# EUR-Lex - 52006IP0077 - EN

Important legal notice

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# 52006IP0077

**European Parliament resolution on relocation in the context of regional development (2004/2254(INI)) **

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Official Journal 291 E , 30/11/2006 P. 0123 - 0133 *

P6_TA(2006)0077

Relocation in the context of regional development

European Parliament resolution on relocation in the context of regional development (2004/2254(INI))

The European Parliament,

- having regard to the 1989 Community Charter of Fundamental Social Rights of Workers and the associated action programme,

- having regard to Council Directive 94/45/EC of 22 September 1994 on the establishment of a European works council or a procedure in Community-scale undertakings and Community-scale groups of undertakings for the purposes of informing and consulting employees [1],

- having regard to Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies [2],

- having regard to Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses [3],

- having regard to Directive 2002/14/EC of the European Parliament and of the Council of 11 March 2002 establishing a general framework for informing and consulting employees in the European Community [4],

- having regard to the Commission communication on guidelines on national regional aid [5],

- having regard to the Commission communication on review of the guidelines on national regional aid for the period after 1 January 2007 [6],

- having regard to Commission Regulation (EC) No 2204/2002 of 12 December 2002 on the application of Articles 87 and 88 of the EC Treaty to State aid for employment [7],

- having regard to its resolution of 13 March 2003 on the closure of companies which have benefited from EU financial assistance [8],

- having regard to its resolution of 22 April 2004 on the Commission communication on the Third Report on economic and social cohesion [9],

- having regard to its resolution of 6 July 2005 on the proposal for a Council Regulation laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund [10],

- having regard to its resolution of 15 December 2005 on the role of direct State aid as a tool of regional development [11],

- having regard to Articles 87(3), 136 and 158 of the EC Treaty,

- having regard to Rule 45 of its Rules of Procedure,

- having regard to the report by the Committee on Regional Development and the opinion of the Committee on Employment and Social Affairs (A6-0013/2006),

A. whereas the goal of regional development policy is to encourage the development of the regions of the European Union, and to this end, it is necessary to ensure consistency between regional development policy and competition policy, and whereas this means that public aid must not provide a spur to the relocation of economic activity,

B. whereas Cohesion Policy is an instrument of the European Union that enables it to reduce disparities affecting the poorest regions and it is essential to support companies and invest in infrastructure projects within those regions; whereas public aid is a legal instrument for achieving that objective,

C. whereas companies choose to relocate their activities for manifold reasons, some of which are in no way connected to issues of productivity, efficiency or economic viability; whereas such relocation is liable, however, to result in major job losses and economic hardships whose impact on regional development will be all the more pronounced where there are few employment possibilities in the region abandoned,

D. whereas in the light of the situation described it is necessary to set up Community-widemonitoring systems to quantify the economic and social cost of any relocation; whereas the European Parliament, in its resolution of 6 July 2005, called for the adoption of all necessary legal measures to ensure that firms which receive Community funding do not relocate for a long and predetermined period, and for a provision ruling out the cofinancing of operations which result in substantial job losses or the closure of plants at their existing locations; whereas it also considered, in its resolution of 15 December 2005, that EU aid for company relocations does not provide any European added value and should therefore be avoided,

E. whereas globalisation, technological progress and the removal of barriers to the access of certain countries facilitates international trade and presents the European Union with opportunities in a globalised world, but may also increase the risks of relocation,

F. whereas public aid must contribute to creating lasting employment,

G. whereas neither the Community's statistical system nor those of the EU Member States are able at present to provide comprehensive and accurate data on the scale of relocations of activities within or out of the Union, particularly when it comes to quantifying company relocations and their impact on employment in the country of origin and the new host country; whereas the European statistical mechanism should therefore be reinforced,

H. whereas public aid may be needed as an emergency measure in circumstances where restructuring or relocation will lead to major job losses in a given locality,

1. Points out that company relocation is a serious concern in several Member States;

2. Calls for the objective of economic, social and territorial cohesion and the strategic goals of full employment, along with rights and social progress, set out in Article 1-3(3) of the draft Constitutional Treaty, to be respected and implemented, and calls for practices that are not conducive to the achievement of those goals, such as relocation that is not justified from the point of view of economic viability or that is liable to lead to substantial job losses, not to be supported financially by the EU;

3. Points out that the Structural and Cohesion Funds must serve the purpose of cohesion consisting of promoting cohesiveness and solidarity between Member States, and that efforts must focus as a priority on the regions lagging behind economically;

4. Believes that relocation can affect not only highly labour-intensive "traditional" industries, but also highly capital-intensive industries and the services sector;

5. Recommends that the Commission keep current company closures and relocations under proper and careful review and that it demand that aid granted be paid back if it is misused;

6. Stresses the necessity for the Commission and Member States to initiate the adoption of measures at national and Community levels to prevent the potential negative impacts on economic development and the social tragedies engendered by the loss of direct or indirect employment in regions of the European Union from which companies pull out and which have little or no ability to restructure themselves;

7. Calls on the Commission to take all requisite measures to prevent European regional policy becoming an incentive to the relocation of companies with ensuing job losses;

8. Acknowledges the Commission's proposal, within the framework of the reform of the Structural Funds, to penalise companies which, having received European Union aid, relocate their activities within seven years of the grant of aid, this being an essential first step in support of economic, social and territorial cohesion within the EU;

9. Calls also for companies that have received public aid — in particular where they have failed to comply with all of the obligations connected with that aid — or laid off the staff at their original location, without complying with national or international law, and have then relocated within the European Union, to be blocked from receiving public aid in their new location, and likewise blocked from receiving Structural Funds or State aid for a period of seven years following relocation;

10. Believes that measures should also be contemplated with regard to "reverse" relocations, namely those which, without relocation of the company's activities, lead to a deterioration in working conditions;

