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HC 42-xxx

House of Commons

European Scrutiny Committee

Thirtieth Report of Session 2003-04 Documents considered by the Committee on 9 September 2004, including:

Security features and biometrics in EU passports

HC 42-xxx Published on 22 September 2004

by authority of the House of Commons London: The Stationery Office Limited

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House of Commons

European Scrutiny Committee

Thirtieth Report of Session 2003-04 Documents considered by the Committee on 9 September 2004, including:

Security features and biometrics in EU passports

Report, together with formal minutes

Ordered by the House of Commons to be printed 9 September 2004

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/escom. 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, 30th Report, 2003-04 1

Contents

Report Page

Documents for debate

1 HO (25390) Security features and biometrics in EU passports 3

Documents not cleared

2 C&E (24538) (25812) Value added tax on postal services 6

3 DFES (25863) Youth in Action programme 2007-13 8

4 DFT (25436) (25437) (25438) (25439) (25455) (25456) Third Railway Package 12

5 DTI (25839) Chernobyl nuclear power plant 15

6 DWP (25613) European Agency for Safety and Health at Work 18

7 HO (25637) Procedural rights in criminal proceedings 21

Documents cleared

8 DFID (24363) Climate change and development cooperation 24

9 DFID (25871) Public-private partnerships in developing and transition countries 26

10 DTI (25858) Single Market Scoreboard 31

11 FCO (25840) World Summit on Information Society 33

12 HMT (25920) Draft Budget 2005 35

13 HO (25764) Access to information by law enforcement agencies 40

14 HO (25789) The Council of Europe Proceeds of Crime Convention 44

15 HO (25831) Asylum procedure 46

16 ODPM (24613) Management of waste from the extractive industries 49

Documents not raising questions of sufficient legal or political importance to warrant a substantive report to the House

17 List of documents 53

Appendix 1: report on Council meeting 57

Formal minutes 59

Standing order and membership 60


1 Security features and biometrics in EU passports

(25390) 6406/1/04 COM(04) 116

Draft Council Regulation on standards for security features and biometrics in EU citizens’ passports

Legal base Article 62(2)(a) EC; consultation; unanimity Department Home Office Basis of consideration Minister’s letter of 18 August 2004 Previous Committee Report HC 42-xxix (2003-04), para 5 (21 July 2004) To be discussed in Council No date set Committee’s assessment Legally and politically important Committee’s decision For debate in European Standing Committee B

Background

1.1 In December 2003, the European Council invited the Commission to make a proposal for the introduction of biometric identifiers in passports.

1.2 By 26 October 2004, countries which wish to continue to obtain the benefit of a waiver of the requirement for a visa to enter the United States must have a programme to issue their nationals with machine-readable passports that are tamper-resistant and incorporate biometric identifiers which comply with the biometric identifier standards established by the International Civil Aviation Organisation (ICAO).

1.3 Article 62(2)(a) of the Treaty establishing the European Community (the EC Treaty) requires the Council to adopt:

“measures on the crossing of the external borders of the Member States, which shall establish standards and procedures to be followed by Member States in carrying out checks on persons at such borders.”

1.4 A Protocol to the EC Treaty provides that the UK is not to take part in the adoption of, or be bound by, any measure made under Title IV of the Treaty (visas, asylum, immigration and other policies related to the free movement of persons) unless the UK gives notice that it wishes to “opt into” the measure. Article 62 is part of Title IV.

1.5 The draft Regulation proposed by the Commission has two main purposes: first, to make EU citizens’ passports more secure; and, second, to establish a reliable link between a passport and its genuine holder by incorporating biometric identifiers. The main provisions of the draft Regulation are:

• Passports issued by Member States must comply with minimum security standards on, for example, the type of paper to be used, printing and issuing techniques, and protection against copying.

4 ESC, 30th Report, 2003-04

• The passport must include a facial image and, if a Member State wishes, it may include fingerprints.

• The Regulation is to apply to ordinary and official passports, short-term passports and travel documents issued in place of passports.

1.6 Passports are checked mainly when the EU’s external borders are being crossed. In the Commission’s view, Article 62(2)(a) of the EC Treaty is the appropriate base for the proposed Regulation.

1.7 In March, the Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) told us that it was the Government’s provisional view that Article 62(2)(a) was not an appropriate legal base for the measure, but she did not say why. We asked the reasons for the Government’s doubts and held the document under scrutiny pending the Minister’s answer.1

1.8 In July, the Minister told us that the Government had now decided that Article 62(2)(a) is an appropriate legal base for the draft Regulation. It had also decided to opt into the measure. The Minister explained that:

“Article 62(2)(a) provides for measures establishing standards and procedures to be followed by Member States in carrying out checks on persons at external borders. Our initial concern with the use of this Article for a measure setting out standards for security features and biometrics in EU passports was that it was not a measure providing for such standards and procedures. Article 62(2)(a) is the legal base for measures requiring, for example, that external borders may only be crossed at authorized crossing points and during fixed hours and that border authorities verify the travel documents of persons crossing such borders. A measure prescribing the security features for EU passports seemed very different from such paradigm Article 62(2)(a) measures.

“Having considered the matter in more detail, however, we have decided that Article 62(2)(a) can be used for this measure. This is on the basis that there is a need for external border authorities to have verification equipment at the external border crossing points that is capable of reading electronically stored data in EU passports. This equipment needs to be able to read the data in all EU passports and this requires compatibility of the data stored and the technical specifications. On this basis the measure proposed is of direct relevance to the exercise of controls at the external border.”

1.9 When we considered the document on 21 July, it seemed to us that the objectives of the draft Regulation are only indirectly related to the establishment of standards and procedures for Member States to follow in making checks at the borders.2 Moreover, in our view, if the aim were to ensure compatibility of equipment to check passports, a specific measure for that purpose would appear more appropriate. We were not yet persuaded, therefore, that it would be proper to use Article 62(2)(a) as the legal base for the proposed

1 (25390) 6406/1/04; see HC 42-xiv (2003-04), para 6 (24 March 2004).

2 See headnote.


Regulation. Accordingly, we asked the Minister to tell us if she considered that there were further arguments which should be taken into account. Pending her reply, we retained the document under scrutiny.

The Minister’s letter

1.10 In her letter of 18 August, the Minister says:

“The justification for using Article 62(2)(a) for this proposal is the need to have common verification equipment at external crossing points on the borders of Member states for use as part of the procedure for carrying out checks on EU citizens crossing the borders. The equipment has to be capable of reading the electronically stored data on the passports of all Member States. This in turn requires harmonisation of the machine readable data stored on EU passports and the technical conditions and specifications relating to such storage. Without such harmonisation it would not be possible to standardise the verification equipment to be used to carry out checks on EU citizens at external border crossing points. So harmonising the security features and technical specifications for EU passports is part of the process of establishing the procedure for carrying out checks on EU citizens at the external border, a matter which falls within Article 62(2)(a).

“We accept that this is not a straightforward use of Article 62(2)(a), hence our initial concern over the use of the Article. For the reasons set out above, however, we consider the proposal is sufficiently related to the standards and procedures to be followed in carrying out checks on EU citizens at external border crossing points to justify it having been brought forward under Article 62(2)(a).”

Conclusion

1.11 We are grateful to the Minister for her further explanation. It seems to us that the precise words of Article 62(2)(a) are crucial: they provide for measures to establish standards and procedures to be followed by Member States “in carrying out checks”. So any proposed measure must relate to the carrying out of the checks themselves and only to that process. In our view, the specification of the contents of passports is distinct from the checking process. We are not persuaded, therefore, that Article 62(2)(a) is the appropriate legal base for the proposed Regulation.

1.12 It is, in our view, vital that the Commission and Council act lawfully in proposing and approving legislation. Because we retain strong doubts about the appropriateness of Article 62(2)(a) as the legal base for this proposal, we recommend the document for debate in European Standing Committee B.


2 Value added tax on postal services

(a) (24538) 9060/03 COM(03) 234 (b) (25812) 11338/04 COM(04) 468

Draft Council Directive amending Directive 77/388/EEC as regards value added tax on services provided in the postal sector Amended draft Council Directive amending Directive 77/388/EEC as regards value added tax on services provided in the postal sector

Legal base Article 93 EC; consultation; unanimity Document originated (b) 8 July 2004 Deposited in Parliament (b) 13 July 2004 Department HM Customs and Excise Basis of consideration EM of 10 August 2004 Previous Committee Report (a) HC 63-xxxiv (2002-03), para 3 (22 October 2003) To be discussed in Council No date known Committee’s assessment Politically important Committee’s decision (a) Cleared

(b) Not cleared; further information awaited

Background

2.1 Directive 77/388/EEC — the Sixth VAT Directive — provides that supplies made by “public postal services” are exempt from value added tax (VAT), as are supplies of postage stamps sold at face value for use for postal services. The present VAT rules mean that the postal services of the Royal Mail, as the public postal service provider, are exempt (except for post to or from destinations outside the EC, which is zero-rated). VAT is chargeable on services provided by other postal operators.

2.2 In October 2003 we last considered document (a), which is a draft Directive to amend the Sixth VAT Directive so as to:

• remove the VAT exemption for public postal services and postage stamps;

• allow an optional reduced rate of VAT for postal services (excluding express services) relating to addressed letters and packets no heavier than two kilograms. This would let Member States, if they so choose, mitigate the impact on prices of removing the existing exemption;

• amend place of supply and VAT liability rules for postal services (excluding express services) relating to addressed letters and packages no heavier than two kilograms and destined for countries outside the EC. This is to avoid difficulties that could arise for postal operators from the existing place of supply rules, which would result in postal services relating to items for delivery outside the EC being taxed at


the zero rate and all other items being taxed (under the Commission’s proposal) at the standard or optional reduced rate;

• allow Member States to have a special tax accounting scheme for postal operators. Such schemes would address potential control and accounting difficulties for postal operators providing, under the Commission’s proposal, a combination of services subject to standard, reduced and zero VAT rates; and

• provide for taxation of terminal dues — that is, payments received by postal operators, as sub-contractors, for delivery of items received from a postal operator outside the Member State concerned.

2.3 We did not clear the document, pending receipt of information on:

• developments in any negotiations that might take place; and

• the outcome of any continuing or formal consultations.

The new document

2.4 In March 2004 the European Parliament asked the Commission to make 12 amendments to the draft Directive. The Commission has accepted four of the suggestions and the amended draft Directive reflects these. The main modifications proposed by the Commission are:

• the proposed special place of supply arrangements and optional reduced rate of VAT would apply for non-express addressed mail items that are not heavier than ten kilograms, rather than the two kilograms in the original proposal, so that the volume of items that would be eligible for the special place of supply rule and the optional reduced rate would be increased. Ten kilograms is suggested as a natural weight borderline which is already established within the postal sector in connection with Member States’ responsibilities to ensure the provision of a universal postal service; and

• Member States would not be required to implement any new Directive until 1 January 2007. This deadline recognises that postal operators would need time to adapt their systems to enable them to implement any VAT changes.

The Government’s view

2.5 The Paymaster General (Dawn Primarolo) says:

“The amendments to the proposal do not alter the fact that the Commission proposal would impose VAT on postal services. The Government is opposed to VAT on stamps, and will continue to make this clear in negotiations on the proposal.”

The Minister adds:

“The Government will continue to maintain its present regular, flexible and open-ended dialogue with affected parties, including postal operators, customers and the postal regulator.”


Conclusion

2.6 We are grateful to the Minister for this progress report. We note that the original document, (a), is now redundant and clear it.

2.7 As with the earlier draft we will hold the amended draft Directive (document (b)) under scrutiny pending information on:

• developments in any negotiations that might take place; and

• the outcome of any continuing or formal consultations.

3 Youth in Action programme 2007-13

(25863) 11586/04 COM(04) 471 + ADD 1

Draft Decision creating the “Youth in Action” programme for the period 2007-2013

Legal base Article 149(4) EC; co-decision; QMV Document originated 14 July 2004 Deposited in Parliament 28 July 2004 Department Education and Skills Basis of consideration EM of 1 September 2004 Previous Committee Report None To be discussed in Council 15/16 November 2004 Committee’s assessment Politically important Committee’s decision Not cleared; further information requested

Background

3.1 The Community’s current Youth programme began in January 2000 and expires on 31 December 2006.3 The document before us for scrutiny sets out the Commission’s proposals for the successor programme, covering the period from the beginning of 2007 to the end of 2013.

3.2 Article 149(1) of the Treaty establishing the European Community (the EC Treaty) provides that the Community is to “contribute to the development of quality education by encouraging cooperation between Member States and, if necessary, by supporting and supplementing their action”. Article 149(2) provides that Community action is to be aimed at, among other things, “encouraging the development of youth exchanges and of

3 Decision No. 1031/2000/EC, OJ No. L 117, 18.5.00, p.1.


exchanges of socioeducational instructors”. Article 149(4) provides that, in order to contribute to the achievement of the article’s objectives, the Council is to adopt “incentive measures”.

The document

3.3 The document comprises a draft Decision and the Commission’s explanatory memorandum on it. The latter says that, in preparing the draft Decision, the Commission took account of the findings of the interim evaluation it made of the current programme earlier this year and the views expressed during the Commission’s public consultations in 2002. Both called for the continuation of a Community Youth programme with modifications to widen participation and make the grant procedures simpler and more flexible.

3.4 The proposed general objectives of the new programme (set out in Article 2(1) of the draft Decision) are:

“(a) to promote young people’s active citizenship in general and their European citizenship in particular;

(b) to develop solidarity among young people, in particular in order to reinforce social cohesion in the European Union;

(c) to foster mutual understanding between peoples through youth;

(d) to contribute to developing the quality of support systems for youth activities and the capabilities of civil society organisations in the youth field; and

(e) to promote European cooperation in youth policies.”

