EN

Brussels, 28.1.2008

SEC(2008) 124

COMMISSION STAFF WORKING DOCUMENT

International Olive Council – Prospects for the future

COMMISSION STAFF WORKING DOCUMENT

International Olive Council – Prospects for the future

1. Presentation of the IOC

1.1. Background

The International Olive Council (IOC) is an intergovernmental organisation with eleven founder countries (Belgium, France, Greece, Israel, Italy, Libya, Morocco, Portugal, Spain, Tunisia and the United Kingdom). It was set up to manage the 1956 international Agreement on olive oil, whose main goals were to encourage the international coordination of production, industrialisation and marketing policies in the olive sector.

Several other agreements signed since 1956 – in 1963, 1979, and 1986 – allowed for closer links with the United Nations Conference on Trade and Development (UNCTAD), the extension of the scope to table olives, the strengthening of technical cooperation and promotion (for each of these two areas of work, an annual "obligatory" budget of ECU 500 000 was established in 1986) and decision-making by consensus. In addition to the "obligatory" promotion budget, the 1986 Agreement provided for members to make an additional voluntary contribution, intended to strengthen promotion actions. The European Community (EC), which joined the IOC in 1978, is the only member to have made a voluntary contribution.

The International Agreement on olive oil and table olives of 2005 (hereafter “the Agreement”) entered into force on 1 January 2006 and is valid until 31 December 2014. It introduced several changes covering inter alia the decision-making process (see Section 1.3) and the calculation of the participation shares. Each member has a number of participation shares, now calculated on the basis of production and exports for the last six marketing years. For 2007 the EC’s participation share is 782/1000.

The financial statement annexed to Council Decision 2005/800/EC of 14 November 2005, concerning the conclusion of the Agreement, provides for multi-annual (2006–2013) expenditure totalling €43.49 million (budget line 05.06.1: International Agreements in agricultural matters). For 2006 the appropriations amount to €5.07 million, for 2007 to €5.17 million and for 2008 to €5.27 million; an annual increase of 2% is provided for up to 2013.

IOC members [1] account for almost 95% of the world production of olive oil. Almost all the Mediterranean countries and some neighbouring countries like Jordan and Iran participate in the Agreement. Other countries (Argentina, Chile, Iraq and Saudi Arabia) have expressed an interest in joining.

The Agreement is one of a number of international commodity agreements concluded under the auspices of UNCTAD. They include sugar, cereals, olive oil, coffee, cocoa, tropical wood, rubber, jute, copper, lead, zinc etc. The international bodies that manage the agreements have been evaluated recently from the point of view of their contribution to development. The consultants' report [2] identifies certain aspects that a new policy for international commodity agreements could cover:

– because of their intergovernmental nature, the international bodies are in a privileged position to collect and disseminate statistical data in an impartial way, as well as to organise the exchange of information between private operators. This justifies public support. However, the report considers that the field of study should be extended upstream (to cover production conditions, including social and environmental aspects) and downstream (to consumption and marketing); the duplication of work on technical cooperation and technology transfer between each body and the common fund for commodities [3] should be reduced;

– an advisory group should ensure that better account is taken of society’s expectations, in particular concerning SMEs and the environment;

– finally, the report calls for better coordination between the various bodies and with UNCTAD and the FAO.

1.2. The IOC crisis

In 2001, European Commission audits found considerable weaknesses in the IOC’s management and internal controls. As a consequence, the Executive Director resigned in December 2002. Further audits carried out in 2003, in collaboration with other IOC members, confirmed the shortcomings. The Commission then decided, inter alia, to suspend the EC’s voluntary contribution.

To address this situation, the IOC’s members agreed to establish an action plan, in order to restructure the organisation. The following measures were taken:

– a new management team took office in November 2004. Sound administrative and financial management were announced as priority objectives;

– a new organisation chart applied as of 1 January 2006. Appropriate administrative and operational procedures were also approved;

– a totally new financial regulation, based essentially mutatis mutandis on the EU financial regulation, was finally adopted in November 2006 and applies as of the 2007 budget;

– the IOC rules of procedure were adapted to match the new financial provisions;

– following audits of the IOC, since December 2005 nearly €1 million has been recovered by the Commission and clearance work on past IOC activities now appears to be finished.

