WRITTEN QUESTION E-0403/04 by Erik Meijer (GUE/NGL) to the Commission. Distortion of competition to the detriment of the environment and of working conditions in the cheap production of the semi-finished product primary aluminium in Iceland.
Date: 2004-02-16
Institutions: European Parliament, Provisional data
Subjects: European Economic Area, Iceland, engineering structure, environmental impact, environmental protection, expatriate worker, impact study, labour law, location of industry, metallurgical industry, restriction on competition

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The Lazio Assesorato all’Agricoltura as managing authority for the programme will be able to provide data
on the various recipients.

In reply to the Honourable Member’s third question, the common market organisation provides market
support instruments such as the quota arrangements, export refunds, measures for the disposal of butter
and milk powder, and intervention. But none of these instruments can be used specifically to help towards
a solution.

Under Articles 87 and 88 of the EC Treaty the Commission is responsible for authorising State aid by Italy
to the farming sector. Dairy farmers could possibly be helped under national or regional aid schemes
already authorised by us or new schemes notified under Article 88 or exempt under Commission
Regulation (EC) No 1/2004 of 23 December 2003 on the application of Articles 87 and 88 of the EC
Treaty to State aid to small and medium-sized enterprises active in the production, processing and
marketing of agricultural products (2).

When State aid in agriculture is notified we examine its compatibility with the common market in the
light of the above Regulation and the Community Guidelines for State aid in the agriculture sector. Aid for
firms in difficulty is examined on the basis of the Community Guidelines on State aid for rescuing and
restructuring firms in difficult.

We are at present examining whether Italian Decree Law No 16 of 27 January 2004 on urgent measures
in the agriculture and fishery sectors complies with the State aid rules. It provides support for dairy
farmers who have received no payment for their produce.

(1) OJ L 160, 26.6.1999.
(2) OJ L 1, 3.1.2004.

(2004/C 88 E/0510)

WRITTEN QUESTION E-0403/04

by Erik Meijer (GUE/NGL) to the Commission

(16 February 2004)

Subject: Distortion of competition to the detriment of the environment and of working conditions in the

cheap production of the semi-finished product primary aluminium in Iceland

1.
Is the Commission aware that in Iceland, a country associated with the EU, in addition to the two
current aluminium smelters belonging to the Canadian firm Alcan at Hafnarfjordur (annual production:
173 000 tonnes) and to the American firm Norderal to the north of Reykjavik (annual production:
90 000 tonnes), a third aluminium smelter is to be built from 2005 in Reydarfjordur by the large American
firm Alcoa and with a planned annual production from 2007 of 295 000 tonnes of the semi-finished
product primary aluminium?

Is the Commission aware that Alcoa’s choice of location is dependent on the completion of the
2.
Karahnjukar project by the Icelandic national energy company Landsvirkjun which will create a 57 km2
reservoir several tens of metres deep and a series of dams, the largest being 750 m long and 190 m high,
as a result of which the unique Hafrahvammergjufur Gorge will disappear and, with it, habitats of
underwater animals?

3.
Is the Commission aware that the Italian construction company Impregilo, which submitted a much
cheaper bid than its Danish, British and German competitors, employs workers from Romania and
Portugal through an agreement with another Italian company, on much lower wages and subject to poor
conditions, in breach of the provisions of its contract to observe all Icelandic rules?

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Does the price for the energy that will be supplied to Alcoa from the hydroelectric power plant cover

4.
costs? Or is it impossible to establish this, as the price is being kept secret?

Does such conduct mean that failure to respect the environment and working conditions is a factor

5.
that may influence the decisions of other companies when deciding where to locate?

6.
Have this project and its consequences in terms of the environmental destruction and distortion of
competition been discussed within the European Economic Area? Does the Commission intend to bring
the above to the attention of the Icelandic Government?

Source: the Dutch newspaper ‘NRC-Handelsblad’, 29.1.2004.

Answer given by Mr Patten on behalf of the Commission

(23 March 2004)

1.
The Commission is aware that an aluminium smelter is going to be built in the eastern part of
Iceland. This project is tied to the power plant investment in Karahnjukar and also a harbour facility which
is going to be built in Reydarfjordur.

Both the Ministry of Industry and the respective energy company (Landsvirkjun) have provided
2.
reassurance that the dam was going to be built on lava field with only musk and no other life. On
24 January 2004, the Icelandic Supreme Court came out with a ruling on the power plant environmental
the arguments presented by the national energy company
impact where the court confirmed all
(Landsvirkjun)
Impact
Statement was conducted in a professional and lawful manner.

