Select Committee on European Scrutiny Second Report




Draft report of the Internal Market Council to the Helsinki European Council on the integration of environmental protection and sustainable development into internal market policy.

Strategy for the integration of environmental protection and sustainable development into internal market policy — Report to the European Council.

Legal base:
Department: Trade and Industry
Basis of consideration: Minister's letter of 18 September and EM of 19 September 2001
Previous Committee Reports: HC 23-vi (1999-2000), paragraph 4 (26 January 2000) and HC 23-xvi (1999-2000), paragraph 1 (10 May 2000)
Discussed in Council: 30-31 May and16-18 June 2001
Committee's assessment: Politically important
Committee's decision: Cleared


14.1 The Internal Market Council was invited, at the Vienna Summit in December 1998, to report to the Helsinki Summit a year later on how it would integrate environmental and sustainable development concerns into Single Market policy. This followed agreement at the Cardiff Summit under the UK Presidency to an integration process across all areas of the Council's work.

14.2 After an open debate at the October 1999 Internal Market Council, a Presidency report was presented to the Helsinki Council on 10-11 December 1999. We considered this report on 26 January and 10 May 2000,[35] but did not clear it. We asked the Minister to report to us again on progress, in particular on the development of specific Internal Market Scoreboard indicators, noting that, as the mandate for this work dated from the 1998 Vienna European Council, we would have expected substantial progress to have been made on these. We also asked the Minister, Mrs Helen Liddell, to ensure that we were given an opportunity to consider documents on this subject before they were discussed in the Council, rather than after, as happened in the case of this report.

The Minister's letter and Explanatory Memorandum of 18 and 19 September 2001

14.3 The Parliamentary Under-Secretary of State for Competition, Consumers and Markets at the Department of Trade and Industry (Miss Melanie Johnson) comments that some time has elapsed since we asked for a progress report in May last year. Work which the Government expected would be carried out under the French Presidency was not and the Swedish Presidency was left to take it forward fairly rapidly, through discussion in Internal Market Working Groups in March, April and May. She recalls that the Helsinki Summit asked the Council to bring all the integration strategies to a conclusion and submit them as part of a comprehensive strategy to the European Council at Göteborg in June 2001, that is, at the end of the Swedish Presidency.

The Strategy

14.4 The objective of the Strategy is to ensure that further development of the internal market takes account of the need to integrate environmental protection, as well as promoting economic growth and social cohesion. It combines the Community's internal market policy objective, as defined in Article 3 of the Treaty, with environmental objectives set out in the Commission's proposal for the Sixth Environmental Action Programme[36] and the Sustainable Development Strategy[37].

14.5 The Strategy proposes a range of actions, including:

  • effective implementation of Community environmental legislation. Incomplete and fragmented transposition, application and enforcement of this legislation can give rise, according to the Commission, to significant competitive distortions and can undermine effectiveness. Member States should seek to achieve the interim transposition target of 98.5% set by the Stockholm European Council Conclusions by the time of the 2002 Spring European Council;

  • improving and simplifying the regulatory framework and including in it arrangements for effective analysis of the impact of economic and environmental regulation;

  • monitoring of notification by Member States of draft technical regulations under the procedures established in Directive 98/34. This provides a degree of transparency as to national measures taken to protect the environment in areas of legislation which are not harmonised;

  • the effective application of the principle of mutual recognition, an important tool for eliminating technical barriers to trade;

  • effective action to ensure that environmental concerns are adequately represented in the process of standardisation;

  • the evaluation of the Integrated Product Policy proposed in the Commission Green Paper;[38]

  • ensuring that an effective Chemicals Strategy is put in place;

  • encouraging use of environmental considerations in Public Procurement;

  • promoting the EU eco-labelling scheme;

  • promoting consumer information and awareness about environmental issues;

  • a framework for energy taxation to be agreed by ECOFIN;

  • monitoring community guidelines for state aid for environmental protection; and

  • promoting voluntary environmental agreements, environmental considerations in financial statements and the EU Eco-Management Audit Scheme.

