CELEX: 31971D0003
Language: en
Date: 1970-12-04 00:00:00
Title: Decision No 3/71/ECSC of the Commission of 22 December 1970 on Community rules for interventions by Member States for the benefit of the coal industry

10                                  Official Journal of the European Communities
5.1.71                               Official Journal of the European Communities                              No L 3 /7
                                    DECISION No 3 /71 /ECSC OF THE COMMISSION
                                                     of 22 December 1970
               on Community rules for interventions by Member States for the benefit of the coal
                                                         industry
THE     COMMISSION       OF    THE   EUROPEAN      COM­         Whereas, however, if Member States were to
MUNITIES,                                                       withdraw all financial aid from their coal industries,
                                                                pits working at a loss would inevitably have to close
Having regard to the Treaty establishing , the                  in the near future ; whereas such development would :
European Coal and Steel Community, and in
particular Articles 2 to 5 , 46, 47, 67 and 68 , and the        — jeopardise the attainment of the basic objective .
first and second paragraphs of Article 95 thereof;                  laid down in the second paragraph of Article 2 of
                                                                    the Treaty, and would in particular interfere with
After consulting the Committee and having obtained                  the efforts, undertaken in the common interest
the unanimous assent of the Council;                                and with due regard for the objectives of Article 3
                                                                    (c), ( d), (e) and (g) of the Treaty, to rationalise
                                                                    the coal industry ;
                             I
                                                                — carry with it, moreover, the risk of serious
Whereas structural changes in the energy market led                 disturbances in economic and social conditions in
the Member States to adopt, on 21 April 1964, a                     certain mining regions in the Community ;
Protocol    of   Agreement       on  Energy    Problems1 ;
whereas, taking account of paragraph 11 of that                 — and, lastly, have results as regards the supply of
Protocol and acting on the basis of the first and                   energy to the Community which would be
second paragraphs of Article 95 of the Treaty, the                  contrary to Article 3 (a) of the Treaty;
High Authority adopted on 17 February 1965
Decision No 3/65 on Community rules for
interventions by Member States for the benefit of the           Whereas the Treaty permits Member States to alter
coal industry2 ; whereas that Decision, having been             arrangements for the financing of welfare benefits
extended by Commission Decision N6 27 /67,3 expires             while at the same time giving the Commission the
on 31 December 1970 ;                                           means to intervene should it find that the changes
                                                                made by Member States are such as would distort
Whereas a detailed study of the economic conditions             conditions of competition in the common market;
under which Community coal is produced and                      whereas contribution from public funds to the
marketed shows that in many coalfields, despite all             financing of welfare benefits for the purpose of
that has been done, the collieries would not be viable          offsetting the abnormal charges borne by the coal
without aid ;                                                   industry owing to its contraction may be considered
                                                                compatible with the common market; whereas such is
                                                                the case, in particular, with regard to the use of
Whereas there is no prospect of the energy market               public funds to bring the ratio between the charge
developing in such a way as would allow the                     per actively employed mineworker and the benefit
Community coal industry as a whole to achieve                   per recipient down to the ratio obtaining in other
financial equilibrium, and whereas, therefore, the              industries ; whereas it is enough, in the present
efforts already undertaken to rationalise and                   circumstances, to provide for the co-ordination of
concentrate the industry should continue;                       measures taken for this purpose ; whereas the Treaty
                                                                does not afford the necessary powers for action to be
                                                                taken in this respect; whereas, this being a case not
1 OJ No 69, 30.4.1964, p. 1099/64.                              provided for, action may be taken under the
2 OJ No 31, 25.2.1965 , p. 480/65.                              provisions of the first paragraph of Article 95 of the
3 OJ No 261, 28.10.1967,- p. 1 .                                Treaty;
 ---pagebreak---                                      Official Journal of the European Communities                                          11
  Whereas, however, the economic analysis set out               Whereas, in view of the foregoing, the Commission
  above will still apply even after Member States have          should be empowered to authorise financial
  made legitimate use of their power to intervene in the        interventions by Member States for the benefit of the
  financing of welfare benefits ; and whereas, therefore,       coal industry prior to their coming into operation but
  failure to furnish temporary support from public              only in so far as such interventions will facilitate :
  funds for the coal industry's efforts to rationalise is
  liable to jeopardise the attainment of the basic              — the concentration of production on the pits best
  objectives mentioned above ;                                        able to improve their productivity and thus help
                                                                      to keep the Community supplied under favourable
                                                                      conditions ;
  Whereas, in these circumstances, it is clearly
  necessary, in order to attain these Community                 — the adjustment of coal production to the state of
  objectives, to institute new Community rules for aids               the energy market while avoiding serious
                                                                      disturbances in economic and social conditions in
  to coalmining undertakings ; whereas the Treaty gives
  the Commission no specific powers to establish such                 regions where the development potential is as yet
                                                                      insufficient.