1.3. The IOC’s structure: organisation, staff and budget

1.3.1. Organisation

The Council of Members (hereafter “the Council”) is the principal decision-making body of the IOC. Unless powers or functions are conceded explicitly to the Executive Secretariat or the Executive Director, it is the Council that takes decisions, adopts recommendations and formulates suggestions stipulated or provided for in the Agreement. The Presidency and Vice-Presidency of the Council is rotated annually. In 2007, the Iranian President has been assisted by an Israeli Vice-President.

Council decisions are taken by consensus. However, if consensus is not reached within the time limit decided by the President, members take a vote. A decision is considered to be adopted when at least 50% of the members, accounting for 82% of the participation shares, vote in favour.

The Council is supported by four Committees:

– a Financial Committee responsible for the execution and control of the three budgets (administrative, technical cooperation and promotion) and for the overall financial control of the IOC;

– a Technical Committee responsible for technical cooperation, standardisation and the chemical analysis of olive products and environmental aspects;

– an Economic Committee responsible for following the olive oil, pomace oil and table olive markets and for undertaking studies related to these markets;

– a Promotion Committee responsible for programmes to promote the consumption of olive oil and table olives.

1.3.2. Staff

The Council is assisted by an Executive Secretariat, which currently comprises an Executive Director, 4 Deputy Directors (Administration and Finance, Technical Cooperation, Studies and Economy, Promotion), one Financial Delegate and the staff necessary to perform the tasks arising from the Agreement. The Council appoints the Executive Director and the senior officials on the basis of the principles of proportionate alternation among the members and geographical equilibrium. In 1960 the IOC staff was 21; by 2005 it had grown to 53 (see staff evolution in the Annex, Table 1). Since 2005 the staff has been cut by more than 20%. This reduction has not affected senior management posts.

The IOC is the International Commodity Body (ICB) with the highest number of staff (see table below). However, the IOC’s competences may be considered broader than those of the other organisations.

| IOC (Olives) | ITTO (Tropical wood) | ICO (Coffee) | ICCO (Cocoa) | IGC (Grains) | ISO (Sugar) | IRSG (Rubber) |

Staff | 45 | 33 | 32 | 18 | 17 | 11 | 7 |

Source: IDC, study on the future of ICB, Feb 2007 (p. viii).

1.3.3. Budget

The Council each year adopts a budget. As of 2006, three separate budgets must be drawn up: an administrative budget, a technical cooperation budget and a promotion budget. For 2007 the total adopted budget of €7 061 494 includes €5 079 269 for administration, €909 225 for technical cooperation and €1 075 000 for promotion. The IOC’s budget resources mainly comprise members’ contributions.

The recent development of IOC expenditure is shown in the Annex, Table 2. The EU’s total contribution since 1999 is shown in the Annex, Table 3.

1.4. Future prospects

In view of the continuous changes in the olive and olive oil sector, the 94th and 95th Council sessions (November 2006 and 2007) decided to create a reflection group to define IOC activities after 2010. A report on the outcome of the group's reflections will be presented to the extraordinary session of the Council in July 2008.

2. Current IOC objectives and activities

2.1. International Technical Cooperation

The Agreement provides that the IOC should meet a range of rather broad objectives concerning international technical cooperation. These include the integrated and sustainable development of world olive production, coordination of production, industrialisation, storage and marketing policies for olive oil, olive-pomace oils and table olives. A particular stress is placed on product quality, environment, by-products and genetic resources. In practice, cooperation takes the form of three types of activity: research and development, training and technical assistance and cooperation with stakeholders.

2.1.1. Research and development (R&D)

The IOC can call for the collaboration of institutes, laboratories and specialised research centres to implement and follow up R&D programmes. Projects are conceived with the aim of modernising olive cultivation and processing techniques, improving product quality and production costs, and the olive sector’s environmental performance. They are often financed or co-financed by the Common Fund for Commodities.

No synergy has so far been found, with either the Community’s research or external cooperation policies.

Activities have in particular been developed in the field of genetic resources, production forecasting by pollen monitoring, the treatment and use of residues and oil cakes, codes of best practice etc.

2.1.2. Training and technical assistance

The IOC organises training sessions and technology transfer. It also assists delegations and experts from member countries to participate in its technical, scientific and general meetings.

Within this framework, the IOC organises training courses at various levels in a number of fields (chemical analysis, sensory analysis, cultivation techniques, etc). It also offers grants for obtaining Masters Degrees in olive cultivation and olive techniques in Cordoba (Spain) and Spoleto (Italy). In addition, the IOC organises international and national sessions and seminars on technical topics. It can also finance technical assistance on topics of interest to its members.

