CELEX: 52012PC0450
Language: en
Date: 2012-08-09
Title: Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mobilisation of the European Globalisation Adjustment Fund in accordance with point 28 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (application EGF/2011/021 NL/Zalco from the Netherlands)

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		52012PC0450
		
			Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mobilisation of the European Globalisation Adjustment Fund in accordance with point 28 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (application EGF/2011/021 NL/Zalco from the Netherlands) /* COM/2012/0450 final */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
Point 28 of the Interinstitutional
Agreement of 17 May 2006 between the European Parliament, the Council
and the Commission on budgetary discipline and sound financial management[1] allows for the mobilisation of
the European Globalisation Adjustment Fund (EGF) through a flexibility
mechanism, within the annual ceiling of EUR 500 million over and
above the relevant headings of the financial framework.
The rules applicable to the contributions
from the EGF are laid down in Regulation (EC) No 1927/2006 of the European
Parliament and of the Council of 20 December 2006 on establishing the European
Globalisation Adjustment Fund[2].
On 28 December 2011, the
Netherlands submitted application EGF/2011/021 NL/Zalco for a financial
contribution from the EGF, following redundancies in Zalco Aluminium Zeeland
Company NV and in two supplier firms (ECL Services Netherlands bv and Start) in
the Netherlands.
After a thorough
examination of this application, the Commission has concluded in accordance with
Article 10 of Regulation (EC) No 1927/2006 that the conditions for a financial
contribution under this Regulation are met.
SUMMARY OF THE APPLICATION AND ANALYSIS
 Key data: ||   
 EGF Reference no. || EGF/2011/021 
 Member State || Netherlands 
 Article 2 || (a) 
 Primary enterprise || Zalco Aluminium Zeeland Company NV 
 Suppliers and downstream producers || 2 
 Reference period || 01.12.2011 – 27.12.2011 
 Starting date for the personalised services || 02.01.2012 
 Application date || 28.12.2011 
 Redundancies during the reference period || 616 
 Redundancies before and after the reference period || 0 
 Total eligible redundancies || 616 
 Redundant workers expected to participate in the measures || 616 
 Expenditure for personalised services (EUR) || 2 185 145 
 Expenditure for implementing EGF[3] (EUR) || 113 329 
 Expenditure for implementing EGF (%) || 4,93 
 Total budget (EUR) || 2 298 474 
 EGF contribution (65 %) (EUR) || 1 494 008 
1.           The application was
presented to the Commission on 28 December 2011 and supplemented by
additional information up to 18 June 2012.
2.           The
application meets the conditions for deploying the EGF as set out in Article
2(a) of Regulation (EC) No 1927/2006, and was submitted within the deadline of
10 weeks referred to in Article 5 of that Regulation.
Link between the redundancies and major structural changes in world trade patterns due to globalisation or the global financial and economic crisis
3.           In order to establish the
link between the redundancies and the global financial and economic crisis, the
Netherlands argues that the European aluminium sector
suffered from a sudden drop in consumer demand (a reduction by 25,7 % from
average EU aluminium usage between 2008 and 2009)[4].
4.           The Netherlands explains that
the production of Zalco Aluminium Zeeland Company NV was dependent on the
construction and transport industry (which represented 63 % of the main
end-user market of aluminium products in Europe in 2010)[5]. The majority of Zalco's Aluminium Zeeland Company NV production was produced
for the rolling and extrusion industry. Almost their entire production of
extrusion billets was used for the construction and transport industries, and
in particular in the automotive sector.
5.           The Netherlands argues that Zalco Aluminium Zeeland Company NV suffered from the declining
demand - due to the global financial and economic crisis - in these two sectors
leading, after unsuccessful attempts to overcome the difficulties, to bankruptcy
at the end of 2011.
6.           The Commission recognised
in its Economic Recovery Plan[6], that the construction industry
in the EU had seen demand plummet as a result of the crisis. Available data[7] confirms the significant
downturn in the construction sector, which fell in the EU-27 for eight
consecutive quarters (Q1/2009 to Q4/2010) compared with the same period of the previous
years, mainly due to the decrease in private investment in the residential
sector.
