House of Commons European Scrutiny Committee Thirty-third Report of Session 2002-03
Documents considered by the Committee on 15 October 2003, including:
Reduced rates of VAT Quality and safety of human tissues and cells Activities of OLAF and the fight against fraud
HC 63-xxxiii
House of Commons European Scrutiny Committee Thirty-third Report of Session 2002-03
Documents considered by the Committee on 15 October 2003, including:
Reduced rates of VAT Quality and safety of human tissues and cells Activities of OLAF and the fight against fraud
Report, together with formal minutes
Ordered by the House of Commons to be printed 15 October 2003
HC 63-xxxiii Published on 30 October 2003 by authority of the House of Commons London: The Stationery Office Limited £0.00
Notes
Numbering of documents Three separate numbering systems are used in this Report for European Union documents:
Numbers in brackets are the Committee’s own reference numbers.
Numbers in the form ‘5467/03’ are Council of Ministers reference numbers. This system is also used by UK Government Departments, by the House of Commons Vote Office and for proceedings in the House.
Numbers preceded by the letters COM or SEC are Commission reference numbers.
Where only a Committee number is given, this usually indicates that no official text is available and the Government has submitted an ‘unnumbered Explanatory Memorandum’ discussing what is likely to be included in the document or covering an unofficial text.
Abbreviations used in the headnotes and footnotes EC (in ‘Legal base’) Treaty establishing the European Community EM Explanatory Memorandum (submitted by the Government to the Committee) EP European Parliament EU (in ‘Legal base’) Treaty on European Union GAERC General Affairs and External Relations Council JHA Justice and Home Affairs OJ Official Journal of the European Communities QMV Qualified majority voting RIA Regulatory Impact Assessment SEM Supplementary Explanatory Memorandum
Euros Where figures in euros have been converted to pounds sterling, this is normally at the market rate for the last working day of the previous month.
Further information Documents recommended by the Committee for debate, together with the times of forthcoming debates (where known), are listed in the European Union Documents list, which is in the House of Commons Vote Bundle on Mondays and is also available on the parliamentary web–site.
Documents awaiting consideration by the Committee are listed in ‘Remaining Business’: www.parliament.uk/parliamentary_committees/european_scrutiny.cfm. The web–site also contains the Committee’s Reports.
Contacts All correspondence should be addressed to the Clerk of the European Scrutiny Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 3292/5465. The Committee’s e-mail address is [email protected]
ESC, 33rd Report, 2002-03 1
Contents
Report Page
Documents for debate
1 C&E (24783) Reduced rates of VAT 5
2 DOH (24598) Quality and safety of human tissues and cells 6
3 HMT (24811) (21814) Activities of OLAF and the fight against fraud 9
Documents not cleared
4 CA/SEJD (24782) Law applicable to non-contractual obligations 14
5 DEFRA (24189) Emissions of volatile organic compounds from solvents used in paints 20
6 DEFRA (24788) Incidental catches of dolphins and porpoises 23
7 DEFRA (24841) Atmospheric emissions from sea-going ships 25
8 DEFRA (24846) Controls on fluorinated greenhouse gases 27
9 DFT (24767) Motor vehicle type approval 29
10 DFT (24831) Global navigation satellite system 32
11 DFT (24840) European Maritime Safety Agency 35
12 DFT/HO (24535) (24480) Pollution from ships 38
13 DOH (24835) Establishment of a European Centre for Disease Prevention and Control 42
14 DTI (24786) Cross-border enforcement of consumer protection 44
15 DTI (24800) Implementation of the Directive on the posting of workers 47
16 DWP (24821) Social security schemes for people moving within the Community 49
17 FCO (24682) Promotion of “active European citizenship” 52
18 FSA (24763) Nutrition and health claims made on foods 55
19 HMT/DFT (24818) Road user charging 58
20 HO (24366) (24860) Minimum standards for procedures for granting and withdrawing refugee status 62
21 HO (24819) Access to Schengen Information System by vehicle registration authorities 67
2 ESC, 33rd Report, 2002-03
22 HO (24826) Assistance in the removal of third country nationals through the territory of other Member States 69
Documents cleared
23 DEFRA (24244) Descriptions of organic produce 71
24 DEFRA (24844) Use in stockfeeding of substances having a hormonal or thyrostatic action and beta-agonists 73
25 DEFRA (24867) Community accession to the International Plant Protection Convention 76
26 DEFRA (24886) Protection of deep-water coral reefs 77
27 DFID (24336) PHARE pre-accession assistance programme 79
28 DFID (24385) Food security policy in developing countries 81
29 DFID (24623) Environmental projects in the candidate countries 84
30 DFID (24651) Pre-accession assistance in 2001 86
31 DFID (24660) Supporting institution-building in the candidate countries through Twinning 88
32 DFID (24685) Assistance to the Democratic Republic of Congo 91
33 DFT (24187) Safety of road tunnels 93
34 DFT (24864) Single European Sky 95
35 DOH (22514) Advertising and sponsorship of tobacco products 97
36 DOH (24719) Medical devices 99
37 DTI (24776) Liability in the field of nuclear energy 102
38 DTI (24809) Information on investment in the nuclear sector 105
39 FCO (24891) (24917) EU Police Mission in Macedonia 107
40 HMT (24834) Annual activity reports of the Commission’s Directorates-General and Services 109
41 HO (24630) EU policy against corruption 111
42 HO (24825) Joint flights for the removal of illegally-resident third country nationals 114
43 IR (24850) Undeclared work 115
44 IR/C&E (24805) Taxation: mutual assistance 117
ESC, 33rd Report, 2002-03 3
Documents not raising questions of sufficient legal or political importance to warrant a substantive report to the House
45 List of documents 120
Appendix 1: reports on Council meetings held during a recess 127
Formal minutes 138
Standing order and membership 139
ESC, 33rd Report, 2002-03 5
1 Reduced rates of VAT
(24783) Draft Directive amending Directive 77/388/EEC as regards reduced 11817/03 rates of Value Added Tax. COM(03) 397
Legal base Article 93 EC; consultation; QMV Department HM Customs and Excise Basis of consideration Minister’s letter of 17 September 2003 Previous Committee Report HC 63-xxxi (2002-03), paragraph 1 (10 September 2003 To be discussed in Council Not known Committee’s assessment Politically important Committee’s decision For debate in European Standing Committee B (decision reported on 10 September 2003)
Background 1.1 On 10 September 2003 we recommended this draft Directive rationalising the present system of reduced rates of Value Added Tax (VAT) for debate in European Standing Committee B.1
The Minister’s letter 1.2 The Paymaster General (Dawn Primarolo) writes to inform us of developments since our recommendation for a debate. She says:
“I thought it would also be useful to provide you with a quick update following the informal ECOFIN on 13 September, when the Commission proposal was discussed. We made clear that the proposal is unacceptable as it stands, and we have been insisting on the retention of our VAT rate derogations. In addition we have continued to pursue our long-standing proposals for reduced rates on church repairs and on energy saving materials for DIY installation. Other Member States also raised concerns about the Commission proposal. Some are in a similar position to the UK in that the proposal also challenges their politically sensitive zero rates (eg children’s clothes in Ireland). For others, the proposed changes to Annex H either go too far or not far enough. However, we think there is now a good possibility that Member States could reach consensus on the retention of Member States’ derogations and limited extensions to the Commission’s proposed Annex H.
“The exact timing and handling of this dossier in Brussels is difficult to predict, but the Presidency remains keen to see swift progress and has proposed a high-level
1 See headnote.
6 ESC, 33rd Report, 2002-03
working party meeting of officials on 22 September, to work towards a compromise solution by the 7 October ECOFIN.”
1.3 The Minister also answers an enquiry we had made separately about the Government’s attitude to a reduced rate of VAT for labour-intensive services.
Conclusion 1.4 The Minister’s update on discussions on the draft Directive and her response on the labour-intensive services issue are both relevant to the debate we have recommended.
1.5 We presume that in the continuing negotiation of the draft Directive the Government has emphasised that the document is still undergoing scrutiny in the UK Parliament.
2 Quality and safety of human tissues and cells
(24598) Amended draft Directive on setting standards of quality and safety 10122/03 for the donation, procurement, testing, processing, storage and COM(03) 340 distribution of human tissues and cells.
Legal base Article 152(4)(a)EC; co-decision; QMV Department Health Basis of consideration Minister’s letter of 2 October 2003 Previous Committee Report HC 63-xxvii (2002-03), paragraph 1 (25 June 2003) To be discussed in Council 2 December 2003 Committee’s assessment Politically important Committee’s decision For debate in European Standing Committee C
Background 2.1 The Commission believes that, in view of the health and ethical considerations2 arising from the increasingly widespread use of human tissues and cells3 from living or deceased donors, and in order to increase public confidence, there should be Community provisions to ensure quality and safety, and to reduce the considerable discrepancies which exist in the coverage of existing regulations of Member States in this area.
2 Including prior informed consent and protection of identity. 3 This includes bone and musculoskeletal elements, cardiovascular tissues, eye tissues, nerve and brain cells, skin, foetal tissue, reproductive and stem cells, but not organs as such.
ESC, 33rd Report, 2002-03 7
2.2 It therefore proposed in June 2002 a draft Directive4 which would regulate the first three steps (donation, procurement and testing) of the use of all tissues and cells of human origin, except blood and blood products (which are the subject of separate legislation), material used as an autologous graft,5 and tissues used for research purposes when administered to the human body (but not for research in vitro). The further steps in their use (processing, preservation, storage and distribution) would also be covered if the tissues and cells are intended for transplantation. More specifically, the proposal would have required each Member State to establish a public register of accredited tissue banking establishments; required staff engaged in procuring tissues and other related activities to be properly trained; ensured that tissues and cells are traceable; and introduced a system for regulating the increasing importation of tissues and cells from third countries, to ensure their safety and quality.
2.3 As we noted in our Report of 16 October 2002, the aims and content of the proposal are consistent with the voluntary accreditation scheme currently in place in the UK, and hence it was broadly supported by the Government, subject to a number of detailed reservations. These were amplified in a partial Regulatory Impact Assessment, which suggested that the overall costs of the proposal as drafted would be around £1–2 million, though it was hoped that these might be reduced in negotiation. On that basis, we cleared the proposal.
2.4 Subsequently, the European Parliament’s first reading of the proposal took place on 10 May 2003, and, in the current document, the Commission set out those of the Parliament’s amendments which it was prepared to accept (and which we understand reflect the common position agreed by the Health Council on 2 June). The main aspects of that position were set out in an Explanatory Memorandum of 13 June 2003, which said that the Council had rejected all those of the Parliament’s amendments to which the UK had been strongly opposed, and that almost all of the UK’s concerns over the original proposal had been addressed.
2.5 However, we were also told that the UK’s opposition to the inclusion of sperm and egg cells had received very little support from other Member States, and that, as a result, the Regulatory Impact Assessment was being redrafted. In the meantime, it was pointed out that very few fertility clinics in the UK, either NHS-assisted or in the private sector, would be able to meet the standards likely to be required, and that some might need to undertake very substantial improvements which, in the case of small clinics, could lead to their closure. In view of this, we said in our Report of 25 June 2003 that, although we had been prepared to clear the original proposal on the basis that the additional costs were unlikely to be significant, we thought it right to hold the present document under scrutiny, pending receipt of the further Assessment promised by the Government. We also noted that the European Parliament’s second reading of the proposal was expected in the autumn.
Minister’s letter of 2 October 2003 2.6 In her letter of 2 October 2003, the Parliamentary Under-Secretary of State for Public Health at the Department of Health (Miss Melanie Johnson) says that, whilst the UK has
4 (23596) 10238/02; see HC 152-xxxviii (2001-02), paragraph 24 (16 October 2002). 5 Involving tissues or cells removed from and transplanted back into the same person.
8 ESC, 33rd Report, 2002-03
succeeded in negotiating out most of the European Parliament’s first reading amendments which would have extended the scope of the Directive, the Parliament may vote to re- introduce some or all of these at its second reading. In the meantime, the draft partial Regulatory Impact Assessment attached to her letter suggests that, although the costs of implementing the Directive as it stands will depend upon the contents of detailed annexes which will be agreed later under comitology procedure,6 the additional set-up costs arising in the UK would now be between £9 million and £15 million, with annual running costs in the region of £1–2 million. Of the former figure, the Assessment suggests that some £4.5– 6.5 million would fall on fertility clinics7 as a result of the inclusion of mature gametes, and £2.5–3 million would be for the establishment of the donor/tissue coding system needed for the traceability of tissues and cells.
Conclusion 2.7 The Regulatory Impact Assessment attached to the Minister’s letter of 2 October confirms that, far from the costs of the proposal having been reduced in negotiation, they will be now be greater than originally expected, and in particular that they could create difficulties for fertility clinics, which in some cases could lead to their closure. In view of this, we are recommending that the amended proposal be debated in European Standing Committee C.
6 Involving committees consisting of representatives of Member States and chaired by the Commission, whereby Member States exercise some control over implementing powers delegated to the Commission. 7 About 20% of these are in the NHS, which would thus bear the cost directly, and which would also bear the indirect costs arising if private clinics were to increase their fees.
ESC, 33rd Report, 2002-03 9
3 Activities of OLAF and the fight against fraud
(a) (24811) Commission Report: Evaluation of the activities of the European 11954/03 and Anti-Fraud Office (OLAF). ADD1 Opinion of the OLAF Supervisory Committee on the Commission COM(03)154 Report.
(b) (24814) Commission Report: Protection of the financial interests of the 11993/03 Communities and the fight against fraud — Annual Report 2002. COM(03) 445
Legal base — Document originated (a) 4 August 2003 (b) 8 August 2003 Deposited in Parliament (a) 20 August 2003 (b) 21 August 2003 Department HM Treasury Basis of consideration (a) EM of 5 September 2003 (b) EM of 4 September 2003 Previous Committee Report (a) None; but see (23085)15156/01: HC 152-xv (2001- 02), paragraph 13 (30 January 2002) (b) None; but see (23669) 10625/1/02: HC 152-xxxix (2001-02), paragraph 2 (23 October 2002) To be discussed in Council Not known Committee’s assessment Politically important Committee’s decision (Both) For debate in European Standing Committee B
Background 3.1 The European Anti-Fraud Office (OLAF) was established in 1999 as the successor to the Commission’s Unit for the Coordination of Fraud Prevention. OLAF’s role is to protect the interests of the European Union, and to fight fraud, corruption and any other irregular activity, including misconduct within the European Institutions. The Commission is required by the Amsterdam Treaty to report annually on protection of the Communities’ financial interests and on the fight against fraud. These reports are to cover measures taken by Member States as well as by the Commission.
The documents 3.2 Document (a) is a report on the activities of OLAF during its first three years, which the Commission is required to make under the legislation establishing OLAF. The report has four sections covering:
• OLAF’s main duties as a result of reform in 1999;
10 ESC, 33rd Report, 2002-03
• OLAF’s general duties post-reform;
• the significance of OLAF as a hybrid body — independent yet part of the Commission; and
• an assessment of progress and discussion of consolidating reform and of a European Public Prosecutor.
3.3 The first three sections have 17 recommendations, including:
• ensuring protection of the individual rights of those being investigated (Recommendation No. 2);
• improving OLAF’s cooperation with national authorities in information exchange and administrative assistance (No. 3);
• helping OLAF to present better its range of activities, to develop an ‘inventory of [its] expertise’ and to exchange know-how, practice and experience with Member States (No. 5);
• establishing ground rules for cooperation between OLAF and other Commission departments (No. 7);
• extending memoranda of understanding to other institutions and bodies, on the lines of the well-regarded information-sharing arrangement already set up with the European Court of Auditors (No. 9);
• OLAF drawing up a work programme to encourage close and regular cooperation with other institutions, to prevent the fragmentation of know-how and to be able to have a better overall view of trans-national fraud issues (No. 11);
• the Commission to examine the possibility of introducing more administrative penalties and to harmonise penalties in the customs field (No. 12);
• acceptance of the Commission’s call for a European Public Prosecutor (No. 13);
• development of cooperation among Member States in preventing and combating fraud, including by updating the Anti-fraud Advisory Committee (No. 14); and
• OLAF to define its own staff management policy.
3.4 Document (b) is the 2002 edition of the Commission’s annual report on protecting the Communities’ financial interests and fighting fraud. The report examines the action taken by national authorities and the Commission to prevent and fight against economic and financial crime. It is divided into three sections:
• an evaluation of the Community’s legislative and regulatory activity, with examples of cooperation with Member States, applicant countries and third countries in 2002;
• measures taken by Member States pursuant to Article 280 EC; and
ESC, 33rd Report, 2002-03 11
• a statistical analysis of the activities undertaken by Member States and the Commission in 2002 to protect financial interests and combat fraud.
3.5 In the first section the Commission highlights:
• its promotion of anti-fraud policies in relation to the accession countries, including advocating strengthening of administrative structures and encouraging use of a “control and audit model” that would apply not only to Community funds but to national income and expenditure;
• its encouragement of a stronger culture of cooperation by, for instance, carrying out, with the support of ten Member States, judicial proceedings in the US against companies accused of smuggling cigarettes into the EU and implementing seven projects (involving representatives of OLAF, the European Central Bank and Europol) on exchange, assistance and training for the protection of the euro against counterfeiting;
• inter-institutional developments, including judgements that the “Communities’ financial interests” include not only the income and expenditure of the Community budget, but also the budgets of other bodies such as the European Central Bank and the European Investment Bank and clarification about which bodies OLAF can internally investigate without such action being interpreted as an attack on their autonomous management — for example Eurojust but not Europol; and
• its view that that the criminal judicial dimension has been strengthened by entry into force of the first protocol of the Convention on Protection of Financial Interests; by wide-ranging debate on creation of a European Public Prosecutor; and by better judicial cooperation in penal matters.
3.6 The second section of the report, on activity by Member States, summarises:
• the principal legislative developments in own resources, agricultural expenditure and structural measures;
• progress on ratification of the Fraud Convention and adoption of its protocols in Member States;
• organisation of departments responsible for protecting the Communities’ financial interests; and
• measures taken to combat fraud and irregularity and to strengthen coordination and information exchange between departments within Member States.
3.7 The statistical analysis in the third section shows that the total number of irregularities communicated in 2002 increased in all sectors in comparison with 2001. The budgetary implications of the irregularities were as follows:
• Own Resources — up 36% (from i239 million to i324 million);
• EAGGF Guarantee — up 41% (i140 million to i198 million); and
12 ESC, 33rd Report, 2002-03
• Structural Funds — up 205% (from i201 million to i614 million).
However, these figures need careful interpretation. Not all irregularity constitutes fraud: most are the result of simple non-criminal errors. Moreover, the outcome of one big case or the identification of a large-scale suspected fraud can skew the figures considerably between years.
3.8 This section also shows:
• in terms of numbers of cases and amounts established, fraud involving cigarettes and bananas accounts for the largest share and is growing;
• in cases of irregularity, Member States were unable to identify the products involved more than 47% of the time;
• the average amount of irregularity was highest in Italy (i285,006) and lowest in Sweden (i10,063). The UK average was just over i100,000 (ninth out of 14); and
• the amounts recovered in 2002 were approximately 25% (own resources and direct expenditure) and 40% (structural actions) of new irregularities detected.
The Government’s view 3.9 In relation to document (a) the Financial Secretary to the Treasury (Ruth Kelly) tells us:
“OLAF’s performance has come under the spotlight recently following the accusations of misconduct against officials at Eurostat. This progress report is therefore timely and provides a basis to assess whether OLAF has met expectations or whether further changes are needed.
“The UK Government welcomes a number of the recommendations including
Numbers 7, 9,11 — which should help OLAF to cooperate more effectively with
other Commission bodies — and recommendation No 15, which would give OLAF the freedom to recruit the most appropriate staff.
“Overall however, the report does not provide a sufficiently detailed picture of what OLAF has achieved in its first three years — and in particular there is no attempt to provide illustrative statistics to show the difference that OLAF has made. The Government will therefore press the Commission and OLAF to provide such data, either in an update of this report or when it produces its annual activity report later in the autumn.
“The report also needs to be seen alongside the comments given by the Supervisory Committee in Opinion No 2/03 (Document 11954/03 ADD1), which, among other criticisms, considers that OLAF took too long to get up to complement, particularly on the investigative side. The Government will be pursuing these concerns in Council committee and bi-laterally with the Commission.
“The report hints that OLAF ‘might come to assume the role of a judicial officer in internal investigations as well as external investigations’. The UK continues to
ESC, 33rd Report, 2002-03 13
oppose the creation of a centralised European Public Prosecutor, and will argue in the forthcoming IGC that it is neither appropriate nor likely to be effective.”
3.10 On document (b) the Chief Secretary to the Treasury (Mr Paul Boateng) says:
“The Government supports the work carried out by the European Anti-Fraud Office to take action against fraud in the European Community. This report is, as usual, comprehensive and informative. The Government notes that the amounts involved in cases of fraud and irregularity detected in 2002 have risen from the previous year, but recognises that (except in the Structural Funds), levels are lower than in previous years. It is inevitable that the heavy and painstaking audit activity carried out by all Member States at the close of the 1994-99 Structural Fund programming period should lead to an increase in the detection and reporting of irregularities, and it is also evident that much effort has been extended to recover the money. It is likely that Structural Fund irregularities will continue to reach a high level in 2003, as the final date for payment claims under the 1994-99 period was 31 March 2003 — and audit activity therefore continues. The Government welcomes the analysis OLAF has carried out of the figures and believes this work is indispensable in the identification of the actual level of fraud against the Community budget.
“The accounts of measures introduced by Member States to protect Community funds show that Member States take their responsibilities seriously. There is much to be learned by mutual co-operation and sharing of experience and knowledge.”
Conclusion 3.11 It is customary for us to recommend that the Commission’s Annual Report on protecting the Communities’ financial interests and fighting fraud be debated in European Standing Committee B together with the Annual Report of the European Court of Auditors and other relevant documents. Accordingly we recommend that both the current documents be debated in European Standing Committee B once we have reported on the 2002 Annual Report of the European Court of Auditors. We expect to have that report before us later this year or early in 2004.
3.12 Such a debate will allow Members to consider issues of fraud and other irregularities against the Communities’ financial interests and to discuss existing and proposed preventative measures, including the Commission’s persistence in promoting the creation of a European Public Prosecutor.
14 ESC, 33rd Report, 2002-03
4 Law applicable to non-contractual obligations
(24782) Proposal for a Regulation on the law applicable to non-contractual 11812/03 obligations (“Rome II”). —
Legal base Article 61(c) EC; co-decision; QMV Document originated 22 July 2003 Deposited in Parliament 29 July 2003 Department Constitutional Affairs; Scottish Executive Justice Department Basis of consideration EM of 2 September 2003 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Legally and politically important Committee’s decision Not cleared; further information requested
Background 4.1 The preparation of conventions and other instruments to establish agreed rules between the Member States on the conflict of laws began in the 1960s. In 1972 a group of experts from the Member States produced a draft convention on the law applicable to contractual and non-contractual obligations. The scope of this draft was later confined to the choice of law in relation to contractual obligations and was eventually adopted in 1980 as the Rome Convention on the law applicable to contractual obligations.
4.2 In December 1998 the Justice and Home Affairs Council adopted an Action Plan on how best to implement the freedom, security and justice provisions of the Amsterdam Treaty. Part of this plan was the preparation of a legal instrument on the law applicable to non-contractual obligations, referred to as “Rome II”.
The draft “Rome II” Regulation 4.3 The Commission describes the purpose of the Regulation as being to “standardise the Member States’ rules of conflict of laws regarding non-contractual obligations and thus extend the harmonisation of private international law in relation to civil and commercial obligations which is already well advanced in the Community with the ‘Brussels I’ Regulation8 and the Rome Convention of 1980”.
4.4 The proposal is based on Article 61(c) EC, which permits the Council to adopt measures in the field of judicial cooperation as provided for in Article 65 EC. Article 65 EC provides for measures in the field of judicial cooperation ‘in civil matters having cross-
8 Council Regulation (EC) No. 44/2001 of 22 December 2000, OJ No L12, 16.1.2001, p.1. This Regulation replaced the 1968 Brussels Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. The Brussels Convention continues to apply between Denmark and the other Member States.
ESC, 33rd Report, 2002-03 15
border implications’ to be agreed under the co-decision procedure and ‘in so far as necessary for the proper functioning of the internal market’. By virtue of Article 65(b) EC such measures may include ‘promoting the compatibility of the rules applicable in the Member States concerning the conflict of laws’. As the measure is proposed under Title IV of the EC Treaty, it does not apply to Denmark and will not apply to the United Kingdom or Ireland unless those countries exercise their right to opt into the measure.
4.5 The Commission argues that the measure should be in the form of a Regulation, since it would lay down uniform rules for the applicable law which are ‘detailed, precise and unconditional’ and require no measures by the Member States for their transposition into national law. The Commission further argues that ‘if the Member States had room for manoeuvre in transposing these rules, uncertainty would be reintroduced into the law, and that is precisely what the harmonisation is supposed to abolish’.
4.6 The material scope of the Regulation is defined in Article 1 as applying to non- contractual obligations in civil and commercial matters in situations involving a conflict of laws. It is apparent from the Commission’s explanatory memorandum that the term ‘civil and commercial matters’ is to be understood in the same sense as that term is used in the ‘Brussels I’ Regulation. The draft Regulation does not, therefore, apply to revenue, customs or administrative matters. Article 1(2) specifically excludes non-contractual obligations arising out of family relationships, matrimonial property regimes and succession, obligations arising under bills of exchange, promissory notes and cheques insofar as these obligations arise out of their negotiable character, the personal liability of officers and members for the debts of a corporate or unincorporated body, the personal liability of persons carrying out a statutory audit, the liabilities of settlors, trustees and beneficiaries of a trust, and non-contractual obligations arising out of nuclear damage.
4.7 Article 2 provides that the Regulation is to have universal application, i.e. that the law specified by the Regulation as the proper law is to be applied, whether or not it is the law of a Member State. The Commission argues in its explanatory memorandum that the proposed Regulation should also apply where one of the parties to the dispute is habitually resident in a third state, asserting that the separation between ‘intra-Community’ and ‘extra-Community’ disputes ‘is by now artificial’. The Commission also argues that the complexity of private international law rules ‘would be even greater if … practitioners had to deal not only with Community uniform rules but also with distinct national rules in situations not connected as required with Community territory’.
4.8 Article 3 sets out the principal rule for determining the applicable law. Accordingly, the law applicable is to be the law of the country in which the damage arises or is likely to arise (irrespective of the country in which the event giving rise to the damage occurred or of the country or countries in which indirect consequences of that event arise). This general rule is subject to particular rules applying in the case of product liability (Article 4), unfair competition (Article 5), privacy and rights relating to personality (Article 6), ‘violation of the environment’ (Article 7) and infringement of intellectual property rights (Article 8).
4.9 By virtue of Article 4, the law applying to a product liability claim in respect of damage sustained from a defective product is to be the law of the country in which the person sustaining the damage is habitually resident, unless the defendant can show that the
16 ESC, 33rd Report, 2002-03
product was marketed in that country without his consent (in which case the applicable law will be that of habitual residence of the defendant).
4.10 In relation to ‘unfair competition’ (a concept which is undefined)9 Article 5 provides that the applicable law is to be the law of the country ‘where competitive relations or the collective interests of consumers are or are likely to be directly and substantially affected’. However, where the act of unfair competition ‘affects exclusively the interests of a specific competitor’ the rules of Article 3 are to apply.
4.11 In relation to privacy or ‘rights relating to personality’, Article 6 provides for the law of the forum (the ‘lex fori’, i.e. the law applied by the court determining the substantive issue) to apply in those cases where application of the law determined under Article 3 would be contrary to the ‘fundamental principles of the forum as regards freedom of expression and information’. Article 6(2) provides for the law of the habitual residence of the broadcaster or publisher to apply in relation to any right to reply or ‘equivalent measures’. The Commission explains that this provision seeks to respond to concerns expressed by some Member States and in the press over cases where a court in one Member State might be obliged to give judgment against a publisher in that State in respect of a breach of the laws of another member State or of a third State, even though the publication was permitted by the law of that first State. The Commission adds that this is a ‘sensitive issue, where the Member States’ constitutional rules diverge quite considerably’.10 For this reason, the Commission believes that the law designated by Article 3 must be disapplied in favour of the lex fori if it is incompatible with the public policy of the forum in relation to freedom of the press.
4.12 Article 8 provides that in relation to ‘violation of the environment’ the applicable law is to be that determined by the general rule in Article 3(1), unless the claimant ‘prefers to base his claim on the law of the country in which the event giving rise to the damage occurred’. The Commission’s reasoning appears to be that relying only on Article 3 ‘would mean that a victim in a low-protection country would not enjoy the higher level of protection available in neighbouring countries’ and that this ‘could give an operator an incentive to establish his facilities at the border so as to discharge toxic substances into a river and enjoy the benefits of the neighbouring country’s laxer rules’ . The provisions of Article 7 therefore allow the victim of environmental damage to determine the law which is most favourable to him.
4.13 Article 8 contains a special choice of law rule to ensure that the Regulation complies with the universally recognised principle that the applicable law in the case of intellectual property rights is the law of the country in which protection is sought . This ‘territorial principle’ stemming from the 19th century versions of the Berne and Paris Conventions enables each country to apply its own law to an infringement of an intellectual property right which may validly be asserted in that country.
4.14 Article 9 provides rules for determining the proper law in cases where a non- contractual obligation arises out of an act other than a tort or delict. The Commission
9 Neither is there any provision on which law is to be applied to the question of characterisation of the act as an act of unfair competition. 10 However, all Member States are bound by Article 10 ECHR on the right to freedom of expression.
ESC, 33rd Report, 2002-03 17
explains that the provision needs to be defined in non-technical language because of the wide divergence between national systems, but that most Member States provide for a non- contractual obligation to arise for repayment of amounts wrongly received, unjust enrichment and in respect of actions performed without due authority in connection with the affairs of another person (negotiorum gestio).
4.15 Articles 10 to 17 provide rules which are common to tort or delict cases as well as those arising from other non-contractual obligations. Article 10 provides that the parties may agree to submit their non-contractual obligations (other than those relating to intellectual property under Article 8) to a system of law of their choice. Where all the elements of the situation are located in a country other than the country whose law has been chosen, the choice of law may not prevent the application of those rules of that other country which cannot be derogated from by contract. Article 10(3) provides that a choice of law shall not debar the application of Community law where the other elements of the situation were located in a Member State at the time the loss was sustained.
4.16 Article 11 provides that the applicable law is to govern, in particular, questions relating to the extent of liability, the availability of damages, measures to prevent or terminate injury or damage, liability for acts of a third party and prescription and limitation.11
4.17 Article 12 is concerned with ‘overriding mandatory rules’, i.e. those rules of law which are to apply irrespective of the choice of law.12 Article 12(1) provides that where the law of a third country13 is applicable by virtue of the Regulation, effect may be given to the mandatory rules of another country with which the situation is closely connected ‘if and in so far as, under the law of the latter country, those rules must be applied whatever the law applicable to the non-contractual obligation’. Article 12(1) further provides that, in considering whether to give effect to those mandatory rules, ‘regard shall be had to their nature and purpose and to the consequences of their application or non-application’. Article 12(2) provides that nothing in the Regulation is to restrict the application of mandatory rules of the forum State.
4.18 Article 13 requires the court, irrespective of the law which is applied, to take account of rules of safety and conduct in force at the place and time of the event giving rise to the damage. Article 14 provides for the right of a person to take direct action against an insurer to be governed by the law applicable to the non-contractual obligation, or the law applicable to the insurance contract, at the option of the claimant. The Commission explains that the purpose of the provision is to limit the choice of law to those two systems which the insurer can legitimately expect to be applied.
4.19 Articles 15 and 16 closely follow equivalent provisions in Articles 13 and 9 of the Rome Convention. They provide, respectively, rules on the choice of law relating to
11 i.e. rules which prevent an action being brought after a period of time. These operate either by extinguishing the cause of action (prescription) or by imposing a procedural bar to proceedings (limitation). 12 The Commission refers to the definition given by the ECJ in Arblade [1999] ECR I- 8453 ‘national provisions compliance with which has been deemed to be so crucial for the protection of the political, social or economic order in the Member State concerned as to require compliance therewith by all persons present on the national territory of that Member State and all legal relationships within that State’. 13 This presumably includes the law of a Member State.
