REPORT on the proposal for a European Parliament and Council Decision establishing a general framework for Community activities in favour of consumers (COM(97)0648 - C40077/98 - 98/0028(COD))

    24 September 1998

    Committee on the Environment, Public Health and Consumer Protection
    Rapporteur: Mr Phillip Whitehead

    By letter of 30 January 1998 the Commission submitted to Parliament, pursuant to Article 189b(2) of the EC Treaty and to Article 129a of the EC Treaty, the proposal for a European Parliament and Council Decision establishing a general framework for community activities in favour of consumers.

    At the sitting of 20 February 1998 the President of Parliament announced that he had referred this proposal to the Committee on the Environment, Public Health and Consumer Protection as the committee responsible and the Committee on Budgets and the Committee on Legal Affairs and Citizen's Rights for their opinions.

    At its meeting of 18 March 1998, the Committee on the Environment, Public Health and Consumer Protection appointed Mr Whitehead rapporteur.

    It considered the Commission proposal and the draft report at its meetings of 20 July 1998 and 22 September 1998.

    At the latter meeting it adopted the draft legislative resolution unanimously.

    The following took part in the vote: Collins, chairman; Poggiolini, Dybkjær and Lannoye, vicechairmen;Whitehead, rapporteur; Apolinário, Bébéar, Blokland, Cabrol, Correia (for Bowe), Diez de Rivera Icaza, Eisma, Florenz, González Alvarez, Grossetête, Hulthén, Kestelijn-Sierens (for Olsson), Lange (for Graenitz), Liese (for Flemming), McKenna, Needle, Pollack, van Putten, RothBehrendt, Schlechter (for Lienemann), Schleicher, Schnellhardt, Virgin, and White.

    The opinion of the Committee on Budgets is attached; the Committee on Legal Affairs and Citizens' Rights decided on 17 March 1998 not to deliver an opinion.

    The report was tabled on 24 September 1998.

    The deadline for tabling amendments will be indicated in the draft agenda for the relevant partsession.

    A LEGISLATIVE PROPOSAL - DRAFT LEGISLATIVE RESOLUTION

    Proposal for a European Parliament and Council Decision establishing a general framework for community activities in favour of consumers (COM(97)0648 - C4-0077/98 - 98/0028(COD))

    This proposal is approved with the following amendments:

    Text proposed by the Commission[1]

    Amendments by Parliament

    (Amendment 1)

    Citation 3a (new)

    Having regard to the Declaration by the European Parliament, the Council and the Commission of 6 March 1995 on the incorporation of financial provisions into legislative acts.

    (Amendment 2)

    Recital 2a (new)

    whereas consumer confidence in products and services is essential to the smooth functioning of the internal market,

    (Amendment 3)

    Recital 4

    whereas the Community intends to give new impetus to its action in favour of consumers and their health in order to enable them to become a driving and innovatory force,

    whereas the Community is committed to giving new impetus to its action in favour of consumers and their health in order to enable them to become a driving and innovatory force,

    (Amendment 4)

    Recital 4a (new)

    whereas the Luxembourg Council's declaration on food safety recognises that everything must be done to restore public confidence severely shaken by the BSE crisis, and whereas the general framework for activities in favour of consumers is essential to achieving this aim,

    (Amendment 5)

    Recital 11

    whereas the implementation of this general framework should make it possible to take better account of consumers' interests in the other policies of the Community, notably in the fields of public health, research and transport,

    whereas the implementation of this general framework should make it possible to take better account of consumers' interests in all other relevant policies of the Community and must ensure the development of consumer participation in the standardisation process,

    (Amendment 6)

    Recital 13

    whereas a harmonised and neutral approach to matters related to the protection of consumers and their health is indispensable and as the Community has at its disposal the skills of the Joint Research Centre,

    whereas a harmonised and neutral approach to matters related to the protection of consumers and their health is indispensable and whereas this general framework shall provide the necessary financial support to ensure the provision of high quality, independent scientific advice, globally recognised risk assessment methods and effective control and inspection methods; whereas the Community also has at its disposal the skills of the Joint Research Centre,

    (Amendment 7)

