Communication from the Commission - Promoting sustainable development in the EU non-energy extractive industry
Date: 2000-05-03
Institutions: European Commission
Subjects: EU policy, competitiveness, environmental impact, mining industry, sustainable development

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 3.5.2000
COM(2000) 265 final

COMMUNICATION FROM THE COMMISSION

Promoting sustainable development in the EU non-energy extractive industry

-------------------

COMMUNICATION FROM THE COMMISSION

Promoting sustainable development in the EU non-energy extractive industry

-------------------

TABLE OF CONTENTS

1. Introduction ......................................................................................................... 3

1.1.

1.2.

The objective of this Communication ........................................................... 3

The sustainable development context............................................................ 3

2. Characteristics of the industry in the EU............................................................ 3

2.1.

2.2.

2.2.1.

2.2.2.

2.3.

2.4.

The industry ................................................................................................. 3

Competitiveness characteristics .................................................................... 6

Geology, land access and exploration ...................................................... 6

The sub-sectors......................................................................................... 7

Environmental impact .................................................................................. 8

Social characteristics .................................................................................... 9

3. Priority issues for sustainable development of the industry............................. 10

3.1.

Improving the sustainability of the industry - a high level of environmental
protection...................................................................................................... 10

3.1.1.

3.1.2.

3.1.3.

3.1.4.

The existing legislative framework.......................................................... 10

Need for new instruments ....................................................................... 11

Environmental agreements ..................................................................... 12

Other initiatives...................................................................................... 13

3.2.

Economic aspects ....................................................................................... 14

3.2.1.

3.2.2.

3.3.

3.4.

3.5.

Competitiveness...................................................................................... 14

Administrative procedures...................................................................... 16

Social performance and employment .......................................................... 17

Research and Technological Development (RTD) ...................................... 17

Enlargement ............................................................................................... 18

4. Follow-up actions ............................................................................................... 19

2

1.

INTRODUCTION

1.1.

The objective of this Communication

The objective of this Communication is to set the broad policy lines for promoting
sustainable development in the EU non-energy extractive industry (hereafter the
industry) by reconciling the need for more secure and less polluting extractive
activities while maintaining the competitiveness of the industry. The Commission
stresses the need for an improvement
in the environmental performance of the
industry in general and to prevent accidents such as the recent breaking of tailing
dams in Romania and Spain. The Communication places existing and future
legislative and other initiatives in the context of sustainable development and sets out
a way forward to continue to address these issues respecting the principle of
subsidiarity. It invites Member States, industry and other stakeholders to actively
participate in setting in place a framework designed to achieve improved dialogue
that should lead to identifiable targets, a timetable for the achievement of these
targets, and concrete actions.

1.2.

The sustainable development context

Article 6 of the Treaty establishing the European Community (EC Treaty) requires
the integration of environment protection requirements into Community policies,
with a view to promoting sustainable development. Giving follow-up to this Treaty
requirement, the European Council has requested from the Council, in its different
formations, comprehensive strategies for integration by June 2001. The Industry
Council has already made its first contribution with regard to industrial policy, in its
conclusions of 29 April 1999 and with its report to the European Council entitled
"Integrating Sustainable Development and Industrial Policy" of 9 November 1999. In
that context, the Council has stressed the need to adopt an integrated approach to
sustainable development, aiming at a high level of economic and social development
and environmental protection (the three pillars). The integration of sustainable
development will be a priority also in Enterprise Policy and in the proposed new
Multiannual Programme for Enterprise and Entrepreneurship (2001-2005).

2.

CHARACTERISTICS OF THE INDUSTRY IN THE EU

2.1.

The industry

With a few exceptions such as fresh water and renewable resources from agriculture
and forestry, all raw materials used by society for production and consumption are
extracted from the earth, the seabed or the sea. Metals and minerals are basic
requirements for everyday life, for buildings, roads and transport vehicles to name
but a few. The industry covers the extraction of all solid minerals except coal and
treated in this
uranium, which are dealt with in other Treaties and thus not
Communication. Also excluded from the scope of the Communication are lignite,
peat, brown coal and oil shale.

The industry is usually divided in three sub-sectors:

–

metallic minerals (e.g. iron, copper, zinc),

3

–

–

construction minerals (e.g. natural stone1, aggregates, sand and gravel,
limestone, chalk, gypsum), and

industrial minerals. The latter group may be divided into

–

–

physical industrial minerals (e.g. kaolin, feldspar, talc), and

chemical industrial minerals (e.g. salt, potash, sulphur).

When reference is made in the Communication to all materials collectively, the term
"minerals" is used.

Extractive operations display features that require a thorough, and sometimes
delicate, balance between economic, environmental and social concerns. On the one
hand, the location of the industry is bound to the presence of geological deposits
which can be viably exploited; on the other hand extractive operations inevitably
impact on the environment and the landscape, the health and safety of workers, and
citizens concerned by the emissions from mining operations. Extractive operations
also raise the question of the depletion of non-renewable resources. It is, therefore, a
question of whether sufficient environmental protection measures have been required
from or provided by the industry in the past, and whether the full environmental costs
have been internalised in the price of the minerals. While the industry is an important
source of wealth creation and employment, its operations require important control
measures to ensure a high level of environmental protection and a high level of
protection of the health and safety of workers.

As a result of the variety of impacts on the environment and above-average risk to
workers, the industry needs to respond to the challenges of sustainable development.
This need is addressed by organisations such as the International Labour Office
(ILO), the United Nations Environment Programme (UNEP) and the World Bank, by
global business organisations such as the World Business Council for Sustainable
Development, by sector federations and individual companies, and by NGOs. Many
countries, in the EU and elsewhere, have taken initiatives to bring their national
policies for the industry in line with sustainable development concerns.
In
resource-rich countries such as Canada and Australia, the need for a sustainable
development approach has resulted in intensive dialogue and consultation between
the stakeholders, which in turn has shaped the policy development framework for the
industry.