7.           The Commission has already
recognised that, as some 60-80 % (depending on the Member State) of new
cars in Europe are purchased with the aid of credit, the financial crisis at
the origin of the downturn hit the automotive industry particularly severely.
According to the European Automobile Manufacturers Association (ACEA)[8], demand for new motor vehicles
in the European Union decreased in 2009 by 5,8 % compared to 2008 and by
13,4 % compared to the pre-crisis year 2007[9].
The EU thus followed the trend noted at world-wide level where demand for new
motor vehicles dropped by 5,6 % in 2009 compared to 2008[10]. Faced with this drop in
demand, manufacturers of motor vehicles reduced their production even more
drastically. In 2009 the production of motor vehicles in the EU decreased by 17 %
compared to 2008 and by 23 % compared to 2007[11]. This downward trend continued
in 2010. The production of motor vehicles in the EU in the first three quarters
of 2010 was 14,6 % below that of the same period in 2008[12].
8.           The arguments presented in
previous cases[13]
concerning the automotive industry and in which the redundancies were a direct
result of the crisis remain valid. 
9.           The Netherlands also
underlines the negative impact of the severe slow-down of aluminium production
(a reduction by 21 % from average EU aluminium production between 2008 and
2009)4 on Zalco's Aluminium Zeeland Company NV revenues.
10.         The Dutch authorities finally
add in this context that the Court in Middelburg pronounced Zalco Aluminium
Zeeland Company NV as bankrupt on 13 December 2011.
Demonstration of the number of
redundancies and compliance with the criteria of Article 2(a)
11.         The Netherlands submitted
this application under the intervention criteria of Article 2(a) of Regulation
(EC) No 1927/2006, which requires at least 500 redundancies over a four-month
period in an enterprise in a Member State, including workers made redundant in
its suppliers and downstream producers.
12.         The application cites 616 redundancies
in total (478 redundancies in Zalco Aluminium Zeeland
Company NV, 18 redundancies in its supplier ECL Services Netherlands bv and 120 in Start) during the short
reference period from 1 to 27 December 2011.
These redundancies were calculated as follows: for Zalco Aluminium Zeeland Company NV using the third
indent of the second paragraph of Article 2 of Regulation (EC) No 1927/2006,
for ECL Services Netherlands bv
using the first indent and for Start using the second indent.
Explanation of the unforeseen nature
of those redundancies
13.         The Dutch authorities argue
that the international context was not favourable to the Zalco Aluminium
Zeeland Company NV and had impacted on its revenues in an unexpected way.
14.         Zalco Aluminium Zeeland
Company NV had already unsuccessfully attempted to reduce the impact of the global
financial and economic crisis by adapting its production process during its
last three years (shutting down 256 of their 592 industrial furnaces in 2009 and
subsequently re-opening 192 furnaces in the first quarter of 2011).
15.         Zalco Aluminium Zeeland
Company NV suffered from rising energy costs (in particular between April 2010
and October 2011). The closure of nuclear plants in Germany following the
nuclear disaster in Japan also contributed to further increase Zalco's Aluminium
Zeeland Company NV production costs (42 % of which were energy costs). 
Zalco's
Aluminium Zeeland Company NV energy price (Euro / Mwh).
Identification of the dismissing
enterprises and workers targeted for assistance
16.         The application relates to 616
redundancies: 478 in Zalco Aluminium Zeeland Company NV, 18 in its supplier ECL Services
Netherlands bv and 120 in its supplier Start. All of these workers are expected to participate in the measures.
17.         The break-down of the
workers is as follows:
 Category || Number || Percent 
 Men || 593 || 96,27 
 Women || 23 || 3,73 
 EU citizens || 616 || 100,00 
 Non EU citizens || 0 || 0,00 
 15-24 years old || 25 || 4,06 
 25-54 years old || 387 || 62,82 
 55-64 years old || 115 || 18,67 
 > 64 years old || 89 || 14,45 
18.         There are 27 workers with
longstanding health-related issues or disabilities among the targeted workers.
