7.12.2004   

EN

Official Journal of the European Union

C 302/1

2.1.1

Strong continuous growth in the production of ships has been experienced for more than two decades. Rapid technological progress has led to considerable reduction of costs for waterborne transportation, providing an effective stimulus to global trade and making world-wide shipping the key driver of globalisation.

2.1.2

Ships, from an economic perspective, are mobile investment goods, which are not imported but registered under a flag, chosen by the ship-owner. As such, the product does not require extensive marketing efforts or dealer or maintenance networks. Naturally, transportation costs of vessels are also very low. With low transaction costs generally and no anti-dumping rules which apply, the shipbuilding market is heavily determined by offer prices.

2.1.3

As a result of its crucial role in providing the essential means of transportation for global trade, building modern equipment for security and defence needs and developing advanced technologies with numerous spin-offs to other sectors, shipbuilding is regarded as a strategically important industry for most industrialised and industrialising countries.

2.1.4

In Europe a diversified network of companies related to the production of ships, including shipyards, marine equipment manufacturers, and a variety of specialised service providers has developed, providing directly more than 350,000 jobs for a highly qualified workforce. The sector in the EU has a turnover of around EUR 34 billion (1).

2.1.5

Commercial shipbuilding in the EU has however lost massive market share due to damaging business practices mainly from South Korea and faces serious difficulties. Since 2000 the market share for new orders (in compensated gross tonnes – cgt) has dropped by two thirds, from 19 % in 2000 to 6.5 % in 2003 (2). The situation worsened by mid-2003 with prices at their lowest level for 13 years together with a further strengthening of the euro exchange rates with respect to the shipping currency, the US dollar, as well as with respect to the currencies of the main Asian competitors. In particular in the last year international trade has increased dramatically, driven by the extraordinary strong growth of China's demand for energy and raw materials as well as the import and export of manufactured goods. This demand has led to a record of new orders, in the segments of oil tankers, bulk carriers and containerships. European shipbuilders benefited from this demand surge and have been able to almost double the order intake in 2003 compared to 2002. Nevertheless, their share of the world shipbuilding market continued to decrease.

2.1.6

The dramatic trend until mid-2003 has levelled off to a certain extent in several Member States. However, the latest developments may not last and Europe should seek sustainable solutions for the shipbuilding industry in the near future. If not, Europe could run the serious danger of losing this vital high technology sector. Experience shows that once shipbuilding capabilities are lost, they are unlikely to be recovered.

2.2.1

As a strategically important sector, shipbuilding has traditionally been an industry with strong government intervention world-wide. In the European Community as well shipbuilding policy has, since the 1970s, focused on defining the conditions for state-aid systems. The authorised ceiling for operating aid was gradually reduced from 28 % of the contract value in 1987 to 9 % in 1992 and finally completely eliminated from 2000.

2.2.2

In 1989 on an initiative of the USA, negotiations were started in the OECD context with the objective of putting in place a new international discipline for all government support to shipbuilding. These negotiations were successfully concluded in 1994 and the Final Act of the Agreement Respecting Normal Competitive Conditions in the Commercial Shipbuilding and Repair Industry was signed by the European Communities, Finland, Japan, the Republic of Korea, Norway, Sweden and the United States. However, since the United States failed to conclude their national ratification procedures, the Agreement never entered into force.

2.2.3

In the absence of an international agreement, in 1998 the Council concluded a new shipbuilding regulation [EC 1540/98] establishing a new set of rules for state aid, including a full abolition on a unilateral bases of operating aid by the end of 2000. The regulation also required the Commission to monitor closely the world shipbuilding market and to appraise whether European yards were affected by anti-competitive practices.

2.2.4

Already in its first monitoring report to the Council issued in 1999, the Commission provided clear evidence of damaging business practices in particular from shipyards in South Korea that offered prices below cost. All the monitoring reports (seven in total until 2003) that followed confirmed the initial findings, providing more and more detailed evidence.

2.2.5

Based on such convincing facts, the Council repeatedly expressed its serious concerns and initiated bilateral consultations with South Korea. After several rounds of talks, an agreement in the form of Agreed Minutes relating to the World Shipbuilding Market was signed in June 2000. However, in the subsequent talks the Korean Government proved unable to implement the principles laid down in the agreement.

2.2.6

Since the bilateral talks with Korea ended without results, the shipbuilding industry filed a complaint under the Trade Barriers Regulation (TBR – [EC 3286/94]) in October 2000.

2.2.7

The Commission remained firmly opposed to an extension of the operating aid at the end of 2000. However, the Commission did agree to bring the case to the WTO in order to seek remedy against unfair Korean practices if a negotiated solution with Korea satisfactory to the EU could not be achieved by May 2001. In addition the Commission proposed in parallel a defensive temporary support mechanism specifically designed to counter unfair Korean practices for the period necessary for the conclusion of the WTO procedure.

2.2.8

The Community finally implemented this so-called twin-track policy in summer 2002, with the filing of a panel request to the WTO and the decision on the Temporary Defensive Mechanism (TDM – [EC 1177/02]).

2.2.9

Renewed efforts to achieve a world-wide level playing field in the shipbuilding sector were launched in 2002 also in the OECD framework context, this time without the participation of the USA. The OECD Council established a Special Negotiating Group, aiming to find a new and effective solution to the existing problem. Progress until now is regarded as being rather slow and it remains to be seen to what extent this approach will be feasible.

3.1

As an overview, the steps towards LeaderSHIP 2015 are listed chronologically:

3.2.1

While the Community approach to the shipbuilding sector has mainly focused on competition and trade policy, the industry felt that a third corner stone - competitiveness policy and in particular a sound concertation of all three policy fields - was lacking. It also acknowledged its own shortcoming in bringing forward its own concerted response to the competitive challenges it was facing.

3.2.2

With the end of operating aid, the industry accepted that subsidies were not the way forward, nor was protectionism of the kind that resulted in uncompetitive industries in shipbuilding nations outside the European Community. However, the aggressive industrial policy in South Korea had to be challenged urgently. A new approach was therefore needed.

3.2.3

When the Committee of EU Shipbuilders' Associations (CESA) presented its outline proposal for the Leadership 2015 initiative to the European Commission in spring 2002, the value of the project as a sector specific response to the EU's longer term strategy as defined by the Lisbon Council was immediately recognised. LeaderSHIP 2015 did in fact address the key elements of the Lisbon strategy.

3.2.4

An overall-strategy had to be elaborated, based on elements of the existing approach but the new element being the invitation of the Commission to industry to formulate an integrated plan. In October 2002, CESA presented LeaderSHIP 2015, a Roadmap for the Future of the European Shipbuilding and Ship-Repair Industry.

3.2.5

For the European shipbuilders, the objective is to improve leadership in selected market segments by strengthening competitiveness through innovation and selective R&D, greater customer focus, production optimisation and the improvement of the industry structure. According to the industry, objectives in which the EU should be directly involved include the promotion of advanced financing and guarantee schemes, higher safety and environmental standards in relation to new high quality vessel orders and the maintenance and enhancement of the protection of European intellectual property.

3.2.6

A European approach to naval defence needs implies a common policy on procurement of defence materials.

3.2.7

Macro trends up to 2015 in this sector imply in particular developments in relation to multi-modal transport, inland waterways and short sea shipping, reinforcement of innovation and R&D, EU enlargement, environmental and health regulations and a progress towards a Common Defence Policy. Because of the impact of government and EU policies in all these areas in the view of the industry the Commission should actively participate in the development of ideas in view of forthcoming policies.

3.2.8

The shipbuilding sector itself accepts a big responsibility for bringing its own house in order. The Roadmap advocates therefore the development of new vessel types and new generations of marine equipment, combining efficiency, safety, comfort, environment and specialisation.

3.2.9

As far as the structure of the industry is concerned two complementary approaches involving the companies are foreseen:

3.3.1

At the beginning of 2003, a High Level Advisory Group, chaired by Commissioner Liikanen, started discussions on LeaderSHIP 2015 based on the CESA Roadmap. The Group included seven European Commissioners, two prominent Members of the European Parliament, the CEOs of the 10 major Shipyards, the Chairman of the marine equipment industry association and the General Secretary of the European Metalworkers Federation.

3.3.2

The Advisory Group published its report LeaderSHIP 2015 in October 2003 (3). It embraces eight chapters, reflecting all the issues covered by the Industry roadmap plus a final chapter on needs of consolidation for the European shipbuilding industry. The overall conclusion of the Group is that ‘LeaderSHIP serves as a good example for an effective European industrial policy on sectoral level’.

3.3.3

In these eight chapters the Group identifies objectives for the shipbuilding sector and for the EU as such. First of all, it proposes the creation of a level playing field in world shipbuilding through the EU trade policy, enforcement of applicable WTO rules and enforceable OECD disciplines.

3.3.4

On the central issue of R&D and innovation a close cooperation between the EU and the shipbuilding sector is needed. The relevant Community regulation did not fully take into consideration the specific needs of shipbuilding and its technology.

3.3.5

This is also true for developing advanced financing and guarantee schemes. The present tools are not competitive on the world market. The possibility of establishing an EU-wide guarantee fund for pre- and post-delivery financing should be explored as well as an intensified cooperation with export credit insurance companies, covered by appropriate re-insurance.

3.3.6

Maritime environment protection is streamlined by the European Maritime Safety Agency. A joint expert committee of relevant maritime stakeholders who holds technical knowledge is to be established in order to provide both the Agency and the Commission with technical advice. Quality assessment improvement, safety and control on both shipbuilding and ship repair should be intensified in order to guarantee that appropriate quality standards are applied world-wide.

3.3.7

The call of industry for more cooperation in the defence sector according to the Group can be supported at EU level by promoting industrial cooperation between yards and between yards and suppliers, access to export markets and consolidation of the industry. Common operational requirements of national navies and common rules for defence equipment are needed via the planned European Defence Agency.

3.3.8

Since European shipbuilders strongly depend on their technological leadership the existing instruments for protection of intellectual property rights have to be fully exploited. Knowledge data bases are required and international rules to protect patents have to be improved.

3.3.9

The shipbuilding sector has formally established a committee for the sectoral social dialogue (the first of its kind within the metal trades), in which programmes for new skill requirements are to be analysed and addressed.

3.3.10

An optimal industrial structure is needed to achieve the desired results. A dynamic development process is leading to new relationships and project partnerships between yards and suppliers, given that today suppliers account for 70-80 % of a yard's production. A consolidation process with special incentives should be facilitated, based on the concept of ‘aid for consolidation’.

3.4.1

With its Communication on LeaderSHIP 2015 (4) the Commission transposes the work of the High Level Advisory Group into formal Community policy. It emphasises once again that a horizontal policy needs to be complemented with specific sectoral approaches. The Commission provides an assessment on each of the chapters and endorses the recommendations of the LeaderSHIP 2015 report.

3.4.2

In the Communication, in which the strategic dimension of shipbuilding and ship repair is acknowledged, the Commission in line with the LeaderSHIP report confirms its responsibility and co-responsibility in the following areas covered by the eight chapters of the Advisory Group report:

3.5.1

On 27 November 2003 the Competitiveness Council has discussed the Commission Communication on LeaderSHIP 2015 in the wider context of industrial policy (6). The Council recognised the importance of sectorial analysis to sharpen horizontal policies and invited the Member States and the Commission to strengthen industrial competitiveness, notably by taking into account the needs and specificities of individual sectors.

3.5.2

In relation to sectoral issues shipbuilding, aeronautics and textiles and clothing are specifically addressed.

3.5.3

The views of the Council are inspired by the need of a fully integrated approach to enhance competitiveness. The same goes for LeaderSHIP 2015.

3.5.4

The objectives of the strategy of Lisbon require sectorial analyses, improvement of the framework conditions and an open and transparent consultation of all stakeholders, including a social dialogue. The Council emphasises continuing initiatives in this respect.

3.5.5

As regards LeaderSHIP 2015 the Council recommends particular efforts of industry and of public authorities relating to:

3.5.6

The Council wants to be informed regularly on the results of LeaderSHIP and on the implementation of its recommendations.

4.1

The EESC agrees that Europe needs a viable shipbuilding industry and that sector specific policies have to be foreseen.

4.2

It is remarkable to note that industry has succeeded in defining a cohesive programme for the period to 2015. This model for a modern sectoral approach is correctly based on EU rules as regards market conformity and competition.

4.3

Equally remarkable is that industry itself and seven Commissioners have issued a common plan for the future: LeaderSHIP 2015. This reciprocal commitment has led to the approval of LeaderSHIP by the Commission.

4.4

The EESC appreciates positively the new approach of the Competitiveness Council as regards horizontal and sectoral industrial policy. The case of LeaderSHIP shows how such industrial policy can fine-tune requirements resulting from sectoral aspects with horizontal approaches.

4.5

The EESC welcomes the specific recommendations of the Council concerning the shipbuilding and ship-repair sector. These correspond with the recommendations of the Commission and the sector itself in LeaderSHIP 2015.

4.6

The EESC welcomes this change of perspective for shipbuilding policy as the fruit of both a new method of working and of a new approach to industrial policy on a sectoral level. These could serve as a model for similar initiatives in other sectors.

4.7

More specifically, the EESC is of the opinion that instead of the continuation of national policies, only shared views and principles and commonly agreed practices in the EU will create a sound base for a sustainable shipbuilding and repair industry in Europe.

4.8

The enlargement of the European Union holds opportunities as it can add valuable assets, which allow a European presence in market segments not served any more by EU shipyards before Enlargement (7). Applicable Community rules must be fully respected.

4.9

LeaderSHIP 2015 can only be successful, if action is undertaken simultaneously by all participating partners (industrial partners, the Commission and, in some cases, the Member States) on all chapters, each player acting in areas for which he is responsible.

5.1

The credibility of the proposed policy depends on its implementation. Follow-up is crucial and this has to be a transparent process that is carefully monitored. Participation, transparency and adequate monitoring have to be safeguarded. In addition to the Conclusions of the Council the EESC is strongly in favour of a yearly progress report by the Commission to the Competitiveness Council.

5.2

LeaderSHIP 2015 starts with the objective of a world-wide level playing field. The EESC underlines the importance of this policy area as a corner stone for the entire strategy. It fully supports the present EU trade policy approach, aiming at an effective international agreement which ensures tight disciplines world-wide.

5.3

The EESC underlines that the impact of the unfair competition from some shipyards in Asia not only constitutes a considerable threat to the European shipyards, but should alarm also the European marine-equipment industry. The announcements in some of the leading Asian shipbuilding countries that they will concentrate on local content, for their supplies must be taken very seriously.

5.4

In the context of a level playing field, the sector discipline in the EU itself is not specifically mentioned, although there are still different levels and methods of support to shipbuilding by Member States. The internal level playing field and the transparency and monitoring of it are points of special concern. In order to promote the credibility of the process and trust in accordance with the agreed rules and objectives the EESC stresses the importance that the Commission monitors the application of state-aid rules and possible unfair practices.

5.5

R&D and innovation are of paramount importance, because Europe is still the source of shipbuilding ideas for the world. This is therefore another key element to ensure success. It is therefore important that various instruments provide effective support and implemented in a practical manner. Industry can be helpful in providing policy-makers with concrete advice. In any case the application of innovation instruments must be transparent.

5.6

In order to streamline ship financing tools both at national and EU-level the EESC's view is that the European guarantee fund as suggested in LeaderSHIP should become operative as soon as possible. Its implementation should be a priority for the Commission. This fund can contribute to creating an effective level playing field in the EU itself.

5.7

The EESC welcomes the agreement between industry and the Commission on the kind of environmental requirements and policies which are necessary in the sector. The EU should continue to take the lead in protecting the maritime environment and in pushing for strict implementation of relevant international rules. A coordinated European approach to the International Maritime Organisation can help to ensure a satisfactory level of effectiveness to support authority of the IMO to act exclusively in setting the global rules.

5.8

Considerable improvements in the legislation on safe shipping have been achieved in the EU over the last years. However, greater attention is required as regards appropriate standards for maintenance of ships, as suggested by LeaderSHIP.

5.9

The EU still has considerable weaknesses concerning the enforcement of applicable rules on safety and security in shipping. The EESC therefore strongly advocates effective cooperation between European coastguards.

5.10

The strengthening of short sea shipping and the objective of moving traffic from road to sea are also important environmental goals. To achieve these goals modern infrastructure, including ports as well as ships, must be further improved. As far as public funding of this infrastructure is concerned, public authorities should safeguard that the investments are carried out to the benefit of EU producers.

5.11

The human factor is an essential element and the EESC welcomes the intention to intensify the sectoral dialogue in which the Commission, employers and the trade unions each have their role to play. It is remarkable that it is in shipbuilding where the first formal Social Sectoral Dialogue Committee in any of the metal trades has been established; another indication for the innovative attitude of the sector.

5.12

The Social Dialogue is already making valuable contributions to a broad range of social topics, including training, recruitment, life-long learning and adjustment to cyclical waves. To date two working groups have been established, one aiming to improve the image of the industry and the other to identify new skills required within the shipbuilding sector.

5.13

The Social Dialogue should also address the considerable differences in labour productivity world-wide.

5.14

The EESC agrees with the increasing approach in Europe in favour of special segments of the manufacturing industry such as shipbuilding and aeronautics in relation to defence objectives, with an interaction between civil and defence industry.

5.15

In this context it is pleasing that LeaderSHIP calls for European naval projects and cooperation between naval yards. National security considerations and divergent traditions have hampered these so far. But if the Europeans do not decide on closer cooperation, costs will continue to spiral upwards and endanger the lead in innovation and technology danger.

5.16

Successful cooperation projects already exist, such as those between Germany and the Netherlands on the building of frigates and between France and the United Kingdom concerning carriers. New projects may be planned in collaboration with the forthcoming European Armaments Procurement Agency. Optimum synergy between yards is very important for maintaining and improving knowledge and know-how. It is desirable that the Agency be asked for an inventory of available capacities, technology and innovation at naval yards, so that the best value for money can be pursued in new calls for tenders. Taking into account that naval yards clients are Governments, spill-over of subsidies between naval and merchant vessels production should be avoided.