Direct employment in the industry in the EU is estimated at 190 000 persons2. The
industry structure is fragmented, consisting both of large numbers of SMEs
supplying regional markets but also several multinational companies headquartered
in the EU with subsidiaries or associated companies across the world. The sub-sector
of construction minerals is by far the biggest employer, with direct employment
estimated at 140 000 persons3. It is also the sector most dominated by SMEs, with
more than 90% of the companies having less than 50 employees4.

1

2

3

4

The terms ornamental stone or dimension stone are also frequently used.
Estimated employment for 1997 for Nace rev. 1 13.1-2 and 14.1-5. Source: Eurostat and national
geological surveys, statistical offices and ministries.
Source: Panorama of EU industry 1997.
Nace rev. 1 14.1-14.2, estimated on the basis of data from Eurostat for 1995 and 1996.

4

The industry is actively present across the Community. Extraction of industrial and
construction minerals is relatively evenly spread within the EU with, for example,
extraction of aggregates (crushed stone) and sand and gravel for construction
purposes being carried out in all Member States. On the other hand the sector where
production is more concentrated concerns mainly metallic minerals, where Finland,
Greece, Ireland, Portugal, Spain and Sweden together account for some 75% of total
EU production5. In the case of quarrying of natural stone, the most prominent
Member States, namely, France, Greece, Italy, Portugal and Spain account for some
90% of total EU production6.

Extractive operations in Europe provide the basis for a competitive and innovative
manufacturing industry for equipment and machinery, an industry which relies on
testing and
close connections with the extractive industry for developing,
demonstrating its products. European equipment and machinery producers supply the
extractive industry world-wide. Other industrial activities, such as construction,
commonly provide a market in terms of spin-off uses for these products.

level,

At global
the industry has an active presence in most countries; major
producing countries include USA, Canada, Australia, Russia and China. In the case
of industrial and construction minerals, the EU's share of world production volume is
more than 20%7, with the EU being among the world's largest producers of some
minerals such as natural stone, feldspar, kaolin and potash. Most industrial and
construction minerals are produced and traded within the EU and indeed within the
individual Member States in some cases. With regard to metallic minerals, the EU
accounts for between 2 and 3%8 of world production. The overall minerals trade
), showing the strong dependence of the EU on
balance is negative (ca 8 billion
in 1998,
imports for its raw materials supply. Of total EU imports of 21.5 billion
more than three-quarters have its origin in non-OECD countries; Brazil, South Africa
and China are among the most important suppliers for the EU9.

€

€

Poor management of the minerals sector in developing countries may jeopardise
access to needed resources, and increase the threats posed to the local and global
environment by poorly run operations, or by public authorities unable to effectively
set in place and administer proper environmental rules.

Therefore, attention should be given to help countries with which the EU is engaged
in co-operation programmes to address issues such as the creation/reinforcement of
adequate business climates and proper mining environment management. Such
assistance should contribute to foster sustainable development, to the objective of
eradicating poverty in developing countries and to their integration into the world
economy.

5

6

7

8

9

Calculated on the basis of production quantities, metric tonnes. Source: World Mining Data 1997.
Calculated on the basis of production quantities. Source: European Minerals Yearbook 1996/97.
Metric tonnes. Includes all minerals in Nace rev. 1 14.1-14.5 except natural stone. Source: World
Mining Data 1997.
Metric tonnes. Source: World Mining Data 1997.
Source: COMEXT 1998.

5

2.2.

Competitiveness characteristics

The EU is the world's largest consumer of minerals, reflecting the dependence of
many manufacturing industries on minerals as raw materials. The economic
prospects of the industry are closely linked to the overall level of economic activity,
at national, European and at global levels. As a consequence, mineral markets are
characterised by heavy price volatility and fluctuations in demand with temporary
but sometimes severe effects on the industry, for example, as evidenced by the 1998
economic crisis in Asia. The most important factors for the competitiveness of all
sub-sectors of the industry includes human resources, land access, a stable and
predictable legal framework generating legislation proportionate to the objectives
sought,
infrastructure,
including transport, low freight costs and energy supply.

research and technological development, availability of

2.2.1. Geology, land access and exploration

Geological deposits determine the location of extractive operations. The economic
viability of deposits is determined by several factors, including the type and grade of
the ore, the depth of the deposit, and the technical process/design that can be used for
the extraction. Equally important is the influence of market prices and production
costs, where changes can turn a deposit considered unviable into a commercially
feasible target for exploitation, and vice versa. Technological development gives rise
regularly to the discovery of new deposits, as well as to the exploitation of minerals
previously regarded as unviable or impossible to extract technically. Consequently,
land access and efficiency of exploration are key factors for the future development
and competitiveness of the industry. However,
land access should be carefully
evaluated against the potential negative environmental impacts.

With regard to land use, initial exploration activity requires access to a large area of
land, sometimes tens of square kilometres, especially in the case of metallic minerals
and high quality industrial minerals, which tend to be difficult to locate. Exploitation
itself requires only a very limited area, usually measuring a few hectares.

€

The EU accounts for a very small share of world expenditure on exploration,
in 199810. Expenditure is mainly on exploration for
estimated at some 68 million
base metals, gold and diamonds, where the EU has limited mineral resources
compared to other parts of
In practice, exploration tends to be
concentrated in Member States in which metallic minerals are currently extracted,
especially in the northern regions of Finland and Sweden. Rationalisation of the
mining legislation in these countries in the early 1990s resulted in a substantial
increase in exploration activities, measured by level of expenditure as well by
number of permits awarded.

the world.

As regards problems in financing due to the high risk involved in exploration, junior
exploration companies are usually not able to obtain debt financing, leaving them
dependent on risk capital for financing exploration activities. In that context,
extractive operations can involve a long and complex planning stage and large
investments of capital, usually with long payback periods. For example, it is not
unusual to have a period of 7-10 years between initial discovery of deposits and

10

Mining Journal, 30.10.1998, Volume 331.

