.6 of the Constitution, one of the government’s functions is to "issue regulations and orders on the basis of and for the implementation of law." In practice, this means that all executive-branch institutions may only issue binding legal acts where they are specifically authorized to do so by a particular law. While the law may delegate this right to different levels of authority (ministers, department directors, local officials), there must always be a specific delegation of authority.

In the case of the housing board’s registration procedures, the lower court argued that the board (and its director) had been out of line, since, under Estonia’s Law on Government (which regulates the executive branch), board directors did not have the right to issue legally binding acts; at most, they could issue directives on internal department matters. As a result, the court called for the nullification of the procedures.In arguments before the CRC, both the legal chancellor and the minister of justice agreed with the lower court and asked that the procedures be nullified. The minister of economics argued that although the procedures were probably illegal, their nullification would halt work in the registries and would foment chaos. In its final ruling, the CRC concurred with the Tallinn Administrative Court but agreed to leave the existing procedures in force until a new set was adopted by the appropriate authorities before September 1, 2000.

In the fall, the CRC heard a case involving a complaint by the Estonian state telecommunications company, Eesti Telefon, against the Estonian Competition Board. In May 1999, the board had issued a decree ordering Eesti Telefon to follow official state tender-and-purchasing rules in connection with a major telecommunications construction project. Eesti Telefon argued that it should be exempt because it was a private company. But the board maintained that, based on a provision in the competition law, all companies enjoying any market monopoly had to follow official procurement regulations, even if they were not state-owned.

Although the Tallinn Administrative Court had nullified the Competition Board’s decree, the case was appealed to the Tallinn District Court, which decided in February 2000 that the entire provision of the Competition Act mandating such purchasing procedures was unconstitutional. It reasoned that there was a gap in the law, according to which monopoly-type firms had to submit their purchasing projects to the State Procurement Board for approval, because under the State Procurement Act the board was authorized to deal only with state-owned companies. The court termed this gap a violation of the rule of law. Specifically, the court cited Art. 10 of the Constitution, which stipulates that "the rights, freedoms, and duties set out in this Chapter shall not preclude other rights, freedoms, and duties which arise from the spirit of the Constitution or are in accordance therewith, and conform to the principles of human dignity and of a state based on social justice, democracy, and the rule of law."

CRC justices concurred with the district court, referring to Art 13.2, which states "the law shall protect everyone from the arbitrary exercise of state authority." The CRC argued that the gap between the Competition Act and the State Procurement Act concerned the principle of legal clarity. In turn, if there were contradictions in the law, these could serve as the basis for an arbitrary exercise of state authority.To this decision, Chief Justice Lohmus submitted a weighty dissent, which argued that not only were the two legal acts in reasonable harmony, but that the district court had overstepped its bounds in agreeing to hear the case. Lohmus thought the two lower courts had dangerously overstretched the two constitutional articles cited. For example, Lohmus stressed that when any court refers to Art. 10 it must be with reference to a specific constitutional right deemed to have been violated. In the given case, the district court did not refer to Art. 31 of the Constitution, which governs freedom of entrepreneurship. With regard to the CRC’s use of Art. 13.2, Lohmus contended that the Chamber was contributing to a confusing proliferation of meanings given to a general constitutional principle, in this case, legal clarity and the arbitrary exercise of power.

Lohmus also argued that the Tallinn District Court (and by implication the CRC) had exceeded its constitutional-review functions by attempting to adjudicate abstract legal norms in a case where such functions are the prerogative of the president and legal chancellor. Under Estonia’s constitutional appeal procedures, all three institutions can appeal cases to the CRC, but the lower courts should restrict themselves to instances where laws are unconstitutional in formal legal terms and where they preclude the adjudication of a specific legal dispute. However, in the given instance, the district court expounded on the principles of rule of law and legal clarity, which traditionally have been beyond the mandate of lower courts; and Lohmus reprimanded the CRC for going along with the argument.

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