A4-0147/98

Resolution on the communication from the Commission on the competitiveness of the construction industry (COM(97)0539 - C4-0597/97)

The European Parliament,

- having regard to the communication from the Commission (COM(97)0539 - C4-0597/97),

- having regard to the communication from the Commission on an industrial competitiveness policy for the European Union (COM(94)0319 - C4-0140/94) and Parliament's resolution thereon of 29 June 1995 ((OJ C 183, 17.7.1995, p. 26.)) and the Commission proposal for a Council Decision on implementation of a Community action programme to strengthen the competitiveness of European industry (COM(95)0087- C4-0404/95 - 95/0081(CNS)) and Parliament's opinion thereon of 27 October 1995 ((OJ C 308, 20.11.1995, p. 470.)),

- having regard to Directive 89/106/EEC on construction products ((OJ L 40, 11.2.1989, p. 12.)) and the Commission's 1995 report on the application of this directive and the work of the SLIM Group in this field,

- having regard to Directive 93/37/EEC concerning the coordination of procedures for the award of public works contracts ((OJ L 199, 9.8.1993, p. 54.)), as last amended by European Parliament and Council Directive 97/52/EC ((OJ L 328, 28.11.1997, p. 1.)),

- having regard to the Commission Green Paper - public procurement in the European Union: Exploring the way forward (COM(96)0583 - C4-0009/97) and Parliament's resolution thereon of 22 October 1997 ((OJ C 339, 10.11.1997, p. 65.)),

- having delegated the power of decision, pursuant to Rule 52 of its Rules of Procedure, to the Committee on Economic and Monetary Affairs and Industrial Policy,

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy and the opinions of the Committee on Research, Technological Development and Energy, the Committee on Employment and Social Affairs and the Committee on Culture, Youth, Education and the Media (A4-0147/98),

A. whereas the close link between 'quality' and 'competitiveness' at all stages of the building process implies a general development of the market and, in particular, of public procurement and whereas the Commission has on several occasions stressed the need to overcome the technical obstacles to the free movement of goods and services by drawing up harmonized rules,

B. whereas legislative instruments such as the abovementioned Directive 89/106/EEC require implementing provisions which are still being drawn up and are unlikely to be completed in the near future,

C. whereas the Simpler Legislation for the Internal Market - (SLIM) team on the Construction Products Directive demonstrated the difficulties of harmonizing standards in this sector,

D. whereas the delay in drawing up harmonized rules is an obstacle to the opening up of the market and makes it easy for individual Member States to pursue protectionist policies,

E. whereas it is necessary to guarantee the free movement of construction products until the harmonized legislation is completed, by allowing, during a transitional phase, EC marking following the submission of a declaration by the manufacturer on the basis of rules customarily recognized as valid, instructions and Commission decisions, with unified test methods for assessing essential safety characteristics,

F. whereas it is necessary to create the legislative and structural preconditions for a review of the standardization bodies, by promoting more decisive government involvement in the standardizing process and confining the management of certification to competent bodies in the construction sector and, possibly, operating only in that sector,

G. whereas it would be appropriate to simplify the regulatory framework, making the conformity attestation procedures as easy and practical as possible,

H. whereas planning, understood in the broadest sense to cover the design of the project and also the conduct of the work and maintenance, plays a central role in the positive development of the construction process; whereas particular attention should be drawn to the role of architects and planning engineers as independent advisers to their clients,

I. whereas the single market requires firms and service companies to make substantial investments and a continuous process of updating in order to enable them to work in an environment larger than the original national context,

J. whereas in view of the single market competition is to be considered as an objective to be pursued and not an obligation to be evaded,

K. whereas the construction sector depends to a substantial extent on public financial resources, with the national authorities playing an essential role in achieving market stability and sustainable growth, whilst budgetary constraints are forcing some of the Member States to reduce their intervention programmes rather than make room for private initiative,

L. whereas the resolution on growth and employment adopted at the Amsterdam European Council on 16 June 1997 ((OJ C 236, 2.8.1997, p. 3.)) urges the EIB to extend its area of intervention to cover urban redevelopment and to establish special financial instruments to support small and medium-sized enterprises,