    Recital 14a (new)

    whereas action under this framework shall contribute to promoting the consumer interest at international level,

    (Amendment 8)

    Recital 15

    whereas it is necessary to draw up a list of priority areas for Community action in order to help achieve maximum effectiveness throughout the planned period,

    whereas it is necessary to evaluate past achievements and draw up a policy priority programme to implement this general framework in order to help achieve maximum effectiveness throughout the planned period; and whereas this should include an action plan,

    (Amendment 9)

    Recital 15a (new)

    whereas maximum effectiveness of Community action is dependent on regular consolidation, review and updating of this general framework,

    (Amendment 10)

    Recital 15b (new)

    whereas the implementation of this general framework should contribute to the transposition into national law of, and monitoring of compliance with, existing Community legislation in the field of consumer protection,

    (Amendment 11)

    Recital 16

    whereas it is also necessary to strengthen the bodies and organisations that are active in the area of consumer protection so that they can be a more effective driving force for making consumers aware of the priorities set by the Community,

    whereas organisations that are active in the area of consumer protection should also be given more opportunity to contribute actively to the determination of consumer policy,

    (Amendment 12)

    Recital 21

    whereas it is necessary to establish effective methods for evaluation and monitoring and to make provision for informing the target groups concerned in an appropriate way,

    whereas it is necessary to establish effective methods for evaluation and monitoring and to make provision for informing the target groups concerned in an appropriate and systematic way,

    (Amendment 13)

    Recital 21a (new)

    whereas, immediately after ratification, the Commission shall present a proposal to adapt this general framework to take into account the extended scope for action in the consumer protection field in the Amsterdam Treaty,

    (Amendment 14)

    Chapter I, Article 1, paragraph 3

    3. This general framework of activities shall be established from 1 January 1999 to 31 December 2003. The financial allocation for carrying out the activities planned in this general framework shall be 114 million ECU for the whole period.

    3. This general framework of activities shall be established from 1 January 1999 to 31 December 2003. The financial allocation for carrying out the activities planned in this general framework shall be130 million ECU for the whole period.

    Annual appropriations shall be authorised by the budgetary authority within the limits of the financial perspectives.

    Annual appropriations shall be authorised by the budgetary authority within the limits of the financial perspectives.

    (Amendment 15)

    Chapter I, Article 2, point (a)

    (a) actions taken by the Commission to support and supplement the policy conducted by the Member States, and to develop, update and monitor it;

    (a) actions taken by the Commission to support and supplement the policy conducted by the Member States, and to develop, update, monitor and enforce it ;

    (Amendment 16)

    Chapter I, Article 4, point (d)a (new)

    (d)a. protecting the legal interests of consumers, their right to redress and access to justice.

    (Amendment 17)

    Article 5(3), 2nd subparagraph

    In addition, the financial support may not, in principle, exceed 50% of the expenditure involved in carrying out the eligible activities.

    In addition, the financial support may not, in principle, exceed 50% of the expenditure involved in carrying out the eligible activities. Administrative costs related to the eligible activities shall be taken into account.

    (Amendment 18)

    Article 6(2b) new

    Unpaid work or donation in kind, if properly documented, may be taken into account, up to a level of 20% of total eligible costs, when assessing the organisation's revenue and costs.

    (Amendment 19)

    Article 8(1)

    1. Each year, the Commission shall publish a note in the Official Journal of the European Communities describing the areas for funding and setting out the selection and award criteria and the procedures for application and approval.

    1. Each year, possibly before the end of July, the Commission shall publish a note in the Official Journal of the European Communities describing the areas for funding and setting out the selection and award criteria and the procedures for application and approval.

    (Amendment 20)

    Article 8(3)

    3. Community assistance shall relate to the actions which should take place in the year of the financial contribution or in the following year.

    3. Community assistance, or the first part thereof, shall be granted before the beginning of the implementation of the project selected by the Commission.

    Community assistance shall relate to the actions which should take place in the year of the financial contribution or in the following year.

    (Amendment 21)

    Chapter III, Article 11a (new)

    Article 11a

    1. As soon as the Treaty of Amsterdam comes into force and the new priorities for Consumer Policy are adopted, the Commission shall submit to the Council and the European Parliament a complementary proposal for the adaptation of the objectives, activities and projects laid down in this Decision and their financing.

