Opinion of the Committee of the Regions on the 'Proposal for a Council Regulation (EC) on Structural measures in the fisheries sector` (1999/C 93/03)

THE COMMITTEE OF THE REGIONS,

having regard to the Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on Agenda 2000: the legislative proposals - Overall view;

having regard to the Proposal for a Council Regulation (EC) on structural measures in the fisheries sector [COM(1998) 131 final - 98/0116 (CNS)] ();

having regard to the Commission decision of 18 March 1998, in accordance with the first paragraph of Article 198c of the Treaty establishing the European Community, to consult the Committee on the subject;

having regard to the Bureau Decision of 13 May 1998 to instruct Commission 2: Agriculture, Rural Development and Fisheries to draw up the relevant opinion;

having regard to its Opinions on the regional consequences of the Common Fisheries Policy (CdR 14/96) (), and on the Common Fisheries Policy: safeguarding of fisheries-dependent regions (CdR 179/97 fin) ();

having regard to the Draft Opinion (CdR 309/98 rev. 2) adopted by Commission 2 on 10 December 1998 (Rapporteurs: Sir Simon Day and Mr Nordwall),

at its 27th plenary session on 13 and 14 January 1999 (meeting of 14 January) adopted the following opinion.

1. Introduction

1.1. In July 1997, the Commission adopted Agenda 2000, a blueprint for the future proposals and budgeting implications for the expansion of the EU, the reform of the CAP and a review of regional policy.

1.2. On 18 March 1998, the Commission adopted its proposals for regulations, inter alia, to govern the Structural Funds in the period 2000-2006. These are the subject of negotiation with Member States and are the subject of consultation with the Committee of the Regions.

2. The Current Position

2.1. Under the existing Structural Funds regime, there is a specific Objective (Objective 5a) whose purpose is to speed up the adjustment of agricultural and fisheries structures. It does not have a geographical limitation as, for example, Objective 5b. The source of funding for Objective 5a is derived in part from the Financial Instrument for Fisheries Guidance (FIFG).

2.2. FIFG covers the whole of the fisheries sector and funding can be used for such activities as fleet modernization, decommissioning, the development of aquaculture, the protection of marine coastal areas, the provision of fishing port infrastructure, fish processing and marketing, product promotion, and grants to fishermen leaving the sector.

2.3. Some Objective 1, 2 and 5b areas have been designated on the basis of dependency on fishing. These areas are eligible for ERDF and ESF assistance for business and tourism support and infrastructure, community economic development and training for employees of SMEs and people in deprived communities. ESF is also available to these areas from Objectives 3 and 4 which are not geographically restricted and fund training and skills development.

2.4. There is also a Community Initiative, called Pesca, which is intended to complement activities under the regional Objectives, but is more geographically limited. Pesca funding is focused on addressing the socio-economic difficulties faced by fishing dependent area, and draws resources from ERDF, ESF and FIFG. It is intended to encourage a more local initiative led programme and in this respect is similar to Leader.

3. The Proposed Regulation

3.1. The reform of the Structural Funds post 2000 envisages just three Objectives. In broad terms Objective 1 stays very much as now, covering assistance to the most disadvantaged areas. The new Objective 2 provides support for development in areas experiencing decline and structural change and will comprise 4 strands, industrial, rural, urban and fishing, whilst the new Objective 3 will cover activities funded under the old Objectives 3 and 4.

3.2. Community Initiatives are being simplified and a specific Pesca Community Initiative is not included although it is intended to include Pesca-type activities within the new framework of assistance.

3.3. For the fisheries sector as a whole, it is intended that structural assistance for the period 2000-2006 will be much the same as in 1994-1999. The fishing industry and coastal areas located in Objective 1 regions will continue to receive assistance not only from FIFG but also ERDF and ESF.

3.4. The new Objective 2, fishing strand, will apply to the areas dependent on fisheries which are undergoing economic and social restructuring. The areas included will be selected by Member States on just two criteria:

(i) the share of employment in the fishing industry in total employment;

(ii) the loss of jobs in the industry as a result of restructuring.

Within these geographically defined areas, assistance to fishing areas would be obtained through ERDF, ESF and FIFG.

3.5. The Committee of the Regions wishes to be satisfied at the extent and nature of assistance there is for regions which were formerly within Objective 1, 2 or 5b and which are no longer and the assistance for regions that are outside the new Objective 1 and 2 areas.