6

production coming on stream. Large amounts of capital may have to be committed at
an early phase of a project, when the risk is highest due to uncertainty in relation to
the value and cost of extraction of deposits. With regard to the expenditures for
environmental protection, a large part is incurred at an early stage in connection with
the preparation of comprehensive environmental assessments and planning of the
operations, including closure, restoration measures and after-care. The other side of
the medal is the environmental benefits of protection requirements, which however
are normally not brought into the equation. Particular administrative difficulties are
experienced from delays in permit approvals, which can be very costly for
operators and lead to decisions not to proceed with investments.

Consequently, the main factors influencing investment decisions for the development
of new operations are market demand forecasts, geological conditions, access to risk
capital, and a legal and administrative framework which permits predictable
decisions.

2.2.2.

The sub-sectors

The competitive position and profitability of operations differs according to
sub-sectors. With regard to metallic minerals, European industry faces strong global
competition especially from large-scale, high-grade, overseas operations capable of
offering minerals produced under low cost conditions on international markets. The
dominance of underground mining adds further to the higher costs of the industry in
the EU, as compared to its global competitors. The industry has made large efforts to
reduce overall cost levels through rationalisations and increasing capital intensity,
which has led to significant downsizing of the labour force. Globalisation offers
many opportunities for investments outside the EU, opportunities which have been
taken up extensively by European industry. Given the global trade in metals and with
prices set on the world market, the industry fully supports fair trade, free competition
and removal of trade barriers.

Construction minerals are mainly extracted through quarrying. Main uses include
construction of roads, buildings and railways, and manufacturing of cement, lime and
plaster and a variety of other products such as glass and ceramics. The EU is a major
world producer and is largely self-sufficient in virtually all the minerals in this group.
Markets for construction minerals are mainly supplied from within a limited radius,
distance between operations and place of use being a key cost factor. Consequently,
transportation costs limit external competition in bulk construction raw materials.
Nevertheless, due to its high value, natural stone is an important export product, with
North America in particular providing a significant market outlet for European
producers; competition is increasingly being experienced from low-cost producers in
countries such as India, Brazil and China.

Industrial minerals are, with few exceptions, extracted through quarrying. They are
major raw materials for the chemicals and fertiliser manufacturing industries, as well
as for ceramics, glass, paper, paints and plastics. Global competition has increased
markedly in recent years as a result of lower costs in many third countries; this trend
is expected to continue. Indications of oversupply for several chemical industrial
minerals, such as potash and salt, also signals further increasing competition.
the quality of the deposits, as well as processing expertise, are
Nevertheless,
important factors in meeting quality requirements and customers needs for specific

7

end-uses; consumers are generally well placed to choose from a range of potential
suppliers from Europe and elsewhere.

2.3.

Environmental impact

From the point of view of the environment, extractive operations raise two types of
concern. Firstly, the use of non-renewable resources as such may mean that these
resources will not be available for future generations. Secondly, the impact of mining
may harm the quality of the environment. The environmental impact of extractive
operations may include air pollution (mainly dust), noise, soil and water pollution
and effects on ground water levels, destruction or disturbance of natural habitats, and
the visual impact on the surrounding landscape. The actual level of environmental
impact of a particular operation depends on the nature of the ore and specific
characteristics of
the chemical
composition of the ore and the surrounding rocks, naturally occurring substances and
factors determining the
other geographic
environmental impact include the technologies used to extract and process the ore,
and to dispose of the waste generated. In general the environmental impact is likely
to be greater in metal mining, where in some cases toxic chemicals need to be used in
the mineral separation process. The large quantities of toxic waste that can remain
from such processes must be carefully managed in order to avoid, for example, water
pollution through acid drainage and to prevent failure of structures and dams built to
contain the waste.

the site, such as the depth of the deposit,

conditions. Other

and climatic

Mining waste is among the largest waste streams in the Community. Some waste
streams, in particular generated by the non-ferrous metal mining industry, contain
large quantities of dangerous substances, such as heavy metals, and represent
significant risks.

The cyanide spill into the river Tisza from the damburst at the “Baia Mare” goldmine
in Romania created a poison plume of pollution that flowed as far as the Danube.
The visible effects on the surrounding ecosystems once again highlighted the
environmental problems of the management of mining activities. Other accidents of
this type occurred during the last few years, in particular the Aznalcollar accident in
Spain where a similar damburst poisoned the environment of the Coto Doñana
National Park. On 25 April 1998 the breach in the tailings dam at the Aznalcollar
mine created a flow of over 5 million cubic metres, of toxic waste which polluted a
large area – approximately 4500 hectares – on the border of the Doñana national
park. The lessons of these accidents should be learnt in order to minimise the risks of
such incidents in the future.

Apart from issues peculiar to minerals several other issues in the environmental field
are directly relevant to this industry. The Commission has already raised the question
of how the Community can promote more eco-efficient production and
consumption patterns, reducing material use, energy consumption and emissions
whilst maintaining levels of products and services11. These issues will continue to be
of significance for this industry and will influence policies related to it. They are

11

Communication from the Commission "Europe's Environment: What directions for the future? The
global assessment of the European Community Programme of Policy and Action in relation to the
environment and sustainable development, Towards Sustainability", COM(1999) 543, 24.11.1999.

8

addressed by the Commission in various contexts; one such example is the
promotion of recycling, where the contribution of specific downstream sectors such
as construction to environmental objectives is an important issue.