    2 . The budgetary authority shall, on the complementary proposal from the Commission mentioned above, adjust the financial allocation for this general framework of activities.

    (Amendment 22)

    Annex, point 1, fifth indent

    - Measures relating to consumer products causing danger to consumers.

    - Measures relating to products and services causing potential hazards and danger to consumers.

    (Amendment 23)

    Annex, point 1, sixth indent

    - Dissemination of information about dangerous products and potential risks.

    - Dissemination of information about products and services and the potential hazards and risks associated with them.

    (Amendment 24)

    Annex, point 2, third indent

    - Measures to ensure a level playing field in consumers transactions, taking into account the impact of new technologies, and the development of financial services.

    - Measures to ensure a level playing field in consumers transactions, taking into account the impact of new technologies, the development of financial services and the impact of the Euro.

    (Amendment 25)

    Annex, point 2, indent 3a (new)

    - Measures to promote the transposition into national law and monitoring of compliance with existing Community legislation in the field of consumer protection.

    (Amendment 26)

    Annex, point 2, third indent b (new)

    - Measures to make consumers more aware of the possible benefits of the internal market and to encourage them to take more advantage of these benefits, particularly by means of comparative tests of the prices, product range and quality of goods and services in the various Member States.

    (Amendment 27)

    Annex, point 3, first indent

    - Improving information to consumers about their rights and how to enforce them and raising awareness of manufacturers and consumers about safety aspects of products.

    - Improving information to consumers about their rights and responsibilities and how to enforce them and raising awareness about safety aspects of products and services.

    (Amendment 28)

    Annex, point 3, indent 1a (new)

    - Measures to encourage consumer access to and participation in the information society.

    (Amendment 29)

    Annex, point 3, first indent b (new)

    - Information to consumers concerning protection of privacy and personal data.

    (Amendment 30)

    Annex, point 3, first indent c (new)

    - Dissemination among producers and consumers of knowledge about product safety.

    (Amendment 31)

    Annex, point 3, fourth indent a (new)

    - Improvement of information and promoting consumer awareness of sustainable and environmentally sound patterns of consumption.

    (Amendment 32)

    Annex, point 4, fourth indent

    - Pilot projects promoting sustainable consumption models, notably those that are environmentally friendly.

    - Pilot projects promoting sustainable consumption models, notably those that contribute to choice and encourage behavioural patterns that respect the environmental and social impact of consumption and disposal.

    (Amendment 33)

    Annex, point 4a (new)

    4a. PROTECTING THE LEGAL INTERESTS OF CONSUMERS

    - Improving common extra-judicial procedures.

    - The development of, and support for, measures aimed at facilitating access to justice inside the courts.

    - Measures to assess the specific risks and potential benefits for consumers in the information society including pilot projects to establish cross-border redress systems applicable to the information society.

    - Measures to promote the protection of privacy and data protection.

    - The development of an overall framework to regulate unfair marketing practices.

    Legislative resolution embodying Parliament's opinion on the proposal for a European Parliament and Council Decision establishing a general framework for Community activities in favour of consumers (COM(97)0648 - C4-0077/98 - 98/0028(COD))

    (Codecision procedure: first reading)

    The European Parliament,

    - having regard to the Commission proposal to Parliament and the Council, COM(97)0648 - 98/0028(COD)[2],

    - having regard to Articles 189b(2) and 129a of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C4-0077/98),

    - having regard to Rule 58 of its Rules of Procedure,

    - having regard to the report of the Committee on the Environment, Public Health and Consumer Protection and the opinion of the Committee on Budgets (A4-0334/98),

    1. Approves the Commission proposal, subject to Parliament's amendments;

    2. Calls on the Commission to alter its proposal accordingly, pursuant to Article 189a(2) of the EC Treaty;

    3. Calls on the Council to incorporate Parliament's amendments in the common position that it adopts in accordance with Article 189b(2) of the EC Treaty;

    4. Should the Council intend to depart from the text approved by Parliament, calls on the Council to notify Parliament and requests that the conciliation procedure be initiated;