18 ESC, 33rd Report, 2002-03
subrogation14 arrangements and rights of contribution,15 and on the formal validity of any unilateral act intended to have legal effect.
4.20 Article 17 provides that the applicable law is also to determine the burden of proof or the existence and effect of presumptions (i.e. inferences which are to be drawn from certain facts). The Commission points out that this provision corresponds to Article 14 of the Rome Convention and serves a similar purpose in making the chosen applicable law apply to such questions in place of the procedural rules of the lex fori which would otherwise generally apply.
4.21 Articles 18 provides for seabed installations, ships and aircraft to be treated as being the territory of a State, whilst Article 19 provides for the principal establishment of a legal person to be treated as its habitual residence. Article 20 provides for the exclusion of renvoi.16
4.22 Article 21 (which is substantially similar to Article 19 of the Rome Convention) provides for the application of the choice of law rules of the Regulation to countries having more than one legal system.17 Article 21(2) provides that a State18 in this situation ‘shall not be bound’ to apply the Regulation to conflicts solely between such systems.
4.23 Article 22 provides for an exception (which corresponds to Article 16 of the Rome Convention) by which the application of any rule of law specified by the Regulation may be refused if to apply that rule would be incompatible with the public policy of the forum. Article 23 preserves the application of choice of law rules in specific Community instruments and provides that the Regulation does not prejudice the application of specific Community measures.
4.24 Article 24 contains a rule which prevents the application of a rule of law which has the effect of causing non-compensatory damages, such as exemplary or punitive damages, to be awarded. The Article provides quite starkly that the application of such rules ‘shall be contrary to Community public policy’.
4.25 Article 25 permits Member States to continue to apply the choice of law rules in conventions to which they are a party at the time of adoption of the Regulation, and Article 26 is to contain a list of such conventions.
The Government’s view 4.26 In their Explanatory Memorandum of 2 September 2003 the Parliamentary Secretary at the Department for Constitutional Affairs (Lord Filkin) and the Minister for Justice in
14 Subrogation is the process whereby one person may assume the rights and liabilities of another in relation to proceedings. It is common in insurance. 15 Where several persons are responsible for a wrongful act, the party sued may seek a contribution from those persons. 16 Renvoi is the doctrine in the private international law of many countries by which the application of its private international law rules leads to the application of the conflict of law rules of another country. 17 Of the Member States, only the UK is in this position, but if the Regulation has a universal application, it would also determine the proper law by reference to the relevant parts of the United States, Canada or Australia. 18 The context seems to confine this reference to a Member State, but the Regulation would require Member States to apply the Regulation to determine the applicable law in the case of third countries having a federal composition, such as the United States.
ESC, 33rd Report, 2002-03 19
the Scottish Executive (Jim Wallace) describe the draft Regulation and explain that the Government has not yet decided whether to opt into this measure under the provisions of Title IV of the EC Treaty. The Ministers indicate that the Government is still in the process of assessing the proposal, but that it is, in principle, content with the general rule in Article 3 on the applicability of the law of the place where the initial damage is suffered as a result of a tort or delict.
4.27 The Ministers add that, among other things, the Government will explore during the course of negotiations:
“• Whether the apparent ‘world-wide’ scope envisaged by Article 2; i.e. that it would apply whether or not either of the parties in a case has any significant connection to the internal market, complies with the requirement in Article 65 EC that measures must be necessary for the proper functioning of the internal market;
• Whether there is a need for the ‘special rules’ envisaged in Articles 4, 5 and 7, and how the scope of any such rules would be defined and operate in practice;
• Whether the rule proposed in Article 6 (violations of privacy and rights relating to the personality), which has important and controversial implications for the press and broadcast media, is appropriate; in assessing this matter the Government is concerned to ensure that any rule in this sensitive area does not operate to restrict freedom of expression in the United Kingdom;
• Whether the section of the proposal concerning non-contractual obligations arising from an act other than a tort or delict (Article 9), is necessary and, if so, whether the proposed rules provide adequate certainty; and
• In Article 10 (freedom of choice), although the Government welcomes the principle of party autonomy, whether the proposed limitation of this provision to agreements made after the dispute has arisen between the parties is appropriate.”
Conclusion 4.28 We agree that the points identified by the Ministers require further explanation, but we also think that a more basic assessment needs to be made of the advantages and disadvantages for the United Kingdom of opting into this proposal.
4.29 A substantial volume of commercial litigation is conducted in London between parties who have no particular connection with the United Kingdom but who choose to litigate or arbitrate their disputes here. The adoption of a Regulation would mean that such cases would become subject to the probability of references being made to the European Court, with consequent delays and expense being imposed on parties who have no connection with the Community. We would therefore be grateful to know the assessment by the Ministers of the likely effect that participation in the Regulation by the United Kingdom would have on the position of London as a centre for such commercial litigation and, given that arbitration is not excluded from the scope of the
20 ESC, 33rd Report, 2002-03
proposal, also on the position of London as a centre for international commercial arbitration.
4.30 It is apparent from the provisions of Article 25 of the proposal that the Community would acquire an exclusive external competence in relation to rules in all sectors providing for the determination of the proper law, and we ask the Ministers if the advantages of the Regulation are sufficient to outweigh the corresponding loss of competence by the United Kingdom.
4.31 On a more detailed point, we ask the Ministers if they consider that it is appropriate for Article 24 to provide for a ‘Community public policy’, when in private international law ‘public policy’ has traditionally been a matter for states. We also ask the Ministers if they are content with the general disapplication of all rules providing for non-compensatory damages.
4.32 We also ask the Minister to inform us of any decision by the Government to opt into this proposal. We shall hold the document under scrutiny pending the Ministers’ reply.
5 Emissions of volatile organic compounds from solvents used in paints
(24189) Draft Directive on the limitation of emissions of volatile organic 5268/03 compounds due to the use of organic solvents in decorative paints COM(02)750 and varnishes and vehicle refinishing products and amending Directive 1999/13/EC.
Legal base Article 95EC; co-decision; QMV Document originated 23 December 2002 Deposited in Parliament 16 January 2003 Department Environment, Food and Rural Affairs Basis of consideration EM of 31 January 2003 and SEM of 4 October 2003 Previous Committee Report None To be discussed in Council 27 October 2003 Committee’s assessment Politically important Committee’s decision Not cleared; further information requested
Background 5.1 Under certain climatic conditions, the emission of volatile organic compounds (VOCs) into the atmosphere can lead to the formation of ground level ozone, which can in turn have adverse effects on human health and the environment, described by the Commission as a “widespread and chronic problem” within the Community. As a result, a number of
ESC, 33rd Report, 2002-03 21
steps have been taken, such as Directive 2002/3/EC19 requiring Member States to establish management plans aimed at meeting air quality objectives for ozone. They also include measures aimed specifically at limiting emissions of VOCs from different sources, such as Directive 98/69/EC (which addresses those from vehicles), and Directive 1999/13/EC20 (which sets emission limit values and introduces plans to reduce such emissions from industrial sectors which are substantial users of organic solvents).
5.2 The Commission says that, as a result of these various steps, man-made emissions of VOCs within the Community are projected to have fallen in 2010 by 50% (from 14.1 million tonnes to 7.1 million tonnes) as compared with 1990, but that further measures are needed to reach the ceiling of 6.5 million tonnes to which Member States have committed themselves. In particular, it says that, since the mechanisms used by Directive 1999/13/EC are unsuitable for plants below a certain size, it was asked by the Council to explore the possibility of an approach which would reduce the VOC content of products.
The current proposal 5.3 The Commission has now set out in this proposal measures to limit such emissions resulting from the use of organic solvents in decorative paints and varnishes and vehicle refinishing products, which it has since identified, not only as significant sources of VOC emissions, but also as among those sectors where it would be technically and economically feasible to reduce the VOC content further within a realistic timeframe. The proposal would therefore set limit values for the content of VOCs in certain categories in these products, these limits applying in the case of vehicle refinishing products by 1 January 2007, and for paints and decorative products by 1 January 2010 ( but with an intermediate level applying as from 1 January 2007). At the same time, in order to avoid a duplication of effort, the proposal would repeal those provisions of Directive 1999/13/EC which set limit values for emissions from the vehicle refinishing sector.
The Government’s view 5.4 In his Explanatory Memorandum of 31 January 2003, the Minister of State (Rural Affairs and Urban Quality of Life) at the Department for Environment, Food and Rural Affairs (Mr Alun Michael) said the proposal could have cost and technical implications for manufacturers who might need to reformulate some paints, and that there would be implications for the solvent manufacturing sector as a result of a reduction in the demand for their products (though he also pointed out that in recent years there has already been a trend towards paints with a lower content of VOCs). The Minister added that, although the proposal was accompanied by a summary of costs and benefits at the European level,21 the Government had not yet completed a Regulatory and Environmental Impact Assessment for the UK, but that a preliminary Assessment would be produced by April 2003.
19 OJ No. L.67, 9.3.02, p.14. 20 OJ No. L.85, 29.3.99, p.1. 21 The costs are put at between €108 and €157 million a year by 2010, and the health-related benefits at about €582 million a year.
22 ESC, 33rd Report, 2002-03
5.5 In view of the importance of such an Assessment, we decided to defer substantive consideration of the proposal until it was available, but we have received only recently an initial Assessment under cover of a supplementary Explanatory Memorandum of 6 October 2003 from the Parliamentary Under-Secretary of State (Farming, Foods and Sustainable Energy) at the Department of Environment, Food and Rural Affairs (Lord Whitty). The Assessment points out that, in 1999, it was estimated that the UK emitted about 1,750,000 tonnes of VOCs into the atmosphere from a variety of sources, of which just over 4% was accounted for by decorative paints and vehicle refinishing products.22 It also highlights the UK’s undertaking to reduce total VOC emissions to 1,200,000 tonnes annually by 2010. In the case of paints, it says that there has already been a considerable shift away from solvent-based products in favour of those based on water, and that the first phase of a voluntary agreement adopted by the British Coatings Federation (BCF), in response to an initiative by the European Paint Manufacturers Association (CEPE), would broadly correspond to the 2007 limit values under the proposed Directive.
5.6 It then seeks to quantify the likely benefits and costs in the UK, whilst also pointing out the large degree of uncertainty this entails, particularly when attempting to assess the potential health benefits. However, as a result of deferred deaths, reductions in respiratory diseases and avoidance of environmental damage, the benefits by 2010 are put at only some £3.4 million a year, whereas the annualised costs in 2010 are estimated at £83 million, of which £49 million would fall on paint manufacturers and £32 million on those manufacturing resins, and about £1.1 million on vehicle refinishers. There would thus be a net disbenefit of nearly £80 million a year. The Assessment also contrasts this figure with the Commission’s estimate that there would be net benefit to the UK of between £30 and £34 million, and says that the Government is currently discussing these differences with the Commission.
5.7 The Minister’s Supplementary Explanatory Memorandum also says that negotiations are at an advanced stage, and that the Italian Presidency has indicated that it will be seeking political agreement at the Environment Council on 27 October 2003. He has added in a covering letter that, if the Presidency can put together a suitable text in the light of any amendments proposed as a result of the European Parliament’s first reading on 29 September, he expects the Council would be willing to reach agreement, and he has indicated that it would be a considerable help if we were able to complete scrutiny of the proposal before the Council in question.
Conclusion 5.8 Whilst we have noted the Minister’s request, we have two points on it. Firstly, this is not the first occasion on which we have held a document under scrutiny on the basis of an undertaking that his Department would shortly be providing a Regulatory Impact Assessment, only to find ourselves faced with an urgent request some months later to clear a document on the basis of information which has only just been provided.
5.9 Secondly, although the Minister does not say explicitly that the UK is willing to sign up to a political agreement on the proposal, we infer from his request for clearance that
22 The largest source of emissions (road transport) accounted for 23% of the total.
ESC, 33rd Report, 2002-03 23
this is so. In that case, we are concerned, not only about the clear difference between the Commission’s estimate of the net cost and that undertaken by the UK, but also because the latter suggests that the annual cost of the proposal in 2010 would be nearly 25 times the monetised benefit. Consequently, before we can consider it further, we need confirmation from the Minister that the UK intends to agree to a proposal on which there appears to be such a clear disbenefit, and, if so, a convincing explanation why.
6 Incidental catches of dolphins and porpoises
(24788) Draft Council Regulation laying down measures concerning 11838/03 incidental catches of cetaceans in fisheries and amending Regulation COM(03)451 (EC) No.88/98.
Legal base Article 37EC; consultation; QMV Document originated 24 July 2003 Deposited in Parliament 30 July 2003 Department Environment, Food and Rural Affairs Basis of consideration EM of 15 September 2003 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Not cleared; further information awaited
Background 6.1 Small cetaceans (dolphins and harbour porpoises) are a protected species under the Community’s Habitats Directive (92/43/EEC),23 which requires Member States to undertake surveillance of their conservation status, and — given the major threat posed to them – to monitor their incidental capture during fishing activities. At the same time, the Council has adopted measures to limit the use of drift nets, which have been found to be a particular problem. However, having sought further scientific advice from the International Council for the Exploration of the Sea (ICES), the Commission has concluded that the measures taken so far are insufficient, and, although it says that scientists consider that a reduction in cetacean by-catches can be addressed primarily through an overall reduction in fishing effort, it believes that more specific measures are also needed.
23 OJ No. L.206, 22.7.92, p.7.
24 ESC, 33rd Report, 2002-03
The current proposal 6.2 Those measures are set out in the current document, and involve three main areas of action:
• First, although the use of drift nets has already been severely restricted in most Community waters, these restrictions do not apply in the Baltic Sea. Since the Commission says that the only cetacean captured in drift nets in that area (the harbour porpoise) is the most endangered of the species in Europe, it is proposing that a general length limitation of 2.5 kilometres should immediately be applied to drift nets in the Baltic, and that their use there should then be progressively phased out, leading to a complete prohibition as from 1 January 2007.
• Secondly, the Commission says that the evidence from gill-net fisheries around the world is that acoustic deterrent devices (“pingers”) have reduced by-catches of small cetaceans, and it is now proposing that their use should be mandatory in all those fisheries which could produce a significant by-catch. The Commission says that this is particularly valid for those fisheries using bottom-set gill-nets in areas where harbour porpoises are found — in particular, the North Sea, English Channel, and the Celtic shelf — and that, given also the significant contribution which small vessels with such nets make to the total fishing effort in those areas, pingers should be deployed on all vessels, independently of their size or the total length of nets used. However, the Commission also says that, in view of concerns that there has been insufficient research into the possible disadvantages of pingers, this large-scale use should be carefully monitored.
• Thirdly, the Commission says that, although these measures can be seen as a first, short-term step towards addressing the by-catch problem, it is conscious of the need to develop wider and more strategic measures. However, it recognises that this requires greater knowledge, acquired through appropriate monitoring of fishing activities coupled with improved assessments of cetacean populations. It is therefore proposing that Member States should set up, as a matter of priority, on-board observer schemes, covering 5 to 10% of total effort, to monitor the situation in a number of “high risk” fisheries where pelagic trawls or gillnets are used, including those adjacent to the UK in the North Sea, west of Scotland, English Channel and western approaches.
The Government’s view 6.3 In his Explanatory Memorandum of 15 September 2003, the Parliamentary Under- Secretary of State (Commons) at the Department for Environment, Food and Rural Affairs (Mr Ben Bradshaw) says that the Government has been concerned for some time about the number of small cetaceans injured and killed in fishing nets, and has been committed to making progress in reducing by-catch levels. It therefore welcomes these proposals, which he says are broadly in line with the thinking set out in the UK’s own by-catch response strategy. However, although the phasing out of drift nets in the Baltic will not affect UK vessels, the compulsory use of pingers in the gill-net fisheries will have an impact, and the Minister highlights the fact that some aspects of the proposals, such as the use of these devices in parts of the Channel, go beyond the UK strategy, and will thus need careful
ESC, 33rd Report, 2002-03 25
consideration. He also points out that enforcement measures, including the use of on- board observers, would be likely to add to the Government’s costs, though the likely increase has not yet been calculated.
6.4 The Minister also says that a full Regulatory Impact Assessment will be prepared in November, based on responses to the Government’s current consultation exercise with interested parties.
Conclusion 6.5 Whilst measures to protect dolphins and porpoises are clearly desirable in principle, we think it wise to await the Regulatory Impact Assessment and the outcome of the Government’s consultations before producing a definitive Report on this proposal. In particular, we would welcome the Government’s comments on suggestions from within the industry that pair trawling is the major source of the problem in those areas where acoustic devices would have to be fitted to gill nets. In the meantime, we are continuing to hold the document under scrutiny.
7 Atmospheric emissions from sea-going ships
(24841) Amended draft Directive amending Directive 1999/32/EC as regards 12142/03 the sulphur content of marine fuels. COM(03) 476
Legal base Article 175(1) EC; co-decision; QMV Document originated 1 August 2003 Deposited in Parliament 8 September 2003 Department Environment, Food and Rural Affairs Basis of consideration EM of 17 September 2003 Previous Committee Report None, but see footnote To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Not cleared (see paragraph 7.4 below)
Background 7.1 In November 2002, the Commission put forward a Community strategy for reducing atmospheric emissions from ships, together with proposals for specific measures for limiting the sulphur content of marine fuels.24 We first reported on these on 22 January 2002, when we noted that the Government was seeking views from interested parties, and
24 (24065) 14933/02; see HC 63-ix (2002-03), paragraph 2 (22 January 2003) and HC 63-xxx (2002-03), paragraph 3 (16 July 2003).
26 ESC, 33rd Report, 2002-03
we therefore said that we would return to the document when we had received further information, including a Regulatory Impact Assessment. We also indicated that it would be helpful if the Government were to spell out more fully its views on the various aspects of the proposal.
7.2 These were subsequently set out in a supplementary Explanatory Memorandum of 7 July 2003 from the Parliamentary Under-Secretary of State (Farming, Foods and Sustainable Energy) at the Department for Environment, Food and Rural Affairs (Lord Whitty), which also pointed out that, at its first reading in June 2003, the European Parliament had proposed a number of amendments. The Minister also attached to his supplementary Explanatory Memorandum a partial Regulatory Impact Assessment, which indicated that further work was in hand to refine the estimates provided. In view of this, we said that we would continue for the time being to hold the document under scrutiny.
The current document 7.3 The current document simply sets out the Commission’s response to the European Parliament’s amendments, but, although the Minister has dealt with these in a further Explanatory Memorandum of 17 September 2003, this covers similar ground to his Explanatory Memorandum of 7 July (which was summarised in paragraphs 3.4 and 3.5 of our Report of 16 July 2003).
Conclusion 7.4 Having already decided to hold the Commission’s original proposal under scrutiny pending receipt of an updated Regulatory Impact Assessment, we think it would be sensible, in noting this latest development, to adopt a similar approach to the current document.
ESC, 33rd Report, 2002-03 27
8 Controls on fluorinated greenhouse gases
(24846) Draft Regulation on certain fluorinated greenhouse gases. 12179/03 COM(03)492
Legal base Article 95EC; co-decision; QMV Document originated 11 August 2003 Deposited in Parliament 8 September 2003 Department Environment, Food and Rural Affairs Basis of consideration EM of 9 September 2003 Previous Committee Report None To be discussed in Council 27 October 2003 Committee’s assessment Politically important Committee’s decision Not cleared; further information awaited
Background 8.1 Three fluorinated gases — hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6) — used in such applications as refrigeration and fire extinguishers, are in the “basket” of six gases25 on which the Community has agreed to take action in order to meet its commitments under the Kyoto Protocol on climate change, an aim which has since been underpinned by the Sixth Environmental Action Programme (for the period 2001-2010) and the Community’s Sustainable Development Strategy. In particular, the first phase of the European Climate Change Programme identified the need for legislation on the fluorinated gases, which, though accounting for only around 2% of overall Community greenhouse gas emissions, nevertheless have a high global warming potential.
The current proposal 8.2 The Commission has now brought forward this draft Regulation, which seeks to contain the three fluorinated gases in question, and to regulate their use and the basis on which they may be put on the market. In addition to placing a general obligation on Member States to take all technically and economically feasible measures to prevent and minimise their emission, the proposal sets out a number of specific containment requirements. These include the inspection of stationary refrigeration, air conditioning, heat pump equipment and fire protection systems containing 3 kg or more of such gases; the maintenance in such cases of records on the quantity and type of gas installed, as well as the amounts added or recovered during servicing; and the need for owners of plant containing 300 kg or more of such gases to instal leakage detection systems. In addition, owners would also have to recover (for reuse as well as disposal) fluorinated gases contained in the cooling circuits of this equipment (and of switch gear and equipment
25 The other three gases in the “basket” are carbon dioxide, methane and nitrous oxide.
28 ESC, 33rd Report, 2002-03
containing solvents), and there would be a general requirement to recover these gases from all other products and equipment if this is technically feasible and cost-effective.
8.3 In addition, the proposal would:
• require companies which produce, import or export more than one tonne of fluorinated gases a year to report to the Commission by each 31 March the quantities produced, imported, exported, recycled and destroyed in the previous year, as well as information on the likely use of the gases and estimates of their expected life-cycle emissions;
• prohibit the use of certain fluorinated gases in certain applications from specific dates, and ban the placing on the market of various products or equipment containing those gases; and
• require Member States to establish a training and certification programme for personnel involved in the inspection and maintenance of equipment containing fluorinated gases, and in their recovery and handling.
8.4 Finally, in view of leakages of fluorinated gases from vehicle air conditioning systems, the proposal would require verification from 1 January 2005 that the air conditioning systems in passenger and light commercial vehicles using a fluorinated gas with a particularly high global warming potential should meet certain leakage requirements before that vehicle can be placed on the market; and, as from 1 January 2009, the use of such gases in new vehicles would begin to be phased out.
8.5 In putting forward this proposal, the Commission suggests that by 2010 projected emissions of fluorinated gases overall are expected to have been reduced by around 23 million tonnes of carbon dioxide equivalent, but it also points out that, as a result of the steps being taken under Regulation (EC) 2037/200026 to replace ozone depleting substances, the phasing out of substances such as chlorofluorocarbons (CFCs) is likely in some applications to lead to an increase in fluorinated gases. It therefore stresses the importance of the link between that measure and those currently proposed. It also makes clear that the Commission envisages a two-stage approach to the control of fluorinated gases, in which, after a period of evaluation and monitoring, it will consider whether those measures now proposed need strengthening.
The Government’s view 8.6 In his Explanatory Memorandum of 9 September 2003, Minister for Environment and Agriculture at the Department for Environment, Food and Rural Affairs (Mr Elliot Morley) says that the UK already has in place a number of the containment measures proposed, and has also been considering for some time putting in place a certification scheme for personnel handling these gases, and that many companies already have in place for other halogenated gases reporting arrangements similar to those which would be required under this proposal. Consequently, the main area needing to be explored arises on the measures proposed for vehicle air conditioning systems, where the Minister says that
26 OJ No. L.244, 29.9.00, p.1.
ESC, 33rd Report, 2002-03 29
their practicality and impact on industry will need to be considered, along with the need for proven alternatives to these particular gases in such systems. He adds that it is also not clear how this proposal relates to existing Community legislation on vehicle design.
8.7 The Minister says that an estimate of the financial implications will be available in a partial Regulatory Impact Assessment, which will be sent to us after its scheduled completion at the end of October.
Conclusion 8.8 We note this proposal, and its relevance to the Community’s commitments under the Kyoto Protocol. We also note that the Government will shortly be letting us have a Regulatory Impact Assessment. In view of this, we will reserve judgement until we have received that Assessment, but, in the meantime, we are drawing the proposal to the attention of the House.
9 Motor vehicle type approval
(24767) Draft Directive on the approval of motor vehicles and their trailers, 11641/03 and of systems, components and separate technical units intended COM(03) 418 for such vehicles.
Legal base Article 95 EC; co-decision; QMV Document originated 14 July 2003 Deposited in Parliament 24 July 2003 Department Transport Basis of consideration EM of 31 July 2003 Previous Committee Report None To be discussed in Council Not known Committee’s assessment Politically important Committee’s decision Not cleared; further information requested
Background 9.1 Design and construction standards for motor vehicles in the Community are governed by Framework Directive 70/156/EEC.27 Its object is to achieve a single market through harmonized safety and environmental standards, using the concept of type approval. Type approval involves testing prototypes, and it ensures that manufacturers are able to produce products in conformity with the type approval. Currently the Framework Directive is
27 OJ L 42, 23.2.1970, p. 1.
30 ESC, 33rd Report, 2002-03
supplemented by 56 Directives prescribing standards for individual components and systems.
9.2 There are various forms of type approval:
• EC type approval for individual components and systems can be granted (and must be accepted in all Member States) for all categories of vehicle;
• EC Whole Vehicle Type Approval (ECWVTA) is given to vehicles complying with a prescribed combination of separate Directives. ECWVTA became mandatory for most passenger cars in 1998. ECWVTA is not yet available for buses and coaches, goods vehicles and trailers;
• Member States have the option of national “small-series” type approval for cars within quantitative limits. The UK has such a scheme, with proportionately reduced technical requirements; and
• for vehicles other than cars, some Member States have national whole-vehicle type approval and others do not. National type approvals of whole vehicles are not harmonized, but they are largely based on Community or United Nations Economic Commission for Europe component and system approvals. In the UK, vehicles that are not subject to type approval are still required to meet appropriate technical standards.
9.3 Vehicles approved individually, for example for specialist manufacturers, amateur builders or imports from non-EU markets, are outside the scope of the framework Directive. The UK has single vehicle approval schemes for these.
The document 9.4 This draft Directive would repeal and replace the Framework Directive. It would make the following main changes to the present regime:
• enable ECWVTA to be granted to vehicle categories other than cars within 12 months of the new Directive being adopted;
• make ECWVTA mandatory for goods vehicles, large passenger vehicles and trailers over the period 1 July 2007 to 1 January 2012 and for “special purpose” passenger cars, such as ambulances, motor caravans, hearses and armoured vehicles from 1 July 2007 for new types and from 1 July 2009 for all vehicles not by then in service;
• for passenger cars, create a new tier of “EC harmonized small series type approval” but within tight quantitative limits, and reduce the scope for Member States to have national type approval schemes, both in terms of quantitative limits and in terms of deciding proportionate technical standards;
• bring vehicles approved individually within the scope of the Framework Directive; and
• make various procedural changes, generally reflecting practical experience.
ESC, 33rd Report, 2002-03 31
The Government’s view 9.5 The Minister of State for Transport (Dr Kim Howells) tells us:
“The UK has advocated the earliest possible voluntary extension of ECWVTA to provide easy access to European markets. To that extent, the proposed Directive is most welcome. However, several of the mandatory elements would impose significant difficulties for some sectors of the automotive industry — in particular: independent low volume manufacturers; and independent importers of vehicles from non-EU markets.
Passenger cars
“Currently, member states have reasonable discretion to establish and operate national type approval and single vehicle approval schemes to cater for domestic requirements. The UK, unlike most other member state[s], has a thriving specialist automotive manufacturing sector of low-volume producers and vehicle converters. These make use of the current UK national small-series type approval and/or single vehicle approval schemes. The reduced quantitative limits and other restrictions on those national schemes now proposed will have a potentially serious impact on some of these smaller businesses. Analysis by industry suggests that the viability of those making fewer than 3,000 vehicles per year — the majority — would be threatened. The UK proposes to seek changes to the proposals accordingly.
“For Single Vehicle Approval, although a degree of harmonization of procedures (especially those concerning the provision of information about SVA standards elsewhere in the EU) is most welcome, the proposal requires technical standards ‘equivalent’ to those for full ECWVTA. That is disproportionately onerous in terms of both practicality and numbers involved. The UK proposes to seek more realistic provisions.
Other vehicle categories
“The issues are different from those affecting cars. From discussions with industry, the ECWVTA and national small-series type approval requirements appear generally reasonable in terms of standards and numbers, Again, the UK has numerous small manufactures — particularly bodybuilders supplying bespoke finishes to mass- produced lorry, bus and coach chassis. The proposed lead times for the new type approval requirements are very onerous for these sectors of the industry because they do not have experience of type approval. Accordingly, the UK proposes to seek a deferral of the mandatory dates, coupled with a review in the light of experience with voluntary ECWVTA.”
9.6 The Minister draws our attention to an initial Regulatory Impact Assessment (RIA), but notes that “Industry has yet to provide comprehensive advice on the cost impact in relation to the initial RIA”. He adds however that:
“Clearly any supplier who does not currently need type approval will be faced with new up-front approval costs. In addition, it is clear that some of the proposed
32 ESC, 33rd Report, 2002-03
technical requirements would not pass cost-benefit analysis for manufactures producing fewer than 3,000 vehicles per year.”
9.7 The initial RIA itself recommends, as regards passenger cars, that the UK seeks “an increase in the quantitative limits for both harmonized EC and National ‘small series’ type approval” and “seeks minor adjustments to the technical requirements for harmonized EC small series type approval for very low volume manufacturers”. In relation to all categories of vehicle it recommends “that the UK seeks changes to enable member states to apply derogations appropriate for domestic needs for national type approvals and individual approvals that are valid only in the member state granting them”.
Conclusion 9.8 We are conscious of the potential single-market benefits to be gained for UK vehicle manufacturers from further development of the type approval system. But we note also the significant potential difficulties for the industry to which the Minister draws our attention and the firm recommendations of the Regulatory Impact Assessment about negotiating objectives.
9.9 Before considering this document further we should like to hear in due course from the Minister about progress in securing substantial improvement in the draft Directive. Meanwhile we do not clear the document.
10 Global navigation satellite system
(24831) Draft Regulation on the establishment of structures for the 12058/03 management of the European satellite radionavigation programme. COM(03) 471
Legal base Article 308 EC; consultation; unanimity Document originated 31 July 2003 Deposited in Parliament 8 September 2003 Department Transport Basis of consideration EM of 6 October 2003 Previous Committee Report None; but see (24372) 7618/03: HC 63-xxiii (2002-03), paragraph 13 (4 June 2003) To be discussed in Council Possibly December 2003 Committee’s assessment Politically important Committee’s decision Not cleared; further information requested
ESC, 33rd Report, 2002-03 33
Background 10.1 The European Community has a two-phase policy for developing a global navigation system (GNSS). The first phase, GNSS 1, is the European Geostationary Navigation Overlay System (EGNOS) programme. The second phase, GNSS 2, is the programme, named Galileo, to establish a new satellite navigation constellation with appropriate ground infrastructure. It is predicated on the presumption that Europe ought not to rely indefinitely on the GPS/GLONASS systems, augmented by EGNOS. Galileo is being carried out in conjunction with the European Space Agency under the management of the Galileo Joint Undertaking (JU), which has been set up for a period of four years.
The document 10.2 The Commission says that it is necessary to create a public authority, to take over from the JU, to supervise the deployment and operational phases of Galileo, and also a suitable body to be responsible for safety and security matters.
10.3 The draft Regulation would establish a Galileo Supervisory Authority. This Authority would:
• be a Community body with its status modelled on that of a regulatory agency and with legal personality;
• conclude the concession contract with whichever consortium is selected on completion of the Galileo development phase, and ensure compliance by that consortium with that contract;
• be responsible for managing and controlling the use of the Community funds allocated to the programme; and
• become, on completion of the development phase, owner of the entire satellite radionavigation system, including whatever may have been developed by the concessionaire, unless the concession contract provides otherwise.
10.4 The draft Regulation would also create a Centre for Security and Safety for the Galileo programme. The Secretary-General of the Council would be responsible for the Centre and would set, in association with the Commission, its policy guidelines. The Commission would be represented in the Centre. The Centre would:
• carry out expert assignments linked to the safety and reliability of the system;
• participate in elaboration of, and promotion of compliance with, a future operational and regulatory framework in the field of safety and reliability; and
• be capable of taking measures required in the event of a crisis, mainly in relation to the operator of Galileo.
10.5 The Commission also suggests that the Council uses existing powers to establish a committee for the safety and reliability of the European satellite radionavigation system to deal with questions of safety and reliability affecting the system falling within the jurisdiction of the Council.
34 ESC, 33rd Report, 2002-03
The Government’s view 10.6 The Parliamentary Under-Secretary of State, Department of Transport (Mr David Jamieson) tells us:
“This document is the first stage in the process of setting up two bodies that will manage the Galileo satellite navigation system on behalf of member states of the European Union and their partners. We expect that there will be several rounds of negotiations before it is agreed in its final form and Council is asked to agree its proposals. During these negotiations the UK will seek to achieve the policy aims listed below. At the present time it is too early to define the structure of these bodies so we need to preserve flexibility that will allow their final form to reflect the extent of the Galileo programme when that is agreed by Council.
