Various Documents considered by the Committee - European Scrutiny Committee Contents

Annex: Detailed UK Government Comments


  • Before it would consider potential regulatory responses to recent developments in commodity markets, the UK would need to see a clear evidence base. It is very difficult to be definitive about the role of speculation in recent price spikes, and, whilst the Government continues to monitor relevant research, there currently appears to be little evidence that the price formation process on commodity markets has changed in recent years with the growing importance of derivatives markets. Also, in light of work by a number of international organisations, the Government is sceptical that speculation played a significant role in commodity price spikes.
  • At the same time, the UK is very aware of the importance of commodities markets to farmers, processors and other market participants around the globe, and believes that improved transparency and data availability is important to inform policy making, and aid understanding of the linkages between commodity markets and raw materials. The UK is promoting measures to improve food security for developing countries beyond those which aim to reduce volatility in commodity markets, and strongly supports initiatives to improve transparency in commodity derivatives.
  • Trading in commodities markets plays an important role in providing the liquidity essential to their functioning. Given climate change, and the possibility of international agricultural prices becoming more volatile, the role of agricultural futures and options markets, and the liquidity they rely on, may become more important.
  • The UK also wants to see greater transparency in the physical market, in order to improve the efficiency of price formation and help to reduce the degree to which participants resort to trade distorting behaviour. Greater awareness of market data will help producers to manage the most important risks to their business, and the food price monitoring tool set up by the Commission will increase transparency of food prices, alongside existing tools such as that operated by the Food and Agriculture Organisation (FAO).
  • The UK would need to ensure that statutory initiatives facilitate a more efficient functioning of the market and avoid measures which create market distortions or increase trade barriers.
  • The UK believes that the appropriate response to volatile commodity prices is to ensure that global commodities markets in areas such as agriculture are open, transparent and efficient. Whilst this does not preclude commodity price volatility (since many commodities are inherently volatile), it should help to make supply more responsive to higher prices, and price spikes less frequent and smaller.


  • The UK supports the strategy of seeking to remove anti-competitive practices from the global market but has concerns about a possible stockpiling programme, which would be contrary to its traditional free market approach. More information on how this might work in practice would be required before such a programme could be agreed.
  • The UK would have concerns about any proposals which favoured an interventionist approach that was likely to create market distortion, or increase trade barriers to the global supply of raw materials.
  • The UK Government supports further work to look at options to improve governance, transparency, investment, geological knowledge and skills on extractives in developing countries, especially through international measures which set global standards.
  • The UK agrees with the importance of boosting resource efficiency and recycling, but notes that there is no reference to the infrastructure needed at EU level to reuse the recycled material, and considers that more analysis is needed on how to achieve the optimum economic and environmental balance. It believes that the introduction in 2012 of further EU legislative proposals on waste management would be premature as the revised Waste Framework Directive will by then only have been implemented for just over a year, and the priority should be on enabling Member States to implement that measure.
  • The UK is unconvinced of the need to specify inspection requirements for waste shipments in a legal instrument, and already has a comprehensive programme of inspections, spot checks and enforcement in place, based on an intelligence-led approach, coupled with a programme of inspection of waste sites and communication with established waste operators.
  • Setting binding legal parameters on the inspection regime would fetter local discretion as to the most appropriate enforcement of the controls. Also, the revised Waste Shipments Regulation is a relatively new instrument, and Member States have only just reported at the end of 2009 on the first full year of activity. Until a full analysis of that information is available, it would be premature to introduce binding inspection criteria.
  • The UK is sceptical about applying a global certification scheme for recycling facilities for the export of waste streams, and considers that the best approach involves targeted, intelligence-led enforcement activity, which is already being undertaken, adding that any form of certification scheme could be burdensome without any environmental gain.

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