COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE, THE ECSC CONSULTATIVE COMMITTEE AND THE COMMITTEE OF THE REGIONS - "The future of structured dialogue after the expiry of the ECSC Treaty"

Background

The ECSC Treaty expires on 23 July 2002, resulting in the ipso jure termination of the ECSC legal regime and procedures and the dissolution of the Consultative Committee established by that Treaty. [1] It is now necessary to establish new consultative arrangements for the sectors concerned. In addition to answers on matters of principle, we need to devise practical and procedural arrangements for the chosen solutions.

[1] See Annex 1 for the Consultative Committee's membership and terms of reference.

It should be noted that, in line with the wishes of the Member States, the Commission was primarily required to submit proposals on the financial repercussions of expiry, covering in particular the devolution of ECSC assets to the European Community, management of those assets and the funding of research activities in the coal and steel sectors. The Commission adopted a package of proposals for that purpose on 6 September 2000.

However, although the Commission is not legally bound to do so, the Member States have recently asked it to present its ideas on the future of structured dialogue as well [2].

[2] See conclusions of the Industry Council of 18 May 2000 on the Commission Communication on the state of the competitiveness of the steel industry in the EU.

The objective of this communication is therefore to analyse the issues at stake, to put forward a solution and to produce recommendations for its implementation.

The possible options

The starting-point of any analysis must be the willingness of the Member States not to extend the life of the ECSC regime and bodies beyond the time-limit laid down in the treaty. However, there is no denying the importance of the experience acquired by the ECSC in facilitating labour/management dialogue and consultation. The Committee's accrued experience, and the unique way in which it reconciles often conflicting interests suggest that the results of fifty years of tripartite consultation should be preserved and enhanced. The Commission has therefore prepared an inventory and analysis of the various structured dialogue options available after 2002. The following possibilities have been considered:

- Creation of an ad hoc structure similar to the current system: at its extraordinary meeting on 11 May 2000, the ECSC Consultative Committee suggested setting up an ad hoc structure comprising 54 members appointed by the Council with the right of initiative, a permanent secretariat, a dedicated budget line, etc.

- Creation of a round table, which would meet periodically at the Commission's instigation and would bring together the coal and steel sectors in a tripartite format. General policy documents and research projects funded by the Commission with ECSC resources would be submitted to participants for an opinion.

- Creation of a committee directly answerable to the Commission, which would be appointed by that body and attached to one of its departments. This committee would be comparable to the various existing scientific and technical committees but its mandate could be extended to include certain general policy issues of concern to the coal and steel sectors.

- Lastly, responsibility for the coal and steel sectors could be transferred to the Economic and Social Committee (ESC).

The last option soon came to be seen as the most viable and the other possibilities were discarded either because they did not reflect the impending expiry of the treaty and its consequences for all the ECSC structures or because they entailed the setting-up of sui generis structures with an ill-defined status, this being hard to justify for two sectors no longer deemed by the Member States as requiring special treatment and which will henceforth be governed by ordinary law.

The chosen approach: Economic and Social Committee to assume responsibility

The ESC's remit is to be extended to include the coal and steel sectors, and to make it the consultative body with ordinary competence for those two sectors, in line with the arrangements for the other economic and social sectors.

In addition to gaining greater powers, the ESC will acquire the Consultative Committee's expertise and experience in structured dialogue. That experience could be used to enhance the ESC's ability to deal with industrial conversion issues, particularly in the light of enlargement.

Some thought therefore needs to be given to the best way for the ESC to take over certain advisory functions and working methods from the Consultative Committee. However, there can be no question of simply transferring members of the ECSC Consultative Committee or responsibilities vested by the Treaty in that body which, by definition, will have ceased to exist in 2002.

The most harmonious way forward would seem to be for the ESC to take over some of the ECSC Consultative Committee's advisory functions given that the ESC was originally designed as the natural consultation body for the Community, and its creation by the EEC Treaty in 1957 makes it the "natural" successor to the ECSC Consultative Committee, which was established in 1952. Indeed, the Member States considered the possibility of merging the two bodies when their two executives were replaced by a single executive in 1965.

A transfer of activities to the ESC also reflects the fact that, as from July 2002, coal and steel will be subject to the ordinary law regime of the EC Treaty. The creation of a parallel between the legal arrangements and the consultative mechanisms places the sectors concerned in an identical position to the other economic and social sectors. It also reflects the Member States' decision not to extend the ECSC Treaty, procedures and bodies beyond the time-limit laid down in the Treaty, and not to re-establish special arrangements for coal and steel.

