WRITTEN QUESTION E-0378/03 by José Ribeiro e Castro (UEN) to the Commission. Closure of Clarks factory in Portugal and Community funds.
Date: 2003-02-13
Institutions: European Parliament, Provisional data
Subjects: EU aid, Portugal, aid system, cessation of trading, footwear industry, fund (EU), multinational enterprise, support policy, terms for aid

14.8.2003

EN

Official Journal of the European Union

C 192 E/179

This company received substantial amounts from both national and Community funds in connection with
the establishment of this factory in 1988 and its operations in Castelo de Paiva, on the understanding that
it would continue its activities up to at least 2007.

It appears from numerous sources that the company C & J Clark is an ‘old hand’ at this kind of financial
opportunism: it is claimed that it has on several other occasions received Community funds aiding its
operations at different plants in a number of EU Member States, only to close many of those plants at a
later date, with adverse social and economic consequences for the Member States and regions where it had
operated.

Can the Commission provide information (with dates) on the amounts granted directly or indirectly from
Community funds to undertakings belonging to this group (Clarks or C & J Clark), since 1985, in aid to
their footwear plants in Member States of the European Union (or, earlier, the EEC)? Can it name the
plants concerned? Can the Commission state whether the plants which have received funding are all still in
operation or have their future guaranteed until, say, 2010? Can it state how many factories have been
closed, are to be closed in the near future, or, for whatever reason, do not have their future guaranteed?

(2003/C 192 E/218)

WRITTEN QUESTION E-0378/03

by José Ribeiro e Castro (UEN) to the Commission

(13 February 2003)

Subject: Closure of Clarks factory in Portugal and Community funds

The announcement of the forthcoming closure of a shoe factory belonging to the British multinational
C & J Clark, in Castelo de Paiva in northern Portugal, has received widespread coverage in the Portuguese
media. This unexpected closure will make almost 600 workers redundant, with extremely severe
level for the households of those who live and work in the municipality
repercussions on the social
(which is, furthermore, located in a region classified as ‘Objective 1’ under the Structural Funds).

The footwear multinational concerned received substantial amounts from both national and Community
funds in connection with the establishment of this factory in 1988 and its operations in Castelo de Paiva.
in 1989 C & J Clark concluded an investment
According to the Portuguese Ministry of the Economy,
contract with the Portuguese state to the value of PTE 1 billion (ca EUR 5 million), while also receiving
PTE 121 million (ca EUR 600 000) under the First Community Support Framework,
in return for an
undertaking to create 618 jobs. In addition, in 2000 the company signed a protocol with the municipal
council of Castelo de Paiva granting it certain privileges in return for committing itself to continuing its
operations in the municipality up to at least 2007.

Is the Commission monitoring these disturbing social and economic developments in Castelo de Paiva
(northern Portugal) arising from the decision of the multinational C & J Clark to close its shoe factory in
that locality? Can the Commission provide information (with dates) on the amounts granted directly or
indirectly from Community funds in aid for the establishment and operation of this company’s Portuguese
factory (or factories), for monies granted both to its Portuguese branch (Clark (cid:1) Fábrica de Calçado, Lda.)
and to the parent company or the group (Clarks or C & J Clark)?

Joint answer
to Written Questions E-0374/03, E-0375/03, E-0377/03 and E-0378/03
given by Mrs Diamantopoulou on behalf of the Commission

(28 March 2003)

In relation to the period covered by the Community support frameworks 2000-2006, the rules in force
regarding the Structural Funds provide for the following measures:

(cid:1) first, in the Guidelines on national regional aid (1998), the Commission stipulated provisions which
oblige recipients to maintain any investment or job arising from such aid in the assisted region for a
period of five years. In the Commission’s view, the five-year period stipulated in points 4.10 and 4.14

C 192 E/180

Official Journal of the European Union

EN

14.8.2003

of the guidelines for maintenance of the investment begins when the investment for which the aid has
been granted is completed, i.e. from the moment when the investment is used in the undertaking (1);

(cid:1) second, along the same lines, the general Regulation on the Structural Funds (1999) provides that
productive activities retain the contribution from the Funds only if the location of these activities does
not change in the five years following the decision to award the contribution (2);

(cid:1) third, for a major project (i.e. over EUR 50 million) to receive cofinancing under a European Regional
Development Fund programme, a specific request must be submitted to the Commission, and the
Member States must complete a questionnaire containing a question on the possibility of it giving rise
to a relocation. This aspect is taken into account by the Commission in deciding on the level of ERDF
cofinancing (up to 35 % in the Objective 1 regions) which may be awarded, if any.

In relation to the period covered by the Community support frameworks 1994-1999, the five-year rule did
not enter into force until 1998, but Regulation (EEC) 2082/93 (3) applied as of 1993, and Article 24 of this
Regulation provides for reduction or cancellation of the assistance where the measure carried out does not
justify the assistance. The Commission must examine this within its partnership with the Member State.

In any case, in the event of aid being used illegally, it is primarily up to the Member State to undertake
legal action based on the agreements made with the undertaking when the aid was awarded. Therefore, if
the undertaking which received the aid has not complied with Community rules on State aid,
it is
primarily up to the Member State to ensure that the authorities which granted the aid are reimbursed.
Moreover, if the aid if cofinanced by the Structural Funds, the Member State is required to repay the
corresponding amount to the Community budget.

(1) Guidelines on national regional aid:

http://europa.eu.int/eur-lex/pri/en/oj/dat/1998/c_074/c_07419980310en00090031.pdf. These guidelines apply as
of the date of publication in the Official Journal (cid:1) OJ C 74, 10.3.1998.
4.10. Aid for initial

investment must be made conditional, through its method of payment or through the
conditions associated with its acquisition, on the maintenance of the investment in question for a minimum
period of five years.

(2) Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds,
Article 30(4)(b) (cid:1) OJ L 161, 26.6.1999 http://europa.eu.int/comm/regional_policy/sources/docoffic/official/regu-
lation/pdf/l_16119990626en00010042.pdf
4. The Member States shall ensure that an operation retains the contribution from the Funds only if that operation
does not, within five years of the date of the decision of the competent national authorities or the managing
authority on the contribution of the Funds, undergo a substantial modification:
(a) affecting …; and
(b) resulting either from a change in the nature of ownership in an item of infrastructure or a cessation or

change of location in a productive activity.

(3) Council Regulation (EEC) No 2082/93 of 20 July 1993 amending Regulation (EEC) No 4253/88 laying down
provisions for implementing Regulation (EEC) No 2052/88 as regards coordination of the activities of the different
Structural Funds between themselves and with the operations of the European Investment Bank and the other
existing financial instruments (cid:1) OJ L 193, 31.7.1993.

(2003/C 192 E/219)

WRITTEN QUESTION E-0376/03

by José Ribeiro e Castro (UEN) to the Commission

(13 February 2003)

Subject: Closure of Clarks factory in Portugal and Community funds

The announcement of the forthcoming closure of a shoe factory belonging to the British multinational
C & J Clark, in Castelo de Paiva in northern Portugal, has received widespread coverage in the Portuguese
media. This unexpected closure will make almost 600 workers redundant, with extremely severe
repercussions on the social
level for the households of those who live and work in the municipality
(which is, furthermore, located in a region classified as ‘Objective 1’ under the Structural Funds).