    5. Points out that the Commission is required to submit to Parliament any modification it may intend to make to its proposal as amended by Parliament;

    6. Instructs its President to forward this opinion to the Council and Commission.

    • [1] () OJ C 108, 7.4.1998, p. 43.
    • [2] () OJ C 108 of 7.4.1998, p. 43

    B EXPLANATORY STATEMENT

    INTRODUCTION

    Europe's consumers have some reason for bewilderment at the current state of validation for the modest expenditure on their behalf envisaged in the good intentions of the European Commission. Your rapporteur had appreciated the opportunity to link the Committee's opinion on the Commission's 3-year programme with the strengthening of the legal base, in the light of the increased scope for action made possible once the Treaty of Amsterdam was ratified. The recent ruling of the European Court of Justice on a challenge to a number of categories of discretionary expenditure has prevented this deliberative approach.

    To be brutally direct, the Commission's decision to suspend the vast majority of consumer funding in the wake of the ECJ judgement necessitates immediate corrective action. The Commission's consumer framework will need to be accepted by both the Council and the European Parliament before the 1 January 1999 if activities on behalf of consumers are to be effectively funded in 1999. It would be a tragedy tinged with farce if this happened. Quite apart from the high hopes and expectations engendered by Article 153 of the Amsterdam Treaty current projects, specifically willed by this Parliament, would be wrecked. There would be no money to finance the indemnities paid to members of the Scientific Committees, or the validation tests essential to rebuilding consumer confidence in beef. The planned information campaign on food safety would be halted. The commendable programmes strengthening consumer organisation in Spain, Portugal, Italy, Greece and the Irish Republic would be vitiated. If this was allowed to happen the European Parliament would stand accused of an inability to will the means for its proclaimed ends. It would be seen not to believe in itself. The Environment, Public Health and Consumer Protection Committee believes this would be profoundly unacceptable. The legal base must be established.

    Nevertheless the ECJ ruling may turn out to be a blessing. It may be, as Churchill famously remarked at a moment of rejection, a blessing which is very effectively disguised. But it will be a real blessing if a secure and impregnable legal base can be established on the debris of this legal defeat. Your rapporteur may have reason later to diverge from the Commission's view of its consumer priorities in the coming triennium, but he believes that the Committee and the European Parliament must stand four square with the Commission on the general principle of setting a programme of legitimacy, logic and relevance.

    THE DRAFT FRAMEWORK

    The Commission proposal for activities in favour of consumers concerns little more than a 1/4 of one percent of community spending. Yet it is essential to the interests of 375 Europeans. Why? Because it will ensure a future for a budget which guarantees that consumer health concerns are effectively addressed, ensures that the consumer voice is heard at European level and reaches out to encourage European citizens to participate in confidence in the single market.

    The Committee believes that this proposal should be immediately adopted in a form which reflects the significantly new responsibilities of the consumer directorate and which ensures that the framework will be supplemented by a Policy programme and adapted to the Amsterdam Treaty.

    The Commission's proposal for activities in favour of consumers establishes a legal base and sets out the financial perspectives for consumer spending for the 1999-2003 period. Its aim is to provide a legal base for spending on budget lines covering both traditional consumer protection activities and measures to improve consumer health.

    The basis of the proposal and the indicative list of activities reflect the scope of Article 129a of the Maastricht Treaty. This article gave the first formal justification to consumer spending which has been funded in an ad hoc fashion for over 20 years.

    THE NEED TO ADAPT THIS PROPOSAL IN THE LIGHT OF AMSTERDAM

    Supporting this proposal now does not deny the need to adapt it to the increased scope for action contained in the new Treaty. Indeed, when the 15 Heads of State and Government agreed the draft Article 153 in Amsterdam, they did so in an effort to ensure a genuine pride of place to consumer protection and consumer health. This was a welcome response to lessons of the BSE crisis which has taught the Union the heavy price to be paid for losing the confidence of its consumers.

