GALILEO PROGRAMME (10427/06, 10431/06,
11282/06)
Letter from the Chairman to Stephen Ladyman
MP, Minister of State for Transport, Department for Transport
Sub-Committee B considered this document (11282/06),
and your Explanatory Memorandum, at its meeting on 9 October 2006.
As you will be aware from the Committee's scrutiny
of the related proposal (10431/06) earlier this year, we share
the consensus view that the Galileo Joint Understanding's responsibilities
should be passed to the Galileo GNSS Supervisory Authority. It
is important that the handover between the two bodies is rapid
and smooth in order to avoid either unnecessary duplication or
disruption to the scheme.
We are thus content to lift scrutiny from this
document.
10 October 2006
Letter from Stephen Ladyman MP to the
Chairman
I thought it would be helpful if I provided
your Committee with an update on the developments that have taken
place since I submitted the above Explanatory Memoranda, and a
response to the queries the Committee raised. Both proposals have
been the subject of discussion at Working Group, in Council, and
in the European Parliament, and the UK is now content with the
text of these draft Regulations.
EM 10431/06 refers to the Commission's proposal
for amending Regulation (EC) No 1321/2004 on the establishment
of structures for the management of the European satellite navigation
programmes—ie for the Galileo GNSS Supervisory Authority
(GSA).
In additon to two more minor amendments that
I will draw your attention to, there are two main developments
I want to highlight. The first is to notify the Committee that
the proposed legal base for the proposed Regulation has changed
from Article 308 to Article 171. The legal base for Regulation
1321/04 is Article 308 and the Commission originally intended
using the same legal base for the amending legislation. The decision
was agreed by deputy ambassadors at their meeting on 29 September.
(i) It was our initial view, as set out in EM10431/06,
that the use of Article 308 was justified for this proposal as
we felt that it was appropriate for amending legislation to use
the same Treaty base as the original legislative instrument. We
considered that the primary purpose of the GSA was to regulate
the Galileo programme, the contract with the concessionaire and
public interests in relation to the programme. That said, given
that the UK is now content with the text of the draft regulations,
we are content for the amending legislation to be based on Article
171. In the circumstances we did not consider that arguing about
the legal base would protect any UK interests.
The second development refers to our concerns
about the tratment of intellectual property rights (IPR) under
the proposal. The EM highlighted several issues in relation to
IPR, in particular we called for a measure of flexibility to allow
explicit recognition of prior Galileo IPR that may be owned by
other third parties, including Member States, for the retention
of IPR by the GSA to not be at disproportionate cost and for further
clarification about the organisation that would be responsible
for keeping and defending IPR. In doing so we had stressed to
the Commission that our purpose was to enhance the clarity of
the text and avoid any potential for future conflicts arising
from possible inconsistencies. The Commission advised us that
whilst the GSA would be the sole owner of the Galileo system and
associated IPR, this did not mean that the GSA could not allow
others to make use of the IPR. For example, the GSA would have
to allow the concessionaire to make use of the IPR in the first
instance. Equally, there was nothing to prevent the GSA from allowing
other parties or organisations such as a Member State or the European
Space Agency (ESA) to use Galileo-related IPR. Explicit guidance
could be sent out in the concession contract and any future proceedings
would have to be consistent with it. The Commission also subsequently
amended the Regulation to make it explicit that the references
to the ownership of assets covers trade mark rights and all other
property rights within the meaning of Article 1(1) of Commission
Regulation 772/2004, on the application of Article 81(3) of the
Treaty (Rules aplying to undertakings) to categories of technology
transfer agreements, and Article 2 of the Convention of 14 July
1967 establishing the Intellectual Property World Association.
This makes clear that the GSA would be the proprietor of the IPR
of the Gailieo system, Given the assurances from the Commission
and the amendments it made to the text we were content to lift
our reserve on the legislation.
The first of the two minor amendments that I
wish to mention provides for the establishment by the Administrative
Board of a System Safety and Security Committee. It will be composed
of one representative per Member State and one from the Commission.