19.         In terms of occupational
categories, the break-down is as follows:
 Category || Number || Percent 
 Manager || 13 || 2,11 
 Professional || 32 || 5,19 
 Technicians || 273 || 44,32 
 Clerical support workers || 8 || 1,30 
 Service and sales workers || 5 || 0,81 
 Plant and machine operators and assemblers || 262 || 42,53 
 Elementary occupations || 23 || 3,73 
20.         In accordance with Article
7 of Regulation (EC) No 1927/2006, the Netherlands has confirmed that a policy of equality between women and men as
well as non-discrimination has been applied, and will continue to apply, during
the various stages of the implementation and, in particular, in access to the
EGF.
Description of the territory
concerned and its authorities and stakeholders
21.         The territory concerned by
the redundancies is within the NUTS II region of Zeeland, a province in the southwest
of the Netherlands. Zeeland borders on the Dutch provinces of South Holland and
North Brabant and the Belgian provinces of West Flanders, East Flanders and
Antwerp. Zeeland has 381 730 inhabitants (30 September 2011). Zeeland can
be regarded as a small labour market: its peripheral location within the
Netherlands, its situation as a border region with huge areas under water, and
the relative vastness of Zeeland with its island structure, results in rather limited
access and mobility.
22.         The main stakeholders are the employment agency (UWV Werkbedrijf), knowledge
institutions (ROC Zeeland and Hogeschool Zeeland), the employers'
organisation for large enterprises (BZW: Brabants Zeeuwse Werkgevers),
the employers' organisation for small and medium sized enterprises (MKB
Zeeland), the following trade unions: FNV Bondgenoten, CNV
Vakmensen, the association of Zeeuwse municipalities (Vereniging Zeeuwse
Gemeente), the Institutes for training funds (Opleidingsfondsen),
and the Province of Zeeland (Provincie Zeeland). 
Expected impact of the redundancies
as regards local, regional or national employment
23.         The dismissed workers live
in relatively small towns (up to about 50 000 inhabitants), so that the
redundancies will have a noticeable local impact.
24.         The consequence on the
regional labour market will be a considerable increase in unemployment because
the number of vacancies is already limited and expected to keep on decreasing.
There are many job seekers in the region, compared with the numbers of open positions
(in November 2011, a total of 7 342 persons were unemployed while there
were only 585 vacancies in Zeeland).
25.         The social partners expect that
other workers in upstream or downstream companies may be dismissed as a direct
result of the Zalco Aluminium Zeeland Company NV bankruptcy.
Co-ordinated package of personalised
services to be funded and a breakdown of its estimated costs, including its
complementarity with actions funded by the Structural Funds
26.         The following measures are
proposed, all of which combine to form a co-ordinated package of personalised
services aimed at re-integrating the workers into the labour market:
–     
Individual Process Guidance (Personal Intake). This activity started with a general meeting on bankruptcy,
followed by 14 workshops of a general nature accessible to all dismissed workers
in January 2012 the purpose of which were to draw a personal educational and
skills profile of the workers and providing a certification of their skills. Advice
on deploying education or training is part of the individual process guidance in
order to encourage the job seeker to become more competent on the labour
market. The availability and potential use of the other instruments in the Mobiliteitscentrum’s
service are also discussed during this measure, for instance, workshops such as
job application training, self-reliant entrepreneurship, learning-working
advice etc. The guidance will be recorded by means of an initial intake form
and a digital report at the end of the measure which will provide useful insight
for the job seeker as well as the guidance staff.
–     
Occupational guidance/assessments: This measure will map the knowledge and skills of the redundant
workers against the labour market needs using the Accreditation of Prior
Learning (APL) procedure[14].
An APL procedure results in an 'experience certificate', stating a person’s
knowledge and his/her capabilities. This knowledge and experience is compared
with a national standard as is used for the Intermediate Vocational Education,
Higher Vocational Education or by the industry. This measure will help the
workers find suitable new jobs based on the acquired certificates.