  rules ; and whereas, this being a case not provided
  for, action should be taken under the provisions of
  the first paragraph of Article 95 in order to ensure                                         111
  that the objectives set out in the opening Articles of
  the Treaty are pursued;
                                                                Whereas, the Commission's power of authorisation
                                                                must be exercised on the basis of full and accurate
                              11                                knowledge of the measures which Governments
                                                                intend to take as well as of the economic, regional
  Whereas such action under the first paragraph of              and social context of such measures ; whereas
  Article 95 must form part of the general attempt by           Member States should consequently be required,
  the Community to frame a common energy policy,                under Article 47 of the Treaty, to furnish the
  such policy being already outlined in the Protocol of         Commission regularly with full particulars
  Agreement on Energy Problems1 of 21 April 1964                concerning proposed interventions, whether direct or
  and subsequently dealt with in more detail in the             indirect, for the benefit of the coal industry, together
  First Guidelines for a Common Energy Policy,2 the             with details of the reasons for and scope of such
  basic principles of which were approved by the                interventions, in the light in particular of their
  Council at its meeting on 13 November 1969 ;                  forecasts of coal production, imports and sales, and
                                                                taking into account the prospects for regional
                                                                development;
  Whereas these First Guidelines stress in particular,
  with regard to coal, the need :                               Whereas it is moreover necessary to establish criteria
                                                                such as will ensure that the aids to be granted duly
  — to compare, with a view to adjusting production             fulfil this purpose; whereas to this end care must be
       to sales potential, the medium-term forecasts of         taken to make it impossible for aids to be granted in
       production tonnages by coalfield prepared by the         amounts or by procedures liable to. impair the proper
      countries concerned ;
                                                                functioning of the common market, in particular by
  — to consider the Community's energy supply not as            interfering     with    the    conditions    of   production ,
       a single entity from the point of view of security       marketing and trade to an extent contrary to the
       or prices, but broken down according to types of         common interest; whereas it must therefore be
       consumption     and   taking  into   account   the       ensured that financial interventions by Member
      possibilities of substitution as between the              States :
       different forms of energy ;                              — are consistent with the tonnage forecasts drawn
                                                                      up for each coalfield or undertaking;
  Whereas the measures to be taken should, moreover,            — take account of the objectives of this Decision, of
  be limited to those which are strictly necessary and                the pricing of Community coal and of the need to
  should depart from the normal rules of the Treaty                   avoid indirectly aiding industrial consumers of
  only to the extent genuinely essential to deal with the             Community coal;
  problems confronting the Community ; in particular
  they must not involve indirect aid to industrial              — contribute         to    the     necessary    progress   of
  consumers of coal ;                                                rationalisation     and    of   the   concentration   of
                                                                      production on pits where productivity is highest;
' 1 OJ No 69, 30.4.1964, p. 1099/64.                            — prevent serious disturbances in economic and
  2 Supplement to the monthly Bulletin of the Commission,           ■ social conditions in regions where there are not as
     12-68 .                                                          yet sufficient employment opportunities ;
 ---pagebreak---   12                                 Official Journal of the European Communities
 Whereas the Commission, in assessing such aids,                 various categories of aid here provided for constitute
 must be able to take into account not only aids                 an effective means of meeting the economic and
 granted in pursuance of this Decision but also all             social demands posed by the objectives set out in the
 other financial measures for the benefit of the                 opening Articles of the Treaty;
 Community coal industry ; whereas, furthermore,
 should the state of undertakings' finances so require,          Whereas proper implementation of this Decision
 it must be possible for them to receive advances, even         must be ensured by provisions enabling the
 before the authorisation procedure is completed ;               Commission to exercise its power of authorisation
                                                                effectively, to attach to its authorisation such
                             IV                                 conditions as may be appropriate, to effect the
                                                                necessary checks thereafter, and to withdraw any
                                                                authorisation as soon • as it is no longer justified ;
