House of Commons - European Scrutiny

Select Committee on European Scrutiny Eighteenth Report

15 European Transparency

(28492)

7793/07

+ ADD1

COM(07) 127

Commission Communication: Follow up to Green Paper on the European Transparency Initiative

Legal base —

Department Foreign and Commonwealth Office

Basis of consideration EM of 18 April 2007

Previous Committee Report HC 34-xxxii (2005-06) para 4 (21 June 2006), HC 34-xxxvi (2005-06) para 11 (19 July 2006) and HC 34-xxxviii (2005-06) para 12 (18 October 2006)

To be discussed in Council To be determined

Committee's assessment Politically important

Committee's decision Cleared

Background

15.1 In the introduction to the Green Paper, which we considered on 21 June 2006, the Commission said that, with a commitment to widening opportunities for stakeholders to participate actively in EU policy-shaping as one of the "Strategic Objectives 2005-2009", it launched a "Partnership for European Renewal".[49] This emphasised that "inherent in the idea of partnership is consultation and participation" and stressed the importance of a "high level of transparency" to ensure that the Union is "open to public scrutiny and accountable for its work". The Commission said "high standards of transparency are part of the legitimacy of any modern administration" and that "the European public is entitled to expect efficient, accountable and service-minded public institutions and that the power and resources entrusted to political and public bodies are handled with care and never abused for personal gain". Against this background, the Commission launched the "European Transparency Initiative" (ETI) in November 2005.[50]

The Green Paper

15.2 The report called for a more structured framework for the activities of "interest representatives" (i.e., lobbyists); feedback on the Commission's minimum standards for consultation; and the mandatory disclosure of information about the beneficiaries of EU funds under shared management. The Commission proposed:

— a voluntary registration system: run by the Commission, with clear incentives for lobbyists to register; compulsory registration not appropriate, though a review should be conducted to examine whether self-regulation has worked;

— a common code of conduct: to be developed by the lobbying profession; and

— a system of monitoring and sanctions: The report proposes that they should be applied in all cases of incorrect registration and/or breach of the code of conduct.

15.3 The report also outlined the need to raise awareness of the use of EU money, notably by explaining better what Europe does and why it matters. The CAP and fisheries policies, the Structural and Cohesion Funds and the European Refugees Fund make up 75.7% of the EU budget (€86.6 billion a year). The shared management formula meant that, when EU citizens asked the Commission for information on the use of the EU budget, it either did not have the information or did not have the right to hand it out without the prior agreement of the Member State concerned. In order to promote transparency, the report proposed a new EU legal framework, directly applicable in all Member States, to ensure a consistent approach to all beneficiaries of EU funds. A consultation began on 6 May 2006, and ended on 31 August 2006.

15.4 When we considered the Minister for Europe's 15 June 2006 Explanatory Memorandum, we concluded that expressing support for "the broad thrust of this Green Paper" was inadequate, and asked him to say what he thought of the proposals, and what reply the Government planned to offer.[51]

The Minister's first letter

15.5 In his 12 July letter, the Minister for Europe (Mr Geoffrey Hoon) undertook to send the detailed Government response as it was submitted to the Commission; but, conscious that this would be during the Parliamentary recess, sought to provide some information before the House rose. The Minister said that he believed lobbying "should be as transparent as circumstances allow". Setting up a publicly available register of lobbyists would be likely to result in a more transparent system, which he supported. Consolidating the existing codes of conduct would clarify lobbying procedures for both EU citizens and lobbyists, and was therefore a sensible suggestion. Further discussion was required on the composition of a new external watchdog to monitor compliance; he would want to avoid creating another agency requiring extensive funding; however, this body would be needed. He would need to consider the details of any proposed scheme regarding sanctions for breaches of a voluntary code of conduct before reaching a view. He supported mandatory disclosure of information about the beneficiaries of EU funding, but would have to take into account the financial and administrative implications of gathering this information.

15.6 We looked forward to hearing the Minister's considered views, once the consultation with other Government Departments, the Devolved Administrations and relevant stakeholders to which he referred had been concluded, and continued to keep the document under scrutiny.[52]

The Minister's further letter

15.7 The Minister's further letter of 14 September provided the Government's detailed response, which covered:

— "Minimum Standards for Consultation: a review of the current situation and detailed comments on suggested reforms under the headings of:

· "Raising Awareness";

· "Clarifying scope of applicability of minimum standards";

· "Duration of consultation exercises";

· "When and how often to consult"; and

· "Hearing a diverse range of views and, in particular, engaging with SMEs".

— A voluntary registration system for lobbyists (which the Government supported)

— A common code of conduct (ditto)

— A system of monitoring and sanctions (a danger that a mandatory system may mean that organisations with a legitimate interest are excluded from taking part in the decision making process)

— Compulsory Disclosure of Beneficiaries of EU Funding under Shared Management (which the Government continued to welcome, it being "important that EU citizens are aware who receives their tax money".

— Review of the "access to documents" legislation (a reasonably sensible compromise).