M. whereas taxation of housing at different levels, VAT and death duties represent major obstacles to the marshalling of European savings with a view to providing a greater supply of social and semi-social housing, and whereas those savings are instead directed towards investments in movable property which are taxed at a lower rate,

N. whereas the sector is characterized by considerable fragmentation of both the production system (a large number of small and very small businesses) and demand (very low average value of contracts) and whereas the service sector has a similar structure,

O. whereas the Green Paper on public procurement recognizes the importance of SMEs to the European economy and the need for them to win a larger share of public contracts, thereby enabling them to make a greater contribution to growth, competitiveness and employment,

P. whereas the lack of regulations continues to encourage the submission of abnormally low bids below the level needed to cover costs, thereby further undermining industrial structures and resulting in uncompleted projects and jeopardizing the transparency and competitiveness of the market,

Q. whereas in the award of public contracts the financial aspects are increasingly important, becoming the main element in competitiveness to the detriment of other factors, such as technical competence or the validity of the solutions proposed,

R. whereas there are wide discrepancies in the level of budgeting for infrastructure among the Member States and, in particular, there are serious deficiencies in many areas,

S. whereas education and training are essential elements in achieving quality at all stages of the construction process, since the competence of operators is the only condition likely to determine the actual 'worth' of the product, even with regard to aspects for which the 'quality system' is not effective,

T. whereas mutual recognition of individual qualifications, established in the Council Decision defining the comparability of vocational training qualifications (85/368/EEC), has not yet been fully implemented because of the continued existence of local safeguard mechanisms and the overlapping of academic and vocational qualifications,

U. whereas technological innovation is a fundamental factor in competitiveness in both production and the provision of services,

V. whereas the sector's present structure and the consequent tendency towards labour mobility are not conducive to investment in training by individual firms, especially small ones,

W. whereas it has become essential to adapt training courses to the new technologies and to the changes in construction processes, by exploiting the potential of information technology,

X. whereas the construction sector is one of the most important as far as job creation is concerned and whereas an increase in employment is closely linked to an increase in competitiveness,

Y. whereas individual productivity is directly linked to working conditions, i.e. job security, career structure and pay levels, and whereas in the sector there is a high and growing proportion of freelance, temporary or part-time work associated with low pay levels and poor working conditions,

Z. whereas a commitment to the highest standards of health and safety for workers in the construction industry is vital for competitiveness,

AA. whereas at present a large proportion of workers are unskilled and they are often in an irregular position as regards tax, social security and/or immigration laws; whereas, furthermore, the high non-wage costs of labour, as well as the inefficiency of the monitoring and inspection system, promote the growth of black economies, which adversely affect the market and distort the conditions of competition,

AB. whereas activity in the building sector is closely linked to the quality of life, in particular as regards environmental protection, the improvement of competitiveness, the rationalization of energy use, the use of environment-friendly substances and the re-use of building materials,

AC. whereas the right to housing is a fundamental need, like the right to employment, food and health, and whereas this need is not being properly met and requires a better supply of private and public social and semi-social housing,

AD. Whereas the concept of benchmarking can be useful for improving competitiveness in the construction industry,

AE. whereas, in order to increase the competitiveness of the construction sector, the European Union's policy should be directed towards:

a) ensuring quality and safety in the construction sector,

b) building up a market for operators in the sector and establishing a regulatory framework for them,

c) pursuing European integration as regards infrastructure,

d) improving the provision of education and training services,

e) redirecting and strengthening research and development in terms of human and technological resources,

f) increasing employment in the sector,

g) exploiting construction as a means of improving the quality of life,

1. Welcomes the Commission's communication and calls on it to draw up a specific plan to enable the sector, on the basis of national circumstances, to fulfil all its potential in an integrated market;

2. Calls on the Commission to make use of the findings of the SLIM team on the Construction Products Directive to boost moves towards harmonization and increased competitiveness;

3. Calls on the Commission to carry out a benchmarking study of the construction industry both inside and outside the Single Market;