5.17

Consolidation of the industry is seen as a cornerstone for the future viability of the sector. It remains to be seen, however, how this process will be realised, given the complicated relationship between the core business and the high percentage of suppliers.

7.12.2004   

EN

Official Journal of the European Union

C 302/8

1.1

The EU has faced and still faces, both before and after the setting of the Lisbon objectives,: (1) serious problems with respect to the competitiveness and modernisation of European companies, in particular SMEs, (2) serious inefficiencies and excessive bureaucracy of public authorities when promoting entrepreneurship, (3) lack of coordination between bodies representing SMEs, public authorities and the Commission in promoting entrepreneurship, (4) lack of coordination between national policies to support SMEs, (5) absence of an essential long-term strategy for SMEs in the Member States, (6) serious problems with respect to financial support for companies (in particular SMEs) from the banking sector and the venture capital industry, (7) high lending costs owing to the small size of SMEs and increased risk and (8) lack of a permanent policy on SMEs.

1.2

The EU recognises that, while the Single Market has been completed in terms of legislation and rules, SMEs have not fully accepted the current system and its potential advantages and are not making full use of that potential.

1.3

The EU is putting up a tough fight against international competition, against the considerable economic and political influence of the US (1), which has achieved very high competitiveness and productivity, and against Japan, the countries of south-east Asia (2) and emerging economies such as China, India and Brazil.

1.4

The most serious social and economic problem facing the EU is unemployment, and it has made the creation of new jobs a primary objective, particularly in SMEs, which constitute the overwhelming majority of European companies.

1.5

The EU is making a huge effort to boost research and technology because it knows that making improvements in these sectors is the only way to guarantee development and progress, but the proposed strategy does not always produce the expected results owing to a lack of flexible mechanisms and to regulatory frameworks that encourage red tape, reduce effectiveness and create undesirable delays.

1.6

In response to the above, the Amsterdam Council (June 1997) and the special Summit on Employment (November 1997 in Luxembourg) laid the foundations for the Growth and Employment Initiative, while the Council of Ministers — with Decisions 98/347/EC (3)and 2000/819/EC (4) — laid the foundations for organised and ongoing support for European entrepreneurship, together with specific programmes to create more jobs.

2.1.1

The reason for supporting SMEs is that it has been demonstrated that they create new jobs more easily because they adapt well to changing market conditions, make decisions easily and implement new requirements more quickly within the company. Moreover, it is often SMEs that have the most problems setting up (owing to red tape and lack of financial resources), promoting innovative projects (given their inability to access funding from banks and, in the new Member States, the lack of a banking system capable of providing similar funding) and stepping up international cooperation.

2.2.1

The budget for the programme was €423.56 million, made up of €168 million for the ETF Start-up Facility, €57 million for JEV and €198.56 million for the SME Guarantee Facility. Owing to high take-up of the SME Guarantee Facility, €30.56 million was transferred to it from JEV. By 29 May 2002, or the end of the period covering the commitment of budgetary funds, the initial budgetary allocation for the ETF Start-up Facility and the SME Guarantee Facility was fully committed by the EIF. For JEV a total of €14.5 million was available for implementing various projects.

2.2.2

The venture capital scheme (ETF Start-up Facility) supports venture capital investment in SMEs, particularly during start-up and their early stages of development, and/or in innovative SMEs, by investing in specialised venture capital funds.

2.2.2.1

Under the Joint European Venture (JEV), the EU provides financial contributions for SMEs to set up new transnational joint ventures in the EU.

2.2.2.2

Under the SME Guarantee Facility, the EU provides funding to cover the cost of EIF guarantees and counter-guarantees to promote an increase in loans to new, innovative SMEs. This is achieved by increasing the capacity of guarantee schemes operating in the Member States and relates to both new and existing programmes. The Facility covers part of the losses incurred under the guarantees up to a predetermined amount, with particular emphasis on funding the intangible assets of SMEs.

3.1

According to the Commission's report, under the ETF Start-up Facility some 206 SMEs in the high-technology sector (biotechnology/life sciences and information technology) had benefited from the programme as at June 2002 (6); they had also achieved very positive results in terms of job creation. The SME Guarantee Facility supported 112,000 smaller companies, which increased employment by over 30 %, while JEV supported very few proposals (only 137 proposals were accepted).

4.1

The Commission Report (7)on the three schemes is based on a very small sample of businesses, which means that the conclusions drawn carry a high probability of statistical as well as factual error.

4.2

Over the four-year period from 1998 (starting year) to 2002 (evaluation year), some 206 SMEs benefited from the ETF Start-up Facility. The EESC considers this number low when compared with the results of equivalent initiatives in the United States, where there has been a proliferation of SME start-ups and flourishing entrepreneurship based on similar measures backed by high-risk venture capital. Only 31 transnational joint ventures were set up and 252 new jobs created under JEV, a result which did not meet expectations. The results of the SME Guarantee Facility are considered good.

4.3

The forecasts made in the report for job creation in companies receiving support are based on earlier data (2001 to mid-2002) and cannot be considered adequate for these three schemes.

4.4

The EESC does not have definitive, concrete and full data on the creation of new jobs (1998-2003), which makes it extremely difficult to assess the situation, and to present positions and conclusions. The EESC nevertheless points again to its particular interest in efforts to create jobs, and calls on the Commission to make this a top priority after adapting the multiannual programme.

4.5

High-risk investment is an essential prerequisite for promoting innovative ideas that will be transformed into business ventures and result in successful investment projects. The phenomenal success of certain ventures like this makes up for the failures of other innovative ventures which are not taken up by the market.

4.6

The scheme completely ignores the traditional economy. By constantly referring to innovative activities, it excludes the possibility of access to funding for small and medium-sized traditional businesses. Innovation is a very important tool for modernising the economy and boosting competitiveness. But it must be stressed that: (a) European businesses risk losing market shares permanently to imports of traditional sector products from low-cost third countries, (b) if support is not provided to traditional small and medium-sized enterprises there is a risk that oligopolies will be created in the trade and distribution sectors, with knock-on effects for the whole production process, and a net loss of jobs.

4.7

Cutting red tape by setting up one-stop shops responsible for implementing procedures and getting rid of unnecessary documents by using modern technology are basic requirements for the involvement of SMEs in the programmes concerned.

5.1

The EESC endorses the amendments to Decision 2000/819/EC proposed by the Commission.

5.2

The Committee agrees with the Commission's view that the full impact of the three funding instruments can only be evaluated after a considerable time lag, but it believes that enough time has elapsed since they were introduced to draw conclusions with a view to making certain adjustments, and that in the current fiercely competitive globalised economy time is of the essence, since business trends and outlooks are constantly changing.

5.3

The EESC realises that during 2001 and 2002 the international business environment was unfavourable and that there was a reduced supply of venture capital in the EU and a reluctance on the part of large banks to lend to SMEs. In 2002 demand for guarantees in Europe rose substantially, as large banks started to request additional security in view of the high risk and high cost associated with loan management. In this situation, the EESC considers the instruments, especially the Guarantee Facility and the Start-up Facility, to still be very useful. It also suggests strengthening cooperation with specialised small banks which work mainly with SMEs and have flexible communication systems.

5.4

The EESC endorses the projects under the three schemes and recognises that there is a need for them. However, it considers the process by which SMEs access the instruments to be onerous, bureaucratic and inflexible, since companies often have considerable problems acquiring information and with internal procedures.

5.5

The EESC considers the SME Guarantee Facility to be particularly useful and calls for this funding to be substantially stepped up and for every effort to be made to directly include those countries that have not been covered up until now (Greece, Ireland and Luxembourg).

5.6

The EESC supports efforts to extend the Guarantee Facility with a view to accession of the new Member States, which contain thousands of SMEs that do not have access to bank loans and are thus unable to invest effectively and create new jobs.

5.7

The EESC thinks that the budget for the programme should be reviewed with a view to covering the needs of the new Member States. The budget currently available was intended for only 15 and not 25 Member States, and the new members will certainly have greater needs.

5.8

The EESC calls on the Commission to take the necessary steps to further enhance the ETF Start-up Facility, since it is an essential instrument for creating innovative SMEs and supporting high-risk business ventures, which are necessary for developing research and technology, as well as other SME investment schemes that do not come under the high-technology heading but are of substantial business interest and must have access to all types of funding means and instruments. The Committee therefore proposes that:

5.9

The EESC considers private and public capital available in the EU for RTD to be inadequate to cover the greater needs of SMEs in the information, new technologies and biotechnology sectors. The Committee calls for substantially increased funding to be found in order to cover those needs.

5.10

Where necessary, the fast-track, flexible systems set up and operated very successfully in the US should be considered, evaluated and used. There should also be more scope for cooperation with specialised venture capital funds, wherever and whenever investment interest exists (8). The EESC calls on the Commission to take the initiative on this matter.

5.11

The EESC thinks that more effort should be made to inform SMEs about the existence and functioning of the Guarantee Facility and to find better ways of accessing and communicating with the EIF and the ΕΙΒ. The survey carried out showed that a majority of SMEs are unaware that the EU has set up a formal support system for them. It is therefore necessary to directly involve business organisations (chambers of commerce, trade associations, organisations of small and medium-sized enterprises, etc.) so as to improve information provision and make communication with SMEs more direct and more effective, and to solve more quickly the practical problems that arise when the programme is implemented.

5.12

The EESC thinks that soon after the accession of the new Member States a special assessment should be carried out to establish take-up of the facilities, since although account is being taken of the problems currently being experienced in the accession countries, it is certain that: a) the actual situation will prove less favourable than reported, b) substantial levels of support will be needed that cannot now be estimated, and c) a period of adjustment will be required that will entail serious risks for SMEs.

5.13

The EESC agrees with the Commission's proposal to phase out the JEV early, bearing in mind its present criticised structure. However, the EESC would like to emphasise that it also continues to support transnational joint ventures because it believes there is a substantial lag in transnational projects and business ventures in the EU and that barriers to business must be removed in Europe.

5.14

It will also be necessary to consider the possibility of re-introducing the JEV programme or a programme based on a similar principle, if and when after enlargement possibilities arise for creating transnational ventures within the EU and the EEA. Thus there should be a policy to support transnational ventures between SMEs so that it is possible to achieve this important goal, without the excessive red tape that puts a strain on the JEV programme and was a reason for its failure.

5.15

The EESC believes that after the experience already gained with the Sixth Framework Programme for Research and Technological Development small-scale programmes should be reintroduced for SMEs, since such programmes are not currently part of the concept of the multiannual programme.

5.16

The EESC recognises that there are heavy administrative costs involved in implementing low-level funding programmes and that there is therefore a tendency to limit them substantially. However, it notes that cutting back on such programmes removes access for SMEs, which are unable to benefit from high-level funding programmes. For these reasons, the EESC agrees with the European Parliament and urges the Commission to be particularly careful with regard to reducing or abolishing these programmes, especially since they manifestly meet actual needs of SMEs. The Committee considers it necessary for the Commission to work together with business organisations to this end.

5.17

The EESC considers the European Charter for Small Enterprises adopted at the European Council in Feira (19 June 2002) to be a particularly important initiative and has drawn up many opinions on this matter. The Committee would reiterate the need to implement the provisions of the Charter in practice on the basis of clear legal rules.

5.18

The EESC endorses the funding objectives set out in Annex I (description of spheres of action) for the SME Guarantee Facility (Annex I, point 4(a)(i)), but it believes this could be further broadened after serious and sustained dialogue with the representative organisations of SMEs (e.g. quality systems, environmental studies, quality studies, technical and technological support, technology transfer).

5.19

The EESC believes that the Commission must take more decisive and effective action to strengthen innovative SMEs and cut the degree of red tape in programmes (e.g. getting rid of unnecessary documents, speeding up procedures, etc.) as this has negative consequences and causes unnecessary delays.

5.20

The EESC is pleased with the way the programmes have developed and hopes that they will continue to be supported and improved.

7.12.2004   

EN

Official Journal of the European Union

C 302/12

1.1

The European Commission issued on 2 December 2003 a consultative document entitled Communication from the Commission to the Council and the European Parliament concerning a New Legal Framework for Payments in the Internal Market.

1.1.1

The European Commission perceives inefficiencies of legal and technical nature in the area of cross-border euro retail payments. According to the European Commission a reason for these cross-border inefficiencies lies in the inadequate legal framework at European level. A number of legal acts relating to payments have been adopted – including the Regulation 2560/2001/EC (1), which introduces the principle of equal charges for national and cross-border payments in euros, the Directive 97/5/EC (2) concerning the protection of the users of electronic payment instruments – but no coherent legal framework is in place. It is a necessary prerequisite for the proper functioning of the internal market for goods and services to be able to use cheap, efficient and secure payment services. The Commission lists a number of guiding principles, which are deemed particularly relevant in the context of the EU payment legislation. They are as follows: 1) Efficiency as a permanent objective; 2) Security as a ‘conditione sine qua non’; 3) Competition: access to markets and level playing field; 4) Customer (3) protection at a high level; 5) Legal provisions need to be technically neutral; 6) Recasting of payment legislation must add value; 7) Nature of a future legal instrument(s).

1.2

The Commission's consultative document is the result of preliminary work carried out over a relatively long period and is intended to lead in 2004 to a legislative initiative.

1.3

The Commission aspires, through the removal of technical and legal barriers, to achieve efficiency of payment services, competition on equal terms, adequate consumer protection, security of payments as well as legal certainty for all parties involved in a payment process.

1.4

The Commission recognises the efforts undertaken by European banks (4). Indeed the European Payment Council was established in June 2002. It decided on a wide-ranging work programme for the Single Euro Payment Area with suggestions for considerable changes on how to organise payment services in the European Union. These plans include, in particular, the decision to establish, as a priority, a new infrastructure (5) for credit transfers in euro at very low transaction costs and an expedient execution time of three days maximum.

1.5

In the Commission's view, the liberalisation of capital has facilitated cross-border money transfers within the EU. At the same time, the internal market, especially for retail payments, is still not as efficient as at a national level. Differences also exist between national legislations and conventions with regard to payment services in the internal market. The new legal framework should remove, where necessary, these legal barriers to the single payment area, in particular if they create an obstacle to the proper functioning of EU-wide payment infrastructures and systems as, for instance, the rules relating to the revocation of a payment order differ depending on where the order was placed in the internal market. Interoperability, the use of common technical standards and harmonisation of the essential legal rules are paramount.

1.6

Legal uncertainty is an element hindering payment service providers and users from transacting without reticence or at all. This is, for example, the case for direct debit transactions, which do not yet exist at the EU-level (see Annex 16). It is also relevant for regular, recurring payments (e.g. standing order for a foreign newspaper or a public utility for a summer house in another Member State) for which 'domiciliation' is not possible. If the users, e.g. consumers and SMEs, should reap the full benefit from the internal market, cross-border payment services have to be as efficient as those at a national level. The new legal framework should therefore close the loopholes and enhance confidence and welfare of consumers in the single payment area in the internal market.

1.7

In the internal market consumer confidence in payment transactions is in particular relevant since there is often a cross-border dimension and since confidence is essential when using the potential of e-commerce within the EU-market. Article 153 of the Treaty therefore requires a high level of consumer protection, which is a guiding principle for the new legal framework. However, the costs for such protection need to be assessed as they will ultimately be borne by the customer in one or the other way.

1.8

For the benefit of customer protection it is necessary to have coherent and user-friendly information requirements prior and post execution of a payment transaction. Many provisions already exist in the present EU payment legislation in this respect, which need to be reviewed. One of the most difficult tasks is to strike the right balance with regard to the content and volume of information so that the Payment Service User reading it is able to understand and to be aware of these rights and obligations.

1.9

The Commission considers legal safeguards for consumer protection in case of non-, defective- or unauthorised payment transactions also to be very important.

1.10

The essential part of the Communication is represented by the 21 annexes, each raising a specific legal and/or technical issue concerning the efficient functioning of the internal market for payments.

2.1

The objective of the Commission's initiative of establishing a coherent and comprehensive legal framework for the Single European Payment Area is shared by the Committee. While there are certainly barriers to the internal market for payments, these are a product of differences in national legislation systems. Payments in the internal market today are still very largely governed by national rules and/or conventions. With 98 % of all European retail payments made domestically (6), consumer demand for cross-border payments in the EU is obviously limited.

2.2

Many domestic markets for payments in Europe are highly efficient. Therefore, legislation should be limited to removing barriers to cross-border payments, so as to achieve a common efficiency level. The improvement of cross-border payment systems should not therefore carry any negative consequences for existing, efficient national payment systems.

2.3

The Commission should remove the legal obstacles that prevent the creation of EU-wide market conventions and agreements, but not impose regulation on aspects that can be covered by those conventions and agreements. Indeed, one has to strike the right balance between the self-regulation/co-regulation and the EU legislation.

2.4

According to the EESC (7), self-regulation as well as co-regulation shall be supported. However, strict regulation must be adopted in all areas where self-regulatory or co-regulatory measures proves to be inappropriate, inadequate or incorrectly applied

2.5

Indeed, the Committee supports the principle of a high, common level of consumer protection on the basis that it is an overriding Treaty objective.

2.6

The internal market for payments must be internationally competitive. If the new EU legislative framework leads to an increase in payment related costs, there is a real risk that payments business will be increasingly operated by non-EU players outside Europe and that the legislation will fail to meet its goals.

2.7

The Committee does not think that it would be desirable to exclude cheques from the scope of payments covered by the new instrument, since this means of payment is still used in some Member States.

2.8

It will also be necessary under the new arrangements to ensure, through self-regulation, that credit and debit cards issued or authorised by any financial institution recognised in a Member State are accepted by any ATM in any other Member State.

3.4.1

Value dating is not only a payments issue; indeed value dates are often not specifically linked to a payment transaction – it can result from any account operation.

3.4.2

As the Commission admits, value dating is primordially a pricing issue (i.e. a product management or customer relationship). As a product management issue, value dates are independent of bookings, which are used to compute movements on the account.