 Whereas the categories of aid qualifying for prior             whereas the Commission must also be in a position
 authorisation   from    the   Commission      should  be
                                                                to prevent undertakings in receipt of aids from fixing,
 specified;                                                     either in their price lists or by alignment, artificially
                                                                low prices liable to interfere with the ' proper
 Whereas the total or partial closure of pits entails           functioning of the common market; whereas,
certain exceptional extra expenditure; whereas it               moreover, it is necessary to make provision for the
 must be possible to authorise aids to offset this in full      suspension of this Decision in the event of serious
 or in part;                                                    difficulties or of a fundamental change in the
                                                                economic conditions on the basis of which it was
Whereas the continuing process of adjustment by                 adopted ;
 undertakings to the state of the coal market requires
 in addition expenditure on capital investment and on
 the training and stabilisation of personnel ; whereas it       Whereas this Decision is intended to remedy the
 must be possible to authorise aids for such                    unforeseen situation which has arisen as a result of
expenditure;                                                    the radical changes which continue to take place in
                                                                the energy market; whereas, in these circumstances,
Whereas it is desirable that undertakings should be             and taking into account the necessarily cautious
enabled where necessary to build up and maintain                progress of the measures of adjustment possible in
exceptional stocks in order to increase the elasticity          this sector, the period of validity of this Decision
of supply of Community coal; whereas it must be                 should be limited to five years :
possible to authorise aids for this purpose;
Whereas the possibility cannot be ignored that the              HAS DECIDED :
categories of aid referred to above may not be
sufficient to prevent serious disturbances in economic
and social conditions in regions where sufficient                                      SECTION I
opportunities for re-employment do not yet exist, or
to prevent the reduction of production to a level
below that considered justified in view of the                                          Article 1
temporary uncertainties concerning Community
energy supply ;                                                The Commission is empowered, subject to the
                                                               provisions hereinafter set out, to - authorise such
Whereas, for these reasons, it is necessary to permit          financial interventions by Member States for the
the granting of additional aids up to a maximum of             benefit of the Community's coal industry as will
an amount covering the difference between the                  facilitate the achievement of the following objectives :
foreseeable average cost of coal production and the
average revenue obtainable during the following
calendar year ; whereas, where the state of                    ( 1 ) concentration of production on the pits best able
undertakings' finances so requires, there is no                      to improve their productivity and best fitted to
objection to their real losses over the two preceding                supply the Community with energy, having
years also being offset, provided it can be shown that               regard in particular to their location in relation
failure to offset such losses would be contrary to the               to markets and to their reserves of the grades of
objectives and criteria of this Decision ;                           coal in demand;
                                                               (2) the continued adjustment of production to the
                             V                                       state of the energy market, in so far as this does
                                                                     not lead to serious disturbances in economic and
Whereas the present prospects of the coal industry                   social conditions in regions where the
suggest that as regards financial interventions the                  development potential is as yet insufficient.
 ---pagebreak---                                        Official Journal of the European Communities                                       13
                         SECTION II                                     (c) for the year immediately ahead :
                                                                            — forecasts by sector of coal and coke
               Obligations of Member States                                     availabilities and sales ;
                           Article 2                              (5 ) particulars for one year ahead of proposed
                                                                        closures and partial closures of pits, and forecasts
1 . A Member State intending to grant any aid                           as to the restructuring and redeployment of the
under Article 1 shall furnish the Commission, by not                    redundant work force in the light of prospects
later than 1 November in any year, with particulars,                    and programmes for regional development.
broken down by coalfield or by undertaking, as to
the following:                                                    2. For 1971 the particulars specified in paragraph
                                                                  1 must be furnished not later than 31 January.
