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JOINT COMMITTEE ON EUROPEAN AFFAIRS (Sub-Committee on European Scrutiny) debate -
Thursday, 26 Jun 2003

Vol. 1 No. 34

Scrutiny of EU Proposals.

The first item for discussion is Commission document 186 of 2003 which relates to excise duty on tobacco products for consumption in Corsica. This proposal provides for the application of lower excise duties on tobacco in order to provide a higher margin for producers in Corsica. It is a derogation negotiated by France in 1992. The higher margins allowed distributors and producers to come from the lower excise taxes levied by the Government. The derogation was due to expire in 1997 but was extended to 2002. The French Government have requested that the derogation be extended until 2009. I am advised that this does not warrant further scrutiny. Is that agreed? Agreed.

Commission document 243 of 2003 is the next item for consideration. This proposal seeks to codify Council Regulation No. 2075 of 1992, in regard to the organisation of the market in raw tobacco. This regulation has been amended on numerous occasions since 1992 and this proposal seeks to consolidate the 1992 regulation, and subsequent amendments, into a new codified regulation which deals with weights and measures. The advice is that this does not warrant further scrutiny. Is that agreed? Agreed.

Item No. 1.3 is COM (2003) 248 regarding community tariff quotas for agricultural and industrial products. This amending regulation, adopted on 16 June, makes provision for the administration of autonomous Community tariff quotas for a number of agriculture products. Autonomous tariff quotas are on occasion required to take account of situations where Community industry is unable to supply raw materials to the level required within the Community. In such instances it is open to the industry to apply for the introduction of quotas of certain products to the amount equivalent to the difference between the level supplied within the Community and the amount required for industry. It is proposed that this measure does not warrant any further scrutiny at this time. Is that agreed? Agreed. To sum up, it is proposed that items 1.1 to 1.3, inclusive, do not warrant further scrutiny.

The next item is a document which it is proposed to refer to sectoral committees for further scrutiny. The first of these is COM (2003) 32, which deals first, with obligations and general principles on the safety of nuclear installations and, second, the management of spent nuclear fuel and radioactive waste. As members will be aware, a number of states that will become members of the Union in 2004 have operating nuclear power stations. This proposal seeks to put in place a number of measures to raise safety standards in the management of safety at nuclear installations and in the management of spent nuclear fuel in advance of enlargement. It would appear that the proposal is grounded in the belief that nuclear installations can be made relatively safe.

The proposal would allow for peer review of safety measures in operation in member states by other member states and the Commission. It would also see the establishment of safety authorities in member states. The Commission would have an overseeing role in relation to these bodies. The Commission would also be obliged to publish a report on nuclear safety every two years. It would be a requirement that funds would be established for the decommissioning of installations. The funds would grow over the life cycle of the installation.

It would also be a requirement that each member state would have a facility for the management of spent nuclear fuel and radioactive waste. I understand the Radiological Protection Institute of Ireland has indicated there is low level waste in Ireland stored form hospitals and colleges and from the old Irish Steel plant. The proposal suggests that member states could co-operate in the processing of waste. However, in the case of Ireland, this could result in the transportation of this waste by sea, something about which we have always complained. It would seem to suggest that we would have to create a nuclear waste management facility here.

A number of issues in relation to the proposal remain to be resolved and the legal basis of it has been questioned by some member states. The legal basis arises from the safety of workers, although I understand the Attorney General's office has initially advised that it appears to be sound. However, I understand it is very likely that amendments will be made to the proposal over the coming months. I understand that Britain and France, in particular, have some resistance to the proposal.

It is recommended that this measure be referred to the Oireachtas Joint Committee on the Environment and Local Government for further scrutiny and also forwarded to the Oireachtas Joint Committee on Health and Children for information. Is that agreed?

I earlier raised questions on this issue. The question of nuclear installations and the EURATOM treaty has surfaced, having bubbled under the surface at the convention. The United Kingdom and France have been reluctant to allow any real debate. I am concerned that negotiations on this directive could be prolonged until such time as the accession states sign up to full membership of the Union in May 2004. Given that many of them have nuclear installations with a poor safety record, to put it mildly, there may be a danger that a lower threshold of safety than we may wish might be agreed. I am not sure how the sub-committe can articulate its concerns, but I agree the matter should be referred to the appropriate sectoral committee with the observation that Ireland should ensure that no lower threshold of safety than that proposed in the document should be agreed.

