RAG Foundation: Legal Background and Organization
The RAG Foundation is a legally capable foundation under civil law with special significance for managing the financial, social, and ecological consequences of German hard coal mining. The following outlines the legal basis, organizational structure, tasks, control mechanisms, as well as financing and tax aspects.
Legal Form and Establishment
Legal Foundations of the Foundation
The RAG Foundation was established in 2007 in accordance with the provisions of the German Civil Code (BGB) and pursuant to the respective state foundation laws as a legally capable foundation under civil law. Such foundations are assets set up for the long term, serving a specific purpose defined by the founders and subject to state supervision.
Articles of Association and Recognition
The main legal basis of the RAG Foundation is its statute, which particularly governs the foundation’s purpose, organization, use of funds, and oversight. The RAG Foundation was officially recognized by the District Government of Düsseldorf and is therefore subject to the legal supervision of this state authority. The statute can only be amended under strict legal requirements if such amendments are necessary for the fulfillment or permanent assurance of the foundation’s purpose.
Foundation Purpose and Tasks
Securing Perpetual Obligations
One of the main purposes of the RAG Foundation is to ensure the so-called perpetual obligations associated with hard coal mining in Germany, particularly in the Ruhr area, Saarland, and Ibbenbüren. These include measures related to water management, mine water and surface water management, and groundwater purification. These obligations stem from the responsibilities of former coal mining operations and must be fulfilled permanently after their cessation.
Social Obligations
Additionally, the foundation assumes social obligations such as the provision of miners’ pensions, adjustment payments, and other benefits for former employees of the hard coal mining industry.
Promotion of Education, Science, and Culture
In addition to its obligations, the foundation finances projects in the fields of education, science, and culture related to the mining industry in order to foster innovation and structural change in the affected regions.
Organization and Administration
Foundation Bodies
According to its statutes, the RAG Foundation consists of the following bodies:
- Executive Board: Responsible for managing and representing the foundation; makes operational decisions.
- Supervisory Board: Highest supervisory body responsible for appointing and overseeing the executive board as well as strategic direction.
- Foundation Council: Advises the executive board and supervisory board on certain matters.
Legal Supervision
In accordance with the foundation law of the state of North Rhine-Westphalia, the RAG Foundation is subject to ongoing state legal supervision. The oversight particularly ensures compliance with the foundation’s purpose and the proper use of foundation funds.
Financing and Asset Management
Foundation Capital and Income
The assets of the RAG Foundation consist of contributions from RAG AG and strategic equity investments, especially in Evonik Industries AG. The perpetual obligations are primarily financed from the returns on the foundation’s assets and, if necessary, through distributions from the subsidiaries. The foundation thus acts as a major shareholder and secures its obligations through a conservative investment strategy in accordance with applicable foundation and capital market regulations.
Transparency and Financial Reporting
The foundation is obliged to publish an annual financial statement and an activity report each year. Bookkeeping and accounting are subject to internal and external audit mechanisms, in particular an audit in accordance with the German Commercial Code (HGB).
Tax Aspects
Non-profit Status
Due to its permanent purposes in the public interest, the RAG Foundation falls under the tax category of non-profit organizations, resulting in significant exemptions from corporate income and trade tax. Donations to the foundation can be claimed for tax purposes, provided they are properly evidenced and certified.
VAT Treatment
The foundation’s commercial activities are subject to the general VAT provisions, provided they exceed the scope of the dedicated activities. Income from pure asset management is generally exempt from VAT.
Legal Relationships with Affiliated Enterprises
Shareholdings and Influence
The RAG Foundation holds significant stakes in several industrial companies, granting it participation rights and oversight powers under the German Stock Corporation Act (AktG). In particular, duties of loyalty and disclosure obligations exist towards these companies.
Prevention of Conflicts of Interest
Statutory and statutory regulations ensure that the foundation pursues no self-serving but exclusively foundation-related objectives. The governing bodies are obliged to exercise their mandates impartially.
Conclusion
As a legally capable foundation under civil law, the RAG Foundation represents a significant instrument for the permanent safeguarding of the ecological, social, and economic consequences of coal mining. Its complex legal framework, wide-ranging tasks, and comprehensive control mechanisms ensure sustainability and legal certainty in fulfilling its long-term obligations. The foundation is under strict state supervision and extensive transparency and accountability obligations, which guarantee proper and purpose-driven asset management.
