Avis juridique important

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32001H0680

Commission recommendation of 7 September 2001 on guidance for the implementation of Regulation (EC) No 761/2001 of the European Parliament and of the Council allowing voluntary participation by organisations in a Community eco-management and audit scheme (EMAS) (notified under document number C(2001) 2503) (Text with EEA relevance.)

Official Journal L 247 , 17/09/2001 P. 0001 - 0023

Commission recommendationof 7 September 2001on guidance for the implementation of Regulation (EC) No 761/2001 of the European Parliament and of the Council allowing voluntary participation by organisations in a Community eco-management and audit scheme (EMAS)(notified under document number C(2001) 2503)(Text with EEA relevance)(2001/680/EC)THE COMMISSION OF THE EUROPEAN COMMUNITIES,Having regard to the Treaty establishing the European Community, and in particular Article 211, second indent, thereof,(1) Whereas Regulation (EC) No 761/2001 of the European Parliament and of the Council of 19 March 2001 allowing voluntary participation by organisations in a Community eco-management and audit scheme (EMAS)(1) defines the essential requirements for participation by organisations in a Community eco-management and audit scheme (EMAS).(2) Whereas Regulation (EC) No 761/2001 calls on the Commission to promote consistency in the application of EMAS, in particular in the field of verification as referred to in Article 4(7).(3) Whereas consistency in the verification field can be ensured by clarifying provisions for organisations and by guiding directly environmental verifiers in performing their activities.(4) Whereas it is approporiate to give practical guidance on implementing Regulation (EC) No 761/2001 to offer organisations effective support and to contribute to a harmonised development of EMAS in all the Member States. That guidance should cover in particular employee involvement as referred to in Annex I(B)(4) to that Regulation and the drafting of environmental statements as referred to in Annex III(3)(1) thereto.(5) Whereas the guidance provided for in the recommendation is in accordance with the opinion of the Committee established pursuant to Article 14 of Regulation (EC) No 761/2001,HEREBY RECOMMENDS:1. EMAS environmental statements as referred to in Article 3(2)(c) of Regulation (EC) No 761/2001 should be prepared in accordance with the guidance set out in Annex I to this recommendation.2. Organisations implementing EMAS should take account of the guidance on employee participation set out in Annex II.3. Organisations and environmental verifiers should take account of the guidance on the identification of environmental aspects and assessment of their significance set out in Annex III.4. Small and medium-sized organisations and environmental verifiers should take account of the guidance of the verification of SMEs set out in Annex IV.5. This recommendation is addressed to the Member States.Done at Brussels, 7 September 2001.For the CommissionMargot WallströmMember of the Commission(1) OJ L 114, 24.4.2001, p. 1.ANNEX IGUIDANCE ON THE EMAS ENVIRONMENT STATEMENT(All references to annexes are the Annexes to Regulation (EC) No 761/2001, except where otherwise provided)1. INTRODUCTIONEMAS is designed to help an organisation to manage and improve its environmental performance. This guidance is intended to assist the organisation in producing the environmental statement required by the scheme under Regulation (EC) No 761/2001 and identifies issues to be considered in preparing the statement in accordance with Annex III.In preparing this guidance consideration has been given to the information needs of interested parties and how organisations can meet those needs. Openness, transparency and periodic provision of environmental information are key factors in differentiating EMAS from other schemes. Those factors are also important for the organisation in building confidence with interested parties.1.1. PlanningThorough preparation of the environmental statement will increase its usefulness and add considerable value for communicating the results and continuous improvement of an organisation's environmental performance. In particular it provides an opportunity to market a positive image of the organisation's performance to customers, suppliers, neighbourhood, contractors and employees.Interested parties require different kinds of information. Early consideration of their needs is important in deciding what to include in the statement, what form it should take and how it should be communicated.EMAS provides flexibility to allow organisations to target relevant information to specific audiences while ensuring that all information is available to those who require it. Consideration should be given to how best to target information, whether in one single report or as extracts from a body of validated information. Information to be used in the environmental statement should be readily available from the environmental management system and, as such, should not prove difficult to generate.Although Regulation (EC) No 761/2001 requires environmental information to be made available in printed form for those who have no other means of obtaining it (Annex III(3)(1)), organisations are encouraged to use all methods available for making the environmental statement publicly available (Annex III(3)(6)). Documents in electronic format, such as web pages, provide a cost-effective way of making information available to a large number of people and can easily be printed out for those who do not have access to such facilities. In this way, organisation can avoid the cost of producing large numbers of expensive glossy reports. To give an overall picture of the organisation's environmental performance, Regulation (EC) No 761/2001 states that the information must be available in a consolidated printed version at the organisation's first registration and then every three years. In addition the organisation must update any changes in this information yearly (except under circumstances defined in the verification, validation and audit frequency guidance set out in Annex II to Commission Decision 2001/681/EC(1)).1.2. Structure and contentAs a public document, the environmental statement should be clearly and concisely written. EMAS statements do not need to be long, elaborate documents. A short, well-presented statement can convey all the appropriate information to the reader. This