Tag Archives: Enterprises

Industry and environment

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.

 

State aid for rescuing and restructuring firms in difficulty

State aid for rescuing and restructuring firms in difficulty

Outline of the Community (European Union) legislation about State aid for rescuing and restructuring firms in difficulty

Topics

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

Organisation and financing of the fisheries sector

State aid for rescuing and restructuring firms in difficulty

Document or Iniciative

Communication from the Commission – Community guidelines on state aid for rescuing and restructuring firms in difficulty [Official Journal C 244 of 1.10.2004].

Summary

The guidelines clarify the Commission’s approach in cases where the public authorities grant financial support to firms in difficulty *. Under the general principle of the prohibition of state aid (Article 87(1) of the Treaty establishing the European Community), aid granted to firms in difficulty must not be allowed to become the rule. The exit of inefficient firms is a normal part of the operation of the market and, while rescuing and restructuring aid may keep in existence firms in difficulty, this is generally at the expense of their competitors.

Financial contribution from the beneficiary firm to the restructuring

The guidelines are based on the principle whereby, in any restructuring operation, the beneficiary is required to finance a substantial proportion of its restructuring costs.

Depending on the size of the beneficiary, thresholds determine its contribution to the overall cost of restructuring: at least 50 % for large firms, 40 % for medium-sized firms and 25 % for small firms. The guidelines are, therefore, concerned especially with large firms operating throughout the European Union. Such firms generally have large market shares and the state aid granted to them has a more appreciable impact on competition and trade.

The beneficiary’s contribution has a twofold purpose: it will demonstrate that the markets (owners, creditors) believe in the feasibility of the return to viability within a reasonable period of time, and it ensures that the aid is limited to the minimum required to restore viability while limiting distortion of competition.

A substantial contribution from the beneficiary to the restructuring was previously required under the 1999 guidelines. The 2004 guidelines reaffirm with greater clarity the principle that the contribution must be real and free of aid.

“One time, last time” principle

The guidelines also stipulate a uniform period of ten years during which the beneficiary of the aid may not receive any additional rescue or restructuring aid. This “one time, last time” principle is designed to prevent repeated granting of rescue or restructuring aid that keeps firms artificially in business. An important exception to this rule is where restructuring aid follows the granting of rescue aid as part of a single restructuring operation.

Definition of rescue and restructuring aid

The guidelines extend the concept of rescue aid so as to allow the beneficiary to take urgent measures, even of a structural nature. Firms in difficulty may already need to take certain urgent structural measures to halt or reduce down a worsening of their financial situation during the rescue phase.

Under the 1999 guidelines, no restructuring measure financed through state aid could be undertaken during the rescue phase. Admittedly, rescue and restructuring involve the interplay of different mechanisms but are often two phases of the same operation. Such a strict distinction between rescue and restructuring has thus given rise to difficulties.

Accordingly, rescue aid is by nature temporary and reversible. Its objective is to allow time to analyse the circumstances which gave rise to the difficulties and to develop an appropriate plan to remedy those difficulties. Restructuring will be based on a practical plan for restoring a firm’s long-term viability. Any aid granted following the adoption and implementation of a restructuring or liquidation plan for which aid has been requested will be considered as restructuring aid.

GENERAL CONDITIONS FOR AUTHORISING AID

Common rules apply to rescue aid and restructuring aid:

  • the firm must qualify as a firm in difficulty within the meaning of the guidelines;
  • a recently established firm may not receive rescue and restructuring aid for the first three years of its existence.

In order to be approved, rescue aid must:

  • be in the form of loan guarantees or loans granted at an interest rate comparable to those for loans to healthy firms;
  • be reimbursed within a period of not more than six months after disbursement of the first instalment;
  • be warranted on the grounds of serious social difficulties;
  • have no unduly adverse spillover effects on other Member States;
  • be accompanied, on notification, by an undertaking given by the Member State concerned to communicate to the Commission within six months a restructuring plan, a liquidation plan or proof that the loan has been reimbursed in full and/or that the guarantee has been terminated;
  • be restricted to the amount needed to keep the firm in business for the period during which the aid is authorised;
  • respect the “one time, last time” principle.

