COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC-Treaty - Common Position of the Council on: amended proposal for a European Parliament and Council Regulation concerning the financial instrument for the environment (Life)

1. Procedure

The proposal COM (1998)720 final was forwarded to the Council and the European Parliament on 10 December 1998. The European Parliament gave its opinion in a first reading on 14 April 1999, and the Economic and Social Committee in its plenary of 26-27 May 1999.

Following the opinion of the European Parliament and pursuant to Article 250(2) of the Treaty, the Commission adopted an amended proposal and forwarded its amended proposal to the Council COM (1999)305 final on 15 June 99.

The Committee of the Regions gave its opinion on 16 September 1999.

The Council adopted its common position for the proposal Life financial instrument on 22 October 1999.

2. Aim of the Regulation

The proposed Regulation foresees the implementation of a third step of Life (referred to as Life III in the following) for 5 years (2000 to 2004) on the basis of a financial amount of EUR 613 Million.

Life III aims at improving on Life II (second step of Life, from 1996 to 1999) and introduces several modifications, which aim at strengthening the link between individual Community financed activities and the priorities of Community environmental policy, and broadening the dissemination of results of these actions to a wider European audience.

Life III comprises three basic components: Life-Nature, Life -Environment and Life -Third countries, complemented by specific provisions for the participation of accession candidate countries and will still focus on demonstration projects.

3. COMMISSION COMMENTS

3.1. Parliamentary Amendments Accepted by the Commission in the Amended Proposal and Which Have Been Incorporated Totally or Partially in the Common Position.

References to recitals and Articles refer to the numbering as used in the Common Position.

- Recital 2 includes now a reference to sustainable development incorporated in the amended proposal (recital 1) (European Parliament amendment 1).

- Recital 5 accepts in principle the amendment 2 of the European Parliament, accepted in principle in the amended proposal (Recital 5) and provides that Life must not be confined to the area not covered by the other Community financial instruments.

- Recital 8 provides now the better utilisation of the results achieved and the experience gained from the individual actions under Life, fully incorporating the European Parliament amendment 5, which was accepted in the amended proposal (recital 8).

- Recital 9 linking the results of Life and the development of the Community environmental policy, fully incorporates the European Parliament amendment 6, accepted in the amended proposal (recital 9).

- Recital 13 accepts in principle the consideration of job creation in the selection of projects, fully incorporated in the amended proposal of the Commission (recital 11) (the European Parliament amendment 8).

- Recital 18 fully incorporates now the principle of receipt from third countries, (amendment 9 of the European Parliament), fully accepted in the amended proposal (recital 16).

- Recital 19 accepts in principle the priorities to be set in relation to the various aspects of the Community environmental policy, which were fully incorporated in the amended proposal (recital 17) (amendment 10 of the European Parliament).

- Recital 22 including the European Parliament to examine together with the Council the advisability of continuing the Life action beyond the third phase, which was fully incorporated in the amended proposal (recital 20) (amendment 13 of the European Parliament).

- Article 1, 2nd paragraph, includes the sustainable development into the general objectives of Life, accepted in principle in the amended proposal (1, 2nd paragraph) (amendment 15 of the European Parliament).

- Article 2(a) accepts in principle the first part of Amendment 16 of the European Parliament, referring to the general objective of Life, which was accepted in the same way in the amended proposal (Article 2(a)).

- Article 4(2)(a), 1st indent, integrates in principle the first part of amendment 20 of the European Parliament, concerning the integration of sustainable development in land-use planning, which was accepted in principle in the amended proposal (Article 4(1)(a) 1st indent).

- Article 4(2)(a), 3rd indent, integrates fully amendment 43 of the European Parliament, including the prevention and reuse of waste, which was fully incorporated in the amended proposal (Article 4(1)(a) 3rd indent).

- Article 4(2)(a), 4th indent, integrates partly amendment 44 of the European Parliament including the reduction of the environmental impact of products at the end of their Life-time and the development and environmentally-friendly products, which was partly incorporated in the amended proposal (Article 4(1)(a) 4th indent).

- Article 4(2) (c) integrates partly amendment 22 of the European Parliament as regards the promotion of the transfer of results through accompanying measures. Amendment 22 was accepted in principle in the amended proposal (Article 2, third paragraph, and Article 4(2)(c)).