3.4.3

Value dates may vary by bank, by customers within the same bank, or even by different operations of the same customer within the same bank.

3.4.4

The Committee welcomes the idea of transparency requirements for payment service providers on the use of value date. There should be a moderation of the financial impact of value dating on the consumer. Convergence of the system of value across Europe must also be considered, although since national systems vary considerably between the Member States, convergence must be seen as a medium-term objective.

3.4.5

This convergence process should be guided by the principle that the value date of a payment transaction must be the same as the date at which the money flow of the payment order at the relevant payment service provider takes place

3.5.1

The existing Regulation 2560 refers to IBAN (8) and BIC (9) which have been promoted and sponsored by the European Authorities, including the ESCB (European System of Central Banks). The IBAN numbering standard is accepted and well functioning across the EU, proving its success. This coding system does not allow portability. Banks should, as a minimum, guarantee the customer to be able to keep his account number when moving to another branch within the same bank.

3.10.1

To ensure the legal certainty for a customer, a more appropriate approach for this annex would be to discuss the definition and communication of a ‘point of irrevocability’ according to the payment instrument used. The Committee supports that a customer should be informed about irrevocability conditions regarding various payment systems and the payment instrument involved.

3.10.2

It also has to be kept in mind that customers are not only sending but receiving payments. Extensively long revocability periods would then have the reverse effect of being detrimental to customers expecting those payments.

3.10.3

Further, it is important to distinguish between customer revocability and system revocability. For clarity and legal certainty reasons, the settlement of payment orders should, as a general rule, not be revoked once entered into a system as defined by the Settlement Finality Directive.

3.10.4

The Committee is of the opinion that the issue of revocability is complex and that further discussion is necessary. Nevertheless, the payment service provider should inform his customer on demand about the point of irrevocability regarding the individual payment in question.

3.12.1

The Committee agrees that a payment service provider should be responsible for accurately executing a payment order and for proving that a transaction has been accurately recorded, executed and credited to the beneficiary's account. He is responsible for the part of the payment system (in a technical sense), that is under his control. At the same time it is clear that a payment service provider cannot be held liable beyond his civil responsibility, and certainly not if he was not negligent, or in case of ‘force majeure’. It is therefore up to the service provider to prove that the payment transaction was accurately recorded, executed and entered into the accounts in the terms in which it was ordered, and this obligation cannot be limited or avoided by contractual means.

3.12.2

The Committee believes that payment service providers could offer to be liable for claims relating to matters outside their control in the form of a value added service. This would be beneficial for a consumer and would lead to increased competition.

3.13.1

With respect to card payments, credit institutions have already to comply with the provisions of the Recommendation 97/489/CE, particularly regarding:

3.13.2

Organised crime also stands behind fraudulent transactions. The 150 euro threshold has the potential of encouraging fraud. Therefore, the Committee believes that a risk-based threshold should be introduced. The cardholder's liability in the above mentioned case should be a percentage of the total credit limit of his card to which he agrees in his contract. Such a fair approach would reflect the true risk and cost, while at the same time more efficiently discouraging fraud, thus reducing the common cost.

3.13.3

A limited update of the Recommendation 97/489/EC in accordance with the New Legal Framework is a positive way forward. The Committee is of the opinion that this annex should be read in connection with the opportunities to use an electronic signature in relation to the Directive on e-signatures.

3.13.4

It is unclear whether a payment service provider can prove conclusively – if at all – whether or not the customer was the initiator of the transaction effected with the technically secure electronic payment instrument. Especially in the case of online banking transactions it seems that payment service providers have difficulty providing such evidence since these transactions can be conducted on private PCs which are beyond the payment service provider's sphere of control.

3.14.1

The principle of transferring the full amount to the beneficiary is central to this annex. This principle is now well established following the Regulation 2560/2001 for payments that can be processed in a full STP manner (Straight-Through-Processing) as long as the corresponding domestic payments are paid in full without deduction on the beneficiary side.

3.14.2

In addition, self-regulation exists in the form of the ICP (Interbank Convention on Payments) (12) , which today limits the scope to credit transfers in euro. The ICP promotes the abolishment of the possibility for intermediary banks, when used, to deduct fees from the transferred amount.

3.14.3

Any legal framework should move away from technical terms used within specific message formats and systems (such as SHARE, BEN, OUR), which in many cases are inappropriate in a domestic context. The Committee is of the opinion that no additional provisions should therefore be created to replace the Directive 97/5/EC. The current charging options exist to give customers a choice, which is part of terms and conditions negotiated between a customer and a bank. The risk of an over simplification and limitation of choice has to be avoided as those charging options are the response to market needs which go beyond the basic intra-EU credit transfer instrument(s) and are necessary to support the various payment types as well as distance commerce. The Committee would like the industry to increase transparency on the charging option applied.

3.14.4

The Committee encourages the Commission to remove the discrepancy between the default ‘OUR’ option of the Directive, a charging mechanism that does not exist in most of the Member States, and the ‘SHA’ option, favoured by the Regulation.

3.15.1

The Committee recalls that European banks within the European Payments Council agreed to the default credit transfer execution time of 3 banking working days (after the acceptance date) via self-regulation under the CREDEURO Convention. In fact, the 3 days are default times which can be further improved by individual banks. As the execution time is a core service element, it should be left to competitive forces to enhance services.

3.15.2

A further need for legislation should only be considered if the sector's initiative fails.

3.16.1

Legislation to be passed and/or legal barriers to be lifted will be precisely identified by the European Payments Council (EPC) and communicated to the Commission once the Pan-European Direct Debit scheme has been approved formally by the EPC. The legal framework needed to support the Pan-European Direct Debit scheme will very much depend on the model chosen. Therefore, the Committee is convinced that a close cooperation of the industry and the legislator (EC) should be envisaged.

3.17.1

This annex is not related to the question of payments and thus outside the scope of the New Legal Framework for Payments.

3.17.2

There should be no discrimination between cash and non-cash payments regulation. A number of regulatory and technical barriers prevent the development of cross-border cash transportation in the euro zone, in particular between national central banks' branches in one country and financial institutions' branches in another country.

3.17.3

The access to cross-border National Central Bank (NCB) services is part of the natural development of the single currency usage within the euro zone.

3.17.4

Competition in the cash transportation sector should be fostered within the Euro zone in order to maximise efficiency, but the Committee expresses the necessity of creating a cross-border cash transportation licence and sufficient controls of its application.

3.21.1

It seems to the Committee that the question referred to in the Annex 21 is a sub-issue of the Annex 12 (non-execution or defective execution). Indeed, it has to be recognised that:

3.21.2

No liability should be imposed on payment service providers for payments not entered into the system at the time of the breakdown. The payment service provider has limited liability according to his civil responsibility and should prove that he has taken all necessary measures to prevent the breakdown.

3.21.3

The recent case of email ‘phishing’ attacks against UK banks, one online provider saw the taking down of the online service as a key response to the attack. Such attacks are beyond the direct control of a provider, due to the direct email contact between an attacker and a customer. Payment service providers should inform their customers, if possible, before they close down the system for security reasons. The Committee considers it inappropriate to penalise a provider for taking measures to protect its customers in this manner. Further, the Committee encourages payment service providers to be pro-active in the prevention of such types of fraud.

4.1

The New Legal Framework should be consistent with the European Consumer Policy Strategy, which sets the achievement of a high, common level of consumer protection as a key objective.

4.1.1

The Committee supports the European Commission's aim to increase consumer confidence, legal certainty and market efficiency for payments in the internal market. It further welcomes the fact that self-regulation and co-regulation are considered as a possible way forward in several of the areas mentioned in the 21 annexes.

4.2

Priority should be given to the legislative measures covering Annexes 1, 2, 8, 12, 13, 18 and 19. In particular, the annexes on Consumer Information Requirements (2), Information on the Originator of a Payment (8) and the Data Protection Issues (18) urgently require attention.

4.3

Increased cooperation between the Commission and the banking industry should be envisaged concerning the establishment of the European Direct Debit Scheme (Annex 16), the determination of who has the right to provide payment services (Annex 01) as well as in the area of security certification of payment instruments and components (Annex 07).

4.4

Regarding the other annexes it seems to the Committee that self-regulation or co-regulation would be a more appropriate way to achieve the Commission's aim of an efficient internal market for payments. It is clear that if self-regulatory measures do not prove successful, a European Regulation should be envisaged.

4.5

In the same vein, the Committee suggests that the overall framework should concentrate on providing transparency to consumers and try to build as much as possible on existing practices and self-regulatory rules. For instance, it is not necessary to regulate further where the market has already achieved the objectives of the legislator (e.g. there is no immediate need to update the Directive on Credit Transfers to shorten the execution times). Nevertheless, in certain areas a common approach is the right solution.

4.6

The scope of the Communication is often much broader than just payments and the Commission has to highlight in a more explicit manner the difference between commercial services and payment systems. Any legislative measure related to payments should exclude issues relating to the fulfilment of undertakings other than the payments themselves.

7.12.2004   

EN

Official Journal of the European Union

C 302/19

1.1

The proposal entails codifying Council Decision 73/391/EEC of 3 December 1973 on consultation and information procedures in matters of credit insurance, credit guarantees and financial credits. This Decision has since been modified by Council Decision 76/641/EEC and by the acts of accession of Spain and Portugal, as well as those of Austria, Finland and Sweden.

1.2

These Decisions exclusively concern matters pertaining to state export credit guarantees. In particular, they lay down the conditions under which Member States must enter into a consultation procedure with other Member States and the Commission about granting or guaranteeing foreign credits which are being considered. The Decision has no bearing on the private export credit insurance market.

1.3

The proposal would replace the various legislative instruments covered by the codification.

1.4

The proposal would not alter the substance of the legislative instruments being codified. It does no more than bring them together with only such formal amendments as are required by the codification exercise itself.

2.1

The proposal comes in response to the Commission's concern to codify legislation, which has been frequently amended, in the interests of clarity and rationality.

2.2

To date the provisions in question have been scattered across various legislative instruments. This has made costly searches and lengthy comparisons between the many different instruments necessary in order to ascertain what provisions apply.

2.3

The proposal is confined to bringing together the different instruments into one single instrument whilst fully preserving their substance. There is no need to take any action as regards content.

2.4

The proposal is to be welcomed in that it boosts transparency and makes EU legislation more comprehensible (1).

2.5

Nonetheless the Commission should take the following points into consideration in the codification process:

2.6

Moreover, particular attention needs to be paid to ensuring that the translations are correct since inaccuracies could lead to legal uncertainty and to the legislation being wrongly applied.

a)

In Article 4 (e) ii) and iv) ‘credit starting point’ should be translated as ‘ponto de partida do credito’ rather than as ‘inícui dó crédito’, the two dates not being necessarily the same;

b)

In Article 4 (e) iv) the expression ‘where repayment is not to be effected by equal instalments at regular intervals’ should better be translated by ‘escalonadas em prestações iguais e espaçadas de modo regular’ rather than ‘escalonadas por parcelas de igual montante de modo regular’;

c)

Identically, the expression ‘aid credit’ (e.g. in Articles 4 (f) i) and 5 (e) i)) should be translated by ‘crédito de ajuda’ and not as ‘crédito de auxílio’ which has a completely different sense in the EU legislation concerning ‘State aid’;

d)

Finally, several orthographic mistakes have been found at least in Article 3.2 (first and third lines) ‘ntureza’ and ‘peirem’, Article 10.1 (c): (‘desdadoravel’), and in the Annex I B) d) (‘antiantamentos’).

7.12.2004   

EN

Official Journal of the European Union

C 302/20

1.1

The International Management Code for the Safe Operation of Ships and Pollution Prevention (ISM Code) was adopted by the International Maritime Organisation (IMO) in 1979 as a tool to promote the development of a safety culture and environmental conscience in shipping. In 1994 the IMO decided to make the Code mandatory through the adoption of a new Chapter IX ‘Management for the Safe Operation of Ships’, in the International Convention for the Safety of Life at Sea (SOLAS) 1974.

1.2

The mandatory application of the Code was effected in two phases. On 1 July 1998 it became mandatory for companies operating passenger ships, oil tankers, chemical tankers, gas carriers and bulk carriers of 500 gross tons and over, engaged on international voyages. On 1 July 2002 the Code became mandatory for companies operating other cargo ships of 500 gross tons and over, engaged on international sea voyages.

1.3

In response to the Estonia tragedy the EU decided to take action for the early implementation of the ISM Code for ro-ro passenger ferries engaged on international and domestic voyages within the Community by 1/7/1996 under Regulation (EC) 3051/95 (8/12/1995) (1). The EESC in its relevant opinion welcomed the proposed action and supported the Commission's initiative. (2)

1.4

The Regulation has been amended twice: a) by Regulation 179/1998 (3) concerning the uniform implementation of the ISM Code documents / certificates for ferries operating in Europe and b) by the Regulation 1970/2002 (4) taking account of subsequent amendments to the ISM Code adopted by IMO. The Regulation entered into force on 26 November 2002.

2.1

When Regulation (EC) No 3051/95 was adopted Member States and the European Parliament stated that the application of the ISM Code to ro-ro passenger ferries was a priority, but also that it was the first of a series of continuing initiatives to improve safety at sea.

2.2

The proposed Regulation is of a more general nature, it will replace Regulation (EC) No 3051/95 and its main purpose is to facilitate the correct, strict and harmonised implementation of the Code in all Member States and acceding countries. The Regulation will maintain in parallel the existing EU ISM rules applicable to ro-ro ferries, irrespective of their flag and sailing on a regular service to and from European ports.

2.3

The Regulation will apply to any companies operating one or more of the following ships at sea:

2.4

The scope of the proposed regulation is based on the provisions of Chapter IX of SOLAS Convention, and applies to all ships falling under the scope of SOLAS and flying the flag of a Member State, even if they operate on domestic voyages. Nevertheless, for passenger ships operating on domestic voyages the provisions will only apply to passenger ships operating more than five miles from the coastline, but these rules will apply to all flags.

2.5

Any company operating one or more of the aforementioned ships will have to comply with the International Management Code for the safe operation of ships and for pollution prevention (ISM Code), reproduced at Title I of the Annex. Member States will have to comply with the Guidelines on the certification process (Provisions for the Administration concerning the implementation of the ISM Code), as outlined in Title II of the Annex.

3.1

The ISM Code is one of the most significant steps forward that IMO has taken in the field of maritime safety because it provides the framework through which IMO Conventions can be effectively implemented. The EESC view, as expressed in its past opinions, is that Regulation 3051/95 has served a useful purpose in advancing the implementation of the ISM Code to ro-ro passenger ships by two years and extending its application to such ships engaged in domestic sea voyages.

3.2

The EESC notes that with respect to companies operating passenger and cargo ships engaged on international voyages, the objective of the proposed regulation has already been achieved, since the obligation to comply with the ISM Code stems from the SOLAS Convention. Likewise, for companies operating ro-ro passenger ships engaged on domestic voyages the objective has been achieved through the implementation of Regulation 3051/95.

3.3

The Commission's basic justification for the proposal is that the transposition of the full ISM Code and relevant IMO guidelines into EU law will enhance the effective implementation of the ISM Code within the Community. The EESC agrees with the justification and fully supports the objective to the extent that it relates to ships to which the ISM Code is already applicable. However, regarding the added value of the proposed extension of application of the ISM Code to other types of ships the EESC has the following comments.

3.3.1

The ISM Code originated from an industry initiative as a voluntary tool to promote quality shipping. The experience from the ISM Code mandatory global implementation since the first phase in 1998, as expected, has revealed the strengths and shortcomings of the Code. It has been generally recognised that there is a need for a better understanding throughout the maritime community (flag states, classification societies and shipping companies) of the objectives of the Code, for improved links between those who issue ISM certificates and uniform standards of training for ISM Code auditors. The cornerstone of good safety management is commitment from the top. In maritime safety and pollution prevention it is the commitment and motivation of individuals at all levels that determine the end result. Without the understanding of the maritime cluster the ISM Code could become the paper exercise that the sceptics would like to suggest.

3.3.2

Risk assessment is nowadays being widely used as an objective and reliable tool for the consideration of safety improvements. Based on this approach, and taking into account the demonstrated need, the mandatory application of the ISM Code within the EU for ferries operating on a regular service to and from European ports was fully justified and endorsed. On the same grounds, the application of the Guidelines to all other ships engaged in domestic voyages so far has been left, quite rightly, to the discretion of the national administrations on the basis of the subsidiarity principle. The EESC is not aware of any national legislation extending the mandatory implementation of the ISM Code to other ships engaged in domestic voyages.

3.3.3

The ISM Code, designed for ships engaged on international voyages, and hence beyond the easy reach of administrations and companies, places significant obligations to companies and their ships and requires compliance with international conventions and encourages adherence to industry standards. Furthermore, the safety regime of cargo ships engaged exclusively on domestic voyages is regulated by national legislations and, by implication, such ships may have to comply with the regime applicable to cargo ships engaged on international voyages.

3.3.4

The EESC as the guardian, inter alia, of the interests of small and medium-sized undertakings in Europe, is concerned about the mandatory application of the ISM Code on small and medium-sized shipping companies exclusively engaged in domestic voyages. In light of the above considerations, the proposed regulation should take into consideration the bureaucratic formalities and the cost of compliance regarding its application to the ships of such companies, Hence, flexibility of application and/or derogations will be required.

4.1.1

The EESC believes that derogations may be necessary for reasons of practicality in cases of small cargo ships and passenger ships engaged in domestic voyages and especially when such ships are operated by the owner himself or under its direct supervision.

4.2.1

By implication, the aforementioned ships may have to comply with the regime applicable to ships engaged on international voyages. The EESC believes that, the Regulation should clearly stipulate the basic requirements of the ISM Code which may be relevant to such ships.

4.3.1

The EESC endorses the mandatory application of the certification process, which is the main valid justification for the proposed regulation.

4.3.2

With respect to paragraphs 2 and 6 it should be noted that Documents of Compliance and Safety Management Certificates respectively can also be issued by an Administration at the request of the flag Administration.

