No decision on environmental damage caused by former GDR companies

A funding dispute between the federal government and the states of Saxony and Thuringia regarding the costs of cleaning up environmental damage caused by former GDR state-owned companies remains unresolved at the Federal Constitutional Court. The highest German court rejected applications by the two federal states as inadmissible, according to information from Wednesday. They had not sufficiently demonstrated their right to file an application and had also not shown any constitutional obligation on the part of the Federal Republic of Germany to (proportionately) bear future costs for the remediation of contaminated sites. The Second Senate in Karlsruhe ruled that such an obligation had not been demonstrated either with regard to the Basic Law or unwritten constitutional principles. (Ref. 2 BvG 1/19 and 2 BvG 1/21)

The background to this are agreements made in the course of reunification. Former state-owned companies in the GDR were transferred to the federally owned Treuhandanstalt and privatized by the latter. In many cases, the Treuhand agreed indemnities with investors for environmental damage caused by these companies.

In 1992, the federal government and the East German states concluded an agreement regulating the financing of environmental contamination. According to the press release, this agreement provides, among other things, for a distribution of the exemption costs for ecological contaminated sites between the Treuhand (60 or 75 percent) and the respective state (40 or 25 percent). As a result of practical difficulties in implementation, some states concluded general contracts with the Treuhand.

As the clean-up costs in Saxony and Thuringia exceeded the estimated budget, the two states want to renegotiate. On the federal side, the Federal Ministry of Finance and the Federal Agency for Real Estate are currently responsible. According to further information from the court, they reject renegotiations.