    Like European consumer legislation, the contents of the new Article will need to be both implemented and enforced. The Committee therefore calls on the Commission to present a proposal to adapt the decision to the new Consumer Protection article. This proposal must ensure that the Community is capable of:

    - Offering citizens a guarantee that their interests shall be taken into account in defining and implementing other Community policies and activities

    - Extending the Commission's role in monitoring

    - Ensuring a role for the Community in promoting consumer's right to information, education and to organise themselves in order to safeguard their interests

    The proposal should be presented immediately after ratification of the Amsterdam Treaty.

    BUDGETARY ASPECTS

    The budget proposed is 114 million for 5 years. This budget is based on the 22 MECU provisional budget for 1999 adjusted annually over the five year period in line with inflation.

    1999-2003 will be an important time for consumer policy with the challenges surrounding the advent of a new currency, the growing development of the information society and the need to tackle the continued unease about the safety and quality of foodstuffs. It will also be an important time for the expanded Consumer Policy and Consumer Health directorate with its significant new role in ensuring Consumer Health Protection.

    With this in mind the rapporteur is extremely concerned that the budget being proposed for the 19992003 period will not give the pride of place to consumer protection and consumer health assured by Commission President Santer in the wake of the BSE crisis. In fact it will lead to a severe downgrading of consumer protection. The reasons are twofold:

    1. The figures proposed will result in a 12% reduction in funding for consumer protection from 1999 onwards

    The table below shows a breakdown of allocations on consumer budget lines from 1994 onwards.

    1994

    1995

    1996

    1997

    1998

    1999*

    1999*

    B5-100 - Measures in favour of consumers

    10,45

    10,55

    12,05

    11,525

    10,5

    7,4

    12,8

    B5-102 - Consumer information

    5,55

    10,7

    8,0

    7,55

    2,25

    3,2

    -

    B5-103 - Measures to improve consumer health

    -

    -

    -

    0,5

    7,12

    11,4

    9,2

    TOTAL

    16,0

    21,25

    20,05

    19,575

    20,87

    22

    22

    * It should be noted that in the 1999 Provisional Draft Budget consumer spending has been presented under two budget lines. The breakdown for 1999 is therefore given in both the 1998 and 1999 formats.

    From this it is clear that the Directorate General now responsible for Consumer Policy and Consumer Health has had to move resources away from the traditional consumer budget lines in order to fund its new responsibilities.

    Consequently in 1999 alone the consumer information and representation budget line will have 12% less money than in 1998. This will affect many of those activities, including the resources devoted to financial support for consumer organisations and the development of co-operation between enforcement practitioners in the member states, which are essential to restoring consumer confidence in foodstuffs.

    This was certainly not the intention of the European Parliament when it welcomed the Commission's reorganisation. It is essential that the Union puts its money where its mouth is and ensures that consumer policy continues to be supported at the, albeit meagre, levels of the past.

    2. The figures proposed are insufficient to ensure the security of products

    The activities under B5-103 are intended to fund the new responsibilities in the consumer health field. The aim of the measures, as described in the Commission's Communication on Consumer Health and Food safety, are to:

    - Enhance the scientific knowledge needed to assess the potential or proven risks to human health, in respect of food in particular

    - Prepare and implement measures to address potential risks to human health and ensure a high level of health protection in risk assessment, inspection and control

    - Disseminate to all interested parties and the general public the results of research

    The table below sets out the breakdown for the provisional budget for 1999 on which spending under the consumer framework is based.

    B5 -103 - MEASURES TO IMPROVE CONSUMER HEALTH

    APB FOR 1999(MECU)

    Scientific Committees

    2

    Risk Assessment

    2

    Inspection and Control

    1,2

    Product Safety:

    EHLASS

    1,5

    Rapex and other measure

    0,3

    Informational activities

    0,6

    Other initiatives

    1,6

    TOTAL

    9,2

    As the breakdown shows, a key component of consumer spending for 1999 is the 1.5MECU designated for the European Home and Leisure Accident Surveillance System (EHLASS). Although this system deserves support it has no immediate direct impact on consumer health. It is also not a product safety measure. The rapporteur is extremely concerned by the fact that the Consumer Health budget, and a priority section of this budget, is being used in this way. This will significantly reduce the overall consumer budget and will leave only 0,3MECU to secure improvements in product safety (including food product safety) for Europe's 375 million consumers.