4.3.3

The EESC maintains that Art. 5 paragraphs 4 and 9 need clarification and streamlining with the ISM Code provisions because they place unnecessary restrictions and lead to confusion.

4.4.1

The safeguard procedure does not, as it should, involve the Member State or the flag State that has issued the Document of Compliance and which may need to suspend the validity or withdraw the Document.

4.5.1

The article refers to a reporting form to be established by the Commission, however it does not stipulate what should be reported. It should be clarified if reporting of compliance of Member States with the Regulation and more specifically with the certification procedures is envisaged, or reporting of compliance of companies and their ships, as may be evidenced by flag and port state control.

4.6.1

Consistent with the comments under Articles 3 and 4, the EESC considers that the one-year transitional period for the compliance of cargo ships and passenger ships engaged on domestic voyages is appropriate.

5.1

The EESC supports the transposition of the full ISM Code and relevant IMO guidelines into EU law through the proposed new Regulation replacing Regulation 3051/95. However, in real terms, the added value of the extension of the scope of the proposed regulation could be limited, since ships engaged on international voyages and ro-ro passenger ships engaged in domestic voyages already comply with the ISM Code.

5.2

The EESC notes that the experience from the ISM implementation since the first phase in 1998 has revealed the strengths and shortcomings of the Code. All parties of the maritime cluster involved in the implementation of the ISM Code should fully understand the objectives of the Code, otherwise it could become a paper exercise. The need is more obvious regarding companies and ships thus far excluded from the ISM Code regime.

5.3

The initiative to extend the application of the ISM Code to all ships engaged on domestic voyages needs to be reviewed with a view to render it more flexible. Inadvertently and disproportionately, the new categories of ships may have to comply with the regime applicable to ships engaged on international voyages with probably prohibitive cost for compliance, in particular in cases of ships operated or under the direct supervision of the owner of the ship. The certification procedure of the proposed regulation needs to be adjusted so as not to impose unnecessary restrictions for small and medium-sized companies engaged in domestic voyages. Hence, derogations or alternatively stipulation of basic requirements of the ISM Code relevant to those ships may be necessary.

7.12.2004   

EN

Official Journal of the European Union

C 302/23

1.1

The Commission with its Communication (1) on Enhancing Maritime Transport Security and with its proposal (2) for a Regulation on Enhancing Ship and Port Facility Security addressed the ship and ship/port interface security concerns and proposed specific action currently going through the legislative process. However, the proposed Regulation stopped at the part of the port which represents the ship/port interface, i.e., the terminal.

1.2

The EESC with its opinion (3) welcomed the proposed action and supported the Commission's intention as a second step to pursue the implementation of additional Community measures that would secure the port and its interface with the hinterland.

1.3

The second, and more difficult, step of the Commission's initiative acknowledges the need for a comprehensive port security policy in view of the vulnerability of the wider port areas that provide an essential link with the total transport chain and passenger flows.

2.1

The proposal complements the security measures introduced by the Regulation on Enhancing Ship and Port Facility Security by ensuring that, as a result, the entire port is covered by a security regime. The Directive will guarantee the proper security levels for Community ports and will ensure the harmonised implementation of security measures covering the entire port areas.

2.2

The Commission asserts that the anticipated IMO and ILO joint measures in the form of a voluntary Code of Practice on Port Security, currently under development, will not guarantee the early establishment of the required security regime. Hence, pro-active EU action is necessary, preferably in the form of a Directive to introduce the required flexibility.

2.3

The proposed Directive will allow the maintenance of existing port security regimes that comply with its principles and framework requirements. More particularly, the Directive requires the obligation to carry out security assessments, to define security levels, to develop and approve security plans, to designate responsible security authorities, to designate security officers, to establish security committees and to support the implementation of the measures.

3.1

Events and actions since the 11 September terrorist attacks vindicated predictions that the war on terrorism is bound to last for long. The tragic events in Madrid on 11 March 2004 brought to the fore the vulnerability of the whole transport system to terrorist attacks and proved that absolute security can never be achieved. In its exploratory opinion on transport security (4) and its subsequent opinion (5) regarding maritime transport security, the EESC maintained that the EU should take the lead internationally in developing a broader framework for security which will address the causes of terrorism and not only seek to prevent it or eliminate its effects.

3.2

Maritime security being a global problem has received adequate global and EU attention. However, rail security appears to be largely focused on national level initiatives whilst terrorism in road and inland waterways transport has thus far received relatively little attention. The EESC underlines that unless the other modes of transport bear their share of responsibility, the ‘weakest link’ will be the target of terrorists in order to infiltrate into the system. It is unrealistic to expect ports to fill the security gaps of other modes of transport and unfair to impose upon them the financial burden.

3.3

The EESC reiterates that measures aimed at fighting terrorism should be coupled with measures aimed at fighting traditional security problems (organised crime, piracy, fraud, smuggling and illegal immigration). Such security problems exist in the wider port areas and should have been addressed as a matter of urgency, as requested by the EESC. In this connection, the EESC regrets that a number of EU Member States are not as yet parties to the Suppression of Unlawful Acts (SUA) Convention and its Protocol and underlines the necessity and urgency of prompt ratifications that would reinforce the legal means for the fight against terrorism.

3.4

The EESC (6) supported EU action to ensure a reciprocal and collaborative arrangement with the US giving equal treatment for all cargoes (containers) originating from the EU and to transfer/integrate the bilateral arrangements in a multilateral agreement under the auspices of the World Customs Organisation (WCO). Similar reciprocal arrangements should be pursued with other regions/countries supported by a system of exchange of information. Where necessary, the agreements should provide for technical cooperation and financial aid to developing countries to upgrade their port security infrastructure.

3.5

The framework of the proposed measures is similar to the one established for the port facilities (terminals). Its significant new element is the extension of the geographical scope to cover the entire port areas, to be defined by the Member States in line with similar action undertaken by the US. The EESC believes that the purpose could have been best served by way of expanding the scope of Regulation (EC) 725/2004 (7). Nevertheless, the EESC acknowledges the constrains for the early extension of the full security regime of the aforementioned Regulation to cover the wider port areas and the need to afford to Member States, through the Directive, the required flexibility to implement appropriate measures in view of the significant variety of Community ports and the diverse activities within them. The flexibility should not lead to big differences of measures in EU ports that may result in the classification of foreign ports as ‘safe’ and blacklisting of ‘unsafe’ in terms of detecting illegal immigrants and terrorists as they may lead to market distortion and could jeopardise the smooth flow of international trade.

3.6

The EESC reiterates its view (8) that with the advent of EU enlargement, the Mediterranean Sea acquires an enhanced role. Its vicinity to areas from where potential security problems might arise emphasises the need for a Mediterranean dimension to maritime transport security. The EESC welcomed (9) the development of a Euro-Mediterranean Transport Network and the incorporation of maritime security in its objectives. It agreed that it is essential that the Mediterranean partners strengthen security measures and the Euro-Mediterranean Institute for Safety and Security was considered as a first step towards this goal.

3.7

In its present form the Directive focuses on administrative aspects. The directive does not define harmonised procedures for the application of the details related to the Annexes. Instead, it provides the possibility for future adaptations. The EESC realises the urgency to enhance security beyond the ship/port interface but underlines that it would have been more prudent to take stock of the progress achieved thus far at international level in this regard, and in particular in IMO, ILO and World Customs Organisation (WCO) and to provide prompt and clear guidance for the realisation of its objective.

3.8

The EESC notes that the Directive does not create new obligations in areas already covered by Regulation (EC) 725/2004 (10), or indeed in the expanded port areas. However, it takes the opportunity to reiterate the basic principle that port security measures should be balanced in relation to the objectives they pursue, their costs and impact on traffic and trade flows. Hence, it is necessary to consider carefully their need and assess whether they are realistic and practically feasible. The measures should respect the fundamental rights and observe the principles recognised in particular by the Charter of Fundamental Rights of the European Union so as not to restrain the personal human rights of the citizens nor the constitutional order, thus serving the purpose of terrorists. Therefore, care should be exercised to avoid:

3.9

The cost of compliance with the additional measures to secure the geographical area of the significantly wider port, namely access restrictions, cargo and luggage control and identification of persons will multiply for most ports, as the expansion of the application of the security measures will involve additional arrangements in terms of infrastructure, equipment, manpower and training. The EESC, recalling its earlier opinions on financing of security costs, reiterates its invitation to the Commission to devise a EU scheme for financing the implementation of the measures. The EESC specifically asserted that ‘although part of the cost of compliance will be passed on to customers, in the interest of the fairness EU governments should also bear part of some costs since terrorism is a reaction to policies of governments’. Moreover, the EESC reiterates its call for an overall impact study by the Commission about the financial implications of the increased maritime security measures and joins the EP in its similar request.

3.9.1

Seaports are critical national assets. Measures aimed at securing the entire port area logically qualify as being of general public interest. Public funding of such measures would, therefore, not be subject to the State aid rules of the EU treaty. Given the fact that Member States, however, have the choice in granting public support for such measures or not, a harmonised approach should be developed at EU level to avoid distortion of competition. This approach, which also takes into account financing of port facility security measures, should be based on the following principles:

3.9.2

Estimates on port security costs are extremely difficult to derive. However, by way of comparison port security costs in the EU are expected to be higher than in the US for geographical reasons due to the larger number of EU ports. It is anticipated that comparatively speaking the cost of compliance for big ports (11) and small ports will be huge.

3.10

Failure to react swiftly to new terrorist realities may result in costly multi-billion port shutdowns. Hence, the danger of security may become a non-tariff barrier to trade.

4.1

Ports are generally well defined in terms of geographical coverage and administration and within them diverse activities co-exist. Normally the boundaries of ports cover port facilities and not vice-versa, as implied by Article 2.4, or indeed by the definition of ‘port’ οr ‘seaport’ in Article 3. The definition seems to imply that the port area is lesser than the area of the ‘port facility’ which includes in addition anchorages, waiting berths and approaches from seaward. Therefore, clarification of the notion on ‘taking precedence’ is required in Article 2.4.

4.2

As a first step, the port security plan, being a master plan, has to be compatible with the decisions already made during the implementation process of the ISPS-code and Regulation (EC) 725/2004 (12), regarding criteria for port facilities. It should encompass the integrated security plans for port facilities within the boundaries of the port. Eventually the subordinate port facilities should function as sections of the port and their security plans should be part of the overall port security plan, adjusted where necessary to be harmonised and coordinated with its comprehensive objectives and consequently the port security authority should have the ultimate authority and responsibility.

4.3

The advisory role of the envisaged port security committees will enhance the effective implementation of the port security plan. The EESC presumes that the committees will be established by the port security authorities, also for the purpose of identifying the elements of the port security plan. The EESC supports the participation of seamen and port workers representatives in ports security committees for the purpose of arriving at practical solutions.

4.4

Cargo and passengers should not be subject to double-checking when entering the port area and then eventually when entering the port facility area. Moreover, a practical approach is required regarding the mobility of the ship's crew, visitors and ship suppliers.

4.5

Inspections of compliance with port security measures in one Member State by security officials of another Member State should be carried out under the authority of the European Commission (Article 17.2 and 14.3).

5.1

The tragic events in Madrid on 11 March 2004 vindicated the fears that the whole transport system is vulnerable to terrorist attacks and the belief that absolute security can never be achieved.

5.2

The EESC underlines that unless all modes of transport bear their share of responsibility, the ‘weakest link’ will be the target of terrorists in order to infiltrate into the system. It is unrealistic to expect ports to fill the security gaps of other modes of transport and unfair to impose upon them the financial burden.

5.3

The EESC firmly believes that a policing strategy is not a secure strategy in a non-secure world. Hence, the EU should take the lead internationally in developing a broader framework for security which will address the causes of terrorism and not only seek to eliminate its effects.

5.4

The EESC fully supports the proposed Directive to implement security measures in the wider port areas. The flexibility afforded to Member States under the proposed Directive should not result in the classification of foreign ports as ‘safe’ and blacklisting of ‘unsafe’ as they may lead to market distortion and could jeopardise the smooth flow of international trade.

5.5

The EESC reiterates that measures aimed at fighting terrorism should be coupled with measures aimed at fighting traditional security problems (organised crime, piracy, fraud, smuggling and illegal immigration).

5.6

Seaports are critical national assets. Measures aimed at securing the entire port area logically qualify as being of general public interest. Public funding of such measures would therefore not be subject to the State aid rules of the EU treaty. A harmonised approach of the Member States in granting public support should be developed at EU level to avoid distortion of competition. The EESC reiterates its invitation to the Commission to devise an EU scheme for financing, where necessary, the implementation of the measures. Hence, the EESC believes that the economic dimensions of port security are a major issue for international trade and should be addressed by the EU as a matter of urgency.

5.7

The security measures in port areas should respect the fundamental rights and observe the principles recognised by the Charter of Fundamental Rights of the European Union so as not to restrain the personal human rights of the citizens nor the constitutional order.

5.8

The EESC underlines the urgent need to give a Mediterranean dimension to the EU port security policy which becomes vital with the EU enlargement.

7.12.2004   

EN

Official Journal of the European Union

C 302/27

1.

2.

3.

4.

5.

6.

1.1

Usable energy (1) is the mainstay of our contemporary way of life and culture. Its ready availability opened the door to our present-day standard of living. Unprecedented strides have been made in the major and emerging industrial countries in terms of life expectancy, food supply, overall prosperity and personal freedom. Insufficient energy supply would jeopardise these achievements.

1.2

The need for a secure, inexpensive, environmentally sound and sustainable supply of usable energy is at the heart of the Lisbon, Gothenburg and Barcelona European Council decisions. EU energy policy is thus pursuing three closely related and equally important objectives, namely to safeguard and enhance (1) competitiveness, (2) security of supply and (3) the environment – all of them linked by the common thread of sustainable development.

1.3

There are serious obstacles to achieving these objectives, however, as the Committee has made clear in a number of opinions. It has addressed the resultant energy question on a number of occasions, considering various facets of the issue and exploring potential solutions (2). Its opinions on the Commission Green Paper Towards a European strategy for the security of energy supply (3) and on Research needs for a safe and sustainable energy supply (4) are worthy of special mention.

1.4

In these opinions, the Committee stressed that supplying and using energy puts a strain on the environment, presents risks, depletes resources and involves the problem of external dependence and imponderables. The Committee also made the point that the most important measure for reducing the risks associated with the security of energy supply — and other risks – is to ensure the most diverse and balanced possible use of all types and forms of energy, including all efforts to save energy and use it rationally. The pros and cons of the various individual processes are also briefly outlined, but, for lack of space, these cannot not be repeated here (5).

1.5

In technical terms, however, none of the potential future energy supply options and technologies is perfect. None is wholly free of damaging environmental impacts. None is sufficient to cover all needs, and it is difficult to adequately gauge their long-term potential. Nor, therefore, can a forward-looking, responsible European energy policy bank on being able to secure an adequate energy supply along the lines of the objectives set out above by using only a small number of energy sources. This is also true given the need to save energy and use it rationally.

1.6

Thus, no secure, long-term, environmentally sound and economically viable energy supply exists — either in Europe or elsewhere in the world (6). The key to potential solutions can lie only in further intensive research and development. Energy research (7) is the strategic element and essential mainstay of any long-term, successful energy policy. In the opinion referred to, the Committee also recommended a consistent European energy research programme, key elements of which are admittedly already contained in the Sixth Framework Programme for research and development and the Euratom research and training programme, but with significantly increased R&D investment.

1.7

The Committee has also made the point that, given the slow pace of change in the energy industry, the fact that climate gas emissions are a global, not a regional issue, and the expectation that the problem will further worsen in the second half of the century, the approach to the energy issue should be more global in scale and cover a substantially longer time period.

1.8

The problems of finite resources and emissions (greenhouse gases) are compounded by the forecast two- if not three-fold increase in global energy requirements by 2060 as the result of population growth and the need for less developed countries to catch up. Any strategy and prospects for development must therefore look beyond that timeframe.

1.9

In its recent Opinion on the sustainable use of natural resources, the Committee also reiterated the point that any sustainable development strategy must cover a considerably longer timeframe.

1.10

As the Committee has also noted, these points are not, however, adequately reflected in either public perceptions or in open debate. Rather, there is a broad range of opinions at the extremes respectively over- or under-estimating the risks and opportunities involved. At one extreme, some people take the view that there is no energy problem at all, that things have always worked out so far and that new reserves could be developed should the need arise (for decades we have been hearing predictions of forest dieback and claims that oil and gas stocks are set to run out in just 40 years). At the other end of the spectrum is the belief that renewables could easily meet the world's entire energy needs if only all research funding were channelled into them and society adapted accordingly.

1.11

There is therefore still no sufficiently consistent global energy policy, and even within the EU Member States, there are considerable differences of approach to the energy issue.

2.1

For a given mass of fuel, around a million times more energy is released through the fission of very heavy atomic nuclei and the fusion of very light atomic nuclei than through chemical processes.

2.2

Around 1928 it was discovered that nuclear fusion was the hitherto unexplained energy source powering the sun and most of the stars. Through the sun's rays, therefore, fusion energy is also the main energy source for life on earth — the energy which makes plants grow and which is locked up in fossil fuels and renewable energies.

2.3

As soon as nuclear fission was discovered in 1938 — and as soon as the potential of its peaceful application as a huge terrestrial energy resource was recognised — a promising and dynamic development was set in motion for its exploitation.

2.4

In the course of that development, the objectives of nuclear fission were achieved astoundingly quickly; the hope of exploiting nuclear fusion as a virtually infinite terrestrial energy resource, however, still remains to be realised.

2.5

The practical use of both kinds of nuclear energy is intended (i) to generate electricity without emitting greenhouse gases and (ii) to reduce consumption of hydrocarbons (oil and natural gas) — key fuels in the transport sector — which produce less CO2 than coal when combusted and are thus also being increasingly considered — or indeed are already being used — to generate electricity (8).