Article 2(2) proposes specific objectives in support of each of the general objectives.

3.5 Article 4 proposes that the objectives should be pursued through the following five “actions”:

• Youth in Europe: to support exchanges of young people and projects for their participation in democratic life.

• European voluntary service: to support young people’s participation in various forms of voluntary activities.

• Youth of the World: to support youth exchanges and projects with neighbouring countries and those which have signed association agreements with the Community.

• Youth workers and support systems: to support youth organisations active at a European level and, in particular, the European Youth Forum, to promote the exchange and training of youth workers and to provide support for innovative schemes for youth activities.

10 ESC, 30th Report, 2003-04

• Support for policy cooperation: to provide support for the exchange of information and ideas between young people and youth workers and policy makers and to contribute to the development of cooperation in youth policies.

The Annex to the draft Decision provides details of the measures that would be supported under each of the actions.

3.6 Article 6(2) proposes that participation should be open to young people aged 13 to 30 (the current programme is open to those aged 15 to 25).

3.7 Article 6(5) proposes that countries should take action:

“to remove obstacles to the mobility of participants, so that the latter have access to health care, retain their social protection and are able to travel and reside in the host country. This applies in particular to the rights of entry, residence and free movement. Countries participating in the programme shall, if necessary, take appropriate measures to ensure that beneficiaries from third countries are admitted to their territory.”

Article 4(4) of the Decision setting up the current programme merely requires participating countries to endeavour to take measures to ensure that people taking part have access to health care and that those taking part in voluntary service retain their social protection.

3.8 Article 8 of the draft Decision proposes that participating countries should be required to appoint and monitor “national agencies” to implement the programme locally.

3.9 Article 13 proposes that the total budget for the programme between 2007 and 2013 should be €915 million. The budget for the 2000-2006 programme is €520 million.

3.10 Article 15 proposes that the Commission should produce a report on an interim evaluation of the programme by the end of March 2011 and a report on the continuation of the programme by the end of that year; a final report on the programme should be produced by the end of March 2016.


3.11 The Minister of State for Lifelong Learning, Further and Higher Education (Alan Johnson) tells us that the activities proposed in the draft Decision fit well with the Government’s policy for young people and, in general, would add value to the UK’s activities. He is satisfied that the proposed legal base for the draft Decision is appropriate.

3.12 The Minister adds that it will not be possible to agree the budget for the new programme until the Financial Perspective for 2007-13 has been settled. The outcome of the negotiations on the next Financial Perspective may affect the targets and priorities of the proposed youth programme.

3.13 The Minister says that the Government will want to explore a number of differences between the proposed programme and the current one:

ESC, 30th Report, 2003-04 11

“The age group eligible to take part in this programme is 13 to 30 year olds compared with 15 to 25 year olds in the current youth programme. The UK Government is not convinced of the need to extend the age range and will argue that young people of 13 have very different needs and expectations from those of 30, with a very different duty of care. The key to success in previous programmes has been that participants take part as equals. This is less likely to be achieved with a wider age range.

“The UK Government is concerned to ensure that normal immigration procedures are not breached by this programme. The ‘Youth of the World’ strand must be fully consistent with existing immigration policy and visa requirements.

“The Commission has long promised a simplification of procedures for the programme and the interim evaluation of the current Youth programme called on the Commission to make sure that this and a greater decentralisation were features of this proposal. We will be pressing this point in negotiations as it is not clear from this first draft that more decisions will be taken at the national level and that application procedures will be simpler and easier to follow.

“We will also be pressing for plans for effective programme monitoring and evaluation and that the results of best practice are identified and widely disseminated.”

3.14 Finally, the Minister tells us that the Commission hopes that political agreement on the draft Decision will be reached at the Youth Council on 15/16 November. The negotiations on the next Financial Perspective are unlikely to be completed until the middle of 2005.

Conclusion

3.15 In our view, the draft Decision does not raise issues of subsidiarity or proportionality and the proposed legal base appears appropriate.

3.16 We are grateful for the Minister’s full and helpful Explanatory Memorandum. We note that, while broadly content with the Commission’s proposals, there are a number of points which the Government will be pursuing in the negotiations. We ask the Minister to keep us informed of the progress of those negotiations.

3.17 Article 8(6) of the draft Decision proposes that participating countries should appoint national agencies to implement the programme locally. We should be grateful if the Minister would tell us what the arrangements would be in the United Kingdom; would there be one agency or separate agencies for England and the devolved administrations?

3.18 Pending the Minister’s response, we shall keep the document under scrutiny.

12 ESC, 30th Report, 2003-04

4 Third Railway Package

(a) (25436) 7170/04 COM(04) 140 (b) (25437) 7147/04 COM(04) 139 (c) (25438) 7172/04 SEC(04) 236 (d) (25439) 7149/04 COM(04) 143 (e) (25455) 7148/04 COM(04) 142 (f) (25456) 7150/04 COM(04) 144

Commission Communication: “Further integration of the European rail system: third railway package” Draft Directive amending Council Directive 91/440/EEC on the development of the Community’s railways Commission staff working paper: Draft Directive amending Directive 91/440/EEC on the development of the Community’s railways to gradually open up the market for international passenger services by rail Draft Regulation on international rail passengers’ rights and obligations

Draft Directive on the certification of train crews operating locomotives and trains on the Community’s rail network Draft Regulation on compensation in cases of non-compliance with contractual quality requirements for rail freight services

Legal base (a) and (c) —

(b) and (d) to (f) Article 71 EC; co-decision; QMV Department Transport Basis of consideration Minister’s letter of 1 September 2004 Previous Committee Report HC 42-xvii (2003-04), para 3 (21 April 2004) To be discussed in Council 7 October 2004 (document (e) only) Committee’s assessment Politically important Committee’s decision Not cleared; further information requested

Background

4.1 The Community’s First Railway Package was intended, amongst other things, to open up more than 50,000 kilometres of the trans-European rail freight network to international goods services in 2003, with the entire network following in 2008. The Commission’s 2001

ESC, 30th Report, 2003-04 13

White Paper “European Transport Policy for 2010: time to decide” proposed, amongst other things, construction of a legally and technically integrated European railway area. The Second Railway Package was designed to provide for the establishment of that legally and technically integrated European railway area. The White Paper and the two packages were all discussed in European Standing Committee A.4 In April 2004 we considered these present documents — together the Third Railway Package.

4.2 The particular objectives of the package are to:

• revitalise the international rail passenger market by extending competition and establishing a harmonised system of minimum passenger rights, including addressing the needs of persons with reduced mobility;

• improve the interoperability of the European rail system by facilitating the movement of train drivers between undertakings and across national borders; and

• enhance the performance and size of the Community rail freight market, through mandatory performance requirements in contracts with freight customers.

4.3 The package includes four legislative proposals:

• document (b) is a draft Directive to amend Directive 91/440/EEC and is concerned with the liberalisation of international passenger services;

• document (d) is a draft Regulation on international passengers’ rights and obligations;

• document (e) is a draft Directive on train driver licensing. It would require licensing and certification of all train drivers and other train staff “with an indirect role in driving” working for those train operators and infrastructure managers required to have safety certification or authorisation under the Safety Directive of the Second Railway Package. It would apply to virtually all train operators and infrastructure managers in the UK, with the exception of operations on functionally-separated infrastructure such as London Underground Ltd’s own network. The proposal sets out detailed requirements for the operation of the licensing system; and

• document (f) is a draft Regulation on contractual quality requirements for rail freight services.

4.4 In April 2004 we said of the Third Railway Package that we should like to hear from the Minister in due course about the outcome of the consultations on these important proposals and about the Government’s consequent negotiating stance.5

4 See Stg Co Deb, European Standing Committee A, 10 March 1999, cols 1-42, Stg Co Deb, European Standing

Committee A, 13 March 2002, cols 3-28 and Stg Co Deb, European Standing Committee A, 8 May 2002, cols 3-24.

5 See headnote.

14 ESC, 30th Report, 2003-04


4.5 The Parliamentary Under-Secretary of State, Department of Transport (Mr Tony McNulty) writes now to tell us of developments on the Third Railway Package. He says initial discussions showed little support from Member States for treating these proposals as a single package and document (e) (train driver licensing) was selected to be discussed first. Subject to a review of the situation following a Council Working Group meeting in September 2004, the Dutch Presidency may seek agreement on a general approach on this draft Directive at the Transport Council meeting of 7 October 2004. The Minister adds that of the other legislative proposals only document (f) (freight services quality proposal) has been discussed by the Council Working Group: there was little support among Member States for it and the Commission has been asked to propose a way forward.

4.6 The Minister also tells us his Department started a formal consultation exercise on the Third Railway Package on 21 July 2004, with a closing date of 31 August 2004 for responses in respect of the train driver licensing draft Directive (in view of the Presidency’s current plans) and of 11 October 2004 in respect of the other proposals. The Department also has consultants estimating the likely costs and benefits of the package so that a fully costed Regulatory Impact Assessment can be prepared. The Minister expects to submit this assessment together with an analysis of the consultation responses on the train driver licensing proposal later this month.

Conclusion

4.7 We are grateful to the Minister for this information and look forward to seeing the Regulatory Impact Assessment and the analysis of the consultation responses on the train driver licensing proposal. We should also like to have then the indication of the Government’s negotiating stance we have previously requested. As we said previously, we may well then wish to recommend a debate. Meanwhile we continue not to clear the documents.

ESC, 30th Report, 2003-04 15

5 Chernobyl nuclear power plant

(25839) 11544/04 COM(04) 481 + ADD1

Commission Report: Third Progress Report on the implementation of the Chernobyl Shelter Fund December 2003 Commission Staff Working Document: Third Progress Report on the implementation of the Chernobyl Shelter Fund — December 2003

Legal base — Document originated 14 July 2004 Deposited in Parliament 21 July 2004 Department Trade and Industry Basis of consideration EM of 31 August 2004 Previous Committee Report None To be discussed in Council Not applicable Committee’s assessment Politically important Committee’s decision Not cleared; further information requested

Background

5.1 Following the accident of 26 April 1986, the shelter enclosing the remains of the Chernobyl Nuclear Power Plant Unit 4 was constructed rapidly and under extremely hazardous conditions. It was not intended to be a permanent solution, is increasingly unstable and has deteriorated such that rainwater gets in. There is a risk of collapse, which would lead to further radioactive contamination of the surrounding area.

5.2 In 1997 international experts finalised a multidisciplinary construction management programme, designated the Shelter Implementation Plan (SIP). The SIP envisaged remedial work directed towards making the Shelter physically stable and environmentally safe. Under European Bank for Reconstruction and Development (EBRD) management, the Chernobyl Shelter Fund (CSF) was constituted to finance and implement the SIP. The SIP project started effectively in 1998 with the setting up of the Project Management Unit. There are five major goals:

• Reduce the potential for collapse of the Shelter.

• Reduce the consequences of Shelter collapse, should one occur.

• Improve the nuclear safety of the Shelter.

• Improve worker industrial safety and environmental protection at the Shelter.

• Conversion to a safe environmental site.

16 ESC, 30th Report, 2003-04

5.3 The Commission presented a first progress report in October 1999. A second report was presented in September 2001, which we cleared on 17 October 2001.6 The present report updates the information provided in the previous ones, based mainly on the progress communicated by the EBRD at the December 2003 CSF Contributors Assembly in London. There, the EBRD reviewed the current situation of the CSF and presented revised cost estimates for the New Safe Confinement (NSC), as the final project is called. The USD 1059 million cost estimate (USD 995 million plus USD 64 million for potential additional work) is the first to be based on actual design work, and replaces the original SIP estimate (approximately USD 768 million). This is due to the inclusion of necessary works not foreseen in the initial budget, the potential additional works and what the EBRD regards as conservative escalation, risk and contingency assumptions, rather than increases in baseline costs. A better cost estimate will only become available once the market response for the largest element — the NSC — has been received.

5.4 At CSF pledging conferences in New York (1997) and Berlin (2000) the total sum pledged was USD 717 million (€754 million based on 2000 exchange rates). The Community contribution was USD100 million followed by a second contribution of €100 million. However, as at 31 October 2003, the EBRD reports that contribution agreements between contributors and itself amount to some €615 million, and that payments received by the end of November 2003 totalled some €480 million. So the EBRD has indicated that contributors are likely to be called on again in the near future to make new contributions for the completion of the project. However, the EBRD says no new payments into the fund would be required before 2005, and should be planned in principle for 2006-7.

5.5 Additional challenges are set out in the Explanatory Memorandum of 31 August from the Parliamentary Under-Secretary of State for Small Business and Enterprise at the Department for Trade and Industry (Mr Nigel Griffiths):

“The situation with the Ukrainian nuclear regulator has improved during the reporting period. However regulatory approvals remain one of major risks as they are on the critical path or are closely linked to activities which have the potential to become critical. It is essential that the regulator continues to be provided with the required level of support to ensure that delays are avoided and a proper regulatory and licensing process is fully implemented.

“A coordinated approach to the overall radioactive waste problem at the site is being developed which requires a strong involvement from the Ukrainian authorities. In particular a solution for the high-level solid wastes needs to be worked out. This implies additional costs and delays, and the EU TACIS Nuclear Safety programme may have to assist in supporting these additional costs.

“The schedule for the completion of the SIP, which had been foreseen for 2007 is significantly delayed. The completion of the project, with the commissioning of the NSC is now foreseen by 3rd/4th quarter 2008.”

6 (22465) 9455/01; see HC 152-ii (2001-02), para 43 (17 October 2001).

ESC, 30th Report, 2003-04 17


5.6 The Minister goes on to say that:

“the Government welcomes the Commission’s Third Progress Report on the implementation of the Chernobyl Shelter Fund [and] is fully committed to the international effort to carry out remedial work on the Chernobyl Shelter directed towards making it physically stable and environmentally safe.