( 1 ) all financial interventions, direct or indirect,
      proposed for the benefit of the coal industry               3 . If, during any calendar year, a Member State
      during the following calendar year;                         plans to undertake financial interventions additional
                                                                  to those already notified under paragraph 1 , or to
                                                                  make changes in existing arrangements, it must notify
(2 ) where the financial interventions referred to in             the Commission in good time for the latter to be able
      subparagraph ( 1 ) are for the purpose of financing         to study the measures proposed and rule thereon in
      welfare benefits in the coal industry :                     accordance with the procedures below.
      ( a) the laws and regulations in force and/or
           amendments to existing laws and regulations                                    SECTION III
           already notified;
       (b) the amount, broken down by category, paid                      Examination and authorisation procedures
            out in welfare benefits during the preceding
           year to employees and former employees in                                        Article 3
           the coal industry and their dependants and
           other persons entitled, and the number of              1.     The Commission shall examine, on the basis of
           recipients concerned, together with the                the particulars provided for in Article 2, whether the
           corresponding particulars for the system               measures notified are compatible with the proper
           obtaining generally;                                   functioning of the market. In so doing it shall apply
                                                                  the following criteria :
       (c) the different funds drawn on, and the
            amounts allocated from each, to finance the           ( 1 ) consistency with the tonnage forecasts drawn up
            benefits referred to in (b);                                for each coalfield or undertaking, having regard
                                                                        to the Community's overall supply position in
(3 ) the grounds for and scope of the various                           respect of coke and coal, and taking account of
      interventions, any further particulars relevant to                intra-Community trade;
      their assessment under Article 3 , and proof that
      they are no larger in scale than is absolutely              (2) suitability of the financial measures proposed by
      necessary to attain the objectives in view;                       the Governments, having regard to the objectives
                                                                        of this Decision, the pricing of Community coal,
                                                                        in so far as this may affect the level of aid, and
(4) forecasts as provided below for production,                         the principle that the amount of any aid must not
      imports and sales of coal and coke, presented in                  exceed that which is absolutely necessary, or lead
      the form of balance sheets :
                                                                        to indirect aiding of industrial consumers ;
      ( a) for the fifth year ahead :                             (3 ) progress of rationalisation and of concentration
                                                                        of production on pits where productivity is
           — an overall forecast of coal availabilities
                                                                        highest, having regard to their location in
               and sales ;                                              relation to markets and to their reserves of the
                                                                        grades of coal in demand;
      (b) for the third year ahead :
                                                                  (4) prevention of serious disturbances in economic
           — a forecast of coal availabilities and sales
                                                                        and social conditions in any region where there
               in each of the following sectors : coking,               are not as yet sufficient employment
               power stations, other industries, private                opportunities ;
               households ;
           — a forecast of coke production and sales in           2.     In conducting its examination in accordance
               each of these sectors ;                            with the criteria set out in paragraph 1 , the
 ---pagebreak--- 14                                   Official Journal of the European Communities
Commission shall take account not only of aids                  expenditure not directly connected with the mining
provided for in this Decision, but also of all other            and marketing of coal. The following items may be
financial measures for the benefit of the Community             so covered :
coal industry, and shall see to it that such aids and
financial measures do not conflict with the principle           ( 1 ) Expenditure borne only by undertakings effecting
of non-discrimination laid down in the Treaty.                        closures, and in particular :
                                                                      ( a) an exceptional burden of payments in respect
                         Article 4                                           of welfare benefits by reason of the
                                                                             retirement of workers in advance of the
1.    State interventions in the financing of welfare                        statutory retiring age;
benefits shall be considered compatible with the                      (b) other exceptional expenditure in respect of
common . market where their effect is to bring the                           workers    deprived of their employment
ratio between the charge per actively employed                               following closure;
mineworker and the benefit per recipient down to the
level of the ratio obtaining in other industries.                       (c) payment       of    extra-statutory   retirement
                                                                             pensions to workers deprived of their
2.    The Governments of the Member States shall                             employment following closure and to
submit to the Commission the necessary facts,                                workers entitled to such pensions prior to
together with detailed calculations of the ratios of                         closure;
charges to benefits referred to in paragraph 1 .                      (d) free coal deliveries to workers deprived of
                                                                             their employment following closure and
                         Article 5
                                                                             workers entitled to such deliveries prior to
                                                                             closure;
1.    The Commission may, after consulting the                         (e) residual tax charges ;
Council, authorise the aids provided for in Articles 6                  (f) additional    underground      safety operations
 to 9 to the extent that it finds that these are in
                                                                             occasioned by closure;
accordance with the provisions of Article 3 .