    OVERVIEW OF BUDGET PROPOSED

    The Environment, Public Health and Consumer Protection Committee believes that its targets need to be measured against a proper balance between traditional consumer spending and new initiatives.

    YEAR

    1999(MECU)

    2000(MECU)

    2001(MECU)

    2002(MECU)

    2003(MECU)

    TOTAL(MECU)

    Commission's Proposal

    22,0

    22,5

    23,0

    23,0

    23,5

    Restoring traditional consumer protection

    1,5

    1,5

    2,0

    2,5

    3,0

    Ensuring genuine consumer health expenditure

    1,5

    1,5

    1,5

    1,5

    1,5

    YEARLY TOTAL

    25

    25,5

    26

    26,5

    27

    130

    This budgetary proposal is in line with the priority placed on food safety in the European Parliament's guidelines for the 1999 budget and with the Parliament's reports on both the Temporary and Followup Committees of Inquiry into BSE. It is also in line with President Santer's commitment to giving "pride of place” to consumer protection and consumer health and with the Luxembourg Council's declaration on food safety which states that "everything must be done to restore public confidence severely shaken by the BSE crisis”.

    The Committee has also considered a preliminary scan of the significant omissions in the Commission's plans for the triennium. Support for the general aims of the Commission should not preclude a sturdy scepticism about the reasons why progress in certain key areas has not been made.

    THE FALLIBILITY OF THE INDICATIVE AREAS FOR ACTION

    In an annex to the Framework the Commission sets out the so-called "Indicative activities by area'. These are divided under the following four headings:

    - Consumer Health and Safety

    - Protecting the Economic Interests of consumers as regards products and services

    - Educating and Informing consumers

    - Promotion and Representation of consumers interests.

    This is only an indicative list of activities that will be resourced over the 5 year period but the Committee is concerned that:

    - No specific reference is made to the funding of activities aimed at securing consumer access to justice

    While some of the activities essential to securing consumer access to justice and redress are presented as measures to promote economic interests or to educate and inform, the Committee believes that specific provision should be made for actions aimed at protecting the legal interests of consumers. Activities here would include measures to establish appropriate redress mechanisms in the information society, measures to promote privacy and data protection and continued support for action to facilitate access to justice inside the courts as well as outside them.

    - There is no reference to the need to represent consumers' financial interest in the run up to the single currency

    Confidence in the Euro will depend on the ability to reassure consumers that they will not bear the cost of conversion or suffer from prices being lifted to the nearest 99 cents. Particular difficulties faced by the elderly, visually impaired and economically disadvantaged also need to be tackled. It is essential that the consumer Directorate General and the Consumer Committee continue to support and supplement positive initiatives like the recent agreement between Consumer Associations and Professional Associations on the transition to the Euro and the Euro round tables. Support should also allow for pilot projects and contribution to non-legislative initiatives.

    - There is no direct reference to measures to secure effective implementation and enforcement of community legislation

    Implementation failures continue to undermine consumer protection across the Union. This is demonstrated by the fact that 6 member states have yet to transpose the timeshare directive over a year after the deadline. Further work is urgently needed to follow-up on the Commission's working document on the Enforcement of European Consumer Legislation and on the conclusions of the International Conference on Enforcement in Edinburgh.

    In addition, inclusion of activities aimed at securing international representation and building a sustainable food policy in the interests of consumers would also have been welcome. As the opinion of the Economic and Social Committee has pointed out, action should also ensure that grass roots organisations are encouraged to tender for funding and not dissuaded by payment delays or red tape. The Committee calls on the Commission to take up these points in its forthcoming Communication on Consumer Policies.

    The Committee has high hopes for this Communication, which should consolidate on past achievements and set a clear plan of action to take consumer policy forward into the next millennium. With this in mind, the Committee would urge the Commission to include in the Communication:

    - An evaluation of achievements over the 1996-1998 period, to consolidate on work already done and establish what needs to be addressed

    - Concrete proposals to improve the implementation, transposition and enforcement of consumer policy

    - An assessment of the new consumer protection article agreed at Amsterdam and concrete proposals for securing the integration of consumer concerns and promoting consumers' right to information and education

    - A targeted and clear action plan that sets the priorities and direction of consumer policy for the 1999-2002 period.