“As the Report states the EBRD will require further commitments from contributors prior to the signature of the contract for the New Safe Confinement, which is currently scheduled for the fourth quarter of 2004. These additional contributions would probably need to be in place by 2006/7. The UK has already contributed a further £10 million to the CSF from the G8 Global Partnership budget, in March 2004. The UK also contributed a further £5 million to EBRD-managed Nuclear Safety Account, specifically for work on radioactive waste clean up at the Chernobyl site. This combined extra contribution of £15 million towards the CSF and projects on the Chernobyl site financed by the CSF, means that the UK will not be in a position to have to contribute further to the CSF when the next pledging round takes place, as noted in the Commission report.”

Conclusion

5.7 Previous reports illustrated steady progress in the early stages of a costly long-term programme. But this third progress report has highlighted some major challenges at what is clearly a crucial stage — significant cost increases, funding uncertainties and suggestions of inadequate responses on the part of the Ukrainian authorities. Nor is it clear what the prospects are for their successful resolution. It may be that “the UK will not be in a position to have to contribute further to the [Chernobyl Shelter Fund] when the next pledging round takes place”. But others will not be free of such obligations. But are they likely to fulfil them, especially if the final estimates are, as intimated in the report, even higher, once potential suppliers have actually quoted for the New Safe Confinement? And what steps are being taken to ensure that the authorities in the Ukraine play their part, without which, as the Minister makes clear, successful completion of the project — which on best estimates is four years away — will be jeopardised? We are not as sanguine as the Minister appears to be, and would be grateful if he would let us have his views on these unresolved issues. Meanwhile, we will continue to hold the document under scrutiny.

18 ESC, 30th Report, 2003-04

6 European Agency for Safety and Health at Work

(25613) 9050/04 COM(04) 50

Commission Communication on the evaluation of the European Agency on Safety and Health at Work accompanied by a draft Council Regulation amending Regulation (EC) No. 2062/94 establishing a European Agency for Safety and Health at Work

Legal base Article 308 EC; consultation; unanimity Department Work and Pensions Basis of consideration Minister’s letter of 5 August 2004 Previous Committee Report HC 42-xxii (2003-04), para 11 (9 June 2004) To be discussed in Council No date set Committee’s assessment Legally important Committee’s decision Not cleared; further information requested

Background

6.1 The European Agency for Safety and Health at Work (the Agency) was set up by Regulation (EC) No. 2062/947 and began work in 1996. The Agency provides technical and economic information about health and safety at work. The information is provided to Member States, the Commission, bodies representing employers and employees and businesses. The Agency organises the annual European Health and Safety Week and a special scheme to support small and medium-sized enterprises (SMEs). It is based in Bilbao.

6.2 The Agency has an Administrative Board comprised of three representatives from each Member State (one representing the Government, one employers’ organisations and one employees’ organisations) and three representatives of the Commission. With the accession of the new Member States on 1 May, the Board will have 78 members.

6.3 Article 137 (1) of the EC Treaty provides for the Community to support and complement Member States’ activities in, among other things, improvement of the working environment to protect workers’ health and safety. Article 137(2) empowers the Council to adopt measures to encourage cooperation between Member States through initiatives to improve knowledge, developing exchanges of information and best practices, promoting innovative approaches and evaluating experiences.

6.4 Article 308 of the Treaty empowers the Council to adopt measures for which there is no other legal base and which are necessary to attain, in the course of the operation of the common market, one of the objectives of the Community.

6.5 Article 308 was cited as the legal basis for the Regulation which created the Agency in 1994. At that time, the Treaty did not contain what is now in Article 137.

7 OJ No. L 216, 20.8.94, p.1.

ESC, 30th Report, 2003-04 19

6.6 The document includes a Communication from the Commission and the draft of a Regulation to amend the Regulation of 1994 which set up the Agency.

6.7 The proposed amendments would:

• clarify the Agency’s objectives and tasks;

• reform the constitution of the Agency’s Board and Bureau;

• add a specific requirement for competent national authorities to take account of the views of social partners; and

• reinforce cooperation with other Community bodies and, in particular, the European Foundation for the Improvement of Living and Working Conditions (the Dublin Foundation).

6.8 Most of the proposed amendments affect the management of the Agency. Notably, a new Governing Board would replace the Administrative Board and concentrate on the strategic management of the Agency. The Board’s membership would, however, continue to comprise three representatives of each Member State and of the Commission. The Agency’s Bureau would be given a legal personality and have only eight members. The Board would be able to delegate to the Bureau the exercise of all its functions except those expressly reserved to the Board, such as approval of the work programme and budget.

6.9 The Minister of State for Work at the Department for Work and Pensions (Jane Kennedy) told us that the Government generally welcomes the proposed amendments, which have no major policy implications.

6.10 Commenting on the legal base for the draft Regulation, the Minister said that the Government believes that Article 137(2) of the Treaty offers a more satisfactory legal base than Article 308. It would try to persuade the Commission and other Member States that the former should be used. She added:

“[If these attempts prove unsuccessful,] we would therefore seek to have a Declaration inserted in the footnote to the amending regulation indicating that we would not regard continuing use of Article 308 as setting a precedent for its use either generally, or in relation to future proposals in respect of the Agency.”

6.11 When we considered the document in June, we concluded that the proposed amendments were reasonable. But we shared the Minister’s concern about the proposal to cite Article 308 EC as the legal base for the draft Regulation. In our view, this raised a matter of legal principle and we were all the more concerned about it because this was not an isolated case. Despite the Government’s and our clear view to the contrary, Article 308 EC was used as the legal base for reforms to the management of the European Centre for the Development of Vocational Training.8

6.12 A Declaration of the kind to which the Minister refers would not cure the defect in the legal basis of the proposal. Moreover, we could not see the case for accepting such a

8 (25350) 6030/04; see HC 42-xii (2003-04), para 2 (10 March 2004); HC 42-xvii (2003-04), para 2 (21 April 2004); and HC

42-xx (2003-04), para 13 (18 May 2004).

20 ESC, 30th Report, 2003-04

compromise on an issue of legal principle. We decided, therefore, to hold the document under scrutiny pending the outcome of the Government’s discussion with the Commission and other Member States about the legal base.


6.13 In her letter of 5 August, the Minister tells us that she would be particularly cautious about the use of Article 308 EC if it were being proposed as the legal base for a major new piece of legislation. But, she says, in this case:

“it is simply being used as a basis for a fairly low key amendment to the regulation giving continuing life to the Bilbao Agency.

“At the Social Questions Working Group on 14 July, there was unfortunately no widespread body of support among other Member States for an alternative Article 137 legal base, meaning the UK is isolated in pressing for this approach. Neither the Commission or [sic] Council supported its use either and the Presidency is pressing for progress.

“In these circumstances, I do not feel that the UK can realistically continue to oppose [the] use of the Article 308 legal base. We would therefore seek to have a Declaration inserted in the footnote to the amending regulation indicating that we would not regard continuing use of Article 308 as setting a precedent for its use either generally, or in relation to future proposals in respect of the Agency….”

Conclusion

6.14 One of the European Union’s objectives, according to Article 2 EU, is to maintain and develop the Union as an area of freedom, security and justice. Fundamental to the establishment of such an area is respect for the rule of law. It is essential, therefore, that in proposing and approving legislation the Commission and Council should act and be seen to act lawfully. It is common ground between the Government and ourselves that, because Article 137 EC is available, the legal criteria for the use of Article 308 EC as the legal base for the proposed Regulation would not be satisfied. Accordingly, until we are provided with a satisfactory explanation why Article 137 EC is not a suitable legal base, we see no grounds to depart from the conclusion we reached in June. We ask the Minister, therefore, to press this issue of principle in the Council’s further discussion of the draft Regulation or to seek a satisfactory legal justification for the use of Article 308 EC. Meanwhile, we shall keep the document under scrutiny.

ESC, 30th Report, 2003-04 21

7 Procedural rights in criminal proceedings

(25637) 9318/04 COM(04) 328 + ADD 1

Draft Council Framework Decision on certain procedural rights in criminal proceedings throughout the European Union

Legal base Article 31(1)(c) EU; consultation; unanimity Department Home Office Basis of consideration Minister’s letter of 20 July 2004 Previous Committee Report HC 42-xxvi (2003-04), para 4 (7 July 2004) and see

(24282) 6781/03: HC 63-xxvi (2002-03) (25 June 2003)To be discussed in Council No date set Committee’s assessment Legally and politically important Committee’s decision Not cleared; further information requested

Background

7.1 The introduction of this measure by the Commission follows its earlier publication of a Green Paper on procedural safeguards for suspects and defendants in criminal proceedings throughout the European Union. In considering the Green Paper we agreed with the Government that any measures adopted at EU level in this field should be limited to cases with a cross-border element. We did not see any justification for wider measures aimed at criminal procedure generally, and considered that any such measures would be likely to infringe the principle of subsidiarity.

7.2 In our Report of 25 June 2003 on the proposals on criminal justice before the Convention on the Future of Europe we again took the view that there was no sufficient justification for any generalised harmonisation of rules of criminal procedure in the EU. In our view, harmonisation should be limited to achieving such minimum standards as were necessary to secure mutual recognition of judgments and decisions in particular cases.

7.3 When we considered the draft Framework Decision on 9 June we expressed concerns over its excessively wide scope, noting that it would apply also to purely internal cases involving only nationals of the Member State of the place of trial. It would therefore apply to the generality of criminal cases tried in the UK, even where no question of recognition and enforcement in another jurisdiction would ever arise, and would provide for monitoring of such cases supervised by the Commission. In our view, the proposal exceeded the scope of Article 31(1)(c) EU, since it was not confined to rules which were necessary to improve judicial cooperation between Member States, and we also considered that the proposal breached the principle of subsidiarity.

7.4 Apart from the question of scope, we expressed two other concerns. First, we noted that Article 4 of the draft Framework Decision would have the effect of preventing anyone other than a barrister, solicitor or advocate from giving legal advice in criminal proceedings. Secondly, we noted that whereas the “Letter of Rights” (which is to set out

22 ESC, 30th Report, 2003-04

“immediately relevant” procedural rights) must be translated into all Community languages, no provision had been made for translations into languages of third countries.

7.5 We noted that the Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) sought to address these concerns in her letter to us of 29 June 2004. The Minister took the view that the proposal did comply with the principle of subsidiarity and also with Article 31(1)(c) EU, arguing that common minimum standards in some areas of criminal procedure were “necessary for increasing trust and confidence in Member States’ judicial systems” and that this would further “mutual recognition and the effectiveness of judicial cooperation”. In relation to the effect of the proposal on purely internal cases, the Minister argued that it was not feasible to limit the proposal to cases in which mutual recognition might be a relevant issue, “as this would create disparities and inequalities in criminal procedure with different categories of defendants being treated differently”.

7.6 In our consideration of her reply on 7 July 2004, we acknowledged the force of the point made by the Minister about the difficulty of operating a national system of criminal procedure at two levels, depending on whether mutual recognition might be an issue. We asked the Minister if this consideration led to the conclusion that there were in practice no means of ensuring that the scope of measures adopted at EU level could be confined to those which were “necessary” for the purposes of improving judicial cooperation, and that such measures would instead lead to the incremental unification of criminal procedure throughout the EU.

7.7 On the provision of advice and representation for persons involved in criminal proceedings, we agreed with the Minister that such advice and representation must be adequate, but we questioned whether it was necessary to confine the giving of advice to those who are now listed in Article 1(2)(a) of Council Directive 98/5/EC (i.e. in the UK, to barristers, solicitors or advocates). We noted that there was no convenient procedure for amending the list in the Directive (which was, in any event, adopted for different purposes) and we asked the Minister if the use of such a list for the purposes of the Framework Decision would be likely to inhibit the development by Member States of new means for providing legal services in criminal proceedings.

7.8 On the translation of the “Letter of Rights”, the Minister agreed that having a “Letter of Rights” and interpretation in languages other than Community languages “may be of benefit to United Kingdom nationals abroad” and said that criminal justice organisations had been asked to comment on the issue. In considering the Minister’s reply, we thought it essential that the translation and interpretation requirements under the proposal should meet the standard imposed under Article 6 of the European Convention on Human Rights, so that translation and interpretation into the languages of third states should also be provided, as the case required. We asked the Minister for an account of the results of her consultations of criminal justice organisations.

The Minister’s reply

7.9 The Minister replies to these points in her letter of 20 July 2004. On the question of the scope of the proposal and our point that the difficulty of operating a system of criminal procedure at two levels leads to the conclusion that there are no means of limiting EU measures to those which are “necessary” for the purposes of improving judicial co-

ESC, 30th Report, 2003-04 23

operation, the Minister replies that the common minimum standards in the proposal would safeguard individual rights and “reinforce trust in other Member States’ justice systems, thus enhancing judicial co-operation in the EU”, and that the nature of these safeguards is such that they “could not be effectively achieved if the proposal was limited to cases in which mutual recognition was a relevant factor”.

7.10 On this issue, the Minister makes this further comment:

“The Government respectfully notes but cannot agree with the conclusion of the Committee. For the reasons given above we consider that common minimum standards for some procedural safeguards are necessary for the purpose of increasing the effectiveness of judicial co-operation. We also believe that the measures respect the principle of subsidiarity precisely because action at national level would not provide effective minimum standards in the EU and because the measures do not intrude into areas where action at national level would be more effective in achieving this aim. We understand the Committee’s concerns and recognise that we must be astute to ensure the principle of subsidiarity is observed but we believe that in so far as we remain vigilant in the application of the subsidiarity principle, these measures will not lead to the incremental unification of criminal procedure throughout the EU.”

7.11 On the Government’s attitude to future EU initiatives relating to the criminal justice process and the criminal law, the Minister comments that the Government “will consider the merits of each proposal individually with the fundamental view that mutual recognition rather than harmonisation, is the basis for effective judicial co-operation in the EU”.