Restructuring aid raises particular competition concerns. The general principle is to allow restructuring aid to be granted only in circumstances in which any distortions of competition will be offset by the benefits flowing from the firm’s survival. Authorisation will be granted only if strict conditions are met:

  • a restructuring plan must be implemented that restores the firm’s long-term viability within a reasonable timescale;
  • compensatory measures must be taken to prevent or to minimise the risks of distortion of competition (divestment of assets, reductions in capacity or market presence, etc.);
  • the aid must be limited to the strict minimum and the rules on the beneficiary’s contribution must be complied with;
  • specific conditions may be attached by the Commission to the authorisation of aid;
  • the restructuring plan must be implemented in full;
  • the Commission must be in a position to make sure that the restructuring plan is being implemented properly, through regular reports communicated by the Member State concerned.

The conditions for authorising restructuring aid are, however, less strict where the aid is granted to small firms since it affects competition less than aid for medium-sized and large firms.

SCOPE

The guidelines are based on Article 87(2) and (3) of the Treaty establishing the European Community, which stipulates that aid falling within the scope of Article 87(1) may be regarded as being compatible with the common market.

They apply to firms in difficulty in all sectors, including agriculture, fisheries and aquaculture, subject to certain conditions. The coal and steel sectors are, however, excluded from the scope of the guidelines.

DATE OF APPLICATION AND DURATION

The Commission will apply the new guidelines with effect from 10 October 2004. Only state aid notified after that date will be subject to them as they do not have retrospective effect.

Key terms used in the act
  • Firm in difficulty: a firm is regarded as being in difficulty where it is unable, whether through its own resources or with the funds it is able to obtain from its owner/shareholders or creditors, to stem losses which, without outside intervention by the public authorities, will almost certainly condemn it to going out of business in the short or medium term.

Related Acts

Communication from the Commission – Temporary Community framework for State aid measures to support access to finance in the current financial and economic crisis [Official Journal C16/3 of 22.1.2009].
This Communication aims to introduce a temporary State aid system in order to cope with the failures resulting from the economic and financial crisis that began in October 2008. The temporary additional measures provided for meet two principal objectives:

  • to unblock bank lending to companies;
  • to encourage companies to continue investing in the future, in particular in sustainable growth.

To achieve these objectives, Member States may, under certain conditions and until the end of 2010, provide in particular:

  • maximum flat-rate aid of EUR 500 000 per company during the first two years, to help companies overcome the current difficulties;
  • State guarantees for loans accompanied by a premium reduction;
  • subsidised loans, in particular for the production of green products (meeting environmental protection standards early or going beyond such standards);
  • aid in the form of risk capital, which may be up to EUR 2.5 million per SME and per year (instead of the current EUR 1.5 million) provided that at least 30 % (instead of the current 50 %) of the investment costs are met by private investors.

Communication from the Commission on the application of State aid rules to measures taken in relation to financial institutions in the context of the current global financial crisis [Official Journal C 270/02 of 25.10.2008].
This Communication clarifies the application of State aid rules to emergency measures aimed to offset losses due to the October 2008 financial crisis.

Public intervention should be decided at national level within a coordinated framework and on the basis of a certain number of European Union common principles. Two types of financial institution receiving aid are distinguished with consequences for restructuring when State aid has been received:

  • financial institutions which are fundamentally healthy and whose difficulties of access to liquidity is exclusively a result of general market conditions;
  • financial institutions with endogenous problems due to their business mode or business practices and whose weaknesses have been exposed and exacerbated by the crisis in the financial markets.

The Communication covers two main types of measure taken with regard to these institutions:

  • guarantees covering financial institutions’ debts. These include in particular general guarantees protecting retail deposits and liabilities, some types of interbank deposits and short and medium-term debt instruments. The duration and amount of these guarantees must be limited to the minimum necessary and the guarantees must include appropriate mechanisms to minimise undue distortions of competition;
  • the recapitalisation of financial institutions. Public funds are provided in order to strengthen the capital base of the institutions directly. This injection of capital must be limited to the strict minimum, so as not to encourage the financial institution to engage in other activities or in an aggressive commercial strategy.

Member States may also accompany this aid and restructuring with the provisions of public funds, in particular from the central bank.