2.1.3. Cooperation with olive sector stakeholders

Twice a year the IOC hosts an Advisory Committee made up of 78 representatives of olive production, the processing industry, trade and consumers in its member countries (23 of the Committee members are from the EU). This Committee allows direct contact between stakeholders of almost all the producing countries (non-member countries the USA and Australia participate regularly as observers).

Funded directly by private operators, the IOC carries out quality controls of oils on the principal non-European export markets (i.e. those where promotion efforts have been made by the IOC).

2.2. International trade standards

2.2.1. Setting standards

The IOC has a long history of setting standards for the sector’s products. It establishes designations for olive oils and olive-pomace oils (extra virgin, virgin, ordinary virgin, olive oil, refined olive oil, etc.), defines purity and quality criteria (chemical, physical and organoleptic characteristics) and methods of analysis and sampling. For table olives the standards prescribe minimum requirements and quality classifications, with the aim of ensuring the authenticity and quality of the product. In particular, the standards and methods of analysis set out to ensure loyalty in international trade, protection of consumer rights and the prevention of fraudulent practices.

In pursuit of this goal, several times a year the IOC brings together specialised groups of experts on: methods of analysis, quality parameters for olive oil, olive pomace oil and table olives; the definition, methods of analysis and up-dating of standards for the sensory evaluation of products; and the control of the competence of physico-chemical and sensory analysis laboratories. These laboratories are approved annually by the IOC on the basis of periodical and circular tests.

2.2.2. Harmonisation of national and international legislation

IOC members are committed to applying the designations and definitions of the different categories of olive oils or table olives laid down by the Agreement to their international trade ("extra virgin olive oil ", "virgin olive oil" etc…).

The IOC is considered by the Codex Alimentarius as a reference organisation for standards and methods of analysis of olive oil (competence of the CCFO – Codex Committee on fats and oils) and of table olives (competence of the CCPFV – Codex Committee on processed fruit and vegetables). Two standards for the sector have been adopted: for olive oil (CODEX-STAN-33, initially adopted in 1981 and revised in 1989 and 2003) and for table olives (CODEX-STAN-66, initially adopted in 1981 and revised in 1987).

The revision of the Codex standard on table olives is underway and the IOC is preparing a basic text that could serve as the starting point for discussions at Codex level. The IOC is also playing a leading role in on-going discussions on the maximum linolenic acid content, with respect to the Codex standard on olive oil.

On the purely practical front, samples of oils and table olives are sent from all over the world to be analysed under the guidance of the IOC. Community legislation already refers to the IOC regarding some methods of analysis and the operation of the sensory analysis laboratories.

2.2.3. Labelling and geographical indications

Up till now the IOC has not been directly involved in harmonising labelling provisions for olive oil. In the Community this issue is covered by Commission Regulation (EC) No 1019/2002 on marketing standards for olive oil. Specific compulsory olive oil indications and rules applicable to optional indications (product origin, cold extraction, acidity labelling, etc.) are not discussed at IOC level.

Despite some provisions in the 2005 Agreement, the Executive Secretariat has not so far initiated any activity on geographical indications.

2.3. Promotion of olive sector products

2.3.1. IOC promotion actions

Members of the IOC undertake jointly to conduct generic promotional activities with the aim of expanding world consumption of olive oil and table olives. These activities take the form of educational and information campaigns that cover nutritional and health aspects, as well as the organoleptic, chemical and other properties of olive oils and table olives. These campaigns aim also to inform consumers about the categories and definitions of olive oils and table olives, while taking care to ensure that no provenance is either promoted or given prominence over another.

Promotion programmes are established according to the resources available. Priority is given to actions in the main consuming countries and in countries where the consumption of olive oil and table olives is judged likely to increase. The technical implementation of the promotion programmes falls on the IOC, which can also entrust execution to specialised entities.

Until 2002, Community financing of these actions took two forms, usually called "obligatory promotion" and "voluntary promotion". The voluntary contribution was the subject of a specific convention between the Commission and the IOC, involving more responsibility for the Commission in the financial management of the funds than in the case of the obligatory contribution.