7.12 The Minister notes our concern that use in the Framework Decision of the list in Council Directive 98/5/EC would be likely to inhibit the development by Member States of new means for providing legal services in criminal proceedings. The Minister states that the Government broadly supports the safeguards contained in the proposal relating to legal advice, but that it is aware “that the proposal in its current format could have implications for the current provision of legal advice in the United Kingdom as well as other Member States.” The Minister adds that the Government has been carrying out research into systems in other Member States for providing legal advice and that it has also been consulting on the issue within the UK. The Minister states that the Government will be sending us a copy of its consultation document and a partial regulatory impact assessment.

7.13 The Minister notes our view that the translation and interpretation requirements under the proposal should meet the standard required under Article 6 of the European Convention on Human Rights, but explains that the Government is investigating how the proposal would fit with current practice in the UK. The Minister adds this comment:

“Whilst [the] ECHR does set out the right to a fair trial encompassing the right to understand proceedings, this proposal will set minimum standards in this area and ensure that these rights are adequately and clearly provided for throughout the EU. Therefore, whilst we are considering whether the articles could be drafted more effectively in this respect, we can be broadly supportive of this part of the proposal in that it will increase the confidence in Member States criminal justice systems.”

24 ESC, 30th Report, 2003-04

Conclusion

7.14 We note the Government’s views on the scope of this proposal, but we remain of the view that measures adopted under Article 31 of the EU Treaty should respect the limits imposed by that Treaty and should therefore not apply to purely internal cases. Whether or not standards imposed under the EU Treaty for cross-border cases are also applied to purely internal cases is, in our view, a matter for decision by parliaments and should not be imposed by an EU Framework Decision.

7.15 We note the statement by the Minister that common minimum standards are necessary for some procedural safeguards (with the implication that they will not be necessary for others), but we do not think it will prove practicable to distinguish some matters of procedure from others in determining the proper scope of EU action. Accordingly we consider that there is a clear risk that the approach outlined by the Minister will lead, over time, to the incremental unification of criminal procedure throughout the EU.

7.16 On the provision of legal advice under the proposal, we shall look forward to an account by the Minister of the views expressed by consultees in the United Kingdom on the proposed means of limiting those who may give advice, and to receipt of the partial regulatory impact assessment.

7.17 On the question of translation and interpretation requirements, we look forward to an account by the Minister of how the relevant provisions might be drafted more effectively, and ask the Minister if she will confirm that she will press for these to apply also to languages of third countries, not just those of Member States as referred to in Article 14.

7.18 We shall hold the document under scrutiny pending the Minister’s reply.

8 Climate change and development cooperation

(24363) 7523/03 COM(03) 85

Commission Communication on climate change in the context of development cooperation

Legal base — Department International Development Basis of consideration Minister’s letter of 24 August 2004 Previous Committee Report HC 42-ix (2003-04), para 24 (4 February 2004) To be discussed in Council Not applicable Committee’s assessment Politically important Committee’s decision Cleared (decision reported on 4 June 2003)

ESC, 30th Report, 2003-04 25

Background

8.1 In mid-2003, the Commission proposed an EU strategy (and a detailed Action Plan) for giving climate change a higher profile, “mainstreaming” it into development cooperation work generally, and tying it to the UN Millennium Development Goals9 for reducing poverty.

Scrutiny

8.2 When we considered this Communication on 4 June 2003, we cleared the document but asked the Secretary of State for International Development (Mr Hilary Benn) to provide us with an update in due course on the development of the strategy.10 We considered his update on 4 February 2004, when, along with noting much successful work by the Development Cooperation Working Party, he identified as controversial the issue of whether support for the Clean Development Mechanism (CDM) — an international greenhouse gas trading arrangement whereby investment in emission reduction projects in developing countries would be rewarded with tradeable permits that could be used to contribute to an industrialised country’s compliance with its emissions reduction target — could be reported as overseas development assistance (ODA). He stated that the Government was opposed to this notion, commenting thus:

“Using ODA funds in this way can be interpreted as tied aid. The primary objective of ODA should be poverty reduction and changes in ODA resource allocation should not be made if the impact on poverty reduction is compromised.”

Given the political importance of this issue, we asked the Government to give us an opportunity to scrutinise any such proposal before the Council took a decision.11


8.3 The Minister has brought us up to date in his letter of 24 August 2004. He reports that the OECD’s Development Advisory Committee (DAC), which includes major non-EU donors, has been examining whether ODA could be used (a) to purchase emission credits and (b) to finance CDM projects. The former (which the Government opposed) was ruled out. But the latter has been more troublesome. Of the two options on financing CDM projects — no reporting of public expenditure as ODA, and unrestricted reporting — the UK argued for no reporting, on the grounds that the alternative would compromise both the agreement made by parties in the United Nations Framework Convention on Climate Change (that public funding for CDM projects from developed countries should not result in the diversion of ODA and should be separate from and not counted towards the financial obligations of developed countries) and the commitments made in the Monterrey Consensus (on increasing the level of ODA to 0.7% of GNP). However, others — notably Japan, the Netherlands and Denmark — strongly supported unrestricted reporting.

9 The development goals in the UN Millennium Declaration include eradicating extreme poverty and hunger,

achieving universal primary education, promoting gender equality, reducing child mortality, improving maternal health, combatting AIDS, malaria and other diseases, and ensuring environmental sustainability.

10 (24363) 7523/03; see HC 63-xxiii (2002-03), para 12 (4 June 2003).

11 (24363) 7523/03; see HC 42-ix (2003-04), para 24 (4 February 2004).

26 ESC, 30th Report, 2003-04

8.4 Consensus finally emerged around a third option, allowing ODA to be invested in CDM, but with the value of all emission credits generated (whether sold or retained by the donor) being deducted to arrive at a measure of net ODA. The Minister says: “It was imperative that a compromise was reached, since the default option effectively allows for unrestricted reporting”. The DAC accepted the compromise option in April 2004. What he describes as “an informal task team, which includes a representative from DFID” is shortly to begin work on the technical aspects of this compromise.

Conclusion

8.5 We thank the Minister for the update, although it would have been preferable for it to have been submitted — as we requested — before, rather than after, agreement was reached on the outcome.

8.6 It is also regrettable that the Government position did not prevail, since it is soundly based. But the unwillingness of such a major donor as Japan to co-operate effectively doomed the “purist” position. And the outcome has at least minimised the amount of Clean Development Mechanism expenditure that can be claimed as overseas development assistance.

8.7 This document was cleared on 4 June 2003.

9 Public-private partnerships in developing and transition countries

(25871) 11856/04 SEC(04) 1033

Commission Staff Working Document: Public-Private Partnerships in Developing and Transition countries — A critical review of existing experiences and analysis of possibilities of donor intervention

Legal base — Document originated 30 July 2004 Deposited in Parliament 12 August 2004 Department International Development Basis of consideration EM of 28 August 2004 Previous Committee Report None To be discussed in Council 22-23 November 2004 GAERC Committee’s assessment Politically important Committee’s decision Cleared, but further information requested

Background

9.1 Public-private partnerships (PPPs) are defined as “forms of cooperation between public authorities and the world of business which aim to ensure the funding, construction,

ESC, 30th Report, 2003-04 27

renovation, management or maintenance of an infrastructure or the provision of a service”.

9.2 In general terms, PPPs are considered to be a promising instrument for growth and economic development in developing countries. 1.1 billion people lack access to a safe water supply, 2.4 billion people do not have access to adequate sanitation and around 2 billion people are estimated to lack an electricity connection. Funding from governments and the international donor community will not be sufficient to close these gaps, and many hope that PPPs will bring in finance for infrastructure investments in developing countries, enabling the international community to achieve the Millennium Development Goals.12 Against this background, the staff working paper reviews the experiences of public-private partnerships (PPPs) in infrastructure development and provision in developing and transition countries and analyses the scope for donor support for this process in these countries, and aims to start a process of analysing and evaluating the possibilities for support by the Commission for the use of PPPs in developing and transition countries, with an emphasis on the delivery of infrastructure.

Commission Staff Working Paper

9.3 The very helpful Explanatory Memorandum of 28 August 2004 from the Secretary of State for International Development (Mr Hilary Benn) analyses the paper in more detail:

“The paper identifies the costs of PPPs as:

• Increased costs to the user/tax payer to meet the commercial return on investment required by the private sector;

• Increased transaction costs arising from setting up and implementing PPPs; and

• Increased cost of long-term financing for the private sector compared to the public sector.

“The benefits are identified as:

• More effective and efficient management of public utilities;

• Acceleration of infrastructure provision;

• Greater innovation and up-to-date know-how; and

• Freeing up of public budgets for spending on direct pro-poor interventions.

“In recent years, three main areas of donor and development bank support for PPPs have emerged — technical assistance, financing and guarantees, and grant support for projects. The paper identifies existing international instruments, and current and potential areas of EC support for PPPs.

12 The eight goals that, in 2000, the UN set itself to achieve, most by 2015: eradicate extreme poverty and hunger;

achieve universal primary education; promote gender equality; reduce child mortality; improve maternal health; combat HIV/Aids, malaria and other diseases; ensure environmental sustainability; develop a partnership for development.

28 ESC, 30th Report, 2003-04

“In relation to technical assistance for governments and agencies, the paper recommends that capacity building facilities should be extended to help governments and local business to transact and manage complex PPP structures. The EC will help strengthen these aspects by working with sector approaches and by joining the Public Private Infrastructure Advisory Facility (PPIAF). PPIAF is a multi-donor facility, initially developed by DFID, that works with developing country governments at central and municipal levels to improve the enabling environment for private sector involvement in infrastructure services.

“In relation to financing instruments to promote private sector participation, the paper notes that there are gaps in the coverage offered by existing guarantee facilities, and suggest that more attention should be paid to equity insurance, foreign exchange risk and sub-sovereign guarantees. The paper proposes that funding from the Investment Facility, (a €2.2bn [£1.46bn] programme launched in 2003 for private sector development in ACP countries),13 could be used to take forward work in this area. On the issue of subsidies, the paper recommends that the EC consider supporting existing pilot initiatives in the field of output-based aid (OBA), a form of subsidy which is paid only when defined service outputs are met, and makes reference to the DFID supported Global Program for Output-Based Aid. The paper also suggests that the EC could examine the possibilities for increased use of OBA14 in its grant financing of services of general interest.

“The paper identifies a number of guidelines and consideration[s] for donors in supporting PPPs. These are:

• It is necessary to carefully evaluate the costs and benefits of private sector participation on a case-by-case basis

• Donors should look at the possibilities to tender design and construction work together;

• More donor support is needed to improve the capacity of governments in developing and transition countries to transact and implement PPPs;

• Development banks need to improve the scope and volume of financing and guarantee instruments suitable for PPPs;

• Grant support to subsidise services of general interest needs to be carefully aligned with national priorities on the use of subsidies; and

• The EC, when using grants, should look increasingly at the possibilities of output-based aid approaches.”

13 Based on the 2003 Cotonou Agreement with the African, Caribbean and Pacific countries, the new five year

revolving EIB Investment Facility provides loans, equity capital, quasi-equity and guarantees, primarily in support of private sector organisations, as the ultimate motor and catalyst behind poverty reduction and its ultimate eradication, the core objectives of the Cotonou Agreement.

14 Under Output-Based Aid (OBA), public money is applied through performance-based contracts to subsidize the cost of delivering basic services and target these on the poor. Service delivery is delegated to private, including not-for-profit, organisations under arrangements that tie the disbursement of public funding to the delivery of pre-specified services or outputs. The contractual commitment of public funds under OBA schemes allows private operators to mobilise commercial funding and thus leverage public money substantially.

ESC, 30th Report, 2003-04 29


9.4 The Secretary of State says that:

“DFID believes that there is a role for the EC and the [European Investment Bank] in facilitating PPPs, and we welcome this in the initial analysis. The poorly developed infrastructure prevalent in most developing countries contributes to poverty and represents a serious constraint to the growth of business and the overall economy. Current investment in the poorer developing countries, (whether it is from developing country government sources, official development assistance or the private sector), is insufficient to fund additional infrastructure needs, leaving hundreds of millions of people without access to basic services. DFID believes that donors have an important role to play in helping to maximise the contribution of all the various sources of financial and human capital to the provision of infrastructure services. DFID agrees that PPPs are a promising instrument for growth and economic development in developing and transition countries, but recognises that there are a number of risks involved that might prevent PPPs from benefiting the poor.

“DFID believes that a flexible approach, both in terms of service provider and sources of finance, should be central to donor policies on PPP. For example, the poor often rely on small-scale private infrastructure service providers. Donors can do more to provide business development support to small-scale providers, and to help link the informal private sector to public utilities and to the large-scale private sector where it is involved. Community and NGO-implemented projects can also provide an alternative to large international companies. Such projects often allow for greater user involvement which can help to ensure that services actually meet demand. There are also multiple sources of finance for PPPs. For example, within the private sector the costs, amount of up-front investment, and currency risks will vary depending inter alia on whether finance is mobilised via the capital or credit markets, or from the local or international financial markets.

“DFID agrees that the EC and EIB should not set up parallel activities to those PPP programmes already covered by existing donor and private sector interventions. Much can be achieved by donors working in partnership and in support of government-led national poverty reduction strategies. DFID welcomes the Commission’s commitment to join PPIAF.

“The paper notes that there is a number of gaps in the range of guarantees covered by existing donor facilities, and suggests that EIB Investment Facility funding could be used to help fill this gap. However, DFID believes that there is a potential overlap with the work already being undertaken by the GuarantCo15 facility, one of the work programmes of the multi-donor supported Private Investment Development Group

15 Many infrastructure projects derive most of their revenues in local currency, making hard currency debt funding

inappropriate. In 2004 PIDG launched GuarantCo, to mitigate risks for local currency financing of infrastructure. It will support private sector and PPP infrastructure investment in low income developing countries by addressing market failure in the domestic capital markets of these countries and reducing the exchange rate risks associated with financing infrastructure that generates local currency revenues.