“Key UK policy aims at this stage are:
— to ensure that full recognition is given to those bodies, public and private, that have so far invested in the programme, and the ownership of the assets of the system; at present we consider that the document does not take this into account;
— to achieve value for money for the public sector by negotiating, between the public and private sectors, appropriate risk including funding and whole life costs, ownership and use of assets, and system performance so as to encourage innovation and the optimisation of benefits of the development and operation of the system to the public sector;
— to seek to gain benefit for the UK industrially and as a user through, for example, industrial contracts in the present development and later phases, the location of ground control infrastructure and the Authority and/or Concessionaire and the development of value for money services for users;
— to ensure that EU Member States have appropriate political control over the Authority and the Centre for Security and Safety, for example, in respect of national security, the security and use of the system particularly in times of crisis, and membership of the Authority; and
— to ensure adequate security measures are put in place whilst minimising any pressures for quasi-military use or control of the civil system.”
10.7 The Minister says his Department is consulting interested parties on the document.
Conclusion 10.8 It is implicit in the Minister’s negotiating objectives that there are important issues to be resolved before this draft Regulation is acceptable. And as he points out, the appropriate resolution of them may be more apparent as the Galileo programme develops and closer to the demise of the Joint Undertaking.
ESC, 33rd Report, 2002-03 35
10.9 Although it may be some time before the draft Regulation is in a form ready for adoption we should like to consider it further now in the light of the outcome of the consultations the Government is undertaking. Thus we should like to see a report on the consultations soon after they are concluded. Meanwhile we do not clear the document.
11 European Maritime Safety Agency
(24840) Draft Regulation to amend Regulation (EC) No. 1406/2002 which 12131/03 established a European Maritime Safety Agency. COM(03) 440
Legal base Article 80 (2) EC; co-decision; QMV Document originated 6 August 2003 Deposited in Parliament 8 September 2003 Department Transport Basis of consideration EM of 19 September 2003 Previous Committee Report None To be discussed in Council Not known Committee’s assessment Politically important Committee’s decision Not cleared; further information requested
Background 11.1 A technical body, the European Maritime Safety Agency (EMSA), was set up in 2002, following the loss of the oil tanker ERIKA in December 1999. Its remit is to provide Member States and the Commission with technical and scientific assistance in applying international and Community legislation on maritime safety and preventing pollution from ships; to monitor the implementation of legislation; and to evaluate the effectiveness of the measures put in place.
The document 11.2 The Commission says that the loss of the oil tanker PRESTIGE in November 2002 demonstrates the need for European-level measures to deal with pollution from ships. It proposes this draft Regulation to amend the Regulation which created EMSA to permit EMSA to:
• support and supplement the efforts of Member States to respond to pollution;
• contribute to the improvement of the anti-pollution capabilities of Member States;
• strengthen and facilitate co-operation between Member States;
36 ESC, 33rd Report, 2002-03
• promote co-operation in seeking compensation from polluters; and
• provide practical help, including specialised pollution-response ships and equipment.
11.3 The draft would also allow EMSA to:
• play a role in application of the International Ship and Port Facility Security Code when it is implemented in the Community;28 and
• take over from Member States the task of assessing training arrangements in non-EU countries to ensure the competence of seafarers certificated by those countries.29
The Government’s view 11.4 The Parliamentary Under-Secretary of State, Department of Transport (Mr David Jamieson) says:
“We supported the creation of EMSA and currently supply the Chairman of the Administrative Board, Brian Wadsworth, an official in this Department. We support proposals for EMSA to enhance co-operation between the Member States and disseminate best practice within the existing civil protection cooperation mechanism of the Community. We also support EMSA taking over from individual Member States the task of assessing the training arrangements in third countries to ensure the competence of seafarers certificated by those countries; that is an economical use of a pooled resource.
“However EMSA should not cut across existing arrangements for international or bilateral co-operation (e.g. the Bonn Agreement),30 or absolve EU coastal States from their responsibility to have their own adequate counter-pollution expertise and equipment. We, and the majority of the other Member States on the Administrative Board of EMSA, oppose an operational role for EMSA as likely to divide and confuse responsibility.
“We, together with the other Member States on the Administrative Board, firmly oppose EMSA’s involvement in security matters because:
— They are of a specialist nature and do not fit well in EMSA whose role is the enhancement of safety and environmental performance;
— Maritime security is closely related to national security and therefore, by subsidiarity, with national state responsibilities;
— EMSA already has a very heavy workload and security would be a major distraction; and
28 See (24536) 8566/03: HC 63-xxix (2002-03), paragraph 2 (10 July 2003) and Official Report, European Standing Committee A, 10 September 2003, cols. 3-22. 29 See (24197) 5369/03: HC 63-xv (2002-03), paragraph 5 (19 March 2003). 30 An international agreement between North Sea coastal states and the EC on mutual assistance and co-operation on anti-pollution matters.
ESC, 33rd Report, 2002-03 37
— There is nothing to stop the Community interpreting through comitology, rather than in EMSA, the draft Regulation on maritime security now before the EP and Council.”
11.5 The Minister highlights the subsidiarity issue, saying “Aspects of the Commission’s proposals relating to maritime security touch on matters of national security which we believe to be properly the responsibilities of the Member States”.
11.6 In relation to initial negotiations on this document the Minister tells us:
“At the Transport Working Group on 9 September there was support from Belgium and Portugal for the Commission’s proposals for an operational role in counter- pollution with the majority of States actively opposed. On its security proposals the Commission had support from only Sweden with firm opposition from the overwhelming majority of the other Member States, All States were in favour of the Commission’s proposal that EMSA should assess training arrangements for seafarers in third countries.”
Conclusion 11.7 We note that the Government supports important aspects of the draft Regulation, which appear consistent with the proper role of EMSA. But we share its view that encroachment on national security matters should not be allowed. Before considering the document further we would like an assurance from the Minister that this aspect of the draft Regulation is being excised in the working group negotiations.
38 ESC, 33rd Report, 2002-03
12 Pollution from ships
(a) (24535) Draft Directive on ship-source pollution and on the introduction of 7312/03 sanctions, including criminal sanctions, for pollution offences. —
(b) (24480) Draft Council Framework Decision to strengthen the criminal-law 9008/03 framework for the enforcement of the law against ship-source — pollution.
Legal base (a) Article 80(2) EC; co-decision; QMV (b) Article 34(2)(b) EU; consultation; unanimity Department (a) Transport (b) Home Office Basis of consideration Minister’s letter of 22 July 2003 Previous Committee Report HC 63-xxv (2002-03), paragraph 8 (18 June 2003) Discussed in Council 9-10 October 2003 Committee’s assessment Legally and politically important Committee’s decision Not cleared; further information requested
Background 12.1 Following the sinking of the oil tanker Prestige off the north-western coast of Spain in November 2002, the Commission stated its intention to present a proposal to ensure that any person who causes or contributes to a pollution incident through grossly negligent behaviour is made subject to appropriate sanctions. The Commission’s proposal sought the more effective enforcement of the International Convention for the Prevention of Pollution from Ships 1973, and its Protocol of 1978 (generally known collectively as MARPOL 73/78). This Convention, adopted by the International Maritime Organisation, contains detailed rules and standards regulating the discharge of waste and residues at sea.
12.2 The Commission argued that that there were a number of legal, practical and political justifications for a new Community measure in which rules relating to ship-source pollution would be brought within the scope of Community law and their enforcement regulated in detail.
12.3 The draft Directive relates to ‘illegal discharges’, which are defined as those prohibited by MARPOL 73/78 involving polluting substances within Annexes I and II of the Convention. By virtue of Article 3, the Directive is to apply to discharges in the internal waters, the territorial sea and the exclusive economic zones of a Member State, to straits used for international navigation and to the high seas. The Directive also provides for criminal offences, and requires Member States to treat the illegal discharge of polluting
ESC, 33rd Report, 2002-03 39
substances, or the participation or instigation of such a discharge, as a criminal offence ‘when committed intentionally or by gross negligence’.
12.4 We noted that when the draft Directive was considered at the Council’s Transport working group on 9 and 15 April, a number of Member States made the point that criminal sanctions were an issue which should be addressed intergovernmentally under the EU Treaty and not by means of a directive under the EC Treaty, and that the Commission addressed this point by proposing a draft Framework Decision for adoption under Article 34(2)(b) EU to supplement the draft Directive.
12.5 We reviewed the terms of the draft Directive and Framework Decision in detail and raised a number of issues. We agreed with the Minister that it was not appropriate for a measure proposed under the EC Treaty to impose criminal penalties. In relation to subsidiarity we noted the Minister’s comment that shipping was an international business and that the implications of Community-level action as opposed to action at national or the wider international level needed careful consideration. We asked the Minister if the concerns addressed in the Directive might not be better addressed within the IMO.
12.6 We agreed with the specific concerns raised by the Minister in relation to the draft Framework Decision. We considered that Article 7 was capable of interfering with the discretion of prosecuting authorities in the various parts of the United Kingdom, and that the rules on jurisdiction in Article 8 seemed to marginalise the jurisdiction of the flag state. We invited the Ministers to consider closely the extent to which the proposals were consistent with the United Kingdom’s obligations under the 1982 United Nations Convention on the Law of the Sea, notably in relation to the right of innocent passage, and with the provisions of MARPOL 73/78.
The Ministers’ reply 12.7 In his letter of 22 July the Parliamentary Under-Secretary of State at the Department for Transport (Mr David Jamieson) replies to our concerns on behalf of the Government, including in his letter comments from the Foreign and Commonwealth Office and the Home Office.
12.8 In relation to our concern over subsidiarity and the view that the subject matter of the Directive might be better addressed within the International Maritime Organisation (IMO), the Minister states that he has ‘no hesitation’ in saying that the regulation of international shipping is best carried out within the IMO and that if states are not applying IMO instruments, such as the MARPOL Convention, in an effective way this is an issue which is best pursued within the IMO rather than on a regional basis. Nevertheless, the Minister adds this further comment:
“However, the Commission’s proposals for a Directive and a Framework Decision have been taken up by a Presidency and are currently under negotiation. In the circumstances, the UK must work to ensure that these two pieces of European legislation are developed in such a way as to be proportionate, effective and consistent with international law.”
40 ESC, 33rd Report, 2002-03
12.9 In relation to Article 7 of the Framework Decision (which we considered interfered with prosecution discretions by requiring proceedings to be brought), the Minister comments that the commencement of criminal proceedings is a matter falling within the competency of Member States and should not be included in this type of instrument. The Minister informs us that officials will be seeking the deletion of these provisions.
12.10 In relation to Article 8 (which contains a series of rules allocating jurisdiction which seemed to us to marginalise the position of the flag state), the Minister comments that the Government is unaware of any practical difficulties arising between Member States in deciding where a prosecution should take place and that it was unconvinced that these provisions were either necessary or appropriate.
12.11 The Minister comments in detail on the extent to which the proposals are consistent with the UK’s obligations under the 1982 United Nations Convention on the Law of the Sea (UNCLOS) and with the provisions of MARPOL 73/78. First, the Minister notes that we drew attention to the fact that the list of connecting factors in Article 8(3) of the Framework Decision determining which state is to have jurisdiction is not to be found in UNCLOS. The Minister suggests that this need not give cause for concern, explaining that under UNCLOS there will be occasions when two or more States may have the right to assert jurisdiction and that it ‘makes sense in a close political grouping like the EU for the members to decide among themselves the priority between them in exercising jurisdiction’. The Minister adds that UNCLOS does not appear to prohibit a pragmatic arrangement of this sort.
12.12 In relation to the effect of the proposals on the right of innocent passage, the Minister points out that under Article 19(2)(h) of UNCLOS passage is not innocent if the ship is engaged in ‘wilful and serious pollution’ and that under Article 21(1)(f) of UNCLOS the coastal state may adopt laws relating to the prevention, reduction and control of pollution. The Minister states that any European legislation must conform to the detailed rules on jurisdiction over pollution contained in Part XII of UNCLOS. He adds that Article 8(1) (which contains rules determining which state is to have jurisdiction) refers to Member States acting ‘in accordance with conventions or ...multilateral agreements’ and that Article 8(2) applies to proceedings being commenced ‘validly’. In the Minister’s view ‘both of these references seem to betoken an intention to act only in accordance with international law, including therefore UNCLOS’.
12.13 The Minister nevertheless refers to having ‘strong concerns’ about the draft Directive and Framework Decision in relation both to UNCLOS and MARPOL. The Minister comments as follows:
“As regards UNCLOS, we remain concerned by the two measures’ references to ‘deprivation of liberty’ and ‘imprisonment’. Article 230 of UNCLOS only permits a state to apply penalties other than monetary penalties to foreign vessels if the offence was committed in the territorial sea and was a wilful and serious act of pollution. Article 230 of UNCLOS prevents a state from applying penalties other than monetary penalties to foreign vessels which committed offences in the territorial sea which were not a wilful and serious act of pollution, and prevents a state from applying penalties other than monetary penalties to foreign vessels which committed any offences beyond the territorial sea — i.e. in the state’s Exclusive Economic Zone
ESC, 33rd Report, 2002-03 41
or equivalent, or on the high seas. We will work, in the coming negotiations, to ensure that the final text of the European legislation properly reflects UNCLOS.
“As regards MARPOL, we remain concerned that the Directive deliberately goes further than the MARPOL requirements in some places — notably in respect of the exceptions set out in MARPOL Annex I, Regulation 11(b) and Annex II, Regulation 6(b). These exceptions31 are an integral part of MARPOL, but are explicitly disallowed in the current texts of both European measures. This would raise serious problems of compatibility with international law if applied to ships in transit through the waters of the UK or other Member States. We will be working, in the coming negotiations, to bring the European measures strictly in line with MARPOL.”
Conclusion 12.14 We thank the Minister for his comprehensive and thorough replies to the points we have raised. We remain sceptical of the value of these measures and agree with the Minister that the subject-matter is better dealt with by the International Maritime Organisation (IMO). In this regard, we are concerned that the principal substantive effect of the measures, and quite possibly their true purpose, is to confer exclusive external competence on the Community in relation to IMO matters.
12.15 We fully support the Minister in his efforts to ensure that these measures are in accordance with the provisions of UNCLOS and the MARPOL Convention.
12.16 We have no further questions to put to the Minister at this stage, but we shall look forward to an account, in due course, of how the Government’s concerns are being addressed in a revised version of the proposals.
31 The exceptions relate to the discharge of oil or noxious substances resulting from damage to the ship where all reasonable precautions have been taken after the occurrence of the damage to prevent or minimise the discharge.
42 ESC, 33rd Report, 2002-03
13 Establishment of a European Centre for Disease Prevention and Control
(24835) Draft Regulation establishing a European Centre for Disease 12098/03 Prevention and Control. COM(03) 441
Legal base Article 152(4)EC; co-decision; QMV Document originated 8 August 2003 Deposited in Parliament 8 September 2003 Department Health Basis of consideration EM of 28 September 2003 Previous Committee Report None To be discussed in Council 1-2 December 2003 Committee’s assessment Legally and politically important Committee’s decision Not cleared; further information awaited
Background 13.1 According to the Commission, communicable diseases pose a significant health threat within the Community, with the large movements across both internal and external borders each day calling for much closer co-operation between Member States, the Commission itself, and bodies such as the World Health Organisation if outbreaks are to be brought under control swiftly and effectively. It also points out that these concerns have recently been increased by the risk of terrorist attacks. As a result, it has concluded that the Communicable Diseases Network set up under Decision 2119/98/EC32 to provide an early warning and response system, and based on ad hoc cooperation, needs to be reinforced, particularly with the accession of the new Member States next year. It has therefore proposed in this document the establishment of a European Centre for Disease Prevention and Control.
The current proposal 13.2 The Commission envisages that the new Centre would be an independent European agency, based on the model of the European Food Safety Agency, which would mobilise and augment the synergies between existing national centres for disease control, and provide policy-makers and individuals within the Community with authoritative scientific advice on serious health threats. It would also recommend control measures, thus “enabling a rapid and effective” Community-wide response going beyond that achieved so far by the Communicable Diseases Network. More specifically, it suggests that the new agency’s role should include facilitating cooperation on epidemiological surveillance and laboratory networking (and in the process gradually take over operational support for the
32 OJ No. L.268, 3.10.98, p.1.
ESC, 33rd Report, 2002-03 43
current networks); early warning and response; scientific opinions and technical assistance; preparedness against health emergencies; the communication of health threats, and providing a rapid response to them; and supporting national public health institutes. However, the Commission recognises that epidemiological centres in the Member States must continue to play a central role, not least because they have available most of the resources needed, and it therefore acknowledges that a large European centre is not needed, so long as it has access to the national centres. At this stage, it envisages an annual budget of around €12 million, rising to around €48 million after five years, which would be funded principally from the Community budget, augmented by income received for work carried out and other contributions,
The Government’s view 13.3 In her Explanatory Memorandum of 28 September 2003, the Parliamentary Under- Secretary of State for Public Health at the Department of Health (Miss Melanie Johnson) says that the UK has a strong record of international collaboration on communicable disease control, and has given its full support to the European Communicable Diseases Network, having been a prime mover in its establishment. She adds that, subject to discussion of the details, the UK supports this proposal, which takes account of views it put forward earlier, and which she believes is likely in due course to result in increasing harmonisation of the approach to communicable diseases across Europe. The Minister’s main reservation at this stage relates to the use of Article 152(4) of the Treaty, which she says the Government is examining further, and on which it will submit an update once it has a clear position on the issue.
Conclusion 13.4 We note the Government’s broad support for the establishment of a European Centre of the kind proposed, and see no reason as regards the substance of the proposal to withhold clearance. However, in view of the Government’s (unspecified) reservations about the Treaty base proposed, we will hold the document under scrutiny, pending the further information which the Minister has undertaken to provide on this point.
44 ESC, 33rd Report, 2002-03
14 Cross-border enforcement of consumer protection
(24786) Draft Regulation on cooperation between national authorities 11830/03 responsible for the enforcement of consumer protection laws. COM(03) 443
Legal base Article 95 EC; co-decision; QMV Document originated 18 July 2003 Deposited in Parliament 30 July 2003 Department Trade and Industry Basis of consideration EM of 9 September 2003 Previous Committee Report None; but see (22924) 12613/01: HC 152-xii (2001- 02), paragraph 18 (16 January 2002), (23575) 10045/02: HC 152-xxxvi (2001-02), paragraph 17 (10 July 2002) and (24683) 10904/03: HC 63-xxxii (2002- 03), paragraph 6 (17 September 2003) To be discussed in Council Not known Committee’s assessment Politically important Committee’s decision Not cleared; further information requested
Background 14.1 In its 2001 Green Paper on consumer protection, which we cleared in January 2002,33 the Commission sought views on whether an EU legal framework was needed for improving cooperation between consumer protection enforcement agencies. In its follow- up Communication in June 2002 the Commission undertook to develop a legislative proposal; we cleared this document in July 2002.34 A related issue was dealt with by adoption of the Injunctions Directive.35
The document 14.2 The present document is the draft Regulation promised by the Commission. It aims to eliminate barriers to effective cross-border enforcement of EU consumer protection legislation by creating a formalised co-operation mechanism between public enforcement agencies in each Member State. The expectation is that better enforcement of consumer protection laws would give businesses more confidence to sell, and consumers to shop, across frontiers, thereby supporting the smooth functioning of the internal market. It would also support the Directive on Unfair Commercial Practices,36 if adopted, as that Directive would potentially widen the scope of EC consumer law.
33 See headnote. 34 See headnote. 35 Directive 98/27/EC; see OJ L 166, 11.06.1998, pp.51-5. 36 See headnote.
ESC, 33rd Report, 2002-03 45
14.3 The draft Regulation would:
• formalise co-operation, through a network of public enforcement bodies, on intra- Community infringements of consumers’ interests;
• set a minimum level of enforcement powers for those bodies;
• require the exchange of information and co-operation on cross-border cases;
• require a single liaison body in each Member State to facilitate this co-operation;
• give the Commission a co-ordinating and supporting role, including for information and education projects; and
• establish an Advisory Committee to assist the Commission in implementing the practical procedures for the operation of the Regulation.
The Government’s view 14.4 The Minister for Industry and the Regions and Deputy Minister for Women and Equality, Department of Trade and Industry (Jacqui Smith) tells us:
“One of the key DTI objectives underpinning our vision to create ‘prosperity for all’ is placing empowered and protected consumers at the heart of an effective competition regime. This involves championing enforcement of consumer law, in the UK and across borders.
“Despite a substantial set of EU consumer protection laws, cross border enforcement is very difficult to achieve in practice as enforcement mechanisms vary greatly between Member States. The Injunctions Directive …. gives designated enforcement bodies the power to apply for injunctions in other Member States if an infringement there has effects on consumers in the enforcement body’s home state. However, the lack of a public enforcement body in some countries is a particular problem as it means that co-operation and information sharing can be severely limited.
“In the UK, the Enterprise Act 2002 provided the OFT with more power to share information on consumer cases with overseas public enforcement bodies. It also gives our consumer protection a more international focus by providing that enforcement authorities can act in the interest of foreign consumers under certain circumstances. Welcome though these developments are, they are only effective if a public enforcement body exists in another Member State. There is also no guarantee that other countries will reciprocate by acting in the interests of UK consumers.
“As well as the legal framework, co-operation also takes place on an informal basis, the main forum being the European sub-branch of the International Consumer Protection Enforcement Network (ICPEN). The forum meets twice a year to discuss and exchange information on cases and to share best practice. This informal network is a valuable channel of co-operation, but it can only operate within the existing legal co-operation frameworks.
46 ESC, 33rd Report, 2002-03
“The Government considers that only this regulatory approach fully addresses the reality that current informal co-operation arrangements are not geared up to effectively tackle cross border scams. Effective enforcement of consumer protection measures is crucial to building up confidence for business and consumers to trade across borders, thus helping to strengthen the internal market. Enforcement is differently applied across Europe and we see evidence of rogue traders who are able to exploit the gaps. Cases the OFT have dealt with recently include alleged 'psychics' and clairvoyants; misleading health and diet claims; misleading prize draws (including some that claim to be UK based but have a PO Box hiding an overseas connection); and timeshare and holiday club scams. This can often involve small and nimble companies that can emerge and re-emerge in different guises and in different countries.
“Most other Member States support the Regulation. However some countries that do not currently have a public enforcement authority, including Germany, Netherlands and Luxembourg, do not favour a Regulatory approach as it would require substantial changes to their enforcement regimes. They do however see the need to address the issue of cross-border consumer fraud and are positively engaged in the negotiation process.”
14.5 In the UK the draft Regulation would build upon Part 8 of the Enterprise Act 2002, which contains all the necessary provisions to ensure the full implementation of the Injunctions Directive, including the facilitation of cross-border enforcement. (The Injunctions Directive gave certain bodies, notably consumer associations nominated by the Member States, the right to seek injunctions in courts in other Member States against rogue traders.) The draft Regulation would take this further by creating a network of public authorities with obligations to act in the interests of consumers in other Member States when requested and by conferring new powers on enforcement bodies. It would not therefore create any new protections, but would strengthen the enforcement of existing ones. The Minister adds that as the UK already has public enforcement bodies, there would be no fundamental changes required here.
14.6 The Minister also says that a consultation exercise is currently under way with UK consumer groups, enforcement authorities and industry representatives and that her Department is preparing a Regulatory Impact Assessment.
Conclusion 14.7 We note that the Government regards the approach in the draft Regulation as the only one that can address fully cross-border consumer protection. But before considering the document further we would like to hear from the Minister about the outcome of the consultations and to have the Regulatory Impact Assessment. Meanwhile we will hold the document under scrutiny.
ESC, 33rd Report, 2002-03 47
15 Implementation of the Directive on the posting of workers
(24800) Commission Communication on the implementation of Directive 11898/03 96/71/EC (Posting of Workers) in the Member States. COM(03) 438
Legal base — Document originated 25 July 2003 Deposited in Parliament 4 August 2003 Department Trade and Industry Basis of consideration EM of 8 September 2003 Previous Committee Report None To be discussed in Council None planned Committee’s assessment Legally and politically important Committee’s decision Not cleared; further information requested
Background 15.1 The Directive on the Posting of Workers requires that a Member State’s minimum terms and conditions of service should apply equally to workers temporarily posted to that country by an employer based in another Member State. Article 8 requires the Commission to review the implementation of the Directive by the Member States.
The document 15.2 The document reports in detail the Commission’s findings on the way each Member State has implemented the Directive. The Commission finds that only the UK and Ireland have not introduced legislation specifically to transpose the Directive into their domestic law. Instead, they have amended existing legislation. In the UK, territorial limits have been removed from the Employment Rights Act 1996 and the Employment Rights (Northern Ireland) Order 1996 so that the rights apply to all employees in the UK, including workers temporarily posted here; and legislation to counter discrimination on the grounds of sex, race and disability and, in Northern Ireland, on the grounds of religious belief or political opinion, has been amended so that those employed outside the UK are no longer excluded from its scope.
15.3 In the Commission’s view, the UK’s transposition of the Directive needs to be reassessed in the light of two European Court of Justice cases (Commission v Greece (Case C-365/93) and Commission v Netherlands (Case C-144/99)). In the light of those cases, the Commission considers that the posting situations covered and the rights derived from the Directive are not clearly defined in the UK and that the jurisdiction clause in Article 6 of the Directive has not been implemented. The Commission will contact the UK Government to seek to resolve this.
48 ESC, 33rd Report, 2002-03
The Government’s view 15.4 The Minister for Small Business and Enterprise at the Department of Trade and Industry (Nigel Griffiths) tells us that the Government believes that it has correctly transposed the Directive and that any additional legislative intervention would have been superfluous.
15.5 The Minister comments that a general principle established by the European Court of Justice is that transposition of a Directive need not require a separate legislative instrument, provided that:
• national law guarantees that national authorities will effectively apply the Directive in full;
• the legal position is sufficiently clear and precise; and
• individuals are made fully aware of their rights and, where appropriate, may rely upon them before the national courts.
In the Minister’s view, the UK has met these criteria for the correct transposition of the Directive and he gives his detailed reasons for reaching that view.
15.6 The Minister also says that the Government has examined the two European Court of Justice cases which lead the Commission to the opinion that the UK should review its transposition of the Directive. He explains why, in the Government’s view, the circumstances of those cases are very different from those relating to the UK’s transposition of the Directive and do not make a clear case for its reassessment.
Conclusion 15.7 We consider that the difference of opinion between the Commission and the Government about the adequacy of the UK’s transposition of the Posting of Workers Directive is legally and politically important. Accordingly, we ask the Minister to tell us the outcome of the Government’s contacts with the Commission about this and, meanwhile, we shall keep the document under review.
ESC, 33rd Report, 2002-03 49
16 Social security schemes for people moving within the Community
(24821) Draft Regulation amending Regulation (EEC) No. 1408/71 on the 12094/03 application of social security schemes to employed persons, to self- COM(03) 468 employed persons and to members of their families moving within the Community and Regulation (EEC) No. 574/72 laying down the procedure for implementing Regulation (EEC) No. 1408/71.
Legal base Articles 42 and 308 EU; co-decision; unanimity Document originated 31 July 2003 Deposited in Parliament 3 September 2003 Department Work and Pensions Basis of consideration EM of 12 September 2003 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Legally and politically important Committee’s decision Not cleared; request to be kept informed
Background 16.1 When people move to another Member State, they can (subject to specified exceptions) take with them social security benefits to which they are entitled in the Member State from which they are moving. Provision for this was made in Regulations (EEC) No. 1408/71 and 574/72. Those Regulations have been amended subsequently, mainly to reflect changes in the social security legislation of Member States and decisions of the European Court of Justice. The document proposes further amendments for the same purpose and to clarify some of the articles of the Regulations.
16.2 Policy responsibility for the document is shared between the UK Government and Scottish Executive Ministers and Ministers of the Welsh Assembly.
The document 16.3 The main changes proposed by the document are as follows.
16.4 Article 4.2A of Regulation 1408/71 defines “special non-contributory benefits”. Such benefits cannot be exported when the people entitled to them move to another Member State. Annex IIa of the Regulation lists those benefits.
16.5 In the light of some recent judgements by the European Court of Justice, the document proposes the amendment of the current definition of special non-contributory benefits in Article 4.2A. In the Commission’s view, the effect of the judgements is that, in the case of a disabled person, only a benefit paid solely because of the beneficiary’s “need for social interaction” may be listed in Annex IIa as exempt from export. So, for example, a benefit granted to a child with a disability, where the main objective is to compensate for
50 ESC, 33rd Report, 2002-03
the family’s additional expenses in caring for the child, would not be paid solely for the child’s need for social integration and so could not be listed as exempt from export. Accordingly, the document deletes the UK’s non-contributory disability benefits (and some benefits paid by other Member States) from the list in Annex IIa.
16.6 The document also proposes the amendment of Article 9a of Regulation 1408/71. That article provides for the extension, in specified circumstances, of a minimum period of insurance before entitlement to a benefit begins. In the light of a recent judgement by the European Court of Justice, the Commission proposes that Article 9a should be amended to add to the specified circumstances for extension any periods when industrial accident pension has been paid by another Member State.
16.7 Article 23 of Regulation 1408/71 concerns the calculation of cash benefits for sickness and maternity. The proposed amendment would enable Member States to take into account earnings in another country in the calculation of entitlement to these benefits.
16.8 The document proposes the addition of a new Article 10c to Regulation 574/72 and an amendment of Article 12a of that Regulation. The changes would affect civil servants and transport workers who work in more than one Member State; they provide for the Member State in which the employer is based to issue the worker with a certificate saying that the worker is subject to that State’s social security legislation.
16.9 Annex IIa of Regulation 1408/71 lists special non-contributory benefits granted exclusively in the territory of the Member State in which the beneficiary lives. Among other things, the document adds to the Annex the UK Pension Credit, which will replace Income Support for elderly people.
16.10 Annex III of Regulation 1408/71 keeps in force certain provisions of bilateral agreements which existed before the Regulation was adopted. Member States have reviewed their entries in the Annex with a view to deleting all these provisions unless they are more favourable to the beneficiaries or relate to specific exceptional circumstances. The document makes deletions intended to give effect to the conclusions of Member States’ reviews.
16.11 Annex VI of Regulation 1408/71 sets out methods of applying the legislation of certain Member States. Among other things, the document amends the Annex to take account of the Welfare Reform and Pensions Act 1999 which extends survivors benefits to widowers. The document also deletes from the Annex the provision which allowed the UK and Ireland to deal with over-lapping entitlement to family benefits for cross-border workers.
The Government’s view 16.12 The Parliamentary Under-Secretary of State at the Department of Work and Pensions (Mr Chris Pond ) says that the most significant amendment proposed in the draft Regulation is for the deletion from Article 4.2A of the UK’s non-contributory disability benefits. If adopted, this proposal would entitle people to export their disability benefits with them when they move to another Member State.
ESC, 33rd Report, 2002-03 51
16.13 The Government’s policy is that these benefits should be available only to people who live in the UK. The Minister cites judgements of the European Court of Justice which, in the Government’s opinion, support its view that there is no requirement for the benefits to be exportable. The Commission contends that, in the light of a more recent judgement of the Court, benefits must be exportable unless a benefit is exclusively for the purpose of meeting the beneficiary’s needs for social integration. The Government does not share the Commission’s interpretation of the effect of the judgement on UK non-contributory disability benefits and believes that Member States can continue to rely on the earlier case law. The Commission knows the UK’s view and the Government will pursue the matter in negotiations on the document.
16.14 The Minister says that the UK asked for the addition of State Pension Credit in Annex IIa in substitution for Income Support for people aged 60 or more.
16.15 He also says that the proposed amendment to Article 23 (calculation of benefits) would be helpful to the UK. Entitlement to UK Maternity Allowance is now decided on the basis of earnings rather than insurance, and so the Government needs to be able to take account of any relevant period of earnings a woman may have had in another Member State.
16.16 The Government already issues certificates to UK civil servants stating that they are subject to UK social security legislation and says it can implement the proposed measure for transport workers too. Accordingly, the Government does not object to the proposed amendments of Articles 10c and 12a.
16.17 The Minister notes that the proposed deletions from Annex III (savings for listed bilateral agreements) do not include some provisions which the Government was content to drop. This can be dealt with during negotiations on the document.