    This Parliament can be remembered, inter alia as the assembly which endorsed, expanded and implemented Article 129a of Maastricht and Article 153 of Amsterdam. Or it can go down as a supine body, happy to drift, an unwitting accomplice of those who would sacrifice consumer expenditure in its final year. This Committee wants to be part of a supportive consumer policy, not a negative one. We believe the European Parliament will think the same.

    2 September 1998

    OPINION

    (Rule 147)

    for the Committee on the Environment, Public Health and Consumer Protection

    on the Proposal for a European Parliament and Council Decision establishing a general framework for community activities in favour of consumers (COM(97)0684 - C4-0077/98 - 98/0028(COD))

    Committee on Budgets

    Draftsman: Mr Carlos PIMENTA

    PROCEDURE

    At its meeting of 25 February 1998, the Committee on Budgets appointed Mr Carlos Pimenta draftsman.

    It considered the draft opinion at its meeting of 2 September 1998.

    At this meeting it adopted the following conclusions with one vote against and no abstentions.

    The following took part in the vote: Samland, chairman; Tillich, vice-chairman; Pimenta, draftsman, Brinkhorst, Christodoulou (for Bardong), Colom I Naval, Dührkop Dührkop, Fabre-Auprespy, Haug, Kellet-Bowman (for Böge), Seppänen, Tappin, Virrankoski and Wynn.

    1. Introduction

    Each significant Community activity in the budget, such as consumer protection activities, requires a legal basis. The financial resources for these actions have always been very limited, and were based on three year priority programmes. The monies available are mainly used for information to the consumer, for the improvement of the representation of consumer organisations, especially in those countries where this representation is not yet well developed, and for European level consumer umbrella organisations. Consumer policy has become much more important since the BSE crisis, as it became clear that neglecting consumer interests could have disastrous consequences for public health.

    2. The Commission proposal

    The Commission now proposes a framework which should serve as a general and broad legal basis for the activities with financial consequences in the area of consumer protection. The Commission remarks that the proposal does not intend to lay down the priorities for future consumer policy. The three year priority programmes fulfil that task. Moreover, after the entry into force of the Treaty of Amsterdam the scope of the present framework might have to be broadened as that Treaty stipulates that "Consumer protection requirements shall be taken into account in defining and implementing other Community policies and activities".

    3. Financial aspects

    The amounts available for consumer actions have never risen much above ECU 20 million. The actions were a priority of Parliament and it is perhaps because of this that the Council cut those provisions year after year in its draft budget. The Commission now proposes an amount of 114 million euros for the five years duration of the framework. Taking into account that the Amsterdam Treaty may lead to an increase of Commission activities in the area, the Commission should have used the opportunity to propose a more significant amount. Such a pro-active approach would have been more dynamic than waiting for and reacting to developments.

    4. Staff matters

    The Commission states that 65 posts will be needed for the actions under this framework. No new posts are proposed. As the programme only focuses on the financial aspects of the actions in the area of consumer protection, and not the legislative actions, the number of staff seem extraordinarily high. DG XXIV has a total of 210 permanent and 23 temporary posts and about 105 of these posts are for the Food and Veterinary Office (FVO).

    5. The amendments

    NGOs will be the main beneficiaries of the financial support that the framework will provide and therefore it seems appropriate that administrative costs and contributions in kind are taken into account when calculating the level of the Community contribution to the activity or core-funding. The Parliament proposed such amendments when discussing the "Commission proposal on a Community action programme promoting non-governmental organizations primarily active in the field of environmental protection". The Council has taken Parliament's suggestions on board[1] and your draftsman proposes to add the amendments here as well. The same applies for the amendment concerning the accounts of the NGOs receiving funding from the Community.

    Your draftsman is of the opinion that core funding of consumer organisations should decrease over time. Over the last 10 years or so this sort of funding was provided too automatically and a more critical attitude towards consumer organisations, especially those working on a European level, is appropriate. Core funding can only be of a temporary nature. The available means should be used as much as possible for the co-financing of actions.