The Government's view

14.6 The Minister comments as follows:

    "The text, at our suggestion, contains a section on the European Commission's White Paper for a Chemicals Strategy. Although this is an Environment Council lead, the strategy is being presented at the Internal Market Consumers and Tourism Council (IMCTC) as one of its specific objectives is to prevent the fragmentation of the single market whilst providing a high level of protection for human health and the environment.

    " The mix of regulatory measures, market-based instruments, voluntary agreements with business and provision of information on the environmental impact of goods and services should progress sustainable development, while at the same time working with the free movement of goods and services, which is the basis of the single market. Objectives and indicators have been included for each instrument, which will be vital to monitor the implementation of the strategy. The only exception is Taxation and we are pleased to say that the Presidency resisted calls from some to include them in the taxation section. Indicators on the implementation of environmental directives which relate to the functioning of the Internal Market (98 to date) have already been included in the latest edition of the Commission's Single Market Scoreboard (May 2001). This should prove an effective monitoring mechanism for one of the key sustainable development indicators.

    "It is important that this strategy dovetails with the work of ECOFIN and is consistent with the ECOFIN Conclusions as approved by the Nice European Council. This report stated that policies aiming for sustainable development should not be limited to the environment, but should also take into account economic and social issues. Also that, while the choice of instrument should be on a case-by-case basis, market-based instruments should constitute a major part of any policy aimed at sustainable development, as these are often more efficient than regulation.

    "The development of an Integrated Product Policy or 'IPP' approach at Community level has a significant place in the strategy. It is seen as potentially providing a general framework for the other instruments described in section 3. We consider that IPP thinking does indeed have strong potential for synergy between the internal market and the achievement of sustainable development objectives. It envisages a mix of market-facing instruments, aimed at stimulating consumer demand for greener products and business leadership in supplying them. The development of this approach is still unfolding. The Commission published a Green Paper (presented at the 12 March IMCTC) and, in the light of reactions from other institutions and from stakeholders, is aiming to produce a White Paper by the end of 2001. In practice the effectiveness of the approach is going to depend on how clearly it is focussed on the specific priorities of the Sustainable Development Strategy[39] itself. The Green Paper did not have a clear vision of this kind, but the Government has urged the need to develop one.

    "The Presidency Conclusions of the Gothenburg European Council[40] not only adopted the Sustainable Development Strategy, but invited the Council to finalise and further develop sector strategies for integrating environment into all relevant Community policy areas with a view to implementing them as soon as possible and presenting the results to the Spring European Council in 2002."

14.7 Commenting overall on the strategy, the Minister repeats her predecessor's comment of January 2000, when she said:

    "The UK supports efforts to ensure sustainable development and high standards of environmental performance within the Single Market while minimising the costs on business of regulatory measures and maintaining consistency with open markets."


14.8 We thank the Minister for her full comments on this strategy. We made a point of asking her predecessor to provide us with Explanatory Memoranda on documents such as this for scrutiny before they were agreed in Councils. In the case of this particular paper, we did not sit between 2 May and 18 July, so it would not have been possible to consider the strategy before it was put to the Council.

14.9 However, we note that important further documents connected with the Sustainable Development Strategy are to be presented to the Spring European Council in 2002. It would be regrettable if, once again, we did not have an opportunity to consider these papers before they are presented and we ask the Government to ensure that drafts are submitted in sufficient time for us to do so.

14.10 We now clear these documents.

35  (20819) 11393/99; see headnote to this paragraph. Back

36  (22132) 5771/01; see HC 28-xi (2000-01), paragraph 5 (4 April 2001) and HC 152-i (2001-02), paragraph 3 (18 July 2001). Back

37  (21239) 8307/00; see HC 23-xix (1999-2000), paragraph 19 (24 May 2000). Back

38  (22175) 6143/01; see HC 28-xi (2000-01), paragraph 14 (4 April 2001). Back

39  (21239) 8307/00; see HC 23-xix (1999-2000), paragraph 19 (24 May 2000). Back

40  Press Release No. 200/01 of 15 June 2001, paragraphs 19 to 32. Back

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