16.18 The Minister says that, with the introduction of Child Tax Credit, the provision in Annex VI to enable the UK and Ireland to deal with cross-border workers’ over-lapping entitlement to family benefits is no longer necessary and can be deleted, as proposed in the document.
Conclusion 16.19 We recognise the need for the Commission to make proposals to update these social security Regulations to reflect changes in Member States’ legislation and recent judgements of the European Court of Justice.
16.20 We note, however, that there remains a difference of opinion between the Government and the Commission on the application of case law to the export of UK non-contributory disability benefits. This is important both for UK citizens who are entitled to those benefits and who wish to move elsewhere and to taxpayers who fund the benefits.
16.21 Accordingly, we shall hold the document under scrutiny and request the Minister to tell us about the progress of the negotiations with the Commission about this difference of opinion in good time for us to consider his response before the document goes to the Council of Ministers.
52 ESC, 33rd Report, 2002-03
17 Promotion of “active European citizenship”
(24682) Draft Decision establishing a Community action programme to 10898/03 promote active European citizenship. COM(03) 276
Legal base Article 308 EC; unanimity Document originated 27 May 2003 Deposited in Parliament 1 July 2003 Department Foreign and Commonwealth Office Basis of consideration EM of 2 October 2003 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Not cleared; further information requested
Background 17.1 The Activity-Based Budgeting Regulation adopted in June 200237 requires basic Acts to be adopted for a number of grants which were previously financed under appropriations from the Commission section of the budget (Part A) for which there was no legal base.
The draft Council Decision 17.2 This proposal seeks to place on a solid legal footing financial support hitherto awarded under headings in Part A of the budget. Those supported include bodies promoting “active European citizenship”, in particular activities such as town-twinning. Bodies supported under Part A are as follows:
• Heading A-3016 co-finances the operating costs of the Association of the Councils of State and Supreme Administrative Jurisdictions of the European Union;
• Heading A-3020 co-finances the operating costs of the Our Europe Association;
• Heading A-3021 co-finances the operating costs of European think tanks and organisations advancing the idea of Europe;
• Heading A-3024 co-finances the activities of associations and federations of European interest;
• Heading A-3026 co-finances the operating costs of European think tanks;
• Heading A-3030 co-finances the operating costs of the European Council on Refugees and Exiles;
37 Council Regulation (EC, Euratom) 1605/2002 of 25 June 2002.
ESC, 33rd Report, 2002-03 53
• Heading A-3036 co-finances the operating costs of the Jean Monnet House and the Robert Schuman House; and
• Heading A-321 supports town-twinning schemes in the European Union.
17.3 Community support for the promotion of European citizenship can already be funded under three headings in Part B of the budget:
• Heading B3-305 finances measures for civil society by means of grants to non- governmental organisations and trade union organisations; and
• Headings B3-4105 and B5-803 co-finance the operating costs of the Platform of European Social NGOs.
17.4 The proposal would allocate these activities to new budget lines under the three policy areas of education and culture, employment and social affairs, and justice and home affairs. It would support two types of grant for activities falling within one of three areas:
i) Parts 1 and 2 activities: Grants to co-finance the operating costs of a number of bodies pursuing an aim of general European interest in relation to active European citizenship, that is promoting civic participation. Civil society bodies and others such as municipalities and organisations may qualify for support according to criteria set out in the Annex which include disseminating information on Community policy and activities of interest to members. For instance, the Platform of European Social NGOs keeps its members informed of the development of Community policy relevant to them and helps to shape EU policies on matters of common interest to its members. It also promotes dialogue with other groups such as NGOs in the accession states. The Association of the Councils of State and Supreme Administrative Jurisdictions of the European Union relays to the public the judicial decisions of the Councils of State with regard to Community law.
ii) Part 3 activities include actions conducted by NGOs, associations and federations of European interest or cross-industry trade unions and actions to promote town- twinning.
An operating grant under part 2 will not fund all the eligible expenditure in the calendar year for which it is awarded. At least 20% must be co-financed from non- Community sources. The activities of bodies other than those already described which can apply for specific grants include:
• The European Council on Refugees and Exiles which represents organisations of refugees and displaced persons and promotes policies which contribute to the objectives of the Treaty as regards asylum and social exclusion.
• The Our Europe Association is a think-tank of personalities from the political, social, economic and scientific worlds of European society and acts as a forum for ideas promoting a closer European Union, an aim described in the preamble as an aim of general European interest.
54 ESC, 33rd Report, 2002-03
• The Jean Monnet and Robert Schuman Houses act as meeting places where the work of these founding fathers is explained.
17.5 The proposal provides for the Commission to submit an evaluation report before the end of 2007, based on an external evaluation report which must examine the overall relevance and coherence of the programme, the effectiveness of the preparation, selection and implementation procedures and its effectiveness in meeting the objectives of the programme. The Council would then take a decision on the continuation of the programme for the period from 1 January 2009.
The Government’s view 17.6 The Minister for Europe (Mr Denis MacShane) says that the move to activity-based budgeting will allow Member States to examine more closely the added value of the activities supported since each budget line must have clearly defined objectives and outputs and a connection is made between outputs and the resources proposed. He adds:
“We are committed to a European Union which is closer to its citizens, and encouraging citizenship would promote this aim. The European Council at Nice recognised ‘the need to monitor the democratic legitimacy and transparency of the Union and its institutions, in order to bring them closer to the citizens of the Member States’. In the United Kingdom, in particular, participation in the last elections to the European Parliament fell to an all-time low of just under 24%. So in principle we support the purpose of this proposal”.
“Discussion in the Council Working Group will allow us to argue for a tightening up of the proposal. This could be done, for example, through more clearly defined and measurable objectives, with a definition of desired outputs and provision for regular reporting against objectives; a systematic evaluation of the activities; and the establishment of a management committee, if practicable. We will also want the Commission to justify its selection of institutions which are to receive guaranteed funding of their operating costs, to ensure that they do offer an essential service and value for money. We may propose inclusion of an additional objective for the grants scheme, on fostering youth participation and active citizenship (currently not supported by any of the specified projects)”.
17.7 The Minister notes that the proposal suggests a budget of €113 million to cover the period 2004–2008. He says that the Government would prefer the proposal to end in 2006, rather than covering two Financial Perspectives (2000-6 and 2007+).
Conclusion 17.8 We fully support the principle of activity-based budgeting and the Government’s intention to argue for this proposal to be tightened up, with more clearly defined and measurable objectives and the other improvements which the Minister outlines. He lists systematic evaluation of the activities. We question whether these are sufficiently homogenous to be placed together in one programme and we believe that an evaluation should be made before the programme is adopted, rather than in three or four years’ time. We appreciate that some bodies have received funding over many years, but we
ESC, 33rd Report, 2002-03 55
do not see this as necessarily a reason for it to continue at the same level, or indeed at all. We therefore also support the Government’s intention to call on the Commission to justify its selection of institutions which are to receive guaranteed funding of their operating costs. In particular we ask the Minister whether the Government considers it appropriate for think-tanks promoting specific political views to be supported from public funds.
17.9 We note that an operating grant under part 2 will not fund all the eligible expenditure in the calendar year for which it is awarded. At least 20% must be co- financed from non-Community sources. We ask the Minister why bodies which are specifically aimed at objectives of European interest should be required to seek funds from non-Community sources. It would be helpful if he could outline for us the donors who have contributed in the past, why they have seen it as in their interest to do so and the scale of the sums involved.
17.10 When the Minister has some idea of the timetable for this proposal, we ask him to inform us.
17.11 We do not clear the document.
18 Nutrition and health claims made on foods
(24763) Draft Regulation on nutrition and health claims made on foods. 11646/03 COM(03) 424
Legal base Article 95 EC; co-decision; QMV Document originated 16 July 2003 Deposited in Parliament 24 July 2003 Department Food Standards Agency Basis of consideration EM of 29 August 2003 Previous Committee Report None To be discussed in Council January 2004 Committee’s assessment Politically important Committee’s decision Not cleared; further information awaited
Background 18.1 According to the Commission, as food production has become more complex, consumers are increasingly interested in the information appearing on food labels, and in their diet. For that reason, it takes the view that the information about foods and their nutritional value appearing on the labelling and used in their presentation should be clear, accurate and meaningful. It notes that, in addition to a basic provision that claims should
56 ESC, 33rd Report, 2002-03
not mislead the consumer, Community legislation38 lays down a number of detailed rules on food labelling, including a prohibition on the attribution of properties which prevent, treat and cure ailments, but that these provisions are open to different interpretations, leading to numerous discrepancies between Member States (and hence hindering the proper functioning of the internal market). The Commission also notes that General Guidelines adopted by Codex Alimentarius prohibit false, misleading or deceptive claims, and require those marketing a food to justify any claim made.
The current proposal 18.2 Against this background, and a recent case39 in which the European Court of Justice interpreted the existing Directive as banning all health claims relating to human diseases, the Commission has put forward this draft Regulation, which it says is intended to achieve a high level of consumer protection, improve the free movement of goods within the internal market, provide legal security, ensure fair competition in the area of foods, and promote innovation. The existing general approach would be maintained, but, on the grounds that certain foods can make important contributions to health, the proposal would allow nutrition and health claims under strict conditions, following an independent scientific assessment and Community authorisation. Only those claims which conform with the Regulation would be allowed on the labelling, presentation and advertising of foods placed on the Community market, and the proposal would apply, not just to “traditional” nutrients (such as protein, carbohydrate, fat, fibre, vitamins and minerals), but to other substances with a nutritional effect, and to all foods. Particular attention would be paid to claims which, although factually true, can be misleading.40
18.3 More specifically, the proposal would establish:
• a positive list of permitted nutrition terms, such as “low”, “rich” and “light”, and the conditions under which they may be used; and
• procedures for the pre-market authorisation of health claims, under which the European Food Safety Agency (EFSA) would be consulted on the supporting scientific evidence before an authorisation was given.
In the latter case, long-established and non-controversial health claims would be subject to a procedure under which a list of permitted claims would be adopted following an opinion of the EFSA, with a Register of such claims being established and regularly updated.
18.4 The proposal would also require the Commission to establish nutrient profiles for foods which may carry nutrition or health claims, based on their content of fat, sugar, salt and sodium, and lay down the basis on which the claims of different products may be compared. Certain labelling information would be required for foods carrying health claims, including nutrient content, a statement indicating the importance of a balanced diet, and (where appropriate) warnings about the maximum quantities to be consumed and to those who should avoid using the food. In addition, the proposal would prohibit
38 Directive 2000/13/EC. OJ No. L.109, 6.5.00, p.29. 39 C-221/00, Austria v. Commission. 40 Such as “90% fat-free”, which masks a fat content of 10%.
ESC, 33rd Report, 2002-03 57
certain categories of health claims, such as those which refer to general non-specific benefits, which the Commission says are vague and often meaningless and unverifiable, or which refer to psychological and behavioural functions (where it is difficult to convey a meaningful message). It would also be prohibited for foods not specifically designed for weight control to make claims relating to potential weight loss.
The Government’s view 18.5 In her Explanatory Memorandum of 29 August 2003, the Parliamentary Under- Secretary of State for Health at the Department of Health (Miss Melanie Johnson) says that the Government is broadly supportive of the proposal, pointing out that developments in nutritional science and food technology, and increasing consumer awareness of the relationship between diet and health, have resulted in an increase in claims of this sort on the UK market. She adds that the validity or otherwise of these claims is not apparent to consumers, and that enforcement authorities generally do not have the expertise or evidence necessary to identify and challenge those which are false.
18.6 The Minister also says that, although a voluntary approach has been encouraged in the UK with some success, through a combination of Food Standards Agency advice and the establishment of a tripartite initiative involving consumer groups, enforcement authorities and industry, it is clear that the coverage has been patchy, and that statutory action at Community level is needed to ensure that consumers can trust claims on all products. As a consequence, the Government believes that statutory conditions for nutrition claims and the introduction of pre-market arrangements for health claims are justified. It also accepts that the use of claims of this sort on products which are high in fat, sugar and salt has the potential to undermine healthy-eating messages, which are aimed at encouraging diets lower in these nutrients. It therefore welcomes the commitment in this proposal to consider options for addressing this issue.
18.7 However, the Minister also suggests that it will be important to establish appropriate transitional arrangements for valid claims which are already being made, bearing in mind both the time required to compile and submit dossiers and the resources available to the EFSA. She adds that it will be important to examine the proposed specific prohibitions on certain types of health claims, since these appear to be unnecessary and could result in the loss of useful consumer information.
18.8 As to the costs of the proposal, the Minister says that, although those who make claims ought to be able to substantiate them, there would be costs to businesses arising from the compilation and submission of dossiers, and from implementing the labelling requirements, though these would be offset by the proposed transitional period. She says that a Regulatory Impact Assessment is being prepared after further consultation with stakeholders. In addition, the Minister points out that the proposal would have significant resource implications for the EFSA, particularly in the short term as lists of approved claims are developed.
58 ESC, 33rd Report, 2002-03
Conclusion 18.9 Given the increasing emphasis on the nutritional and health aspects of food, this is clearly an important proposal, on which we note that the Government is broadly supportive, subject to the need for a suitable transitional period and to the clarification of some detailed points. That said, we think it sensible to await the promised Regulatory Impact Assessment before taking a firm view. In the meantime, we will continue to hold the document under scrutiny.
19 Road user charging
(24818) Draft Directive amending Directive 1999/62/EC on the charging of 11944/03 heavy goods vehicles for the use of certain infrastructures COM(03) 448 (presented by the Commission).
Legal base Article 71(1) EC; co-decision; QMV Document originated 23 July 2003 Deposited in Parliament 28 August 2003 Department HM Treasury and Transport Basis of consideration EM of 19 September 2003 Previous Committee Report None; but see (22660) 11932/01: HC 152-xv (2001- 02), paragraph 2 (30 January 2002) To be discussed in Council No date set Committee’s assessment Legally and politically important Committee’s decision Not cleared; further information requested
Background 19.1 Directive 1999/62/EC (the Eurovignette Directive) sets out rules governing the use of tolls, user charges and vehicle excise duties on heavy goods vehicles. The Directive does not require Member States to introduce charging. The Commission’s 2001 White Paper “European Transport Policy for 2010: Time to Decide” concluded that Community action should be gradually taken to replace existing transport taxes with more effective instruments, including charges; and that external costs (for example the costs of accidents) should be integrated into infrastructure pricing.41
41 See headnote.
ESC, 33rd Report, 2002-03 59
The document 19.2 The document proposes amending the Eurovignette Directive to further develop the harmonisation of lorry charging that has been achieved through that legislation. The rationale for this is that:
• fair mechanisms are required to charge lorry operators for the costs they impose on the infrastructure, in order to ensure sustainable transport in the Community; and
• there is need to improve competitiveness and eliminate distortions of competition between transport undertakings in Member States and ensure the proper functioning of the internal market.
19.3 The changes envisaged in the draft Directive are:
• Applicable Vehicles: the proposal would extend the rules governing the imposition of tolls and user charges42 to all goods vehicles of more than 3.5 tonnes as opposed to the current limit of more than 12 tonnes;
• Geographical Scope: the proposal would apply the rules to the trans-European road network (TERN) (in the UK most, but not all, motorways and some “A” roads, particularly those leading to ports). It would be possible also to extend the tolling/charging regime to any other primary/main road which is in direct competition with the TERN and onto which traffic may be diverted;
• Rate Structure: the existing Directive provides that the total charge collected must be related to the costs of constructing, operating, and developing infrastructure. The proposal would add, in so far as they are not covered by insurance, the cost of accidents. A detailed “common methodology” describes the calculations to be used to determine the rate structure;
• Variable Rates of Charge: it would be permissible to vary the charge rate to reflect:
— the type of vehicle, in accordance with the provisions of a detailed annex related to the amount of damage it does to roads and its emissions class;
— the time of day, and level of congestion on the road concerned, provided that no toll is more than 100% above the toll charged during the cheapest period of the day;
— a particular road in the network dependent on the environmental sensitivity of the area, the population density or the accident risk. By 1 July 2008 it would be obligatory to vary the charge according to route in accordance with these factors;
• Use of Revenues: revenue from tolls and/or user charges would have to be used for the maintenance of the infrastructure concerned and the benefit of the transport sector as a whole. An independent infrastructure supervision authority would have to be set up to verify that this happened in practice; and
42 In the context of this document “tolls” are distance-based charges and “user charges” are time-based charges such as vignettes.
60 ESC, 33rd Report, 2002-03
• Offsetting Tax Cuts: the proposal provides that a proportionate level of compensation would be able to be paid following the implementation of tolls or user charges. This could be done, in particular, by a reduction in vehicle taxes (in the UK the Vehicle Excise Duty (VED)) even if that means lowering them to below the minimum rates presently set out in the Eurovignette Directive.
The Government’s view 19.4 The Minister of State, Department for Transport (Dr Kim Howells) and the Paymaster General (Dawn Primarolo) tell us:
“The Government has made efforts to keep its plans for lorry road-user charging strategically aligned with Community thinking on road charging, in particular the principles elaborated in the Commission’s White Paper. The Government therefore supports the principle of amending the Eurovignette Directive to become consistent with the White Paper and with our plans. In particular:
• Applicable Vehicles
The Government welcomes clarification that tolls may be levied on all lorries over 3.5 tonnes;
• Geographical Scope
The Government welcomes the explicit statement in the proposal that user charging on minor roads off the TERN is a matter for Member States in accordance with the principle of subsidiarity.
• Off-setting tax cuts
The Government welcomes the reconfirmation that compensation schemes are permissible.
“Nevertheless, the Government has some apprehension about the detailed scope of the Directive and reservations about procedure:
Rate Structure
• According to the proposal, the Charge must relate to the costs of constructing, operating, maintaining and developing infrastructure. Insofar as they are not covered by insurance, the cost of accidents may also be accounted for. A “common methodology” is provided to calculate the rate. The Government will seek to ensure that the rate structure is not too prescriptive and does not impose an unwarranted limitation on a Member State’s ability to charge appropriately within objectively defined criteria and in accordance with Treaty principles.
Variable Rates of Charge
• The Government is receptive to proposals, which allow for charges to be varied according to objectively justified criteria. In particular, the ability to vary the structure of a charge according to various factors of environmental impact of a
ESC, 33rd Report, 2002-03 61
vehicle and congestion condition of a road, are very welcome. However the Government will work to secure sufficient flexibility for the UK to achieve its policy objectives within the spirit of the proposals, i.e. vehicles which impose more external costs should pay more. For example, we might want to vary the Charge according to the type of day as well as time of day.
• The Government also notes that the proposals allow for a mark-up of up to 25% in areas of environmental sensitivity after consultation with the Commission. We would be alert to ensure that where this provision is implemented it is done in accordance with Treaty principles such as proportionality and non- discrimination and that the UK haulage industry operating in other Member States are not disadvantaged in any way. More generally, the Government will also be concerned to ensure, as negotiations progress, that emerging legislation provides adequate protection for UK hauliers operating elsewhere in the EU.
Use of revenues
• The proposal requires that revenues from tolls and/ or user charges must be used for the maintenance of the infrastructure concerned and the benefit of the transport sector as a whole. The Government has already made clear that it intends that the introduction of the LRUC [Lorry Road User Charge] will not increase the overall tax burden of the haulage industry that buys fuel in the UK, and so following the general principle of successive Governments on taxes/charges we do not accept that it is appropriate to hypothecate these toll receipts to the transport sector.
Legal base
• The proposal is presented on a non-tax legal base but the Government will be carefully considering whether, as negotiations progress, the provisions constitute a tax measure and should be subject at least jointly to a tax legal base.”
19.5 The Ministers also tell us that the Government is consulting interested parties about the draft Directive and that a Regulatory Impact Assessment on the LRUC is to be prepared.
Conclusion 19.6 This document raises important issues both in relation to road use charging itself, for example the scope of a “common methodology” or the proportionality of additional environmental charges, and to the question of the appropriate legal base and hypothecation. But before considering the document further we should like to see the outcome of the Government’s consultations and a Regulatory Impact Assessment of the Commission’s draft Directive itself.
62 ESC, 33rd Report, 2002-03
20 Minimum standards for procedures for granting and withdrawing refugee status
(a) (24366) Amended draft Council Directive on minimum standards on 7214/03 procedures in Member States for granting and withdrawing refugee — status.
(b) (24860) Amended draft Council Directive on minimum standards on 12281/03 procedures in Member States for granting and withdrawing refugee — status.
Legal base Article 63EC; consultation; unanimity Document originated (b) 11 September 2003 Deposited in Parliament (b) 15 September 2003 Department Home Office Basis of consideration (a) Minister’s letter of 12 September 2003 (b) EM of 30 September 2003 Previous Committee Report (a) HC 63-xxii (2002-03), paragraph 7 (21 May 2003) To be discussed in Council By the end of 2003 Committee’s assessment Politically important Committee’s decision Not cleared; information on progress requested
Background 20.1 The aim of this draft Directive is to set minimum standards for fair and efficient asylum procedures in Member States. We first considered the proposal in February 2001.
20.2 In June 2002, the Seville European Council called for the Directive to be adopted by the end of 2003.
20.3 When we last considered the proposal, on 21 May 2003, we questioned the Government’s view that the approach of the draft Directive was over-prescriptive. In our view, the risk was that, by allowing derogations and permitting Member States to set their own timescales and guidelines in some areas, the principle of common minimum standards might be compromised. Accordingly, we kept the document under scrutiny and asked the Minister to respond to some specific questions.
20.4 The Minister replied on 12 September. Subsequently, amended drafts of Articles 23 to 47 have been deposited and an Explanatory Memorandum on them has been submitted.
ESC, 33rd Report, 2002-03 63
The Minister’s letter 20.5 In her letter of 12 September 2003, the Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) replied to our questions. Those questions (in italics below) and the Minister’s replies to them are as follows.
What was the reason, in Article 12, for changing the requirement for a transcript of a personal interview to a report?
20.6 The Minister tells us that some Member States were unwilling to provide a transcript because of the cost; a report would provide a summary of the main points of the interview and would be easier to produce. The change would have no impact on the UK, in which a written transcript of all interviews is already required.
In Article 13.2(c), what is the justification for choosing to give free legal advice and/or representation only if there is a reasonable chance of a positive decision in review or appeal? Who decides when a chance is “reasonable”?
20.7 The Minister replies:
“This provision reflects the current provisions in the UK law. In order to avoid wasting limited public funds on the provision of legal advice in cases that have little or no chance of success, the Legal Services Commission require the solicitors and organisations they have contracted to provide free legal advice to conduct a merits test of the claim at an early stage. If the test is met and the claim is considered to have sufficient merit, further time and resources can be spent on the case.
“The directive would induce a change, as the determining authority would be entitled to decide upon the merits of the appeal or review. But there would be safeguards, as the article indicates that ‘Member States shall ensure that legal assistance and/or representation granted under sub-paragraph (c) is not arbitrarily restricted’. As a consequence of this provision, legal assistance could not be refused for example on the basis of the nationality of the claimant. The merits of the case would have to be fully examined”.
In Article 14, how can “administrative management” be justified as a reason to limit the possibility of legal advisers visiting applicants in closed places?
20.8 The Minister considers that this provision is justified because Member States cannot ensure access to closed areas for 24 hours every day of the week. The Article contains a safeguard: access should not be severely limited or rendered impossible.
Why, in Article 17.2, are Member States allowed to hold an asylum applicant in detention in cases of border procedures?
20.9 The Minister tells us that Article 17 has been substantially amended since March 2003 and now reads:
“1. Member States shall not hold a person in detention for the sole reason that he/she is an applicant for asylum.
64 ESC, 33rd Report, 2002-03
“2. Where an applicant for asylum is held in detention, Member States shall ensure that there is a possibility of speedy judicial review”.
20.10 The Minister says that the new Article makes no reference to border procedures. She adds, however, that three Member States are trying to ensure that this Article allows Member States to detain people who make their applications at the border.
Why, in Article 20, are Member States allowed to lay down time limits in case of implicit withdrawal or abandonment of applications? Should there not at least be a minimum time limit in the measure?
20.11 The Minister says that some Member States consider time limits a useful means to curb the abuse of the asylum system. Time limits also allow the Member State to retain the initiative in determining applications.
20.12 The Minister adds that the draft Article has been amended since last March. It now provides that, if an applicant can demonstrate within a reasonable time that his failure to provide essential information or to appear for a personal interview was due to circumstances beyond his control, it will not be assumed that he has implicitly withdrawn or abandoned his application.
Does the kind of derogation found in Articles 35 (border procedures) and 39 (review and appeal proceedings under the regular procedure) negate the principle of common minimum standards? Why should it be allowed in these particular Articles? Will either of these derogations affect the UK?
20.13 The Minister explains that the derogation in Article 35 was included by the Commission because some Member States wanted to preserve specific features of their procedures at borders. She says that the derogation does not affect the UK.
20.14 The Minister tells us that the derogation in Article 39 was included because non- suspensive appeals prove efficient to curb asylum abuse and some Member States are willing to make use of them in regular procedures. She adds:
“Under the current provisions [of Article 39], the UK wouldn’t benefit from this derogation: non-suspensive appeals in the UK, as introduced in the legislation by the Nationality, Immigration and Asylum Act (NIA) 2002, are only in force when appeals are heard under the accelerated procedure, if an asylum claim is certified as clearly unfounded. Nevertheless, the UK might be willing to extend the non- suspensive appeal procedure to the regular procedure in the future. To benefit from the derogation, the UK would have to reform its asylum legislation before December 2003, which is the deadline for the adoption of the Directive…”
Our concern about communication with applicants is heightened by the new provisions in Article 10.3(b) and (c) which address the situation in which an interpreter cannot be provided. Both these provisions assume that an applicant can read and write. We ask if any thought has been given to those who are illiterate.
ESC, 33rd Report, 2002-03 65
20.15 The Minister refers us to Article 10.3(a) which requires Member States, if they cannot provide an interpreter, to provide the applicant at no charge with the assistance of a legal adviser who can make written comments on behalf of the applicant.
What is the Government’s current position on non-suspensive appeals?
20.16 The Minister says that, under the Nationality, Immigration and Asylum Act 2002, if an asylum claim is certified as clearly unfounded, the applicant will be removed from the UK before he can lodge an appeal. If the applicant wishes to appeal, he must do so from outside the UK. The Government’s position is unchanged. It is keen to ensure that the Directive allows the UK to implement the Act fully.
What are the views on the draft Directive of the non-governmental organisations which the Home Office consults at quarterly meetings?
20.17 The Minister tells us that the most recent meeting with non-governmental organisations was on 9 September 2003, when :
“An update on the Common European Asylum Package was provided to the attendees. Discussion focussed on this Directive and specific concerns were raised that any procedure for designation of safe countries of origin should ensure that flexibility to deal with rapidly developing situations is retained.
“A number of NGOs have made written submissions to the Asylum Working Group and have discussed the Directive with the Presidency. Their comments are being taken into account in the drafting of the texts.”
The amended draft of Articles 23 to 47 of the Directive 20.18 The Asylum Working Party has produced a revised draft of these Articles (document (b)). The main changes are as follows.
20.19 A new Article 23 specifies the circumstances in which Member States may prioritise or accelerate the examination of asylum applications.
20.20 Article 30 has been amended to specify the circumstances in which a third country may be designated as a safe country of origin.
20.21 Article 30A provides that the Council, acting by qualified majority on a proposal from the Commission and with the assent of the European Parliament, may adopt a minimum common list of third countries which all Member States are to regard as safe countries of origin. Where the Council or a Member State asks the Commission to submit a proposal to remove a third country from the common list, the requirement on Member States to reject applications from applicants from that country is suspended for three months or until the Council has rejected a proposal from the Commission to remove the third country from the list.
20.22 Article 30B authorises Member States themselves to designate third countries as safe countries of origin and specifies how they are to assess whether a third country can be designated.
66 ESC, 33rd Report, 2002-03
20.23 Article 38 specifies the decisions against which applicants for asylum must be given the right to an effective remedy through an appeal to a court or tribunal.
20.24 Article 39 provides that a Member State must allow an appellant to remain in that State pending the outcome of the appeal, but it also allows Member States to derogate from that requirement in specified circumstances.
20.25 It is clear from the text that most Member States have reservations about the amended Articles.
The Government’s view 20.26 In her Explanatory Memorandum, the Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) says that the Working Group has not yet debated the redraft of the Appeals Chapter (Articles 38 to 41). She adds that a number of Member States, including the UK, are concerned that the drafting of the right to an effective remedy (Article 38) goes further than is required by Article 13 of the European Convention on Human Rights and may not be appropriate for all decisions taken under the Directive.
20.27 The Government supports the creation of an EU list of safe countries of origin (Article 30A) so long as the provision is flexible enough for Member States to add to it in any national lists.
20.28 While supporting the principle of safe third country and safe country of origin (Articles 27 to 30B), the Government believes that the current text is too restrictive and should allow greater discretion for Member States. It will continue to press for Member States to be allowed to designate part of a country as safe.
20.29 Finally, the Minister says that the text is likely to undergo further changes as negotiations continue during the autumn.
Conclusion 20.30 We are grateful to the Minister for her letter of 12 September and her Explanatory Memorandum. We recognise that derogations have been included in the previous text of the draft Directive and in the amended drafts of Articles 23 to 47 with the aim of achieving unanimous agreement on an overall package of measures and that Member States wish to preserve specific features of their national procedures. On the other hand, this latitude may pose an unacceptable risk of compromising the principle of common minimum standards.
20.31 As the Minister says, further changes are likely to be made to the text before it is ready to be put to the Council for approval. Accordingly, we consider that it would be premature for us to reach a view on the risk of compromising common minimum standards. We shall, therefore, keep the document under scrutiny, and ask the Minister to keep us informed of the progress of negotiations.
ESC, 33rd Report, 2002-03 67
21 Access to Schengen Information System by vehicle registration authorities
(24819) Draft Regulation amending the Convention implementing the — Schengen Agreement of 14 June 1985 on the gradual abolition COM(03) 510 of checks at common borders as regards access to the Schengen Information System by the services in the Member States responsible for issuing registration certificates for vehicles.
Legal base Article 71(1)(d) EC; co-decision; QMV Document originated 21 August 2003 Deposited in Parliament 2 September 2003 Department Home Office Basis of consideration EM of 19 September 2003 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Not cleared; further information requested
Background 21.1 The Schengen Convention of 1990 authorises Member States to insert on the Schengen Information System (SIS) data about stolen, misappropriated and lost vehicles. Article 9 of Council Directive 1999/37/EC (which deals with the issue of vehicle registration documents) provides for Member States to exchange information before they register a vehicle. But, at present, national vehicle registration authorities do not have access to information on the SIS about vehicles and their registered owners.
21.2 The draft Regulation proposes that vehicle registration authorities should have direct access to certain SIS information. The intention is to help them to check before they register a vehicle that it has not been stolen, lost or misappropriated and that the applicants’ supporting documents are valid. The aim is to facilitate mutual recognition of vehicle registration certificates and to assist in the fight against fraud and illegal trade in stolen vehicles.
The document 21.3 The draft Regulation inserts a new Article in the Schengen Convention giving Member States’ vehicle registration bodies direct access to SIS data on:
• data on motor vehicles of more than 50 cc;
• data on trailers and caravans with an unladen weight of more than 750 kg;
• blank official documents; and
68 ESC, 33rd Report, 2002-03
• issued identity papers.
Communication by registration authorities of any of this information to the police or judicial authorities is to be governed by national law.
The Government’s view 21.4 The Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) tells us that, in the UK, the Driver and Vehicle Licensing Agency (DVLA) and Driver and Vehicle Licensing Northern Ireland (DVLNI) would be the national registration authorities for the purposes of the Commission’s proposal. The implications for their workload have yet to be assessed.
21.5 The Government is concerned about whether this draft Regulation is the right means to help the fight against vehicle fraud and cross-border crime. It will also need to be satisfied that the proposal is consistent with the stringent data protection safeguards on access to the SIS. The Minister says that the Commission and the Council’s Legal Service will be asked for clarification of these and some other points, including the proposed legal base of the proposal.
Conclusion 21.6 We recognise the potential benefits of greater cooperation between Member States to combat cross-border crime associated with motor vehicles. But we share the Minister’s concern that any proposal for widening access to the SIS must be fully compliant with the safeguards for personal data protection. We should be grateful, therefore, to know the outcome of the Minister’s request for clarification from the Commission and the Council’s Legal Service. We should also be grateful for her views on whether there are other means to achieve the Commission’s objectives that would be as effective but at less cost and without widening access to the SIS. Meanwhile, we shall not clear the document.