A legacy of abandoned mine sites and unrestored quarries bears witness to the
unsatisfactory environmental performance of
the industry in the past. These
abandoned sites spoil the landscape and can pose severe environmental threats due
especially to acid mine drainage. The legal
responsibility for environmental
restoration of these sites is often unclear, due to deficiencies in the legal framework
or difficulty in identifying the parties responsible. The Commission considers that an
inventory should be made of these sites and of the environmental problems they
cause, which should make it possible to identify corrective measures in close co-
ordination with the Member States. European industry has declared its willingness to
assist in carrying out such an inventory and in developing a tool for prioritising the
measures needed. Several Member States have also started to take action on the
through the LIFE-
restoration of these sites. The Commission also supports,
programme, initiatives to prevent or reduce impact of extractive activities on the
environment, including in relation to abandoned sites.

Technological development has allowed for safer handling and disposal of dangerous
wastes and the replacement of hazardous processing methods, often achieving gains
in productivity at
the same time. Modern information technology has enabled
efficient monitoring of environmental impact of operations in real-time, as well as
monitoring of sites after closure. Methods for site restoration towards attractive
alternative uses have improved. In many cases quarries can offer good opportunities
for ecological restoration for natural habitat types and species of Community interest.
Despite progress in environmental performance made over recent years, further
improvements are both necessary and achievable, although the scope for such
improvements will vary depending on the sub-sectors involved, and also within each
sub-sector. The introduction and dissemination of improved technology throughout
the Community will be a key factor in improving performance.

2.4.

Social characteristics

Accident statistics show that the industry belongs to the high-risk sectors, harbouring
potential hazards as a result of the close interaction between nature, technology and
people. Occupational health and safety impacts include the control of potential
hazards to workers related to a hostile working environment to which work has to be
adapted. The extent of potential impacts differs depending on the type of operation,
with, for example, potential negative health and safety impacts in underground
extractive operations (no daylight, limited ventilation in confined places, risk of falls
of rocks, etc).

The impact of extractive operations may also impair the health and safety as well as
the sources of income of the surrounding population if the appropriate measures to
reduce emissions and prevent accidents are not taken. In the case of liquid effluents,
the population living downstream of a site needs to be protected.

9

and

health

With regard to EU legislation in the health and safety field, the Directive12 on the
introduction of measures to encourage improvements in the safety and health of
workers at work and the Directive13 on the minimum requirements for improving the
safety
underground
of workers
mineral-extracting industries lays down specific requirements for the industry. Both
Directives are based on former article 118A of the EC Treaty requiring that "such
directives shall avoid imposing administrative, financial and legal constraints in a
way which would hold back the creation and development of small- and
medium-sized undertakings".

protection

surface

and

in

The regional
importance of the industry as a source of employment can be
substantial, especially in remote and sparsely populated areas where it is often the
the
main employer, for example,
industry accounts for 14-17% of total employment14. The industry has a large
reliance on subcontracting for various parts of its operations, such as sinking of
the indirect employment created by a
mineshafts and transport. Consequently,
particular industry operation in a local area may be as much if not greater than the
direct employment provided.

in certain municipalities in northern Sweden,

3.

3.1.

PRIORITY ISSUES FOR SUSTAINABLE DEVELOPMENT OF THE INDUSTRY

Improving the sustainability of the industry - a high level of environmental
protection

Priority issues for the integration of environment into the industry include prevention
of mining accidents, improvement of the overall environmental performance of the
industry, and sound management of mining waste, including recycling.

3.1.1.

The existing legislative framework

With regard to EU environmental legislation, the activities of the industry are
governed by EU Directives on waste, water, and air quality and the nature
conservation Directives on Birds and Habitats. Land access, a key issue for the
to the
industry’s competitiveness, must be carefully assessed with respect
environmental impact. The Directive on environmental impact assessment (EIA)15
covers open-pit mining and quarries, where the surface of the site exceeds 25
hectares. For other extractive operations, Member States decide on a case-by-case
examination, or by setting thresholds or criteria, which determine whether operations
will be subject to an assessment in accordance with the Directive.

Directive 75/442/EEC on waste as amended by Directive 91/156/EEC16 applies to
treatment and storage of mineral
waste resulting from prospecting, extraction,
resources and the working of quarries, since the latter are so far not covered by other
Community legislation. Article 4 of Directive 75/442/EEC establishes that Member

12

13

14

15

16

Council Directive 89/391/EEC of 12.6.1989.
Council Directive 92/104/EEC of 3.12.1992.
Municipalities of Kiruna, Gällivare and Arjeplog. Source: Swedish Geological Survey.
Council Directive 85/337/EEC of 27.6.1985 on the assessment of certain public and private projects on
the environment, as amended by Council Directive 97/11/EC of 3.3.1997.
Council Directive 75/442/EEC of 15.6.1975 on waste and Council Directive 91/156/EEC of 18.3.1991
amending Directive 75/442/EEC on waste.

10

States shall take the necessary measures to ensure that waste is recovered or disposed
of without endangering human health and without using processes or methods which
could harm the environment.

The deposit of waste from the processing of minerals (tailings) in a pond is a waste
disposal operation covered by existing EU legislation - Directive 99/31/EC on the
landfill of waste17. This Directive came into force 16 July 1999 and will be effective
by 16 July 2001. The Directive lays down requirements concerning the authorisation
of landfills, the technical construction of landfills, the types of waste acceptable at
landfills and the monitoring procedures for landfills.

The Directive concerning integrated pollution prevention and control (IPPC)18 covers
minerals processing, as installations for the production of non-ferrous crude metals
from ore are covered by annex I (category 2.5.a) of the Directive. Activities covered
by the Directive must prevent and reduce pollution through the use of Best Available
Techniques (BAT). The Directive is applicable since 1999 for new or substantially
changed installations, and in 2007 at the latest for existing ones.

