August 2016 - Increasingly in the context of administrative procedures (particularly in permitting procedures under the Building Act) we are confronted with the concept of systemic bias. Systemic bias refers to the situation where a decision on a matter (e.g. a zoning permit, building permit) cannot be granted by an officer of the competent administrative authority (typically a Building Authority) because in connection with their employment at the territorial self-governing unit (usually a Municipality) there is a real risk that their stance on the matter could be influenced by other than legal means. A risk of systemic bias of administrative authority officials exists primarily in situations where an administrative authority decides on permits directly or indirectly relating to such territorial self-governing unit. Systemic bias will always occur in situations where someone has an interest in a particular outcome and currently has or may have the ability to act on key relevant officials through their employment with the territorial self-governing unit.
As a result of a decision that was issued by a biased official (including the situation where due to systemic bias an entire administrative body is excluded from the decision making) is very crucial because such decision is impaired by a defect that would normally justify annulment of a contested decision. In addition, the period during which a decision can be challenged on the grounds of systemic bias is relatively long, because an objection against systemic bias can be exercised during an appeal. Although Section 14 paragraph 2 of the Administrative Code states that a late objection will not be taken into account, this does not mean that the deciding administrative body will automatically reject the objection due to late filing. On the contrary, the Supreme Administrative Court stressed that bias arises directly from law, and therefore the administrative body has the authority to informally examine an objection which if deemed relevant could be grounds for annulment of the first-instance decision.
With respect to the above risks, it is essential that investors dealing with the political representatives of local government concerning the implementation of construction projects take particular care if they request political representatives for political support, if the implementation of such construction project is also in the interest of a local self-governing unit, and especially if such meetings are attended by officials from territorial self-governing units who will be deciding under delegated powers on such matters.
Based on the current case-law of the administrative courts, below are various examples of conduct that will be burdened with a risk of systemic bias along with relatively "safe" limits for negotiations that won’t usually be impaired by systemic bias.
In its earlier ruling, the Supreme Administrative Court, while admitting bias of a particular officer of administrative authority through the potential influence of the officer by his employer (i.e., by the municipality or region), but rejected the idea of exclusion of the administrative authority as a whole due to the bias of all its officers, mainly because of the fact that the Administrative Code doesn’t contain any explicit regulation of systemic bias.
Since the above-mentioned judgment there has been an opinion shift in the case-law of the Supreme Administrative Court. The issue of systemic bias has been reopened in recent years by the expanded chamber of the Supreme Administrative Court and the existence of systemic bias has not only been accepted, but the basic general criteria for assessment of systematic bias have been set out.
In the presented case, the Municipality of Prague 7 authorised the felling of trees and clearing of shrub vegetation as part of construction of the Prague City Ring Road on the basis of an application submitted, inter alia, by the City of Prague. The case was brought before the Supreme Administrative Court, which referred the matter to the Chamber (in extended composition) of the Supreme Administrative Court. The Chamber in this resolution acknowledged the existence of the risk of systemic bias and emphasised the fact that in accordance with the Administrative Code the existence of doubts alone that a public officer might not be unbiased is sufficient justification for his/her exclusion. With regard to the current model of the public administration (particularly with regards to the efficiency and demands of decision making given the number of such cases) the Chamber recognised that officers cannot be excluded because of the risk of systemic bias in all pending cases in which this risk occurs. In accordance with the Administrative Code it would mean that the mere suspicion of being biased could ultimately lead to the exclusion of all officers of the administrative authority. With regard to the number of pending cases where the municipality itself (or region) is the applicant, a large number of cases would be burdened with a risk of systemic bias and a decision would have to be delegated to other bodies. Therefore, for the exclusion of an official other facts must be established that support the suspicion that as a result of his employment relationship the decision making of the public officer could be influenced by factors other than legal means, such as "(...) acts in the political or the media spheres that precede the relevant administrative proceedings or accompany them and indicate increased interest in the outcome of the proceedings on the part of people able to influence the procedure of territorial self-governing units as an employer of the officer. An example might be the interest of policy makers or other influential people in the relevant self-governing unit (e.g. the backstage players in local politics or business entities) on a particular outcome of the proceedings (e.g. the permitting or non-permitting of a certain construction or activity); such an interest can be traced from various media statements, pre-election promises, specific investment or other business accomplishments, previous efforts to steer related decisions in a certain way."