ESC, 33rd Report, 2002-03 69
22 Assistance in the removal of third country nationals through the territory of other Member States
(24826) Draft Council Directive on assistance in cases of transit through the 11770/03 territory of one or more Member States in the context of removal — measures taken by Member States against third-country nationals. + ADD 1
Legal base Article 63(3)(b) EC; consultation; unanimity Document originated 8 August 2003 Deposited in Parliament 8 September 2003 Department Home Office Basis of consideration EM of 2 October 2003 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Not cleared
Background 22.1 Article 63(3)(b) of the EC Treaty requires the Council to adopt measures on the repatriation of illegal residents. Last May we considered a draft Directive on the removal of third country nationals by air, which we regarded as politically important. We decided to clear it when we were told that the Government had decided not to opt into the proposal.43
22.2 The Italian Presidency has now proposed a draft Directive on assistance for the removal of illegally resident third country nationals over land, through the territory of other Member States. By virtue of the Protocol on the position of the United Kingdom and Ireland, the UK will have three months after the adoption of the measure to decide whether to opt into it.
The document 22.3 The document provides that, where a third country national is the subject of an order for removal from a Member State, that Member State (“the requesting Member State”) may apply to another Member State (“the requested Member State”)for the transit of the person through its territory. The request may be made to more than one Member State if that is necessary to achieve the removal of the person to the third country of destination. The document specifies the grounds on which a request for transit may be refused. Requests should normally be made not later than two days before the proposed transit and the requested Member State should normally accept or reject a request within two days of receiving it.
43 (23762) 10386/02 (24405) 7366/03; see HC 63-xxiii (2002-03), paragraph 19 (4 June 2003).
70 ESC, 33rd Report, 2002-03
22.4 The transit should normally be completed within 36 hours. Public carriers, such as scheduled trains, buses, ferries and unmarked police cars, should be used. The requested Member State would be required to provide the third country nationals and their escorts with assistance, including sustenance, accommodation and medical assistance. The requesting Member State would meet the cost of the assistance.
22.5 In implementing the Directive, Member States would be expressly required to respect human rights under the Geneva Convention on refugees and the European Convention on Human Rights.
The Government’s view 22.6 The Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) says that the Government generally takes a positive approach to participation in measures on illegal immigration and supports increasing operational cooperation on the removal of third country nationals.
22.7 The Minister tells us that the discussion of the document has only just started in the relevant Council Working Group. The Government’s concerns about the Air Transport Directive also apply to this proposal about transit by land. Among other things, the present draft does not contain enough flexibility to refuse a request for transit. The requirement to provide assistance would impose direct costs and heavy logistical burdens on the requested Member State. Moreover, there are insufficient safeguards for Member States when transit operations stall, with the potential for the requested State to be left with responsibility to consider asylum and human rights claims made during the transit.
22.8 The Government will take a full part in the discussion of the proposal and will consider whether to opt into it.
Conclusion 22.9 We understand the reasons for the Government’s concerns about the proposal and note that discussion of it in the Working Group is still at an early stage. We shall keep the document under scrutiny until the outcome of the discussion of the Government’s concerns is known and until the Government can tell us if it intends to opt into the initiative.
ESC, 33rd Report, 2002-03 71
23 Descriptions of organic produce
(24244) Draft Council Regulation amending Regulation (EEC) No. 2092/91 on 5488/03 organic production of agricultural products and indications referring COM(03) 14 thereto in agricultural products and foodstuffs.
Legal base Article 37EC; consultation; QMV Document originated 16 January 2003 Deposited in Parliament 20 August 2003 Department Environment, Food and Rural Affairs Basis of consideration EM of 11 February 2003 and SEM of 9 September 2003 Previous Committee Report None To be discussed in Council Towards the end of the year Committee’s assessment Politically important Committee’s decision Cleared
Background 23.1 Council Regulation (EEC) No. 2092/9144 dealing with organic agricultural production includes a stipulation that only foodstuffs produced in accordance with the provisions set out in the Regulation may be designated as organic (or the equivalent term in other Member States), the intention being to give such produce a distinctive profile and thereby ensure fair competition between producers.
The current proposal 23.2 According to the Commission, the intention was that this protection should include the usual derivatives or diminutives of the terms in question, whether they are used alone or combined, and independently of which language is used, and it now intends to remove any ambiguity on this point by amending the Regulation to make this condition explicit. Given that organic production in other Member States is described by such terms as “biologic” and “ecologic”, the main effect of the proposal would be to reserve descriptions such as “bio” and “eco” for organic produce, including that sold in the UK.
23.3 In addition, the proposal would make three other changes to Regulation 2092/91, in that it would:
• extend the inspection system, which is currently confined to operators who produce, prepare or import organic produce, to all those handling it (except retailers who simply sell it direct to the public), thus bringing within its scope wholesalers who sell on produce without carrying out any operation on it;
44 OJ No. L.198, 22.7.91, p.1.
72 ESC, 33rd Report, 2002-03
• modify the provision requiring inspection authorities not to disclose information, so as to allow them to exchange it among themselves where this is necessary for enforcement purposes; and
• stipulate that the Community logo indicating that products are covered by a specific inspection scheme may be applied to those imported from third countries only when inspections have been carried out by a body which has been supervised by a public authority.
The Government’s view 23.4 In his Explanatory Memorandum of 10 February 2003 (which was based on an unofficial text), the then Minister of State (Environment) at the Department for Environment, Food and Rural Affairs (Mr Michael Meacher) said that the last two of these amendments did not raise any particular difficulties, and that the Government also generally welcomed the proposed extension of the inspection system, subject to further consideration of any additional costs that would arise, and clarification of the impact on caterers who sell organic produce to the final consumer other than in prepacks. However, on the main amendment proposed, he pointed out that the existing provisions of Regulation 2092/91 have been interpreted in the UK as not prohibiting the use of diminutives such as “bio” and “eco” on conventional produce sold here, because they appear sufficiently far from the term “organic” as to be unlikely to lead to confusion in the minds of consumers. As the Commission proposal would in future reserve these terms for organic produce, it would restrict manufacturers’ scope for labelling conventional products, such as live yoghurts. The Minister also said that the Government would aim to produce a Regulatory Impact Assessment by the end of March 2003, and we therefore decided to await this before forming a view on the proposal.
23.5 In the event, we have only recently received a partial Regulatory Impact Assessment under cover of a supplementary Explanatory Memorandum of 9 September 2003 from the current Parliamentary Under-Secretary of State (Mr Ben Bradshaw). The latter makes it clear that there is little support for the UK position on the use of diminutives, largely because there is a real possibility of confusion in many Member States arising from the use of the terms in question. Consequently, the Minister does not see any real prospect of heading off this part of the proposal. On the other hand, he says that changes have been made to the proposed coverage of the inspection system, with those (such as supermarket distribution centres and traders supplying retailers) operating akin to wholesalers being made subject to control, whilst leaving retailers and caterers selling organic produce to be dealt with by national consumer protection legislation. He adds that further thought will be needed to ensure that the inspection arrangements actually put in place are proportionate and take full account of existing audit and traceability systems, and that there will need to be a suitable transitional period.
23.6 The Minister has also provided a partial Regulatory Impact Assessment, which suggests that there would be a one-off cost of around £1 million to industry (equivalent to £25,000 per business) arising from the need to re-label conventional products currently described as “bio”, but that it is expected this would be spread over a transitional period. The Assessment also suggests that the ongoing costs for those newly subject to the
ESC, 33rd Report, 2002-03 73
inspection system would range from £1,000 to £10,000, depending upon turnover and the inspection effort needed, arising from the need to register with an organic inspection body.
Conclusion 23.7 We note that, whilst the main part of this proposal is intended to remove the confusion in other Member States over the use of terms such as “bio” and “eco”, its effect in the UK will be to prohibit their use on conventional products, such as live yoghurts. In other words, a measure designed to benefit consumers may well have the opposite effect, at least in this country, and at the same time impose additional re- labelling costs on manufacturers. That said, we also note that the Government’s reservations have received little support within the Council, and that it sees no real prospect of heading off this part of the proposal, its main aim now being to negotiate a suitable transitional period over which those costs can be spread. Given this background, we do not think any further consideration is called for, and we are therefore clearing the proposal. However, we think it right to draw its unintended consequences to the attention of the House.
24 Use in stockfeeding of substances having a hormonal or thyrostatic action and beta-agonists
(24844) Amended draft Directive amending Council Directive 96/22/EC 12173/03 concerning the prohibition on the use in stockfarming of certain COM(03) 489 substances having a hormonal or thyrostatic action and of beta- agonists.
Legal base Article 152(4)(b)EC; co-decision; QMV Document originated 11 August 2003 Deposited in Parliament 8 September 2003 Department Environment, Food and Rural Affairs Basis of consideration EM of 18 September 2003 Previous Committee Report None, but see footnote To be discussed in Council Shortly Committee’s assessment Politically important Committee’s decision Cleared
74 ESC, 33rd Report, 2002-03
Background 24.1 Council Directive 96/22/EC45 regulates the use in stockfeeding within the Community of certain substances having a hormonal or thyrostatic46 action and beta-agonists,47 and the main effect of the complex series of provisions described in our predecessors= Report of 15 November 2000 is to ban the use of hormone growth promoters in food-producing animals, and hence in meat, except for therapeutic purposes or zootechnical treatment.48 That Report set out the background to a Commission proposal49 which would, among other things, have banned one such substance, oestradiol 17 (and its derivatives), in food- producing animals, and allowed its use in non-food-producing animals only where there was no alternative treatment.
24.2 A number of issues arising on this — including a clear difference of view between the Commission’s Scientific Committee on Veterinary Measures Relating to Public Health (SCVPH) on the one hand, and bodies such as the UK=s Veterinary Products Committee (VPC) on the other — were pursued further by our predecessors on 7 February 2001, at the end of which they simply noted the relative weight which the Government had attached to these respective opinions. They also dealt on 2 May 2001 with the need for alternative treatments to be clearly defined before any ban on oestradiol 17 was implemented, following which they cleared the proposal and an amended proposal50 which the Commission had put forward in the light of the changes proposed by the European Parliament at its first reading in February 2001.
24.3 We ourselves considered on 24 April 2002 a supplementary Explanatory Memorandum, indicating that the then Danish Presidency had put forward a compromise, which addressed some of the UK=s previous concerns, though without resolving the difference in scientific opinion. It would thus allow the continued use of oestradiol 17 and its derivatives for therapeutic purposes, with maximum residue levels being set, but require alternative products to be found for zootechnical uses. Since the loss of zootechnical uses would still have posed problems for veterinarians for whom the alternatives are less effective, the UK’s preference was to defer a decision until the outcome of new studies by the SCVPH, which was expected in the summer.
24.4 In noting this, we also took the view that, since the proposal would narrow the terms of the ban somewhat as compared with the original proposal which had been cleared, there was no reason, on the basis of the further information supplied, for us to take a different view. Likewise, on 20 November 2002, we cleared without a Report a further supplementary Explanatory Memorandum, indicating that the Danish Presidency had
45 OJ No. L 125, 23.5.96, p.3. 46 Thyrostatic substances reduce the activity of the thyroid gland, which affects metabolism. A decrease in metabolic rate manifests in a number of ways, including an increase in body weight. 47 Beta-agonists give a positive response when combined with a specific receptor site in the body, and can also promote the production of lean meat in treated animals. 48 Zootechnical treatment means administering to a farm animal a substance for synchronizing oestrus and preparing donors and recipients for the implantation of embryos. 49 (21460) 10060/00; see HC 23-xxix (1999-2000), paragraph 8 (15 November 2000), HC 28-v (2000-01), paragraph 6 (7 February 2001), HC 28-xiii (2000-01), paragraph 10 (2 May 2001) and HC 152-xxvi (2001-02), paragraph 8 (24 April 2002). 50 (22317) 6976/01; see HC 28-xiii (2000-1), paragraph 10 (2 May 2001) and HC 152-xxvi (2001-02), paragraph 8 (24 April 2002).
ESC, 33rd Report, 2002-03 75
further narrowed the scope of the ban by authorising the use of oestradiol 17 for oestrus induction in cattle, horses, sheep and goats, and for the treatment of foetus maceration or mummification,51 and pyometra52 in cattle. This compromise was subsequently adopted by the Agriculture and Fisheries Council in February 2003.
The current proposal 24.5 The current proposal reflects amendments to that agreement put forward by the European Parliament at its second reading in July 2003. These would limit the use of oestradial 17 for oestrus induction to a three-year period after the amendment comes into force, and ask the Commission to present a report within two years on the availability of alternative veterinary products for the treatment of foetal mummification and pyometra.
The Government’s view 24.6 In his Explanatory Memorandum of 18 September 2003, the Parliamentary Under- Secretary (Commons) at the Department for Environment, Food and Rural Affairs (Mr Ben Bradshaw) says that, in so far as it is likely that the Commission’s report will recommend that alternatives are used for other treatments, the European Parliament’s amendments effectively aim to eliminate all use of oestradiol 17 for the treatment of farm animals within five years, and would thus in effect involve reverting to the original Commission proposal for a definitive ban. He also says that the Council Secretariat was able to secure agreement to the Parliament’s amendments from all Member States, except the UK, Spain and Portugal, and that the revised proposal was adopted as an A point at the meeting of the Agriculture and Fisheries Council in July 2003.
24.7 In commenting on these developments, the Minister recalls that the UK has consistently voted against a ban on hormonal growth promoters on the grounds that it could not be justified scientifically. He points out that the further studies by the SCVPH (see paragraph 24.3 above) are now complete, and that it has maintained its earlier concerns about the carcinogenicity of small amounts of oestradiol 17 in food. He also says that the Committee on Veterinary Medicinal Products (CVMP) has referred this new opinion to its Safety Working Group for evaluation, but that this is unlikely to be ready until next spring at the earliest. In the meantime, the Veterinary Products Committee (VPC) in the UK has set up a working group to examine the scientific evidence supporting the new SCVPH opinion, and he says that, when this is available at the end of the year, it will inform the Government’s thinking. He also says that he hopes that both the VPC and CVMP views will be available well before the two-year deadline for the Commission to produce its report on alternatives to oestradiol 17, though he notes that in the past the Commission has followed the opinions of the SCVPH.
Conclusion 24.8 As with the original Commission proposal, the key issue remains the apparent difference in the views taken by various expert committees on the risks posed by
51 Arising when natural abortion does not occur after the death of a foetus. 52 An infection of the uterus.
76 ESC, 33rd Report, 2002-03
oestradiol, and the relative weight placed on these in the development of Community policy in this area. Since the latest information on these matters is still being examined at a technical level, there is little further that can be done at this stage, given also that the approach advocated by the European Parliament in this document has been agreed by the Council, and will presumably come into force once the text has been published as a Directive in the Official Journal. We are, however, drawing these latest developments to the attention of the House.
25 Community accession to the International Plant Protection Convention
(24867) Draft Council Decision approving the accession of the European 12302/03 Community to the International Plant Protection Convention, as COM(03) 470 revised and approved by Resolution 12/97 of the Twenty-ninth Session of the FAO Conference in November 1997.
Legal base Articles 37 and 300EC; consultation; QMV Document originated 31 July 2003 Deposited in Parliament 15 September 2003 Department Environment, Food and Rural Affairs Basis of consideration EM of 6 October 2003 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Legally important Committee’s decision Cleared
Background 25.1 The purpose of the International Plant Protection Convention (IPPC) is to secure common and effective action to prevent the spread and introduction of pests of plants and plant products, and to promote appropriate means for their control. The Convention was originally adopted in 1951, but was amended in 1997 to reflect responsibilities arising under the World Trade Organisation’s Agreement on the Application of Sanitary and Phytosanitary Measures. At present, about 40% of the existing contracting parties have accepted these amendments, but they will not come into force until two-thirds have done so.
The current proposal 25.2 The Community is not a party to the 1951 Convention, but one of the amendments made in 1997 permits members of the Food and Agriculture Organisation (FAO) to
ESC, 33rd Report, 2002-03 77
become contracting parties. As the Community is a member of the FAO, the Commission is proposing in this document that the Council should approve its accession to the IPPC, thus enabling the President of the Council to deposit the necessary instrument with the FAO Director-General.
The Government’s view 25.3 In his Explanatory Memorandum of 6 October 2003, the Parliamentary Under- Secretary of State (Commons) at the Department for Environment, Food and Rural Affairs (Mr Ben Bradshaw) says that, although the principle of the Community’s accession has been accepted, it is the Government’s clear view that the Community cannot purport to approve its accession to the Convention until the 1997 amendments have been accepted by the required two-thirds of existing members needed to trigger its entry into force. Consequently, unless the Commission has good arguments to the contrary, the UK would need to oppose the proposal as it stands on procedural grounds.
25.4 The Minister also says that the UK has difficulties with one of the Annexes to the proposal, which defines areas where the Community and its Member States have competence. This is because it describes the various competences in general terms, rather than in relation to the specific Community rules which allocate them.
Conclusion 25.5 We note with interest the Government’s view that the Commission is seeking in this proposal to jump the gun as regards Community accession to the International Plant Protection Convention, and, although we do not think this is an issue requiring any further consideration, we are nevertheless drawing it to the attention of the House.
26 Protection of deep-water coral reefs
(24886) Draft Council Regulation amending Regulation (EC) No. 850/98 as 12448/03 regards the protection of deep-water coral reefs from the effects of COM(03) 519 trawling in an area north west of Scotland.
Legal base Article 37 EC; consultation; QMV Document originated 27 August 2003 Deposited in Parliament 19 September 2003 Department Environment, Food and Rural Affairs Basis of consideration EM of 30 September 2003 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Cleared
78 ESC, 33rd Report, 2002-03
Background 26.1 According to the Commission, deep-water coral reefs have been identified as endangered habitats needing protection, and have been designated as such both in the relevant Council Directive (92/43/EEC)53 and within the Convention for the Protection of the Marine Environment of the North East Atlantic (the OSPAR Convention). One such set of reefs off the north-west of Scotland — the “Darwin Mounds” — has been identified as in need of protection against erosion by fishing gear, and the UK has expressed its intention to designate them as a special area of conservation in fulfilment of its obligations under Directive 92/43/EEC.
The current proposal 26.2 The current proposal arises because the UK has asked the Commission to use the emergency powers now available to it under the Common Fisheries Policy (CFP) by virtue of Regulation (EC) No. 2371/200254 to prohibit the use of those types of towed fishing gear which are known to damage the mounds. The Commission adopted a Regulation (1475/2003) in August which bans trawling on the seabed for a period of six months. However, although this measure can be extended for a further six months, the Commission recognises the need for a longer-term solution, and has therefore proposed in this document a permanent ban on bottom (demersal) trawling in the area in question.
The Government’s view 26.3 In his Explanatory Memorandum of 30 September 2003, the Parliamentary Under- Secretary of State (Commons) at the Department for Environment, Food and Rural Affairs (Mr Ben Bradshaw) says that the UK welcomes the proposal as protecting an area of high conservation value. He also points out that there is little fishing by UK vessels in this area, so that the proposal should not give rise to any additional costs to the industry, or impair its ability to take its quota allocations, bearing in mind also that other types of gear (such as pelagic trawls, long lines and purse seines) may still be used. Similarly, any enforcement needed would be undertaken within existing resources.
Conclusion 26.4 This proposal is as uncontentious as it is welcome, and, in clearing it, we are simply drawing it to the attention of the House as an example of a step being taken to further the process of integrating environmental protection requirements into the CFP.
53 OJ No. L.206, 22.7.92, p.7. 54 OJ No. L.358, 31.12.02, p.59.
ESC, 33rd Report, 2002-03 79
27 PHARE pre-accession assistance programme
(24336) Commission Report: The PHARE Programme Annual Report 2001. 7056/03 COM(03) 97
Legal base — Department International Development Basis of consideration Minister’s letter of 20 September 2003 Previous Committee Report HC 63-xviii (2002-03), paragraph 9 (9 April 2003) To be discussed in Council None planned Committee’s assessment Politically important Committee’s decision Cleared (decision reported on 9 April 2003)
Background 27.1 PHARE is one of the three EC pre-accession instruments, the other two being ISPA55 and SAPARD.56 The guidelines for the programme were revised in 1999, to take account of these other two programmes, so that it is now designed to assist the ten candidate countries of Central and Eastern Europe in incorporating the acquis, and the funds now focus on the pre-accession priorities identified in each applicant=s Accession Partnership.
27.2 When we considered the annual report on PHARE in April,57 we cleared it but asked to be kept informed of the Government’s view of the effectiveness of the administration of the pre-accession programmes, to which the UK contributes 19.5%.
27.3 The former Secretary of State for International Development (Baroness Amos) has replied as follows:
“DFID is pleased to see that over the period that accession countries have been receiving assistance, there has been a steady improvement in their absorption capacity. The most recent figures available demonstrate that by the end of 2002, the 2000 PHARE programme had contracted upwards of 90% of the allocation (spend figures are not yet available).
“However, DFID recognises that there is room for further improvement. The effectiveness of these programmes and the absorption capacity of the countries continue to be of major concern. The effectiveness of PHARE national programmes from 2000 onward is difficult to measure at this stage. Under the PHARE programme, allocations must be contracted within two years and disbursed within three. Additionally, extensions of a year can be granted to the contracting or
55 The Instrument for Structural Policies for Pre-Accession. (ISPA) supports infrastructure policies for the environment and transport in the candidate countries. 56 SAPARD is the Special Accession Programme for Agriculture and Rural Development. 57 See headnote.
80 ESC, 33rd Report, 2002-03
disbursement period. None of the programmes operating under the new guidelines introduced in 2000 have been completed as yet.
“The Commission has recently placed greater emphasis on ex-post evaluation58 of the PHARE programme. In May 2003, the Commission published an independent evaluation of the programme allocation for 1997-98 and implementation up to end 2001. This was presented to the PHARE management committee in June and July. Lessons from this evaluation will be used to influence future programming for PHARE and other EC instruments. The UK proposed, at the July management committee, that a seminar be held later this year to discuss this evaluation in more detail and to compare it with other EC monitoring and audit evaluations, such as the Court of Auditors report on Twinning.59 Such a seminar would give a clearer sense of how effective the PHARE programme has been in preparing the candidate countries for accession and provide valuable insights into how future EC assistance, both in the remaining PHARE countries and other programmes, can be improved.”
Conclusion 27.4 We thank the Minister for providing us with these comments. We may ask her successor to give evidence to us on this and related issues after the seminar on evaluation to which she refers.
27.5 In recent months we have considered a number of documents in which deficiencies in the EC’s performance in drawing up programmes, monitoring and evaluation have featured all too frequently. The Commission has argued that it is too early for its reforms to have worked through and the Government has, in some cases, supported this argument. Also, the Government has drawn attention to a number of improvements, such as (in this letter) a steady improvement in the capacity of the recipients to absorb the funds available. This lack of capacity is a fundamental reason for unsatisfactory results to date and the Secretary of State says that it continues to be a major concern.
27.6 The document was cleared on 9 April this year.
58 As opposed to ex-ante, ex-post evaluation is carried out at the end of the action in question. 59 (24660) —; see paragraph 31 of this Report.
ESC, 33rd Report, 2002-03 81
28 Food security policy in developing countries
(24385) Special Report No. 2/2003 from the European Court of Auditors on Special the implementation of the food security policy in developing Report No. countries financed by the general budget of the European Union, 2/2003 together with the Commission’s replies.
Legal base — Department International Development Basis of consideration Minister’s letter of 24 September 2003 Previous Committee Report HC 63-xxv (2002-03), paragraph 6 (18 June 2003) To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Cleared
Background 28.1 The World Food Summit in Rome, hosted by the UN Food and Agriculture Organisation (FAO) in 1996, made a commitment to halve the number of undernourished people from 800 million to 400 million by 2015. However, the number of people in developing countries who do not receive enough food is still reckoned to be 800 million. The annual decrease of 8 million has been matched by the growth in the world’s population.
28.2 In central, southern and eastern Africa, 44% of the total population is undernourished. In Afghanistan, Haiti, North Korea and Mongolia, the figure is 62%, while India, China and Bangladesh account for half of the undernourished people in the world.
The document 28.3 Council Regulation (EC) 1292/96 pre-dates the Summit and deals with food aid policy, food aid management and special operations in support of food security. The Special Report by the European Court of Auditors (ECA) examines whether the Commission has taken all reasonable steps to achieve the food security objectives set out in the Regulation. The Regulation introduced a new approach, moving the focus away from short-term aid to long-term development.
28.4 When we considered the Special Report on 18 June 2003, we asked the then Secretary of State (Baroness Amos) to summarise the Commission’s replies annexed to the Special Report and to add any further comments she wished to make.
82 ESC, 33rd Report, 2002-03
The Secretary of State’s letter 28.5 The then Secretary of State points out in her letter of 24 September that the objective of halving the number of undernourished people in the world was not in the Regulation but was adopted by the World Food Summit. She notes that Council Conclusion 1539/01 recommended that the Commission initiate improvements to the way the food aid programme is directed and managed. The changes urged by the Council are, she says, very much in line with the main recommendations contained in the ECA Report, and to a certain extent pre-empt them. She comments that the Government, together with the other Member States, is working with the Commission to implement fully the changes recommended in the Council Conclusions and repeated in the ECA Special Report.
28.6 Under separate headings, the Minister comments at some length on the issues raised in the report. These can be summarised as follows:
Policy coherence
• Some progress has been made in achieving more systematic procedures. The reformed Country Strategy Papers (CSP) emphasise full cooperation and collaboration with partner governments, other donors and civil society institutions in benefiting countries. At the same time, whilst food security is a priority for many developing countries, it has not always featured prominently in their own National Development Plans. The new generation of CSPs, which are developed in partnership with beneficiary governments, other donors and civil society, represent significant progress in correcting this. These CSPs are often themselves integrated into nationally owned Poverty Reduction Strategies. There is still some way to go before all food insecurity issues are addressed in all CSPs for all countries but the mid-term review of the revised CSPs is due to begin in 2003/4.
Separate regulation and instrument
• The Commission expresses the view that a separate food aid regulation is justified as an instrument to provide a link between immediate food crisis responses, medium-term relief and rehabilitation, and long-term development. It also largely accepts the case of those Member States which call for the complete integration of food aid into existing mainstream development and development structures. It proposes that this entire area be studied as part of an, already planned, second evaluation of EC food aid and food aid policy scheduled for 2004.
• Without pre-judging the outcome of the second evaluation study, the Minister says that her Department (DFID) favours a complete integration of food aid into existing EC assistance programmes. The EC’s existing humanitarian assistance programme should take on emergency responses and the EC’s existing main regional development programmes should absorb longer-term relief, rehabilitation and food security interventions. The separate food aid regulation could then be allowed to lapse — for reasons of clarity and simplicity. The separate food aid budget line could be integrated into other existing regional development budget lines, making a small contribution to a much needed simplification of the overall budget. The separate Commission and
ESC, 33rd Report, 2002-03 83
Council food aid committees and working groups could be absorbed into the existing main regional development programmes’ committees and working groups offering greater policy coherence. Furthermore, she says, DFID remains to be convinced that these changes could not be initiated now, rather than awaiting the outcome of a second evaluation study. The Department will explore these issues in future meetings with the Commission.
Deconcentration
• The Commission identifies a number of institutional and structural reasons for the lack of involvement of benefiting groups in the planning and implementation of food security programmes, noting that this situation has improved as the Commission reform process has become effective, with deconcentration (devolution) of food programme identification, planning and management to the EC’s own in-country offices (delegations). The deconcentration process has also improved the frequency and effectiveness of co-ordination and consultation with other donors and institutions locally. Information DFID has received from its overseas offices suggests that this is mostly the case. However, there is still room for improvement and this will be one priority for DFID officials when considering future EC food aid programmes.
More reliable food vulnerability, programme and financial data
• The Commission agrees that better baseline data is needed for monitoring food security in working with other bodies and donors on international efforts to improve the quality of the data. Similarly, the Commission claims that recent improvements and upgrades to its own management information means it is now able to provide the type of financial and programme data that was unavailable at the time of the ECA report. The Minister comments that recent EC food programme reports issued by the Commission seem to bear this claim out, as they contain more up-to-date and comprehensive detail than previously.
Delays in programming
• The ECA report highlights the long delay between decisions being taken and funds being made available. This has now been addressed by shortening the programming process to a maximum of nine months and changing from annual to multi-annual financing periods.
Co-ordination
• The Commission agrees that co-ordination with Member States through the Food Security and Food Aid Committee has recently improved but still remains unsatisfactory. However the programme of deconcentration of management of EC food aid programmes to the Commission’s in-country delegation offices has shown that local co-ordination is the most effective model. This reinforces DFID’s view that there is little reason to continue the role of the Food Security and Food Aid Committee and that its work should be integrated into the existing main regional development programme committee structures. But, whilst the Food Security and Food Aid
84 ESC, 33rd Report, 2002-03
Committee continues to exist, DFID will continue to engage with the Commission and Member States in attempting to focus the Committee’s agenda on more strategic issues whilst also supporting moves towards reform.
Conclusion 28.7 We thank the Government for this full and informative response, which gives us a good idea of its thinking on this important issue and how it should be handled in future by the Commission.
28.8 We now clear the document.
29 Environmental projects in the candidate countries
(24623) European Court of Auditors’ Special Report No.5/2003 (pursuant to Special Article 248(4), second subparagraph, EC) concerning PHARE and ISPA Report No. Funding of Environmental Projects in the Candidate Countries 5/2003 together with the Commission's replies.
Legal base — Department International Development Basis of consideration Minister’s letter of 20 September 2003 Previous Committee Report HC 63-xxx (2002-03), paragraph 4 (16 July 2003) To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Cleared, but further information requested
Background 29.1 The objective of the audit which is the subject of this Special Report from the European Court of Auditors (ECA) was to assess the effectiveness of assistance given under the PHARE60 and ISPA61 programmes to the environment sector in the ten candidate countries of Central and Eastern Europe62 between 1995 and 2000.
29.2 When we considered the document on 16 July 2003, we asked the Minister to provide a short summary of the Commission’s replies to the European Court of Auditors and to comment on them. We also asked her to comment on whether any of the lessons to which the ECA drew attention had already been learnt by the Commission, whether the Court’s
60 Named, initially, the Poland and Hungary Assistance for Reconstruction programme, PHARE was later extended to all the countries of Central and Eastern Europe. 61 Instrument for Structural Policies for Pre-Accession. 62 Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. Of these, eight are now referred to as the Accession States.
ESC, 33rd Report, 2002-03 85
recommendations were being acted upon and whether the lessons learnt had wider relevance. We asked if the Minister was content that steps had been taken to improve any structural deficiencies within the Commission or to review any constraints within which it operated.
The Minister’s letter 29.3 The then Secretary of State (Baroness Amos) replied as follows:
“The Court’s recommendations fell into three broad categories: the need for more institution building, the need to have more effective targeting of grant financing and the need to improve the absorption capacity of the candidate countries.
“The Commission pointed out that the report concerns only the first year of ISPA programming and PHARE under its new guidelines introduced in 2000. As such many of the concerns raised by the report have already been addressed or are being addressed and the lessons to which the report draws attention are being learned. In addition wider structural problems within the Commission are being addressed, in line with the Commission’s general move towards reform of their external assistance programmes. Examples of these reforms are deconcentration to local delegations,63 moves towards multi-annual programming and more linkages to recipient- government owned strategies.
“The Commission has already begun to address the need for more institution building. They have introduced the Transition Facility, to begin in 2004, to provide further assistance for institution building in the post-accession period. As institution building in the candidate countries has been a priority for DFID, we welcome the introduction of this facility and will continue to work to ensure that the funds allocated are used in the most effective way possible.
“The report recommendations raise the question of effective targeting [of] grants in ISPA. The Commission felt that there was little room for reducing grant levels in ISPA. This was due to a number of factors, including the income levels of the candidate countries (far below that of the current EU15) and access to co-financing with International Financial Institutions, such as the European Investment Bank (EIB). DFID agree with the Commission that care would need to be taken in reducing the ISPA grant levels particularly if the financial burden that this would cause would fall disproportionately on those with the lowest incomes.