While these additional resources were available, the IOC conducted promotional campaigns for olive oil in third countries (USA, Canada, Australia, Argentina, Japan and South-East Asia). Actions included information dissemination, consumer education, promotional events, participation in scientific conferences highlighting the health and nutritional properties of olive oil, the publication of fact-sheets on health and gastronomic brochures.

Since suspension of the Community’s voluntary contribution in 2002, only a reduced number of measures could be maintained by the IOC: participation and/or support for national and international events related to the olive sector, promotion material, dissemination of scientific results, production and distribution of the Olivae review.

In 2006 the IOC adopted a three-year (2007–2009) promotion strategy based on obligatory contributions only. The 2007 budget was increased to about €1,073,000, allowing a promotion campaign in India. For 2008, the main actions are planned for India, Russia and China. The promotion budget proposed for 2008 is €2.1 million.

At the EU’s request, an evaluation of IOC promotion activities (1997–2006) was carried out by external consultants financed by the IOC [4] The main conclusions of the evaluation give some indications of the impact on third countries:

· over the period studied, consumption of olive oil increased by 41% in the third countries where the IOC organised promotion campaigns (United States, Canada, Australia, Argentina, Japan and South-East Asia, Brazil, China). An unspecified part of this development is due to the promotion campaigns; the consultants mainly consider that promotion efforts have to continue in order to avoid the future loss of market share to other oils;

· the positioning of the promotion campaigns, targeting the professional world (health, media, gastronomy, trade) rather than consumers, and centred on health and nutritional aspects (with taste playing a secondary role) is considered correct, overall.

The evaluation nonetheless makes a number of recommendations on procedures (decision-making process, planning, administration, professional marketing approach) and promotion activities (messages, market research and selection, target groups and tools, co-ordination with private or public promotion actions). The IOC Promotion Committee adopted the conclusions and recommendations of the study in 2006.

2.3.2. EU promotion measures for olive products

Independent of the IOC, the EU has its own promotion policy and since the mid-1980s has been financing promotion measures in the olive oil sector. At present these actions fall within the scope of information and promotion actions for agricultural products established by Council Regulations (EC) No 2702/1999 (third countries) and No 2826/2000 (internal market).

Since 2001, 16 olive oil and table olive programmes have been approved, with a total Community funding of €10.4 million (i.e. about €2 million a year): 10 (€6.5 million) for the internal market and 6 for third countries (€3.9 million). The general co-financing rule is a maximum 50% by the EU, maximum 30% by the Member State and a minimum 20% by the applicant.

The actions to promote olive oil consumption in the Community (1999–2002) were evaluated in 2003 [5]. The evaluation confirmed that EU consumption increased both in absolute quantities and the number of daily users; but the number of consumers and frequency of consumption could still increase (apart from in GR and IT); and the image of oil can be improved (the "health" image in Scandinavia and the taste and potential culinary use in all non-producing Member States).

2.4. Olive sector data

2.4.1. Economic and statistical data

In this area, the objectives assigned to the IOC are to facilitate the study and implementation of measures aimed at balancing production and consumption, as well as to establish information and consultation procedures that allow greater market transparency. Members commit themselves to providing the IOC with all necessary statistics, information and documentation.

At its annual session, on the basis of all available information, the Council discusses the olive oil, olive pomace oil and table olive supply balance sheets (production, consumption, trade, stocks). Simple fact sheets for each producing country are also compiled. On its website the IOC publishes a short monthly report devoted essentially to the EU market, as well as pdf versions of the approved supply balance sheets.

2.4.2. Studies

The IOC conducts or coordinates studies that set out to improve knowledge of nutritional, health or other properties of olive oil and table olives, as well as economic issues.

2.5. Indicative comparison with other ICBs

Table 4 in the Annex provides an indicative comparison of the activities of the IOC with those of the other ICBs.

3. Potential for improvement

While the 2005 Agreement is valid until the end of 2014, between now and 2010 and in compliance with the present Agreement, IOC members have an opportunity to refocus IOC activities in order to meet the new challenges of the olive sector.

3.1. IOC as agricultural actor for the EU Neighbourhood Policy

As the cultivation of olive trees is historically identified with the Mediterranean area, most IOC members are also involved in the EU Neighbourhood Policy: Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Syria and Tunisia. Other IOC members are either EU candidates (Croatia, Turkey) or potential candidates (Montenegro, Serbia).