30 ESC, 30th Report, 2003-04

(PIDG),16 and other PIDG programmes under consideration. Collaboration between the EIB and PIDG could help the EIB fulfil its poverty reduction mandate, whilst meeting the revolving fund criteria of the Investment Facility.”

9.5 He concludes by saying that the document is to be discussed in the Development Co-operation Working Group on 9 September and is likely to go to the 22-23 November General Affairs and External Relations Council, where Council Conclusions will be agreed.

Conclusion

9.6 We share the Commission’s major conclusion — which it describes as “seemingly trivial” but “often overlooked” — that public-private partnerships (PPPs) are not a universal panacea, but in each instance have to be analysed on a case-by-case basis. We also endorse the Commission’s view that “private participation in service provision is not considered a goal in itself”, and that costs and benefits need to be carefully assessed, particularly in ensuring that such schemes are indeed accessible to and benefit the poor. Nonetheless, we agree with the Government’s view that PPPs have a role to play in addition to conventional official sources of funding, and not just to provide necessary public services but also to improve local management skills.

9.7 On direct Commission participation in projects, we particularly note what the paper has to say about output-based aid (“paid only when defined service outputs are met”), given that it is not aspirations but outcomes that are most important, and are glad that this innovative approach is to be further piloted.

9.8 We would be grateful if the Minister would let us know in due course how discussion of the paper develops in the Working Group and what Conclusions the Council finally adopts. Meanwhile, we clear the document.

16 In 2002, DFID, SECO (Switzerland), SIDA (Sweden) and DGIS (the Netherlands) formed the PIDG (Private

Infrastructure Development Growth), with the aim of mobilising private investment in infrastructure for growth and the elimination of poverty. The World Bank has recently joined the PIDG.

ESC, 30th Report, 2003-04 31

10 Single Market Scoreboard

(25858) 11566/04 SEC(04) 956

Commission staff working paper: Internal Market Scoreboard No. 13

Legal base — Document originated 14 July 2004 Deposited in Parliament 27 July 2004 Department Trade and Industry Basis of consideration EM of 31 August 2004 Previous Committee Report None; but see (24544) 9354/03: HC 63-xxv (2002-03),

para 13 (18 June 2003) To be discussed in Council 24 September 2004 Committee’s assessment Politically important Committee’s decision Cleared

Background

10.1 As part of the Internal Market Action Plan agreed in June 1997, the Commission undertook to produce a ASingle Market17 Scoreboard@ during each Presidency of the European Union. The purpose of the Scoreboard is to monitor the functioning of the Single Market and allow Member States to compare their performance in certain key areas.

The document

10.2 This Scoreboard is the 13th edition. It is presented in three parts. The first — “Implementing the Internal Market’s Legal Framework” — looks at progress in transposition (the implementation of Directives through national legislation) and action on transposition failure. The focus is on reducing the proportion of Directives overdue for transposition (the transposition deficit) to the 1.5% target set by the European Council in March 2002. The UK met the target then and in all subsequent Scoreboards. In this Scoreboard the UK has achieved joint fourth place with a transposition deficit of 1.2%. France has the worst transposition record, followed by Greece and the other five founding Member States. The EU average stands at 2.2%, which is a slight improvement on the 2.4% average of the last Scoreboard.

10.3 The Commission uses infringement proceedings, involving considerable resources, to try to enforce transposition. So far such proceedings have not been started against new Member States. The Scoreboard notes that the Internal Market Strategy 2003-2006 set a target of a 50% reduction in infringement proceedings by 2006. But the Commission

17 The Commission uses the term AInternal Market@, and the subject of this paragraph is entitled the AInternal Market

[email protected], the term ASingle Market@ is more commonly used in the UK and therefore we use it except when referring to titles or headings using AInternal Market@.

32 ESC, 30th Report, 2003-04

reports little improvement in the last year. The position in relation to the two Member States currently with the most cases against them — Italy and France — has worsened.

10.4 The second part of the Scoreboard reports on the two informal methods the Commission uses, before resorting to infringement proceedings, to resolve Single Market problems and ensure respect for Community law. One of these involves meetings at which experts from Member States and the Commission informally discuss a package of cases being considered by the Commission. In 2003 46% of the cases so discussed were resolved, and discussions continue on a further 38%. The other mechanism is SOLVIT, an online system dealing with cases of misapplication of Single Market rules by national and local administrations. The Commission says that SOLVIT’s performance is good, with an average success rate of 75% for all cases opened and closed between May 2003 and May 2004.

10.5 In the third and fourth parts of the Scoreboard the Commission discusses the role of European standards in the Single Market and the practical benefits of the Single Market as measured by the Internal Market Index of indicators of market integration and by price convergence.


10.6 The Parliamentary Under-Secretary of State for Employment Relations, Competition and Consumers, Department of Trade and Industry (Mr Gerry Sutcliffe) says:

“The primary aim of the Scoreboard is to monitor a range of indicators which reflect the health of the Internal Market. It has no direct policy implications but, has proved extremely useful both as a means of evaluating developments in the Internal Market and as a spur towards greater achievement. The Government, therefore, supports the continued use and development of the Internal Market Scoreboard.”

Conclusion

10.7 The Scoreboard continues to be a useful source of information on, amongst other things, the relative performance of Member States in transposing Directives and on reducing infraction cases. We note again that the UK is amongst those making good efforts to improve its transposition record.

10.8 But we are dismayed again at the continuing failure of some Member States to meet promptly and properly their obligations in relation to the Single Market. This disadvantages not only UK businesses and consumers but the interests of all those who stand to benefit from a properly functioning Single Market. We trust that the Minister will make plain in discussion of this Scoreboard, particularly to recalcitrant Member States, the cynicism engendered in ordinary European citizens by this disregard for what is supposed to be a common enterprise.

10.9 We clear the document.

ESC, 30th Report, 2003-04 33

11 World Summit on Information Society

(25840) 11546/04 COM(04) 480

Commission Communication: Towards a Global Partnership in the Information Society: Translating the Geneva principles into actions: Commission proposals for the second phase of the World Summit on Information Society (WSIS)

Legal base — Document originated 13 July 2004 Deposited in Parliament 21 July 2004 Department Foreign and Commonwealth Office Basis of consideration EM of 3 August 2004 Previous Committee Report None To be discussed in Council To be determined Committee’s assessment Politically important Committee’s decision Cleared, but relevant to the debate on the future of e-

Europe

Background

11.1 The December 2003 Geneva World Summit on Information Society (WSIS) was the first global event concerning the Information Society, involving over 150 countries and some 11000 participants from public entities, civil society and the private sector. It adopted a Declaration of Principles, embodied in a Plan of Action (POA), as the basis of a common approach to the information society by all UN Member States. This includes key human rights, such as freedom of opinion and expression; access to information and the media; combating the “Digital Divide”; and the potential of the information and communication technologies (ICT) for achieving the UN Millennium Development Goals.18

The Commission Communication

11.2 This latest Commission Communication seeks to suggest how the EU’s own experience hitherto and its external policies can contribute to the next phase —implementing the POA, preparatory to the second WSIS, to be held in Tunis in November 2005. The Communication notes the importance of countries creating an “enabling environment” capable of attracting information society investment and providing sustainable growth. It highlights the importance of “e-Strategies”, especially in the area of Government, education, health and business; of stimulating research and development in this area; of favourable regulatory frameworks; and establishing and disseminating best practice. It describes how to improve the provision of IT services.

18 The eight goals that , in 2000, the UN set itself to achieve, most by 2015: eradicate extreme poverty and hunger;

achieve universal primary education; promote gender equality; reduce child mortality; improve maternal health; combat HIV/Aids, malaria and other diseases; ensure environmental sustainability; develop a partnership for development.

34 ESC, 30th Report, 2003-04

11.3 The Communication also considers various EU mechanisms that could be used to achieve the overall objectives of the POA (such as development aid and economic co-operation) and highlights key issues that will need to be considered by two groups set up as a result of the Geneva Summit — the Working Group on Internet Governance and the Task Force on Financing.

The Government’s View

11.4 The Minister for Europe (Mr Denis MacShane) says the UK supports EU aims for the WSIS and describes the ideas outlined as “broadly in line with UK policy for the second phase of WSIS” and containing “no issues that we would strongly disagree with”. Additional UK objectives for phase two are that the preparatory process should be fully transparent and not involve elaborate, expensive meetings; that civil society and business should be able to participate fully; and that fundamental rights in the area of access to information and freedom of the media are respected (especially during the Summit itself in Tunis), which officials will pursue in further preparatory work in Brussels and Geneva. He notes that there are no direct financial implications, other than the possibility raised by the Communication of using existing EU resources (e.g. development aid) in line with the POA objectives.

Conclusion

11.5 It is inevitable that the international community will feel the need to examine, discuss and seek to address issues such as the role of the information and communication technologies (ICTs) in bridging the gap between rich and poor — hence the WSIS. But it is equally important to ensure that the follow-up is realistic and avoids over-ambition and waste. In this context, the UK objectives for the next phase are good ones, particularly in not overlooking “low-tech” but nonetheless fundamental information society issues such as access to information and freedom of the media. Beyond that, the Minister’s somewhat half-hearted Explanatory Memorandum suggests a lack of enthusiasm for the Commission’s approach, which we share.

11.6 Although the Communication puts forward some sensible suggestions — e.g. the possibility of participating in the Global e-Policy Resource Network, launched at Geneva, to help ICT policymakers in developing countries — there is a strong theme of “the Commission knows best” running through it, the basis of which is not at all clear. It is as if it is the Commission, and not national governments and private companies, that is responsible for the ICT strides made in Europe, and that the developing world should simply follow suit — especially in copying methodologies such as “the open method of co-ordination” — in an area in which public authorities have a generally unimpressive, and costly, track record. It appears to ignore the huge developmental differences not only between Europe and the developing world, but within the latter. It has very little to say about what individual Member States might do with different partners of choice in different parts of the world. And there is scarcely a word about the central role of the market, which in the middle-income developing countries in particular has shown what can be achieved, and quickly, if the right environment is created. Although the Communication is not of great significance in itself, in many ways it reinforces our earlier concerns about the Commission’s approach to the future

ESC, 30th Report, 2003-04 35

of e-Europe, which we recommended for debate,19 and over manifestations of the e-Agenda such as the proposed e-Health programme.20 We are accordingly drawing the Communication to the attention of the House, and we consider it relevant to the debate we have already recommended on the future of e-Europe.

12 Draft Budget 2005

(25920) — —

Draft General Budget for the European Communities for the financial year 2005

Legal base Article 272 EC; the special role of the European

Parliament in relation to the adoption of the Budget is set out in Article 272; QMV

Department HM Treasury Basis of consideration Minister’s letter of 18 August 2004 Previous Committee Report None; but see (25654) —: HC 42-xxi (2003-04), para 3

(26 May 2004) Discussed in Council 16 July 2004 Committee’s assessment Politically important Committee’s decision Cleared

Background

12.1 The Commission=s Preliminary Draft Budget (PDB) is the first stage in the Community=s annual budgetary procedure. We reported on the 2005 PDB in May 200421 and it was debated in European Standing Committee B on 30 June 2004.22 The second stage is the adoption by the Council of the Draft Budget (DB). The 2005 DB was adopted on 16 July 2004. The 2005 PDB and the 2005 DB form the basis of the 2005 Adopted Budget which is expected to be agreed in mid-December 2004, after consideration by the European Parliament, followed by further consideration by the Council in November 2004 and subsequent negotiations between the Council and the European Parliament.


12.2 The Financial Secretary to the Treasury (Ruth Kelly) has written in advance of publication of the DB (which will be later in the Autumn) to tell us what the Council

19 (25683) 9675/04; see HC 42-xxv (2003-04), para 1 (30 June 2004).

20 (25646) 9185/04; see HC 42-xxix (2003-04), para 7 (21 July 2004).

21 See headnote.

22 Stg Co Deb, European Standing Committee B, 30 June 2004, cols 3-26.

36 ESC, 30th Report, 2003-04

decided in relation to the DB. The Minister encloses with her letter annexes, which we reproduce, helpfully setting out the euro and sterling figures for the eight budget categories and the changes in these in relation to the PDB.

12.3 She tells us that the main changes to the DB are:

• The totals. The DB has €115.98 billion in commitment appropriations and €105.22 billion in payment appropriations. This is a reduction of €1.27 billion (or 1.1%) for commitments and €4.35 billion (or 4.0%) for payments compared to the PDB. These figures are within the ceilings set by the multi-annual Financial Perspective (FP), leaving increased margins of €3.62 billion for commitments and €9.01 billion for payments;

• Heading 1 (Agriculture). Commitment and payment appropriations for agricultural expenditure are reduced by €1 billion, leaving a margin of €1.76 billion below the FP ceiling for commitments.23 This is a horizontal cut across all chapters greater than €800 million reflecting the Council’s estimate of actual financing needs. It does not affect direct payments to farmers in the ten new Member States, which are being made for the first time in 2005;

• Heading 2 (Structural Operations). Payment appropriations are cut by €3 billion, split between the Structural Funds programmes (€2.45 billion), Community Initiatives (€253 million) and completion of earlier programmes (€301 million). The cut is designed to bring payment appropriations more closely in line with implementation capability, so minimising the budget surplus;

• Heading 3 (Internal Policies). Commitment appropriations are reduced by €55.2 million and payment appropriations by €42.4 million, leaving a margin of €108.7 million under the FP ceiling for commitments. This cut is achieved through targeted cuts to annually-decided budget lines where the justification for funding in the PDB was poor (such as press and communication and a proposed preparatory action on security research); by reducing subsidies for certain agencies (in particular to take account of revised estimates of start-up costs); and by striking out certain items of unnecessary new expenditure proposed in the PDB (notably the European Police College and maritime anti-pollution measures). Allocations for multi-annual programmes under the co-decision procedure, as amended for enlargement in 2004, are not affected;

• Heading 4 (External Actions). Commitment appropriations are reduced by €129.4 million and payment appropriations by €24 million, leaving a margin of €14.4 million under the FP ceiling for commitments. This allows the full assistance budgeted for reconstruction in Iraq in 2005 (€200 million) to be financed within the Financial Perspective ceiling, removing the need to call on the Flexibility Instrument.24 It also allows for a modest €7.6 million increase in appropriations for

23 There is a global FP ceiling for payments, but this is not sub-divided for individual categories. So individual category

margins are available only for commitments.

