WRITTEN QUESTION E-0412/96 by Sérgio Ribeiro (GUE/NGL) to the Commission (29 February 1996)

Subject: Use of Community funds (ESF) by Cofaco (San Miguel, Azores, Portugal)

It is common knowledge that cases have occurred (not all of which can be confirmed) in which Community funds (ESF) intended for vocational training have been diverted, by underhand methods, in order to pay wages for work passed off as 'practical classes' under a complete travesty of Portuguese law (Decree-Law 242/88 of July 1988 and the contracts based thereon, and Legislation Dispatch No 464/94).

A recent and highly illuminating case is that involving the Cofaco fish canning factory in San Miguel (Azores, Portugal), at which training was only undertaken sporadically and intermittently and where the 'trainees' were offered a contract which actually required them to work as employees. Responsibility for this was placed on the Community for failure to comply with certain financial conditions and the result was a thoroughly precarious and unacceptable employment situation.

In addition it is clear that the intention was to carry on this scheme using Community funds, with complete disregard for the purpose for which they are intended and with contempt for the relevant laws.

There must be many such cases but a special feature of this one is that there was apparently a visit from 'someone connected with the EU', which resulted in a short period during which priority was given to training so that the visitor in question would uncover fewer irregularities.

Could the Commission say whether or not such a visit took place and, if so, under what conditions and with what outcome?

Answer given by Mr Flynn on behalf of the Commission (11 April 1996)

According to information supplied, the Regional Directorate for Employment of the Azores autonomous region, responsible for administering the European Social Fund (ESF) strand of the development programme for the region (Pedraa II), approved in 1994 a training plan to be developed by Cofaco at its Rabo de Peixe plant (S. Miguel, Azores).

The plan covered 11 training measures involving a total of 241 people (122 employees and 119 unemployed) between November 1994 and November 1995. The unemployed trainees were chosen by the regional employment services, and Cofaco guaranteed to recruit 50% of these trainees after training. The plan provided for 1 500 hours of training for each trainee (1 000 hours of theoretical training and 500 hours of on-the-job training).

The total cost approved was ESC 932 million (ECU 4,8 million), broken down as follows:

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Income corresponds to the estimated production volume for the period of on-the-job training.

As the measures have been subject to delay, Cofaco has asked to extend the training plan until February 1996.

The payments made to Cofaco (ESF and the government contribution) amount to ESC 130 million (first advance, 1994/1995) and represent 26% of the approved public-sector joint financing. A request for the second advance for 1995 has already been forwarded to the regional authorities, which are still analysing the statement of declared expenditure and the accounting data requested from the company.

The actual execution of the measure will be evaluated with the balance request, at which time all financial and teaching elements will be analysed. The Regional Directorate for Employment is in frequent contact with the Cofaco management and has monitored the measures on several occasions, analysing the accounts and interviewing the trainees.

In addition, the enterprise has announced its intention of recruiting during March 1996 a total of 85 of the unemployed trainees who have successfully completed training; this is well in excess of the 50% initially forecast.

At the June 1995 meeting of the Pedraa II monitoring committee, as part of an inspection of a number of projects co-financed by the Structural Funds, the Commission paid a short visit to the enterprise. However, no questions relating to vocational training were dealt with during this visit.