We could ask the relevant committee to consider that aspect and to undertakeits work expeditiously to ensure there are nodelays.

We cannot bury our heads in the sand, as some seek to do, over this very serious issue. The fact that this country does not have a nuclear installation does not absolve us from taking a strong interest in what is happening. Some waste in this country needs to be disposed of, and the ways of doing it must be considered. I agree with the points raised by Deputy Carey.

Chernobyl is the biggest nuclear timebomb within the range of Europe. I attended a Council of Europe meeting in Kiev when we considered the current situation at Chernobyl. It is clear that the temporary measures put in place in 1986, including the imposition of a sarcophagus on the damaged installation, are causing problems. From what I can understand, there are huge possible dangers associated with the deterioration of the sarcophagus. If it blows again, the catastrophe could be ten times worse than on the last occasion.

The directive deals with a community approach to nuclear safety to ensuring a higher level of harmonisation and standards for nuclear installations within the European Union. That is as it should be, either within the current Union or as it is enlarged next year. The possible dangers on the Union's new borders should also be considered. It would be in the interest of the Union to take a broader approach. If there is another major problem at Chernobyl, the ensuing radiation will not respect national borders. In view of this, it is desirable to extend consideration of the issues involved to helping to raise safety standards at installations located at venues outside the borders of the Union.

The relevant committee should be notified that this is a critical issue. The directive refers to common standards and that a Community approach to the safety of nuclear installation does not necessarily entail laying down detailed technical safety standards. I do not understand that. Verification is to be welcomed, including the financing of it. The directive goes on to say that the objectives of the standard should be to ensure the maintenance of a high level of nuclear safety within the European Union. There appears to be a contradiction here and perhaps it might be explained.

This is a directive, not a regulation. Its purpose is to supervise the supervisors rather than the industry.

I understand that.

That is why it does not go into detail. However, it allows for peer review as well as the Commission having an oversight. The best course of action for us to take is not to engage in the detailed work of the Oireachtas Joint Committee on the Environment and Local Government, but to ask it to expeditiously look into the matter in a detailed manner to try to ensure that the minimum levels laid down are not eroded and to see if the committee could encourage the Government and the Commission to explore encouraging the same safety levels in neighbouring states. We will draw this issue to their attention.

Perhaps there is a cost involved. This issue came up at a Council of Europe meeting in Strasbourg on Monday and the Ukrainian delegate pointed out the moneys needed to implement the safety standards were not being made available. The issue was to get the bank for European reconstruction to help. We need a broader vision when examining this problem and should not examine it from the perspective of within our own borders.

I will bring those points to the attention of the committee. Is that agreed? Agreed.

The next document is COM (2003) 219 which relates to waste electrical and electronic equipment. Members will have noted from their brief that in 2002 two substantive directives relating to COM 219 were adopted. These are the directives on waste electrical and electronic equipment, WEE, and on the restriction of certain hazardous substances, ROHS, in electrical and electronic equipment. These directives were initiated prior to the establishment of the scrutiny process. Their main thrust is the introduction of producer responsibility, whereby manufacturers take responsibility for the entire life cycle of a product.

A feature of the directives - the forced take-back of end of life products - is likely to provide a strong incentive for more ecologically minded design, since manufacturers themselves will directly benefit from reparability, easy dismantling and low content of hazardous substances. The current proposal seeks to amend one element of Directive No. 96 of 2002, the WEE directive. The amendment proposed would put the take-back burden on the producer of the replacement equipment. The person who comes along with the replacement equipment would take responsibility. For example, if one had a Phillips washing machine and then bought a Zanussi machine, it would be the responsibility of the Zanussi installers to take away the Phillips machine. The responsibility is on the producer of the replacement equipment to dispose of the equipment being removed.

That happens in practice but this amendment would put it on a statutory basis. The amendment is designed to eliminate a disproportionate burden on some companies with a larger market share in the past whose share may have reduced. In other words, they will not look after the replacement. Whereas on one level the directive can be deemed purely technical, the overall implications of the WEE and ROHS directives will have a profound impact on waste management in Ireland and the rights of consumers, manufacturers and importers. While Directives Nos. 95 and 96 of 2002 have been adopted, this amending measure provides an opportunity to explore in detail the thinking behind the WEE and ROHS proposals and the structures to be put in place in Ireland for their implementation.