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

Business environment

Business environment

Outline of the Community (European Union) legislation about Business environment

Topics

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

Enterprise > Business environment

Business environment

The process of starting up and developing a business is not just an adventure, but also a real challenge. In order to help entrepreneurs with this, it is essential to create a favourable business environment.
Ensuring easier access to funding, making legislation clearer and more effective and developing an entrepreneurial culture and support networks for businesses are all instrumental as far as the setting up and growth of businesses are concerned.
However, creating a favourable business environment does not mean simply improving the growth potential of businesses. It also means turning Europe into a place in which it is advantageous to invest and work. In this way, the promotion of corporate social responsibility is contributing to making business in Europe more attractive.
Small and medium-sized enterprises (SMEs) make up 99% of European businesses. Their small size makes them very sensitive to changes in the industry and environment in which they operate. It is therefore vital for their well-being to be a focus of political attention.

SMALL AND MEDIUM-SIZED ENTERPRISES (SME) – 99% OF EUROPEAN ENTERPRISES

  • A “Small Business Act” for European SMEs
  • A modern policy for SMEs
  • European Charter for Small Enterprises
  • Definition of micro, small and medium-sized enterprises
  • The SME Envoy
  • A programme for clean and competitive SMEs

ENTREPRENEURSHIP

  • Action plan for entrepreneurship
  • Promoting entrepreneurship in schools and universities

BUSINESS SUPPORT

Financing

  • Developing Public Private Partnerships
  • Development of micro-credit
  • Access to financing for businesses
  • Financing SME Growth
  • Competitiveness and Innovation Framework Programme (CIP) (2007-2013)

Advice

  • Support to businesses

IMPROVING THE BUSINESS ENVIRONMENT

Improving rules, practices and management

  • Combating late payment in commercial transactions
  • Green Paper: European Contract Law for consumers and businesses
  • Open method of coordination: BEST procedure
  • Reducing administrative costs
  • Administrative burdens: sectoral reduction plans 2009
  • A simplified business environment
  • Transfer of businesses
  • Overcoming the stigma of business failure
  • Community eco-management and audit scheme (EMAS)
  • Late payments

Corporate social responsibility (CSR)

  • A European strategy 2011-2014 for Corporate Social Responsibility
  • Promoting corporate social responsibility
  • Corporate social responsibility: a business contribution to sustainable development.
  • Green Paper on corporate social responsibility
  • Sustainable Consumption, Production and Industry Action Plan

A programme for clean and competitive SMEs

A programme for clean and competitive SMEs

Outline of the Community (European Union) legislation about A programme for clean and competitive SMEs

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

A programme for clean and competitive SMEs

Document or Iniciative

Communication of 8 October 2007 from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions, entitled: “Small, clean and competitive – A programme to help small and medium-sized enterprises comply with environmental legislation” [COM(2007) 379 – Not published in the Official Journal].

Summary

Small and medium-sized enterprises (SMEs) represent 99 % of all enterprises and 57 % of economic added value in the European Union (EU), yet they fail to apply a significant number of European environmental laws. This happens either because they fall below the thresholds that trigger the application of these laws, or because they are unaware of their impact on the environment and of the legislation applicable to their activities.

This situation has adverse effects on the competitiveness of SMEs, which don’t reap the economic benefits associated with better environmental management and eco-innovation, and also on the environment and the health and safety of workers.

To help SMEs adopt sustainable production methods and business practices, the Commission aims to increase SME compliance with environmental legislation by reducing the costs involved, increasing the eco-efficiency of SMEs and enhancing their eco-innovation and competitiveness.

This action plan entails improving legislation, adapting environmental management tools, providing SMEs with financial assistance, building local expertise and improving communication and information. The Commission and Member States must regularly review the programme’s implementation, whose initial assessment will take place by 2010.

Better regulation

Measures that can be taken to improve the design and implementation of legislation include streamlining administrative procedures in order to cut costs, grouping and disseminating best practices for meeting environmental obligations, for instance via initiatives such as BEST, working with implementation authorities such as the IMPEL Network and consulting with SMEs in policy-making and policy implementation.

Tailoring environmental management schemes to SMEs

The Commission encourages the application of the environmental management and audit system (EMAS). In particular, it intends to extend this system to a given industrial cluster or sector, and to develop tools such as EMAS-Easy to facilitate its implementation. Furthermore, it plans to reduce the red tape involved in dealing with EMAS in order to encourage European companies to use it. .

