European Parliament resolution on the European Court of Auditors’ Special Report  No 11/2000 on the support scheme for olive oil, accompanied by the Commission's replies (C5-0009/2001 — 2001/2001(COS))
Date: 2001-05-17
Institutions: Committee on Budgetary Control, European Parliament
Subjects: agricultural statistics, aid system, geographical information system, production aid, vegetable oil

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9. Support scheme for olive oil

A5-0114/2001

European Parliament resolution on the European Court of Auditors(cid:146) Special Report No 11/2000 on
the support scheme for olive oil, accompanied by the Commission(cid:146)s replies (C5-0009/2001 (cid:129)
2001/2001(COS))

The European Parliament,

(cid:129) having regard to the Special Report of the Court of Auditors No 11/2000 (C5-0009/2001) (1),

(cid:129) having regard to Article 248 (4), second subparagraph of the EC Treaty,

(cid:129) having regard to Rule 47 (1) of its Rules of Procedure,

(cid:129) having regard to Petition No 378/99,

(cid:129) having regard to the report of the Committee on Budgetary Control and the opinion of the Committee

on Agriculture and Rural Development (A5-0114/2001),

A. whereas the control, recovery and penalties system on olive oil is more strict than the system applied
to other products susceptible to similar types of falsification and fraud such as subsidies to skimmed
milk (see Court of Auditors(cid:146) special report No 1/1999) (2),

B. whereas the Court of Auditors(cid:146) examination of the olive oil scheme concentrates on the period up to
1998, i.e. before the entry into force of the three-year interim measures introduced by Council Regu-
lations (EC) Nos 1638/98 and 1639/98 (3),

C. whereas the interim measures represent a quantitative increase in controls: introduction of a maxi-
mum guaranteed quantity by Member State (see paragraph 12 of the Court(cid:146)s observations), additional
conditions for the approval of mills, quality control of olive oil, obligation on growers to keep records,
imposition of a scale of penalties, specific on-the-spot checks, control coverage between 1 and 10 % of
the growers(cid:146) declarations, additional cursory checks on mills and in-depth cross-checks for suppliers
and consignees (paragraph 13 of the Court(cid:146)s observations),

D. whereas, in accordance with the deadline established in Regulation (EC) No 1638/98, the Commission,
on 21 December 2000, submitted a proposal on the support scheme for olive oil extending the exist-
ing aid scheme by two marketing years,

E. whereas there is an urgent need for reliable statistical data concerning the number of olive trees, the

areas planted and the yields, already requested from Member States as early as 1975,

F. whereas control mechanisms based solely on yields (counting of trees and analysis of geographical
areas under cultivation) constitute an important instrument but nevertheless one that is insufficient
for the purposes of effective, reliable evaluation of the production aid schemes; whereas, therefore,
such controls should be supplemented, in accordance with the conclusions drawn by the Court of
Auditors, by data concerning quantities processed by olive mills,

G. whereas some Member States have failed to establish the olive cultivation register (OCR), which was
originally introduced in the Community of 9 Member States in 1975, in spite of considerable financial
support provided by the Community to that effect; whereas work on the setting up of the Geographi-
cal Information System (GIS), introduced as a control facilitating tool, is behind schedule,

H. whereas the Commission has been applying decreased financial corrections under the clearance of

accounts procedure (see paragraph 59 of the Commission(cid:146)s replies),

(1) OJ C 215, 27.7.2000.
(2) OJ C 147, 27.5.1999.
(3) OJ L 210, 28.7.1998, pp. 32 and 38.

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I. whereas, according to the Commission (see reply to paragraph 33), official statistics indicate that pro-
motional programmes have had a positive effect on consumption of olive oil, although no confirm-
ation of this assertion could be provided by a general evaluation of these programmes,

J. whereas obligations under the support scheme for olive oil (cultivation declarations, aid applications,
need for producers to notify any changes in the data concerning their activities) are particularly com-
plex and heavy; whereas this is one of the reasons for the poor quality of statistical data,

K. whereas it is necessary for the Commission to carry out an evaluation of the cost- effectiveness of the
national control agencies, which are entrusted with the task of ensuring that Community legislation
on olive oil is complied with at national level,

L. whereas, although consumption aid for olive oil was abolished as from 1 November 1998, consider-
able unduly paid amounts have yet to be recovered by national authorities for the period 1985-1998,

M. whereas, similarly, only a small part of export refunds unduly paid during the 1990-1998 period has

been recovered by national authorities,

N. whereas there have been cases where ten years elapsed before proceedings for the recovery of wrongly
paid sums were initiated; whereas, consequently, it is essential that the Commission set a deadline for
recovery action, failing which any unrecovered amounts should be credited to the Community budget
pending definitive judgements in sub-judice cases,

O. whereas the data provided by the Member States concerned on amounts to be recovered are far from

reliable, thus requiring the Commission to act upon the relevant observations of the Court,

Calls on the Commission and the Council, in accordance with its resolution of 18 December 1997 (1)
1.
on the olive and olive oil sector, to respect the system of production aid which has proved to be the most
suitable for this sector (cid:129) by operating efficiently and making it possible to maintain the olive sector,
despite competition from other vegetable oils which receive a high level of support, and develop external
markets without generating surpluses (cid:129) and which, in the production regions, has played a dual role as a
market policy and as a driving force behind rural development;