24 See para 3.15 of our report on the PDB, cited in the headnote.

ESC, 30th Report, 2003-04 37

the Common Foreign and Security Policy (CFSP), to €62.6 million (equal to the level in 2004);

• Heading 5 (Administration). Commitment and payment appropriations are cut by €80.6 million, leaving an increased margin of €51.9 million under the FP ceiling for commitments. These cuts are intended to ensure that appropriations for administration are based on a realistic assessment of operational needs, taking into account the increased demands resulting from enlargement while exploiting the possibilities for economies of scale and redeployment of existing staff resources;

• Heading 7 (Pre-Accession Strategy). Payment appropriations are reduced by €200 million (€110 million for the SAPARD (Special Accession Programme for Agriculture and Rural Development) instrument and €90 million for assistance to Turkey). This reflects the Council’s expectation that the implementation of payments for these instruments will be lower than that forecast in the PDB, in line with a more disciplined approach to payment appropriations across the budget. These reductions in payments do not affect the level of pre-accession aid ultimately committed to the accession countries.

12.4 There are no changes to the PDB proposals for Headings 6 (Reserves) and 8 (Compensation).

12.5 The Minister also tells us that the Council and the European Parliament have agreed three procedural declarations relating to the budget. These

• call for more detailed financial programming from the Commission for Headings 3 (Internal Policies) and 4 (External Actions);

• ask the Commission to include the needs of Iraq in financial programming for 2006; and

• express the willingness of the Council, the European Parliament and the Commission to cooperate and exchange information in negotiations on the next FP.


12.6 In relation to the changes to Heading 4 (External Actions) the Minister tells us:

“Reflecting the lack of Council consensus on priorities, this package was made possible by a modest horizontal cut of [about] 2.85% to all the main budget lines, excluding co-decided programmes, programmes determined by international agreements, Iraq and Afghanistan. The Government endorsed this blunt approach in order to secure budget discipline, but successfully shielded humanitarian aid from the full impact of the cut.”

12.7 More generally the Minister says:

“The Government believes the Council’s 2005 DB goes a considerable way to meeting its key objectives. In particular, the DB maintains budget discipline: it

38 ESC, 30th Report, 2003-04

significantly reduces the level of payment appropriations in Headings 1, 2 and 7, to reflect a more realistic forecast of implementation; it finances Heading 4 within the FP ceiling, while protecting allocations for Iraq and securing a modest increase for CFSP; and it takes a rigorous approach to expenditure in Headings 3 and 5, delivering savings and increasing margins for flexibility. In addition, the 2005 DB remains fully consistent with the financial settlement for the new Member States agreed at Copenhagen in December 2002. The Government will continue to pursue its key objectives in the subsequent stages of the 2005 budget process.”

Conclusion

12.8 We are grateful to the Minister for her report on progress on setting the 2005 Budget. We note that the Government is achieving some successes in maintaining budgetary discipline and expect to hear that these gains are sustained in the later stages of the process. We clear the document.

ESC, 30th Report, 2003-04 39

Annex 1 Table 1: 2005 PDB and Draft EC Budget (Euros) (€ million) 2005 PDB 2005 Draft Budget Change PDB/DB CA PA CA PA CA PA Agriculture 50,675.5 50,113.9 49,675.5 49,113.9 -1,000.0 -1,000.0 Margin 763.5 1,763.5 Structural Operations 42,378.5 35,396.0 42,378 32,396.0 0 -3,000.0 Margin 62.5 62.5 Internal Policies 8,958.6 7,728.6 8,903.4 7,686.2 -55.2 -42.4 Margin 53.4 108.6 External Actions 5,234.0 5,010.2 5,104.6 4,986.2 -129.4 -24 Margin -115.0 14.4 Administration 6,388.7 6,388.7 6,308.1 6,308.1 -80.6 -80.6 Margin 0.0 51.9 Reserves 446.0 446.0 446.0 446.0 0 0 Margin 0.0 0.0 Pre-Accession Aid 1,856.0 3,179.8 1,856.0 2,979.8 0 -200.0 Margin 1,616.0 1,616.0 Compensations 1,305.0 1,305.0 1,305.0 1,305.0 0 0 Margin 0.0 0.0 Total 117,242.2 109,568.2 115,977.0 105,221.2 -1,265.2 -4,347.0Financial Perspective ceiling

119,594.0 114,235.0 119,594.0 114,235.0

Margin 2,351.8 4,666.8 3,617.0 9,013.8

Table 2: 2005 PDB and Draft EC Budget (Sterling) (£ million)25 2005 PDB 2005 Draft Budget Change PDB/DB CA PA CA PA CA PA Agriculture 33,990.6 33,613.9 33,319.8 32,943.1 -670.8 -670.8 Margin 512.1 1,182.9 Structural Operations 28,425.4 23,741.9 28,425.4 21,729.6 0 -2,012.3 Margin 41.9 41.9 Internal Policies 6,009.0 5,184.0 5,972.0 5,155.5 -37.0 -28.4 Margin 35.8 72.8 External Actions 3,510.7 3,360.6 3,423.9 3,344.5 -86.8 -16.1 Margin -77.1 9.7 Administration 4,295.2 4,285.2 4,231.2 4,231.2 -54.1 -54.1 Margin 0.0 34.8 Reserves 299.2 299.2 299.2 299.2 0.0 0.0 Margin 0.0 0.0 Pre-Accession Aid 1,244.9 2,132.9 1,244.9 1,998.7 0.0 -134.2 Margin 1,083.9 1,083.9 Compensations 875.3 875.3 875.3 875.3 0.0 0.0 Margin 0.0 0.0 Total 78,640.3 73,492.9 77,791.6 70,577.1 -848.6 -2,915.8Financial Perspective ceiling

80,217.7 76,623.1 80,217.7 76,623.1

Margin 1,577.4 3,130.3 2,426.0 6,046.0

Note: CA = commitment appropriations, PA = payment appropriations. Figures in table may not add up exactly due to rounding.

25 Converted at rate of €1 = 0.67075 (30/6/2004).

40 ESC, 30th Report, 2003-04

13 Access to information by law enforcement agencies

(25764) 10745/04 COM(04) 429

Commission Communication: Towards enhancing access to information by law enforcement agencies

Legal base — Department Home Office Basis of consideration Minister’s letter of 9 August 2004 Previous Committee Report HC 42-xxvii (2003-04), para 8 (14 July 2004) Discussed in Council 19 July 2004 Committee’s assessment Politically important Committee’s decision Cleared

Background

13.1 The objective of the Commission’s Communication is to help establish an EU Information Policy for law enforcement that will contribute to the realisation of the purpose of Article 29 of the Treaty on European Union (the EU Treaty). The Commission says that, in making the proposals, it has taken account of the relevant parts of the European Council’s Declaration of 25/26 March on Combating Terrorism.

13.2 Article 29 of the EU Treaty provides that the Union’s objective is to provide citizens with a high level of security in an area of freedom, security and justice by developing police and judicial cooperation between Member States. This is to be achieved by preventing and combating crime through, among other things, closer cooperation between police forces, customs authorities and other competent authorities and between them and the European Police Office (Europol).

13.3 In its Declaration on Terrorism, the European Council:

• instructed the Council to examine measures to simplify the exchange of information and intelligence between Member States’ law enforcement authorities; and

• called on Member States to ensure that law enforcement authorities cooperate with each other and exchange all information relevant to combating terrorism.

13.4 The Commission says that the Communication is intended:

“to improve information exchange between all law enforcement authorities, i.e. not only between police authorities, but also between customs authorities, financial intelligence units, the interaction with the judiciary and public prosecution services, and all other public bodies that participate in the process that ranges from the early

ESC, 30th Report, 2003-04 41

detection of security threats and criminal offences to the conviction and punishment of perpetrators.”26

13.5 The Commission makes eight main proposals for the improvement of access to information and the introduction of intelligence-led law enforcement at the level of the EU. The proposals are as follows:

• The law enforcement authorities of each Member State would have rights of access to the data and databases of every other Member State on the same conditions as the law enforcement authorities of the Member State holding the data. The Commission says that law enforcement authorities should also have access to data not collected for law enforcement purposes and that the authorities should have that access for “as long as appropriate, necessary and proportionate to the specific and legitimate purposes pursued” by the authorities.27

• The Commission proposes a scoping study of the conditions for access to data.

• The Commission says that common standards for data collection, classification and access would provide the basis for effective access to information. The Commission will, therefore, also conduct a study of such standards.

• The Commission says there are some things which may impede the sharing of information, such as incompatible crime definitions and incompatibilities between IT systems. It will present a Communication on how to remove obstacles.

• The Commission proposes that research should be commissioned on the use and implementation of European criminal intelligence systems. This would be additional to research already planned.

• The Commission proposes the development of common definitions for crime statistics and common analysis methods for the production of intelligence at EU level. The Commision says:

“The importance of Europol would increase, since data and procedures will be more European. This would result in criminal intelligence of a superior quality as it would be more standardised and thus more widely understood. The relations between Europol, the Council and the CPTF [Chiefs of Police Task Force] need to adapt to changing circumstances. At that moment, the EU will be in a position to assert itself on the international scene as a law enforcement partner with its distinct character and quality.”28

• The Commission regards building trust between law enforcement authorities as an essential element of the proposed Information Policy. This will require the development of shared values and standards and the training of law enforcement staff for a common understanding of criminal intelligence. The European Police Training College (CEPOL) could play a major part in this.

26 Commission Communication, page 4.

27 Commission Communication, page 6, para 2.

28 Commission Communication, page 11.

42 ESC, 30th Report, 2003-04

• The Commission proposes that there should be a Framework Decision on the protection of fundamental rights in, and common standards for, the processing of personal data exchanged under the police and judicial cooperation powers of the EU Treaty.

13.6 The Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) told us that the Government broadly supported the purpose of the Commission’s Communication, and would consider the details of the Commission’s more specific proposals when they are presented. In particular, the Government would want to be satisfied that the proposals did not extend into security matters, which are national responsibilities of Member States.

Our previous comments and the Minister’s response

13.7 When we considered the Communication in July,29 we said that we saw no objection, in principle, to the exchange of information between Member States in order to prevent or detect terrorism and serious crime. But it was essential that such exchanges should be subject to rigorous data protection safeguards and clearly defined rules on access to and use of the information. For that reason, we had a number of reservations about the Commission’s proposals. Those reservations are quoted below in italics and are followed by the Minister’s response to them in her letter of 9 August.

The Commission’s definition of law enforcement authorities includes all public bodies which “participate in the process that ranges from the early detection of security threats and criminal offences to the conviction and punishment of perpetrators”. Taken literally, this would mean that, among others, probation officers and prison officers would be entitled to access to the same information as the police, including criminal intelligence and personal data held in other Member States. In our view, the list of those with access to data should be defined with precision and limited to those with a legitimate “need to know”.

13.8 In her response, the Minister says:

“I share the Committee’s view that the definition of ‘law enforcement authorities’ should not be so wide as to include bodies and persons not having a relevant and appropriate interest in the information to be exchanged. I am sure that that is the Commission’s intention, but you can be assured that in examining specific proposals for legislative instruments we would seek to ensure that the scope was clear and that definitions were precise. In general, we would expect to see Articles dedicated to definitions, and Explanatory Reports elaborating and putting beyond doubt the purpose and meaning of the detailed legislative provisions. Each instrument would of course be for its own particular purposes, so definitions might differ as between one instrument and another.

The Commission refers to giving law enforcement authorities access to information not collected for law enforcement purposes. The Communication does not define such information but, in the absence of definition, it could include records about a person’s health,

29 See headnote.

ESC, 30th Report, 2003-04 43

education, taxes, social security and so on. In our view, there should be no general right of access to such data and access should be allowed only in exceptional circumstances for a specific purpose connected with the prevention or detection of serious crime.

13.9 The Minister tells us that:

“I also agree that there would need to be clarity on the question of access by law enforcement authorities to information not collected for law enforcement purposes. Access by law enforcement agencies to such information would need to be justified by particular well-defined and appropriate circumstances. We will of course consult the Information Commissioner on this and other aspects of individual specific instruments which the Commission may in due course propose.”

The Commission also proposes that the law enforcement authorities of one Member State should have access to data held in another State on the same conditions as the law enforcement authorities of the holding Member State. The Communication does not qualify the proposal by a requirement for the prior consent of the holding Member State. On the face of it, the proposal would open the way for any body concerned with law enforcement to go fishing in the databases in any other Member State, subject only to the access conditions which apply to law enforcement authorities of the other State. It is not apparent from the Communication that this proposal is necessary or proportionate.

13.10 The Minister responds that:

“We support the broad principle of reciprocal access to data, but agree that this should be subject to the usual safeguards against speculative or ‘fishing’ enquiries. We envisage that any request for access to data under any proposed new instrument would expressly be required to show a clear link between the data subject and the offence in relation to which the data was being requested.”

