European Scrutiny Committee Contents


17 Conflict of interest in EU agencies

(34338)

15096/12

Special Report No. 15/2012: Management of conflict of interest in selected EU agencies


Legal base
Document originated18 October 2012
Deposited in Parliament22 October 2012
DepartmentForeign and Commonwealth Office
Basis of considerationEM of 26 November 2012
Previous Committee ReportNone
Discussion in CouncilNo date set
Committee's assessmentPolitically important
Committee's decisionCleared

Background

17.1 Following a series of press reports alleging conflicts of interest in various EU agencies, the European Parliament asked the European Court of Auditors in May 2011 to undertake a comprehensive analysis of the approach taken by agencies in managing situations where potential conflicts arise.

The current document

17.2 The Court has now sought in this Special Report to fulfil that request by examining four agencies — the European Aviation Safety Agency (EASA), which seeks to maintain a high uniform level of civil aviation safety in Europe; the European Chemicals Agency (ECHA), which has an important regulatory role in implementing EU chemicals legislation; the European Food Safety Authority (EFSA), which provides independent information on food and feed safety; and the European Medicines Agency (EMA), which is responsible for the scientific evaluation and supervision of medicines developed by pharmaceutical companies for use in the EU.

17.3 It notes that there are a number of definitions of conflict of interest, and it says that, for the purpose of this audit, it has taken that provided by the OECD, namely "situations in which the private interests and affiliations of a public official create, or have the potential to create, conflict with the proper performance of his/her official duties". It also notes that certain conflicts are embedded in an agency's structure (insofar as the same organisation is both a management representative and a supplier of services), or in the use of research performed by the industry, and that this is compounded by the fact that agencies often operate in a highly technical area, where expertise is in limited supply, meaning that individuals often pass between the agency and industry.

17.4 The Court says that this makes it paramount for there to be robust systems in place to manage this: and it notes that there is no comprehensive EU regulatory framework which would ensure minimum standards of independence and transparency applicable to all EU agencies and to those who influence strategy, operations and decision-making. It also says that, although various degrees of shortcomings were identified in the agencies examined, none of them adequately managed conflicts of interest. However, it welcomes the fact they are all continuously developing and enhancing their policies and procedures.

17.5 It recommends that improvements could be made by:

  • screening candidates for conflict of interest before their appointment;
  • establishing policies and procedures which would ensure that conflicts of interest are managed to a comparable standard by national authorities performing outsourced tasks;
  • establishing clear and objective criteria for the assessment of declarations of interest and applying them consistently;
  • introducing gifts and invitations policies and procedures for the entire agency;
  • developing clear, transparent and consistent breach of trust policies and procedures for the entire agency;
  • improving the transparency of the declared interests during the meetings and in the context of scientific decision-making processes;
  • ensuring comprehensive and compulsory training on conflict of interest;
  • the selected agencies, in coordination with all the appointing bodies involved, addressing post-employment issues.

17.6 The Court also recommends that the EU legislator, possibly in conjunction with other EU institutions, should consider developing the regulatory framework dedicated to the management of conflict of interest situations, using as a reference the OECD guidelines and existing best practices.

The Government's view

17.7 In his Explanatory Memorandum of 26 November 2012, the Minister of State at the Foreign and Commonwealth Office (Mr David Lidington) simply says that there are no immediate policy implications, since the Court's recommendations are purely declaratory and lack any legal effect. He adds that the recommendations could potentially trigger a process leading to the creation of the comprehensive EU regulatory framework which is called for in the report, and that the Government would clearly need to see the details of any such proposal before it could take a definitive view. However, he says that it is in principle committed to full transparency within the EU institutions and to mitigating conflicts of interest.

Conclusion

17.8 As the Minister has pointed out, any legislative follow up to this report by the European Court of Auditors will presumably be the subject of formal proposals, and hence liable to scrutiny in their own right. In view of this, we do not see any need to hold this document under scrutiny, but, as it deals with an area of some importance and wider interest, we think it right to draw it to the attention of the House.




 
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Prepared 13 December 2012