“The report recommends that the need to strengthen the absorption capacity of the candidate countries has to be addressed in a more significant way. The Commission agrees that absorption capacity is an issue and has made it a priority in the lead up to accession. They have provided technical assistance through the ISPA programme to strengthen project preparation and tendering procedures. The PHARE programme has also invested considerable funds in improving absorption capacity, particularly in the preparation for EDIS (Extended Decentralised Implementation System)
63 Devolution of the planning and management of programmes to the EC’s staff in the country concerned.
86 ESC, 33rd Report, 2002-03
whereby the PHARE programme will be fully decentralised to the country level. Absorption capacity has been a priority for DFID and of great concern to us in the entire pre-accession period. We approve of the move to EDIS as a preparation for the Structural Funds, as well as a vehicle to aid in the absorption of PHARE funds. Furthermore, our experience is that the measures taken by the Commission to strengthen administrative capacity in ISPA have had an appreciable impact.
“It is the case that many of the lessons learnt from the pre-accession assistance programmes have wider relevance, particularly to the CARDS64 and TACIS65 programmes. Many of the lessons regarding institution building and absorption capacity are already being fed through to these programmes and DFID continues to work with the Commission in identifying further lessons to be learnt. We have, for example, recently requested that the Commission holds a seminar on evaluation of the PHARE programme, to identify lessons from the PHARE programme that would be of use to other assistance programmes and in the development of the New Neighbourhood Initiative, which will encompass aid in the Wider Europe area.”
Conclusion 29.4 As indicated above, the UK recently asked the Commission to hold a seminar on evaluation of the PHARE programme. We ask the present Secretary of State to let us know when this seminar is to take place, as we may wish to ask him to give evidence to us after that event on the Commission’s arrangements for monitoring and evaluation, as well as its performance in drawing up its programmes.
29.5 We now clear this document.
30 Pre-accession assistance in 2001
(24651) Commission general report on pre-accession assistance (PHARE 10655/03 — ISPA — SAPARD) in 2001. COM(03) 329 ADD 1
Legal base — Department International Development Basis of consideration Minister’s letter of 20 September 2003 Previous Committee Report HC 63-xxx (2002-03), paragraph 5 (16 July 2003) To be discussed in Council No date set
64 CARDS is the EU programme of assistance for Albania, Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia and the former Yugoslav Republic of Macedonia. 65 TACIS is the EC’s programme of technical assistance to the Commonwealth of Independent States and Mongolia.
ESC, 33rd Report, 2002-03 87
Committee’s assessment Politically important Committee’s decision Cleared
Background 30.1 This is the second annual report by the Commission on the three pre-accession aid instruments, PHARE,66 ISPA67 and SAPARD,68 and their coordination.69 It sets out the allocation of each instrument on a country-by-country basis and explains the development of the two new instruments introduced in 2000 (ISPA and SAPARD). All three programmes operate under guidelines agreed in 1999 and first implemented in 2000. To minimise the overlap between the three instruments, the areas of responsibility were agreed as follows:
• PHARE’S main purpose should be to assist the candidate countries to adopt the acquis communautaire and to prepare them for using Structural Funds;
• ISPA should be to assist in the implementation of EC environment policy and to build the Trans-European Transport Network; and
• SAPARD’s purpose should be to assist in the implementation of the acquis in relation to the Common Agricultural Policy and all related areas. In addition to primary agricultural production, projects to improve product processing, marketing and quality are eligible for support, as are more general rural development measures.
The Minister’s letter 30.2 We did not clear this document when we considered it on 16 July, but asked the Secretary of State when it would be possible to make a sound assessment of the EC pre- accession assistance programmes. We commented that it was disappointing to learn from the Minister that the more recently established programme, SAPARD, had not been very efficient in contracting and disbursing funds. Once again, it appeared that the administrative deficiencies of the candidate countries had been under-estimated. We also said that it was just as disappointing to read that, as recently as 2001, PHARE projects were evaluated as poorly designed and prepared.
30.3 The former Secretary of State (Baroness Amos) replied as follows:
“The new PHARE procedures introduced in the 2000 programme cannot be properly assessed until its conclusion. The programme will conclude in 2003, except for those elements that have received extensions. It is disappointing that the Joint Monitoring Committees concluded that an appreciable number of PHARE projects in 2001 were poorly designed. It should be noted however, that these projects belonged to older programmes (prior to 2000) and as far as we can determine, future
66 The PHARE programme supports economic restructuring and democratic reform in the states of Central and Eastern Europe, the Baltic States and in Albania, FYROM, and Bosnia and Herzegovina. 67 Instrument for Structural Policies for Pre-Accession. 68 Special Accession Programme for Agriculture and Rural Development. 69 (24225) 5585/03; see HC 63-xv (2002-03), paragraph 15 (19 March 2003).
88 ESC, 33rd Report, 2002-03
ones should prove to be more effective. For example, recent initiatives to introduce multi-annual programming in PHARE and more delegated authority to the recipient governments should improve the effectiveness of programming. DFID has requested that an evaluation seminar be held later this year, specifically with regards to the PHARE programme but also covering ISPA and SAPARD. This should enable us to develop a clearer understanding of the current effectiveness of programming.”
Conclusion 30.4 We have indicated elsewhere in this Report70 that we may ask the current Secretary of State to give evidence to us on the issues raised in this document and related issues after the seminar on evaluation.
30.5 We now clear this document.
31 Supporting institution-building in the candidate countries through Twinning
(24660) European Court of Auditors Special Report No. 6/2003 (pursuant to Special Article 248(4), second subparagraph, EC) concerning Twinning as the Report No. main instrument to support institution-building in Candidate 6/2003 Countries together with the Commission’s replies.
Legal base — Department International Development Basis of consideration Minister’s letter of 18 September 2003 Previous Committee Report HC 63-xxx (2002-03), paragraph 6 (16 July 2003) To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Cleared
Background 31.1 In November 1999, the Commission adopted new guidelines for implementing PHARE, the main programme to assist the candidate countries of Central and Eastern Europe to incorporate the acquis communautaire and prepare them for using Structural Funds. Under these guidelines, approximately 30% of resources are targeted on institution- building. This is the process of helping the candidates to develop the structures, strategies,
70 (24336) and (24660) ; see paragraphs 27 and 31.
ESC, 33rd Report, 2002-03 89
human resources and management skills needed to strengthen their economic, social, regulatory and administrative capacities.
31.2 The main instrument used is Twinning. The public administrations of Member States provide experts on a full-time and long-term basis to assist the candidate countries to incorporate the acquis, through a transfer of knowledge and experience from Member State administrations and public institutions. The Commission has a rule that these should be civil servants or acting civil servants. They are known as PAAs — Pre-Accession Advisers. Between 1998 and February 2002, 503 Twinning projects were approved, with an overall budget of €471 million.
The European Court of Auditors’ report 31.3 The objective of the audit on which the European Court of Auditors (ECA) based this Special Report was to assess the effectiveness of Twinning as the main instrument used to assist candidate countries to strengthen their administrative capacity.
The Minister’s letter 31.4 We did not clear this document when we considered it on 16 July, but asked the Government for more information. The then Secretary of State (Baroness Amos) notes that the further information requested concerned:
“the main messages of the Commission’s response to the Special Report and my opinion of them; what action the Government and other Member States are taking to encourage change with regards to the delays of procedures; and my view of the European Court of Auditors’ suggestion that the Commission should consider using fixed-price and lump-sum contracts except perhaps selectively in countries benefiting from PHARE.”
31.5 The Minister comments:
“The Commission noted the points made by the Court and pointed out that some of the concerns raised had already been addressed, particularly with regards to simplification of procedures. They stressed too that the concept of ‘guaranteed results’ was integral to the Twinning instrument and that although some of the early projects were overly ambitious, they acted as a catalyst to encourage the recipient government to continue the process of reform. In response to the Court’s view on fixed-price or lump sum contracts, the Commission did not think that they were appropriate given the financial arrangements of Twinning. The Commission welcomes the idea of a PAA network and is in the process of refining a database to enable this to happen.
“DFID is pleased to see that the Commission is pushing ahead with the idea of a PAA network. As stated in the Explanatory Memorandum, DFID welcomes this idea as a lesson-learning tool. It is true that many early Twinning projects started the reform process with overly ambitious objectives. All Twinning projects have important ancillary benefits to recipient administrations and these should be taken into account when the value of Twinning is assessed.
90 ESC, 33rd Report, 2002-03
“The UK, along with participants from other Member States, is working closely with the European Commission to apply the lessons learnt from previous projects and from evaluations such as the Court of Auditors’ Report. We have already seen significant improvements since the early Twinning rounds. We are confident that the administrative process will continue to improve.
“With regards to the Court of Auditors’ suggestion regarding fixed-price and lump- sum contracts in Twinning we would tend to agree with the Commission’s line. The Twinning instrument’s financial arrangements would preclude the use of such contracts save in a limited number of cases. If such an approach in these cases was found to be more effective, then we would, of course, support the measure.”
Conclusion 31.6 The former Secretary of State has provided us with her view on some of the issues dealt with in the report, but she has not commented on whether the Commission’s contention that it has simplified its financial procedures has, indeed, led to fewer delays. In her letter of 20 September which we discuss elsewhere in this Report,71 the Secretary of State refers to a seminar later in the year on the EC’s performance on evaluation and monitoring. We may ask her successor to give evidence on these and related issues after the seminar, as deficiencies in this area of the Commission’s work have featured in a number of documents we have considered recently.
31.7 We now clear this document.
71 (24336) 7056/03; see paragraph 27 of this Report.
ESC, 33rd Report, 2002-03 91
32 Assistance to the Democratic Republic of Congo
(24685) Draft Council Decision on the reallocation to cooperation operations 10920/03 in the Democratic Republic of Congo (DRC) of payments made by COM(03) 367 the DRC in respect of special loans and of the proceeds and income from risk capital operations in the DRC under the 2nd, 3rd, 4th, 5th and 6th EDFs.
Legal base Article 7(1) of the Internal Agreement under the Financial Protocol of the Cotonou Agreement; unanimity Document originated 23 June 2003 Deposited in Parliament 1 July 2003 Department International Development Basis of consideration EM of 10 September 2003 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Cleared
Background 32.1 Following several years of conflict, the Democratic Republic of Congo (DRC) has, since 2001, made considerable progress towards the establishment of peace and economic stability. New macro-economic programmes have been agreed with the international community. The country now needs to return to sustainable growth and address the poverty that affects more than 80% of the population.
32.2 The DRC’s external debt burden is significant, amounting at 31 December 2001 to US$ 13,729 billion, of which US$10 billion was accumulated arrears. In 2002, the DRC’s principal creditors, namely the International Monetary Fund, the World Bank, the African Development Bank (AfDB) and members of the Paris Club, agreed to reduce significantly or write-off these arrears. This enabled the international financial institutions to renew assistance to the DRC and to allow it to be considered for ‘fast-track’ access to the Heavily Indebted Poor Countries (HIPC) Initiative, which is crucial to the country’s continued economic recovery.
32.3 In order not to undermine the DRC’s qualification for HIPC assistance, arrears on European Development Fund (EDF) loans financed from EDF resources, estimated to be i105 million, needed to be addressed. In exploring options, the European Commission was mindful of the need to safeguard the Community’s preferred creditor status, which would be affected if the loans were cancelled or rescheduled. Following discussions, the DRC Government asked the Commission to use €105 million from its allocation under the 9th replenishment of the EDF to meet these arrears. This has, however, dramatically reduced funding available for other planned priority activities supporting the process of
92 ESC, 33rd Report, 2002-03
political transition, including the holding of elections, demobilization of the army and reform of the civil service.
32.4 The Cotonou Agreement, governing the operation of the EDF, does not permit increases in country allocations until a mid-term review covering all African, Caribbean and Pacific (ACP) countries, scheduled for late 2004/mid-2005, has been undertaken. Therefore, the Commission proposes to finance these other priority activities by retaining the arrears paid on the debt rather than returning it back to Member States as would normally occur.
The draft Decision 32.5 The then Secretary of State for International Development (Baroness Amos) comments in her Explanatory Memorandum of 10 September that the Government supports the proposal as a major contribution to peace and stability in the region in line with UK objectives. Clearance of the DRC’s arrears will enable it to benefit from access to the HIPC relief at an early stage. She says that the Government believes it is equally important to support the process of political transition in the country.
32.6 The Commission has confirmed that this is an exceptional proposal and, as such, does not establish a precedent.
32.7 The Minister says that the UK’s share of the arrears is €15.3 million. She adds that the Treasury and the Foreign and Commonwealth Office have been consulted on the position to be taken by the UK on the proposal.
Conclusion 32.8 We report on this proposal as it is exceptional, and to record that the Commission has confirmed that it does not establish a precedent.
32.9 We clear the document, but ask to be informed if any substantial amendments are made to the proposal before it is adopted.
ESC, 33rd Report, 2002-03 93
33 Safety of road tunnels
(24187) Draft Directive on minimum safety requirements for tunnels in the 5207/03 Trans-European Road Network. COM(02) 769
Legal base Article 71(1) EC; co-decision; QMV Department Transport Basis of consideration Ministers’ letters of 16 and 29 September 2003 Previous Committee Report HC 63-xii (2002-03), paragraph 2 (12 February 2003) To be discussed in Council Not known Committee’s assessment Legally and politically important Committee’s decision Cleared
Background 33.1 In February 2003 we left uncleared72 this draft Directive, which would harmonise the organisation of tunnel safety at national level and clarify the different roles and responsibilities of the various organisations involved in managing, operating, maintaining, repairing and upgrading tunnels. It would apply only to tunnels longer than 500 metres within the Trans-European Road Network (TERN). The objective is to prevent accidents happening, but where they do so to keep their impact to a minimum. The number of road accidents occurring in tunnels is relatively small, but fires are fairly frequent, and the fires with the most serious consequences have mostly been the result of accidents.
33.2 We noted that we shared the Government’s reservations about the draft Directive in relation not only to the practicality of the proposals but also to their proportionality and compliance with the principle of subsidiarity. We asked for a report on progress on these issues and for a Regulatory Impact Assessment before the Council reached political agreement on the draft Directive.
The Ministers’ letters 33.3 The Minister of State, Department of Transport (Dr Kim Howells) writes in his letter of 16 September that because of possible, unexpected, rapid progress in the European Parliament the Italian Presidency might press for political agreement at the Transport Council of 9-10 October 2003. He continues that the Government has made significant progress towards securing key amendments to the draft, in particular, significant improvement in terms of proportionality and costs. He adds that, given the helpfulness of the Presidency in securing these improvements, he would not wish to withhold support for a political agreement, even though our scrutiny process is not complete.
72 See headnote.
94 ESC, 33rd Report, 2002-03
33.4 The Parliamentary Under-Secretary of State, Department of Transport (Mr David Jamieson) tells us in his letter of 29 September that the Transport Council was likely to adopt a common approach rather than a political agreement.
33.5 The Minister also gives us more detail of the improvements to the draft Directive secured in negotiation:
• the retrospective requirement to bring existing tunnels into conformity with the Directive has been amended to requiring Member States to conduct a risk analysis where adaptation would otherwise be too costly;
• the requirement to install lay-bys in uni-directional tunnels (all UK TERN tunnels are uni-directional) has been deleted;
• the requirement for every third cross-section in twin-tube tunnels to be designed for the passage of emergency service vehicles has been deleted; and
• the Annex of the Directive relating to road signs (the subsidiarity issue) has been changed. For signs not covered by the Vienna Convention, Member States are free to modify the symbols in the Directive, provided this does not alter their essential characteristics.
33.6 The Minister comments “that as a result of these amendments to the draft Directive, potential costs to the UK are now significantly lower than previously estimated by the Commission’s consultants, with a commensurate fall in the costs of delay to tunnel users.” But he continues: “Despite the changes to the text made in the Working Group, however, the Government continues to believe that the Directive’s costs outweigh its benefits”.
33.7 The Minister concludes: “We are given to understand that other Member States are quite happy with the text as currently drafted, and if it were to come to a vote in the Council it is likely that it would command a clear qualified majority.”
33.8 The Minister encloses the promised Regulatory Impact Assessment and draws our attention to the absence of the usual declaration about costs and benefits. The Regulatory Impact Assessment concludes:
“The Department for Transport, having participated in the working group that has been developing the text of the proposed Directive, believes that it now incorporates many of the UK’s demands. Nevertheless, the Government continues to believe that the expenditure required by the Directive could achieve better road safety outcomes if spent in other ways. However, given the likely Qualified Majority support for the Directive across the European Union, an abstention or vote against the Directive would be nugatory, and counterproductive in terms of international perception of the UK’s commitment to road safety.”
33.9 We understand that a general approach was adopted at the Transport Council of 9-10 October, which the Minister acquiesced in, whilst reiterating the Government’s concerns about costs.
ESC, 33rd Report, 2002-03 95
Conclusion 33.10 We are grateful to the Ministers for their reports on progress on this draft Directive. We note that significant improvements to the text have been achieved, particularly in relation to the problems identified when we considered this document previously, but that the Government believes that the value of the proposal is outweighed by the likely costs.
33.11 We note also the Government’s decision, given the probability of a clear qualified majority in favour of the revised text, nevertheless to join that majority if a vote is taken. We understand the case the Government makes for acting so and, having no further questions to ask, clear the document.
34 Single European Sky
(24864) Commission Opinion on the European Parliament’s second reading 12243/03 amendments to the draft framework Regulation for the Single — European Sky and to draft Regulations on air navigation service provision, on the use of airspace and on interoperability of the air traffic management network in the Single European Sky.
Legal base Article 80(2) EC; co-decision; QMV Document originated 4 September 2003 Deposited in Parliament 15 September 2003 Department Transport Basis of consideration EM of 25 September 2003 Previous Committee Report None; but see (24768) 10821/03, (24780) 10820/03: HC 63-xxxi (2002-03), paragraph 11 (10 September 2003) To be discussed in Council Not known Committee’s assessment Politically important Committee’s decision Cleared
Background 34.1 The Single European Sky initiative, launched in 1999, is intended to reduce air traffic delays, enhance air safety and minimise the environmental impact of air travel through more efficient airspace design and more direct routing of aircraft. The Commission=s proposals for creating a Single European Sky included:
• establishing routes regardless of national frontiers in order to maximise use of airspace;
• ensuring better coordination between civil and military use of airspace; and
96 ESC, 33rd Report, 2002-03
• separating regulation and service provision in air traffic management and air traffic control within Member States and within Eurocontrol.73
34.2 Last month we reported74 the latest developments on this matter: the European Parliament’s 50 second reading amendments. We noted that the Government was confident that the Italian Presidency would be able to retain the substance of the Council’s common position excluding military aviation from the scope of the legislation in conciliation with the European Parliament.
The document 34.3 This document is the Commission’s Opinion on the European Parliament’s amendments. Of the 50 amendments the Commission accepts 20, accepts, subject to drafting, another 19 and rejects 11.
The Government’s view 34.4 The Parliamentary Under-Secretary of State, Department for Transport (Mr Tony McNulty) reminds us that “the Government is a strong supporter of Single Sky and wishes to see it established as soon as practicable.” He comments “Whilst it was slightly disappointing to see the European Parliament table 50 amendments on the proposals, we welcome the support it is giving to Single Sky and expect a satisfactory resolution to each of the points made by the Parliament.”
34.5 The Minister continues:
“There are only eight amendments where there is a significant difference between the Government and the Commission’s view. They are:
“(i) Amendments 5 & 18 (Framework Regulation) — removes the reference to ‘education and training purposes’ and ‘military training’. The Commission is happy to accept them, but we consider that these amendments could affect the Common Position surrounding Single Sky and we are opposed to them,
“(ii) Amendment 3 (Air Navigation Service Regulation) — sets up a contingency fund to smooth the cost of air traffic services in case of a sudden downturn in air traffic. The Commission originally proposed this idea and so it not surprising that it still supports the creation of this fund. We have yet to be convinced that such a fund is necessary nor that it is in the best interests of the aviation community;
“(iii)Amendment 12 (Air Navigation Service Regulation) — requires the Commission to be informed about the way co-operation is organised between civil and military air traffic services We consider that this amendment would place the military within the scope of Single Sky and so we rejected it. The Commission supports this amendment as it is a reinstatement of its original proposal;
73 The European Organisation for the Safety of Air Navigation. 74 See headnote.
ESC, 33rd Report, 2002-03 97
“(iv) Amendment 21 (Airspace Regulation) Eurocontrol to draw up the plan for functional airspace blocks. We were surprised that the Commission supports this amendment given the importance of this issue. We do not consider that Eurocontrol has the necessary expertise and that the best interests of the aviation community would not be served by transferring this responsibility to it. Eurocontrol could, however, act in a consultative role.
“(v) Amendments 24 & 28 (Airspace Regulation) — extension of Single Sky to the lower airspace. The Commission originally proposed this and is still keen to see a wider role for Single Sky. We are not against the principle of extending the Single Sky to the lower airspace, but we recognise that this airspace is much more complicated than the upper airspace and that further work is necessary before such a move is acceptable; and
“(vi) Amendment 32 (Interoperability Regulation) — shortening the time allowed for achieving technical interoperability. The Commission supports the Parliament’s view that interoperability should be achieved sooner than the Common Position envisages. We consider that reducing the time allowed by four years goes too far, but we are willing to consider some flexibility on this issue.”
Conclusion 34.6 We note the Government’s continued expectation of a successful outcome on the military aviation issue and are content to clear the document.
35 Advertising and sponsorship of tobacco products
(22514) Draft Council Directive on the approximation of the laws, 10184/01 regulations and administrative provisions of the Member States COM(01) 283 relating to the advertising and sponsorship of tobacco products.
Legal base Articles 47(2), 55 and 95 EC; co-decision; QMV Department Health Basis of consideration Minister’s letter of 24 September 2003 Previous Committee Report HC 152-iv (2001-02), paragraph 2 (7 November 2001), HC 152–xxvi (2001-02), paragraph 3 (24 April 2002) and HC 63-xxix (2002-03), paragraph 6 (10 July 2003) To be discussed in Council Not applicable (see paragraph 35.4 below) Committee’s assessment Politically important Committee’s decision Cleared
98 ESC, 33rd Report, 2002-03
Background 35.1 The story of the Community’s attempts to introduce a ban on the advertising and sponsorship of tobacco products — summarized in our Report of 24 April 2002 — is long and complex, due in part to difficulties over establishing an appropriate legal base, and in part to the controversy generated by the exemptions proposed for certain sporting events, in particular Formula One motor racing. However, as we noted in that Report, the Commission’s most recent proposal of May 2001 would require Member States to bring in laws which would prohibit:
• advertising of tobacco products in the press and other printed publications, other than that limited to publications intended exclusively for professionals in the tobacco trade and to those published and printed in third countries which are not principally intended for the Community market: this provision would also apply to internet advertising;
• all forms of radio advertising of tobacco products, including sponsorship by companies manufacturing or selling tobacco products;
• the sponsorship of events or activities involving or taking place in several Member States, or otherwise having cross-border effects; and
• the free distribution of tobacco products in the context of such events.
35.2 In all cases, including sponsorship at events such as Formula One, it was envisaged that these provisions would need to be in place by 31 July 2005, but that the Commission would review the action taken no later than five years after the Directive had entered into force.
35.3 Although much of our Report was concerned with the availability of an Opinion provided by the Council Legal Services (on which we subsequently reported at some length on 10 July 2003), we also asked the Government to let us know the progress of discussions in the Council on the substance of the proposal (on which the Government had previously indicated that it would be pressing for exceptional global events, such as Formula One, to be allowed to retain tobacco sponsorship for a “short transitional period up to 2006”). This resulted in letters of 25 and 28 November 2002 to our Chairman from the then Parliamentary Under-Secretary of State at the Department of Health (Ms Hazel Blears), indicating that the Danish Presidency was likely to be seeking political agreement at a meeting of the Health Council on 2 December 2002. She said that she would keep us informed of the situation following the European Parliament’s first reading on 20 November 2002, in the hope that this would enable us to clear the proposal in advance of the Council in question.
Minister’s letter of 24 September 2003 35.4 Since we did not in fact receive any further information from the Minister, we took the opportunity in our Report of 9 July 2003 to ask her successor where matters now stood. As a result, we have received a letter of 24 September 2003 from the present Parliamentary Under-Secretary of State (Miss Melanie Johnson), enclosing an undated letter from her
ESC, 33rd Report, 2002-03 99
predecessor — which never reached us — setting out the outcome of the Health Council on 2 December 2002. This indicated that, as a result of a “first reading deal” with the Parliament, the Council agreed a text based on the Commission’s original proposal, subject only to two minor amendments in the recitals. It added that the UK had voted against the measure, on the grounds that its drafting in some places lacked clarity. The present Minister says that the text has since been published in the Official Journal as Directive 2003/33/EEC,75 and is to be implemented by the Member States by 31 July 2005.
Conclusion 35.5 Although it is unfortunate that the letter sent to us following the Council on 2 December 2002 never reached us, we can do little more at this stage than note the outcome, including the fact that the resulting Directive has now been published in the Official Journal, and clear the document. In doing so, we also note that the Directive will apply to all events, including Formula One motor racing, on the same date.
36 Medical devices
(24719) Commission Communication on medical devices. 11164/03 COM(03) 386
Legal base — Document originated 2 July 2003 Deposited in Parliament 10 July 2003 Department Health Basis of consideration EM of 22 July 2003 Previous Committee Report None To be discussed in Council 20-21 October 2003 Committee’s assessment Politically important Committee’s decision Cleared
Background 36.1 Within the Community as a whole, a medical device is broadly defined as any appliance used for the diagnosis, prevention, monitoring or treatment of disease or injury. Thus (to quote a few examples) the term covers a wide range of equipment used in hospitals and dentistry; hearing aids and spectacles; artificial limbs; wheelchairs and rehabilitation equipment; and dressings. The main Community instrument governing use
75 OJ No. L.152, 20.6.03, p.16.
100 ESC, 33rd Report, 2002-03
of the generality of medical devices is Directive 93/42/EEC,76 which aims to lay down the essential requirements which must be met before such a product can be put on the market or into service. These include a prior risk assessment, a risk management process and a risk-benefit analysis, covering issues such as chemical, physical and biological properties, infection and microbiological contamination, construction and environmental properties, and protection against radiation. In addition, the Directive contains a number of conformity assessment procedures. These vary according to which of four defined areas of risk apply to any given device, and — with the exception of low-risk devices — involve assessment by independent notified bodies monitored by national authorities. The Directive also sets out a number of ways in which those authorities can intervene to ensure its proper functioning.
36.2 Although the Commission regards this legal framework as stable, and not in need of regular updating, the Directive does require it to submit a report containing information on any incidents which have occurred following the placing of a device on the market (vigilance); on those clinical investigations carried out to establish how a device performs under normal conditions of use; and on design and EC type examination of any device where a medicinal product is an integral part. This Communication has been presented in response to that remit, but it also addresses other issues highlighted in a report last year by the Commission’s Medical Device Expert Group (MDEG).
The current document 36.3 In its introduction, the Communication notes that medical devices have become an increasingly important area in terms of their impact on health and healthcare, and that expenditure on them now appears in some Member States to exceed that on pharmaceutical products. It also notes that the management and implementation of Directive 93/42/EEC is resource-intensive, and that the wide variety of products and risks involved requires a large measure of consultation between national authorities and the Commission (and indeed with the authorities in third countries).
36.4 As regards the three areas on which it is required to report, the Commission notes that the data provided on vigilance is extremely heterogeneous. It therefore says that it will, in the framework of the MDEG Working Group, reinforce cooperation with national authorities on improving practices in this area; make available periodically on its website summary reports on statistics regarding vigilance reports; and launch a pilot project during the second half of this year on a European database (EUDAMED), with a view to making the system operational in 2004. It will also continue to promote European participation in global vigilance schemes compatible with Community rules and implemented under the Global Harmonisation Task Force (GHTF).77
36.5 On the other two elements, the Commission notes that only about half of the Member States provided information on clinical investigations, which proved difficult to interpret. It thus lays greater stress on the comments it has received from the Member States, which
76 OJ No. L.169, 12.7.93, p.1. 77 This was set up in 1992 to encourage greater convergence between participants from the three main areas covered (Europe, Asia-Pacific and North America).
ESC, 33rd Report, 2002-03 101
in particular have pointed to the absence of any specific mechanism enabling information to be obtained on investigations carried out in another Member State, and to the instances where manufacturers do not have clinical data available. On pharmaceutical consultation, the Commission says that it has received only very isolated data from Member States, and that it will be drawing up further guidance in this area.
36.6 The rest of the Communication addresses the major issues raised by the MDEG report. These include:
• on conformity assessment (where shortcomings have been identified in such areas as the designation and monitoring of notified bodies, poor design evaluation, and lack of clinical data from manufacturers), the Commission will clarify how manufacturers and notified bodies should proceed, encourage Member States to make greater use of the mechanisms available for reclassifying the degree of risk presented by particular devices, and improve the arrangements for designating and monitoring notified bodies;
• on transparency (which it sees as a key factor in establishing trust between the authorities and the general public), it notes that, unlike pharmaceutical products, summary reports on market approval are not generally available, and says that the Commission intends to introduce measures to ensure that information on devices which present high risks should be made available;
• on market surveillance (which is seen as essential for low-risk products which have undergone a less rigorous conformity assessment procedure) it expresses concern at the wide variations between Member States, and says that the Commission intends to define basic rules which Member States will be obliged to meet; and
• on co-operation between the Commission and Member States, it says that there appears to be a wider need for consultation, and that the Commission therefore intends to set up a high-level group of senior officials which would meet as necessary to consider issues related to medical devices.
36.7 The remainder of the Communication deals briefly with enlargement and the international dimension. In the former case, it stresses the “utmost importance” of the new Member States participating fully in all Community activities relating to medical devices, and the need for Directives in this area to be implemented strictly. More generally, the Communication highlights the need for mutual recognition agreements78 with third countries to come into force only where strict guarantees exist as to the capacity of the conformity assessment bodies in the countries concerned, and the importance of the Community continuing to play a leading role in the work of the GHTF.
The Government’s view 36.8 In his Explanatory Memorandum of 22 July 2003, the Parliamentary Under-Secretary of State for Health at the Department of Health (Lord Warner) comments that the Communication has set out a “comprehensive and ambitious action programme”, which covers all the UK’s principal concerns. He points out that the UK made a considerable
78 These enable bodies in third countries to assess the conformity of products with European Directive.
102 ESC, 33rd Report, 2002-03
input to the MDEG report on which much of the Communication is based, and that the Medicines and Healthcare Products Regulatory Agency (MHRA) will ensure that both manufacturers and UK notified bodies are aware of it. He adds that the MHRA will continue to work with the Commission and other Member States to take this programme of improvements forward.
Conclusion 36.9 Much of this Communication is concerned with procedural matters, and we note that the Commission regards the basic legal framework in this area as stable. That being so, we do not think the document raises any major issues, and we are therefore clearing it. However, as it deals with a subject of some intrinsic importance, we are also drawing it to the attention of the House.
37 Liability in the field of nuclear energy
(24776) Draft Council Decision authorising the Member States to sign the 11609/03 Protocol to the Paris Convention of 29 July 1960 on third party — liability in the field of nuclear energy and for a Council Decision authorising the Member States to ratify that Protocol.
Legal base Article 61(c), Article 67(5) and the first sub-paragraph of Article 300(2) EC; co-decision; QMV Document originated 9 July 2003 Deposited in Parliament 28 July 2003 Department Trade and Industry Basis of consideration EM of 15 August 2003 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Legally and politically important Committee’s decision Cleared
Background 37.1 The Paris Convention of 29 July 1960 on third-party liability in the field of nuclear energy, concluded under the auspices of the OECD, establishes a legal framework for the provision of compensation for victims in the event of a civil nuclear accident. The United Kingdom, Belgium, Denmark, Finland, France, Germany, Greece, Italy, the Netherlands, Norway, Portugal, Slovenia, Spain, Sweden and Turkey are parties to the Convention.
37.2 The legal framework established by the Paris Convention differs from the rules which would apply under the laws of Member States in relation to non-contractual liability in a
ESC, 33rd Report, 2002-03 103
number of important respects. First, the liability of the operator of a nuclear installation is strict, so that it is not necessary to show fault for liability to ensue. Secondly, the liability of the nuclear operator is exclusive and must be covered by insurance or some other financial guarantee. Finally, the Convention provides for the exclusive jurisdiction of the courts for the place where the nuclear incident occurred.
37.3 Negotiations were commenced in 1998 to increase the liability amounts and to widen the definition of nuclear damage and the geographical scope of the Convention with a view to providing higher compensation levels to a greater number of victims. These negotiations led to the conclusion of a Protocol in May 2002.
