Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) providing for an offer of compensation to certain producers of milk and milk products temporarily restricted in carrying out their trade` () (98/C 410/07)

On 29 September 1998 the Council decided to consult the Economic and Social Committee, under Articles 43 and 198 of the Treaty establishing the European Economic Community, on the above-mentioned proposal.

The Economic and Social Committee decided to appoint Mr Nilsson as rapporteur-general to draw up its opinion.

At its 358th plenary session of 13, 14 and 15 October 1998 (meeting of 15 October) the Economic and Social Committee adopted the following opinion by 99 votes to one.

1. Background

1.1. When the additional levy scheme in the milk and milk products sector and the related individual milk quota scheme were introduced in 1984, some producers who had not delivered or sold milk for a certain period before implementation were excluded. The Commission claimed that they had participated in a special scheme - Regulation (EEC) No 1078/77 - and that they had thus entered into a special undertaking under that regulation, and were consequently not entitled to quotas.

1.2. Several of these producers took legal action, and the Court of Justice handed down a number of rulings in which certain provisions of the Community legislation were declared invalid. Council Regulation (EEC) No 857/84 was subsequently amended, first by Regulation (EEC) No 764/89 and then by Regulation (EEC) No 1639/91, thereby providing for the allocation of special reference quantities as long as certain specific conditions were fulfilled.

1.3. A number of producers also pursued a claim for compensation for the losses they had incurred. In its judgment of 19 May 1992, the Court of Justice held that the Council and the Commission were liable to make good the damage. The Council adopted Regulation (EEC) No 2178/93 which introduced compensation arrangements for 80 % of those affected (7 000 cases).

1.4. However, there were still problems with the new rules, which excluded certain producers. In a 1997 judgment, the Court of Justice ordered the Council and the Commission to make good the damage suffered by these producers. There are some 1 900 producers who are - in principle - entitled to compensation.

1.5. The purpose of the Commission proposal is to provide for arrangements for paying this compensation.

2. General comments

2.1. The Commission proposal contains a number of rules to determine when and how compensation shall be paid. The Commission states that the proposed Regulation follows closely the previous Regulation (EEC) No 2178/93 which regulated the majority of affected cases.

2.2. The Commission also proposes that it be authorized to decide offers of compensation in cases where proceedings are already underway and where agreement must be reached.

3. Specific comments

3.1. When the additional levy and reference quantity scheme (quota system) was introduced, it was, from a legal standpoint, a very delicate operation as it affected the potential livelihood of all producers.

3.2. Evidently, the Commission proposal was not drafted in such a way as to take account of all aspects affecting individual rights.

3.3. At the same time, it must be said that implementation of the milk quota system was very complicated; it was extremely difficult to frame rules relating to individual rights, whilst providing a level playing field for the various individual producers, without causing a few problems.

3.4. Although the vast majority of the producers concerned have obtained satisfactory redress and compensation, it is unacceptable that it has taken from 1992/1993 until now for the matter to be resolved.

3.5. Consequently, it is now particularly important that the Commission and the Council really do provide a definitive solution to this problem. The proposal to authorize the Commission to make offers of compensation will therefore play an important role in dealing with the remaining cases.

3.6. Article 11 provides that interest on the amount of compensation shall be paid from 9 December 1997, i.e. the day the Court of First Instance handed down its ruling calling on the Community to make good the damage for producers affected after that date. Following this logic, it would be preferable if the time limit for reasonable interest claims were backdated to 1993, when the Commission and the Council framed the rules which denied these producers redress and compensation. Moreover, the proposal under this Article to withhold interest in cases where producers have provided insufficient information, gives the competent authorities far too much leeway to exercise their discretionary powers.

3.7. Whilst the Committee otherwise endorses the proposal, it would call on the Commission to waste no time in dealing with the remaining cases, and thus provide a definitive solution for the matter.

Brussels, 15 October 1998.

The President of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

() OJ C 273, 2.9.1998, p. 3.