3.6. Within the former Objective 1, 2 or 5b areas, there are transitional arrangements proposed such that assistance, albeit at a reduced level, will continue to be available for 6 years, in the case of former Objective 1 areas, and for 4 years in respect of former Objective 2 and 5b areas. The Committee of the Regions in its response to the draft regulations argues that there should be equal treatment in all areas in terms of the transitional period.

3.7. In terms of assistance to the fisheries sector outside the new Objective 1 and 2 areas, the Commission proposes that, because FIFG under Objective 2 is to be exclusively regional, it cannot be used to cover measures programmed at a national level, such as the restructuring of fishing fleets. So it proposes that this form of assistance is brought into the Guarantee Section of the European Agricultural Guidance and Guarantee Fund, which is where the programme is developed at a national level.

3.8. Thus FIFG will assist all schemes in the regions covered by the new Objective 1, including those affecting the fishing fleet, and will also fund structural measures in the Objective 2 areas, except those involving the fleet.

3.9. The EAGGF Guarantee Section will fund fleet restructuring outside Objective 1 regions and schemes involving the fishing industry apart from in areas covered by Objectives 1 and 2. The EAGGF will also fund structural measures during the transitional period highlighted earlier.

3.10. Although the Pesca initiative is not being carried forward, many of the activities undertaken under Pesca are proposed for inclusion in the new Objective 2.

4. Conclusion

4.1. The European Commission intends continuity of assistance. It has been anxious to ensure that by simplifying the number of Objectives (and the number of Community Initiatives), the fisheries sector is not adversely affected. The use of the nationally based EAGGF programme is its preferred way of ensuring that that the fisheries sector outside the new geographically defined areas continues to get assistance. Nevertheless, it is not the intention that the EU co-finance the same measure under two different financial instruments depending on the region concerned, as happens with the fleet restructuring measures financed by the FIFG in Objective 1 areas and by the EAGGF Guarantee in Objective 2 areas. Hence the FIFG should also participate in co-financing the fleet restructuring measures in Objective 2 regions.

4.2. However, whilst simplification is intended overall, for the fisheries sector, the regulation brings more complexity, since there would be 4 different mechanisms for getting support, in some cases all operating in one region:

- FIFG: everything in Objective 1 areas;

- FIFG: structural measures in Objective 2 areas;

- EAGGF: fleet restructuring in non Objective 1 areas;

- EAGGF: structural measures (undefined) in non Objective 1 and 2 areas.

The first two would be managed regionally, the latter two, nationally. It is difficult to see how this will be managed coherently and transparently and conflicts with the 'one region - one strategic plan` for all funds and objectives which is being recommended for many regions. We believe that wherever practicable, funding should be administered on a regional basis and not a national basis, since we do not share the Commission's view that it is impossible to regionalize fleet restructuring measures. In the interests of transparency and efficiency, fleet restructuring and compliance with the MAGPs should be programmed on a regional basis since it would not seem consistent for programming to be at national level and financial administration at regional level. To this end, regionalization along the lines of the FIFG programme, setting up proper machinery for transfers between regions and making the regions responsible for compliance, would ensure that the national objective was attained.

4.3. The European Commission has yet to determine the structural measures (other than fleet restructuring) to be available under the EAGGF in non Objective 1 and 2 areas. The draft regulation was due to be tabled in September and was still not available at the time this Opinion was drafted. It is important that the Committee of the Regions is consulted on this new regulation.

4.4. For example, it is important that fishing ports outside the definition of the new Objective 1 and 2 regions are covered by the new structural measures under EAGGF and that these include assistance in terms of economic diversification and all the other activities previously outlined which FIFG currently covers.

4.5. Thus unless a fishing area can qualify for assistance under Objectives 1 or 2, or unless it is included in the new structural measures, yet to be announced, it will get no help on aquaculture, fishing port facilities, product processing and marketing, product promotion to name but a few. The only assistance which the draft regulation provides nationally, other than training and skills development under ESF, will be for fleet restructuring to meet the requirements of the Multi-Annual Guidance Programmes.