2.6

The processes of nuclear fission and nuclear fusion differ fundamentally in terms of how they work, operating conditions, environmental and safety aspects, raw material reserves and availability, etc. In all these areas nuclear fusion would have conceptual advantages (see points 2.11 et seq.).

2.7

Nuclear fission. Nuclear fission has been used for decades to generate energy. Nuclear fission power plants have already done much to prevent greenhouse gas emissions (CO2) and to reduce the dependencies involved in the consumption and import of oil and gas. This was a factor in reviving the nuclear energy debate, especially in the context of moves to cut CO2 emissions and ways and means of achieving this (incentives/penalties). The Committee recently devoted an opinion to this question (9).

2.8

Fuel for nuclear fission is provided by isotopes (10) of the particularly heavy elements in the periodic system: thorium, uranium and plutonium. The neutrons released during nuclear fission set off new fission processes in the nuclei of these materials. This produces an energy-yielding chain reaction that needs to be controlled. During this process, radioactive — and in some cases very long-life — fission products and actinides arise that must be kept away from the biosphere for thousands of years. This raises concerns and leads some people to reject nuclear energy use out of hand. Moreover, new fissile substances are also generated – for instance plutonium (from (11)uranium) — which are subject to monitoring as potential nuclear weapons material.

2.9

Nuclear fission reactors operate on the basis of a ‘pile’. The nuclear fuel stock — sufficient for a number of years (100 tonnes in a power plant) — is enclosed in the core. Control processes regulate the number of fission reactions needed to secure the desired output. In spite of the advanced technology available to control these processes and to guarantee safety, the sheer quantity of the energy stored heightens these concerns even further. Moreover, considerable amounts of after-heat are also produced, necessitating, for most reactor types, a relatively long and intensive cooling period once the reactor has been shut down to prevent the cladding overheating.

2.10

Referring to such concerns, the Committee notes in its recent opinion on this subject (12), that the fourth generation of fission power plant is now under development. These will raise the high passive safety standards of current plants still further.

2.11

Nuclear fusion. In terms of the fuel masses employed, nuclear fusion is the most efficient potentially useable energy process on the planet. Fusion reactors are facilities for the controlled generation of fusion processes and the use of the energy thereby released. They operate continuously as power plants generating electricity (13) – mainly baseload electricity. They will be fuelled by heavy hydrogen isotopes (see below). Helium, a harmless noble gas (14) with useful applications, is the ‘ash’ of the fusion reactor.

2.12

However, during the fusion reaction, which only takes place when the reaction partners meet each other at very high speeds (15), additional neutrons are released which produce radioactivity in the reactor's wall material (and may change its mechanical properties). For that reason, one of the aims of the relevant R&D programme is to develop material, the radiotoxicity (16) of which will drop to the range of coal ash in between one hundred and, at most, several hundred years. This could, among other things, potentially make it possible to reuse a large part of the materials in question, thereby substantially defusing the question of final storage.

2.13

The scientific and technological requirements for generating fusion energy are extremely exacting. The basic — and difficult — task is to heat a gas consisting of hydrogen isotopes (a deuterium-tritium mix) to temperatures of over 100 million degrees (the gas thereby becoming a plasma (17)), so that the colliding nuclei reach speeds high enough to facilitate the desired fusion processes. It is also necessary to hold this plasma together long enough and to extract and use the energy thereby generated.

2.14

These processes take place in the fusion reactor's combustion chamber. The energy contained in the few grams of fuel that is injected — if not constantly topped up — is only enough for a few minutes' output, so there can be no undesired nuclear excursions. Moreover, the fact that, if any error is made, the thermonuclear burning process cools and stops (18), is another inherent safety benefit.

2.15

Thus, given these inherent safety qualities, the opportunity to drastically cut long-lived radiotoxic waste levels (fusion processes do not involve fission products or any long-lived, particularly hazardous components [actinides]) and the practically limitless availability of raw materials, the use of fusion energy would therefore be a very attractive and important component of future sustainable energy supply, and would thus help resolve current difficulties.

2.16

Accordingly, in earlier opinions the Committee made the point that R&D geared towards the use of fusion energy is a key element of future energy policy and a prime example of successful European integration. As such, it must be vigorously promoted in the European R&D framework programmes and the Euratom research and training programmes.

3.1

The peaceful use of fusion energy was first mooted almost fifty years ago. At that time some countries already had fusion weapons technology (the hydrogen bomb), and the move towards the peaceful use of fusion appeared very promising, although extremely difficult and protracted.

3.2

Two statements from that period which are still quoted today make this particularly clear and typify the tension recognised early on between high expectations and the most intractable physical and technical difficulties. The first is from H. J. Bhabha in his opening speech to the first Conference on the Peaceful Uses of Atomic Energy held in Geneva in 1955: ‘I venture to predict that a method will be found for liberating fusion energy in a controlled manner within the next two decades.’ (19) Conversely, in the first general article on the fusion issue published by the USA (20), R.F. Post wrote: ‘However, the technical problems to be solved seem great indeed. When made aware of these, some physicists would not hesitate to pronounce the problem impossible of solution.’ (21)

3.3

Among the many possible approaches put forward at the time were proposals for magnetic confinement, which have now emerged as the most promising means of achieving the required conditions. Coming to that realisation, however, required laborious scientific and technological development and optimisation, marked by obstacles and setbacks. This concerns the tokamak (a Russian acronym for toroidal (22) magnetic chamber), and the stellarator. Both these approaches are variants of a common basic concept which involves confining the hot plasma under the required conditions using appropriately structured ring-shaped magnetic fields.

3.4

The pioneering role in this process was played by the European JET project (Joint European Torus), the technical blueprint (23) for which appeared twenty or so years later (24). During this project's experimental phase not only were the required plasma temperatures achieved for the first time, but in the 1990s, using the deuterium-tritium fusion process, it proved possible to release significant amounts of fusion energy (some 20 megajoules per experiment) in a controlled manner. Thus, for a short period, the plasma's fusion energy output almost equalled the heating energy fed into the plasma.

3.5

This success was made possible through the synergy of all the resources of the European Community's fusion research programme implemented under Euratom auspices. The network established as part of this programme brought together the various Euratom-associated laboratories in the Member States — with their respective test facilities, their various individual contributions and their involvement in the JET project — and gave them a shared identity. This therefore is an early example of the European research area in practice and a clear demonstration of its effectiveness.

3.6

This was, therefore, the first, critical step forward in worldwide fusion research. The physical principle of generating and magnetically confining fusion plasma had been demonstrated.

3.7

Advances on this front were also marked by exemplary worldwide cooperation, coordinated by organisations such as the International Atomic Energy Agency (IAEA) and the International Energy Agency (IEA). European research provided key input. It worked determinedly to catch up — particularly with the USA — and is now recognised to hold the leading position in the field.

3.8

Building on an initiative launched seventeen years ago by President Gorbachev and President Reagan — later joined by President Mitterrand — a plan emerged for a joint global project to develop, and, possibly also as a joint project, to build and operate ITER (25) — the first test reactor to provide a net energy gain from the plasma (i.e. where the plasma's power output from fusion processes is considerably higher than the energy fed into the plasma). The purpose of ITER is to demonstrate the technological and scientific feasibility of producing useable fusion energy by means of a burning plasma.

3.9

The term ‘burning’ (also known as ‘thermonuclear burning’) describes a process in which the energy released by the fusion process (or more accurately the energy carried by the helium nuclei) plays a major part in keeping the plasma temperature at the extremely high levels required. Experimental findings to date have shown that that can only be achieved using sufficiently large facilities (i.e. similar in size to power plants). ITER was thus designed to an appropriate size.

3.10

The programme, therefore, is in a transitional phase between research and development although it is not possible to make a clear-cut distinction between the two concepts. To achieve the ITER targets, it is necessary on the one hand to provide a definitive response to certain physical questions that can only be answered once a fusion plasma has been kept burning for a reasonably long time. On the other hand, some technical building components are also needed to similar specifications and on a similar scale to those that will later be required for an operational reactor (e.g. very large superconductive magnets, a combustion chamber able to withstand the plasma (26), plasma heating units etc.). This therefore is the first step from physics to power plant technology.

3.11

The results of the worldwide planning for ITER include design data and comprehensive blueprints, as well as prototypes and tested model components. These results draw on experience and extrapolation from all the experiments conducted to date, starting with JET, the flagship not only of the European but of the worldwide fusion programme.

3.12

ITER's linear dimensions will thus be around twice those of JET (mean diameter of the plasma ring: 12 meters, combustion chamber volume: around 1000 m3). The idea is that ITER will generate some 500 MW of fusion power in combustion times of initially at least eight minutes, with a tenfold energy output/input ratio (27) (and a lower output/input ratio during essentially unlimited combustion times).

3.13

ITER construction costs are estimated at around EUR 5 billion (28).

3.13.1

In the construction of ITER, most of these costs would accrue to those firms that are awarded the contract to manufacture and fit the various components of the test facility. A significant European contribution to ITER's construction would therefore benefit European industry in terms of innovative capacity and general technological know-how and thus help achieve the Lisbon strategy objectives.

3.13.2

Industry has already benefited in the past from many fusion programme spin-offs (29). This is expected to be a particularly important side benefit of ITER's construction.

3.13.3

During the ITER construction period, European expenditure on the entire fusion programme (i.e. both the Community and the Member States) would be less than 0.2 % of the costs of final energy consumption in Europe.

3.14

In the course of its development, the ITER partnership has had various ups and downs (30). Initially, it involved the EU, Japan, Russia and the USA. The USA withdrew about five years ago but rejoined in 2003, while China and Korea also came on board. This partnership has made it possible not only to spread the planning costs among all the major international energy research partners, but also to ensure that the project planning benefits from all available results worldwide.

3.15

This has also brought out the importance of the scheme as a global project to resolve a global problem.

3.16

The joint construction and operation of ITER would also mean a substantial gain in knowledge and technical skills for all the partner countries concerned (see also section 5), not only as regards this new kind of energy system, but also in terms of overall innovation for cutting-edge technologies.

3.17

In terms of technological development, however, it would be a new departure if, across the world, just one facility were to be build in line with ITER objectives, in other words if it were decided to dispense at this stage with any exploration or testing of contending and equally advanced alternatives, as had been done, for instance, in the development of aviation, space exploration and fission reactors.

3.18

This cost-cutting move would thus have to be offset by a particularly effective back-up programme which also offered scope for innovative ideas and alternative concepts (31) for reducing development risks. However, these could be studied, initially, on a lesser scale and thus at lower cost.

4.1

The accumulated results of the ITER project, expected some twenty years after building work starts, will provide basic data for the design and construction of the first electricity-producing fusion demonstration power plant (DEMO). Construction work on DEMO could thus begin in around twenty to twenty-five years.

4.2

On the basis of current knowledge, fusion power plants should be designed to incorporate the following features:

4.3

To bring DEMO to fruition, it is necessary not only to address key issues such as energy output and processes which limit the combustion time (these issues are to be examined and demonstrated within the ITER framework), and to apply sophisticated procedures which are already available or remain to be developed further for that purpose, but also to press ahead with and consolidate other important technical developments.

4.4

These relate mainly to the internal fuel cycle (the breeding and treatment of tritium); power extraction; the capacity of certain materials to withstand plasma load (plasma-wall interaction) and neutron load; repair technology; the optimisation of remote operations and technological solutions for extending the combustion time with a view, ultimately, to achieving a fully continuous burning process. Another particularly important task is to develop appropriate low-activation structural materials – or structural materials that are activated only for short periods. More work must be done on that front, given the need to test and verify such materials over long periods.

4.5

It would, however, be a mistake to believe that DEMO marks the final phase of R&D. As the history of technology shows, intensive R&D often gets underway only when the initial prototype is already in place.

4.5.1

The history of technology also shows that initial prototypes of new technologies are often crude, primitive devices compared with later, elegant versions that gradually evolve.

4.5.2

The present-day optimisation of the diesel engine came almost a century after its invention. Fusion power plants too will certainly also need to be improved, optimised and then adapted to the requirements of the time.

5.1

Two sites — Cadarache (37) in Europe and Rokkasho-mura (38) in Japan — are currently competing at the highest government level to house ITER. The outcome will determine both the financial participation of the various partners involved and the shape of the requisite back-up programme.

5.2

Before the USA rejoined the ITER partnership and before China and Korea came on board, there was, realistically speaking, little doubt that ITER would be located in Europe, not least because, as with JET, that would be the best guarantee of its success.

5.3

A new state of affairs has now arisen, however, as the USA and Korea currently back the Rokkasho-mura location in Japan, despite the clear and broadly accepted technical advantages of the Cadarache site. If this decision were confirmed, Europe would lose its leading position and be deprived of the fruits of investment made and work done to date – with all that that implies for research and industry.

5.4

The Committee therefore notes, welcomes and backs the European Council's decision of 25 and 26 March 2004 in which it reaffirms unanimous support for the European proposal and calls on the Commission ‘to progress negotiations on the ITER project with a view to its rapid commencement at the European candidate site.’

6.1

The Committee agrees with the Commission that, in the long term, the peaceful use of fusion energy has the potential to play a very important part in resolving questions of energy supply in a sustainable, environmentally sound and competitive way.

6.1.1

This is due to the potential advantages of this technology of the future, i.e.:

6.1.2

The potential of fusion energy particularly complements that of renewables – but with the advantage over wind and solar energy that it is not dependent on the weather, the seasons or the time of the day. That is also true of the relationship – adjusted to suit actual requirements – between centralised and decentralised systems.

6.1.3

In a number of opinions, therefore (40), the Committee has already advocated clear and enhanced promotion of the R&D programme for fusion energy.

6.2

The Committee is pleased to note that, thanks to the leadership provided by the European fusion programme and its JET project, the first, critical stage in global fusion research has successfully been completed, i.e. to demonstrate the physical principle of releasing energy from nuclear fusion, thereby laying the foundations for the ITER test reactor in which, for the first time, a burning fusion plasma - with energy output substantially exceeding input - is to be produced and studied.

6.3

Thanks, therefore, to many years of R&D - and the requisite investment - it has been possible, through worldwide cooperation, to reach the decision-making stage of planning and policy for the construction and operation of the ITER, which is already approaching power plant dimensions.

6.4

The Committee would also stress the leading, pioneering input of the European fusion programme, without which the ITER project would not exist today.

6.5

The results of the ITER project will provide basic data for the design and construction of the first electricity-producing fusion demonstration power plant (DEMO). Building work on DEMO could thus begin in around 20 to 25 years.

6.6

The Committee backs the Commission in its efforts to prepare Europe strategically so that it can also play a central role in the commercial exploitation phase and thus, even today, increasingly use part of its fusion research programme to look beyond ITER and focus on DEMO.

6.7

To develop DEMO, it is essential not only to find answers to key issues to be examined and demonstrated as part of the ITER project, but also to press ahead with other major tasks. Examples include the optimisation of the magnetic configuration; material development (improvements in the case of plasma-induced erosion, neutron damage, decay time of the induced radioactivity); the fuel cycle; energy extraction; driving the plasma current and controlling its internal distribution; efficiency; and component reliability.

6.7.1

The Committee also points out, however, that further such progress will only be attainable through a broad European R&D back-up programme, tying in the Member States and requiring a network of physical and especially technical experiments and large-scale facilities that must be available to back up and complement ITER.

6.8

The Committee feels it is vital to keep up the present momentum and, with vigour, commitment and the requisite resources, to rise to a challenge of great scientific and technological complexity that is so important for long-term energy supply. That also involves a serious commitment to carrying out the Lisbon and Gothenburg strategies.

6.8.1

For the future seventh R&D framework programme and the Euratom programme, this means giving energy research as a whole — and the fusion programme in particular — the markedly increased resources they need for continued success. It also means making full use of other ITER financing options.

6.8.2

It also involves ensuring a sufficient supply of physicists and technologists so that an adequate number of European experts are on hand to operate ITER and develop DEMO. The Committee would also point to its recent opinion on this specific issue (41).

6.8.3

It also means that academic institutions and research centres remain part of the network, not only so as to train young scientists and engineers in the specialist disciplines required, but also so that they can use their expertise and knowledge to contribute to the various tasks and, ultimately, also act as a link to civil society.

6.8.4

One key task is to take timely steps to secure the increasingly necessary involvement of European industry in this very varied field of cutting-edge scientific and technological development. In the fusion programme to date, European industry has mainly been involved in developing and supplying highly specialised and extremely sophisticated components – and this experience should be cultivated and maintained. However, as fusion reactors move closer to becoming a practical reality, industry should gradually take on a more independent, pro-active role.

6.8.5

The considerable investments earmarked for industry to build ITER and develop DEMO will both strengthen the economy and, even more importantly, boost expertise and innovation in a technologically most demanding new area. This is already becoming clear from the many spin-offs of the fusion programme to date.

6.9

Internationally, Europe faces a multiple challenge. It is vital on the one hand to maintain its leading role in fusion research not only in the face of US dominance in research but also against the growing strength of the three Asian ITER partners. On the other hand, however, it is important as far as possible to maintain and expand the unprecedented international cooperation seen up to now.

6.10

The Committee therefore supports the Commission in its intention to take up that challenge, and calls on the Council, the Parliament and the Member States to do the same and not to give up Europe's leading position in this key area of the future. This does however present difficulties.

6.11

Before the USA rejoined the ITER partnership and China and Korea came on board, there was, realistically speaking, little doubt that ITER would be located in Europe, not least because, as with JET, that would be the best guarantee of its success.

6.12

A new state of affairs has now arisen, however, as the USA and Korea currently back the Rokkasho-mura location in Japan, despite the clear and broadly accepted technical advantages of the Cadarache site. If this decision were confirmed, Europe would lose its leading position and be deprived of the fruits of investment made and work done to date — with all that that implies for research and industry.

6.13

The Committee therefore notes, welcomes and backs the European Council's decision of 25 and 26 March 2004 in which it reaffirms unanimous support for the European proposal and calls on the Commission ‘to progress negotiations on the ITER project with a view to its rapid commencement at the European candidate site’.