                                                                       (g) subsequent subsidence damajge;
2. With regard to all other aid and financial                         (h) residual charges in connection with the
interventions coming within the scope of the Treaties,                       payment of water and sewerage rates ;
the   Commission      shall    reach   its - decisions  in
accordance with the rules and procedures laid down                       (i) other residual charges in connection with
in the Treaties .                                                            water supply and sewerage.
3 . Member States may not implement the measures                 (2) Expenditure borne by undertakings referred to in
referred to in paragraph 1 without prior                               ( 1 ) and by other coalmining undertakings :
authorisation from the Commission .
                                                                      ( a) increase in contributions in respect of
                                                                              extra-statutory welfare benefits in con­
4.    Should the state of undertakings' finances make                         sequence of the reduction in the number of
it essential for them to receive advances on the                              contributors due to closures;
financial measures envisaged before the authorisation
procedure is completed, such advances shall be                         (b) expenditure occasioned by closures in respect
designated as such and be made only on the express                            of water supply and sewerage;
condition that they may have to be refunded.                            ( c) increase in water and sewerage rates, where
                                                                              this is due to a reduction in the number of
                                                                              rate-paying undertakings following closures.
                      SECTION IV
                                                                 2. • The aid may take the form of a lump sum
                  Aid by Member States                           payment, which shall not exceed the amount of the
                                                                 expenditure incurred in respect of closure.
                       . Article 6
 1 . Authorisation may be given under Article 3 in                                           Article 7
 respect of State aids intended to enable undertakings
 to adjust their production to the state of the coal             1.       Authorisation may be given under Article 3 in
 market- by means of a total or partial closure of pits;         respect of state aids intended, as part of the process
 such aid may be only for the purpose of covering                of adjustment by undertakings to the state of the coal *
 ---pagebreak---                                          Official Journal of the European Communities                                    15
market, to increase profitability or to improve mine                4. Separate rates of aid per metric ton shall be
safety.                                                             fixed one year in advance for coking coals, other
                                                                    coals and coke respectively; the mode of calculating
2.       Such aids may be granted either for individual             of such rates must be communicated .
investment projects or for investment programmes,
subject to the following conditions :                                                        Article 9
( 1 ) The investment project or programme must
      contribute towards increasing profitability or                1 . Aid additional to the aids provided for in
      improving mine safety and Governments must                    Articles 6, 7 and 8 may be authorised where it can be
      furnish proof to that effect;                                 shown that the adjustment of production to the level
                                                                    demanded by the state of the market
(2) Investment projects or programmes aimed at                      ( 1 ) would cause serious disturbances in economic
      increasing profitability must be primarily directed                 and social conditions in any region where
       to :
                                                                          sufficient opportunities for re-employment do not
       ( a ) the concentration of pits ;                                  yet exist;
      ( b) the further mechanisation and automation of              (2 ) would prevent production warranted by the
              coal winning and underground operations ;                   temporary uncertainties in the Community's
                                                                           energy supply.
        (c) coal valorisation ;
                                                                    2. Any aid thus granted to a coalfield or to an
(3 ) In the case of an investment programme, the                    undertaking may at most cover the difference
      Commission shall also be informed at least once
                                                                    between the foreseeable average cost of coal
       a year of the purpose of, amounts of capital                 production and the average revenue obtainable
      investment involved by, and amount of aid                     during the following calendar year. The aid must be
       allocated to, those of its various component                 expressed as an amount per metric ton produced per
        projects which it has been decided to implement;            coalfield or undertaking.
 (4) Should the aids applied for concern investment in              As evidence in support of the amount of such aid,
       respect of which loans or guarantees have                    Governments shall furnish the Commission with the
       already been provided under Article 54 of the                necessary particulars, including details of average
      ECSC Treaty, the amounts so loaned or                         production costs and revenues for the period most
      guaranteed shall be shown in respect of each                  recently ended.
       project;
                                                                    Production costs may include allowances for normal
                                                                    depreciation and for an adequate return on working
 3.       Authorisation may also be given under Article 3           capital. The Commission may lay down standard
in respect of state aids to help with the financing of              values for these items .
essential recruitment, training,             adaptation   and
stabilisation of personnel.                                         3.      The reduction of costs as a result of the
                                                                    granting of aids under Articles 7 and 8 of this
                                                                    Decision must be allowed for when calculating
                            Article 8
                                                                    production costs.