As follows from the above-cited decision of the Supreme Administrative Court, the criteria for systemic bias are very general and systemic bias must be considered "case by case". To determine which situations might be deemed suspicious in terms of systemic bias there is therefore nothing left but to wade through the practice of administrative courts and compare which behaviour is deemed biased and which is not.
Associated proceedings which are not zoning or territory proceedings are generally not burdened by systemic bias.
In the aforementioned case of the felling of trees systemic bias was not found by the Supreme Administrative Court. Even though the Supreme Administrative Court recognised that the permit for felling of trees was issued due to the implementation of the Prague City Ring Road, which is considered by the Supreme Administrative Court to be a very important and controversial project subject to frequent disputes and is therefore a major political issue, and even though the Supreme Administrative Court recognised that in some proceedings relating to the Prague City Ring Road the critical amount of "systemic risk bias" had already been exceeded, in the permit procedure for the felling of trees no grounds were identified for the existence of systemic bias. This conclusion is justified mainly by the fact that the tree felling permits were issued after the decision on the location of the construction had been issued and any political pressure on the outcome of the proceedings would be developed within the permitting process for the construction and not in the permitting process for the tree felling.
From the above-mentioned summary it can be concluded that the risk of systemic bias is usually very low in proceedings not related to the actual location or construction of a project, e.g. in proceedings to issue binding opinions or observations of the authorities concerned, which are the basis for the issuance of the decision itself, in the proceedings e.g. a permit for felling of trees outside forests or exemptions from the prohibitions concerning “monument” trees and protected species of plants and animals under the Act on the protection of nature and landscape (Act No. 114/1992 Coll.), etc.
Even in terms of intent being directly applied by the municipality, there is no systemic bias if there is no pressure on the deciding officer
The judgment of the Supreme Administrative Court dated 14 January 2016, file No. 47 A 31/2013 also shows that the fact that a municipality is the applicant in zoning proceedings on the location of a construction and that on the basis of this a local authority, as the applicable building authority, issues a zoning decision in the case, does not in itself constitute grounds for declaring bias. For exclusion due to systemic bias other specific circumstances must exist which demonstrate pressure on the authorising officer. Systemic bias was not found even in the case where the subject of proceedings is a request submitted by the mayor of the municipality that was then decided on by the mayor himself. The applicant and the officer who decided the case was therefore the same person.
A negative decision does not have to mean systemic bias
There cannot be an automatic presumption of systemic bias and a hostile relationship of the administrative authority just because of a negative decision, even where the complainant alleges bias on the part of officers and accuses them of bullying and being hostile for repeated failure to deal with objections.
Yes to a “party”, but not to a “round table meeting”
Behaviour that may cause bias of public officers is having “round table” meetings between state administration officers with specific responsibilities and representatives of the developer, if the output of the meeting "has the character of agitation for the unblocking a contested plan." If such negotiations are attended by officers from self-governing unit who exercise delegated powers and representatives of the developer, and as part of these negotiations they discussed construction or other projects, these officers could subsequently be excluded from deciding in the case if the administrative authority after consideration of all the facts concludes that the officers face a risk of bias. The Supreme Administrative Court stated that in such case there is given reason to doubt the unbiasedness of an officer because the attitude of officers could be affected due to their employment.
Round table meetings attended by a representative of the developer, the mayor and the head of the construction office are generally common and serve a practical purpose. However, with regard to the risk of systemic bias and the subsequent possibility of annulment of a decision it is necessary to avoid such negotiations, and in negotiations with the local government (mayor etc.) require that such negotiations are not attended by any person exercising delegated powers, in particular the head of the building authority.
On the other hand, the mere meeting of officials at a social level, e.g. at various social events, or the fact that the official person knows the party to the proceeding very well does not in itself establish bias.
Beware of political proclamations and media support of a plan
An objection concerning the bias of the officers was also found to be relevant in the case of Pilsen Gas (Plzeňská plynárenská), regarding the construction of an energy recovery plant for a municipal rubbish dump in Chotíkov. In this case, the Regional Court of the Pilsen Region stated that the realisation of that project is not a standard event, in part because of the media interest related to the project. Another factor that played an important role in the matter was the previous local referendum and the great interest of environmental associations. Last but not least the commitments of the Pilsen Region and the City of Pilsen to do everything within their power to implement the plan were taken in consideration.