In this context technical cooperation and training can reinforce the joint development strategy and neighbourhood policy in the area in general, and in the Mediterranean’s south bank countries in particular. These countries are the main beneficiaries of IOC Research & Development and training actions, financed at 80% by the EU. As technological development in the sector is, on average, at a higher level in the EU than in most other IOC members, the transfer of technology is justified. The participation of EU experts in most of the events organised encourages the dissemination and transfer of Community know-how. The training of professionals from the Mediterranean countries builds up a climate of confidence between administrations on both sides of the Mediterranean.

In addition, particular attention should be paid to the achievement of sustainable development, including environmental issues, within the technical cooperation programme, with a view to harmonise the approach of all ICBs on these issues.

Consideration could, however, be given to improving efficiency by a better integration with – or creating synergies between – IOC actions and EU development policy, as well as the UN Common Fund for Commodities.

Standardisation (in particular the harmonisation of national regulatory provisions between IOC Members) also contributes to facilitating trade between IOC Members by helping eliminate non-tariff barriers between markets.

Finally, the IOC remains a technical forum where delegates can exchange views and understand each other. The value of this, while largely symbolic, should not be under-estimated. The IOC shows itself willing to see its membership grow and to attract emerging producer countries of the New World, Asia, etc. However, the current structure of olive production (95% of world production is around the Mediterranean basin) ensures that the Mediterranean dimension of the IOC is an aspect that will remain strong for the foreseeable future.

3.2. IOC as international standardisation body

Periodic revisions of the Codex standard for olive oil are necessary, in order to take into account scientific developments in chemistry that influence the quality and purity parameters and their method of analysis, new types of fraud and the extension of olive cultivation to new geographical areas. As the likely starting point for such a revision, detailed technical discussions within the IOC will have an impact on the subsequent negotiation stages at Codex Alimentarius level.

From an EU perspective, in the debate on the simplification of the CAP and, more widely, the objective of better regulation, there are questions about the use of co-regulation and the "New Approach" – as proposed for the marketing of non-food products [6]. Other ways of delegating regulatory competence are also being considered. In the case of olive oil, where there is no single body that represents the sector and to which a delegated regulatory competence could be entrusted, the most realistic possibility for simplification is the option of applying international standards. In this context, Community legislation on the characteristics of olive oils and the relevant methods of analysis (currently Commission Regulation (EC) No 2568/91) may directly be based on the IOC rules. This reference could represent a major simplification of EU legislation.

3.3. IOC as a world olive statistics centre

At present the IOC’s economic work and reports are factual and static. The IOC does not have the appropriate resources to bring a genuine added value to the data that IOC members provide. Despite this, the IOC remains the principal source of information on world production of olive oil, as well as on consumption in the principal non-producing countries.

Following the example of other international commodity bodies, the IOC could deliver a much higher value added as regards market reporting, forecasts and sector surveys. Closer collaboration with the Advisory Committee and the direct involvement of the sector's stakeholders could give an impetus to IOC work in this field. It should be noted that the IOC is a unique forum where stakeholders from the whole world meet and exchange views.

3.4. The IOC as an organisation for the generic promotion of olive oil at international level

3.4.1. Justification for promoting olive oil

The medium-term outlook is that production of olive oil will rise: a number of new orchards have recently been planted, in particular in Spain and to a lesser extent in Italy, Greece, Portugal and France. New plantations are reported regularly in Mediterranean south bank countries. The increase in supply, if not coupled with a rise in demand, could destabilise the market. The continuation of promotion activities is thus vital, to preserve market balance.

Olive oil consumption in most non-producing countries remains much lower than in the principal producing countries (see Annex, graphs 3 and 4), which indicates that there is still a margin for growth.

In terms of health, nutrition and culinary value, olive oil maintains – together with some other vegetable oils rich in unsaturated fatty acids like rapeseed oil – a comparative advantage compared with animal fats and many vegetable oils. The fact that olive oil market prices are high (between €2.5 and 3.5/l at wholesale stage for basic unrefined olive oils – 3 to 5 times more than most other vegetable oils) makes promotion all the more important, to ensure that other messages than simple price comparison reach the consumer.

3.4.2. A future policy for olive oil promotion

The restructuring of the IOC was completed in November 2006 with the adoption of the new Financial Regulation. Although financial management has improved, a long probation period is necessary, with no certainty of a positive outcome, for the new set-up to prove its operational efficiency and reliability. A continuing lack of decision on the voluntary contribution will harm the credibility of both the Commission and the IOC. As a financing tool the voluntary contribution constitutes an insecure practice, as the Commission’s authorising officers assume all the responsibilities and risks for actions undertaken by external bodies. In addition, other IOC Members are not held accountable for the spending of this contribution. The EU voluntary contribution should therefore be definitively dismissed.