    The Commission does not propose a timetable to handle the requests for subsidies or for the cofinancing of activities. Your draftsman is of the opinion that such a timetable brings more regularity to the whole spending process and should therefore be introduced. It also brings more predictability which is in the interests of the beneficiaries and improves the implementation of the budget. Moreover, the whole procedure of sending in applications, etc. should take place at least twice a year.

    The reporting of the activities should not only have the character of an overview of monies spent but should indicate whether the European tax payer has received value for money. The times when consumer organisations received money from the Community budget without much evaluation of their use of the money should now really be over. Reporting should consist of critical evaluation of past actions. It seems therefore appropriate to have external experts participate in the evaluation process.

    6. Conclusions

    The Committee on Budgets requests the Committee on the Environment, Public Health and Consumer Protection to take the following amendments into account:

    (Amendment 1)

    Indent 3 (a) new

    Having regard to the Declaration by the European Parliament, the Council and the Commission of 6 March 1995 on the incorporation of financial provisions into legislative acts.

    (Amendment 2)

    Article 5(3)

    The conditions for granting financial support are set out in Articles 7-9.

    The conditions for granting financial support are set out in Articles 7-9.

    In addition, the financial support may not, in principle, exceed 50% of the expenditure involved in carrying out the eligible activities.

    In addition, the financial support may not, in principle, exceed 50% of the expenditure involved in carrying out the eligible activities. Administrative costs related to the eligible activities are taken into account as far as they are in conformity with Art. 6(2a).

    (Amendment 3)

    Article 6(2a) new

    A financial contribution to cover certain administrative costs will be considered only for NGOs or a network of NGOs working at a European level, taking account of their general work programme.

    (Amendment 4)

    Article 6(2b) new

    Unpaid work or donation in kind, if properly documented, may be taken into account, up to a level of 20% of total eligible costs, when assessing the organisation's revenue and costs.

    (Amendment 5)

    Article 7 becomes art 7(1)

    Article 7(1a) new

    In order to receive a grant in excess of 150 000 euro, a non-governmental organization's accounts for the preceding two years must be certified by a registered auditor, as must also the accounts for the period in which the grant is used. To receive a grant of less than 150 000 euro, a non-governmental organization's accounts must be available in a form recognized by the Commission for the preceding two years and maintained in this form for the period in which the grant is used. The NGOs annual activity report and their annual financial report for the years in which they receive EC funding will be sent to the budgetary authority.

    (Amendment 6)

    Article 8 (1)

    Each year, the Commission shall publish a note in the Official Journal of the European Communities describing the areas for funding and setting out the selection and award criteria and the procedures for application and approval.

    Each year, the Commission shall publish, before 31 January and 31 July a note in the Official Journal of the European Communities describing the areas for funding and setting out the selection and award criteria and the procedures for application and approval.

    (Amendment 7)

    Article 8 (2)

    Having assessed the proposals, the Commission shall select the activities and projects referred to in Chapter II which are to receive financial support. This decision shall lead to the conclusion of a contract with the recipients responsible for implementation, concerning the rights and obligations of the parties.

    Having assessed the proposals, the Commission shall select, within four months from the dates mentioned in Art 8(1), the activities and projects referred to in Chapter II which are to receive financial support. This decision shall lead to the conclusion of a contract with the recipients responsible for implementation, concerning the rights and obligations of the parties. The Commission shall organize that the contracts are signed within five months from the dates mentioned in Art 8(1).

    (Amendment 8)

    Article 8 (4)

    A list of the recipients and of the actions funded under this framework shall be published each year, with an indication of the amount of the assistance.

    A list of the recipients and of the actions funded under this framework shall be published each year, within four months from the dates mentioned in Art 8(1), with an indication of the amount of the assistance.

    (Amendment 9)

    Article 10

    The Commission shall see to it that the actions funded by the Community are evaluated regularly. These evaluations may be carried out by the Commission and by independent experts employed to this end.

    The Commission shall see to it that the actions funded by the Community are evaluated every two years. These evaluations shallbe carried out by the Commission in cooperation with independent experts employed to this end, and forwarded to the two branches of the budgetary authority.

    • [1] () See the relevant Council Decision: 9⅞72/EC; O-J. L 354, of 30 December 1997, pages 25 to 29.