6.14

Summing up and reiterating this point, the Committee calls on the Council, the Parliament and the Commission to launch initiatives and to genuinely exhaust all possibilities — if necessary working out new structural approaches to the international division of labour — to ensure that, whatever happens, ITER is located in Europe, given its key strategic role in the development of a major sustainable energy resource.

7.12.2004   

EN

Official Journal of the European Union

C 302/35

1.1

The GALILEO programme represents a major challenge for the European Union, its independence, its technological and scientific capacity, its economy and, primarily, its space and telecommunications industries. Over the last few years, the development of the space industry in the EU has been based mainly on commercial activity linked to satellite telecommunications. The difficulties which have afflicted the telecommunications industry have had serious repercussions on the space industry, which has been given insufficient institutional and political support, in particular in comparison with its main competitors.

1.2

The GALILEO programme, which was delayed because of the discussions on the allocation of ‘fair returns’ from the programme between the various states which are members of the European Space Agency and because of pressures from outside Europe, finally entered the actual starting phase following the agreement on 26 May 2003 in the Council of the European Space Agency (ESA) on the respective financial contributions of the ESA Member States.

1.3

The GALILEO programme has an important feature when compared with the GPS system, namely that it is a civil programme. This major infrastructure project is of decisive strategic importance to Europe and the independence of Europe, as has already been pointed out by the EESC, the European Parliament and the European Council. The GALILEO programme ties in perfectly with the Lisbon Strategy. The importance of such a large-scale project to the cause of promoting European integration should also be strongly emphasised.

1.4

The GALILEO system will provide five services:

1.5

As GALILEO is a civil system, its main use is nonetheless for everyday purposes, particularly in the field of transport. It will therefore have to be able ensure a continuous and secure service, and, in the event of a breakdown, its civil liability may be engaged, which is not the case with the GPS system.

1.6

Finally, GALILEO will be slightly more precise than GPS and, above all, have a range covering the whole of the planet. It can also provide for real time verification of the integrity of the signal; this is a vital requirement for certain applications, particularly in the field of civil aviation.

1.7

The basic aim of the communication under review is to report on the progress made with the GALILEO programme, to outline the prospects for the future and to pinpoint a number of ongoing uncertainties in respect of a project which is expected to cost EUR3.2 bn. and to involve three phases, namely:

—

the progress of the development phase;

—

the development of international cooperation;

—

the transition to the deployment and operating phases.

—

the latest work on the definition phase;

—

basic infrastructure;

—

the EGNOS system, which will soon be operational;

—

a European radio navigation schedule.

2.1.3.1

The issues at stake were extremely important for the EU, which had two objectives:

2.1.3.2

The discussions took place against the background of the historical monopoly of the American GPS system. The EU did, however, in fact secure the outcome which it had hoped for, both as regards the conditions for utilising the frequency spectrum and as regards its demand that there should be impartial multilateral coordination.

2.2.1

As the Council has stressed on several occasions, international cooperation is an essential element for ensuring that maximum benefits are derived from the GALILEO programme. Furthermore, requests from third countries to be associated with the project are becoming more and more numerous. In this context, the Commission wishes to pursue, at one and the same time, a bilateral approach and a regional approach.

2.2.2

An initial agreement was signed with China on 30 October 2003 and talks have got under way with India and Israel. Similar steps are being taken in the case of South Korea, Brazil, Japan, Canada, Australia, Mexico and Chile.

2.2.3

As regards regional cooperation, dialogue has started with the Mediterranean region, Latin America and Africa.

2.2.4

Negotiations are also under way with the two states which already have a satellite navigation system, namely Russia and the United States. These negotiations are particularly important as they are designed to ensure technical compatibility and interoperability between the systems used by these latter states and the GALILEO programme. It should be pointed out that, initially, the United States questioned the very justification of the GALILEO programme. The consultation mechanism currently under discussion must be based on a system under which each of the partners has symmetrical rights and duties in respect of the other partner, particularly in connection with the exercise of a possible right of veto.

2.3.1.1

The concession procedure is managed by the Joint Undertaking. The procedure was launched in October 2003. Four tenders were registered and declared to be eligible. The tenders were submitted by consortia consisting of a number of lead partners, backed up by a cluster of associated companies. All of the bidders considered that the future European system could generate substantial commercial revenue and each was willing to fund a considerable proportion of its contribution from its own assets.

2.3.1.2

This factor is all the more important in view of the fact that the Council wishes that Community funding should not exceed one-third of the financing for the deployment phase. Under the second phase of the concession procedure, known as ‘competitive negotiation’, three consortia have been shortlisted (Alcatel/Alenia/Vinci, EADS/Thalès/Inmarsat, Eutelsat).

2.3.1.3

Six types of resources have been identified, namely:

2.3.2.1

The Commission has forwarded to the Council and the European Parliament a proposal for a Regulation on the establishment of structures for the management of the European Satellite Radionavigation Programme. It had been proposed to establish a Supervisory Authority and a Centre for Security and Safety; the latter body would be placed under the direct responsibility of the General Secretary of the Council/High Representative for the Common Security and Foreign Policy. It ultimately transpired that a Supervisory Authority should indeed be established and would be given responsibilities in respect of security. The Centre for Security and Safety would not be set up; the Council itself would take decisions in real time in the event of a crisis.

2.3.2.2

Another key issue with regard to the framework structure for the system is the issue of possible threats to individual privacy. It should be pointed out that the GALILEO system does not, in itself, pose any threat to privacy since it does not receive any information from users (there is no ‘uplink’). On the other hand, information received by the user can be retransmitted by another system — e.g. mobile phones — thereby making it possible to pinpoint the location of the user. Responsibility for regulating such use of information provided by the GALILEO system does not in any way lie with the EU programme management structures but rather with national authorities. The attention of the national authorities should be drawn to the measures which they are responsible for taking in order to regulate the use of the GALILEO system and — forthwith — the use of the GPS system.

3.1

The Committee appreciates the decisive approach adopted by the Commission in its Communication in view of the fact that the project in question is clearly of the utmost importance and involves considerable difficulties. In this spirit — marked by a determination to succeed — sustained attention should be paid to the following issues:

3.2

The success of this major project depends upon the clear affirmation of political and financial will by the Council and its resolute adherence to this stance. By committing itself to the GALILEO project, the Council has demonstrated its ambition for both the EU and its space policy.

4.1

In its conclusions, the Commission appears to demonstrate some anxiety or uncertainty as regards the issue of financing. This is a matter of fundamental importance; if the financing were to be called into question, the whole programme could be placed in jeopardy. The EESC can only reaffirm the fact that the GALILEO project is of major strategic importance to the EU, to the future of its space industry and to the cause of promoting European integration; The EESC already strongly emphasised this point, setting out a detailed case, in its opinions on the Commission's Green Paper and White Paper on the European space policy (1). The EESC shares the Commission's satisfaction with regard to the very real progress which has been achieved in getting this project underway and hopes that the optimism displayed by the Commission will not be lessened by last-minute difficulties.

7.12.2004   

EN

Official Journal of the European Union

C 302/38

1.

The purpose of the proposal is to codify Council Directive 95/18/EC of 19 June 1995 on the licensing of railway undertakings (1).

2.

Simplifying and clarifying Community law is a matter of great importance in the context of a people's Europe. The European Parliament, Council and Commission have therefore underlined the need to codify legislative acts that have been frequently amended, and agreed by interinstitutional agreement of 20 December 1994 that an accelerated procedure may be used. No substantive changes may be made to acts when they are codified.

3.

The Commission proposal complies with this requirement, and the EESC therefore has no objections to raise.

7.12.2004   

EN

Official Journal of the European Union

C 302/39

1.1

Regulation 1228/2003/EC of the European Parliament and of the Council on conditions for access to the network for cross-border exchanges in electricity (the ‘Electricity Regulation’) aims to set up a true single electricity market by stepping up cross-border trade in electricity. Fair, cost-oriented, transparent and directly applicable rules are to be introduced for the fixing of prices for cross-border transfers and the allocation of available connection capacity. These rules would take account of a comparison between efficient network operators from structurally comparable areas and supplement the provisions of Directive 96/92/EC so that cross-border transactions are guaranteed effective access to transmission networks.

2.1

The Republic of Slovenia has submitted to the Commission a request for amendment of the Electricity Regulation, which would allow Slovenia to continue operating its current system of congestion management at the interconnections with Austria and Italy until 1 July 2007. At the moment, half of the total available capacity of the two interconnections in question is allocated by Slovenia on the basis of this system. In fact, according to an arrangement between the transmission system operators concerned, the other halves of the total capacity are allocated by the Italian or the Austrian system operator respectively. Under the current Slovenian system the available capacity, in case total demand for capacity exceeds the capacity available (congestion), is allocated to applicants for capacity on a pro rata basis. The capacity is allocated free of charge. Such a system cannot be considered a non-discriminatory, market-based solution in the sense of the Electricity Regulation. Slovenia has justified its request for a derogation on the grounds that the restructuring of Slovenian industry has not yet been completed and Slovenian electricity production is still adjusting to the new market conditions (high costs of investment in environmental protection).

3.1

The EU Commission proposal is based on Article 95 of the Treaty establishing the European Community, which is part of the chapter on the approximation of laws. The facts, however — Regulation 1228/2003 came out after the end of the accession negotiations and the signing of the accession treaty, so that Slovenia could not take part in the adoption process — justify in every respect an approach based on the relevant Accession Treaty and Act of Accession.

3.2

The latter contains provisions concerning the application of decisions taken by the institutions, and particularly if a new Member State has not been able to take part in the negotiations concerning a decision that has been taken between the date on which the Treaty or Act was signed and the country's actual accession on 1 May 2004. That is now the case for Slovenia.

3.3

It is in the spirit of these provisions that one must consider the request from the Slovenian government for a postponement until 1 July 2007 of the application of Article 6(1) of the Regulation and the provisions of the Annex relating directly to it, together with the present Commission proposal.

3.4

In line with the adage ‘pacta sunt servanda’, a refusal can only be considered if acceptance of the proposal would result in irreparable damage for the Union as a whole.

3.5

However, the Commission states in its proposal that the practical impact of the transitional period on the functioning of the internal electricity market would be very small. The EESC can go along with this view. It is also difficult to maintain that during the requested transitional period Slovenia can realise its potential of becoming a not unimportant regional hub within the internal market.

3.6

In addition, the argument that Regulation 1228/2003 was brought in for the very reason of at last getting proper international trade in electricity off the ground (1) and the Slovenian request would be in breach of it does not, in view of the duration, scope and geographical area involved, carry enough weight for the request to be rejected.

3.7

The statement — which in itself is correct — that fair competition between, for instance, European aluminium and steel makers as well as between electricity producers is an essential component of the single market also does not apply here.

3.8

From another angle, it can be argued that ensuring a safe and reliable electricity system in Slovenia and enabling environmental investments to be made during the transitional period are grounds for accepting the Commission proposal.

3.9

The EESC is all the more inclined to recommend acceptance of the proposal since, in its opinion of 17 October 2001 (2) on Regulation 1228/2003, it said the following concerning the consequences for the applicant countries, as they were then: ‘... the electricity and natural gas sectors in the applicant countries … maintain uncompetitive infrastructures and management methods. The immediate consequence of this could be considerable job losses in companies in these sectors, which in turn would cause unbearable social tensions in the applicant countries, particularly for those countries which do not have the same kind of social security system as found in the Member States. The European Union must share with these countries the experience that has been gained from the liberalisation processes currently underway in Europe, and provide funding to help them modernise their companies. Opening up these new markets is not enough; their energy sectors must also be restructured so that companies in the applicant countries can compete under the same conditions.’

4.1

The arguments put forward in the Commission proposal for allowing Slovenia until 1 July 2007 to comply with Article 6(1) of Regulation 1228/2003 and with the relevant provisions concerning congestion management are not justified when considered purely from the point of view of the interests of fair competition in the single market.

4.2

However, after considering the facts of the time when the Regulation was produced and the accession negotiations were signed, the EESC feels that these arguments are justified. Authorisation of the short transitional period requested will not result in irreparable damage for the Union as a whole — on the contrary: security and reliability as well as environmental investments in the Slovenian system are ensured — and in its opinion on Regulation 1228/2003 (3), on the issue of competition from the applicant states as they were then, the EESC recommended that the EU should offer a helping hand. The EESC believes that it is quite clear that Slovenia was unable to take part in the negotiations concerning or in the approval of Regulation 1228/2003.

4.3

Quite apart from the explanation and the basis of the Commission proposal, which should be completed or adapted in line with the views set out above, the EESC recommends acceptance of the proposal to postpone the application of Regulation 1228/03 until 1 July 2007.

7.12.2004   

EN

Official Journal of the European Union

C 302/41

—

regional development as a factor regulating globalisation, through the creation of regional clusters, as an effective way to attract firms to an area and encourage them to stay;

—

corporate social responsibility and the implementation of ‘good practices’ as part of an approach involving preventive and other measures for anticipating and managing change;

—

negotiations and social dialogue in firms to ensure that restructuring is tackled in a socially responsible fashion, with a firm's management and workers adopting a positive attitude to seeking solutions which are seen as successful by the firm, workers and community, thus striking a balance between social and economic aspects;

—

action in partnership between businessmen, social partners, civil society (universities, research and innovation centres, associations, etc.) and local authorities, so as to create the right conditions for boosting productivity and improving regions' growth potential; and

—

proposal to create the status of ‘most favoured region’ for those regions which have high levels of social and employment cohesion and suddenly lose skills because firms relocate, without having any alternative economic activities to sustain local employment levels; these regions would receive financial support, with the specific aim of regenerating the local economic fabric.

1.1

In order for this own-initiative opinion to be viewed in the right context and properly interpreted, ‘industrial change’ has been defined as ‘the normal and continuous process of an industrial sector pro-actively responding to the dynamic movements in its business environment in order to remain competitive and create growth opportunities’ (2). ‘Restructuring’ refers to ‘a particular form of industrial change and regularly is [viewed as] an ad hoc process of (often enforced) adaptation to the conditions in the business environment in order to regain competitiveness, leading to discontinuities in business activities’ (3). The idea of ‘anticipating’ change provides the key to good management of such change, because it means that problems can be avoided in the restructuring process. Anticipating change involves studying and forecasting future terms of competition and market requirements, allowing the necessary adjustments to be planned in good time, thus keeping a firm's social and productivity problems to a minimum.

1.2

Globalisation can be defined as efforts to step up and facilitate trade relations between countries, to which end trade barriers between countries are dismantled, import taxes cut back or abolished, and international groupings such as the EU and Mercosur are consolidated. As part of this process, governments in every country offer incentives to attract foreign firms to establish operations within their borders and facilitate the internationalisation of all aspects of their trade. Globalisation also calls for common, basic rules to be established and respected world-wide.

1.3

Economic, social and territorial cohesion policy aims to narrow current economic and social disparities between Member States and between regions, speed up growth and encourage more sustainable development, helping less-favoured regions adapt to the challenges of a knowledge-based economy, thus assisting all regions to achieve the objectives of the Lisbon strategy.

More specifically, this policy has to target infrastructures, the environment, entrepreneurship, per capita income, access to employment and social security, steps to counter social exclusion, access to new information technologies, education and lifelong learning, better administration and a stronger role for economic and social operators.

1.4

One good definition of ‘cluster’, as defined by Michael Porter (Professor at the Harvard Business School) in his book on ‘The Competitive Advantage of Nations’, is ‘a geographically proximate group of interconnected companies and associated institutions (universities, public agencies or trade associations) in a particular field, linked by competition and cooperation’.

2.1

Throughout European society, there is acceptance of the fact that industrial change is inevitable as a result of globalisation and lasting changes to the world economy; these are hallmarked by rapid, far-reaching developments in the markets and in behaviour, growing technical complexity and considerable consumer involvement in the design and production of goods, products and service delivery.

2.2

Globalisation is the driving force behind world-wide labour market and productivity competition. Multinational companies are redirecting investment to countries with low-cost labour, direct market access and technological skills.

2.3

Increased competition, an ageing population, and new consumer requirements and standards all come together to create an environment where there are, and will continue to be, major tensions and problems.

2.4

The European Union must face up to these tensions and problems with determination using measures which anticipate de-industrialisation in Europe, i.e. taking steps to prevent the following three problems from occurring at the same time:

These three things are not yet occurring at the same time, but it is clear that there is a genuine deterioration in the employment and trade balance situation.

2.5

The EU will only be able to mount a successful response to these challenges if industrial policy is revamped in such a way as to make it more pro-active and provide comprehensive, systematic transparency regarding the particular, cumulative effects of any decision affecting the European industry's cost and efficiency structures – in terms of both horizontal aspects and specific industrial sectors, such as the steel and textile industries, all the while bearing in mind the impact of enlargement.

3.1

It is a paradox of our times that inequalities persist in an era when scientific and technical progress is such that everyone's hunger should be able to be satisfied and yet at the same time, there is a serious risk that the ‘new global economy’, because it is rooted in deregulated competition, may exacerbate these asymmetries.

It is against this background that regional development is to be seen as a vital instrument for regulating globalisation itself, paying more attention to people's needs, irrespective of where they are located, giving them easier access to goods, services and opportunities.

3.2

Development has to come to the people, wherever they might be; it cannot be blithely assumed that the mobility available to some for boosting personal development is available to everyone, apart from anything else because those lacking most in means are also those who are least able to move around.

Regions must mark out their ambitions regarding industrial change and restructuring, pinpoint the investments which need to be made and define the cooperation necessary between the public and private sectors, and more particularly infrastructure for education and vocational training.

3.3

The EESC deems the creation of regional ‘clusters’ to be the most effective way of attracting firms and encouraging them to stay; this is a key component of regional competitiveness and at the same time a driving force for economic, social and territorial cohesion, as well as a means to avoid the negative economic, social and territorial repercussions which might be triggered by industrial change and restructuring.