The Community Eco-Management and Audit Scheme (EMAS)19 provides an
to integrate and manage environmental concerns in companies. The
instrument
industry in the EU, as well as globally, can be described as a late follower with
regard to the take-up of EMAS or other environmental management systems such
as ISO 14001. Nevertheless take-up is increasing rapidly. The Commission
welcomes the efforts made by industry in this respect and encourages it to further
adopt such systems, which can be a vital tool not only for improving environmental
management and performance but also with regard to external communication. The
Commission has proposed a revision of the regulation. This revision in particular
provides for means to address stakeholders’ concerns in a credible manner with
strengthened requirements for periodic and independently verified environmental
statements and use of indicators for ensuring quality and relevance of external
communication. The revision will also integrate ISO 14001 as the environmental
management system required by EMAS.

It is important that SMEs, which make up the great majority of enterprises in the
industry, adopt such systems. In that context, it should be recalled that the EMAS
regulation recommends Member States to promote in particular the participation of
SMEs, by establishing technical support measures. In the case of less developed
regions the structural funds can also be used to provide support for eco-auditing and
environmental management in SMEs. The information networks envisaged under the
proposed new Multiannual Programme in favour of enterprise will emphasise such
requirements.

Environmental reporting, as required by EMAS, is also a vital tool for the industry
to provide detailed information on its environmental performance, both to the public
as well to the regulatory authorities. The Commission encourages the industry to
further develop environmental reporting, which should include site-specific reports,
including the results of independent third party auditing.

17

18

19

Council Directive 1999/31/EC of 26.4.1999 on the landfill of waste.
Council Directive 96/61/EC of 24.9.1996 concerning integrated pollution prevention and control
Council Regulation (EEC) No 1836/93 of 29.6.1993 allowing voluntary participation by companies in
the industrial sector in a Community eco-management and audit scheme.

11

3.1.2. Need for new instruments

As regards initiatives relating to environmental
legislative
proposals from the Commission of relevance to the industry include the Water
Framework Directive20 and the Directive on strategic environmental assessment
(SEA)21.

legislation, current

In view of the recent accidents, Community legislation on the safe operations of
mining installations should be reviewed. To that effect the Commission will shortly
present a Communication on these issues, including an Action Plan, as a follow-up to
the Baia Mare and Aznalcollar accidents. In terms of industrial risk management, the
Seveso II Directive22 seems to be the most appropriate legislative tool to prevent
accidents such as the ones which recently occurred in Romania and Spain. This
Directive obliges industrial operators to put into effect Safety Management Systems,
including a detailed risk assessment on the basis of possible accident scenarios.
However, the current scope of the Directive does not clearly include mining activities
and/or tailing ponds or dams, and it could be reviewed in order to assess how
extractive activities could be covered.

Tailing ponds are covered by Directive 99/31/EC on the landfill of waste. However,
all
the issues related to tailing pond management have not been specifically
considered in this Directive.

An “EU 15” study on the management of mining waste and the assessment of related
environmental risk will be completed during summer 2000 and at the end of 2000 for
the candidate countries. On the basis of the results of this study, the need for a
proposal for a new Directive specifically focussing on the management of mining
waste will be assessed.

It would be possible to produce a special Best Available Technology (BAT)
reference document (BREF), as a result of the exchange of information according to
article 16(2) of the IPPC Directive, dealing with relevant ore processing activities.
The BREF could deal with techniques to reduce "everyday" pollution and with
techniques to prevent or mitigate accidents.

In addition, the White Paper proposing a directive on environmental liability23
seeks to improve the implementation of key principles such as polluter-pays,
prevention and precaution, and of existing EU environmental laws, and also to
ensure adequate restoration of the environment. Timely cost-effective investments in
prevention measures to avoid damage that would be more costly to repair are likely
to pay dividends in the case of operations which have not taken adequate measures.

So far, measures affecting the industry have rarely been evaluated according to their
costs and benefits. It is therefore difficult to evaluate whether particular measures
actually lead to a net increase in the welfare of society or whether the additional
costs, including the loss of competitiveness, are a burden to society leading to a net

20

21

22

23

COM(1997) 49, 17.6.1997, COM(1999) 271, 17.6.1999.
COM(1996) 511, 4.12.1996, COM(1999) 73, 18.2.1999.
Council Directive 96/82/EC of 9.12.1996 on the control of major-accident hazards involving dangerous
substances.
White Paper on environmental liability, COM(2000) 66, 9.2.2000.

12

welfare loss. It would be worthwhile exploring these issues again in the light of the
difficulties encountered in the course of an earlier study on this issue24. More
conclusive findings would assist in assessing what environmental objectives should
be adopted from a societal point of view. The Commission is prepared to look at this
issue in consultation with the Member States, industry and other stakeholders.

3.1.3.

Environmental agreements

A focus of the recent debate in the 1990s on the regulatory framework for European
industry in general, particularly with regard to environmental protection, has been
how to increase the use of instruments other than regulatory ones. The Commission
has previously described the potential advantages of the further use of environmental
agreements, such as providing cost-effective, tailor-made solutions, and laid down
guidelines on the criteria such agreements must adhere to25. The extent to which
binding agreements can be used depends on the legal and institutional scope for
concluding such agreements in the different Member States, and also the extent to
which they are taken up by business in a substantial and ambitious way. Currently
the actual take-up and effect of environmental agreements is limited.

Prima facie, environmental agreements would seem to have significant potential at a
local level due to the site-specificity of the industry in relation, for example, to
issues such as water quality and site restoration. It is also at that level that such
agreements have been developed so far. On the other hand, local by-laws can also
allow for the necessary flexibility in setting specific conditions and targets for
particular operations on the basis of an environmental assessment and local
conditions.

The Commission has launched a study on existing voluntary initiatives in the EU, as
well as in other countries, which will
include an inventory of environmental
agreements in the EU. On the basis of the findings of the study, the Commission
will further assess the potential use of such instruments in the industry and
recommendations
to be made. With regard to Community Environmental
Agreements, the Commission is currently preparing a proposal for a framework
regulation to address the current legal and institutional obstacles for such agreements
at Community level and the need to ensure public participation.

