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Sustainable and responsible business

Voluntary approaches

The Commission adopted the 17 July 2002 a second Communication on Environmental Agreements. A first Communication on Environmental Agreements was adopted in 1996 (COM(1996)561 final 27/11/1996) followed in 1997 by Council Conclusions (OJ C 286 of 22/09/1997 p. 254) and a Resolution from the European Parliament ( OJ C 321 of 22/10/1997 p. 6).

Environmental agreements

The new Communication presents how the provisions of the recently adopted Action Plan "Simplifying and improving the regulatory environment" with regard to co-regulation, self-regulation and voluntary sectoral agreements can be applied in the context of environmental agreements (COM(2002)278 final of 05/06/2002).

Policy makers have shown an increasing interest in environmental agreements in recent years. Environmental Agreements are largely recognised as offering a number of potential benefits, including stimulating a pro-active approach by industry, cost-effectiveness and faster achievements of environmental objectives.

The proposed procedural requirements differ according to the use of environmental agreements in the context of Self-regulation or of Co-regulation.

Environmental Agreements can come from a variety of sources:

  • Firstly, they can be purely spontaneous decisions initiated by stakeholders in a broad range of areas in which the Commission has neither proposed legislation nor expressed an intention to do so. The Commission encourages stakeholders to be proactive in developing such agreements.
  • Secondly, they can be a response by stakeholders to an expressed intention of the Commission to legislate.
  • Thirdly, they can be initiated by the Commission.

The Industry Council, in its Conclusions adopted in May 2001 ("Integration of Sustainable Development into Enterprise Policy", Council Conclusions, 2347th Council Meeting (Energy/Industry), Brussels, 14/15 May 2001, Council doc. 8763/01 of 29/05/2001), pointed out that "in a strategy for the integration of sustainable development into Enterprise Policy, within a balanced mix of policy instruments and bearing in mind that such a strategy can not rely mainly on regulatory instruments, priority should be given to market based as well as voluntary approaches".

In its Communication on "Corporate Social Responsibility: A Business Contribution to Sustainable Development" (COM(2002)347 final of 02/07/2002), the Commission has indicated its support for a partnership approach which aims at reaching agreements between business and other stakeholders on guiding principles for corporate social responsibility practices and instruments. This is in line with the approach set out in this Communication.

Environmental agreements, by their very nature, are self-regulatory practices since they do not have legally binding effects at Community level. Many agreements are spontaneous. However, according to its proposals in the Action Plan, the Commission may also encourage or acknowledge them (under self-regulation) or propose to the legislator to use them when appropriate (co-regulation).

Self-Regulation

Once the Commission has completed its analysis of a proposed environmental agreement, it may inform the European Parliament and the Council of its evaluation and conclusion, indicating whether it considers that an agreement can be acknowledged. Such an intention to acknowledge an environmental agreement could be included in the Commission work programme or a broader paper, for example a sufficiently detailed White Paper or a Thematic Strategy under the 6th EAP.

Acknowledgement of the environmental agreement by an exchange of letters or Commission Recommendation

In the environmental field, the modalities used so far at Community level to acknowledge self-regulation include Commission Recommendations and, in some instances, a simple exchange of letters. In other words, the Commission may stimulate or incite an environmental agreement by means of a Recommendation or recognise it by means of an exchange of letters with the relevant industry's representatives.

A recent example is the unilateral industry self-commitment negotiated among chemical companies using renewable as well as fossil raw materials as feedstock for their production [3 MB] . The European Commission through its informal working group of DG Enterprise and Industry on "Renewable Raw Materials for Industry" played a facilitating role in the development of that agreement.

Acknowledgement of the environmental agreement by a Commission Recommendation accompanied by a monitoring Decision

In certain cases the Commission and the legislator may have an interest in the results of an environmental agreement and may therefore wish to monitor it closely, for example by combining a Commission Recommendation with a Parliament and Council Decision on monitoring.

Co-regulation

Under co-regulation arrangements, the European Parliament and the Council would adopt, upon a Proposal from the Commission, a Directive. This legal act would stipulate that a precise, well-defined environmental objective must be reached on a given target date. It would also set the conditions for monitoring compliance.

Under co-regulation, key elements - notably the environmental objective and monitoring requirements - and potentially also a follow-up mechanism in case of failure of an environmental agreement to deliver, are integrated into the legal act itself. The latter is subject to stakeholder consultation during its preparation, in line with the Commission Communication on minimum standards for consultation, and is adopted under normal co-decision procedure. Given the above mentioned content of the legal act itself, procedural requirements for individual environmental agreements submitted in the framework of the legal act can be reduced.

Where the Commission decides that co-regulation is the best means of achieving an environmental objective and where key elements of its proposal are based on an existing or proposed voluntary agreement, which is satisfactory from the Commission's point of view, the Commission will include these elements in its proposal and pursue them in discussions with the other institutions, making full use of the possibilities available to it in accordance with its Communication on the Action Plan "Simplifying and improving the regulatory environment".

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