At institutional level, this solution appears flexible and less costly than the other options, merely entailing a marginal increase in the ESC's budget resources, which are currently set at EUR80 million; the budgetary authority could also consider a limited adjustment in administrative back-up for the ESC's new consultative activities, along the lines of what is currently offered to the ECSC Consultative Committee. Unlike all the other options, this approach avoids setting up a new structure with an ill-defined status which is difficult to justify vis-à-vis the other institutions and economic and social sectors.

It should be noted that, as in the other economic sectors, the ESC's general responsibility for coal and steel does not constitute an obstacle to the specific role played by the Commission in the bipartite social dialogue conducted by labour and management within sectoral dialogue committees organised by DG EMPL. Committees of that type set up at the request of labour/management in the sectors concerned, and for which the Commission provides a secretariat, already exist for 25 sectors [3] and could if necessary be set up in the coal and steel sectors. These sectoral social dialogue committees enable the social partners in the sectors concerned to pursue an autonomous social dialogue. At the same time they constitute forums for information and consultation on the sectoral policies.

[3] See Annex 2 for further information on this subject.

Lastly, the ESC's general responsibility for coal and steel would not prevent the Commission from consulting committees representing those sectors in connection with the funding of research activities after 2002. The Member States want those committees to be involved in research programmes funded by ECSC resources after the time-limit expires and such involvement facilitates the continuity of current ECSC programmes. [4]

[4] See "Proposal for a Council decision laying down the multiannual technical guidelines for the research programme of the Coal and Steel Research Fund", adopted by the Commission on...

A favourable climate

Apart from the expiry of the ECSC Treaty and the future of structured dialogue as currently conducted under the aegis of the Consultative Committee, several factors tend to favour the transfer of responsibilities to the ESC and a changing role for that institution:

- Like all the other institutions and organs, the ESC is aware of the need to adjust its role and modernise its structures and operations. It has launched a discussion process and taken measures with a view to strengthening its contribution to the various Community policies. This work is backed by the European Parliament and the Commission. In its opinion to the IGC entitled "Adapting the institutions to make a success of enlargement", [5] the Commission argued that the Conference "should re-examine the role of the Committee and adapt its composition and tasks. In the future, the Economic and Social Committee will have to establish itself as the framework for the consultation between the social and economic partners. (...) The reformed Economic and Social Committee could act as a relay vis-à-vis civil society."

[5] COM(2000)34, 26 January 2000.

- Against a background characterised by globalisation and increased interdependence of economic factors, it is essential for political initiatives and decisions to be understood by civil society and to reflect its concerns. This has been underlined by several recent events, and developments in public opinion suggest that there is a need for the ESC to play to the full its role as a bridge between Europe and organised civil society and as a permanent, structured forum for dialogue and consultation at Community level.

- These concerns have already met with a response on the part of the ESC, which is currently examining the possibility of setting up an "Observatory of Civil Society": indeed, it organised a convention on that topic in October 1999.

- The debate currently taking place throughout society on the ultimate objectives and nature of the European project is leading in the same direction and has generated discussion of new interrelationships between the different levels of government. The Commission has announced the publication of a White Paper on Governance in 2001. Community decisions must be underpinned by a more solid socio-economic basis. This need to create new ways of interacting between the Community institutions, national authorities, regional and local authorities and civil society also suggests that thought will have to be given to the role of the ESC as a forum for dialogue and consultation.

- The conclusions of the Lisbon summit on the modernisation of the European economy, and in particular on the need to take economic and social dimensions into account, also tend to favour a new role for the ESC. The Committee has a role to play in combining a culture of macro-economic stability with a spirit of enterprise and a specifically European social culture. This project will be successful only if all parties are actively involved and jointly responsible. These are also arguments in favour of a consultation forum in which all social groups and interests, including the voluntary sector, are represented. If they are to be successful, future reforms will inevitably have to take account of environmental issues, consumers' needs, sustainable development, ongoing education and training, etc.

- The Commission's determination to examine the development of ECSC structured dialogue in a firmly future-based perspective; what is important for the ESC is to derive maximum benefit from the ECSC's unique experience in labour/management dialogue and technical expertise. In line with the conclusions of the Lisbon European Council, the ESC intends to capitalise on this know-how and make it work for all the Community's other areas of economic activity. This experience - notably in the fields of social consensus, industrial restructuring and research - will enhance the ESC's ability to play an active role in modernising the European economy and making it more competitive.