4. Calls on the Commission to promote the widespread development of recycling, and end of use concept, for the building industry, as effective environmental policies such as these can boost profits, jobs and competitiveness;

5. Calls on the Commission to promote the highest standards of health and safety for workers so as to reduce the appallingly high accident and death rate in construction, reduce fluctuations in employee numbers due to injury and to address the insurance premium and payment problems of the industry;

6. Considers that the construction sector has special characteristics with regard to quality management and requires specific legislation to take account of company size and the specific field of activity (design, production or building);

7. Considers it necessary to continue resolutely along the road towards harmonized legislation, allowing, on a transitional basis, EC marking;

8. Considers it important to promote mechanisms to compensate firms for the burdens inherent in guaranteeing quality, not least in order to make SMEs more successful rather than causing discrimination against them;

9. Recognizes that the EU has a definite interest in guaranteeing the openness of markets on equal terms, both within Europe and vis-à-vis third countries;

10. Considers that the public authorities should play a role in programming and coordination and should involve private resources, directly managing public services only if the market is incapable of providing efficient services at moderate costs;

11. Considers it essential to adopt systems for the improvement of firms and service companies, by specifying comparable and tangible requirements not only in the economic and financial spheres but also, and above all, in the technical and organizational spheres;

12. Advocates greater clarity in tendering procedures in accordance with quality systems which may also be applied to government departments, guaranteeing a 'legal certainty' which will allow fair competition and provide mechanisms for avoiding or excluding anomalous bids; at the same time hopes to see European rules for public and private building concessions, and speedier procedures, in order to maintain short deadlines throughout the EU;

13. Calls for the relaunching of funding in this sector, direct intervention by the EIB and the development of real estate, which is currently being hampered, by opening this sector to the international market and the involvement of third countries; advocates integrated forms of public and private partnership, such as project financing, covering the entire construction sector;

14. Emphasizes, in view of the stated aim of supporting SMEs in the construction sector throughout Europe, the need to separate design and construction in order to guarantee quality assurance and curb costs in the interests of consumers and clients and to ensure that building prices are determined by means of competition;

15. Considers it essential to enhance the role of SMEs and safeguard their existence, inter alia by guiding them towards forms of specialization and/or grouping together in 'networks' in regional systems;

16. Stresses that the development and modernization of major infrastructure networks, as well as playing a symbolic role in integration and increasing the competitiveness of the 'Europe system', are objectives likely to increase demand;

17. Considers it important, with a view to channelling the influx of private capital into public projects and in particular into infrastructure, to create conditions which are as advantageous as for other forms of saving;

18. Sees the development of restructuring and maintaining urban areas and enhancing the artistic, cultural and environmental heritage as attractive sectors for private investment worthy of encouragement by means of appropriate measures, including tax measures;

19. Hopes, in particular, that the Member States can quickly follow up the Commission proposal to introduce a reduced VAT rate for labour-intensive services not subject to transfrontier competition;

20. Stresses the importance of making homes a 'safe investment' and the essential meeting place for all types of families, inter alia by means of a policy of low taxation;

21. Considers it essential to increase public and private investment in education and training, strengthen links with schools and universities and focus attention on the administrative and managerial aspects, environmental problems and energy saving;

22. Considers it essential, with regard to research and development, to coordinate public and private investment, by promoting collaboration between firms and research bodies, and encouraging the dissemination of new ideas and scientific findings and the exchange of technology with other production sectors;

23. Considers it necessary to raise standards in the labour market by harmonizing protective legislation and social security standards, guaranteeing assistance for those who work outside their country of origin and regulating access to the sector for workers from third countries, not least in order to prevent the widespread circumvention of health and safety rules;

24. Notes that competition in the construction sector at present mainly concerns the price of completing a construction project; in future competition should focus more on the properties of the end-product in terms of maintenance and durability; the value for money aspect must be emphasized;

25. Encourages the Commission to follow the evolution and competitiveness of the European construction sector, giving special attention to the aspect of overall life-cycle costs;

26. Stresses that a comprehensive innovation chain is needed in the construction sector and that this can only be obtained if those investing in R& D are able to benefit from it; new financing and insurance instruments should be developed to lower the risk threshold as a means to encourage implementation of new innovations;