It is proposed to refer this measure to the Oireachtas Joint Committee on the Environment and Local Government for further scrutiny and to the Oireachtas Joint Committee on Enterprise and Small Business to note in the context of the impact of the measure on business. Is that agreed?

The Director of Consumer Affairs might also be asked for a view. I thought responsibility had been placed on manufacturers under waste management directives. They have a practice of using larger electrical and electronic retailers in Dublin and elsewhere as clearing houses. For example, if one wants to return one's cooker in certain locations, it will be taken but one will be charged a collection fee of €40. That does not comply with the spirit of previous directives and I doubt if it complies with this proposal. How can the retail sector be involved in this? That is why the Director of Consumer Affairs might be consulted.

A broad base of people on the task force has been involved, including representatives of Northern Ireland retailers, local government, the EPA and the Department. This measure will be a statutory requirement and there will be no fee involved if it goes through. That takes care of the Deputy's concern.

I wonder about the degree to which retailers are fulfilling their obligations. A significant amount of white goods is deposited in my local landfill by concerned citizens and these goods must be put in a container and sent to Germany, which results in a significant cost to the local authority. I do not suggest that what is proposed is wrong but a high standard is required under this, yet the same standard is not applied to the nuclear industry, which is much more lethal.

The intention behind this proposal is that it might encourage manufacturers to build these products in such a way that they can be dismantled and recycled. That is a good objective. Let us not do the work of the Oireachtas Joint Committee on the Environment and the Local Government. We will refer the proposal to that committee and the Oireachtas Joint Committee on Enterprise and Small Business in the context of how this will impact on business. Is that agreed? Agreed.

COM (2003) 229 relates to enhancing ship and port facility security. The proposed regulation would give a legislative basis to measures adopted earlier at the Intentional Maritime Organisation, IOM, on port and ship security. The regulation will cover both domestic and international shipping, although the IOM measures were based primarily on those for international shipping. The Department of Communications, Marine and Natural Resources indicated there was surprise when the Commission proposals included domestic shipping.

The regulation, as drafted, would see all port facilities - defined in the draft as locations "where the ship/port interface" - having a designated safety officer and a safety plan designed to react to three levels of a perceived or real security risk. A security officer would also have to be appointed for each seagoing vessel. Port facilities may also need to be improved to a level comparable with airports.

The Department has indicated 120 vessels are licensed to carry passengers around the coast of the State. It is likely that each vessel would land at a larger number of port facilities. The proposal, as drafted, could have serious financial implications that could negatively impact on the services provided for islanders and tourists in Ireland. It is likely to have similar consequences for fellow member states with populated islands off their coasts. However, it is not thought likely the proposals will be given a high priority by the incoming Presidency and the Commission may agree to amend the proposals to exclude vessels carrying fewer than 120 passengers, whether that is desirable.

The Department has also indicated that companies operating internationally have been consulted about the proposals and indicated the measures had been anticipated and, therefore, they have made provision for them as far as the ships are concerned.

Given the importance of the service of the boats going between the mainland and offshore islands, it is proposed that this measure be referred for further scrutiny to the Joint Committee on Communications, Marine and Natural Resources and forwarded to the Joint Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs for information. Is that agreed?

I must express alarm at this proposal. There are seven inhabited islands in my constituency and a dozen places that would qualify as ports. The notion that landing areas on the inhabited islands and ports would need to have this security infrastructure in place is mind-boggling.

I am alarmed by the implication in the note from the Department that, while the proposal will not be given a high priority during the Irish Presidency of the European Union, once it is over, this proposal may slip through. I would like to see it being given a high priority during the Presidency on the basis that it should be substantially amended to take into account that we are the main island member state without direct access to the European mainland.

In addition to the seven inhabited islands in my constituency there are about 14 or 15 othersdotted around the coastline. This proposal has serious possibilities as far as this country is concerned and I would like to see it tackled head-on rather than being pushed to one side.

The reference to the incoming Presidency is to the Italians who will take over shortly, not the Irish.