3.1.4. Other initiatives

One essential requirement for achieving sustainable development is the integration of
environmental concerns into every stage of an operation, from the planning stage to
site restoration and after-care. This approach is all the more essential as the layout
and method used for an extractive operation is sometimes difficult to change once
extraction has begun.

Voluntary initiatives have been taken by industry to foster improvements in
environmental performance and to communicate past and on-going achievements.
Several companies, especially multinationals in the metallic minerals sector, have
adopted environmental and sustainable development policies. Business federations
have developed codes of conduct and mission statements for their members, setting

24

25

Carried out for the Commission 1996.
Communication from the Commission on Environmental agreements, COM(96) 561, 27.11.1996.

13

out the principles for the sectors' environmental policy. Best practice guides have
been developed to illustrate how the industry strives to ensure environmental
protection. An important application of such codes of conduct relates to operations in
developing countries, where the legal
framework may be insufficient. An
independently verified code of conduct can, in such circumstances, be a way for
industry to demonstrate its commitment to environmental and social requirements. It
has to be assessed whether these commitments have sufficient effect compared to
other instruments in reducing the environmental impacts.

On the whole, however, initiatives of this kind appear to be fewer in number and less
far-reaching compared to those in leading minerals producing countries outside the
EU. Existing initiatives can not be considered as having made a substantial
contribution to the overall policy framework. One possible reason for this is that it
may not be cost-effective for SMEs, which dominate the industry in the EU, to
undertake such initiatives. This highlights the need for active involvement of
for example, disseminating relevant
business
information. As mentioned in subchapter 3.1.3, the Commission has launched a
study on voluntary initiatives in the EU, as well in other countries, to identify what
the impact and scope of such initiatives can be and possible models for further
development.

support organisations

through,

Important progress could be realised through the development of environmental
performance indicators, in order to establish a detailed assessment of the industry's
environmental performance, to monitor improvements and to differentiate between
the different sub-sectors and locations, as influenced by geological conditions and
the local ecosystem. Examples of suitable indicators could be resource use,
importantly, they must satisfy
discharges to air and water, and land use. Most
requirements of transparency, relevance, measurability, and analytical soundness.

More comprehensive environmental reporting by the industry could play an
important role in the development of indicators. Some companies have already
started to develop and use such indicators in their reports. Indicators can only
achieve results if they provide for common measuring standards, allowing for
comparison and evaluation of performance. This approach will provide the degree of
objectivity needed to bring about improved dialogue between the stakeholders, a
dialogue based on objective analysis which can result in agreed targets for future
improvements. Such dialogue can also help to bring about a greater understanding of
the constraints faced by the industry in terms of competitiveness and social
development.

The Commission invites Member States, industry, and other stakeholders to further
exchange information on work already carried out in this field and to discuss how it
could be progressed.

3.2.

Economic aspects

3.2.1. Competitiveness

In order to attain economic efficiency from a societal point of view, it would be
optimal to internalise all negative impacts on the environment (“externalities”) into
the price of extractive operations and ultimately the product as sold. This would then
also lead to an optimised level of resource use through the control of demand due to

14

the price mechanism, the incentive to install an optimal level of pollution control and
prevention measures to avoid accidents and, finally, an optimal trade-off in the
choice of locations. This trade-off has to weigh inter alia the use of high-grade ore
(with less creation of waste and/or emissions to the environment) with the impact on
landscape and bio-diversity. However, due to the lack of available studies, an exact
quantification of the overall welfare loss to society as a consequence of the
environmental impact of extractive activities is impossible at the moment. Further
research is needed to see how far this type of analysis can be taken with a view to
designing optimised economic instruments which may, as a long term goal, reduce
the need for legislation.

Land use and spatial planning policies directly affect sustainable development
strategies for the industry. Land access is an essential pre-requisite for the further
development of the industry. Land access for the industry, however, may have
considerable environmental impacts, which need to be assessed. Over recent years
conditions for land access for the industry have been increasingly influenced by other
competing land uses, such as urban development,
infrastructure construction,
intensified agricultural development, and preservation of nature areas.

Although land use planning is mainly the responsibility of public authorities in the
Member States, a number of key initiatives of a strategic nature at EU level provide
scope for developing a more integrated approach. In that regard, the European
Spatial Development Perspective (ESDP)26,
intended to promote co-operation
through a more
between Member States in pursuit of sustainable development
balanced spatial use of EU territory, is relevant to the industry. In accordance with
the Habitats and Birds Directives27, Member States should also, when designing land
use measures, ensure that the nature conservation requirements of the sites of the
Natura 2000 network are complied with. This network aims at maintaining biological
diversity in the EU by the conservation of natural habitats and wild fauna and flora.
When a plan or project, including those related to extractive operations, is likely to
have a significant effect on a Natura 2000 site, the Member States have to apply the
necessary safeguards defined in Article 6 of the Habitats Directive, in order to ensure
that such activities are sustainable from a nature conservation point of view.

The activities and impact of the extractive industries in the EU can not be viewed
separately from the global market. Increased imports of raw materials to the EU may
have negative effects on the global environment through greater use of transport. In
addition, as compared to the situation in the EU, the environmental conditions under
which minerals are extracted in developing countries are often difficult to assess. The
need to integrate sustainable development into development policy is especially
relevant in that context. The experience of the industry from operating under strict
environmental requirements in the EU also allows for development of best
environmental practices, which can be spread to developing countries and thereby
help achieve environmental objectives.

26

27

"Towards Balanced and Sustainable Development of the Territory of the European Union", Agreed at
the Informal Council of Ministers responsible for Spatial Planning in Potsdam, May 1999. Published by
the European Commission.
Council Directive 92/43/EC of 21.5.1992 on the conservation of natural habitats and of wild fauna and
flora and Council Directive 79/409/EEC of 2.4.1979 on the conservation of wild birds.