In order to counter-balance the elimination of the voluntary contribution it is proposed that the following measures be implemented.

1. Within the EU: allocate to the indicative budget of the Commission’s co-financed promotion programmes €3 million, for the exclusive use of olive oil promotion activities in third countries. The proposed increase of €3 million represents 7% of the financial appropriations proposed for the 2008 budget (€45 million).

2. At the IOC: allocate future IOC structural budget savings to the promotion budget (see point 4.2 below).

Regarding this strategy the following points should be noted:

· generic promotion in third countries and on EU markets, whether financed by the IOC or the EU, remains generic and therefore benefits olive oil and table olive producers of the whole world equally;

· the additional €3 million budget for co-financing promotion programmes would result in a €6 million campaign, with the financial participation of Member States and Community operators;

· the pre-crisis promotion budget of the IOC was €5.5 million (€5 million voluntary and €0.5 million obligatory); the new arrangement would result, as of 2011, in a total olive oil promotion budget of €7.7 million (at least €1.7 million IOC promotion budget and €6 million Community co-financing programmes);

· synergies between EU-financed programmes and those of the IOC would increase the overall efficiency of the promotion programmes.

3.5. IOC in support of EU strategy on geographical indications

The 2005 Agreement includes provisions on geographical indications that appear very ambitious but also rather vague as to the concrete engagement of IOC members. In the absence, to date, of any initiative from the Executive Secretariat or from the members, this provision has remained inactive.

The IOC Agreement offers its members the opportunity to adopt a regulatory framework and legal provisions to ensure the protection of geographical indications.

4. Conclusions

The IOC is an organisation that participates in the promotion of international and neighbourhood cooperation, contributes to the development and stability of markets for olive products and to the attainment of the objectives of the Community’s commercial and agricultural policy. From an operational point of view, the IOC is in a privileged position to deliver an international reference for olive oil and table olive standards; a direct reference to international standards in EU legislation; a neutral and objective observatory of world olive oil markets; a means of making our partners and competitors co-responsible for generic promotion on third country markets.

4.1. Refocusing IOC activities

In view of the above analysis and our objective to see emerging a more efficient IOC, it would be appropriate for the Commission to propose to its IOC partners, in the framework of "the IOC after 2010" reflection group, a refocusing of its activities along the following lines.

° Standardisation

The IOC has acquired valuable know-how in this area. It is necessary to further develop and consolidate this high level expertise.

° Economics

Increase IOC capacity to provide more information and data on production costs, trade, prices at all levels and consumption. In addition, the frequent release of updated reports; creation of an operational olive oil market website; user-friendly dissemination of information; organisation of conferences and seminars.

° Promotion

With the abolition of the EU's voluntary contribution, promotion activities would be financed only by obligatory contributions. Savings from the Administrative budget (see point 4.2 below) and the transfer of part of the unspent amounts from the year N-2 to year N would strengthen this budget. The IOC’s current tri-annual promotion plan (2007–2009), not based on an EU voluntary contribution, would be followed by one built on the new financial perspectives.

° Technical cooperation, training and transfer of technology

It seems important in this field to look for synergies with other existing policies: the Common Fund on Commodities, EU Research and External Cooperation policies etc.

° Strengthening links with the private sector

Improve communication channels between the IOC and the Advisory Committee, for example by inviting participation in the IOC Committees as observers; information and/or consultation on decisions (to be) taken; a broader opening to environmental actors and social partners.

° Geographical indications

Engage in discussions within the IOC to explore and/or develop the potential for cooperation in this field; establish a work programme including legislation in force, registered GIs, comparability of policies, geographical indication specifications and technical assistance.

4.2. Impact of refocusing on the IOC Executive Secretariat

In view of the refocusing of IOC activities, a rational restructuring of the IOC services is necessary. A comparison with other international commodity bodies shows the IOC’s structure to be the biggest by far (40% more staff than any other body). By the end of 2009, the number of staff is forecast to be 47; it is clear that this workforce will not correspond to post-2010 activities.