1.        Authorisation may be given under Article 3 in             4. In fixing the rate of aid account must be taken
 respect of aids for the building and holding of                     of any aids granted under Decision No 70/ 1 /ECSC
 exceptional stocks for the purpose of increasing the               on coking coal and coke. Such aids must be shown in
 elasticity of supply of Community                  coal and         the calculation .
 improving         adaptability    to    short-term    market
 fluctuations .
                                                                    5 . Exceptionally, where production has to be
                                                                    maintained by reason of one of the situations
 2.       Aids for exceptional stocks shall be payable               envisaged in paragraph 1 of this Article, but such an
 only in respect of tonnages of saleable coal and coke               operation is jeopardised by a lack of balance in the
 in     excess     of  one-twelfth    of   the   annual   coal       state of undertakings' finances, aid additional to that
 production of the coalfield or undertaking in                      permitted under paragraph 2 may be granted, but
 question.                                                           shall be limited to an amount covering any difference
                                                                     not already covered between the costs of and
 3.       Such aids may at most cover stock-holding costs            revenues from coal production in the course of an
 for the tonnages referred to in paragraph 2, no                     immediately preceding period not exceeding two
 allowance being made for depreciation or value loss.                years . In this ease, supporting evidence covering the
 ---pagebreak--- 16                                   Official Journal of the European Communities
items referred to in the preceding paragraphs must be          6 to 9 of this Decision or that the practical results of
furnished, and for this purpose particulars shall - be         any such aid or of the use made of it are contrary to
given concerning the period in question during which           the requirements laid down for its authorisation. The
the losses were incurred. In addition, the extent to           Member State concerned shall comply with any
which such losses have meanwhile been reduced by               decision revoking or amending an authorisation
other State measures shall be specified .                      within such period as the Commission shall fix.
                         SECTION V                                                      Article 12
                General and final provisions                   If, upon application by a Member State or on its own
                                                               initiative, the Commission finds that :
                          Article 10                           ( 1 ) the operation of . this Decision threatens to
                                                                     provoke serious disturbances in the common
In determining whether any aid granted under                         market for coal, or to give rise to difficulties
Articles 6 to 9 of this Decision is compatible with the              which could cause deterioration in the state of a
proper functioning of the common market, the                         regional economy, or that
Commission shall take account of any aid granted                (2) marked changes are taking place in the pattern or
 under Decision No 70/ 1 /ECSC of 19 December 1969 .
                                                                     the "scale of intra-Community trade in coal, thus
                                                                      altering the economic conditions on the basis of
                          Article 11                                 which the Decision was adopted, the
                                                                      Commission may, after hearing the parties
                                                                     concerned, suspend its operation in whole or in
1.      In order to ensure that aids authorised by it are            part. The matter shall be referred immediately to
employed solely for the purposes set out in Articles 6               the Council .
to 9, the Commission may :
 ( 1 ) attach to its authorisation such conditions as may                               Article 13
       be appropriate;
                                                                The Commission shall report regularly to the Council
 (2) restrict the exercise by undertakings in receipt of        regarding the operation of this Decision.
       aid of the right of alignment provided for in
       Article 60 of the Treaty establishing the ECSC
       and require them to abide by minimum prices.                                      Article 14
       Should any undertaking fail . to comply, the
       provisions of Article 64 of the Treaty establishing      The Commission shall, after consulting the Council,
       the ECSC shall apply.                                    take any measures required to implement this
                                                                Decision .
2. The Commission may effect the necessary
 checks upon undertakings.
                                                                                         Article 15
3.      The Commission shall revoke its authorisation
 of aids or amend the terms thereof if it finds that            This Decision shall enter into force on 1 January
 such aids no longer satisfy the provisions of Articles         1971 and shall cease to apply on 31 December 1975 .
                Done at Brussels, 22 December 1970.
                                                                                     For the Commission
                                                                                         The President
                                                                                    Franco M. MALFATTI