–     
Training and re-training: After the guidance and assessment, the services will prepare educational
advice for further actions. This advice is central to drawing up an Individual Development
Plan (IDP) per worker. During the IDP training, a focus on a new job can be
recommended for which education or re-training may be necessary. The majority
of the training courses will involve operator and foreman training at an
Intermediate Vocational Education level 3 qualification which is the highest available
training course in the industrial sector. The re-training activities will be
mainly offered as courses and can take between one week and six months. Each
participant receives a certificate on completion.
–     
Outplacement services: These services can be deployed individually as well as in groups. The
outplacement support includes profiling and job search assistance and will be
tailored to the requirements of the individual participants fitting his/her
competences and skills while taking into account the current labour market
needs.
–     
Entrepreneurship promotion: The core idea of this measure is to create a support programme in
order to help the redundant workers to become entrepreneurs. The Netherlands
considers that this requires a new view on entrepreneurship with the need to incorporate
issues like the current economic crisis, climate change, exploitation of
natural resources, social diversity and Corporate Social Responsibility. The programme
itself is a structured set of business activities with a supportive set of
people and tools aimed at the successful launch of a new venture. The course
will include small weekly assignments. Each week will provide two hours of lecturing
and coaching. A coach or advisor can be a business person (or an employee of
the Chamber of Commerce) who will function as a mentor for the worker or as an
expert available as a resource. 
–     
Measures to stimulate older workers: These measures will help the workers to cultivate a sense of
self-respect, appreciation and usefulness in the labour market. During
workshops and training, practical examples of private, local, regional and
national initiatives and learning possibilities will be linked to the specific
requirements and profile of older workers. These examples will generate
practical insights and can help the participants understand their strenghts and
the challenges on the current labour market. The workers will have to learn how
to deal with new assignments, based on their experience, for instance as
trainer or tutor, and act accordingly. Possibly, an additional program will be
set up at which a trainer or coach will implement individual guidance and
coaching towards a new working environment.
27.         The expenditure for
implementing the EGF, which is included in the application in accordance with
Article 3 of Regulation (EC) No 1927/2006, covers management and control
activities as well as information and publicity.
28.         The personalised services
presented by the Dutch authorities are active labour market measures within the
eligible actions defined by Article 3 of Regulation (EC) No 1927/2006. The Dutch
authorities estimate the total costs at EUR 2 298 474, of which
the expenditure for personalised services at EUR 2 185 145 and
the expenditure for implementing the EGF at EUR 113 329 (4,93 %
of the total amount). The total contribution requested from the EGF is
EUR 1 494 008 (65 % of the total costs).
 Actions || Estimated number of workers targeted || Estimated cost per worker targeted (EUR) || Total costs (EGF and national cofinancing) (EUR) 
 Personalised services (first paragraph of Article 3 of Regulation (EC) No 1927/2006) 
 Personal intake || 616 || 139[15] || 85 800 
 Occupational guidance/assessments || 150 || 2 153 || 322 950 
 Training and re-training || 250 || 4 108 || 1 027 000 
 Outplacement services || 75 || 4 217 || 316 275 
 Entrepreneurship promotion || 30 || 1 844 || 55 320 
 Measures to stimulate older workers || 100 || 3 778 || 377 800 
 Sub total personalised services ||   || 2 185 145 
 Expenditure for implementing EGF (third paragraph of Article 3 of Regulation (EC) No 1927/2006) 
 Preparatory activities ||   || 0 
 Management ||   || 28 332 
 Information and publicity ||   || 28 332 
 Control activities ||   || 56 665 
 Sub total expenditure for implementing EGF ||   || 113 329 
 Total estimated costs ||   || 2 298 474 
 EGF contribution (65 % of total costs) ||   || 1 494 008 
29.         The Netherlands confirms
that the measures described above are complementary with actions funded by the
Structural Funds and that all double financing will be prevented.
Date(s) on which the personalised
services to the affected workers were started or are planned to start
30.         The Netherlands started the
personalised services to the affected workers included in the co-ordinated
package proposed for co-financing to the EGF on 2 January 2012. This
date therefore represents the beginning of the period of eligibility for any
assistance that might be awarded from the EGF.