A representative from ESA and one from the Secretary-General of
the Council, High Representative for the Common Foreign and Security
Policy shall attend as observers. The second noteworthy amendment
to the text grants ESA observer status on the Administrative Board
and the proposed System Safety and Security Committee. This is
a logical amendment in recognition of standard practice by which
ESA is currently invited to attend meetings of the Administrative
Board.
The European Parliament approved this Regulation
on 12 October 2006. Member States reached a General Approach on
the draft Regulation at the October Transport Council. The Regulation
will now be adopted shortly. In commenting on EM 11282/06 of 25
July 2006 both Scrutiny Committees endorsed the intention to minimise
the duplication of structures and costs of the GJU and the GSA.
In doing so, however, the House of Commons Scrutiny Committee
requested an explanation for the increased costs it was suggested
that the GJU be authorised to finance, and confirmation that this
would not be followed by further requests for public expenditure
on Galileo. The additional funding is required to ensure the completion
of the In Orbit Validation Phase (IOV). Further funding for this
was necessary because of design changes and other unexpected development
costs. The full details of how the Commission proposes to find
the necessary finance required—€201 million (£139
million)—were set out in the earlier Explanatory Memorandum
of 13 July 2006 on the Galileo stock take (Document 10427/06 COM
(2006) 272 final). This amendment provides for the remaining resources
from the GJU budget, after it is wound up, to be used for the
Union's contribution to the additional IOV costs.
Funding for the Galileo programme is split equally
between the EU and ESA. Any consideration of further funds for
Galileo would be for the GJU/GSA and ESA in the first instance.
As the Government attaches great importance to securing value
for money within the Galileo programme, we will look to ensure
that all Galileo expenditure within ESA and the EU is subject
to appropriate scrutiny and challenged when required.
There has been one change to note in the draft
Regulation; 31 December 2006 has been inserted as the firm and
final closing date for the GJU. Previously the closing date of
the GJU had been the end of the development phase. This is now
scheduled for 2008 and it is logical to alter this closing date
in order to avoid duplication of structures and costs between
the GJU and the GSA.
The European Parliament has now approved this
Regulation. Member States reached a General Approach on the draft
Regulation at the October Transport Council. The Regulation will
now be adopted shortly.
I will continue to keep you informed of progress
on the Galileo programme and expect to send you a Supplementary
Explanatory Memorandum giving a more detailed update on the programme
in due course.
27 November 2006
Letter from the Chairman to Stephen Ladyman
MP
Thank you for your letter of 27 November 2006.
Sub-Committee B considered your letter at its meeting on 11 December.
We were grateful to you for updating us on both
draft Regulations. We were pleased that your concerns over intellectual
property rights have been addressed in the revised draft Regulation
10431/06, and are content to lift scrutiny on the document.
We look forward to receiving a Supplementary
Explanatory Memorandum from you providing a more detailed update
on the programme.
12 December 2006
Letter from Stephen Ladyman MP to the
Chairman
I thought it would be helpful if I provided
your Committee with an update on recent developments on the Galileo
programme, since my letter and Supplementary EM 10427/06 of 27
November 2006 a copy of which is enclosed for ease of reference
(not printed). I will also comment on a question raised by the
Commons Committee during its consideration of the SEM, as it may
also be of interest to your Committee. I will be writing separately
concerning our response to the Commission's Green Paper (EM 16540/06).
There were two agenda items on Galileo at the
Transport Council on 22 March 2007. The first was an update from
the Commission on the status of the Public Private Partnership
(PPP) negotiations and the second was on a draft mandate proposal
to authorise the Commission to open negotiations with non-EU countries
on participation in the GSA.
The PPP negotiations have effectively been at
a standstill for a number of months due to the inability of the
private sector consortium bidding to run Galileo to agree a governance
structure, to appoint a CEO (fully empowered to take decisions
in the contract negotiations) and to agree the division of work
amongst themselves. It had become impossible to smooth away these
problems. Before the March Council, the Commission distributed
two letters from the Presidency and Vice President Jacques Barrot,
with a frank assessment of the present situation. Discussions
at the Council concluded with the adoption of conclusions in which
Ministers issued a strong message to the consortium with a deadline
of 10 May for its governance to be agreed.
The Council conclusions reaffirm the decision
for a PPP but acknowledge that the Commission should assess the
options available and provide the results to the June Council.
