Tag Archives: Business

Industry and environment

Outline of the Community (European Union) legislation about Industry and environment

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Enterprise > Interaction between enterprise policy and other policies

Industry and environment

Document or Iniciative

Conclusions of the Council of 14 and 15 May 2001 on “A strategy for integrating sustainable development in the European Union’s enterprise policy” for the Gothenburg European Council.

Conclusions of the Council of 6 and 7 June 2002 on enterprise policy and sustainable development.

Summary

The activities carried out by businesses can exert considerable pressure on the environment. European legislation lays down rules aimed at preventing pollution and repairing the damage companies cause to the environment. It also contains measures aimed at promoting the development of environmentally friendly industrial activities.

The European Union’s objective is to separate the economic development of businesses from the environmental damage that their activities cause, by ensuring a high level of environmental protection without compromising business competitiveness.

Preventing pollution and repairing damage to the environment

Article 174 of the Treaty establishing the European Community (EC Treaty) sets out the basic principles of Community action on the environment, in particular the precautionary principle and the polluter pays principle. These general principles are implemented by specific legislation applicable to industrial activities in Europe.

Under Article 6 of the EC Treaty environmental protection requirements must be integrated into Community policies, in particular with a view to promoting sustainable development.

By adopting the strategy for sustainable development at the Gothenburg European Council in 2001, the EU made the simultaneous pursuit of environmental objectives and the integration of the environment into economic and social objectives one of its priorities.

European legislation on the environment sets limits on the amount of polluting substances discharged by industry into the air or water.

In order to prevent or minimise pollutants being released into the air, water and soil as well as waste, in particular from industrial plants, the IPPC Directive also establishes a procedure for authorising activities with a high pollution potential and sets minimum requirements to be included in all permits, particularly in terms of pollutants released.

In addition, the EIA Directive (SK) (SL) (FI) requires an environmental impact assessment to be carried out on certain public and private projects before they can be approved. This is the case in particular for projects involving dangerous industrial plants such as oil refineries or chemical facilities.

The environmental liability of companies is covered specifically in Directive 2004/35/EC, with a view to preventing and repairing damage to the environment. This liability regime applies to some explicitly listed occupational activities as well as other occupational activities when the operator is guilty of error or negligence.

Companies whose activities involve hazardous substances are also subject to certain specific obligations in order to prevent accidents and limit their consequences.

European legislation also sets out detailed rules for the management of waste produced by businesses, both for “traditional” waste (recycling, landfill, incineration, etc.) and for certain specific types of waste (radioactive substances and waste, plastics, waste resulting from certain industrial activities).

Waste management is increasingly seen as a stage in the life cycle of resources and products. Thematic strategies on preventing and recycling waste and on the sustainable use of natural resources adopted in 2005 focus mainly on the ways of promoting more sustainable waste management, reducing the amount of waste produced, minimising the environmental impact of waste and reducing the use of resources. This global, life cycle-based approach obliges businesses to manage their resources and products in a more sustainable way.

Promoting environmentally-friendly activities

The Council stated in its conclusions of May 2001 that an effective strategy for integrating sustainable development into industrial policy cannot be based on legislation alone, but that a large part of this work must be stem from market-based and voluntary approaches. It reiterated that integrating sustainable development is a challenge, but at the same time an opportunity to stimulate innovation and create new economic prospects and a competitive advantage for European businesses.

The EU has instruments that favour the development of environmentally friendly economic activities. The aim is to boost the competitiveness of businesses that meet environmental standards or help improve the environment. These instruments include incentives and measures aimed at facilitating business activities.

Among these incentives, the EU offers businesses numerous funding possibilities in the form of co-financing or loans through various financial instruments and programmes, such as LIFE or the successive research and technical development framework programmes, or through other financial institutions such as the European Investment Bank (EIB) or the European Structural Funds.

Other incentives focus on improving businesses’ visibility and image. The main examples are the Ecolabel, the Community Eco-Management and Audit Scheme (EMAS) and certain one-off events such as the European Business Awards for the Environment.

European action also aims to facilitate businesses’ activities, in particular by spreading best practice resulting from instruments such as the IPPC Directive on integrated pollution prevention and control, integrated product policy, European standardisation, or the Best project. The integrated product policy is the main policy for promoting sustainable production and consumption. The Commission and the national and local public authorities must act as catalysts by fostering dialogue and coordinating the spread of knowledge and best practices.

The EU has also developed instruments to improve the regulatory and management frameworks in which businesses develop. These include the action plan in favour of ecotechnologies, the EMAS system and the promotion of voluntary agreements between businesses.

Voluntary initiatives taken by businesses as part of corporate social responsibility (CSR) practices play an important role in integrating social and environmental concerns into business strategies and action. These initiatives demonstrate the business sector’s commitment to sustainable development, innovation and competitiveness.

Background

The Vienna European Council (December 1998) asked the Industry Council to define a strategy aimed at integrating environmental issues and sustainable development into enterprise policy.

The Cardiff European Council (June 1998) laid the foundations for coordinated action at Community level to integrate environmental requirements into the Union’s policies.