Procedures for consulting the social
partners
31.         The proposed application
was discussed on 15 December 2011 with the social partners referred to in point
22 above. 
32.         The social partners will
also participate in the Mobility Centre Zalco (Mobiliteitscentrum Zalco - MCZ) which is a collective
initiative of the parties involved in the Zeeland job market: workers'
organisations (FNV, CNV, Union), employers' organisations (Brabant Zeeland
Employers Association and SMB), the Zeeland municipalities (represented by one
municipality per region), the training institutes (Regional Training Institutes
and the Zeeland College), the Institute for Employee Benefits Schemes and the
Province of Zeeland. The Province of Zeeland is in contact at the management
and official level with the social partners about the organisation of the MCZ.
33.         The Dutch authorities
confirmed that the requirements laid down in national and EU legislation
concerning collective redundancies have been complied with.
Information on actions that are
mandatory by virtue of national law or pursuant to collective agreements
34.         As regards the criteria
contained in Article 6 of Regulation (EC) No 1927/2006, the Dutch authorities
in their application:
·      confirmed that the financial contribution from the EGF does not
replace measures which are the responsibility of companies by virtue of
national law or collective agreements; 
·      demonstrated that the actions provide support for individual workers
and are not to be used for restructuring companies or sectors;
·      confirmed that the eligible actions referred to above do not receive
assistance from other EU financial instruments. 
Management and control systems 
35.         The Netherlands has
notified the Commission that the financial contribution will be managed and
controlled by the same bodies that manage and control the ESF. The Netherlands
has formulated a scheme published on 15 July 2009 including the major
conditions from the EGF Regulation. For the Zalco application, an agreement will
be drawn up between the Province of Zeeland and the Minister of SZW (Sociale
Zaken en Werkgelegenheid) on the basis of which the Province of Zeeland will be
obliged to keep clearly organised and verifiable administrative records. These
will be audited by the Ministry Agency (Agentschap SZW). 
Financing
36.         On the basis of the
application from the Netherlands, the proposed contribution from the EGF to the
coordinated package of personalised services (including
expenditure to implement EGF) is EUR 1 494 008,
representing 65 % of the total cost. The Commission's proposed allocation
under the Fund is based on the information made available by the Netherlands.
37.         Considering the maximum
possible amount of a financial contribution from the EGF under Article 10(1) of
Regulation (EC) No 1927/2006, as well as the scope for reallocating
appropriations, the Commission proposes to mobilise the EGF for the total
amount referred to above, to be allocated under heading 1a of the financial
framework.
38.         The proposed amount of financial
contribution will leave more than 25 % of the maximum annual amount
earmarked for the EGF available for allocations during the last four months of
the year, as required by Article 12(6) of Regulation (EC) No 1927/2006.
39.         By presenting this proposal
to mobilise the EGF, the Commission initiates the simplified trialogue
procedure, as required by Point 28 of the Interinstitutional Agreement of 17 May 2006,
with a view to securing the agreement of the two arms of the budgetary
authority on the need to use the EGF and the amount required. The Commission
invites the first of the two arms of the budgetary authority that reaches agreement
on the draft mobilisation proposal, at appropriate political level, to inform
the other arm and the Commission of its intentions. In case of disagreement by
either of the two arms of the budgetary authority, a formal trialogue meeting
will be convened.
40.         The Commission presents separately
a transfer request in order to enter in the 2012 budget specific
commitment appropriations, as required in Point 28 of the Interinstitutional
Agreement of 17 May 2006.
Source of payment appropriations 
41.         Appropriations from the EGF
budget line will be used to cover the amount of EUR 1 494 008
needed for the present application.