The proposed Council Decisions 37.4 The document proposes a Council Decision to authorise Member States to sign the Protocol to the Paris Convention and a Decision to authorise ratification of that Protocol. The need for such authorisation arises from the adoption by the Council of Council Regulation (EC) No. 44/2001 of 22 December 200079 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. This Regulation (which is binding in all Member States except Denmark) provides a general code of rules for allocating civil jurisdiction. In relation to actions for tort, delict or quasi-delict the Regulation provides that a person domiciled in a Member State may be sued in the courts for the place of his domicile, or in the place where the harmful event occurred. This has been interpreted to mean both the place of the act giving rise to the harmful event or the place where the damage occurred.80 In matters relating to insurance, an insurer domiciled in a Member State may be sued in the courts of his domicile or in those of the claimant’s domicile and, in respect of liability insurance, in the courts for the place where the harmful event occurred.
37.5 By contrast, the Paris Convention and its amending Protocol provide for a more limited range of courts to have jurisdiction over claims arising from a nuclear accident. The jurisdiction of the courts for the place where the nuclear incident occurred is exclusive under the Paris Convention. If the accident occurs outside the territory of the Contracting Parties, or if the place of the accident cannot be determined with certainty, the courts having jurisdiction are those for the place where the nuclear installation is situated.
37.6 By reason of the doctrine of exclusive external competence,81 the adoption of Council Regulation (EC) No 44/2001 has the consequence that the Member States are no longer free to derogate from the rules contained in that Regulation or to conclude obligations with third states which affect those rules. To resolve this conflict, the Council instructed the Commission to negotiate, on behalf of the Community, the provisions of the Protocol which affected the operation of the Regulation. The Commission subsequently informed the depositary of the Paris Convention that the Community would accept the proposed amendments contained in the Protocol. As the Paris Convention contains no provision allowing the participation of regional organisations, the Community will not accede to the
79 OJ L No 12, 16.1.2001, p.1. 80 See Bier v. Mines de Potasse d’Alsace [1976] ECR 1735, a case decided by the ECJ on the similarly worded provisions of Article 5(3) of the Brussels Convention which was converted into an EC Regulation by Regulation (EC) No 44/2001. 81 Derived from the judgment of the ECJ in AETR [1971] ECR 263.
104 ESC, 33rd Report, 2002-03
Convention, but must exercise its powers through those Member States which are parties. (Of the Member States, Austria, Ireland and Luxembourg are not party to the Paris Convention.)
37.7 The draft Council Decisions set out the formal authorisation for the Member States which are currently parties to the Paris Convention to sign and to ratify the Protocol amending that Convention.
The Government’s view 37.8 In her Explanatory Memorandum of 15 August 2003 the Minister of State for Industry and the Regions and Deputy Minister for Women and Equality (Jacqui Smith) welcomes the proposed draft Council Decisions and explains that the revised Paris Convention will significantly improve the arrangements for the compensation of victims in the event of a civil nuclear accident.
37.9 The Minister also explains the relationship between the rules of jurisdiction contained in Council Regulation (EC) No. 44/2001 and those of the Paris Convention, and the consequent need for a Council Decision authorising Member States to become parties to the amending Protocol to the Paris Convention.
Conclusion 37.10 We thank the Minister for her helpful and clear Explanatory Memorandum. We agree with the Minister in welcoming these draft Council Decisions, which will enable the Member States to sign and ratify the Protocol to the Paris Convention.
37.11 We have no further questions to put to the Minister on these proposals, but we draw attention to the extremely wide effect the adoption of Regulation (EC) No. 44/2001, with the consequent conferring of exclusive external competence on the Community, is having on the freedom of Member States to negotiate international agreements on jurisdiction in specialised areas.
37.12 We clear the document.
ESC, 33rd Report, 2002-03 105
38 Information on investment in the nuclear sector
(24809) Draft Council Regulation amending Regulation (EURATOM) No. 11941/03 2587/1999 defining the investment projects to be communicated to COM(03) 370 the Commission in accordance with Article 41 of the Treaty establishing the European Atomic Energy Community.
Legal base Article 41 Euratom; —; simple majority Document originated 23 July 2003 Deposited in Parliament 20 August 2003 Department Trade and Industry Basis of consideration EM of 29 August 2003 Previous Committee Report None To be discussed in Council Not known Committee’s assessment Politically important Committee’s decision Cleared
Background 38.1 Regulation (Euratom) No. 2517/1999 requires that the Commission be notified of nuclear investment projects where the cost of these projects exceeds certain limits. The Regulation lays down the broad parameters for information to be notified to the Commission. For investment projects for the decommissioning of installations, the Commission is to be notified only of the essential characteristics of the investment.
The document 38.2 The present draft Regulation would amend Regulation No. 2517/1999 so as to require additional information. First, it would be necessary to provide the Commission with plans for management of spent fuel or radioactive waste originating from a notified investment and the plans for the decommissioning of the installation. Secondly, given the growing significance of decommissioning, the Commission argues that it needs to examine decommissioning projects in detail in the light of the objectives of the Euratom Treaty, so the proposal would require more information on decommissioning projects. Finally, the Commission would require information on the methods of financing of investment projects, that is private or public funding. The Commission says this information is necessary to allow it to facilitate coordinated development of investment in the nuclear sector and to assess how the proposed investment fits in with existing support mechanisms at Community level, for example Euratom loans or research aid.
The Government’s view 38.3 The Minister of State for Energy, e-Commerce and Postal Services, Department of Trade and Industry (Mr Stephen Timms) tells us:
106 ESC, 33rd Report, 2002-03
“It is not clear that notification of the method of financing (e.g. private or public) is a matter for the Euratom Treaty. It appears to be intended to monitor investments for State aids purposes (a competition matter under the EC Treaty). There is a question as to whether such a provision is necessary given the State aids notification procedures or whether the appropriate Treaty base should be the EC Treaty and not Euratom. We expect that the Council Legal Services will be requested to provide an opinion on this.
“The Government will want to be convinced that the Commission’s proposal will not duplicate unnecessarily existing regulatory requirements under Article 37 of the Treaty and will not affect the competitive position of the companies involved. The Government will also want to be sure that the information to be published by the Commission will be consistent with the need to protect commercial confidentiality.”
“The Government recently announced the intention to create the Nuclear Decommissioning Authority (NDA), which will be responsible for the clean up of the UK’s nuclear legacy. The provisions in this Regulation will impact on the NDA if they become responsible for submitting Article 41 investment notifications for the public sector decommissioning projects which would have been managed by BNFL and UKAEA. However, we envisage that this impact will only be to the extent of the information which they are required to provide to the Commission. In the current economic climate it is unlikely that there will be many investments that will need to be notified apart from those for radioactive waste management and decommissioning.”
Conclusion 38.4 We support the Government’s intention to ensure that the appropriate legal base is used for this proposal and note the Government’s view that the information required should not duplicate existing requirements, should not be anti-competitive and should not compromise commercial confidentiality. On that basis we are content to clear the document.
ESC, 33rd Report, 2002-03 107
39 EU Police Mission in Macedonia
(a) (24891) Draft Council Joint Action for a possible European Union Police — Mission in the former Yugoslav Republic of Macedonia. —
(b) (24917) Council Decision concerning the appointment of the Head of — Mission/Police Commissioner of the European Union Police Mission — (EUPol) in the former Yugoslav Republic of Macedonia.
Legal base Article 14 EU; unanimity Department Foreign and Commonwealth Office Basis of consideration Minister’s letters and EMs of 25 September and 2 October 2003 Previous Committee Report None Discussed in Council Adopted at 29 September GAERC Committee’s assessment Politically important Committee’s decision Cleared, but further information requested
Background 39.1 On 17 September 2003, we considered a letter dated 10 September from the Minister for Europe (Mr Denis MacShane) in which he advised us that the EU was thinking of sending a police mission to the former Yugoslav Republic of Macedonia (FYROM) on 15 December.82
The Joint Action on the police mission 39.2 On 25 September the Minister submitted an Explanatory Memorandum on the draft Joint Action and said that he hoped that we would understand that, with Parliament in recess, it would be necessary to override scrutiny when the draft was put to the General Affairs and External Relations Council (GAERC) on 29 September for adoption by the Council. The decision had to be taken then to ensure that the planning process and the setting up of the mission, EUPol “Proxima”, could start in good time. He stressed that, although it would follow the successful EU Military Mission, Operation Concordia, in FYROM, for which the mandate lasts until 15 December 2003, there would be no explicit link between the mandates of the two missions.
39.3 At the UK’s request, a comprehensive risk assessment would be carried out as a priority in the planning process. The Minister said that this was intended to ensure that the planning phase took account of the fluid security situation on the ground.
82 Not reported.
108 ESC, 33rd Report, 2002-03
39.4 The Minister attaches the final version of the Joint Action to his letter of 2 October. He says that it does not differ in any significant way from that submitted on 25 September. It sets out the broad mission statement and a basic structure, the chain of command and arrangements for the political oversight of the mission, primarily through the Political and Security Committee reporting to the Council. These follow closely the arrangements for the EU Police Mission in Bosnia. In its covering note to COREPER83 on the draft Joint Action, the Presidency said that it envisaged that the mission would be composed of up to 180 police officers and 20 civilians.
39.5 The budget estimates are €7.3 million for start-up costs, to include planning costs of €420,000, and running costs for the first year of €7.4 million, plus €6.6million yearly for per diems.84 Per diems for 2003 were set at €100 per person. They are quoted separately as it is not clear whether there will be sufficient funds in the 2004 CFSP budget for per diems. The Council will decide on the final amount for the year 2004, including the method of financing per diems, in December.
The Council Decision 39.6 The 29 September GAERC also adopted a Council Decision implementing the provision in the Joint Action for the appointment of a Police Head of Mission, on the basis of a proposal from the Secretary General/High Representative Javier Solana. It appoints Bart d’Hooge, a Belgian national and Head of the OSCE policing presence in FRYOM. He will head the EUPol “Proxima” planning team immediately and become Head of Mission when the Mission begins in December.
The Government’s view 39.7 The Minister says that the EU’s operations in FRYOM continue to ensure the EU’s active involvement in developing a stable, secure environment to allow the Government of FYROM to implement the Ohrid Framework Agreement. This is the agreement which brought the crisis of 2001 to a close and which guarantees equality for ethnic Albanians. The Government supports “Proxima”, since it sees a clear need for assistance with reform, training and the provision of advice in the policing sector. FYROM has already received help in some areas of police reform through the OSCE and bilateral projects and the new EUPol mission will take these into account. The Government is content that, by launching this mission, the EU is demonstrating its continued commitment to and involvement in the post-conflict stabilisation of FYROM.
39.8 On the financial implications, the Minister comments that the UK share is around 18%. If the UK decides to send any police officers or other personnel to the mission, it will bear that cost as well. He adds:
“The Government supports the principle that all running costs for ESDP civilian operations should be funded from the Community budget (as set out in Article 28.3 TEU) as far as possible. But it will look at overall budget prioritisation for Category
83 The Committee of Permanent Representatives. 84 Subsistence allowance for local expenses, usually including the cost of a hotel bed.
ESC, 33rd Report, 2002-03 109
Four External Action, of which the CFSP budget is part, before taking a decision on this particular case”.
39.9 In his Supplementary Memorandum of 2 October, the Minister supports the appointment of Bart d’Hooge, as Head of Mission. He enjoys the support of the EU Special Representative to FYROM and has experience of policing there.
Conclusion 39.10 We thank the Minister for providing us with advance warning of the Council’s intention to establish this police mission and with a full account of the Government’s view of it.
39.11 We ask the Minister whether, if it is decided that the running costs for this mission should be charged to Category Four of the Community Budget, the decision would have an impact on other external actions for which provision has been made and, if so, which actions would be affected.
39.12 We now clear both documents.
40 Annual activity reports of the Commission’s Directorates-General and Services
(24834) Commission Communication — Synthesis of annual activity reports 12090/03 for 2002 of Directorates-General and Services. COM(03) 391
Legal base — Document originated 9 July 2003 Deposited in Parliament 8 September 2003 Department HM Treasury Basis of consideration EM of 1 October 2003 Previous Committee Report None To be discussed in Council Not known Committee’s assessment Politically important Committee’s decision Cleared, but relevant to the debate recommended on the Commission’s Reports on OLAF and on the protection of the financial interests of the Communities and the fight against fraud (see paragraph 3 above)
110 ESC, 33rd Report, 2002-03
Background 40.1 The Commission now publishes a synthesis of all the annual reports produced by the different Directorates-General (DGs) and Services. The synthesis is a management tool which gives a concise view of policy achievements in the last year, takes stock and shows the progress of follow-up actions previously agreed.
The document 40.2 The document is the synthesis of the annual activity reports for 2002. It is divided into six sections:
• Introduction: this section discusses the sources used and methodological problems with the annual report process and gives an overview of progress on reform;
• Overview of main policy results: showing the key goals and achievements of the DGs and Services, by policy area, in 2002. Policy highlights include reform of the Staff Regulations (modernising the pay and conditions of EU civil servants), the adoption of detailed implementing rules for the new Financial Regulation, the successful completion of enlargement negotiations, and the introduction of euro notes and coins in all eurozone Member States;
• Overview of the Services’ management and controls in 2002;
• Stabilisation of annual report process;
• On-going work and new corrective actions required: this is the longest section in the report and contains detailed synopses of ongoing work, and the corrective measures that need to be taken, in a variety of areas of Commission work; and
• Conclusion: containing a brief round-up of the lessons learned in the second year of annual activity reports.
40.3 The document also gives a tabular presentation of all the tasks and actions resulting from the synthesis of 2002.
The Government’s view 40.4 The Financial Secretary to the Treasury (Ruth Kelly) tells us:
“The UK Government welcomes the publication of the Synthesis of Annual Activity Reports 2002. It is a useful way of appreciating, ‘at a glance’, what the policy achievements of DGs and Services have been in the previous year and — even more importantly — which areas still need improvement, and what commitments have been given to achieve such improvements.
“The UK reflects with particular satisfaction on the achievements in reforming the Staff Regulation (which will save hundreds of millions of euros in pension costs by 2030), the recasting of the Financial Regulation (which came into force in January
ESC, 33rd Report, 2002-03 111
2003) and the recent agreement by OLAF to improve information flows between it and the Commission in order to speed up the response to fraud allegations.
“However, the UK would like to see DGs and Services continue to improve management and control practices — and to draw lessons from the [annual activity report] process in order to better embed the principles of management responsibility, accountability and transparency into the way that the European institutions work.”
Conclusion 40.5 This document is a useful background to discussion of the reform process in the Communities’ institutions. We are content to clear it, but note that it is relevant to the debate we have recommended in European Standing Committee B on the Commission’s Reports on OLAF and on the protection of the financial interests of the Communities and the fight against fraud.85
41 EU policy against corruption
(24630) Commission Communication on a comprehensive EU policy against 10332/03 corruption. COM(03) 317
Legal base — Department Home Office Basis of consideration Minister’s letter of 28 August 2003 Previous Committee Report HC 63-xxx (2002-03), paragraph 9 (16 July 2003), and see (23885) 12249/2/02: HC 63–v (2002-03), paragraph 10 (18 December 2002) To be discussed in Council No date set Committee’s assessment Legally and politically important Committee’s decision Cleared
Background 41.1 We considered this Communication from the Commission on 16 July, when we noted that corruption has been a matter of international and European concern for some years, with initiatives in the United Nations and the Council of Europe as well as the European Union.
85 See headnote.
112 ESC, 33rd Report, 2002-03
41.2 We noted that the Communication was an overview of what has been achieved at EU level and that it indicated the Commission’s ‘firm intention to reduce corruption at all levels in a coherent way within the EU institutions, in EU Member States and outside the EU’. We reviewed the Communication in some detail and put three questions to the Minister.
41.3 We agreed with the Minister that proposals by the Commission to regulate spending on, or the conduct of, national and local elections would raise subsidiarity issues. Having regard to the Commission’s stated ‘firm intention’ to reduce corruption ‘in a coherent way within the EU institutions, in EU Member States and outside the EU’, we first asked the Minister to explain what role, if any, could properly be undertaken by the Commission in this regard within the UK.
41.4 We noted that the Communication advocated Community accession to the relevant Council of Europe conventions and Community membership of GRECO (the group of states against corruption). We therefore asked the Minister if Community accession to GRECO might have the effect of conferring an exclusive external competence on the European Community to negotiate international agreements in this area, and if so, whether the Minister would find this acceptable.
41.5 The Communication also invited Member States to introduce clear guidelines on ‘whistleblowing’ for staff of public administrations, suggesting that reference be made to the Commission Decision of 4 April 2002 as a model for such guidelines. We noted that controversy has arisen when Commission staff have raised concerns over actual or potential impropriety, and we recalled our own concerns about the limited protection given to such persons under the Decision of 4 April 2002 and the proposed Staff Regulations. Our third question was whether the Minister considered that these were an appropriate model to recommend to the Member States.
The Minister’s reply 41.6 In her letter of 28 August 2003 the Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) replies to our three questions.
41.7 On the first question, the Minister states that the Government does not see any role for the Commission in relation to the funding or expenditure of national political parties participating in national and local elections taking place within the UK. In relation to a more general policy of reducing corruption, the Minister recalls that the Commission may make proposals under Title VI EU for the Council to exercise its formal powers to achieve the objectives set out in Article 29 EU relating to corruption. The Minister adds that the Government has no objection to the Commission proposing less formal measures, such as encouraging Member States to ratify existing conventions on corruption and to develop standards of integrity in public administration.
41.8 With regard to Community accession to GRECO, the Minister explains that GRECO operates under a statute which gives it the aim of improving members’ capacity to fight corruption by monitoring their compliance with agreed international standards, but that GRECO does not itself negotiate agreements. The Minister states her belief that EC participation in GRECO could not have the effect of conferring an exclusive external
ESC, 33rd Report, 2002-03 113
competence on the EC to negotiate international agreements relating to corruption, but that if it did, the Government ‘would certainly object’. The Minister adds that one of the international standards monitored by GRECO is the Council of Europe’s ‘20 Guiding Principles for the Fight Against Corruption’ and that one of these Principles (number 10) relates to the rights and duties of public officials. The Minister comments that if the EC were to become a member of GRECO, it should become subject to GRECO’s peer review process and that ‘in so far as there may be any deficiencies in the Commission’s staff regulations in this field the process can be expected to reveal them’.
41.9 On the question of recommending the Commission Decision of 4 April 2002 and the proposed Staff Regulations to Member States as an appropriate model, the Minister comments that the Government would have no objection to the Commission recommending model guidelines to Member States but that it believes it must be for individual States to determine their own arrangements. The Minister describes the arrangements applying to civil servants in the United Kingdom under the Civil Service Code, including the possibility of a civil servant bringing a complaint directly to the Civil Service Commissioners without having to go through internal processes. The Minister also refers to the protection available under the Public Interest Disclosure Act 1998 to employees in the public and private sectors who ‘blow the whistle’ outside the normal channels.
Conclusion 41.10 We thank the Minister for her reply to our three questions. We agree with the Minister that the Commission has no role in relation to the funding or expenditure of national political parties participating in national and local elections.
41.11 We are grateful for the Minister’s statement that membership by the European Community in GRECO should have no effect on the competence of Member States to negotiate agreements with third countries in relation to the prevention of corruption. We agree with the Minister that the peer review process within GRECO may help to reveal any deficiencies in the Commission’s Staff Regulations.
41.12 We also agree with the Minister that there can be no objection in principle to the Commission recommending model guidelines to Member States on the rights and duties of public officials, provided the Member States remain free to determine their own arrangements. In describing the arrangements applying to public and private sector employees within the United Kingdom, we believe the Minister is right to mention protection for ‘whistleblowing’ outside the normal reporting channels, since we consider this an area in which the Commission’s own staff regulations are deficient.
41.13 We have no further questions for the Minister on this document which is not, in any event, a proposal for legislation. We are therefore content to clear it from scrutiny.
114 ESC, 33rd Report, 2002-03
42 Joint flights for the removal of illegally-resident third country nationals
(24825) Draft Council Decision on the shared organisation of joint flights for 11769/03 removals of third-country nationals illegally present in the territory + ADD 1 of two or more Member States. REV 1
Legal base Article 63(3)(b) EC; consultation; unanimity Document originated 8 August 2003 Deposited in Parliament 5 September 2003 Department Home Office Basis of consideration EM of 2 October 2003 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Cleared, but further information requested
Background 42.1 The Return Action Plan, approved by the Council in November 2002, recommended the sharing of capacity for the removal of illegally-resident third-country nationals. The present document, which has been initiated by the Italian Presidency, provides for the organisation by two or more Member States of shared flights for the return of third country nationals who are illegally present in their territories.
The document 42.2 The draft Decision would require each participating Member State to nominate an authority with responsibility for organising joint flights for third country nationals against whom measures have been taken for their removal. It sets out practical action to be taken by the authority organising a flight. This includes establishing the number of escort personnel, including medical staff and interpreters, that will be required; obtaining authorisation for the flight from the third country to which the flight is bound; determining how costs are to be shared; and so on.
42.3 Member States taking part in the joint flight would be required to assess the risk attached to the operation and to use the assessment to determine the type and number of escorts. Information should be obtained on the criminal records (if any) of the third country nationals to be carried. Arrangements should be made for the provision of escorts capable of dealing with violent behaviour which could endanger the flight.
42.4 The fourth Recital to the draft expressly provides that Member States, in implementing the proposal, must respect human rights and, among other things, the requirements of the European Convention on Human Rights and the Charter of Fundamental Rights.
ESC, 33rd Report, 2002-03 115
42.5 The current text of the proposal states that the UK will not be taking part in the adoption of the Decision and will not be bound by it.
The Government’s view 42.6 The Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) tells us that, in principle, the Government supports joint charter flights as a potential way of increasing the removal of illegal residents and reducing the cost. The Government is considering whether to opt into the draft Decision and, meanwhile, will continue to take part in discussion of the proposal.
Conclusion 42.7 We share the view that this proposal has the potential to facilitate the removal of illegal residents and to save money. We attach especial importance to the inclusion in the draft Decision of the requirement to respect human rights in the organisation of flights organised jointly by two or more Member States.
42.8 We clear the document but ask the Minister to tell us the conclusion the Government reaches on whether to opt into this proposal and to keep us informed of progress.
43 Undeclared work
(24850) Draft Council Resolution on transforming undeclared work into 12196/03 regular employment. —
Legal base — Document originated 3 September 2003 Deposited in Parliament 9 September 2003 Department Inland Revenue Basis of consideration EM of 1 October 2003 Previous Committee Report None; but see (19065) 7663/98: HC 155-xxx (1997- 98), paragraph 19 (10 June 1998) To be discussed in Council 20 October 2003 Committee’s assessment Politically important Committee’s decision Cleared
116 ESC, 33rd Report, 2002-03
Background 43.1 In June 1998 our predecessors reported their clearance of a Commission Communication on undeclared work86 which was intended to promote a debate on the causes of undeclared work and on the policy options for combating it.
The document 43.2 This draft Resolution is the latest move at European Union level to address the problem of undeclared work, both in relation to tax evasion, benefit fraud and illegal immigration and to encouraging regular employment. It is intended to reinforce the political message that effective action against undeclared work is required in all Member States, and to encourage Member States to take positive action on undeclared work in the context of the European Employment Strategy. The draft is built around the existing Employment Guideline 9, which deals with undeclared work, in National Action Plans drawn up under the Employment Strategy. It encourages action on undeclared work in Member States rather than imposing any new obligations.
The Government’s view 43.3 The Chief Secretary to the Treasury (Paul Boateng) tells us that the draft deposited has already been modified in working group negotiations. He says, basing himself on the revised text:
“There are a number of strands to the actions that the Resolution calls upon Member States to undertake. None have any direct policy implications.
“The first strand …. is specifically to take account of actions to combat undeclared work in compiling future National Action Plans as part of the European Employment Strategy. Member States, including the UK, have already signed up to do this and in particular Guideline 9 in the National Action Plans is specifically about the fight against undeclared work.
“The second is to co-operate with other Member States in considering any common features of undeclared work that might best be approached by a common approach…. This work would be purely exploratory and there is no commitment to implement any common approach.
“The third …. is to develop a comprehensive approach to tackling undeclared work within the European employment strategy. A number of measures that could be included in such an approach are listed. The UK, following on from the findings of Lord Grabiner in his Report on the Informal Economy in March 2000, already has in place a comprehensive package of measures featuring many of the ideas listed in the draft resolution.
“The final strand is to endeavour to improve the understanding of the extent of the problem of undeclared work — an area by definition extremely hard to measure…. It
86 See headnote.
ESC, 33rd Report, 2002-03 117
is clear that the intention is that Member States should make better use of existing data in order to do this — there is no suggestion that any costs should be incurred in new data-gathering exercises.
“The final sections of the draft Resolution …. simply call upon social partners to support the fight against undeclared work and invite the Commission to study the issue further at EU level.
“While some of the language of the revised draft needs to be tightened, for example to ensure that references to EU process reflect current arrangements, the broad thrust of the Resolution is consistent with the Government’s overall approach to undeclared work.”
Conclusion 43.4 This draft Resolution addresses an important but difficult problem. We are content to clear the document.
44 Taxation: mutual assistance
(24805) Draft Directive amending Directive 77/799/EEC concerning mutual 11906/03 assistance in the field of direct and indirect taxation. COM(03) 446
Legal base Article 95 EC; co-decision; QMV Document originated 28 July 2003 Deposited in Parliament 20 August 2003 Department Inland Revenue and HM Customs and Excise Basis of consideration EM of 10 September 2003 Previous Committee Report None; but see (22537) 10510/01: HC 152-xxxix (2001- 02), paragraph 9 (23 October 2002) To be discussed in Council Not known Committee’s assessment Politically important Committee’s decision Cleared
Background 44.1 Directive 77/799/EEC of 1977, the Mutual Assistance Directive, provides the framework for mutual assistance and exchange of information between EU tax authorities, so as to help them apply their tax laws more effectively. It provides for three types of information exchange: on request, spontaneous, and automatic. It also provides safeguards to ensure that any exchange of information respects taxpayers’ confidentiality. The Directive currently covers both indirect and direct taxation.
118 ESC, 33rd Report, 2002-03
The document 44.2 The draft Directive is intended to amend and update the Mutual Assistance Directive. The aim is to improve the functioning of procedures, so as to enable Member States to deal more effectively with cross-border tax evasion and avoidance. The amending Directive would:
• clarify certain provisions, where the meaning is not totally certain;
• modernise information exchange procedures, more closely aligning those for direct tax and indirect tax; and
• provide a new mechanism for co-operation and exchange of information via simultaneous multilateral controls (joint audits). Member States would be able to choose on a case by case basis whether or not to participate in controls.
44.3 Under a separate proposal on administrative cooperation,87 exchange of information on Value Added Tax (VAT) would be dealt with under the new VAT Regulation and insurance premium taxes would be covered by the Mutual Assistance Directive. In addition, the Commission is expected to propose that exchange of information on excise duties should be covered in a separate instrument. This means that the Mutual Assistance Directive would, in future, focus on exchange of information on taxes on income, capital and insurance premiums.
The Government’s view 44.4 The Paymaster General (Dawn Primarolo) tells us:
“The UK Government strongly supports the use of exchange of information in combating cross-border tax evasion and avoidance.
“The Mutual Assistance Directive has provided valuable benefits to the UK; and the UK has a good record on co-operation under the Directive with other Member States.
“In general, HMG believes the procedures under the Directive have worked well and that any practical problems that arise in operating the Directive can be dealt with effectively by Member States’ tax authorities. But the Government is willing to consider the modest changes proposed, to the extent that they can be shown to enhance the effectiveness of existing exchange of information.
“The Commission have issued the draft Directive on an Article 95 legal base. This entails qualified majority voting and co-decision with the European Parliament. The Government’s view is the legal base is incorrect; and that the proposal should have a unanimity legal base in line with the existing Directive’s legal base, and in line with all previous amendments that Member States have agreed to the Directive. The UK will pursue this point in forthcoming meetings of the Council Working Groups.”
87 See headnote.
ESC, 33rd Report, 2002-03 119
Conclusion 44.5 We note that the Government, despite its view that the Mutual Assistance Directive works well and that any practical problems can be dealt with effectively by the tax authorities, is willing to consider the proposal if its utility can be demonstrated. We also note and support the Government’s insistence that the proper legal base be used for this proposal. On that basis we are content to clear the document.
120 ESC, 33rd Report, 2002-03
45 Documents not raising questions of sufficient legal or political importance to warrant a substantive report to the House
Department for Environment, Food and Rural Affairs
(24799) Amended draft Directive on the promotion of cogeneration based on 11875/03 a useful heat demand in the internal energy market. COM(03) 416
(24813) Draft Council Regulation amending Regulation (EC) No. 2803/2000 as 11966/03 regards the opening and the increase of autonomous Community COM(03) 474 tariff quotas for certain fishery products.
(24827) Draft Council Regulation introducing a scheme to compensate for the 11826/03 additional costs incurred in the marketing of certain fishery products COM(03) 516 from the Azores, Madeira, the Canary Islands and the French departments of Guiana and Réunion as a result of those regions' remoteness.
(24828) Draft Council Regulation adopting autonomous and transitional 11890/03 measures concerning the importation of certain processed COM(03) 511 agricultural products originating in Malta and the exportation of certain processed agricultural products to Malta.
(24837) Commission Annual Report on the results of the multi-annual 12103/03 guidance programmes for the fishing fleets at the end of 2002. COM(03) 508
(24861) Draft Council Regulation amending Regulation (EC) No. 527/2003 12188/03 authorising the offer and delivery for direct human consumption of COM(03) 525 certain wines imported from Argentina which may have undergone oenological processes not provided for in Regulation (EC) No. 1493/1999.
(24866) Draft Council Regulation amending Regulation No. 79/65/EEC setting 12256/03 up a network for the collection of accountancy data on the incomes COM(03) 472 and business operation of agricultural holdings in the European Economic Community.
(24907) Draft Council Regulation amending Regulation (EEC) No. 1696/71 on 12975/03 the common organisation of the market in hops. COM(03) 562
(24912) Draft Council Regulation amending Regulation (EC) No. 1098/98 12964/03 introducing special temporary measures for hops. COM(03) 563
ESC, 33rd Report, 2002-03 121
(24913) Draft Council Regulation setting aid rates in the seeds sector for the 12979/03 2004/05 marketing year. COM(03) 552
Food Standards Agency
(24735) Amended draft Regulation on smoke flavourings used or intended 11388/03 for use in or on foods. COM(03) 407
(24848) Draft Directive on the approximation of the laws of the Member 12183/03 States on extraction solvents used in the production of foodstuffs and COM(03) 467 food ingredients (codified version).
Foreign and Commonwealth Office
(24771) Draft Council Decision on the signing of an agreement on the 11798/03 participation of the Czech Republic, the Republic of Estonia, the COM(03) 439 Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic in the European Economic Area and four related agreements. Draft Council Decision on the conclusion of an agreement on the participation of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic in the European Economic Area and four related agreements.
(24778) Draft Council Decision establishing a Community action programme 11652/03 for bodies promoting reciprocal understanding of relations between COM(03) 280 the European Union and certain non-industrialised regions in the world.
(24836) Commission Report to the Council on the application of Annex X to 12102/03 the Staff Regulations (Council Regulation No. 3019/87 of 5 October COM(03) 495 1987) — Year 2002.
(24885) Commission Policy Paper for transmission to the Council and the — European Parliament: A maturing partnership — shared interests and COM(03) 533 challenges in EU-China relations (Updating the European Commission’s communications on EU-China relations of 1998 and 2001).
122 ESC, 33rd Report, 2002-03
Home Office
(24530) Draft Agreement on Co-operation between Romania and the — European Police Force. —
(24729) Draft Council Decision updating Annex 8 of the “Schengen 6177/1/02 Consultation Network (Technical Specifications)”. REV 1 —
(24758) Draft Council Resolution on the posting of drug liaison officers to 11051/03 Albania. —
(24816) Draft Council Regulation on the establishment of a regime of local 12161/03 border traffic at the external land borders of the Member States. COM(03) 502 Draft Council Regulation on the establishment of a regime of local border traffic at the temporary external land borders between Member States.