The Sixth Environment Action Programme, adopted in September 2002, reaffirmed the importance of the principle of integration and laid the foundations needed to create the horizontal thematic strategies which required by the various economic and political actors.

Related Acts

Commission working document of 1 June 2004 – Integrating environmental considerations into other policy areas – a stocktaking of the Cardiff process [COM(2004) 394 final – Official Journal C 49 of 26.02.2006].
In this document the Commission stresses the substantial positive achievements made as a result of measures to integrate environmental considerations into industrial activities. These measures have contributed to an overall reduction of carbon dioxide produced by European industries. They have also made it possible to break the link between industrial activities and emissions of atmospheric pollutants (acidifying gas and ozone precursors in particular), and to some extent between energy production and the use of raw materials. However, despite this progress the Commission indicates that industrial production processes still account for a considerable share of all pollution in Europe. Industry generates 21% of EU greenhouse gas emissions and is a major source of pollution (such as heavy metals, volatile organic compounds, nutrients, etc.).

Communication from the Commission of 11 December 2002 on industrial policy in an enlarged Europe [COM(2002) 714 final – Not published in the Official Journal].

Communication from the Commission of 15 May 2001 – A Sustainable Europe for a Better World: A European Union Strategy for Sustainable Development (Commission’s proposal to the Gothenburg European Council) [COM(2001) 264 – Not published in the Official Journal].
The EU has formulated a long-term strategy to dovetail the policies for economically, socially and environmentally sustainable development, its goal being sustainable improvement of the well-being and standard of living of current and future generations. A review of this strategy was launched in 2005.

Council report of 9 November 1999 on the integration of sustainable development in the Union’s industrial policy, written for the Helsinki European Council.
In this report the Council points out that the integration of environmental considerations into industrial policy is based on certain essential principles, namely the importance of competitiveness as a key aspect of industrial policy in the three dimensions (economic, social and environmental) of sustainable development, the satisfactory cost/efficiency ratio of policies and business measures, the promotion of voluntary action between parties involved, and the specific features and interests of small and medium-sized enterprises.

Conclusions of the Council of 29 April 1999 on integrating the environment and sustainable development into the industrial policy of the EU.

LeaderSHIP 2015

Outline of the Community (European Union) legislation about LeaderSHIP 2015

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Transport > Waterborne transport

LeaderSHIP 2015

Document or Iniciative

Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions of 21 November 2003: LeaderSHIP 2015 – Defining the future of the European Shipbuilding and Repair Industry – Competitiveness through Excellence [COM(2003) 717 final – Not published in the Official Journal].

Summary

In January 2003, the Commission set up the LeaderSHIP 2015 Advisory Group. This group was made responsible for drafting recommendations to improve the competitiveness of the shipbuilding and repair sector. In this notice, the Commission presents the recommendations, divided into eight fields of crucial importance for the competitiveness of the sector.

A level playing field for shipbuilding worldwide

European shipbuilding essentially suffers from unfair competition from certain countries. This takes the form of prices set below cost levels and injurious subsidisation. The Commission therefore approves the following three recommendations made by the LeaderSHIP 2015 Group:

continuation of the EU’s current commercial policy;
implementation of the rules of the World Trade Organisation (WTO) applicable to shipbuilding;
negotiation within the Organisation for Economic Cooperation and Development (OECD) of an agreement on shipbuilding and the application of the existing rules.

Research, development and innovation

In order for the shipbuilding sector to receive sufficient support from the Member States for its research activities, the Commission has adapted the rules governing innovation aid for the shipbuilding sector.

Financing

The shipbuilding sector needs substantial financing for both the construction phase (pre-delivery) and the operational phase (post-delivery) of the vessel. However, many banks are losing interest in shipbuilding. The Commission therefore proposes that the European Investment Bank support pre- and post-delivery financing.

In view of the risks linked to markets in foreign currencies, the Commission suggests organising an exchange-rate risk insurance system at European level.

Safety and environment

In the fields of maritime safety and protection of the marine environment, the Commission supports all the recommendations made by the LeaderSHIP 2015 Group:

the strict application of European legislation and its promotion on an international scale;
more transparent, uniform, efficient and independent inspections;
the establishment of a programme to assess the quality of shipyards throughout the world, also covering the construction of new ships and repairs;
improvements in ship repairs;
the creation of an expert committee to assist the Commission and the European Maritime Safety Agency;
exploitation of the potential of short-distance maritime transport.

European approach to shipbuilding needs

The naval defence industry does not have the same needs as the commercial naval sector. The Commission is in favour of creating a common market for defence equipment. It also approves the following proposals:

the strengthening of cooperation between shipyards, particularly between different Member States. The creation of highly integrated European stakeholders will encourage European competitiveness;
the harmonisation of export rules by the Member States. Such harmonisation would make it possible to avoid distortions of competition and increase industrial cooperation.