The following factors are likely to ensure that the ‘cluster’ system makes it easier for firms to stay in an area and keep skills in a region:

3.4

Since firms in the present economic climate compete on a global basis, they gravitate towards ‘clusters’ relating to their area of business, and may gain competitive advantages from doing so. These advantages are rooted in generic factors such as: the qualifications and skills of the working population, the quality of governance, territorial infrastructure, local and regional innovation and development levels and generally the quality of life in the region (which might require, for example, public intervention to clean up derelict industrial areas). Regional ‘clusters’ may be key factors in boosting economic, social and territorial cohesion and provide a reason for firms to move to developing regions, as long as the EU and national governments carry out and fund programmes to provide back-up for the establishment of technology firms, promote development, innovation and vocational training and foster partnership between firms, universities, local authorities, social partners and civil society.

3.5

Metropolitan areas, as centres of culture and a variety of activities where public and private operators work together to seek solutions for change and modern developments, have a key role to play in successfully creating ‘clusters’, since these areas ‘are in the front line of technological change, affecting transport, construction and public works, information and communication technologies, infrastructure management, etc. This technological change is also at the root of industrial restructuring and the relocation of workforce activities and services with high added value. Economic specialisation also has a spatial manifestation: ‘clusters’ or groups of business working as part of a network with research and innovation centres and universities’ (5).

The major challenge for metropolitan areas also relates to social cohesion problems such as exclusion and poverty, the solution to which clearly involves the harmonious, balanced and sustained development of the major metropolitan areas in Europe, including links to neighbouring areas. Nevertheless, the lack of consistent data makes it difficult to find suitable solutions.

(1) & (2):

These two scenarios cover a horizontal investment strategy adopted by multinationals. In the first scenario multinationals mainly seek to move into new markets and extend their services network, such as banking services and transport and energy networks. In the second, multinationals try to expand their production capacities for services or products which are easily re-exportable.

(3):

This scenario covers a vertical delocalisation strategy which has a greater employment impact.

This scenario covers firms whose activities are essentially labour intensive (for example, textile and car electronics).

4.4.1

In the event of industrial restructuring or a firm's relocation elsewhere, infrastructure, equipment and human resources assets must be assessed and measures taken to attract new businesses into the area. In some cases, it is vital to clean up the soil and sub-soil when a firm leaves a region so that the area can be put to another use.

Investors receiving public funding must bear more responsibility locally and this must be monitored.

Cooperation agreements between all parties is necessary to breathe new life into regions badly hit by industrial change.

4.7.1

Since the 1970s, economic growth has been hallmarked by the services sector becoming predominant over the manufacturing industrial sector. Nevertheless, it is vital that there be a certain interdependence and interaction between the two sectors in order to increase productivity, boost innovation and improve the quality of products and services.

As far as industrial restructuring and change is concerned, this interaction is crucial, since firms providing services (such as R&D) for industrial firms generally follow the latter if they relocate.

5.1

The EESC Opinion on Industrial change: current situation and prospects — An overall approach (6) states that Europe needs to apply ‘a new paradigm focused on ’industrial change with a human face‘ which is based on competitiveness, sustainable development and social and territorial cohesion.’ The Lisbon strategy objectives provide the backdrop to this statement; to this end, the EU has made a special appeal to firms' sense of social responsibility, bearing in mind vocational training requirements and best practices for life in general, work organisation, equal opportunities, social inclusion and sustainable development.

5.2

It is generally acknowledged that corporate social responsibility, based on an ethical approach, can be applied in two key spheres:

Firms are generally asked to involve the social partners, local authorities, consumers and suppliers, each at their own level of responsibility.

5.3

This exercise in corporate social responsibility (in relation to the above-mentioned aspects) may be valuable as a tool for helping achieve economic, social and territorial cohesion, if a proactive, preventive approach is adopted to managing change and restructuring; this will benefit all the parties involved.

6.1

The European Social Fund is encouraging and supporting ‘good practice’ as regards ways to manage industrial change. The European Monitoring Centre on Change (EMCC), at the Dublin-based European Foundation for the Improvement of Living and Working Conditions, regularly reflects such good practice in its moves to promote local and regional corporate social responsibility. Moreover, the first phase of consultation launched by the Commission, entitled ‘Anticipating and managing change: a dynamic approach to the social aspects of corporate restructuring’, has also made it possible to pinpoint a series of good practices in this connection.

Generally such good practice involves:

6.2

Negotiation and social dialogue are crucial if restructuring is to be implemented in a socially responsible manner; it is therefore very important that both firms and trade unions are positive in their approach to seeking successful restructuring formulas which are good for firms, workers and local communities. The Commission gave a boost to these good practices in directives 98/59/EC, 2001/23/EC, 94/45/EC, and 2002/12/EC, which lay down certain guidelines and requirements. The 2002 European-level initiative advocating ‘socially responsible’ restructuring is to be noted here, on the basis of which a series of guidelines were issued in June 2003. Every alternative to laying off workers should be explored.

6.3

There are many positive instances good practice in this field, of European firms adopting socially responsible practices as part of industrial change and restructuring strategies. One such case — among many — is the Arcelor steel group, the result of a merger between Arbed, Aceralia and Usinor; it decided — against a backdrop of structural overcapacity in steel flat production and with a view to improving synergies — progressively to close the Liège steelworks and scale down production in Bremen and Eisenhüttenstadt. In the light of the job losses these measures would entail, Arcelor undertook to assist all those concerned, rehabilitate all the sites affected and contribute to the reindustrialisation of the local economic fabric, with the help of all the parties involved.

On the other hand, an example of what happens when such good practices are not adopted can be seen in the restructuring process in the car industry in Mezzogiorno (Italy), where the company involved was planning to transfer part of its sub-contracting business abroad without envisaging or organising any adequate back-up measures or solutions to the problems thus created.

6.4

The industrial change needed for firms to remain competitive should be backed up by the authorities; this should include funding for education and training for the work-force, and against this background, steps should be taken to promote new technologies. Moreover, it is necessary to work towards increased corporate social responsibility, the social benefits of creating more and better jobs and environmental sustainability in regions where these businesses are located.

7.1

The aim of sustainable development is central to the EU. The main trans-European projects such as transport networks and other infrastructures in the pipeline at EU level are not enough to promote sustainable development or to launch development in general in the least favoured regions. Persistent disparities between countries and regions in production, productivity and access to employment are rooted in shortcomings in key areas of competitiveness, namely human and physical capital, environmental aspects, innovation capacity and regional governance.

7.2

Opportunities created by industrial change — due to its impact on the economic fabric, social and scientific issues and civil society and local authority involvement, through the combined use of social cohesion instruments and policies and Community structural policies — may significantly assist the process of sustainable, balanced development. Change does in fact require certain adjustment, research, innovation and new attitudes, both on the part of businessmen and the social partners and civil society acting in partnership. Here the aim is to help regions maintain and improve their economic and social structures in a balanced fashion.

8.1

The Commission is proposing a new design for EU economic, social and territorial cohesion policy, built up around three priorities:

9.1

The EESC welcomes the fact that the Third Report on Economic and Social Cohesion, published on 17 February, has specifically and objectively tackled the subject of industrial and economic change in general.

9.2

In particular, it fully endorses the principles underlying the strategies of the Third Cohesion Report, and the link between the Lisbon Strategy and the future regional policy with regard to knowledge-oriented programmes and national and regional programmes, with a view to driving forward the economic development of the more disadvantaged regions. It nevertheless deems these measures to be inadequate and would raise a number of concerns regarding the following points:

10.1

The EESC considers that the proposals for cohesion policy reform presented by the Commission are inadequate, and that the opportunity to manage change has not been fully grasped; such change is not only unavoidable, but it is also a crucial element for securing a dynamic economy and a lever for attaining sustainable development. All this is because not enough steps have been taken to obtain maximum benefit from the situation and to combine the opportunities created by the Lisbon strategy, its positive approach to change, competitiveness and cohesion, the Social Policy Agenda — a key objective of which is to pinpoint and anticipate the management of change — and the European employment strategy, in particular its focus on adaptability.

10.2

The EESC feels that it is necessary to strike a balance between economic and social aspects and to manage industrial change with the two-fold aim of a) securing and promoting comprehensive social objectives (training, employment, opportunities and social protection) and b) ensuring the survival of businesses by means of specific support policies which guarantee restructuring and consolidation as a condition of their survival and increased competitiveness, through integrated, complementary actions involving the main operators, i.e. the state (at national, regional and local level) and the businesses concerned.

10.3

The EESC deems it vital to the success of economic, social and territorial cohesion policy that there be better coordination in implementing the EU's current development policies, involving: existing directives governing workers' participation in firms; social dialogue covering all the industrial sectors; regular consultation of the EESC's Consultative Commission on Industrial Change (CCIC); the European Monitoring Centre on Change (EMCC); structural fund deployment; competition policy; and steps to promote implementation of corporate social responsibility. To this end, it is crucial that all the parties concerned demonstrate compromise and commitment.

10.4

The EESC considers it necessary to draw up a series of principles for situations where restructuring is needed; these principles should provide a basis and back-up for good practice, involving the requirement that firms' competitiveness be boosted and other requirements pertaining to the consolidation of economic, social and territorial cohesion.

10.5

The EESC feels that the continued deterioration in Europe's competitiveness compared to that of the USA is due to the fact that there is no obligation on Member States to meet the deadlines for implementing the EU's basic strategies and instruments such as the Lisbon strategy, structural reforms and sustainable development.

If this trend continues, the EU runs the risk that it will slip back from second to third place in terms of world power (Japan, China and India are waiting in the wings); this must be avoided. The EESC therefore concludes that the Commission has to impose stricter requirements and take on a more active role in coordinating and monitoring effective implementation of the aforementioned strategies. A key coordination measure might entail appointing a commissioner responsible for monitoring industrial change and relocation; this would allow a better link-up between industrial policy and environmental protection.

a)

It is necessary to revisit the strategic vision for cohesion in view of the current challenges facing the EU, by devising a new, stronger concept of cohesion, which is not limited just to the financial aspects of the Structural and Cohesion Funds, but which bears in mind the following three-fold aim:

b)

The absolute criterion of per capita GDP for determining eligibility should be altered, given that this is a source of injustice as regards implementation of the structural policies. As is well known, relative wealth is not only reflected in cold statistics such as per capita GDP. Workers' skill levels, infrastructure shortcomings, distance from the hub of the European economy and demographic structure — these are all factors relevant to a region's eligibility.

c)

A new matrix of criteria for assessing the regions should be drawn up so as to produce a new map of European cohesion requirements.

d)

As far as territorial cohesion is concerned, the way that the Community's territory is managed should be revamped so as to allow multi-centred, harmonious, balanced and sustained development to take place. Such spatial planning should bear in mind inter-regional physical and economic cohesion, involving local, regional national and European authorities in the construction of a European territorial development model leading to new economic strategies (investment, R&D and social (employment) strategies).

e)

A more speedy approach has to be adopted to formulating structural policies for economic, social and territorial cohesion, as a way of anticipating economic change in general and industrial change in particular. The current ceiling on financial resources (1.2 %) — which might even be lowered in the 2007-2013 financial perspectives — is too low to cover needs and it limits the scope for action, which prevents the cohesion objectives being attained more quickly.

f)

It is important to focus on human resources, channelling resources to vocational courses at school and colleges and vocational training per se, but adopting a flexible approach which can be adapted to the various problems facing Member States and regions.

g)

Special assistance must be provided to regions where the industrial production structures are undergoing dramatic restructuring, by pinpointing those sectors and regions where there is a high risk that competitiveness may be lost; specific proposals for support must be made, taking account of the particular features of each sector. Particular attention should be paid to the impact of industrial restructuring on the new Member States.

h)

In this connection, a ‘most favoured region principle’ must be established, whereby it would be possible to provide specific financial support aimed at fostering regional conversion. Social dialogue has a key role to play here, as well as does civil dialogue, involving all the local protagonists (firms, universities, research centres, local authorities, associations, trade unions, etc.). It would thus be possible to breathe new life into the economic fabric of a region by creating new alternatives for economic activity.

i)

It is necessary to encourage the development of regional ‘clusters’ by fostering the expansion of information and communication technology sectors, creative industries, and industries with a strong technological base so that they boost regional potential and skills, promoting region's capacity to attract firms and encourage them to stay. This would help ensure that industrial change and restructuring generates stronger regional competitiveness, greater economic, social and territorial cohesion and more employment.

It is vital that regional studies be carried out and that steps be taken together with national and regional governments to plan how to make full use of a region's potential in building up a ‘cluster’.

j)

Account should be taken of positive, previous experience with sectoral programmes such as Rechar, Resider and Retext in formulating policies for the industrial modernisation of regions in order to make full use of their potential for development.

k)

The Commission must continue to modernise and revitalise industrial policy with a view to aligning its rules on the new world context. Here the EESC welcomes the recent proposal to revisit industrial policy, which was presented on 20 April 2004. (7) It is particularly important to ensure that industrial policy is coordinated with other Community policies, especially environmental policy.

l)

Europe must comply strictly with, and enforce, the ILO rules; if nothing is done to put a stop to ‘social and tax dumping’ in other areas which do not apply market rules equally, it could slide into an economic crisis because of a lack of competitiveness on the part of European firms.

m)

Europe must operate on the world stage by displaying high levels of technical, technological and human skills, but to do so it has to revisit its policy for supporting research, and particularly human capital. Of the approximately 14,000 European researchers who leave to study in the USA, only around 3,000 intend to return to Europe. This is a most serious situation requiring immediate measures. One step in the right direction is the ‘Regions for Knowledge’ initiative (KnowREG) under which it was decided on 27 April 2004 to set up 14 pilot projects promoting the knowledge economy at local and regional level.

n)

The European Council must establish a clear link between the competitiveness and knowledge objectives on the one hand, and the future regional policy on the other.

7.12.2004   

EN

Official Journal of the European Union

C 302/49

1.1

The convention was adopted by the General Assembly of the United Nations in its resolution No. 45/158 of 18 December 1990. It entered into force on 1 July 2003 following ratification by the first 20 states. Thus far, 25 states have ratified the convention (1). As such, it is a fully enforceable international treaty that must be upheld by the states' parties.

1.2

The aim of the convention is to protect the human rights and dignity of people across the globe who emigrate for economic or employment-related reasons by means of appropriate legislation and good national practice. The common basis for such international legislation on migratory policies should be the promotion of democracy and human rights. The Convention also safeguards the balance between the different situations in both countries of origin and host countries.

1.3

This convention is one of seven international United Nations treaties governing human rights. It recognises that certain basic human rights, as defined in the Universal Declaration of Human Rights, must be guaranteed internationally for all migrant workers and their families. It codifies in a comprehensive and universal manner the rights of migrant workers and their families on the basis of the principle of equality of treatment. It sets out those rights that must be granted to immigrants who are in a regular and an irregular situation, setting down minimum standards of protection in terms of civil, economic, political, social and employment rights and recognising that migrant workers must have fundamental rights that are safeguarded in international rules.

1.4

This convention further develops previous conventions of the ILO (2) by extending the legal framework to all immigration worldwide, promoting just treatment for immigrants and striving to prevent exploitation of irregular immigrants. It looks at the migration process as a whole from education, selection, departure, transit and residence in the country of employment to return to and re-establishment in the country of origin.

1.5

The individual states are responsible for managing migratory flows. The EESC supports the view of the Secretary-General of the United Nations and advocates better bilateral, regional and international cooperation between countries of origin and host countries. The convention neither promotes nor manages migratory flows, rather aims only to guarantee the universal recognition of basic human rights and reinforce the protection thereof worldwide.

1.6

The convention considers the possible administrative situations of migrants in different ways: it guarantees for all individuals the protection of their basic human rights, applying further-reaching rights to legal immigrants.

1.7

Through this convention, the international community and the United Nations have reasserted their desire to improve cooperation between states so as to prevent and indeed eradicate the trafficking and clandestine employment of immigrants who are in an irregular situation as well as to extend the protection of the basic human rights of immigrants to the entire world (3).

2.1

The convention aims to guarantee equal treatment and the same legal conditions for immigrant workers as for national workers. This implies:

2.2

The convention also stipulates that immigrants must have the right to maintain ties with their country of origin. This implies:

2.3

The convention is based on the fundamental principle of ensuring a minimum level of protection for all immigrants. It considers the two possible situations in which immigrant workers can find themselves (regular and irregular), setting out a series of further-reaching rights for legal immigrants and recognising some basic rights for irregular immigrants.

2.4

The convention proposes that initiatives be undertaken to eradicate illegal immigration, principally by eliminating the misleading information used to entice people into irregular immigration and by imposing sanctions on traffickers and employers of non-documented immigrants.

2.5

It establishes a Committee on the Protection of the Rights of All Migrant Workers and Members of their Families, consisting of ten experts to be appointed by the states parties and who will oversee the application of the convention.

3.1

International immigration is a consequence of the major economic and social inequality between the rich countries of the north and the developing countries. This inequality is deepening in the increasingly globalised economic system of today. And yet, the majority of those countries that have thus far ratified the convention are countries of origin of immigrants. The Member States of the European Union, the United States of America, Canada, Australia, Japan and the remaining countries of the western world, who play host to a great many immigrants (4), have as yet neither ratified nor signed (5) the convention.

3.2

The European Union, which is keen to establish international rules in a host of areas (in international trade within the WTO, in the environment through Kyoto, and so on), must also ensure that the basic rights of immigrants are guaranteed via such international norms.

4.1

The European Union is an area in which human rights are upheld and protected and most of the international legal instruments of the United Nations are applied. The European Union also has its own instruments in this area, such as the European Convention on Human Rights and the Charter of Fundamental Rights.

4.2

The European Union has also developed a series of legal instruments to counter discrimination (6). Despite this, various experts, including the European Monitoring Centre on Racism and Xenophobia (7), have reported discrimination suffered by migrants in terms of their working conditions.

4.3

Since the European Council of Tampere, the European Union has been in the process of drafting common legislation governing asylum and immigration. Tampere laid down a sound political basis enabling the Union to harmonise its immigration and asylum legislation and improve cooperation with third countries in order to better manage migratory flows. Furthermore, in Tampere consensus was reached as to the need to guarantee fair treatment for all individuals and develop policies to promote integration and prevent discrimination.