15.8 We then cleared the document, which we considered relevant to the debate we had already recommended on the Commission Communication on "A Citizens' Agenda — delivering results for Europe", which took place on 26 October 2006, and which was now better informed by having the Minister's considered views on this major Commission initiative on participation and transparency.[53]

The Government's view

15.9 In his helpful Explanatory Memorandum of 18 April 2007 the Minister for Europe at the Foreign and Commonwealth Office (Mr Geoffrey Hoon) says that, as part of this consultation exercise, the European Economic and Social Committee (EESC) held a hearing with more than 60 different groups, and that this document outlines the feedback received and the next steps proposed by the Commission. He summarises it thus:

Register of interest representatives

"In the Green Paper the Commission proposed a voluntary register of lobbyists. Lobbyists who registered would receive automatic alerts to upcoming consultations, thereby creating an incentive for registration.

"Feedback, particularly from Non-Governmental Organisations (NGOs), advocated a compulsory register of lobbyists.

"The Commission proposes to apply the following criteria when assessing whether the information supplied is sufficient to join the register:

i) Professional consultancies and law firms must declare turnover linked to lobbying EU Institutions as well as the proportion of their clients that contribute to this portion of turnover;

ii) "In-house" lobbyists and trade associations must provide an estimate of the cost associated with the direct lobbying of EU institutions;

iii) NGOs and think-tanks must provide details of their overall budget and sources of funding.

Code of Conduct

"The Commission received a large amount of feedback regarding the proposed Code of Conduct. The Green Paper proposed a system that would be developed by lobbyists and include a system of penalties for failure to comply. The feedback received indicates that there is no common position amongst lobbyists making a code developed by the lobbying industry difficult to implement. The Commission therefore proposes to review the existing minimum standards for the conduct of lobbyists first adopted in 1992.

"Feedback indicated a clear preference for a future register and Code of Conduct to be applied to all EU Institutions. The Commission therefore recommends that the European Parliament, the Committee of the Regions and the European Economic and Social Committee should examine the feasibility of using one system.

Consultation Standards

"Feedback indicated that a large number of organisations do not believe the Commission gives enough information on how responses to consultation exercises have fed into the policy process. There was also concern that consultations are often conducted with less than the 8-week minimum deadline. The Commission proposes to improve:

i) Training of staff to ensure they are aware of the minimum standards for consultations;

ii) Sharing information and good practice between the Directorates-General in the Commission;

iii) Reviewing the guidelines for stakeholder consultations;

iv) Creating a new standard consultation template to improve consistency.

Publications of the Beneficiaries of EU Funds under Shared Management

"The Commission held discussions with Member States, the European Parliament, lobbyists and civil society. A number of Member States have now dropped their initial opposition to the publications of the beneficiaries of EU funding. The Commission was therefore able to insert the basic requirements of the system into the Financial Regulation during 2006.

"The Commission points out that implementing this policy will be complex as it requires significant co-operation with a number of organisations across the EU. Feedback indicated a preference for a searchable, centralised database, managed by the Commission. However, the Commission believes this is not practical as the data is collected by bodies who distribute the EU funds in the Member States, not by the Commission. The Commission therefore suggests the following system in co-operation with the European Data Protection Supervisor:

i) Member States will have to grant public access through national websites. Member States will publish information on the beneficiaries of EU funding on a website with the link published on the Commission website. This will be linked to the website on EU funds under direct management (funds paid directly by the Commission) launched by the Commission in 2006, thereby ensuring equality of treatment between direct and shared management;

ii) In autumn 2007 the Commission will propose a common standard for the publication of data. This will ensure the websites are comparable and that data can be easily searched".

15.10 In relation to the envisaged timetable the Minister says that:

— in Spring 2008, the Commission plans to create and launch a new voluntary register for interest representatives; that this will include an "alert" function; and that the existing CONECCS[55] database will be wound down.

— a Draft Code of Conduct will be discussed with stakeholders in 2007 (no date has yet been set).

— no specific timetable for other areas of implementation have been announced.

15.11 The Minister supports the Commission's proposals for taking forward the three main components of the Green Paper and is pleased that many of the UK's comments have been taken into account. However, he says, there is still much implementation work to be done by the Commission, and the UK "will look closely at the future implementing proposals when they are published by the Commission, which will be deposited for Parliamentary scrutiny".

Conclusion

15.12 We look forward to this, and in the meantime clear the Communication, which we are reporting to the House because of its inherent importance.

49 COM(2005) 12 Back

50 SEC(2005) 1300 Back

51 HC 34-xxxii (2005-06), para 4 (21 June 2006) Back

52 HC 34-xxxvi (2005-06), para 11 (19 July 2006) Back

53 (27508) 9412/06: HC34-xxxviii (2005-06), para 12 (18 October 2006). Back

54 It is the Commission's stated policy that "if this information is not provided, submissions will be considered as individual contributions" COM(2002) 704. Back

55 CONECCS - Consultation, the European Commission and Civil Society Back