2.
Points out that, from the experience of the operation of the COM, it can be concluded that the COM
has allowed a fair level of income for producers to be maintained, has promoted modernisation of farming
and farms, improved product quality and helped to protect the environment;

3.
Invites the Commission, in the context of the transitional measures proposed on 21 December 2000,
to implement a regime based on reliable data with regard to quantities of olives processed and quantities
of oil produced in mills; these figures may be backed up by data concerning the number of trees and the
areas planted;

Considers that the new transitional regime must be considerably simplified in order to allow better

4.
and more efficient control and to relieve the excessive administrative burden on farmers;

5.
Asks the Commission to clarify in what way the decision of 21 December 2000 to extend the
current aid scheme for the olive oil sector addresses the findings by the Court of Auditors in its special
report No 11/2000 and takes account of its recommendations;

Deplores some Member States(cid:146) persistent failure to introduce olive cultivation registers (OCR), in

6.
spite of considerable financial support provided by the Community to that effect;

7. Welcomes the Commission proposal to make, as from 1 November 2003, the payment of any olive
oil support conditional on the completion of the geographic information system (which includes the olive
cultivation register);

(1) OJ C 14, 19.1.1998, p. 190.

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Recalls its position of 16 June 2000 (1) concerning an integrated control system for Community aid
in the list of products covered by the Integrated

8.
schemes, which proposed the inclusion of olive oil
Administration and Control System (IACS) as an effective means of management and control;

9.

Invites the Commission to change its position and to include olive oil in the IACS;

Regrets the Commission(cid:146)s decisions to apply decreased financial corrections under the clearance of

10.
accounts procedure to some Member States;

11.
Notes the Commission(cid:146)s appraisal of official statistics indicating that promotional programmes have
had a positive effect on olive oil consumption; demands, however, that hard facts and not vague conclu-
sions should be presented when € 135,9 million of funds destined to olive oil production aid has been
used for these and other programmes, and therefore asks for a global evaluation of their efficiency;

Asks the Commission to create a single promotional scheme, taking into account the current dis-

12.
cussion on harmonisation of the twelve existing promotional schemes in agriculture;

13.
Notes that consumption aid for olive oil has been abolished since 1 November 1998; deplores that,
nevertheless, considerable unduly paid amounts have yet to be recovered by national authorities for the
1985-1998 period;

Deplores, similarly, that only a small part of export refunds unduly paid during the 1990-1998

14.
period has been recovered by national authorities;

15.
Regrets the excessively long periods, up to ten years, which have elapsed before proceedings for the
recovery of wrongly paid sums were initiated; consequently urges the Commission to set up a deadline for
recovery action;

Deplores that the dissuasive effect of penalties and fines is diluted due to the fact that these are paid

16.
by national treasuries rather than by beneficiaries of wrongly received sums;

17.
Urges the Commission to propose an integrated strategy for improved recovery of unduly paid
amounts, accompanied by an action plan and timetable, based on Article 280 of the Treaty, ensuring an
equivalent protection of the Community(cid:146)s financial interests in all the Member States;

Urges Member States to follow up the suggestion of the Court of Auditors (paragraph 101) to intro-

18.
duce measures to deal with administrative/judicial appeals;

Asks the Commission to act upon the Court of Auditors(cid:146) observations (paragraphs 96-106) concern-

19.
ing the reliability and completeness of data on amounts to be recovered;

Asks the Commission to enshrine in Community legislation the requirement of keeping debtor

20.
accounts;

21.
Recalls its resolution of 21 April 1993 containing the comments which form part of the decision
giving discharge to the Commission for the 1991 financial year (2), in which it called upon the Commis-
if satisfactory controls were not guaranteed by the
sion to suspend payments in respect of olive oil
Member States within a reasonable time-scale;

22.
Invites all the EU institutions and bodies, in particular OLAF, the European Court of Auditors and
the Commission, as well as the Member States, to give the highest priority to and to treat as a matter of
urgency, the fight against olive oil fraud, in particular with regard to the unlawful addition of hazelnut oil
to olive oil

(1) OJ C 67, 1.3.2001, p. 324.
(2) OJ C 150, 31.5.1993, p. 104.

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(i)

Specifically, invites the Commission to:

(a) present legislation proposals to stiffen rules against falsification of olive oil as soon as possible;

(b) give the highest priority in European research and development to new methods of detecting

falsifications of olive oil, namely through the use of hazelnut oil;

(c)

create a pan-European black list of any economic agent involved in the falsification of olive oil
and other food products and to cancel immediately any financial support to them.