4.4

The Commission has drawn up numerous legislative proposals which have, however, met with considerable resistance within the Council (8). Four years on, the results are meagre: the legislation that has been adopted is disappointing and has moved away considerably from the Tampere objectives, the proposals of the Commission, the opinion of the Parliament and the stance of the EESC. The current system used within the Council to adopt agreements allows proposals to be blocked. This, coupled with the attitudes of some governments, makes it very difficult to achieve consensus.

4.5

The European Economic and Social Committee has called upon the Council through a series of opinions to act with greater responsibility and adopt a more constructive approach based on enhanced cooperation. It is becoming increasingly necessary for the European Union to have adequate common legislation enabling it to manage immigration in a legal and transparent manner.

4.6

The EESC has drafted several opinions (9) in which it urges the European Union to adopt a policy that will ensure that economic immigration is processed through the right legal channels, irregular immigration is prevented and illegal trafficking of people is stopped.

4.7

In the light of the above, the approval of the Directive on the conditions for entry, residence, and access to employment of immigrants, which is based on the Commission proposal (10) and takes account of the opinion of the EESC (11), is now a matter of urgency.

4.8

The Thessaloniki European Council welcomed the Commission's Communication on immigration, integration and employment (12), in which it projects that labour migration into the European Union will increase considerably over the coming years and that appropriate legislation will therefore be required enabling immigration to be managed within a legal framework. The Commission also states that integration policies focusing on the migrant population and endeavouring to eliminate all forms of exploitation and discrimination will be needed.

4.9

Some national legislation on immigration does not fully tally with the applicable international conventions on human rights, and some European Directives (on family reunification for example) are even considered by various NGOs and by the European Parliament to run contrary to basic human rights. The EESC believes that the existing international conventions on human rights as well as the EU Charter of Fundamental Rights should be the basis for the entire European legislative structure in terms of immigration.

5.1

Of late, the United States has been developing a unilateral approach to governance of international affairs. The entire system of the United Nations faces serious problems as a result of this situation. As a result the only system that currently exists within which to seek out multilateral solutions to international conflicts based on cooperation is in danger.

5.2

The European Union is, albeit with great difficulty, drawing up its own common foreign policy within which the United Nations will play an essential role. The future Constitutional Treaty will consolidate this external policy mandate as one of the Community's tasks.

5.3

The European Union's external relations are based on multilateralism and active compromise within the United Nations. In a recent document (13) the European Commission asserted that: ‘The challenge currently facing the UN is clear: “global governance” will remain weak if multilateral institutions are unable to ensure effective implementation of their decisions and norms – whether in the 'high politics' sphere of international peace and security, or in the practical implementation of commitments made at recent UN conferences in the social, economic and environmental fields. The EU has a particular responsibility in this regard. On the one hand, it has made multilateralism a constant principle of its external relations. On the other, it could and should serve as a model to others in implementing – and even going beyond – its international commitments’.

5.4

Globalisation is generating new opportunities and new problems for global governance (14). At present, migration entails major problems both for the migrants themselves and for the countries of origin and host countries. The challenge we face is to transform these problems into opportunities for everyone, for migrants, for countries of origin and for host countries. Multilteralism and international cooperation are the route to good global governance, to a system of rules and institutions established by the international community and universally recognised.

5.5

As Kofi Annan, Secretary-General of the United Nations, said at the European Parliament on 29 January 2004, international cooperation is the best approach to managing the rising international migration of the coming years. ‘Only through cooperation – bilateral, region, and global – can we build the partnerships between receiver and sender countries that are in the interests of both; explore innovations to make migration a driver of development; fight smugglers and traffickers effectively; and agree on common standards for the treatment of immigrants and the management of migration’

5.6

Europe is an area of freedom, democracy and respect for the human rights of all people. In order to strengthen these values in the future, all the Member States of the EU must ratify the international conventions that protect these basic human rights and their legal precepts must be incorporated into both Community and national legislation.

5.7

Article 7 of the draft Constitution for Europe advocates the accession of the European Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms. The EESC supports this. The EESC also backs the inclusion into the Constitution of the Charter of Fundamental Rights of the Union, which will create a common basis for the rights of all people inside the Union.

5.8

These values must also become an integral part of the Union's international relations. Europe must promote the creation of a common judicial body for the worldwide protection of the basic rights of all people, irrespective of national origin and place of residence, on the basis of the international conventions drawn up by the United Nations.

6.1

In line with the opinions it has drawn up on European immigration policy and in support of the opinion of the European Parliament, the European Economic and Social Committee would encourage the Member States of the European Union to ratify the International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families, which was approved by the General Assembly of the United Nations in resolution No. 45/158 of 18 December 1990, and which entered into force on 1 July 2003.

6.2

The EESC calls upon the President of the Commission and the current Presidency of the Council to undertake the necessary political initiatives to ensure that the Member States ratify this convention within the coming 24 months and that the EU also ratify the convention when the Constitutional Treaty authorises it to sign international agreements. To facilitate ratification, the Commission should carry out a study analysing national and Community legislation relating to the convention. Furthermore, the social partners and other civil society organisations will join with the EESC and the Commission in promoting ratification.

7.12.2004   

EN

Official Journal of the European Union

C 302/53

1.1

In November 2003, the European Commission organised a conference in Salzburg on the future of Community rural development policy against the backdrop of EU enlargement. Like the Cork conference, which had called for a ‘living countryside’, (1) the Salzburg event was an opportunity:

Thus, the Committee is proposing that any consideration of changes to rural development policy for the period 2007-2013 should build on the conclusions of this conference.

1.2

Given the increasing diversity of rural areas in the wake of EU enlargement, but above all recognising that social issues and employment are of paramount importance in the new Member States, the Committee feels it is essential to focus on the consistency and interlinkage between regional policy and the second CAP pillar.

1.3

The Commission has published two documents: one sets out the financial perspectives for the future programming period (2), the other is the third cohesion report (3). As these documents show, regional policy plays a full part in the Lisbon strategy, which is designed to put in place a competitive and knowledge-based economy. Future rural development policy is dealt with under the section on Sustainable management and protection of natural resources which refers to the sustainable development strategy. This section also covers the first CAP pillar and Community environment programmes.

1.4

The Gothenburg European Council of 15 and 16 June 2001 (4) provided, in its conclusions, for the adoption of a European sustainable development strategy and, as part of that, agreed that the common agricultural policy ‘… should, among its objectives, contribute to achieving sustainable development by increasing its emphasis on encouraging healthy, high-quality products [and] environmentally sustainable production methods.’ (5)

1.5

The conclusions of the June 2003 Agriculture and Fisheries Council in Luxembourg confirm that the second CAP pillar is to be strengthened in order to ‘… promote the environment, quality and animal welfare and to help farmers to meet Union production standards starting in 2005.’ (6) This own-initiative opinion will thus have to consider — and examine in greater depth — the three lines of action taken up in Salzburg, i.e. the competitiveness of the farming sector, environmental protection and the contribution to economic and social cohesion in rural areas.

1.6

In the Salzburg conference final declaration, rural development players also stressed that a significant simplification of EU rural development policy was both necessary and urgent. As part of that simplification, more responsibility must be given to programme partnerships to define and deliver comprehensive strategies.

1.7

In this own-initiative opinion, therefore, the Committee proposes (i) examining the consistency between future regional policy and future rural development policy in order to limit the number of grey areas; (ii) taking a closer look at the three main lines of action put forward for future rural development policy and (iii) focusing specifically on the various facets of administrative simplification.

2.1

The 1986 Single European Act accelerated the integration of the Member States' economies. However, the widely differing levels of regional development within the Union and the introduction of interregional competition gave rise to a proper cohesion policy, designed to offset single market constraints in southern European countries and less-favoured regions. Economic and social cohesion policy was subsequently placed on an institutionalised footing by the Maastricht Treaty on European Union, which entered into force in 1993.

2.2

At the same time, the EU's growing trade relations and the gradual opening-up of the single market intensified competition between the European regions despite the fact that they did not all enjoy the same advantages. Thus, in the 1990s, structural policy sought to address the following key concerns:

2.3

Building on elements of existing structural policy, the reform adopted in 1999 (Agenda 2000) sought:

2.4

The declaration of the EU Member States' spatial planning ministers (Potsdam, 10 and 11 May 1999) (7) and the June 2001 Gothenburg European Council conclusions setting out a European sustainable development strategy underscored the need for territorial cohesion in the interests of balanced and sustainable regional development within the EU. This process culminated in the Convention's proposal to include territorial cohesion as a Union objective (see Article 3 of the draft Constitution for Europe). (8)

2.5

Moreover, Regulation 1260/1999 laying down general provisions on the Structural Funds (9) recognises that building on local potential in rural areas remains a key objective for promoting the development and structural adjustment of regions whose development is lagging behind.

2.6

Given the way in which the principles underpinning structural policy have evolved — i.e. in providing support for growth and sustainable development — the Committee asks the Commission and the Council to make it clear, in the interests of territorial cohesion, that rural development must remain one of the top priorities of regional policy. Hence, this policy must fully address the difficulties rural areas face in the fields of job creation, continuing training and access to new information technologies.

3.1

In the space of almost fifty years, farming has undergone major changes which, over time, have shaped the Community's agricultural structural policy. From 1962 to 1972, the Community was involved only in coordinating the nascent market management measures. From 1972 to 1985, activities fell into two further main categories: (i) horizontal measures applicable in all Member States (vocational training, early retirement etc.) and (ii) regional measures designed to mitigate natural structural handicaps and promote agriculture as a whole.

3.2

From 1985 to 1999, agricultural structural policy evolved into the agricultural dimension of the new regional policy strategy as a result of a number of factors, i.e. the search for a balance between the necessary improvements in the competitiveness of Europe's farming sector on the one hand and matching production potential with market requirements on the other, environmental protection and the development of less-favoured regions. Structural policy therefore not only involves horizontal measures, but also includes actions designed to conserve rural areas, protect the environment and develop rural and tourist infrastructure and farming activities.

3.3

Building on the Cork conference, Agenda 2000 made it possible to establish an integrated rural development policy using two legal instruments (EAGGF–Guarantee and EAGGF-Guidance). These instruments are designed to secure greater consistency between rural development policy (second CAP pillar) and market policy (first CAP pillar) among other things by promoting a more diversified rural economy.

3.4

The option of direct aid modulation was also introduced. This tool makes it possible to increase funding for agri-environmental, early retirement and afforestation measures, and measures to support less-favoured areas, through a levy on the compensatory support for reductions in institutional prices adopted under the common organisations of the markets in agricultural products.

3.5

Regulation 1257/1999 on support for rural development from the EAGGF (10) makes the following key points:

3.6

For the 2000-2006 programming period, the twenty-two measures that Member States may include in their rural development programming divide up as follows: (11) 39.2 % for improving competitiveness and promoting change in the farming sector, 35 % for less-favoured areas and agri-environmental measures and 25.8 % for adapting and developing rural areas.

3.7

The CAP reform adopted in June 2003 reinforced one of the tasks of regional development policy, namely to back moves to adapt agriculture to the needs of society. The scope of measures has been widened to include promoting product quality, improving production standards (environment, animal welfare), implementing Natura 2000 and stepping up measures for the setting-up of young farmers.

3.8

Moreover, modulation is now mandatory at European level and should mean the transfer of almost EUR 1.2 billion over the whole year from market policy to rural development policy.

3.9

In the light of these developments, the Committee would stress that the primary purpose of the second CAP pillar must be to support agriculture as it adapts to meet the underlying changes in public expectations.

3.10

The Commission communication on the 2007-2013 financial perspectives presents a stable and modest budget, maintaining EU own resources at 1.24 % of GNP. The Committee backs the Commission's proposal and stresses that cutting Community resources would send out the wrong signal just as EU enlargement was taking effect.

3.11

The same also applies to rural development policy. The only ‘extra’ resource for this policy would be the application of modulation. This basically means allowing financial transfers only between the first and second CAP pillars. Hence, the Committee would urge the Council and the European Parliament to ensure that adequate financial resources are made available for this policy as otherwise it would be devoid of substance.

3.12

Furthermore, future rural development policy will be implemented by a new and probably 25-strong Commission. There would be a real risk of these two policies becoming disjointed if the two CAP pillars were each managed by a different commissioner. The Committee reiterates its opposition to any move to establish separate directorates-general and appoint different commissioners for agriculture and sustainable development issues.

4.1

In its earlier opinions (12), the Committee has already reiterated the point that agricultural markets are, by their very nature, unstable and frequently subject to price fluctuations. Hence, the mechanisms in place to regulate supply and the market are essential for farms to be able to meet the conditions of sustainable agriculture. The Committee would stress that maintaining a policy that supports the regulation of markets in agricultural products is also conducive to the success of any rural development policy.

4.2

Moreover, the last CAP reform of 26 June 2003 broke the link between production and public support for agriculture. This change reinforces the need to secure farming's economic development in order to better reflect new requirements — such as biodiversity, the conservation of specific landscapes, and job creation by this sector. The Committee therefore notes that agricultural production is a prime factor in securing a living countryside, as it establishes a direct link between human activities and the local area.

4.2.1

Regionally-based production systems and measures to enhance the value of farm products — including the expansion of protected designations of origin (PDOs), protected geographical indications (PGIs) and direct sales — are elements of multifunctional agriculture that help promote rural development.

4.3

In a Union of 25 Member States, farming will employ more than 13 million people directly, and more than 5 million indirectly in its upstream and downstream sectors. By their very nature, these jobs are firmly rooted at regional level. Processed agrifood products also make up a growing share of intra-Community trade, strengthening the link between the farming and the agrifood sectors. The maintenance and distribution of farming activities across rural areas is thus becoming a priority if their integration into the regional economy is not to be held back.

4.4

In an EU of 27 Member States, 190 million hectares — 45 % of the land mass — will be given over to farming. In 2001, more than 10 % of the utilised agricultural area (UAA) was subject to agri-environmental measures. Agricultural land makes up 15 % of areas classified under the habitats and birds directive. 38 % of agricultural land in the fifteen ‘old’ EU Member States has also been designated as ‘nitrate-vulnerable zones’. These measures meet local environmental protection and/or spatial planning requirements. Clearly, then, farming will always play a key role in land management.

4.5

The Committee would again make the point that one aim of multifunctional agricultural production is to maintain a living countryside. The Commission and the Council must make that clear before embarking on any new departure in rural development policy.

4.6

While backing the Salzburg conference conclusions on diversifying the rural economy, the Committee would stress the need to avoid any ‘rurbanisation’ of the countryside, i.e. the application of the same development measures in rural as in urban areas. The Committee is currently working on an own-initiative opinion on agriculture in peri-urban areas (13). Moves to diversify the rural economy as part of rural development policy should therefore focus on a few issues closely linked to farming, including services to the farming community designed to improve people's quality of life, promote agri-tourism and support agriculture-based multiple jobbing.

5.1

The conclusions of the third cohesion report show that disparities in sustainable output, productivity and job creation which persist between regions stem from structural deficiencies in the key factors of competitiveness. The Committee would stress that rural development policy must also be guided by these principles in order to help foster structural developments in rural areas.

5.2

EU enlargement exacerbates the issue of economic development in rural areas because of the high level of ‘hidden unemployment’ in the new Member States. This further complicates the distinction between regional policy and rural development policy. The Committee proposes that the issues common to regional policy and rural development policy should be set out clearly in a new Structural Funds regulation and that the number of measures eligible for funding under one or other of these policies should be limited so as to establish greater clarity between them.

5.3

While agriculture cannot claim to be the sole guarantor of rural development, it does remain a sine qua non of any successful rural development policy. The link between jobs — both direct and indirect — and the local region and the sheer size of the areas concerned mean that back-up for agriculture as it adapts to meet changing public expectations remains a priority. Moreover, the first and second CAP pillars are also conducive to achieving rural development targets by maintaining or strengthening farming activity.

5.4

EU enlargement also presents a key challenge for the future of the CAP. The Committee stresses that exchanges of experience and the transfer of good practice should also play a special role in establishing the conditions for implementing the second CAP pillar for the future period.

5.5

The Committee would also stress that because of their permanent natural handicaps sparsely populated regions such as islands, Arctic areas and upland areas are still pursuing the goal of completing the single market. Regional policy and rural development policy must reflect this in the way in which they are implemented, not least by proposing a higher level of co-financing to take account of these constraints. The Committee is also currently working on an own-initiative opinion (14) looking more specifically at how to better integrate regions suffering from natural handicaps into the regional economy.

5.6

The Committee would also stress that rural development policy and regional policy are not the only ways in which the authorities can promote harmonious territorial development within the European Union. The Committee notes that firmly implanting public services in a region also helps secure territorial cohesion.

6.1

The CAP reform of June 2003 highlighted the stronger link between the second pillar (rural development) and the changes to the first pillar. A series of new first-pillar flanking measures have been introduced, taking the total number from 22 to 26.

6.1.1

Two new measures have been introduced in the area of food quality (voluntary participation in recognised national quality indicator schemes and actions to promote these products and inform consumers about them). The two other new measures seek to adapt production methods to European standards of environmental protection, animal welfare and animal and plant health.

6.1.2

A number of existing measures have been adapted (the incorporation of animal welfare considerations into agri-environmental measures, the consolidation of public support for the setting-up of young farmers, implementation of the habitat and birds directive and the funding of forest investments to promote environmentally and socially sound forest management.

6.2

For the new Member States, a temporary rural development programme has been adopted for the period 2004-2006. As well as the four new flanking measures, this programme will provide support to encourage farming partnerships, support for semi-subsistence farms, technical assistance, and top-ups to direct aid under the CAP first pillar.

7.1

As the single market consolidates and the internal market gradually opens up to farming economies with comparative natural advantages or lower environmental standards, it is essential that the European agricultural model continue to become ever more competitive.

7.2

The Committee therefore feels that support for farming investments as part of rural development policy should continue to be strengthened. It is important to support investments that enable farms to take account both of environmental requirements and of improvements in animal welfare and working conditions, especially where they help reinforce farming activity in a particular area.