Strengths of the ECSC Consultative Committee: possible elements of a transfer to the ESC

Leaving aside the general responsibility of the ESC as from 2002, if we wish to preserve the ECSC's experience and know-how in the field of structured dialogue, we need to examine the elements which contributed to the efficiency and prestige of the Consultative Committee and which could enrich the ESC. These elements can be summarised as follows:

1. Top-level technical expertise

This expertise contributed to the Committee's authority and the quality of its opinions. It is based on several factors. First, the in-depth knowledge that committee members have of their respective fields. Second, the constant efforts made by members to promote the harmonious development of the coal and steel sectors. Third, the high level of representation of members; who occupy leading positions within their organisations and have the necessary authority to take decisions. Lastly, the particular way in which the Committee's work is organised to ensure interaction between "technical" or "sectoral" dimensions and more "horizontal" aspects. This approach ensures that all opinions, which are prepared by study groups in which specialist knowledge is given full rein, are underpinned by excellent technical work; it also provides a kind of democratic filter in the more general standing committees, thus enabling most of the Committee's opinions to be adopted unanimously, which reflects a particular approach to achieving social consensus.

The ESC has three possible ways of maintaining this top-level expertise:

The number of ESC members

The number of ESC members is currently set at 222 by Article 258 of the Treaty. In its aforementioned opinion on the IGC, the Commission took the view, by analogy with the European Parliament, "that the total number of Committee members should be set at a level which would allow it to continue to operate effectively [which] supposes a freeze on the number of the members around its current level."

When it examines the total number of ESC members, the IGC will also have to take on board the need to provide for adequate representation of the coal and steel sectors within the ESC. The objective basis for this adjustment must be the expected increase in the ESC's workload in connection with coal and steel and its broader responsibilities in the industrial conversion field.

In view of the current levels of activity of the ECSC Consultative Committee and the integration of coal and steel into the broader framework of an operating structure within the ESC geared to industrial conversions, the number of members concerned by all industrial conversion issues will in future be around 25-30.

A unique appointment procedure

ESC members are directly appointed by the Council, voting unanimously, on the basis of proposals from the Member States. Their term of office is four years. The Treaty states that the Committee membership must take account of the need to ensure adequate representation for the various economic and social groups. The members of the Consultative Committee are appointed by a similar procedure, with the difference that the Council designates in advance the organisations deemed suitable to submit candidates.

In its aforementioned opinion of 26 January, the Commission expressed the view that "the Committee should be more representative of the various components of civil society of the European Union as a whole and of its different geographical aspects. This supposes that one has to reflect on the representation of civil society and on the means to supplement the representation by category referred to in the Treaty (Article 257). One should also examine the designation of representatives by the Member States."

Whatever the appointment procedure eventually chosen by the IGC, it is this unique procedure which will apply to the representatives of the coal and steel sectors.

In addition, one of the strengths of the ECSC Consultative Committee lay in the very high level of representation of its members, as a result of which the opinions it issued were of a very high quality and the decisions taken received the backing of the sectors concerned. In particular, this was made possible by the fact that the Consultative Committee's activities were focused on two sectors, whereas the ESC's remit is far broader.

This problem, which is closely related to the expiry of the ECSC and the need to capitalise on the experience acquired by the Consultative Committee, was not addressed by the Commission in its opinion of 26 January. However, in order to reconcile the need for a high level of expertise and representation with the broader remit of the ESC, the conference could provide for full members and alternate members to be appointed. This would ensure, at no extra cost, a very high level of representation of full members to examine sensitive or more political issues, while guaranteeing that more technical matters were handled with the requisite degree of specialisation by alternate members. It would also provide the ESC with a broader base and make it more representative.

The budgetary repercussions of this change will have to be looked at closely. As in the Committee of the Regions, where this method is used, the appointment of alternate members to the ESC should entail no more than a minimal increase in operating expenses.

Changes to the internal organisation of the ESC:

The way in which the ECSC Consultative Committee works ensures that its analysis of problems draws on a specialist knowledge of the industries concerned while at the same time expressing the views of the whole Committee. This is achieved by interaction between the sectoral or technical level and the horizontal or political level. The Committee's opinions, resolutions and declarations are usually drawn up by a working party consisting of an equal number of members from each category, chosen for their thorough knowledge of the subject. The working party's deliberations result in a text which is sent to the appropriate horizontal committee, before being presented to the plenary for adoption. This three-stage procedure allows the concerns of the members to be taken into account without distorting the text prepared by the working group.