15

From a social perspective there are also a number of important considerations to be
taken into account. In scarcely populated regions, already under pressure from
structural change, there may be limited possibilities for alternative economic activity.
The direct and indirect employment created by an extractive operation may offer
opportunities to arrest depopulation. However, an extractive operation has a finite
life, and it
is necessary to plan at the outset of an operation how lasting and
beneficial economic effects can be continued after site closure. Furthermore, some
extractive operations can have a negative impact on traditional ways of life in rural
in the case of adverse impact on local populations. This
areas, for example,
highlights the important responsibility of industry to involve the local community in
all phases of the planning and development of an operation.

The Commission recommends that public authorities in Member States adequately
balance the need for land access for industry with the need for a high level of
environmental protection. Member States are also invited to share experiences and
information, for example, on balanced approaches to assigning areas of land for
future extractive operations and on how comprehensive decision-aiding systems,
integrating data on land use, bio-diversity, cultural heritage, geology and water
resources, can be effectively developed and applied.

3.2.2.

Administrative procedures

In many Member States, the right to exploration and exploitation with regard to
metallic minerals and high-value industrial minerals belongs to the State. National
legislation, usually in the form of a mining law, lays down the principles on how
such rights can be acquired and exercised.

Mining, land use, environmental, and health and safety legislation, national as well
as Community, reflects the situation in Member States. The different aspects may be
integrated, environmental and land use provisions, for example, being included in
mining law. Legislation and enforcement are in many cases under regional or local
responsibility,
including the setting of precise conditions for environmental
protection, such as methods of working, waste management and site restoration.
Similarly, permit procedures may be handled by different authorities and at different
levels.

implementation, and strict enforcement, of

Proper
legislation are essential
pre-conditions for ensuring effective environmental protection and even-handed
treatment of the industry. To achieve these results, public authorities must equip
themselves with adequate administrative structures, and have available a high level
of knowledge and expertise, to deal effectively with the issues arising.

The efficient application of the large number of administrative procedures
governing the industry is also of particular importance in maintaining a business
climate conducive to investment in the industry. This applies with even greater
weight to SMEs, which are especially sensitive to administrative burdens. It would
be beneficial to study the design and functioning of these procedures in the Member
States, in order to encourage the exchange of information and to identify best
practices.

The Commission invites the Member States and industry to identify aspects of
the business climate and the
relevant
national mining legislation most

for

16

competitiveness of the industry, in order to form a basis for future benchmarking of
such legislation.

3.3.

Social performance and employment

In the field of health and safety, industry has improved its performance in recent
years, leading to a marked decline in accidents. However, accident statistics show
that the industry is a high-risk sector and improvements need to be achieved to
become comparable to those in other industrial sectors. Compared to the issue of
environmental protection, it appears that this aspect does not give rise to the same
public concern.

A highly skilled workforce is essential for maintaining the competitiveness of the
sector. Due to the long tradition of extractive operations, the EU possesses excellent
human capital in this field. However, the limited size of the extractive industry in the
EU has had repercussions on the resources devoted to higher education in mining
engineering. Such education is a pre-condition for the competitiveness of the
industry and for innovations and new technologies, and it also offers the possibility
of increasing knowledge and awareness of environmental protection in all stages of
extractive operations. With regard to the supply of labour in the future, the industry
also needs to communicate effectively its performance in relation to health and safety
in order to attract sufficient and qualified staff.

The Commission recommends that Member States study the industry's needs for
higher education in order to support the future competitiveness of the industry. The
industry, through sponsorship of learning centres for example, should be actively
involved in the process. In that context, the Commission welcomes the initiative
taken by a number of European technical universities and European industry to set up
a network for co-operation and student exchange in the field of mining and mineral
engineering, an initiative supported by the Community through the Socrates
programme.

3.4.

Research and Technological Development (RTD)

The rate of development of new technologies in the industry has been very rapid,
particularly in the metallic minerals sector. Modern information management
technologies and ICT use have increased the efficiency of exploration through real-
time operations, reducing costs and capital risk at the same time. More effective
exploration methods and monitoring of extractive operations, involving remotely
sensed data acquisition and digital processing techniques,
laboratory analysis,
equipment use, and assessment of environmental impact has increased productivity
and environmental performance. The impact of e-commerce has so far been
relatively slow in the raw materials sector, but this is likely to change with, for
example, development of
internet-based commodities exchanges and trading
opportunities, which will further increase competition in the industry.

Through its programmes for RTD in Europe, the Community is supporting a wide
range of actions in this field. Under the Fourth Framework Programme (FP)
1994-1998, more than 50 projects have been supported, with over 40 million
of EU
financing, along themes such as mining and tunnelling technologies, ornamental
stones, clean processing technologies for ores and industrial minerals and exploration
technologies. Individual projects have addressed issues such as acid mine drainage

€

17

and water pollution, computer-integrated systems and processes, and improvement of
product quality. The programme has also financed the European Thematic
Network on Extractive Industries (EUROTHEN), set up on the initiative of the
European Commission. The network groups together the research projects financed
by this programme and provides a European forum to share problems and
experience, facilitating the incorporation and transfer of technology and mobility of
researchers, and interacts between industry and regulatory authorities with respect to
sustainable development.

The Fifth FP (1998-2002) and its thematic programme for Competitive and
Sustainable Growth addresses industry needs through its key action on Innovative
Products, Processes and Organisation and through generic activities on new and
improved materials. The CRAFT programme is centred on the needs of SMEs, for
which thematic priorities and objectives are in line with those of the Fifth FP.

In the thematic programme for Energy, Environment and Sustainable Development
within the key action on Sustainable Management and Quality of Water, research is
carried out on the rehabilitation of sites polluted by extractive activities and on the
management of water leaching from mining sites, with the objective of producing
advanced guidelines for better environmental protection.