(ii)

Invites the Court of Auditors to produce a special report on this issue;

(iii) Invites the Member States to give the higest priority to this question;

23.
Recalls that the European Union is now paying as much as 25 % of traditional own resources
collected to pay customs collection costs; it is therefore unacceptable that falsified olive oil evades customs
controls;

24.
Invites the Commission to study the feasibility of an integrated computerised system that would
make it possible to carry out effective and timely monitoring of the movements of oil products between
operators;

Asks the Commission to prohibit,

25.
in the framework of the current revision of Regulation (EC)
2815/98 (1), the placing on the market of olive oil without a label, and to provide for the product(cid:146)s origin
to be determined not by the place where it is produced but by the place where it is harvested;

26.
Notes that although the elimination of public storage has resulted in average annual savings of € 26
million, this result might have been outweighed by a decline in market prices and, consequently, on pro-
ducers(cid:146) earnings;

Shares the Court of Auditors(cid:146) criticism of the unreliability and ineffectiveness of exclusive reliance

27.
on oil yields as a method of controlling production aid;

28.
Regrets that, although the Commission said in its answers to the Court of Auditors that improving
the system of control would be one of the main aspects of the proposed reform it would be presenting in
the second half of 2000, the proposal does not seek to change the control system in any way;

29.
Expresses its surprise at the Commission(cid:146)s reply as to the reliability of the International Olive Oil
Council(cid:146)s statistics, and asks the Commission for details of the new elements that permitted changing
production and stocks at the eightieth session of the IOOC; is also surprised that the stocks resulting
from these stock corrections did not have any effect on either the markets or intervention; asks the Com-
mission to explain the role of yields in the review carried out at the eightieth IOOC session;

30.
Considers that budgetary constraints, inconsistencies of the system and anticipated structural sur-
pluses should not be the only concerns of the reform of the COM in olive oil since the income of olive
growers must remain the basic concern, in accordance with the Treaty;

Stresses that it is important for some important objectives to be taken in consideration in the new
31.
COM, such as promoting environmental protection, rural life and communities, the historical and patri-
monial value of olive oil trees, the need to privilege the income of small farmers and rurally depressed
regions, the aim of market balance, promoting quality by fighting fraud, effective protection for Commun-
ity products, and an appropriate type of institutional promotion in order to increase consumption;

Strongly advises the Commission to consider the need to streamline bureaucratic procedures, since

32.
the transitional reform has increased the administrative burden on operators and public administrations;

(1) OJ L 349, 24.12.1998, p. 56.

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33.
Notes with concern, that there is an overall EU budgetary tendency within the COM in oil and fats
to lower the relative weight of olive oil support schemes; considers the importance of olive oil to overall
rural policy objectives to outweigh the importance of any oilseed production, and invites the Commission
to give due consideration to this fact;

34.
Instructs its President to forward this resolution to the Council, the Commission and the European
Court of Auditors, as well as the governments, parliaments and Courts of Auditors of the Member States
concerned.

10. Estimates of European Parliament

A5-0166/2001

European Parliament resolution on the estimates of revenue and expenditure of Parliament for the
financial year 2002 (2001/2062(BUD))

The European Parliament,

(cid:129) having regard to Article 272 of the EC Treaty,

(cid:129) having regard to its resolution of 3 April 2001 on the guidelines for the 2002 budgetary procedure:
Section II (cid:129) Council; Section IV (cid:129) Court of Justice; Section V (cid:129) Court of Auditors; Section VI (cid:129)
Economic and Social Committee; Section VII (cid:129) Committee of the Regions, and Section VIII (cid:129)
Ombudsman and on the European Parliament(cid:146)s preliminary draft estimates (Section I) for 2002
(2000/2325(BUD)) (1),

(cid:129) having regard to the Secretary-General(cid:146)s report to the Bureau on the preliminary draft estimates of the

European Parliament for the 2002 financial year,

(cid:129) having regard to the preliminary draft estimates established by the Bureau on 2 April 2001 pursuant

to Rules 22(5) and (6) and 183 of its Rules of Procedure,

(cid:129) having regard to the provisions of the Financial Regulation, the declaration on the presentation of an
analytical budget, and the interinstitutional conclusions on the rationalisation of administrative expen-
diture (2),

(cid:129) having regard to the report of the Committee on Budgets (A5-0166/2001).

Economic and general framework

A. whereas economic forecasts project 2,5 % growth in the European Union(cid:146)s economy for 2002 and an
inflation rate of 2 %; whereas the European Parliament must continue a policy of budgetary rigour,

B. whereas the ceiling in heading 5 ((cid:145)Administrative expenditure(cid:146)) of the financial perspective is fixed at
€ 5 179 million (after technical adjustments) and whereas the margin under the financial perspective
will be increasingly under pressure as a result of additional needs in the European institutions,

C. whereas Parliament has decided to budget 20 % of heading 5 of the financial perspective in its esti-
mates, which corresponds to a total of € 1 035 million and to an increase of 4,8 % over the 2001
budget; whereas the decision to budgetise the full margin available to it in heading 5 enables Parlia-
ment to proceed with investments in buildings property that are financially sound and beneficial in
the short and long term,

D. whereas the 2002 estimates are based on the following parameters: 40 working weeks, 12 ordinary
part-sessions, 6 additional part-sessions, a duration of 4 days of part-sessions in Strasbourg, 6 % inter-

(1)
(cid:145)Texts Adopted(cid:146), Item 10.
(2) OJ C 308, 20.11.1995, p. 122.