Frequently Asked Questions
What legal form does the RAG Foundation have?
In accordance with the provisions of German foundation law, the RAG Foundation is a legally capable foundation under private law based in Essen. Its legal basis is the articles of association recognized by the District Government of Düsseldorf on June 26, 2007, which are regularly adapted by the foundation’s executive board and council to reflect current conditions. The foundation is independent, meaning it has its own legal personality and acts in its own name, especially with regard to its extensive equity interests. Its asset management and use of funds are subject to the legal requirements of the German Civil Code (BGB), especially §§ 80 ff. BGB, as well as supplementary foundation law regulations of the state of North Rhine-Westphalia, where the RAG Foundation is based.
Who is legally responsible for supervising and monitoring the RAG Foundation?
The RAG Foundation is subject to state supervision by the Foundation Supervisory Authority of North Rhine-Westphalia. According to the StiftG NRW, compliance with statutory and legal regulations in the use of foundation funds, adherence to the founder’s intentions, and the proper management of assets are particularly monitored. The foundation’s governing bodies, consisting of the executive board and the foundation council, are legally obliged to conduct their business affairs properly and are continuously monitored by the supervisory authority. In addition, the annual financial statements are audited regularly by independent auditors and must meet the requirements of the German Commercial Code (HGB). This ensures transparency and prevents mismanagement or misuse of foundation funds.
How is the liability of the RAG Foundation regulated?
As an independent legal entity, the RAG Foundation is liable for its obligations with its own assets. The governing bodies (executive board and foundation council) are personally liable only in the event of a breach of duty or gross negligence, with claims against board members being asserted under the general principles of the BGB, especially § 823 BGB (tort liability), as well as under specific foundation liability provisions. For other obligations, particularly those arising from the ongoing fulfillment of the foundation purpose, only the foundation’s assets are relevant. The personal assets of board members remain unaffected unless intentional or grossly negligent misconduct occurs.
Is the RAG Foundation a non-profit entity and what legal requirements must it fulfill for tax purposes?
According to its articles of association and certification by the competent tax authorities, the RAG Foundation pursues exclusively charitable and benevolent purposes within the meaning of the Fiscal Code (AO), especially §§ 51 ff. AO. This entails an obligation that all funds may only be used for the defined charitable purposes; private use is excluded. Recognition as a non-profit foundation provides the RAG Foundation with tax advantages, such as exemption from corporate income tax and trade tax, as well as the ability to issue donation receipts. Compliance with non-profit requirements is regularly reviewed by the Corporate Tax Office in Essen.
What special legal obligations exist regarding perpetual tasks?
According to the Coal Financing Act and its own statute, the RAG Foundation is obliged to finance the so-called perpetual tasks – namely groundwater management, mine water drainage, and polder measures. These obligations are legally binding, meaning that the foundation is required permanently and independently of other commercial success to provide sufficient funds for these tasks. The legal design of these obligations occurs in close cooperation with the respective supervisory authorities and is also of great importance for the protection of the environment and the affected regions. These provisions are also subject to constant review and adaptation to changing conditions by the foundation itself and the competent authorities.
Can beneficiaries or third parties assert legal claims against the RAG Foundation?
As a rule, the foundation’s benefits, particularly in the context of perpetual tasks and charitable activities, are voluntary and do not establish any legal claim for third parties or individual beneficiaries unless expressly specified. Individual claims arise only within the framework of statutory obligations, such as existing contracts with suppliers or under public law regulations. As part of its charitable activities, the foundation decides at its own discretion on the use of its funding within the limits set by the articles of association and the law. Any claims for damages by third parties are governed by the usual civil law provisions, with liability limited to the foundation’s assets.
To what extent is the RAG Foundation required to provide information about its activities?
According to the requirements of foundation law and respective state legislation, the RAG Foundation has a limited obligation to provide information to supervisory authorities. A broader duty to provide information to the public exists only as required under transparency regulations (e.g., disclosure of annual financial statements) or specific legal provisions (e.g., Environmental Information Act). Internal decision-making processes of the foundation are generally not subject to a general obligation of disclosure, although the foundation regularly publishes reports on its activities, particularly regarding the use of funds and fulfillment of perpetual obligations, in the interest of transparency.