The Commission foresees a crucial role for Europol in the operation of information-led criminal intelligence within the EU. It seems to us that, if Europol were to be given such a role, commensurate systems for its supervision and accountability should be established first.

13.11 The Minister says:

“… we do not think that the Commission is in fact suggesting an additional role for Europol. Rather, we believe that the intention is that Europol would play a more effective role than at present in adding value to Member States’ own criminal intelligence and information. It would do this in part through a process of providing clearer guidance on the nature of high priority organised crime threats to the Member States. This would enable the Member States’ law enforcement authorities to sharpen their own performance in relation to criminal intelligence and information on organised crime which could in turn be fed into Europol’s threat assessment. We attach importance to development within the EU of intelligence-led policing and to ensuring that Europol, within its existing remit, adds real value to Member States’ own investigations.”

Because of our concerns about the document, we ask the Minister to tell us about the discussion of it at the Council on 19 July.

44 ESC, 30th Report, 2003-04

13.12 The Minister tells us:

“Following a general discussion, the main decision taken was that the Communication should be fed into the multi-annual work programme. This endorses the purpose of the Communication, which is that it should be the basis for more detailed proposals in due course. The details would need to be considered on their own individual merits against the background of this general endorsement.”

Conclusion

13.13 We are grateful to the Minister for her constructive reply. It is clear that there is substantial agreement between us and that both we and the Government will be scrutinising the detailed proposals for clear definitions of powers and robust safeguards against inappropriate access to personal data.

13.14 We note that the Minister’s letter refers to Member States making “requests” for access to data held by other Member States. As we read the Communication, however, access would not be subject to a request and consent process; there is no reference to a requirement for prior consent. We consider that access to such information should be subject to the prior consent of the Member State holding the information. We are particularly glad, therefore, that the Government will be consulting the Information Commissioner about the Commission’s detailed proposals; and we ask the Minister to tell us the Commissioner’s views in due course.

13.15 We shall scrutinise the detailed proposals with great care when they are presented. We have concluded that it is not necessary to subject this Communication to further scrutiny and we are content, therefore, now to clear it.

14 The Council of Europe Proceeds of Crime Convention

(25789) 11060/04 COM(04) 444

Draft Council Common Position on the negotiations in the Council of Europe relating to the 1990 Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime

Legal base Article 34(2)(a) EU; unanimity Document originated 25 June 2004 Deposited in Parliament 5 July 2004 Department Home Office Basis of consideration EM of 20 July 2004 Previous Committee Report None To be discussed in Council No date fixed Committee’s assessment Legally and politically important Committee’s decision Cleared

ESC, 30th Report, 2003-04 45

Background

14.1 The 1990 Council of Europe Convention on laundering, search, seizure and confiscation of the proceeds of crime was ratified by the UK in September 1992. The purpose of the Convention is to facilitate international cooperation in relation to investigative assistance, search, seizure and confiscation of the proceeds of crime of all types, especially serious crimes and in particular drug offences, arms dealing, terrorist offences, trafficking in children and young women and other offences which generate large profits. Since the adoption of the Convention the EU itself has adopted a number of instruments designed to achieve broadly the same objectives under Title VI of the Treaty on European Union. The Council of Europe Convention is unaffected by the subsequent legislative measures adopted by the EU.

The document

14.2 The document contains a Commission proposal for a Council Common Position to coordinate the position of EU Member States in the negotiations relating to the aspects of the Council of Europe draft Protocol to the 1990 Convention on laundering, search, seizure and confiscation of the proceeds of crime that fall under Title VI of the Treaty on European Union. The purpose of the proposal is to ensure that there is a coherent and consistent approach in negotiations at the Council of Europe and to prevent inconsistencies between the Protocol and other instruments agreed or under negotiation at EU level.

14.3 Article 1.1 of the Commission proposal provides that the Union supports the drafting of an additional Protocol to revise the Convention and advocates its rapid completion. Article 1.2 provides that the Protocol’s provisions on identification, seizing and confiscation of criminal assets and international cooperation in criminal matters between law enforcement authorities must apply equally to the fight against terrorist financing. Article 1.3 states that the Protocol should address the need to enhance international cooperation in criminal matters regarding the provision of information on bank accounts held by any person who is the subject of a criminal investigation. The latter reflects provisions on the supply of financial information already accepted in the EU under the Protocol to the Convention on mutual legal assistance.

14.4 Article 2 provides that provisions drawn up in the Protocol should be compatible with instruments drawn up on the basis of Title VI of the EU Treaty.

14.5 Article 6 states that this Common Position is without prejudice to the authorisation of the Commission to negotiate on those parts of the Convention which are covered by Community law. A separate mandate for the Commission is being negotiated for that purpose.


14.6 In his Explanatory Memorandum of 20 July 2004 the Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) welcomes the proposal on behalf of the Government and writes as follows:

46 ESC, 30th Report, 2003-04

“The Government can agree to the proposed text of the Common Position. This [position] is suitable for a Common Position as recognised by the Treaty on European Union and we have no objection to the (fairly general) principles which the draft contains.”

Conclusion

14.7 We thank the Minister for her clear indication of the Government’s support for the proposed Council Common Position. We too are happy with the document and have no further questions for the Minister. Accordingly we clear the document.

15 Asylum procedure

(25831) 10471/04 COM(04) 503 + ADD 1

Commission Communication: ”A more efficient common European asylum system: the single procedure as the next step”

Legal base — Document originated 15 July 2004 Deposited in Parliament 19 July 2004 Department Home Office Basis of consideration EM of 27 July 2004 Previous Committee Report None To be discussed in Council No date set Committee’s assessment Politically important Committee’s decision Cleared

Introduction

15.1 In 2003, the Thessaloniki European Council reaffirmed the importance of establishing a more efficient asylum system within the EU to identify quickly everyone in need of protection; and invited the Commission to examine ways to improve the system.30 Accordingly, this Communication asks the Council and the European Parliament to approve the Commission’s proposed approach to the introduction of a single procedure for dealing with applications for both refugee status and subsidiary protection status.

30 Conclusions 26 and 27, Thessaloniki European Council, 19 and 20 June 2003.

ESC, 30th Report, 2003-04 47

The existing EU legislation

15.2 Article 63 of the Treaty establishing the European Community required the Council by 1 May 2004 to adopt measures on asylum relating to, among other things:

• the criteria and mechanisms for determining which Member State is responsible for considering an application for asylum made by a third country national in one of the Member States (the relevant measure — the Dublin Regulation — was adopted in February 2003);31

• minimum standards for the reception of asylum seekers in Member States (the Council Directive was adopted in January 2003);32

• minimum standards for the qualification and status of third country nationals and stateless persons as refugees or as persons who otherwise need international protection (the Qualifications Directive was adopted in April 2004);33 and

• minimum standards for procedures for granting and withdrawing refugee status (the Council reached political agreement on the Procedures Directive in April 2004, and the European Parliament is now being consulted about it).

15.3 The United Kingdom is not bound by measures adopted under Title IV of the EC Treaty (including those adopted under Article 63) unless it opts into them. The Government has opted into all four of the measures listed in the previous paragraph.

The Commission’s proposals

15.4 The Communication notes that some Member States, such as the Netherlands and the United Kingdom, already have a single procedure in which the administrative body which decides whether an applicant for asylum qualifies under the Geneva Convention as a refugee also considers whether the applicant is entitled to subsidiary protection on grounds such as fear of torture, the death penalty, inhuman treatment or for family reasons. The applicant is not required to make separate applications for different types of protection; the authority makes one decision either denying protection or granting it on any of the possible grounds; and there is a single appeals process.

15.5 Some other Member States have one procedure for considering applications for refugee status and other procedures for applications for other types of protection. Yet a third group of Member States consider some, but not all, grounds through the procedure they use for applications for refugee status.

15.6 The Commission notes the following as among the advantages of a single procedure:

31 OJ No. L 50, 25.2.03, p. 1.

32 OJ No. L 31, 6.2.03, p. 18.

33 The Qualifications Directive prescribes criteria for Member States to use in determining whether an applicant is entitled to “subsidiary protection”. The Directive defines “subsidiary protection” as a form of international protection, separate from but complementary to refugee status, granted to third country nationals or stateless persons who are not refugees but who need international protection because they have well-founded fears of, for example, torture, inhuman treatment or severe violation of human rights in their countries of origin.

48 ESC, 30th Report, 2003-04

• reduction in the time needed to decide whether protection, on whatever grounds, should be granted;

• avoidance of duplication and so resource savings;

• less uncertainty and complexity for asylum seekers (no need for multiple applications); and

• speedier return of applicants not entitled to protection and admission.

The Communication also notes some disadvantages and mentions, in particular, the risk of “watering down” the Geneva Convention because authorities might grant applicants a status less beneficial to them than the one to which they would be entitled as refugees under the Convention.

15.7 The United Nations High Commissioner for Refugees and the non-governmental organisations the Commission consulted before drafting the Communication favour the adoption of a single procedure.

15.8 The Commission now proposes, therefore, a two-stage approach:

• A Preparatory Phase in which the Commission would consult on, and evaluate, the existing procedures for considering asylum applications and ways to make them quicker and more efficient. By the end of this year, the Commission will publish a “One-Stop Shop Action Plan” providing details of the Preparatory Phase.

• A Legislative Phase: the Commission says:

“legislation should only be brought forward to address those areas identified by the Preparatory Phase as suitable and possible and of real benefit to the asylum systems of EU Member States.”34

It is too soon to judge, therefore, how much amendment, if any, will be proposed to the existing Community legislation, such as the Qualifications and Procedure Directives.

15.9 The Annex to the Communication (ADD 1) includes a summary of the Commission’s study of Member States’ procedures in 2002 for dealing with applications for refugee status and subsidiary forms of protection; and further information about the aims and scope of the Preparatory Phase the Commission proposes.


15.10 The Parliamentary Under-Secretary of State at the Home Office (Caroline Flint) tells us that the Government endorses the two-stage approach proposed by the Commission because:

“it recognises the need to carefully assess the impact of existing measures in order to identify the need for further legislation. Any proposals arising from these initiatives will need to take into account the needs of Member States to adapt policies in

34 Commission Communication, para 14.

ESC, 30th Report, 2003-04 49

response to changing asylum situations, and to reflect different judicial systems present in the Member States.”

The Government will consider any proposed new legislation and decide if it is in the interests of the United Kingdom to take part in it.

Conclusion

15.11 We share the Minister’s view about the need for a thorough assessment of the effects of the existing EU legislation before more is proposed. Accordingly, we see no objection to the two-stage process the Commission advocates. We have no questions to put to the Minister about the Communication and we now clear it from scrutiny.

16 Management of waste from the extractive industries

(24613) 10143/03 COM(03) 319

Draft Directive on the management of waste from the extractive industries

Legal base Article 175(1)EC; co-decision; QMV Department Office of the Deputy Prime Minister Basis of consideration Minister’s letter of 31August 2004 Previous Committee Report HC 42-xxii (2003-04), para 16 (9 June 2004) To be discussed in Council 14 October 2004 Committee’s assessment Politically important Committee’s decision Cleared, but information on progress requested

Background

16.1 Although the Community already has in place measures on waste management, the Commission has pointed out that there are a number of exclusions affecting that from mineral extraction and quarrying, and that certain of the landfill provisions are not readily applicable to this particular form of waste. Since the waste in question accounts for about 29% of the total generated in the Community each year, the Commission put forward in June 2003 this proposal, which seeks to set minimum requirements under which waste management plans would address the environmental and human health risks which may arise from the treatment and disposal of extractive waste,35 and to encourage its recovery wherever possible by such means as recycling and re-use.

35 The proposal would exclude waste, such as unpolluted soil, which represents a low environmental risk, whilst only a

limited set of requirements would apply to inert waste. It also excludes waste from offshore operations, as well as that generated in the course of mineral extraction or treatment but not resulting directly from it.

50 ESC, 30th Report, 2003-04

16.2 We noted in our Report of 10 July 2003 that the Government had identified a number of differences between the main sectors likely to be affected in the UK (metalliferous mining, china clay and slate extraction, the coal industry, and the construction aggregates sector), and that, although it believed that a common set of rules may well be helpful where items are traded either globally or widely within the Community, it was concerned that this would not be the case for sectors where there is an essentially local market. Also, there were dangers that excessively onerous regulation for sectors traded world-wide might lead to a closure of operations in Europe. In view of these concerns, and the fact that the potential costs and benefits had yet to be quantified, we decided to hold the document under scrutiny pending further information.

16.3 We subsequently received a supplementary Explanatory Memorandum of 20 May 2004, together with a partial Regulatory Impact Assessment. These confirmed that the main implications of the proposal as drafted would arise in the areas indicated above, the costs to business being likely to arise principally from the one-off need to prepare plans to deal with emergencies (about £2 million) and from annual costs of around £16 million for the provision of financial guarantees. In addition, there would be certain administrative costs involved, but we were told that, since the proposal largely reflects existing practice within the UK, it would not have a significant impact on the minerals industry here, which largely produces inert waste.36 However, this conclusion appeared to be subject to the proviso that further clarification was needed on the precise impact of the proposal on inert wastes, and on the criteria which determine the circumstances under which the provisions for preventing major accidents would apply.

16.4 The supplementary Explanatory Memorandum also drew attention to the amendments adopted by the European Parliament at its first reading of the proposal on 31 March 2004, a number of which could affect adversely the balance of the proposal, and have subsidiarity implications. Concern was also expressed that the Parliament’s amendments would extend the scope of the proposal beyond waste by seeking to regulate the extraction operation itself, further shorten the period for transposition into national law, require an inventory of all closed mining sites, rather than taking a risk-based approach, and attempt to reproduce provisions already contained in the Water Framework Directive.