- Article 4(4), 2nd sentence integrates fully amendment 23 of the European Parliament) defining the objective of the guidelines to be established for Life-Environment demonstration projects, which was fully incorporated in the amended proposal (Article 4(4), 2nd sentence).

- In Article 4(6)(d) fully integrates amendment 26 of the European Parliament, introducing the dissemination and the widespread application of practices and technologies, which was fully incorporated in the amended proposal (Article 4(6)(d)).

- Article 4(6), 3rd sub-paragraph, accepts in principle amendment 25 of the European Parliament now introducing the consideration of employment implications in the selection of Life-Environment demonstration projects, which was accepted in principle in the amended proposal (Article 4(6)(g)) with different wording. The commission would prefer the wording of the amended proposal because it is more appropriate and clear.

- Article 4(8)(a) accepts in principle amendment 27 of the European Parliament, providing for the consultation of the Committee of Article 11 before publishing calls for preparatory projects, which was fully incorporated in the amended proposal (Article 4(8)).

- Article 6(8) integrates fully amendment 30 the European Parliament regarding the publication in the general budget of appropriations devoted to the instrument by the accession candidate countries, which was fully incorporated in the amended proposal (Article 6(7a)).

- Article 12(1) integrates partly amendment 38 of the European Parliament, as regards the reporting on the Life contribution to the development of Community environmental policy. Amendment 38 was partly incorporated in the same way, in the amended proposal (Article 12(1)).

3.2. Parliamentary Amendments Accepted in Total or in Part by the Commission in the Amended Proposal but which have not been incorporated into the Common Position.

- Amendment 3 seeking to incorporate the word "methodology" among the transparency and implementation of the procedures for Life and the words disseminating (for information to public) and "procedures for co-operation" between the potential beneficiaries, fully incorporated in the amended proposal (recital 6).

- Amendment 4 seeking a synergy of the Life Environment with URBAN initiatives, fully incorporated in the amended proposal (recital 7).

- Amendment 7 which adopted the wording of "development of Community policy" instead of "new Community activities" and introduced the concept of innovative actions in preparatory projects, fully incorporated in amended proposal (recital 10).

- Amendment 11 introducing the utilisation of project results in Community policies, fully incorporated in the amended proposal (recital 18).

- Amendment 17 seeking to give priority to projects liable to foster cross-border, trans-national or regional co-operation, accepted in principle in the amended proposal (Article 2, 3rd paragraph).

- Amendment 18 including the criteria of paragraph 3 of Article 2 fully incorporated in the amended proposal (Article 3(5)).

- The second part of amendment 20, giving a priority to urban areas in the objective of Life-Environment regarding land-use development and planning, accepted in principle in the amended proposal (Article 4(1)(a), 1st indent). Such a priority is justified by the importance of urban areas for the environment in the European Union; the Commission regrets the absence of this priority in the Common Position.

- Amendment 21 giving to preparatory projects the objective of developing the Community environmental policy through new actions in this field, fully incorporated in the amended proposal (Article 4(1)(b)).

- Amendment 24 including the criteria of paragraph 3 of Article 2, fully incorporated in the amended proposal (Article 4(6)).

- Amendment 28 seeking to give priority to projects liable to foster cross-border, transnational or regional co-operation, accepted in principle in the amended proposal (Article 2, 3rd paragraph).

- Amendment 29 introducing a reference to the criteria of the paragraph 3 of Article 2, fully incorporated in the amended proposal (Article 5(5)).

- Amendment 34 including the accompanying measures as defined in Article 3(2)(b), 4(2)(c), 5(2)(b) in the authorisations to be given by the budgetary authority in connection with the available annual appropriations within the limits of the financial perspective, accepted in principle in the amended proposal (Article 8(2)).

- Amendment 35 seeking to include annual reports to be sent to the Commission every full year for multi-annual projects and also seeking that the indicators of the progress of the work should include information about the management performance and any problems. This amendment has been accepted in its second part in the amended proposal (Article 9(1)).

3.3. Changes in the Common Position with Respect to the Amended Commission Proposal.

References to recitals and Articles refer to the numbering as used in the amended proposal, except for the new recitals.