The system is slightly different in the ESC, which has a wider remit: members are divided into three groups ("Employers", "Workers" and "Various Interests"); opinions are produced by the sections and sometimes, in the case of multidimensional subjects, by sub-committees. The rules of procedure provide for the constitution of at least six sections. These sections may set up study groups to help them prepare opinions. Unless authorised by the Bureau, the study groups are temporary, have no more than 15 members and may enlist the services of experts. Finally, the rules allow the ESC to set up "observatories", if the nature, scope and specific characteristics of the subject under discussion demand particular flexibility in terms of the working methods, procedures and instruments to be used. These observatories are permanent and attached to a particular section. The only example at present is the Single Market Observatory.

There might be a case for reorganising the internal structures and working practices of the ESC to ensure permanent interaction between an initial level, where full use was made of sectoral expertise, an intermediate level, where the matter would be debated in a wider context, and finally the plenary assembly itself. Whatever the formula or terminology adopted, the important thing is that the new structure should be permanent, that it can be used by each of the sections as required, and that it should be explicitly involved in the preparation of opinions, albeit at a preliminary stage and without prejudice to the horizontal powers subsequently exercised by the sections. Finally it must be adequately represented in the political bodies of the ESC.

This would require an amendment to the ESC Rules of Procedure, which govern internal organisation, in accordance with Article 260 of the Treaty.

2. The three groups

The ECSC Consultative Committee consists of representatives of producers, workers and consumers/dealers in the coal and steel sectors. This structure has made possible a productive debate between groups with often conflicting opinions, and has engendered a very valuable culture of consensus at times of difficult decisions and industrial restructuring.

The ESC also has a tripartite structure, although the nature of the third group is different ("Various interests"). The three groups are not all the same size and membership of a group is a matter of individual choice.

The demands of the ECSC sectors could probably be satisfied within the current ESC framework, in that consumers/dealers are already represented in the ESC's Groups I and II ("Employers" and "Workers"). This is true for example for the car industry, shipbuilding, electricity producers, transport and primary processing industries.

3. Extended right of initiative

The Treaty bestows on the Consultative Committee the right to debate any issue of interest to the industries concerned and to deliver an opinion or recommendation on the matter.

The ESC has effectively enjoyed a similar right since 1974, and this was formalised by the Treaty of Maastricht.

As things currently stand, therefore, the two regimes are compatible and do not require amendment.

4. Mandatory consultation

Many provisions of the ECSC Treaty require mandatory consultation of the Consultative Committee. However, custom and practice, and changes in the sectors concerned have allowed many of these provisions to fall into disuse. Consultation now remains mandatory only for measures taken under Article 95 (exceptional measures proposed by the Commission after consulting the Consultative Committee and adopted unanimously by the Council: special state aid, trade agreements) and Article 55(2)(c) (proposals to fund research activity).

The EC Treaty, on the other hand, provides for the ESC to be consulted on many more subjects: free movement of workers (Article 40), the right of establishment (Article 44), the freedom to provide services (Article 52), transport (Articles 71, 75, 80), taxation (Article 93), approximation of laws (Articles 94, 95), employment (Articles 128, 129), social policy (Articles 137, 140), equal pay (Article 141), migrant workers (Article 144), the Social Fund (Article 148), education and youth (Article 149), vocational training (Article 150), public health (Article152), consumer protection (Article 153), Trans-European Networks (Article 156), industry (Article 157), economic and social cohesion (Article 159, 161, 162), research (Articles 166, 172), the environment (Article 175).

Referring to mandatory consultation and the ESC's right of initiative, the Commission indicated in its opinion of 26 January 2000 that "There would need to be a rethink of its role regarding legislative opinions, and the texts of the Treaty would have to be adapted to allow the Committee to judge for itself whether it should issue an opinion on proposals under the EC Treaty. The European institutions would still be able to ask the Committee for an opinion."

As the Treaties now stand, the EC regime is more generous than that of the ECSC Treaty. The coal and steel sectors would therefore stand to gain from the ESC taking over certain of the Consultative Committee's activities. Their representatives would then be systematically consulted on such matters of importance to their sectors as vocational training, social policy, taxation, employment, industry, etc. on which they are not always consulted under the ECSC Treaty.

5. Early referral

One of the strengths of the Consultative Committee has been its ability to deliver opinions and make recommendations at an early stage of the decision-making process. As a result, the proposals for legislation and decisions taken by the Commission have been based on a thorough knowledge of the industries involved and have often enjoyed the support of these sectors. This early referral has occurred both under the ECSC Treaty, certain provisions of which require an opinion from the Committee before a decision is taken, and at the instigation of the Commission, which found it useful to consult the Committee on certain important issues. [6]

[6] Typical examples of this practice are the general objectives and forward programmes. Article 46 of the ECSC Treaty provides for the publication at regular intervals of general objectives, medium and long-term forecasts of the development of the coal and steel industries, and short-term programmes, particularly on the market (price, quantity) and employment trends. Over the years differences have emerged between the nature of the general objectives and programmes for coal and those for steel. But the long-term programmes and objectives have been discussed with the Consultative Committee on the basis of a provisional document presented by the Commission in order to canvas the opinion of the Committee before publishing the final text. In the case of the study on the competitiveness of the steel industry, a special meeting was called at the beginning of 1999 on the basis of a simple annotated table of contents presented by the then DG III.