Impact Assessment and stated that

in its Environmental

the Environmental

3.
The Commission would like to underline that Annex XVIII to the European Economic Area (EEA)
Agreement, as amended by the decision of the EEA Joint Committee No 37/89 of 30 April 1998, extends
the geographical scope of Directive 96/71/EC of the Parliament and of the Council of 16 December 1996
concerning the posting of workers in the framework of the provision of services (1) to the non-EU Member
States of the European Economic Area. It follows that undertakings have to guarantee that workers posted
to the territory of Iceland enjoy, whatever the law applicable to their employment relationship, the terms
and conditions of employment in force in Iceland and covering the following matters: maximum work
periods and minimum rest periods, minimum paid annual holidays, minimum rates of pay (including
overtime rates), conditions for hiring out of workers, health, safety and hygiene at work, protective
measures with regard to the terms and conditions of employment of children and young people, equality
of treatment between men and women and other provisions of non-discrimination. The monitoring of
compliance with these rules by individual employers is observed by the national authorities of the EEA-
Member State concerned.

According to existing information, the Commission is aware that
Impregilo employs workers from
Portugal and Romania, among other nationalities. Although the Confederation of Icelandic Labour Union
has expressed general concerns about conditions and salaries of workers under the Italian contractor, no
formal complaints have been put to Icelandic authorities or labour unions regarding violations of Icelandic
law. Icelandic national legislation contains provisions on minimum rights and wages for workers of all
nationalities working in the country (2). A dispute between Icelandic authorities and Impregilo on wages
recently been settled (October 2003). According to the Icelandic
and working conditions has
Confederation of Labour, some few outstanding disagreements of working conditions are being negotiated
and salaries too are in compliance with the Icelandic law.

A contract has been signed between Landsvirkjun and Fjardaal (fully owned by Alcoa). The term of
4.
the contract is for 40 years and the energy price will be renegotiated in the middle of the term for the
latter 20 years. The parent company Alcoa signed the contract with respect to guaranteeing purchase of
the electricity and being responsible for completion of building the aluminium plant. The schedule is to
deliver electricity from 1 April 2004. Fjardaal is obligated to pay the full price for 85 % of the contracted
energy, regardless of use.

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According to the Commission’s information, environment provisions and working conditions are in

5.
compliance with Icelandic law.

6. With regard to measures relating to competition, the European Free Trade Association (EFTA)
Surveillance Authority has approved measures taken by the Icelandic authorities to apply state aid for the
project as of March 2003. A smaller case concerning state aid is still pending at EFTA Surveillance
Authority (ESA), which according to the EEA Agreement has the task to control the observance of internal
market rules in the EEA/EFTA countries.

(1) OJ L 18, 21.1.1997.
(2)

Icelandic law on the legal status of foreign employees include Act no 55/1980 on Worker’s Wages and Terms of
Employment and Obligatory Insurance of Pension Rights where Article 1 includes rights to mininum wages,
overtime payments, vacation entitlement, maximum working hours and rest time; Act No 46/1980 on Working
Environment, Health and Safety in Workplace; Act No 95/2000 on Maternity/Paternity leave and Parental Leave;
Act No 30/1987 on Vacation Pay.

(2004/C 88 E/0511)

WRITTEN QUESTION E-0406/04

by Jules Maaten (ELDR) and Jan Mulder (ELDR) to the Commission

Subject: Discrimination against a Netherlands onion farmer in Poland

(17 February 2004)

1.
Is the Commission aware of the article published on 3 February 2004in the Netherlands newspaper
De Telegraaf (page 5), which describes the situation of the Netherlands onion farmer Hans Goense, who
has established himself in Poland?

Does the Commission share the view that the success of EU enlargement depends not least on
2.
entrepreneurs like Hans Goense who want to establish themselves in new Member States? Does it also
share the view that there is a risk that such entrepreneurs may be discouraged by examples of this kind?

Does the Commission share the view that the situation set out in the article raises questions about

3.
the conduct of the Polish authorities?

4.

Finally, is the Commission prepared to raise the case of Hans Goense with the Polish authorities?

Answer given by Mr Verheugen on behalf of the Commission

(23 March 2004)

The Commission’s response to the first three points raised by the Honourable Members in their question is
affirmative.

The case in question gives rise to concerns as to the proper functioning of the law enforcement bodies in
Poland and, in a broader context, the living together and integration of foreigners in Poland. Moreover, the
case clearly illustrates the importance of reliable economic and legal
in
particular, an impartial and efficient judiciary and police organisation for the success of any foreign
investment in Poland. Examples like this can have negative repercussions on the general investment climate
in Poland.

framework conditions and,

The Commission takes the issue seriously. However, as the Honourable Members are well aware, the
Commission cannot interfere in lawsuits.

In parallel to the legal steps currently taken, the Dutch citizen could present his case to the Polish
Ombudsman.