Intellectual property rights (IPRs)

In order to protect the shipbuilding industry from pirating and the violation of intellectual property rights, the Commission supports the following initiatives:

maximum use of existing IPR instruments (copyrights, registered designs and models, trademarks, patents, specific non-disclosure and cooperation agreements);
the creation of databases containing information on the state of the art, existing patents, the competitive situation for certain products and the main right holders;
the examination, and even reinforcement, of international patent rules.

Education and training

In order to keep a skilled workforce and attract young people, the following measures are recommended:

the development of management training programmes specific to the shipbuilding sector. New management skills will be needed in order to adapt to the new structure of the industry, which comprises a few large businesses and many subcontractors;
increased sectoral social dialogue should make it possible to meet new qualification needs. The Commission has in fact established a social dialogue committee for the sector;
the exchange of staff and know-how, university workshops;
the launch of an advertising campaign to improve the image of the sector;
the creation of regional centres of excellence to support the implementation of these recommendations. Businesses and educational establishments could participate in these centres of excellence, thus facilitating student exchanges, transfers of knowledge, the dissemination of good practices and the recognition of qualifications throughout the EU.

Building a stable industrial structure

The sector has specific needs which require an appropriate response. The Member States must acknowledge the important strategic dimension of shipbuilding and ship repair in Europe. They need to develop a political approach to the sector in order to prevent its extinction in the near future. Furthermore, for security reasons, it is important to preserve some shipbuilding capacity for both maritime transport and defence.

Lastly, greater cooperation between naval defence and shipbuilding resources in Europe can also help to improve the competitiveness of the sector.

Related Acts

Commission working document of 25 April 2007 – LeaderSHIP 2015 Progress Report [COM(2007) 220 – Not published in the Official Journal].
The LeaderSHIP 2015 strategy is achieving results. The sector is no longer perceived as a subsidised industry on the decline, but is now seen as a modern, efficient industry which creates growth and jobs. The Commission intends to continue with the initiative, accelerating it in a number of fields.

Overcoming the stigma of business failure

Outline of the Community (European Union) legislation about Overcoming the stigma of business failure

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Enterprise > Business environment

Overcoming the stigma of business failure

Document or Iniciative

Communication from the Commission of 5 October 2007 to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: Overcoming the stigma of business failure – for a second chance policy – Implementing the Lisbon Partnership for Growth and Jobs [COM(2007) 584 final – Not published in the Official Journal].

Summary

Half of all businesses do not survive the first five years. However, the death of businesses is not incompatible with economic dynamism. Public opinion often associates failure with fraud or personal inability. Yet only 4 to 6 % of bankruptcies are fraudulent. Most of the time, bankruptcy is simply the direct consequence of business renewal.

Business failures have a high cost in terms of employment, purchasing power (unpaid wages) and finance (unpaid debts). This cost could be reduced if businesses in difficulty received better assistance and, in the event of bankruptcy, if it was made easier for them to make a fresh start. Furthermore, entrepreneurs who restart a business learn from their mistakes and subsequently enjoy greater success. For all these reasons, a second chance should be given to failed businesses.

Public image, education and the media

Europeans fear business failure. They need to be shown that new attempts are part of a normal process of learning, research and discovery through, for example, information campaigns and education programmes. The Commission has created awareness-raising tools which can be used for this purpose. The media also have a role to play, particularly when it comes to combating the cliché according to which bankruptcy is a crime, regardless of the cause. Lastly, sustained dialogue with all involved parties should make Europeans aware of the advantages of a fresh start.

The role of insolvency law

Many European bankruptcy laws treat fraudulent and honest business failure in the same manner. Sometimes, they impose restrictions, prohibitions and even disqualifications on bankrupts. Legislation should make a greater distinction between the treatment of fraudulent and non-fraudulent bankruptcies. Furthermore, legal proceedings should be made simpler and faster, lasting no longer than one year. Lastly, legislation should provide for early discharge from remaining debts subject to certain criteria. Overwhelming debts can in fact dissuade an entrepreneur from setting up another business.

Actively supporting businesses in difficulty

Business failure must be prevented by supporting entrepreneurs at as early a stage as possible. The Commission recommends that the Member States introduce support measures such as expert assistance. As businesses in difficulty cannot afford to pay for costly advice, it is essential to make such support more accessible. The Commission has in fact developed an early warning instrument: it has put a self-assessment tool on-line to help entrepreneurs make a rapid estimate of their financial health. In addition to this, the INTERREG IVC programme and European business organisations offer many possibilities for networking and the exchange of good practices in the field of business support.

Lastly, it is also possible to prevent bankruptcies by considering other alternatives: the Commission advises Member States to shift their focus to restructuring and rescuing businesses in difficulty.

Actively supporting restarters

Entrepreneurs who create a second business face psychological, technical and financial difficulties. Training and coaching should therefore be made available to them. It is also necessary to promote the link between these entrepreneurs and their clients, business partners and investors, who are often suspicious of bankrupts.

Furthermore, entrepreneurs who are restarting a business need financial resources. Public bodies should remove barriers to public financing. Banks and financial institutions should be less cautious vis-à-vis restarters, and the names of non-fraudulent bankrupts should not appear on lists restricting access to loans in the banking sector.