(24868) Draft Council Decision concerning control measures and criminal 12244/03 sanctions in respect of the new synthetic drug 2C-I. —
(24869) Draft Council Decision concerning control measures and criminal 12245/1/03 sanctions in respect of the new synthetic drug 2C-T-7. —
(24870) Draft Council Decision concerning control measures and criminal 12246/03 sanctions in respect of the new synthetic drug 2C-T-2. —
(24871) Draft Council Decision concerning control measures and criminal 12247/03 sanctions in respect of the new synthetic drug TMA-2. —
(24873) Council Decision on the repeal of the decision authorising the 12137/03 Secretary-General of the Council in the context of the integration of — the Schengen acquis into the framework of the European Union to act as representative of certain Member States for the purposes of concluding contracts relating to the installation and the functioning of the "Help Desk Server" of the Management Unit and of the Sirene Network Phase II and to manage such contracts.
ESC, 33rd Report, 2002-03 123
(24874) Council Decision on the repeal of the Financial Regulation governing 12138/03 the budgetary aspects of the management by the Secretary-General — of the Council, of contracts concluded in his name, on behalf of certain Member States, relating to the installation and the functioning of the "Help Desk Server" of the Management Unit and of the Sirene Network Phase II.
(24879) Joint Supervisory Body opinion in respect to draft agreement 12622/03 between Europol and Romania. ADD 1 —
Inland Revenue
(24808) Draft Council Directive amending Directive 90/435/EEC on the 11935/03 common system of taxation applicable in the case of parent COM(03) 462 companies and subsidiaries of different Member States.
Department for International Development
(24829) Draft Council Decision adopting measures in a case of special urgency 12040/03 amending Council Decision 2002/274/EC. COM(03) 513
Office of National Statistics
(24854) Draft Regulation concerning statistics on the Information Society. 12145/03 COM(03) 509
(24877) Draft Regulation on Community statistics concerning balance of 12461/03 payments, international trade in services and foreign direct COM(03) 507 investment.
Department of Trade and Industry
(24820) Amended draft Regulation on the production of annual Community 12048/03 statistics on steel for the reference years 2003-2009. COM(03) 464
(24830) Draft Council Regulation amending the Commission Decision of 8 July 12042/03 2002 on administering certain restrictions on imports of certain steel COM(03) 494 products from the Russian Federation.
124 ESC, 33rd Report, 2002-03
(24849) Draft Council Decision on the position to be taken by the Community 12158/03 within the Association Committee established by the Europe COM(03) 486 Agreement between the European Communities and their Member States and Bulgaria with regard to the adoption of a Regional aid map on the basis of which regional aid granted by Bulgaria will be assessed.
(24851) Commission Report: Trans-European Networks (TEN) Annual Report 12241/03 for the year 2001. ADD 1 Commission Staff Working Paper: Annexes to the TEN Annual Report COM(03) 442 for the year 2001.
(24875) Commission Communication: The Structural Funds and their 12342/03 coordination with the Cohesion Fund Revised indicative guidelines. COM(03) 499
(24881) Draft Council Decision on the position to be taken by the Community 12337/03 within the Association Committee established by the Europe COM(03) 487 Agreement between the European Communities and their Member States and Slovakia with regard to the adoption of a regional aid map on the basis of which regional aid granted by Slovakia will be assessed.
(24888) Commission Opinion pursuant to Article 251(2), third subparagraph, 12587/03 point (c) of the EC Treaty, on the European Parliament's amendments COM(03) 536 to the Council's common position regarding the draft Directive amending Directive 94/62/EC on packaging and packaging waste.
(24894) Draft Council Decision on the position to be taken by the Community 12680/03 within the Association Committee established by the Europe COM(03) 482 Agreement between the European Communities and their Member States and the Czech Republic with regard to the adoption of a Regional aid map on the basis of which regional aid granted by the Czech Republic will be assessed.
(24900) Draft Council Regulation imposing a definitive anti-dumping duty 12016/03 and collecting definitively the provisional duty imposed on imports of COM(03) 505 para-cresol originating in the People's Republic of China.
(24901) Draft Council Regulation extending the definitive anti-dumping duty 12022/03 imposed by Regulation (EC) No. 408/2002 on imports of certain zinc COM(03) 504 oxides originating in the People's Republic of China to imports of certain zinc oxides consigned from Vietnam, whether declared as originating in Vietnam or not, and to imports of certain zinc oxides originating in the People's Republic of China and mixed with silica.
(24922) Draft Council Regulation terminating the anti-dumping proceedings 12013/03 concerning imports of polyester textured filament yarn (PTY) COM(03) 488 originating in Taiwan, Indonesia, Thailand and Malaysia.
ESC, 33rd Report, 2002-03 125
(24923) Draft Council Regulation amending Regulation (EC) No. 1796/1999 12024/03 imposing a definitive anti-dumping duty, and collecting definitively COM(03) 518 the provisional duty imposed, on imports of steel ropes and cables originating, inter alia, in Poland and Ukraine.
(24924) Draft Council Regulation amending Regulation (EC) No. 1995/2000 12121/03 imposing, inter alia, a definitive anti-dumping duty on imports of COM(03) 521 solutions of urea and ammonium nitrate originating in Algeria, Belarus, Lithuania, Russia and Ukraine.
Department for Transport
(24832) Draft Regulation on the transfer of cargo and passenger ships 12059/03 between registers within the Community. COM(03) 478
(24847) Draft Council Decision on the position of the European Community 12180/03 on the draft Regulation of the United Nations Economic Commission COM(03) 498 for Europe on uniform prescriptions concerning the approval of cornering lamps for power-driven vehicles.
(24884) Draft Directive on the regulation of the operation of aeroplanes 12584/03 covered by Part II, Chapter 3, Volume I of Annex 16 to the Convention COM(03) 524 on International Civil Aviation, second edition (1988) (codified version).
HM Treasury
(24738) Commission Communication: Report to the discharge authority 11455/03 summarising the number and types of internal audits carried out in COM(03) 422 2002, the main recommendations made and the action taken on those recommendations.
(24747) Commission Opinion pursuant to Article 251(2), 3rd paragraph, point 11459/03 (c) of the EC Treaty on the European Parliament's amendments to the COM(03) 432 Council's common position regarding a draft Directive on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC.
(24773) Draft Council Decision concerning the analysis and cooperation with 11761/03 regard to counterfeit euro coins. COM(03) 426
(24817) Preliminary draft amending budget No. 5 to the budget for 2003 — 11910/03 Statement of revenue and expenditure by section — Section III — SEC(03) 886 Commission.
126 ESC, 33rd Report, 2002-03
(24839) Draft Council Decision on additional macro-financial assistance to 12129/03 Serbia and Montenegro amending Decision 2002/882/EC providing COM(03) 506 further macro-financial assistance to the Federal Republic of Yugoslavia.
(24845) Draft Decision on the mobilisation of the EU Solidarity Fund 12177/03 according to point 3 of the Interinstitutional Agreement of 7 COM(03) 529 November 2002 between the European Parliament, the Council and the Commission on the financing of the European Union Solidarity Fund, supplementing the Interinstitutional Agreement of 6 May 1999 on budgetary discipline and improvement of the budgetary procedure.
(24906) Preliminary draft amending budget No. 6 to the budget for 2003 — 12967/03 Statement of revenue and expenditure — Section III — Commission. SEC(03) 1059
Department for Work and Pensions
(24882) Commission Communication concerning the non-binding guide of 12176/03 good practice for implementing Directive 1999/92/EC of the European COM(03) 515 Parliament and of the Council on minimum requirements for improving the safety and health protection of workers potentially at risk from explosive atmospheres.
(24935) Directive amending Council Directive 96/82/EC on the control of — major-accident hazards involving dangerous substances. —
ESC, 33rd Report, 2002-03 127
Appendix 1: reports on Council meetings held during a recess
When the House is sitting, we table a written Question on the day of each meeting of the Council of Ministers asking for a report on the Council meeting and on the activities of UK Ministers in it. However, for Council meetings taking place when the House is in recess we ask Departments to write to us instead. Replies concerning meetings during the Conference recess are published below.
Letter from the Parliamentary Under-Secretary of State for Science and Innovation (Lord Sainsbury of Turville) to the Chairman of the Committee
COMPETITIVENESS COUNCIL — 22 SEPTEMBER 2003 I am writing to inform you that I represented the UK at the Competitiveness Council of Ministers in Brussels on 22 September. In addition to the 15 Member States, the 10 accession countries also attended.
Political agreement was reached on the proposal for a Directive on Free Movement of EU Citizens and their Family Members, but only after extensive discussions and after a new Presidency compromise text. This new text favoured the UK because, amongst other points, the Commission accepted 3 months as the period EU citizens can reside in another Member State without conditions, rather than the 6 months they had proposed. Separately, there was also political agreement on Pedestrian protection (proposal for a directive on standards and tests to make cars safer in the event of collisions with a pedestrian). Home Office officials will be writing separately in due course with a copy of the final text of the Common Position.
The Council held extensive debates on the Internal Market and Competitiveness Strategy, and on Chemicals. I underlined the importance of redoubling efforts on the Lisbon agenda, and the Commission noted that reforms are taking too long. On Chemicals, the Council heard a presentation from Commissioner Liikanen on the findings of its Internet consultation. I intervened to send a strong message to the Commission that major changes were necessary.
The Council also heard progress reports on the Community Patent; the signing of the framework agreement between the European Community and the European Space Agency (for which there was agreement on co-operation); and ITER (International Nuclear Fusion Energy Research project). [On ITER, the Presidency stressed the importance of making a decision on 27 November as well as the need for ITER to be in Europe].
Conclusions on the pharmaceutical sector were agreed, mainly supporting further benchmarking work and reflection on the effects of national priority regulation. Other conclusions agreed were on endorsing the Commission’s action plan for modernising company law and corporate governance; welcoming the Commission’s work plan on making EU contract law more coherent; and urging further effects to move forward with
128 ESC, 33rd Report, 2002-03
the biotechnology strategy and roadmap. The Council considered draft conclusions endorsing the Commission’s action plan for increasing investment in R & D so as to meet the target of 3% of GDP and the resolution agreed.
The Commission’s proposed ethical guidelines for stem cell research funded by the 6th R & D framework programme were discussed over lunch. There is a continued split on this dossier, and the Presidency reported back to Council that it had been agreed that the Commission would produce a new proposal following the opinion of the European Parliament in November.
Finally, France requested a discussion on the European Research Council. France underlined the importance of basic research for future competitiveness and growth. The EU needed an agency for science and research along the lines of the US National Science Foundation and France called on the Commission to produce a proposal looking at this idea. The Commission said they shared the belief that support to EU research needed increasing and they were planning to ask for more funding in this area. The issue of an ERC was tied up with the present initiatives to create a European Research Area and they were planning to produce a communication on the latter which the next Presidency could take forward.
7 October 2003
Letter from the Secretary of State at the Department for Environment, Food and Rural Affairs (The Rt. Hon. Margaret Beckett) to the Chairman of the Committee
AGRICULTURE AND FISHERIES COUNCIL: 29 SEPTEMBER 2003 My Hon Friend, the Parliamentary Under-Secretary (Commons) represented the United Kingdom at a meeting of the Agriculture and Fisheries Council in Brussels on 29 September. No Ministers from the Devolved Administrations or Northern Ireland were present.
The agenda was on this occasion a light one. No fisheries items were discussed.
The main item of business was on Genetically Modified Organisms. The Commission presented to the Council a Recommendation on guidelines for strategies to ensure the co- existence of GM and non-GM crops, which it had published in July. The Presidency had circulated a short list of questions on the subject, exploring Member States’ attitudes about the desirability of GM-free production zones, the tolerances for GM material in seeds and organic products; and the liability of producers for the adventitious presence of GMOs in non-GM crops. No decisions were required but discussion revealed a wide range of views. My Hon Friend indicated that he could only give preliminary views because we awaited a report on co-existence from the Agriculture and Environment Biotechnology Commission. He noted that the UK would welcome clarification from the Commission on where the concept of GM free production areas would stand in relation to existing EU law on GM crop production. On tolerances for seeds, decisions should be guided by
ESC, 33rd Report, 2002-03 129
proportionality and practicality and, as regards organic products, we continued to reflect in consultation with interested parties. As to liability, the UK argued that we would want to consider first whether our existing civil law provisions were adequate for handling any disputes arising.
The Commission introduced a paper covering possible reform of the common market organisations for sugar, cotton, olive oil and tobacco. For sugar, the Commission stressed that it wished to see a number of different broad approaches discussed before it decided on specific proposals to be published in the New Year. There was no debate, but Spain and Greece stressed the importance of certain of these products to their agricultures. Denmark signalled that it would be pressing for extensive liberalisation of the sugar regime.
A request by Spain for approval of a national aid to the nut sector was withdrawn from this agenda.
Finally, it may be worth noting that among the measures adopted as ‘A’ items by this Council — that is, formal adoption without debate — were the Council Regulations giving effect to the CAP reforms agreed on 26 June this year. Work will now proceed on detailed implementing measures.
6 October 2003
Letter from the Minister for Europe at the Foreign and Commonwealth Office (Mr Denis MacShane) to the Chairman of the Committee
GENERAL AFFAIRS AND EXTERNAL RELATIONS COUNCIL: 29 SEPTEMBER 2003 I am writing to inform you of the outcome of discussions held at the 29 September General Affairs and External Relations Council in Brussels, in place of my reply to the usual Parliamentary Question.
Outcome of Council Dr MacShane, Minister for Europe, represented the UK at the General Affairs and External Relations Council (GAERC) in Brussels on 29 September.
Conclusions on Iraq, the Middle East Peace Process, Iran, ESDP, Weapons of Mass Destruction, Western Balkans, and Sierra Leone Special Court were agreed by consensus.
General Affairs Session
Progress Of work in other Council configurations The Presidency gave a standard progress report on work in other Councils (Agriculture and Finance).
130 ESC, 33rd Report, 2002-03
Decision to launch the Intergovernmental Conference Ministers held a short exchange of views on procedural arrangements for the Intergovernmental Conference (IGC), ahead of its formal launch on 4 October, in Rome.
Preparation of European Council (Brussels, 16-17 October) The Council examined an annotated draft agenda prepared by the Presidency for the European Council meeting held on 16 and 17 October in Brussels. The Council agreed to discuss this in greater detail at the 13 October GAERC, once an updated draft agenda is made available. The European Council's agenda is expected to include:
• Re–launching the European economy.
• Strengthening the area of freedom, security and justice.
• External relations.
Staff Regulations These were approved by Qualified Majority Vote following confirmation from the Staff Unions that they could accept the latest compromise from the Conciliation Committee.
External Relations Session
Iraq The Council agreed Conclusions. It condemned the terrorist attacks in Iraq; paid tribute to Sergio Viera de Mello; and called for active co-operation between the UN and the Governing Council. Commissioner Patten debriefed on his visit to Iraq on 17 September. The Council also looked ahead to the planned Donors Conference in Madrid on 23-24 October and agreed that the EU would need to play its full part. Further discussion on funding is expected at 13 October GAERC, when the Commission Communication setting out proposals for the European Union’s position on reconstruction will be circulated.
Middle East Peace Process The Council agreed Conclusions recalling the Quartet’s (USA, EU, UN, and Russia) public statement of 26 September in New York. The Council also stressed the need for the Quartet to continue to meet on a regular basis in order to push for continued implementation of the Roadmap by both Israel and Palestine. The Council also welcomed the fact that the US monitoring mission on the ground would make monthly reports to the Quartet.
There was general agreement by Partners that the EU needed to be more proactive in the Peace Process. The Presidency commissioned a report from Marc Otte (EU Special Representative to the Middle East Peace Process) to determine how best to achieve this.
ESC, 33rd Report, 2002-03 131
Iran The Council agreed Conclusions. The Presidency recalled that the Council had expressed its concern about nuclear activities in Iran on a number of occasions. Ministers agreed that continued progress on EU-Iran dialogue would depend crucially on Iran's actions, in particular whether it would sign and implement an Additional Protocol.
The Council also supported the 12 September IAEA Board of Governors Resolution on Iran. It called on Iran to comply with all requirements of the Resolution and fully cooperate with the IAEA to enable the Board to draw definitive conclusions at its next meeting in November. Partners agreed that Iran would be a key external affairs issue for the autumn.
Follow up to WTO Ministerial The Council took note of Commissioner Pascal Lamy’s evaluation of the breakdown in negotiations at the 5th Ministerial Conference of the World Trade Organisation, which took place on 10- 14 September. The Council shared the Commission’s strong regret at the outcome and held a preliminary discussion on how to solve this breakdown; an informal EU trade ministers meeting was considered as a possible next step. There was consensus that multilateralism remained the most optimal way to approach trade issues.
Western Balkans Conclusions were adopted covering a wide range of Western Balkans issues. There was strong support for new UN Secretary General Special Representative Holkeri in Kosovo and for the forthcoming launch in Vienna of dialogue between Belgrade and Pristina on technical issues. Commissioner Patten briefed on his recent visit to Serbia and Montenegro (SaM) and Kosovo. Several Partners underlined the importance of the recent historic gesture of reconciliation between the presidents of SaM and Croatia.
ESDP Conclusions welcomed the EU/UN declaration on co-operation in crisis management, which was signed by Italian Prime Minister Silvio Berlusconi and UN Secretary General Kofi Annan on 24 September during UN General Assembly Ministerial Week. The Council also adopted the decision to launch a police mission in Macedonia (the EU's second civilian crisis management operation).
Non-proliferation of WMD Short Conclusions were agreed. The Council took note of the oral presentation by the Presidency on work in hand under the EU WMD Action Plan. It also welcomed the progress already made under the Action Plan on additional EU funding for the IAEA and increased co-operation with Russia.
132 ESC, 33rd Report, 2002-03
Sierra Leone: Special Court Dr MacShane made the case for Partners to provide additional funding for the Special Court in Sierra Leone. The Council agreed to task the Committee of Permanent Representatives (COREPER) to take forward how to do this.
14 October 2003
Letter from the Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) to the Chairman of the Committee
JUSTICE AND HOME AFFAIRS COUNCIL, 2-3 OCTOBER 2003 I am writing to inform you of the outcome of the Justice and Home Affairs Council that took place in Brussels on the 2-3 October. I represented the UK on the first day while Lord Filkin, from the Department for Constitutional Affairs, represented the UK on the 3 October.
Council Agenda
A points The list of A points was adopted as in document 13058/03 PTS A 47 and ADD 1.
Asylum and Immigration
Follow up of Thessaloniki The Presidency and Commission updated the Council on the work begun since the Thessaloniki Council to tackle illegal immigration. Commissioner Vitorino confirmed that the Commission would, in early November, put forward proposals for the creation of an external border agency. The agency could take over responsibility for cross-border operational co-operation and co-ordination. It would not replace national agencies and nor would it be an EU border guard. There was broad support for this approach.
He also set out his thinking on two new financial instruments to support the return of illegal immigrants to their country of origin. The first of these would improve reception conditions in the receiving country and the second would support enforced returns. Again there was broad support although several Member States said this money should not be seen as an inducement for countries to sign readmission agreements.
There was support for the Commission’s work to include biometric data in visas and residence permits in the EU. The Commission reassured the Council that its work is consistent with what is being done in other international fora and the USA. The Commission proposed using digital photographs and fingerprints and urged the Council to approve this choice by the end of the year.
The Presidency noted general support for the Commission to speed up conclusion of readmission agreements with third countries. The Presidency suggested quotas for legal
ESC, 33rd Report, 2002-03 133
migrants might be useful in this context. In the light of reservations about EU migration quotas the Presidency concluded that the Council should re-examine this question when the Commission published its report on quotas next Spring.
Proposal for a Council Directive on Minimum Standards on Procedures for Granting and Withdrawing Refugee Status There was broad support for a minimum common EU list of safe countries of origin, which Member States could supplement with national lists based on the criteria in the Annex to the Directive.
However, while the UK supported the principle I could not support the criteria set out in the Annex, as the existing text would be inconsistent with UK national legislation.
The discussion centred on the Annex. I made some progress towards bringing the text more in line with UK legislation, in particular, through the inclusion of the test of whether a safe country of origin is generally free from persecution. Nevertheless the revised Annex still contains problems for us and so I maintained a reservation on it.
The UK also kept open the possibility of including provisions in the text giving Member States discretion to designate part of a country as safe or to designate a country as safe for specific groups of people. There was some support for this position.
The Presidency concluded that there was a general consensus on the principle of a minimum common EU list of safe countries but that further negotiation was needed on the criteria, based on the revised Annex. They also noted that most Member States supported adopting an initial list at the same time as the Directive, following consultation with the European Parliament. The Commission was asked to start work on drawing up an initial list. Finally, the Presidency noted that there was no consensus on the need for an EU list of safe third countries.
Immigration Liaison Officers’ (ILO) Network In the light of the UK’s previously expressed concerns recital 11 was revised to clarify the UK’s participation in this Schengen building measure. The Presidency noted a general approach to the text subject to outstanding scrutiny reservations from two Member States and Parliamentary Scrutiny Reservations from two other Member States, including the UK.
Policing/Criminal Law
Operational project entitled “Multinational ad hoc teams for exchanging information on terrorists — start of activities.” Following interventions from three Member States the Presidency said that it would send a strong message to the Terrorism Working Group to speed up its work on this project, which had been under discussion since the JHA Council of 19-20 September 2001.
134 ESC, 33rd Report, 2002-03
Co-operation agreement between Europol and Russia The Presidency reached a general approach on the strategic agreement and said that it would be submitted for adoption and signed in the coming weeks, ideally at the EU-Russia summit.
Draft Council Framework Decision on the execution of confiscation orders With one exception Member States lifted their outstanding reservations on Articles 14 and 17 dealing with the disposal of assets and the costs of executing a confiscation order.
Member States however remained divided on the German proposal for an additional ground for refusing to execute confiscation orders in cases where fundamental rights may have been infringed.
I registered the UK’s opposition to the provision arguing that it is unnecessary, since Article 1 already emphasises the obligation to respect fundamental rights. I also expressed concern that it could undermine the principle of mutual recognition if it gave courts the opportunity to review the substance of decisions made in another Member State. The Commission and one other Member State intervened in similar terms.
Three Member States took the view that the measure was necessary for constitutional reasons but noted that it would only be used exceptionally.
The Presidency informed the Council that it wished to reach agreement on the draft confiscation orders by the end of the year.
Meeting between Ministers of the Member States and Norway and Iceland in Mixed Committee
Framework Decision on the application of the ‘ne bis in idem’ principle The Presidency sought a political steer on whether the ‘ne bis in idem’ rule in Article 2 (right of any person not to be tried twice for the same facts) should be subject to whether any penalty imposed had been enforced.
The Commission and one other were against on the grounds that this would be contrary to Article 50 of the Charter of Fundamental Rights. They said that the issue of enforcement of sentences should be addressed in a separate mutual recognition instrument.
Six Member States intervened favouring such an exception on the basis that it would close a potential loophole in the text. The Presidency concluded that further technical work was needed on the issue.
Along with a majority of others I indicated UK support for the Presidency’s compromise text in Article 3. The revised Article means that the procedure for deciding which country should prosecute when more than one has jurisdiction (lis pendens) is indicative, rather than binding. Only one Member State maintained its reservation, which it linked to the outcome of Article 4 on exceptions.
ESC, 33rd Report, 2002-03 135
There was also a discussion on Article 4 and the scope of the exceptions to the ‘ne bis in idem’ rule. Three delegations opposed the inclusion of any exceptions, arguing that these undermined the recognition of each others’ judicial decisions and efforts to build an area of freedom, security and justice. As a compromise, they could accept the inclusion of the exceptions with a review mechanism and automatic deletion after 5 years.
With four other Member States I insisted on maintaining the exceptions, without a sunset clause, particularly in respect of a country’s right to prosecute conduct occurring within its territory. Three other Member States favoured a more limited list in Article 4.
Civil Law Issues
Proposal for a Council Regulation on Parental Responsibility Final political agreement was reached on this difficult dossier, with the UK’s key concern on the need to make the relation between the Regulation and the 1980 Hague Convention clear in the text satisfactorily resolved on the basis of a compromise proposal negotiated between UK and France and presented by the Presidency.
Formal adoption will follow at the November Council once another Member State has lifted its parliamentary scrutiny reserve. In order to accommodate that Member States’ concerns about the need for sufficient time to implement domestically before the date of application of the Regulation, it was agreed that it would come into effect from 1 March 2005.
Decision in the Perspective of Concluding the 1996 Hague Convention The Presidency asked the UK and Spain to resolve bilaterally the issue over Gibraltar which, once the European Parliament’s Opinion is delivered on 8 October, will be the only outstanding issue. Adoption of the Decision was a Presidency priority.
AOB
Afghan Drugs Strategy Over lunch on the first day I sought greater practical and financial support for efforts to counter narcotics in Afghanistan. There was general support, which will be pursued at official level.
Draft Council Resolution on a more coherent contract law The Netherlands and France stressed the importance of discussing proposals on a more coherent contract law in the JHA Council to ensure a comprehensive civil law approach, while bearing in mind the consumer protection elements of the proposals. The Presidency concluded that this would be discussed at a future JHA Council.
Juvenile Delinquency The Presidency highlighted a conference on juvenile delinquency taking place near Naples on 30/31 October and urged that high-level officials attend.
136 ESC, 33rd Report, 2002-03
The next JHA Council will take place in Brussels on Thursday 6 November.
13 October 2003
Letter from the Parliamentary Under-Secretary at the Department for Transport (Mr David Jamieson) to the Chairman of the Committee
TRANSPORT, ENERGY AND TELECOMMUNICATIONS COUNCIL — 9 OCTOBER 2003 A transport session of the Transport, Energy and Telecommunications Council was held in Luxembourg on 9 October. I represented the United Kingdom. This is a summary of the outcome.
In summary, the Council reached a general approach on maritime and ports security and on road tunnel safety, and political agreement on three aviation proposals.
The Council reached a general approach on the regulation on maritime and port security. The regulation implements in EU law the new International Maritime Organisation security regime agreed in December 2002. The agreed text reflects the position I outlined in the debate in European Standing Committee A on 10 September. In particular, we and others were successful in ensuring that application to most domestic traffic would be decided by Member States on a case by case basis following a security risk assessment.
There was a policy debate on a draft directive which would impose criminal sanctions for pollution from ships caused by gross negligence. Member States agreed on the need to integrate international requirements into EU legislation, and agreed with the Commission’s view that the measures taken should be dissuasive. There were objections to the proposed inclusion of criminal sanctions in Community first pillar legislation, with nearly all Member States looking for a third pillar instrument for criminal sanctions. There was concern over extension beyond the requirements of the IMO convention on prevention of pollution from ships (MARPOL), but agreement that it should be possible to adopt measures covering ships flying third country flags. Some Member States wished to ban insurance against fines, while others took the view that insurable fines were more likely to be paid.
The Commissioner presented a proposal for a revision of the transport trans-European network (TEN) guidelines which would add 22 new TEN projects to the list of 14 priority projects agreed at the Essen European Council and improve project coordination, and a proposal to increase the maximum rate of EU grant to projects (up to 30% for some key cross-border elements). She suggested lorry charging revenues and public/private partnerships would help with the increased funding requirements. The aim was to realise the benefits of enlargement and promote growth. There was broad support for the Commission’s approach. I referred to the need for financial discipline to be respected and agreed with other Ministers who had emphasised the importance of public/private partnerships. I stated that the UK does not agree with an increase in the maximum rate of grant above 10%.
ESC, 33rd Report, 2002-03 137
The Council reached a general approach on the Directive establishing minimum safety standards for tunnels on the Trans-European Road Network (TERN). The Presidency will now seek early agreement with the European Parliament. I noted that the UK had some concerns about the level of compliance costs, but recognised that significant reductions in costs had been achieved during the negotiations.
The Council reached political agreement on the regulation on negotiation and implementation of air service agreements with third countries. The revised text incorporated amendments from the European Parliament.
The Commission reported on the first round of aviation negotiations with the US held in Washington on 1 and 2 October. Both sides recognised that further detailed discussion on technical issues will be required before agreement can be reached.
The Council reached political agreement on the regulation allowing it to take measures against third countries which subsidise their airlines or support other unfair pricing practices. These measures largely follow existing trade defence instruments.
The Council also reached political agreement on the Regulation on insurance requirements for air carriers and aircraft operators. The proposal sets minimum levels of insurance for aircraft and passengers in the event of accidents and/or war or terrorism incidents.
The Commission presented its proposals to amend Directive 1999/62/EC (known as the ‘Eurovignette’ Directive) on the framework for Member State charges for lorries' use of road infrastructure. The proposal sets down rules for the levying of charges on lorries over 3.5 tonnes on the trans-European road network (TERN) and potentially on main roads parallel to the TERN. It also makes clear that Member States are free to apply charges to any other roads provided these respect Treaty principles. Charges would need to be related to infrastructure costs and non-insured accident costs. But they could be varied by type of vehicle, type of road and time of day. The Commission's intention is that all revenue should be hypothecated to transport investment and maintenance, under the supervision of an independent national infrastructure authority. While broadly welcoming the proposal, I joined several other Ministers in saying that the hypothecation requirement would have to be dropped if there was to be progress. I also warned of potential problems over the use of a transport legal base alone if, as seemed possible, Member States’ tax arrangements would be affected — in which case any Directive should be adopted by unanimity in the Council.
Under Any Other Business, the Commissioner reported on the successful outcome of the Commission’s negotiations with China over cooperation on the Galileo satellite navigation project. The Netherlands called on the Commission to bring forward its proposals for river and inland waterway information services.
There were no formal votes at this Council.
16 October 2003
138 ESC, 33rd Report, 2002-03
Formal minutes
Wednesday 15 October 2003
Members present:
Mr Jimmy Hood, in the Chair
Mr Richard Bacon Mr David Heathcoat-Amory Mr Michael Connarty Mr Jim Marshall Mr Wayne David Angus Robertson Mr Terry Davis Mr Anthony Steen Jim Dobbin Mr Bill Tynan
The Committee deliberated.
Draft Report, proposed by the Chairman, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Paragraphs 1.1 to 38.3 read and agreed to.
Paragraph 38.4 read, amended, and agreed to.
Paragraphs 39.1 to 45 read and agreed to.
Resolved, That the Report be the Thirty-third Report of the Committee to the House.
Ordered, That the Chairman do make the Report to the House.
[Adjourned till Wednesday 22 October at half-past Two o’clock.
ESC, 33rd Report, 2002-03 139
Standing order and membership
The European Scrutiny Committee is appointed under Standing Order No.143 to examine European Union documents and— a) to report its opinion on the legal and political importance of each such document and, where it considers appropriate, to report also on the reasons for its opinion and on any matters of principle, policy or law which may be affected; b) to make recommendations for the further consideration of any such document pursuant to Standing Order No. 119 (European Standing Committees); and c) to consider any issue arising upon any such document or group of documents, or related matters.
The expression ‘European Union document’ covers — i) any proposal under the Community Treaties for legislation by the Council or the Council acting jointly with the European Parliament; ii) any document which is published for submission to the European Council, the Council or the European Central Bank; iii) any proposal for a common strategy, a joint action or a common position under Title V of the Treaty on European Union which is prepared for submission to the Council or to the European Council; iv) any proposal for a common position, framework decision, decision or a convention under Title VI of the Treaty on European Union which is prepared for submission to the Council; v) any document (not falling within (ii), (iii) or (iv) above) which is published by one Union institution for or with a view to submission to another Union institution and which does not relate exclusively to consideration of any proposal for legislation; vi) any other document relating to European Union matters deposited in the House by a Minister of the Crown.
The Committee’s powers are set out in Standing Order No. 143.
The scrutiny reserve resolution, passed by the House, provides that Ministers should not give agreement to EU proposals which have not been cleared by the European Scrutiny Committee, or on which, when they have been recommended by the Committee for debate, the House has not yet agreed a resolution. The scrutiny reserve resolution is printed with the House’s Standing Orders, which are available at www.parliament.uk.
Current membership Jimmy Hood MP (Labour, Clydesdale) (Chairman) Richard Bacon MP (Conservative, South Norfolk) Colin Breed MP (Liberal Democrat, Cornwall South East) William Cash MP (Conservative, Stone) Michael Connarty MP (Labour, Falkirk East) Tony Cunningham MP (Labour, Workington) Wayne David MP (Labour, Caerphilly) Terry Davis MP (Labour, Birmingham Hodge Hill) Jim Dobbin MP (Labour, Heywood and Middleton) David Heathcoat-Amory MP (Conservative, Wells) Mark Hendrick MP (Labour, Preston) Jim Marshall MP (Labour, Leicester South) Angus Robertson MP (SNP, Moray) John Robertson MP (Labour, Glasgow Anniesland) Anthony Steen MP (Conservative, Totnes) Bill Tynan MP (Labour, Hamilton South)