Proposal for a
DECISION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL
on the mobilisation of the European
Globalisation Adjustment Fund in accordance with point 28 of the
Interinstitutional Agreement of 17 May 2006 between the European
Parliament, the Council and the Commission on budgetary discipline and sound
financial management (application EGF/2011/021 NL/Zalco from the Netherlands)
THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union,
Having regard to the Interinstitutional
Agreement of 17 May 2006 between the European Parliament, the Council
and the Commission on budgetary discipline and sound financial management[16], and in particular point 28
thereof,
Having regard to Regulation (EC) No
1927/2006 of the European Parliament and of the Council of 20 December 2006
establishing the European Globalisation Adjustment Fund[17], and in particular Article
12(3) thereof,
Having regard to the proposal from the European
Commission[18],
Whereas:
(1)       The European Globalisation
Adjustment Fund (EGF) was established to provide additional support for workers
made redundant as a result of major structural changes in world trade patterns due
to globalisation and to assist them with their reintegration into the labour
market.
(2)       The scope of the EGF was
broadened for applications submitted from 1 May 2009 to 30 December 2011 to include
support for workers made redundant as a direct result of the global financial
and economic crisis.
(3)       The Interinstitutional
Agreement of 17 May 2006 allows the mobilisation of the EGF within
the annual ceiling of EUR 500 million.
(4)       The Netherlands submitted
an application to mobilise the EGF, in respect of redundancies in the enterprise
Zalco Aluminium Zeeland Company NV and in two supplier firms (ECL Services
Netherlands bv and Start), on 28 December 2011 and supplemented it by additional information up to 18 June 2012. This application complies with the requirements
for determining the financial contributions as laid down in Article 10 of
Regulation (EC) No 1927/2006. The Commission, therefore,
proposes to mobilise an amount of EUR 1 494 008.
(5)       The EGF should, therefore,
be mobilised in order to provide a financial contribution for the application
submitted by the Netherlands.
HAVE ADOPTED THIS DECISION:
Article 1
For the general budget of the European
Union for the financial year 2012, the European Globalisation Adjustment Fund
(EGF) shall be mobilised to provide the sum of EUR 1 494 008 in
commitment and payment appropriations.
Article 2
This Decision shall be published in the Official
Journal of the European Union.
Done at Brussels, 
For the European Parliament                       For
the Council
The President                                                 The
President
[1]               OJ C 139, 14.6.2006, p. 1.
[2]               OJ L 406, 30.12.2006, p. 1.
[3]               In accordance with the third paragraph of Article 3
of Regulation (EC) No 1927/2006.
[4]               Statistics based on Eurostat (PRODCOM and COMEXT
data) quoted in the final report "Competitiveness of the EU Non-ferrous
Metals Industries" - Framework Contract "Sector Competitiveness
Studies" - European Commission, Directorate-General Enterprise and
Industry - 5 April 2011.
[5]               European Aluminium Association (www.alueurope.eu).
[6]               Communication from the Commission to the European
Council on A European Economic Recovery Plan, COM(2008) 800 final of
26.11.2008.
[7]               Eurostat: newsrelease
euroindicators - Construction output.
[8]               http://www.acea.be.
[9]               ACEA - Statistics "new vehicle registrations by
manufacturer and by vehicle category (Enlarged Europe)" - 2007 to 2009.
[10]             ACEA - The automobile industry pocket guide (2010).
[11]             ACEA - Economic Report European Union (March 2010).
[12]             ACEA - Economic Report European Union (July 2011).
[13]             EGF/2010/002
Cataluña Automoción, COM(2010)453 final; EGF/2010/004 Wielkopolskie,
COM(2010)616 final; EGF/2010/031 GM Belgium COM(2011)212 final; EGF/2011/003
Arnsberg and Düsseldorf COM(2011)447 final; and EGF/2011/005 PT/Norte-Centro Automotive
COM(2011)664 final.
[14]             http://www.kenniscentrumevc.nl/ 
[15]             The real estimated cost per worker provided by the MS
is EUR 139,2857. In order to simplify the presentation in the table this
figure has been rounded down, without modifying the total estimated cost for
the measure as calculated by the MS.
[16]             OJ C 139, 14.6.2006, p. 1.
[17]             OJ L 406, 30.12.2006, p. 1.
[18]             OJ C […], […], p. […].