If there is no assurance by June that the negotiations can proceed,
the Council may have to consider the other options. The UK will
press for transparency on all proposed measures for taking the
project forward and will continue to pursue our priority objectives
of value for money for the Community, improved governance and
competition within the programme.
The delay in the PPP negotiations is also affecting
the EGNOS augmentation programme as it was hoped to transfer a
certifiable, operational system to the concessionaire in March
2008. It now appears that although the documentation required
for the system to be certified for safety-critical aviation use
should be complete by that date, the necessary contracts with
the private sector operator will not be in place to permit the
transfer and provide the stable, long-term management and funding
structure necessary for certification. The GSA, ESA, Eurocontrol,
the Commission and EU Member States are therefore discussing interim
management arrangements that will allow certification to take
place and realise the benefits of the system.
A mandate for negotiations with third countries
was agreed at the Council after prior discussion at Working Group
level. Given the need to preserve the confidentiality of the negotiating
process we were not able to inform your Committee of the scope
and development of these proposals before the adoption of the
text. The mandate authorises the Commission to open negotiations
with non-EU countries that wish to enter into co-operation agreements
with the GSA, with final approval resting with the Council. The
proposal is that non-EU countries should have the possibility
of participating in the GSA as associated members in a new and
yet to be established body called the Galileo International Board
(GIB). The proposal is that the GIB would be composed of representatives
of the Commission, the EU Member States and one delegate per associated
member. Its opinions would be considered by the GSA Administrative
Board. We expect an amendment to EC Regulation 1321/2004 would
be required to set up the GIB.
When I last wrote to update the Committee on
developments in the Galileo Programme the Commons Committee agreed
to clear the draft Regulations amending Council Regulations 1321/2004
and 871/2002 but requested more information on the proposed System
Safety and Security Committee (3SC). In particular the Committee
asked if:
— it was still the intention to supplement
the Joint Action 2004/552/CFSP on aspects of Galileo affecting
the security of the EU with another Joint Action establishing
a Security and Safety Board and a Centre for Security and Safety;
and
— if so, when a draft Joint Action
is expected.
In its Explanatory Memorandum of 24 May 2004
on Joint Action 2004/552/CFSP the Foreign and Commonwealth Office
(FCO) made reference to the need for a further Joint Action for
the establishment of a security board or centre. The 3SC will
not be an autonomous Board. It shall prepare system safety and
security related GSA Administrative Board decisions and give advice
on the Authority's papers and proposals, guidelines, specifications
and the implementation of security policies.
It is being set up under the provisions of Article
10 of EC Regulation 1321/2004 to report on security and safety
matters related to the Galileo programme. The Committee is expected
to replace the Galileo Security Board. This was set up by the
provisions of the Galileo Joint Undertaking (GJU) Regulation—876/2002—to
advise the GJU on security matters. The GJU is now in voluntary
liquidation and the planned transition to the GSA is being completed.
The GSB is continuing while the 3SC is being set up. The 3SC will
be largely composed of the same experts as the GSB. The 3SC is
a first pillar body and will report directly to the GSA Administrative
Board. Its terms of reference have recently been agreed by the
Board and make it clear that a Member State can refer a matter
to the Council for decision at any time. On second pillar matters
the Council will be advised by the Council Security Committee
(CSC) in GNSS formation—the Council's own committee on GNSS.
The UK will participate actively in both the committees as they
pursue their remits.
The role, responsibilites and architecture of
the Galileo Security Monitoring Centre (GSMC), as the Centre for
Safety and Security is now known, which will be needed in the
operational phase of Galileo, have not yet been defined. The working
assumption is that it will be a unit within the GSA. Two studies
for the GSMC have been let. UK officials have already provided
detailed views to the contractors and are fully involved in the
ongoing discussions.
Taking these developments into account, and
following discussions between my officials and their counterparts
in FCO and MOD (who provide us with technical and security policy
advice) we no longer take the view that a further Joint Action
is necessary. Neither the formation of the 3SC, nor the Council's
own security formation requires one. The working arrangements
between the GSA and the Council Secretariat are currently still
being defined. We will continue to work closely with FCO in monitoring
the situation and will press for a further Joint Action if required.
23 April 2007
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