The EC Treaty makes no provision for systematic early consultation of the ESC. Leaving aside the instances of mandatory consultation, Article 262 merely allows the Council and the Commission to consult the Committee in all cases in which these institutions consider it appropriate. "Exploratory" opinions are a special type of optional opinion. Their purpose is to allow the institutions to seek the opinion of the ESC before taking a decision or passing legislation. In such cases, the ESC does not have a formal proposal before it but is asked to consider an issue and to make recommendations. In practice, recourse to exploratory opinions has been exceptional.

Without altering the decision-making process, the Commission could announce its intention of making greater use of exploratory opinions where the subject matter warranted it. Such a practice, which would not require any amendment to the Treaty, would be based on a political commitment and would reflect the Commission's desire to engage in structured dialogue in an institutional framework with all sections of economic and social life and civil society. It would also strengthen the foundations of the Commission's proposals and decisions.

Conclusions

The Commission

- suggests that when considering the question of the total number of members of the ESC the IGC take into account the expiry of the ECSC Treaty and the case for ensuring proper representation of the coal and steel sectors in the ESC and for considering the possible appointment of alternate members for the ESC;

- suggests that the ESC amend its rules of procedure and working methods to allow full use to be made of sectoral expertise. This change could take the form of a permanent structure involved on a regular basis in preparing opinions, answering to all of the sections and represented at the level of the political bodies of the ESC;

- suggests to the ESC that this structure should not be confined to the coal and steel sectors but extended to all matters relating to industrial changes. It also suggests that similar structures might be set up for other specific sectors of economic and social life where high-level technical expertise is required;

- notes that, when the time comes, consideration should be given to modifying slightly the administrative support for the ESC under the heading of coal and steel.

ANNEX 1 The ECSC Consultative Committee: role and composition

The ECSC Consultative Committee consists of 108 members representing the producers, consumers and workers in the coal and steel sectors. Members are nominated by the Member States and appointed by the Council. This appointment procedure has ensured a high level of representation and given the institution a certain prestige.

The Committee delivers opinions either as required by ECSC procedures or on its own initiative. These opinions can be on matters of general policy of relevance to the coal and steel sectors or on more legal or technical questions (state aid, research, etc.). The Committee has three permanent sub-committees (Markets and Forward Studies, Labour Problems and Research Projects) and several special ad hoc committees, whose role is to prepare the work of the Consultative Committee.

The Consultative Committee is served by a secretariat provided by the Commission and has its own budget line of roughly EUR700 000 annually.

Much of the originality and added value of the Consultative Committee lies in its tripartite structure, the technical expertise of its members and its continuity, which has made it a permanent forum for dialogue. Experience has shown that these three factors have enabled the Consultative Committee to accommodate the often conflicting interests of the Member States, the coal and steel sectors and the social partners.

ANNEX 2 Sectoral dialogue committees

The Commission has established a new framework for European sectoral dialogue. [7] This is applicable on the same terms to all sectors wishing to take part in social dialogue and will be extendable to new sectors. The Commission has accordingly adopted a framework decision on the establishment of sectoral social dialogue committees.

[7] See Commission Communication: "Adapting and promoting the social dialogue at Community level", 20 May 1998, COM(1998)322 final.

The new committees constitute the key forum for sectoral social dialogue (consultation, joint action and negotiations) and will be set up in all sectors which submit a joint request and are structured and have a European presence in line with the criteria of representativeness.

They operate as follows: at least one high-level plenary meeting each year, and restricted preparatory meetings.

The Commission will provide secretarial services through the DG most concerned with the issues on the agenda or through DG EMPL. Meetings are normally chaired by a representative of the employers or workers, but a Commission representative will take the chair if asked to do so by the two parties.

The Commission will organise timely and substantial consultation on sector-specific issues with social implications. Each sector will be fully supported through a partnership between DG EMPL and the other relevant DGs, including technical back-up for the preparation of and follow-up to meetings.

Within the framework of their social dialogue, the social partners may also engage in contractual activity and through agreements or recommendations contribute directly to defining certain social aspects of policies affecting their sector.