I would like to see this issue being focused upon so that the regulation takes into account the special Irish circumstances.

I share the concerns expressed. The introduction to the document presented by the European Commission states that recent events have shown that no country in the world is immune from terrorism and that, whatever the reason behind them, acts of terrorism can be committed at any time and in any place, shipping being no exception.

While that appears true at first sight, are we going to try to make the world a fortress immune from terrorism? This thinking is obviously influenced by the aftermath of 11 September 2001. I do not agree with it. Perhaps it is not for us to do so today, but someone must send out a message somewhere along the line that, just because some think a fortress can be made of the world does not mean we all think that way.

On the other side of the coin, there have been terrorist attacks on ferries in the past. Some of them travelling from Athens to the islands are very large and carry many people. Whereas this would not apply to a ferry from Castletownbere to one of the islands, it could certainly have application in other places. This is something that needs detailed scrutiny so we will send it for detailed examination to the Joint Committee on Communications, Marine and Natural Resources and the other committee for consideration. There are implications that need to be vetted. Is that agreed? Agreed.

Item 2.4 is document COM [2003] 234 regarding VAT on services provided in the postal sector. This proposal to introduce VAT on postal services has been introduced by the European Commission on the basis that the absence of VAT on services provided by public postal organisations distorts the postal market. It is understood that its introduction could have negative financial implications for voluntary organisations and those bodies not in a position to reclaim VAT. A number of these have made their views known to the Department.

I understand that this proposal is at an early stage of consideration, that the first working group on it is likely to meet in mid-July and that it is therefore likely the proposal will evolve over time. It is important to recall that any decision on this will be made by unanimity.

It is recommended that this measure be referred to the Joint Committee on Communications, Marine and Natural Resources for detailed scrutiny and forwarded for information to the Joint Committee on Finance and the Public Service and the Joint Committee on Arts, Sports, Tourism, Community, Rural and Gaeltacht Affairs. Is that agreed?

Who decides to which products VAT is applied? Is it national governments or the European Union?

The decision is taken by the European Council of Ministers by unanimous decision on recommendation by the Commission.

Do we not have certain items in Ireland to which no VAT is applied but to which it may be applied in some European countries?

I think there are some items. Food is one example and books may be another.

Is it not accordingly a matter of national authority as to whether VAT would be applied to postage stamps?

We went through this idea of taxation in some detail yesterday with an Assistant Secretary of the Department of Finance, Ms McManus, and she gave us a detailed briefing on VAT and corporation and income tax. There are ranges of taxes that can apply to items and, in certain member states, because certain items were not included for taxation purposes from the beginning, they remain in suspension. They do not seek to include them because the precedent has been set.

This proposal could only proceed if the Council of Ministers acting unanimously agreed to it. It is for member states to agree inter-governmentally and it is not something for the Commission. Qualified majority voting does not apply either.

Services of general interest are a topic for discussion in the Convention on the Future of European Union and postal services would obviously be one of those. I imagine there will be some considerable teasing out of how services of general interest might be dealt with in the new constitutional treaty. It obviously has implications for the voluntary sector and so on. We should refer the proposal and we could send a stamped, addressed envelope in anticipation of a reply.

With VAT.

There is an alternative, namely, to give the VAT exemption to private operators.

If VAT applies, the cost of stamps rises and e-mail and telephones, for example, become more attractive. It has implications across the board. If one is registered, one claims back the VAT. It is the consumer and non-registered organisations that would pick up the cost. This proposal needs detailed examination and we should refer it for that. Is that agreed? Agreed. In summary, items 2.1 to 2.4 warrant further scrutiny and will be referred to the appropriate sectoral committees.

Item 3.1 is document COM [2003] 330 which deals with restrictive measures in respect of Liberia. Under the confidential briefing procedures, this is a matter on which I was briefed before a decision was taken on it. This regulation was derived from an EU Council common position that itself is based on EU-UN resolutions. It renews the EU embargo on the direct or indirect importation into the Community of rough diamonds from Liberia and includes a prohibition on the importation into the Community of timber products from Liberia. The trade in the goods concerned is believed to be funding the conflict in certain regions of the country. The regulation was adopted at the General Affairs and External Relations Council on 16 and 17 June. The earlier common position was considered by the sub-committee. It is proposed to note the measure.