11. Believes that in the absence of better coordination of the European Union's national systems of social provision, it is now imperative that a package of coordinated measures be implemented via the European Union's various policies; for that reason, calls for the rapid establishment of a European strategy for averting, managing and monitoring the relocation of companies within and also out of the EU, implemented at Union level and coordinated with all the Member States;

12. Draws attention, in this connection, to the significance of its resolution of 13 March 2003 cited above and asks that the Commission entrust the Dublin-based European Foundation for the Improvement of Living and Working Conditions (European Monitoring Centre on Change) with the remit of studying, assessing (including establishing the number of jobs created and lost, while taking into account their quality) and monitoring the issue of relocation, in order to objectivise its social and economic impact and effect on cohesion policy, spatial planning and regional development, and of submitting the findings obtained and putting forward specific proposals to Parliament in the form of regular reports;

13. Welcomes the fact that the Commission has taken measures adapting the new guidelines on national regional aid with a view to repayment of aid granted to companies which fail to comply with the conditions attaching to the aid and which relocate their plants within or, especially, outside the EU;

14. Notes that the Commission has also included within the new guidelines on national regional aid a system allowing for the grant of public aid, as an emergency measure, in the event of major job losses even though the region or locality concerned would not normally be eligible for such aid;

15. Reiterates its call for State aid law to be coherent and for excessive disparity in assistance between neighbouring regions to be avoided;

16. Calls on the Commission to make the grant and continued payment of public aid from the budget of the European Union or a Member State conditional on precise commitments on employment and local development that are binding on the management of the company and that of the local, regional and national authorities concerned;

17. Alerts the Commission to the importance of ensuring that these subsidies carry solid guarantees on long-term employment and regional growth;

18. Calls on the Commission to implement effectively the existing provisions with regard to reimbursement of subsidies by companies which fail to respect their obligations with regard to investment for which they have received public subsidy and to submit a report on the implementation of those provisions;

19. Calls likewise on the Commission and the Member States to list companies which infringe rules on State aid or Community funds by proceeding to relocate their activity within or out of the EU without having fulfilled the requirement on perenniality contained in the rules concerned;

20. Calls on the Commission to draw up a European Code of Conduct to prevent transfers of companies or their production units to another EU region or country for the sole purpose of obtaining European financial aid;

21. Calls on the Commission to work for the inclusion of social clauses in international treaties, and to do so on the basis of the five International Labour Organization (ILO) conventions considered to be priorities, namely the right to organise, freedom of assembly, and the elimination of child labour, forced labour, and discrimination; calls for the implementation of these social clauses to be backed up by positive measures and incentives for countries and companies to abide by them; calls on the Commission and Council to work to ensure that this matter is again placed on the agenda at the World Trade Organization ministerial conference, and that a committee for trade and human rights is created to deal in particular with issues of human rights in the working world;

22. Is convinced that greater transparency regarding all the places where products are made and the labour standards in force could help to influence buyers and consumers in their choice of purchases;

23. Demands that companies benefiting from public aid be encouraged to develop, in consultation with workers' representative organisations and regional and local authorities, responsible behaviour as part of the implementation of cohesion policy aiming at balanced regional development;

24. Calls on the Commission and the Member States, in cooperation with the local and regional authorities concerned, to monitor the effective and targeted use of the European funds, which should be focussed on vocational training and the retraining of workers in regions affected by restructuring or relocation and, in particular, of those workers who have been directly affected by a job loss as a result of the relocation of their former employer;

25. Stresses the need to step up structural funding and focus it on job creation and sustainable economic development, setting up new job-creating companies, life-long vocational training and improved productivity; supports, in this connection, the Commission's proposal to create a globalisation fund to stave off and address the economic and social impacts of restructuring and relocation, and calls for that fund to be allocated sufficient funding to cover the roles assigned to it;

26. Considers that the use of Community funds, and especially funding for industry and from the European Social Fund, should be made subject to specific rules relating to innovation, local development, employment, and to production commitments within the territory, in the long term, of the undertakings benefiting from these funds; calls in particular for the rules on use of the Structural Funds to be respected and reinforced;

27. Calls for the rights of affected workers to be safeguarded and for full guarantees to be given as regards the provision of information to workers;

28. Believes that the impact of many relocations means that an open and constructive approach needs to be taken to the issue of creating a genuine European social area, and considers that the social dialogue has a crucial role to play in averting relocations and in addressing their effects;

29. Calls on the Commission, in line with its proposals in connection with the reform of the Structural Funds, to draw up provisions designed to penalise more severely companies which, after having received public subsidies, relocate all or part of their activity outside the European Union;

30. Calls for all interested parties to be given the right to know if a company subsidy has been awarded;

31. Calls for particular account to be taken of problems in border areas affected by large subsidy shortfalls;

32. Recommends that its own relevant Committees carefully evaluate the Commission's follow-up to this resolution;

33. Instructs its President to forward this resolution to the Council, the Commission, and the national parliaments of the Member States.

[1] OJ L 254, 30.9.1994, p. 64.

[2] OJ L 225, 12.8.1998, p. 16.

[3] OJ L 82, 22.3.2001, p. 16.

[4] OJ L 80, 23.3.2002, p. 29.

[5] OJ C 74, 10.3.1998, p. 9.

[6] OJ C 110, 8.5.2003, p. 24.

[7] OJ L 337, 13.12.2002, p. 3.

[8] OJ C 61 E, 10.3.2004, p. 425.

[9] OJ C 104 E, 30.4.2004, p. 1000.

[10] Texts adopted, 6.7.2005, P6_TA(2005)0277.

[11] Texts, adopted, 15.12.2005, P6_TA(2005)0527.

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