4.6. It is important to recognize that meeting the requirements of MAGP IV requires decommissioning or a reduction of fishing effort or a combination of both. In order not to worsen the employment situation, it would be opportune and advisable to give financial aid to regions concerned by decommissioning or by a reduction in fishing effort, so that they can reinvest in other activities. For example, such funding should be made available to reinvest the human resources withdrawn from fishing in complementary activities such as the processing and marketing of fishery and aquaculture products. We believe it is important to restore the compensation provisions, which applied in an earlier MAGP such that payments for laying up boats on a temporary basis (in effect a set-aside payment) are made. These need to be included in the regulations. We also believe that the requirement in MAGP III to require a minimum of 55 % of the target to be achieved through decommissioning and a maximum of 45 % through a reduction in fishing effort be restored.

4.7. It is important that as much help as possible is given to the fishing industry, to help it adapt to change. For example, we would like to see included, in the structural measures, provision for diversification, which is not available currently outside the current Objective 1, 2 and 5b areas. Also excluded from the FIFG regulations are public sector aquaculture projects. Matched funding from public sector sources towards schemes to allocate part of an estuary in which to train ex-fishermen in aquaculture are currently disallowed, whereas privately promoted aquaculture projects can be funded. There are areas which have fishing and fishing related activities but which are not necessarily interpreted as being fishing dependent. This is unnecessarily discriminatory and does not assist the EU and the fishermen in achieving the main goal - a balance between fishery resources and their exploitation, to achieve a sustainable fishing industry.

4.8. The Committee is aware that it is mainly a question of determining how a sector which employs more than 300 000 people in Europe is to be kept going.

It is aware that the fisheries sector is a highly family-based and traditional sector, which must be further developed in market terms.

Extra thought should be given to the further development of vertical integration, given the imbalance between the various players on the market and especially between family businesses and the retail chains.

4.9. The Committee thinks that as a result of the greater scale in the market for fisheries products, the managers of fish auctions in the various regions of Europe must consider the various possibilities for privatization and above all cooperation.

The latter is especially important because it would seem that in the near future there is bound to be some merging of the more than 500 auctions in Europe.

The Committee thinks that there is a case for discussing the payment of financial aid by the European Commission or other bodies to support initiatives in this direction.

4.10. The Committee recognizes the importance of the need to use more technological innovations on board vessels. Financial support from (regional) authorities for the acquisition of maritime electronics must not be ruled out in advance. This will involve energy distribution systems, engine management and operating systems and the like. In addition, the development of quality criteria for various fish species must be promoted in order to make tele-auctioning possible in the near future.

5. Recommendations:

The Committee of the Regions recommends that the draft Regulation is amended as follows:

1) Access to funding must be made as simple as possible.

2) Instead of the complexity of funds proposed, there should be a single fund for nationally administered schemes and a separate fund for regionally administered schemes.)

3) With regard to the restructuring of the fleet, which is closely linked to the fisheries sector, the COR does not share the view that it is impossible to regionalize such restructuring measures; these measures should be regionalized and financed by the FIFG.

4) In terms of fleet restructuring, in addition to compensation payments for decommissioning, where reduction of fishing effort is pursued, compensation payments should be made for temporary laying up of boats.

5) The requirement in MAGP III to require a minimum of 55 % of the target reductions to be achieved through decommissioning and a maximum of 45 % through a reduction in fishing effort be restored.

6) There should be no geographical limitations to support for the fishing industry. If a fishing port, of whatever size, is outside the new Objective 1 and 2 areas, it should be eligible for assistance - all the more so if it is small and in a state of crisis.

7) There should be a wide interpretation of diversification to meet the four stated primary goals of the Common Fisheries Policy and matched funding should be drawn from either public or private sector sources to achieve this.

8) That the fishing industry, along with agriculture, is recognized as a major primary industry within the EU and that the level of funding made available is commensurate with its importance bearing in mind that in certain coastal areas of Europe fishing is the only source of wealth and local productive strength is based upon it.

9) In future, the criteria for providing aid to the fisheries sector should pay still greater attention to sustainable development considerations. However, this should be achieved in a way which is practicable from an aid-policy standpoint and does not complicate administrative costs.

Brussels, 14 January 1999.

The President of the Committee of the Regions

Manfred DAMMEYER

() OJ C 176, 9.6.1998, p. 44.

() OJ C 129, 2.5.1996, p. 1.

() OJ C 379, 15.12.1997, p. 1.