Perhaps we should consider the impact on the ports in west Cork.

On a serious note, the conflict that has erupted again in recent days has been dreadful with fighting and killing occurring again.

The idea is to try to bring some sanity to the conflict.

Document COM [2003] 126 is an anti-dumping measure applicable to certain hot rolls of coils and tube and pipe fittings of iron or steel. Document COM [2003] 162 is an anti-dumping duty on imports of stainless steel fasteners and parts thereof originating in China, India, Korea, Malaysia, Taiwan and Thailand. These items were adopted before coming here. A number of other directives were adopted also before coming here. I am concerned that a number of documents emanating from the Department of Enterprise, Trade and Employment have not come in for vetting and are going through. I have written to the Secretary General asking why this is happening and requesting that the practice be stopped. I propose that we note these three items in the interim.

I have a strong comment in relation to the directive on salmon. I would not be averse to asking the Secretary General of the Department to appear before us.

Let me deal with these three items. We will note paragraphs 3.2, 3.3 and 3.4 in the context that I will be writing to the Secretary General of the Department. We will proceed to paragraph 3.5 which deals with anti-dumping and anti-subsidy proceedings concerning imports of farmed Atlantic salmon originating in Norway, Chile and the Faroe Islands. This proposal was adopted prior to consultations with the committee. I would like the committee to note that this measure is deemed to be of major significance by the Department of Enterprise, Trade and Employment. However, the European Council adopted the proposal on 26 May 2003. Ireland and the UK opposed the lifting of the anti-dumping and anti-subsidy measures. The following statement was included in the Council minutes of the meeting of 26 May:

Ireland stated that it could not support the Commission proposal. In its view, this action would leave an already fragile EU salmon-producing sector with a very uncertain future. In particular, the livelihoods of small producers in remote areas, without alternative forms of employment, would be at serious risk.

The anti-dumping measures were first introduced in 1997 on imports of farmed Atlantic salmon, originating in Norway. Since then a large number of exporters-producers in Norway were exempt from duties on condition that they adhere to certain minimum prices. As a matter of course the anti-dumping-anti-subsidy measures would have come up for review after five years. The Commission conducted such a review and included the proposed anti-dumping-anti-subsidy measures for Chile and the Faroe Islands.

Arising from its review, the Commission concluded that the total amount of Norwegian governmental support to salmon has decreased significantly. The review also found that the volume of Chilean and Faroe Island imports into the Community did not warrant anti-dumping measures. The Commission concluded that in the absence of a continuation or recurrence of dumping and subsidisation of exports by Norway, the existing measures cannot be continued, or new measures against Chile or the Faeroe Islands initiated.

It is proposed to note this measure. However, given the potential impact of the proposal, and notwithstanding the fact that the measure has been adopted, it is proposed to forward the proposal to the Joint Committee on Communications, Marine and Natural Resources for its information. It is further proposed that this should be a subject of my letter to the Secretary General of the Department of Enterprise, Trade and Employment.

I am unhappy about this proposal, not just the timing of it. I am pleased that Ireland objected at the time. Norway is probably one of the wealthiest countries in Europe. The average earnings there are in the region of €50,000 per person per year. They have tens of billions of euro in their bank accounts from oil revenues they have not spent over the years. It is an immensely wealthy country. What this proposal appears to be saying is that because the Government is no longer subsidising the production of farmed salmon, they should be allowed full access to the European market. I am not sure if this includes customs duties.

Norway has not joined the European Union. It has deliberately decided to keep its money for itself and not share its wealth with the people of Europe. To allow its large salmon industry flood into the European and Irish markets is a scandal. I am extremely unhappy about this measure. I would like to know why Ireland was not more vigorous in its campaign to stop this happening or can the matter be reviewed again? Perhaps I am missing something. Certainly from what I can see, it is a retrograde step. There is absolutely no need for the measure and Norway should be paying hand over fist to enter the European market, if at all.