Providing appropriate and sustainable financial assistance

To facilitate investment in eco-efficient processes, SMEs can receive European funding and aid through programmes such as LIFE+, the Competitiveness and Innovation Framework Programme and the new instruments of the Cohesion Policy 2007-2013, such as the ERDF, the Cohesion Fund and the European Social Fund. The Commission plans to publish a handbook on new funding opportunities for businesses.

In addition, Community regulations on State aid make it possible for Member States to financially assist businesses that comply with and even improve on the EU’s environmental legislation.

Building local expertise

The Commission plans to build capacity to support SMEs in the Member States by organising training seminars on how to find information and on the legal requirements and the benefits of improved environmental performance. The Euro Info Centres (EIC) Network and, from 2008, the new network in support of business and innovation, integrating the services of EICs and the Innovation Relay Centres (IRCs), will support the efforts of the Commission by promoting partnerships and working actively with SMEs.

Improved communication and more targeted information

A multilingual website should be established to provide SMEs with information on the implementation of laws, management tools, funding opportunities, good practices and so on. The Commission also intends to develop guidelines for SMEs to help them control their impact on the environment.

Combating late payment in commercial transactions

Combating late payment in commercial transactions

Outline of the Community (European Union) legislation about Combating late payment in commercial transactions

Topics

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

Enterprise > Business environment

Combating late payment in commercial transactions

Document or Iniciative

Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (Text with EEA relevance).

Summary

This Directive aims at combating late payment * in commercial transactions * in order to contribute to the proper functioning of the internal market and to foster the competitiveness of undertakings, particularly small and medium-sized enterprises (SMEs).

The Directive applies to all types of payment made as remuneration for commercial transactions between public authorities and between undertakings. It may exclude:

  • debts that are subject to insolvency proceedings against a debtor;
  • proceedings aimed at debt restructuring;
  • transactions with consumers;
  • interest relating to other payments (for examples payments made under the laws on cheques and bills of exchange, or payments made as compensation for damages including payments from insurance companies).

Transactions between undertakings

In the event of late payment, a creditor is entitled to claim interest on condition that they have fulfilled their contractual and legal obligations and that they have not received the amount due * on the agreed date. The creditor is paid such interest according to the payment period or date laid down in the contract.

With regard to commercial transactions between economic operators, the Directive stipulates, whilst respecting their contractual freedom, that they must pay their invoices within 60 days except where they have expressly agreed otherwise and insofar as other terms are not grossly unfair to the creditor.

Where the contract does not specify any date for payment, the creditor is also entitled to receive interest if 30 calendar days after receipt, by the debtor, of the invoice or an equivalent request for payment, the creditor has not received the amount due.

The creditor may even be entitled to compensation from the debtor for recovery costs.

Transactions between undertakings and public authorities

In the event of late payment, and where the debtor is a public authority, the creditor shall be entitled to claim interest if they have fulfilled their contractual and legal obligations and have not received the amount due on the agreed date.

Where the debtor is a public authority, the date of receipt of the invoice must not be the subject of a contractual agreement. The period of payment for an invoice must not exceed:

  • 30 days following receipt of the invoice;
  • 30 days following the date of receipt of the goods or services where the date of receipt of the invoice is uncertain.

Member States may extend payment periods to a maximum of 60 days under certain conditions.

The statutory rate of interest for late payment shall be increased to at least 8 percentage points above the reference rate applied by the European Central Bank. Public authorities may not set lower interest rates for late payment.

Unfair contractual terms and practice

Contractual terms shall not apply if they cause prejudice or are unfair to the creditor – for example if they exclude the payment of interest for late payment or compensation for recovery costs.

In order to avoid such unfair practice, Member States must ensure transparency with regard to the rights and obligations resulting from this Directive and shall be bound to publish the applicable rate of statutory interest for late payment.

Member States may also encourage the implementation of payment codes setting out payment time limits.

Recovery procedures

Creditors may lodge action or apply to a court provided that the debt is not disputed.

This Directive repeals Directive 2000/35/EC.

Key terms of the Act
  • Late payment: payment not made within the contractual or statutory period of payment.
  • Commercial transactions: transactions between undertakings or between undertakings and public authorities which lead to the delivery of goods or the provision of services for remuneration.
  • Amount due: the principal sum which should have been paid within the contractual or statutory period of payment, including the applicable taxes, duties, levies or charges specified in the invoice or the equivalent request for payment.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2011/7/EU

15.3.2011

16.3.2013

OJ L 48, 23.2.2011