In particular, the present number of senior management positions – one Executive Director, four Deputy Directors and one Financial Delegate – appears excessive. While the staff of the IOC has been reduced by 20% since 2005, senior management posts have not been affected. A new organisational balance should be sought, to ensure the efficient and successful management of the Executive Secretariat.

Under the political agreement of 2004, the appointments of three senior officials expire in November 2008, while those of the remaining two expire in November 2010. The end of 2008 and 2010 therefore offer windows of opportunity for restructuring. In this context, it is proposed to decrease the number of Director posts from five to three at the end of 2008, and to two at the end of 2010. Further staffing adjustments could be considered in view of the refocusing of activities.

ANNEX

Table 1: Evolution of IOC staff

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Source: IOC

Table 2: Evolution of IOC expenditure (in €'000)

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Source: IOC – 2007 and 2008 are budget figures

* the 2008 budget includes exceptionally high transfers from the N–2 exercise

Graph 1

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Table 3: EU Financial Contribution to IOC ('000 €)

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Table 4: Indicative comparison of ICB activities

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Source: IDC, study on the future of international commodity bodies, Feb 2007 (p. viii), basic agreements, …

Graph 2: EU-25 exports of olive oil to third countries (tonnes)

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Source: Comext

Graph 3: Consumption of olive oil in the EU (kg/head/year) – 2004/05

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Source: IOC

Graph 4: Global consumption of olive oil (kg/head/year) – 2004/05

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Source: IOC

INDICATIONS FINANCIÈRES | AGRI |

1. La mesure n'a pas encore fait l'objet d'indications financières. X Commission Staff Working Document. International Olive Oil Council. | La mesure a déjà fait l'objet d'indications financières, car il s'agit : de la mise en œuvre d'un règlement du Conseil; voir fiche financière annexée à la procédure écrite n° ................. |

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2. La mesure en tant que telle entraîne-t-elle des conséquences financières ?concerne les modalités techniques d'applicationnégligeable………………. Conséquences financières de la mesure en tant que telle (sur recettes / dépenses):* sur l'exercice en cours (2008): 0 €* sur l'exercice suivant (2009): 300 000 € | NON OUI |

3. Lignes budgétaires concernées et crédits pour l’exercice 2008 poste: 05 02 10 01crédits: 45,00 Mio € |

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Financement de la mesure:a) Possible par les crédits inscrits pour le budget en cours ?au(x) poste(s) concerné(s)au(x) chapitre(s) concerné(s)b) Dans la négative, y-a-t-il risque, en raison de cette mesure, d'insuffisance de crédits totaux du FEOGA-Garantie inscrits pour l'exercice en cours ?c) Est-il prévu / à prévoir dans l'avant-projet de l'exercice suivant ? | OUI / NON OUI / NON OUI / NON OUI / NON |

Observations: In this working document an estimated increase of 3 million euros of the annual indicative budget for the promotion of olive oil sector is stated. It should be noticed that the Council just approved the new promotion regulation and shortly the Commission will establish new detailed rules in which a final decision on the indicative annual budget will be proposed. Therefore, this indicative amount should not pre-empt Commission's future proposal. Having in mind that the majority of the programmes are approved for a 3-year period and due to the fact that the payment delays foreseen in the regulation have an impact in 5 budget years we can estimate the budget impact of a decision approved in 2008 as follows: 2009 – 300 000 €; 2010 – 900 000 €; 2011 – 1.000 000 €; 2012 – 600 000 €; 2013 – 200 000 €. |

[1] The IOC has 14 members: Algeria, Croatia, Egypt, European Community, Iran, Israel, Libya, Jordan, Lebanon, Montenegro, Morocco, Serbia, Syria and Tunisia.

[2] Study on the future of international commodity bodies, IDC (Investment Development Council), CIRAD, IRAM, February 2007 (authors: K. Burger (Wageningen University), B. Daviron (CIRAD), V. Alby-Flores (IRAM)).

[3] The Common Fund for Commodities is an intergovernmental financial institution established within the framework of the United Nations.

[4] Evaluation of the IOC promotion measures 1997–2006, P&A Consultores – Ageron international, August 2006.

[5] Evaluation of measures to promote the consumption of olive oil in the Community (No 0769/00 OJ-S211), 17 July 2003 (Taylor Nelson Sofres – DIMARSO). Source TNS-Dimarso.

[6] COM(2007) 53 final of 14.2.2007 and COM(2007) 37 final of 14.2.2007.

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