- The Common Position introduces clarification in the wording of Recitals 1 and 2, Article 3(3)(b), Article 3(5)(b), and Article 4(6)(g) (Article 4(6)(h) of the Common Position). The Commission agrees with the Council.

- Recital 7 of the Common Position is a new recital coming from rrecital 18 of the amended proposal and seeking to ensure effective monitoring and evaluation of the actions undertaken under Life. The Commission agrees with the Council.

- Recital 10 of the Common Position is a new recital seeking to underline the considerations which should be given to migration routes and the role of buffer zones in the context of projects contributing to the implementation of Nature 2000. The Commission agrees with the Council.

- Recital 12 of the Common Position is a new recital highlighting the specific role and problems of SMEs. The Commission fully agrees with the Council.

- Article 3(4), 2nd sub-paragraph, Article 4(5), 2nd sub-paragraph and Article 5(4), 2nd sub-paragraph introduce different dates for the year 2000, in order to facilitate the transition between Life II and Life III. The Commission agrees with the Council.

- In Article 3(8)(a), which now includes the consultation of the Committee of the Article 21 of Directive 92/43/EEC, in connection with the accompanying measures, the Commission agrees with the Council.

- Article 4(1) and 4(2) are structured differently in the Common Position. The Commission would prefer to keep the structure of the proposed regulation, which defines more precisely the objectives of Life-Environment.

- Article 4(4) 1st sentence which stipulates that as far as demonstration projects are concerned, guidelines will be established by the Commission after opinion by the Committee provided for in Article 11, is changed in the Common Position, which stipulates the complete Committee procedure for the guidelines. The Commission would prefer the wording of the amended proposal leading to simplified Committee procedures.

- The Article 4(6)(g) (new) of the Common Position introduced a new criterion on cost-benefit ratio, coming from Life II Regulation. The Commission would prefer to avoid such a criterion, which is difficult to apply to innovative projects.

- Article 5(1), Article 6(7) and Recital 12 (Recital 14 of the Common Position), have been modified in the Common Position, in order to clarify the position of candidate countries not included among Central and Eastern European Countries. The Commission agrees with the Council.

- In Article 5(7), the consultation of the Habitat Committee was introduced in the Common Position. The Commission agrees with the Council.

- Article 8(1) and Recital 21 (new) introduce a financial framework of EUR 613 Million for the period 2000-2004. The Commission agrees with the Council.

- Article 9(1) stipulates now that reports transmitted by beneficiaries should be sent to Member States on request. The Commission agrees with the Council.

- Article 11 now introduces a Regulatory Committee (Common Position). The Commission disagrees with the Council. A Management Committee would be more coherent with the criteria set out in Article 2 of the Council Decision (1999/468/EC) of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission.

- Article 12 now introduces changes in dates in connection with the evaluation of the third phase of Life and its continuation (Common Position). The Commission agrees with the Council.

4. CONCLUSION

The Common Position maintains the main features of the proposed Regulation and introduces several clarifications in the text which the Commission welcomes. However, the Commission cannot agree with the type of committee chosen to assist the Commission in the management of Life-Environment and Life-Third Countries. The Commission invites the European Parliament to amend Article 11 in accordance with the Council Decision (1999/468/EC) of 28 June 1999. The Commission issued a statement to this effect. A copy of the statement is annexed.

ANNEX

Statement by the Commission

Proposal for a regulation (EC) concerning the financial instrument for the environment (Life)

In the common position on the proposal for a regulation (EC) concerning the financial instrument for the environment (Life), the Council has laid down, in article 11 and by reference to article 21 of Directive 92/43/EEC, a regulatory procedure for the committee when considering matters within the scope of this regulation (except for certain accompanying measures and expressions of interest).

The Commission believes that the selection of a regulatory procedure is inconsistent with the criteria laid down by the Council itself in article 2 of its decision 1999/468/EC, which provides that "...management measures, such as...the implementation of programmes with substantial budgetary implications, should be adopted by use of the management procedure."

Moreover, the proposed regulation does not envisage any "measures of general scope designed to apply essential provisions of basic instruments", for which a regulatory procedure would have been appropriate.

The Commission considers it of the utmost importance that the terms of article 2 of the recently-adopted decision 1999/468/EC must be followed. The Commission therefore reserves the right to return to this issue in second reading.