27. Calls on the Commission to coordinate existing technology programmes that are relevant to the construction industry as effectively as possible, and to give proper attention in such programmes to the life-cycle concept, and especially to:

a) a 'people-oriented¨, integrated planning taking into account the demands of multi-functionality and the changing needs of users;

b) energy-efficiency and rational use of raw materials and water, functional use of building products and materials, improved fire safety, and effective reusing and recycling of materials;

c) sustainable design and management methods, as well as maintenance, repair and preservation methods;

d) training and education, improved safety at work, and improved quality of the whole sector;

28. Notes the substantial job creating potential, especially of small businesses, in this sector, but also stresses the need for minimum qualifications of those working in the sector and guarantees in respect of the work and services they provide;

29. Encourages the Commission to follow developments in the European construction industry, especially with regard to small-scale businesses, and to put forward proposals to ensure and foster competitiveness of the industry and strengthen consumer rights where it deems appropriate;

30. Calls on the Member States to comply with the labour policy directives by reducing indirect labour costs, notably in respect of relatively unskilled labour;

31. Urges the social partners to initiate negotiations on a sectoral framework agreement on employment and the organization of labour in the construction sector and recalls, in this connection, the framework agreement adopted in July 1997 as part of the social dialogue in the agricultural sector;

32. Supports the idea of setting up a network of local training centres with a view to improving vocational training in the construction sector; urges the Commission to submit proposals to put this idea into practice;

33. Calls on the Member States forthwith to rectify the shortcomings detected by the Commission in its Fourteenth Annual Report on Monitoring the Application of Community Law as regards the transposition of the acquis communautaire in the field of safety and health protection; urges the Member States also to adopt, at the earliest opportunity, the necessary legislative and administrative measures to transpose Directive 96/71/EC concerning the posting of workers in the framework of the provision of services ((OJ L 18, 21.1.1997, p. 1.));

34. Welcomes the fact that the Commission intends to submit a proposal for a directive on scaffolding; calls on the Commission also to submit a proposal amending the directive on protective measures in view of the risks relating to exposure to physical substances and a proposal on measures to promote exchanges of information and the dissemination of best practices in cooperation with the European Agency for Health and Safety at Work;

35. Urges all the players in the sector to combat social dumping and illegal work in the construction industry; urges the Member States closely to monitor compliance with the provisions in this area and to exercise their right to exclude from procedures for the award of public works contracts undertakings which violate the protection provisions provided for in labour legislation; urges the social partners in this sector to adopt a code of conduct modelled on that obtaining in the textile and clothing sector in order to avoid social dumping;

36. Calls on the Commission to submit proposals aimed at giving greater prominence, in the procedures for the award of public works contracts, to Community and national social policy objectives; calls in particular for existing directives in the field of public contracts to be amended, with a view to applying social criteria in judging the aptitude of contractors and awarding contracts;

37. Concerning the improvement of quality, believes that a broad understanding of the notion of quality is essential, which embraces the planning and design process, as well as the actual construction itself; improved collaboration between the different actors throughout the lifespan of a project can play an important role in raising levels of quality;

38. Considers there is an urgent need to improve education and training provision in this labour-intensive sector of the economy, which is currently characterised by underinvestment in education and training. Both the quality and the quantity of provision need to be tackled. Moreover, increased emphasis on the importance of skills along with improved career opportunities can play a role in enhancing the image of the sector, and thereby assist in the recruitment and retention of labour;

39. Points to the importance of enhancing the artistic and cultural heritage in urban areas, and notes the importance of restoration work as well as new construction projects in this respect. Underlines the potential of such projects for producing economic growth and creating jobs;

40. Recalls in this context that, in its resolution of 30 January 1997 on the consideration of cultural aspects in European Community action ((OJ C 55, 24.2.1997, p. 37.)), Parliament called for an amount of 0.5 to 1% of the budget provided for the European funds to be allocated to the production of a work of art to adorn public construction projects cofinanced by the European Union; reiterates this request whilst stressing in particular the need to foster contemporary art;

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