To further strengthen efforts in the field of RTD, the Commission has proposed the
creation of a European research area28. The aim is to better integrate and
co-ordinate research activities at both Union and national level. Key elements will be
networking centres of excellence, a common approach to research infrastructure and
enhancement of the mobility of researchers in Europe. This will provide further
the extractive industry to improve its competitiveness and
opportunities for
environmental and social performance. The Commission encourages industry to
develop a common European platform to take advantage of the potential which the
European research area will offer. Considering the diverse structure of the industry
and the high number of SMEs, such a platform would be important for co-ordinating
and disseminating results, and in identifying areas for future research.

3.5.

Enlargement

The industry structure in the candidate countries resembles to a degree that of the
EU, insofar as it comprises a relatively small metallic mineral sector and larger
industrial and construction minerals sectors designed to meet domestic demand.
Mining of metallic minerals is mainly concentrated in Bulgaria, Romania, Turkey
and, in particular, in Poland. The industrial minerals sector is also important in the
above countries, as well as in the Czech Republic.

So far, restructuring and privatisation have been more successful in the industrial and
construction minerals sectors, with considerable foreign investments being made in
extractive operations as well as in related downstream industries. In the metallic
foreign
minerals sector, progress has been much slower with insignificant
investment, due in part to the low quality of many of the ores currently being mined,
an inadequate legal framework and the legacy of past environmental damage,
although the liability regime in the region is not a strong driving force.

28

Communication from the Commission "Towards a European research area", COM(2000) 6, 18.1.2000.

18

The industry, and the regions concerned, face very difficult challenges in relation to
economic, social and environmental requirements. Total employment in the industry
is difficult to estimate but can be assumed to be higher than in the EU, reflecting the
much lower productivity in the CEECs. The necessary restructuring of many
operations, in order to cope with European and global competitive pressures, will
inevitably result in substantial downsizing and social adjustment which may have a
severe impact at regional or local level. Most operations need to improve their
environmental and social performance. Comprehensive information to facilitate this
process is lacking in many cases. In particular, a large number of sites are in
urgent need of environmental rehabilitation, as shown by the recent accidents in
Romania.

The Commission urges the candidate countries to speed up privatisation and
restructuring of the industry. Full adoption, implementation and enforcement of
the acquis is an essential prerequisite for successful enlargement. The Commission
considers that an inventory should be made of existing "hot-spots" in relation to
extractive operations in the CEECs, to assess how further assistance can be provided
for necessary corrective measures and help to identify necessary actions with the aim
of avoiding further mining-related accidents in the future. Application of the polluter
pays principle is appropriate for existing “hot-spots”. It also recalls the importance of
a stable and predictable legal framework to encourage investment in the industry,
investment
in restructuring existing
operations, and in spreading best practices. Due to the requirement that economic as
well as environmental issues be taken into account at the planning stage, developing
new extractive operations may constitute the most effective way to develop the
sector in these countries. In this regard, industrial co-operation can play an important
role and the Commission will continue to encourage suitable initiatives by the EU
industry for that purpose.

that can play a key role in exploration,

4.

FOLLOW-UP ACTIONS

The Communication has identified a number of complex issues that need to be
addressed through balanced consideration of economic, environmental and social
the industry. A coherent
aspects to ensure the sustainable development of
Community policy is necessary to address these issues.

The main lines for this policy approach are already indicated in this Communication,
which outlines a number of potential Community actions within which improved
stakeholder dialogue has an essential part. These include also the safety management
and prevention of industrial risks, cover best available techniques for the industry,
and focus on the specific requirements for sound management of mining waste as
well
a
Communication, including an Action Plan, on these issues as a follow-up to the Baia
Mare and Aznalcollar accidents.

liability. The Commission will

shortly present

environmental

as

In addition, a study on voluntary initiatives on the part of the industry is being
undertaken in order to ascertain how such initiatives could contribute to the overall
environmental performance of the industry.

Improved dialogue has a central place in achieving a more sustainable minerals
industry. With regard to existing structures for dialogue, the Safety and Health

19

Commission for the Mining and Other Extractive Industries, set up by a Council
Decision29, is funded and managed by the European Commission and composed of
national representatives of governments, employers and workers. At present, it is
seeking to intensify its contacts with the candidate countries. Its activities consist in
information in the establishing of
the ensuring of an efficient exchange of
recommendations, guidelines and proposals to the Member States and in assisting the
European Commission as regards the preparation of relevant measures aiming to
improve the working environment in the industry.

Concerning informal arrangements, Commission officials have consulted regularly
with experts of Member States and industry representatives through the Raw
Materials Supply Group on the main issues arising, notably in relation to
competitiveness. Recently the first steps have been taken to involve other
stakeholders in the group, including NGOs and trade unions.

Other existing fora include EUROTHEN, mentioned in chapter 3.4, and
EuroGeoSurveys, a consortium of national geological surveys of the Member States
together with Norway and Iceland.

As already indicated several Community policies and programmes, notably in
relation to environment, enterprise, employment and research directly or indirectly
affect these industries. The particular actions identified, notably in relation to the
gathering and dissemination of information and the identification of best practices,
will help contribute to the objective of the sustainable development of the industry.
Nevertheless, for substantial progress to be realised, it will be necessary to have the
wholehearted commitment of the industry and of other stakeholders to co-operate
together in an objective and transparent manner in the interest of the sustainable
development of the industry.

The existing separate structures in different areas shows the need to create a more
in which all the stakeholders can jointly
streamlined framework for dialogue,
examine the different aspects of sustainable development of the industry in an
integrated way. In order to be successful, the dialogue must involve Member States,
both sides of
the
Commission. The Commission is willing to facilitate a framework to strengthen and
intensify the dialogue on all priority issues affecting the industry. It invites Member
States, both sides of industry, NGOs and other stakeholders to make proposals on
the objectives, constitution, and format for such a framework, including the
identification of the conditions for achieving tangible results.

industry, NGOs and other stakeholders, as well as

29

Council Decision 74/326/EEC of 27.6.1974.

20