16.5 In our Report of 9 June 2004, we noted that it now seemed as though the impact of the original Commission proposal on the UK would be fairly limited, but we said that we had two areas of concern. First, it was not entirely clear whether the uncertainties over the impact of the proposal on inert waste and in relation to activities likely to cause major hazards had been satisfactorily resolved. Secondly, the supplementary Explanatory Memorandum did not say whether other Member States shared the UK’s concerns over some of the amendments put forward by the European Parliament; nor was it clear whether the Commission intended to adopt any of these in an amended proposal. We therefore said that we would continue to hold the document under scrutiny, pending further information on these points.

36 The main exception to this is the deep-mine coal industry, where a significant proportion of waste contains

relatively high concentrations of iron sulphide.

ESC, 30th Report, 2003-04 51

Minister’s letter of 31 August 2004

16.6 We have now received a letter of 31 August from the Minister for Local and Regional Government, Office of the Deputy Prime Minister (Mr Nick Raynsford), providing an update, in the light of the hope of the Dutch Presidency that political agreement can be reached at the next meeting of the Environment Council on 14 October.

16.7 The Minister says that, although the Presidency has been generally supportive of the proposal, it has demonstrated similar concerns to those voiced by the UK about the European Parliament’s amendments, and that these have to a considerable degree been shared by other Member States and the Commission. More specifically, he indicates:

• that a large number of Member States are concerned that the Parliament’s suggestion to extend the proposal beyond waste management to the extractive operation itself would alter its essential nature, and that, since that concern has been reflected in the Presidency’s most recent compromise text, it seems likely that the proposal will not be amended in this way;

• that there is also general concern at the Parliament’s attempt to apply additional provisions to non-hazardous inert waste, unpolluted soil and waste from prospective operations, and that, although discussion at the Environment Council on 28 June did not provide a clear steer on this point, UK officials have pressed in the subsequent discussions for provisions which are appropriate and proportionate;

• that the Commission and Member States are strongly opposed to the Parliament’s wish to include additional prescriptive text on matters, such as the implementation of financial guarantees, best left to Member States, and that, subject to a need for some fine-tuning, the text now on the table provides flexibility on these issues; and

• that there is strong resistance among all Member States and the Commission to the Parliament’s suggestion that all closed mining sites should be included in an inventory, and that there is a shared understanding among delegations that any such provision should be on a risk-based approach; also, the UK is working to ensure that the proposed deadlines for implementing this provision are realistic and integrate effectively with the Water Framework Directive where there is overlap.

16.8 The Minister also refers to the main outstanding issue on the original Commission proposal, namely major accident prevention and information policy, which he suggests has the potential to hinder the prospects of achieving political agreement next month. He says that the UK is one of many Member States pressing for this provision to be focussed on those facilities where there is a significant risk of the loss of human life, and for this focus to be supported with clear and risk-based criteria. He adds that there is general agreement on the need to avoid regulation with no obvious benefits for the environment or safety, and that, although there is currently no agreement on an appropriate text, the latest draft represents a step forward from the original proposal.

16.9 The Minister concludes by saying that, although the timetable set by the Presidency may prove to be optimistic, he regards it as important that progress should be made in

52 ESC, 30th Report, 2003-04

completing the parliamentary scrutiny process, and that, although he cannot provide a definitive response on all our points, he hopes he has reassured us that our concerns are shared by the Government and other Member States, and are being addressed in the negotiations on the proposal. He says that he is optimistic that the UK can secure a Directive which provides appropriate controls specific to this kind of waste, and that the Government’s overall aim remains a regulatory framework proportionate to the risks involved and the costs to industry and public authorities.

Conclusion

16.10 We are grateful to the Minister for this further information, and, although a number of uncertainties remain over certain detailed aspects of the proposal, we have noted that the progress made so far, together with the momentum of the negotiations, seems likely to lead to an acceptable outcome. In view of this, and of the timing considerations involved, we are clearing the proposal, but we would be glad if the Minister could continue to keep us informed of the progress of discussions within the Council.

ESC, 30th Report, 2003-04 53

17 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

(25842) 11590/04 ADD 1 and ADD 2 COM(04) 431

Commission Communications: Financing Natura 2000 and Staff Working Papers.

Foreign and Commonwealth Office

(25827) 11395/04 + ADD 1 COM(04) 414

Commission Report: Hong Kong Special Administrative Region: Annual Report 2003 and Staff Working Paper.

(25889) 11886/04 COM(04) 547

Commission Communication concerning the opening of consultations with Côte d'Ivoire under Article 96 of the Cotonou Agreement.

(25898) — —

Draft Common Position imposing a travel ban against three Belarusian government figures implicated in state sponsored disappearances.

(25899) — —

Draft Council Joint Action amending Council Joint Action 2004/523/CFSP on the European Union Rule of Law Mission in Georgia, EUJUST THEMIS.

Home Office

(25819) 11375/04 COM(04) 437

Draft Council Regulation amending Regulation (EC) No. 539/2001 as regards the reciprocity mechanism.

Department for International Development

(25794) 11099/04 COM(04) 451

Draft Council Regulation amending Council Regulation (EC) No. 2667/2000 on the European Agency for Reconstruction.

54 ESC, 30th Report, 2003-04

Department of Trade and Industry

(25820) 11376/04 COM(04) 463

Draft Council Regulation amending Regulation (EEC) No. 3030/93 on common rules for imports of certain textile products from third countries.

(25824) 11211/04 SEC(04) 911

Commission Staff Working Paper concerning the Framework Strategy on Gender Equality — Work Programme for 2004.

(25837) 11508/04 COM(04) 482

Draft Council Regulation on administering the double-checking system without quantitative limits in respect of the export of certain steel products from the Republic of Moldova to the European Community.

(25838) 11510/04 COM(04) 483

Draft Council Decision concerning the conclusion of an Agreement in the form of an Exchange of Letters between the European Community and the Republic of Moldova establishing a double-checking system without quantitative limits in respect of the export of certain steel products from the Republic of Moldova to the European Community.

(25843) 9848/04 COM(04) 389

Draft Council Regulation amending Council Regulation (EC) No. 1601/1999 imposing a definitive countervailing duty on imports of stainless steel wire with a diameter of less than 1 mm originating in India.

(25844) 9778/04 COM(04) 387

Draft Council Regulation amending Council Regulation (EC) No. 1600/99 imposing a definitive anti-dumping duty on imports of stainless steel wire with a diameter of 1 mm or more originating in India.

(25849) 9783/04 COM(04) 388

Draft Council Regulation amending Council Regulation (EC) No. 1599/99 imposing a definitive countervailing duty on imports of stainless steel wire with a diameter of 1 mm or more originating in India.

(25850) 10956/04 COM(04) 440

Draft Council Regulation amending Council Regulation (EC) No. 2320/97 as last amended by Regulation (EC) No. 235/2004 imposing definitive anti-dumping duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating in, inter alia, Russia and Romania.

(25866) 11718/04 COM(04) 513

Draft Council Regulation amending the Commission Decision No. 1469/2002/ECSC on administering certain restrictions on imports of certain steel products from the Republic of Kazakhstan.

ESC, 30th Report, 2003-04 55

(25867) 11721/04 COM(04) 514

Draft Council Decision concerning the conclusion of an Agreement between the European Community and the Republic of Kazakhstan amending the Agreement between the European Coal and Steel Community and the Government of the Republic of Kazakhstan on trade in certain steel products.

Department for Transport

(25801) 11238/04 COM(04) 449

Draft Council Decision on the position of the European Community in relation to the draft Regulation of the United Nations Economic Commission for Europe on the uniform provisions concerning the approval of vehicles with regard to the location and identification of hand controls, tell-tales and indicators.

(25802) 11239/04 COM(04) 450

Draft Council Decision on the position of the European Community in relation to the draft Regulation of the United Nations Economic Commission for Europe with regard to the type-approval of a heating system and of a vehicle with regard to its heating system.

(25803) 11265/04 + ADD 1 COM(04) 453

Commission Communication on short sea shipping and Staff Working Paper.

HM Treasury

(25800) 11137/04 + ADD 1 COM(04) 425

Commission Communication: Public Finances in EMU —2004 and Staff Working Paper.

(25829) 11477/04 + ADD 1 COM(04) 491

Commission Report and Annex to the budgetary authority on guarantees covered by the general budget situation at 31 December 2003.

(25870) 11755/04 SEC(04) 1018

Preliminary draft amending Budget No.10 to the Budget for 2004 — General Statement of Revenue — Statement of Revenue and Expenditure by Section — Section VIII Part B: European Data-protection Supervisor.

(25878) 11832/04 COM(04) 523

Commission Report on the implementation of macro-financial assistance to third countries in 2003.

56 ESC, 30th Report, 2003-04

(25887) 11867/04 —

Draft Recommendation of the European Central Bank on the external auditors of the Banca d'Italia.

(25893) 11892/04 COM(04) 548

Draft Council Decision on the opening of the negotiations on an agreement concerning monetary relations with the Principality of Andorra.

ESC, 30th Report, 2003-04 57

Appendix 1: report on Council meeting

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. A reply concerning a meeting during the summer recess is published below.

Letter from the Minister for Europe at the Foreign and Commonwealth Office (Denis MacShane) to the Chairman of the Committee

GENERAL AFFAIRS AND EXTERNAL RELATIONS COUNCIL: 26 JULY

I am writing to inform you of the outcome of discussions held at the 26 July General Affairs and External Relations Council in Brussels, in place of my reply to the usual Parliamentary Question.

Outcome of the 26 July 2004 General Affairs and External Relations Council

Mike O’Brien (Minister of State for Trade, Investment and Foreign Affairs) and John Grant (UK’s Permanent Representative to the EU) represented the UK at the General Affairs and External Relations Council (GAERC) in Brussels on 26 July.

Conclusions were agreed on WTO, Sudan, and Western Balkans.

GENERAL AFFAIRS SESSION

FINANCIAL PERSPECTIVES 2007-2013

The Council heard a presentation by Commissioner Schreyer of the Commission proposals for the EU’s financial perspectives for the 2007-2013 period. The Presidency noted that the GAERC would start discussing the Commission proposals at its 13 September meeting.

PROGRESS OF WORK IN OTHER COUNCIL CONFIGURATIONS

The Council took note of a progress report from the Presidency on work under way in the Council’s other configurations (the Justice and Home Affairs Council, the Trade Council, the Transport and Communications Council, and the Environment Council).

EXTERNAL RELATIONS SESSION

WTO/DOHA DEVELOPMENT AGENDA

Concerns were expressed over the first draft framework agreement currently under discussion in Geneva. Council Conclusions were agreed. Commissioner Lamy noted the desire of all WTO members to put the DDA negotiations back on track by agreeing a

58 ESC, 30th Report, 2003-04

framework package this week. The Presidency concluded that there was a need for a further Council meeting in July, either in Geneva or Brussels.

SUDAN

The Council remains extremely concerned at the situation in Dafur and called upon the Government of Sudan and on the rebel movements to meet the seven demands set out in its Conclusions of 12 July.

The Council cleared the legal obstacle to Peace Facility funding. The need now was to maintain strong pressure on the Sudanese government, and to improve EU/AU/UN/US co-operation. Conclusions were agreed.

MIDDLE EAST PEACE PROCESS

The Council assessed the situation in the Middle East. High Representative Solana briefed Ministers on his visit to the region (Jordan, Egypt, Israel, 19-23 July), with particular reference to the follow-up to the ICJ’s advisory opinion and the ensuing vote in the UN General Assembly; future developments in the Gaza disengagement plan including the role of Egypt; and the situation in the Palestinian Authority. Mr Solana also briefed the Council on his contacts in Cairo with the Iraqi Foreign Minister and the Ministers of countries neighbouring Iraq.

The Presidency noted that Ministers would return to the issue of the Middle East at their informal meeting in early September in the Netherlands.

WESTERN BALKANS

The Council adopted conclusions on Serbia and Montenegro, the Former Yugoslav Republic of Macedonia, and Bosnia and Herzegovina.

EU — ECOWAS (Economic Community of West African States)

The Council, at the Presidency’s initiative, agreed to invite the Foreign Ministers from the sixteen member States of ECOWAS for an informal meeting on 4 September in the margins of the “Gymnich” (informal Foreign Ministers) meeting in the Netherlands.

The meeting is meant to underline the increasing importance of international co-operation in the area of peace and security, notably in Africa, as well as the partnership between the EU and ECOWAS.

3 August 2004

ESC, 30th Report, 2003-04 59

Formal minutes

Thursday 9 September 2004

Members present:

Mr Jimmy Hood, in the Chair

Mr Richard Bacon Mr William Cash Mr Wayne David Jim Dobbin

Mr David Heathcoat-Amory Sandra Osborne Angus Robertson Mr Anthony Steen

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 1.11 read and agreed to.

Paragraph 1.12 read, amended, and agreed to.

Paragraphs 2.1 to 17 read and agreed to.

Appendix 1 agreed to.

Resolved, That the Report be the Thirtieth Report of the Committee to the House.

Ordered, That the Chairman do make the Report to the House.

The Committee further deliberated.

[Adjourned till Wednesday 15 September at twenty-past Two o’clock.

60 ESC, 30th Report, 2003-04

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) William Cash MP (Conservative, Stone) Michael Connarty MP (Labour, Falkirk East) Wayne David MP (Labour, Caerphilly) Jim Dobbin MP (Labour, Heywood and Middleton) Nick Harvey MP (Liberal Democrat, North Devon) David Heathcoat-Amory MP (Conservative, Wells) Sandra Osborne MP (Labour, Ayr) Anne Picking MP (Labour, East Lothian) Angus Robertson MP (SNP, Moray) John Robertson MP (Labour, Glasgow Anniesland) Anthony Steen MP (Conservative, Totnes) Bill Tynan MP (Labour, Hamilton South)