There might be a dangerous down side to the thinking of Deputy Mulcahy. Norway is already part of the EEA, the customs free zone, therefore duties cannot be levied. Other countries throughout the world might consider us to be very wealthy compared to their situation. Going back to my west Cork roots, where we produce a lot of milk, beef and so on, I could see the same kind of thinking arising in countries that might be trying to stop our dairy and beef exports because this could be regarded as a wealthy country. We should be careful putting forward views restraining trade. I am aware there are certain circumstances where one would seek to protect a niche or a corner of the market but, in the main, free trade has benefited this country enormously and only in the most exceptional circumstances should we support measures against free trade.

However, it is extraordinary that we should get a note from the Department of Enterprise, Trade and Employment stating that this measure is deemed to be of major significance. It is their opening line and they then tell us they have already agreed to it. I support fully the approach outlined by the Chairman. We may as well give up the ghost if this is the thinking of the Department. I can see how steps may have to be taken within days or weeks in relation to urgent measures of a Community nature. As this is something which came up for review after five years and was considered by the Department to be of major significance, it is not acceptable that it should be brought to our attention after it has been agreed. We cannot accept that kind of thinking.

I concur with Deputy O'Keeffe on the manner in which this has been dealt with by the Department. I am baffled that a process which began in February 2002 and is regarded by the Department as of major significance should be dumped on us at this stage. It may or may not be of huge significance but the manner in which the Department has dealt with this and other draft directives is entirely unacceptable. I support the Chairman writing in the strongest terms to the Secretary General and, if necessary, requesting that he appear before this committee to explain how these situations arise on a continuing basis.

Not only did the process begin but the document was available on 7 May. There was time to bring it to the attention of the committee but that was not done. There are a couple of documents yet to be dealt with, it is not just this one and the three we have noted. There are a few more anti-dumping measures which have been dealt with already and they have not been brought to the attention of this committee. I was inclined to write to the Secretary General. However, I can write to him, meet him or ask him to attend.

I previously raised the issue of this Department and we got assurances at the time that it would sharpen its practices, which clearly has not been done. There are three or four issues relating to the same section of the Department. The officials in that section might like to explain how this has arisen.

Will we invite the Secretary General to come before the committee?

I think so.

It is a very big Department but that is not the point. This is not a residents' association, this is a scrutiny committee of the Oireachtas. We will invite the Secretary General to appear, the objective being to say that except in exceptional circumstances, we do not want directives or regulations going through before we have seen them and, second, to express concern about particular ones that are of major significance.

Perhaps in advance of that meeting we might do an historic trawl of how many such situations have arisen since this committee was established.

We will see if that can be arranged for the next meeting while it is still fresh in our minds. That is referred to the committee even though it has been adopted.

Item 26 is Commission document 260 which relates to customs tariff duties on certain industrial, agricultural and fisheries products. Commission document 264 relates to anti-dumping duties on imports of tube or pipe fittings or iron or steel originating in China and Thailand or consigned from Taiwan. Item 3.8 number 281, concerns countervailing duties on imports of recordable compact discs originating in India. Items 3.9 and 3.10 are documents 292 and 293, together, dealing with anti-dumping measures on imports of magnesium oxide originating in China and anti-dumping measures on imports of dead burned magnesia originating in China. Item 3.11 is Commission document 295 regarding an extension of anti-dumping duty to imports of certain malleable cast iron tube or pipe fittings consigned from Argentina. All these items have been dealt with before they have come to the committee. That is to underline the points of concern which we have made. In all these cases it is proposed to note the measures and we will take up with the Secretary General of the Department why it is that this practice has come about. Is that agreed? Agreed.

Item four is, the reports of the sub-committee. The 14th and 15th reports of the sub-committee have been circulated. It is proposed that the reports, as circulated, as amended, be agreed and placed in the Library of the Houses of the Oireachtas. Is that agreed? Agreed.

The next meeting of the sub-committee is scheduled for Thursday, 10 July 2003 at 9.30 a.m.

Are we meeting in August and September?

We will have meetings in July and in September but not in August.

Could we meet later in September if possible?

We will not have meetings in the first couple of days but there may be some scrutiny that needs to be done in advance of Council meetings. For the information of members, the main committee will be going to Clonakilty on 26 September. It will be the third of our scheduled meetings.

Is Deputy O'Keeffe organising the hospitality?

The sub-committee adjourned at 10.24 a.m. until Thursday, 10 July 2003 at 9.30 a.m.
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