is particularly applicable to small companies.Regulation (EC) No 761/2001 does not specify a structure for the environmental statement or the order in which items should be presented, that is a matter for the organisation to determine provided that the requirements of Annex III(3)(2) are met. If the organisation produces a corporate environmental statement covering a number of geographic locations, it should consider how to structure the statement to ensure that the significant environmental impacts of each site are clearly identified and reported in the corporate statement (Annex III(3)(7)).Readers of the environmental statement may want to compare the results of an organisation's environmental performance over time in order to identify significant trends. It is therefore important to include the same type of information as reported in previous years as well as to repeat any statements made to help improve comparability for the reader and make the information understandable. It might be advisable to appoint an outside person to review and comment on the document when it is complete.2. GUIDANCEThis section gives guidance on the requirements specified in Annex III(3)(2).Requirement:Point (a) "a clear and unambiguous description of the organisation registering under EMAS and a summary of its activities, products and services and its relationship to any parent organisations as appropriate".Intent: To give a clear understanding of the organisation and its activities, products and services.How: Give the organisation's location and outline its activities, products and services. Annotated maps, photographs and diagrams are effective in providing this information and may also be used to illustrate the organisation's management structure and relationship to other parts of the organisation.The presentation should clearly state if only part of the organisation is registered under EMAS so that there is no confusion with regard to closely related parts of the organisation, both from a geographical and managerial point of view.If the organisation produces a large range of products, these may be combined into product groups. Goods produced and services provided could be included as well as the number of employees at the organisation and its basic economic data.If the company has partially owned subsidiaries, joint ventures or out-sourced production, this should be accounted for. The same applies for acquisitions, mergers and divestments during the year.Good practice:- maps and diagrams- annotated aerial photographs- flow diagrams- classification (i.e. the NACE code) of the organisation- name of contact person (if applicable).Requirement:Point (b) "the environmental policy and a brief description of the environmental management system of the organisation".Intent: To present the organisation's policy commitments and outline how these are implemented throughout the organisation.How: Include the environmental policy in the environmental statement. Briefly outline the organisation's management framework for implementing the policy. An organisational chart showing responsibility for environmental issues may demonstrate how the environmental management system (EMS) is implemented. A simple flow chart or diagram may also show links between the policy, identification and evaluation of aspects, targets and objectives and auditing.Good ideas:- include the environmental policy, and possibly an introduction letter, signed by the Chief Executive Officer (CEO)- include an organisational chart with contacts for the environmental representative- include a diagram showing the EMS structure- comment on any major changes in environmental policy or management system.Requirement:Point (c) "a description of all the significant direct and indirect environmental aspects which result in significant environmental impacts of the organisation and an explanation of the nature of the impacts as related to these aspects (Annex VI)".Intent: To give an overall picture of the organisation's significant environmental aspects and to explain the environmental consequences of its activities, products and services. The key issue is that the reader understands the link between what the organisation does and the significant environmental impact that can be caused.How: The organisation may describe how each of its significant environmental aspects impact on the environment. Alternatively, the organisation may show different environmental media (such as air, water, flora and fauna) and describe which of its significant aspects impact on each. Input/output diagrams, matrices and annotated pictograms are all useful ways of showing this information in a concise form. See also the guidance on environmental aspects and impacts set out in Annex III to this recommendation.Comment also on impacts due to accidents and environmental liabilities. Impacts associated with past activities that may be translated into future liabilities might also be of importance.Example - Environmental aspects and environmental impactsIt is important that the EMAS statement clearly describes the relation between the environmental programme with its various activities and the potential nature of their environmental impacts. One way to describe this may be done in a matrix showing the relationship between the activities in the programme and the associated nature of the environmental impacts.>TABLE>>TABLE>Good ideas:- include the criteria for identifying significant environmental impacts to fulfil the requirement in Annex VI(6)(1)- use tables, diagrams or flow charts.Requirement:Point (d) "a description of the environmental objectives and targets in relation to the significant environmental aspects and impacts".Intent: To show what the organisation intends to do to improve its environmental performance. The organisation's environmental programme with its objectives and targets will help the reader to understand the organisation's activities to improve its environmental performance. The organisation should be able to demonstrate a clear link between the aspects that it considers most significant and the plans it has for improvement.How: Relate objectives and targets to significant environmental aspects and impacts. This can be presented in a table which includes the time period by which the targets and objectives should be achieved. This may be combined with the information required under point (c). Present targets and objectives so that they are specific, adequate and relevant, and wherever possible, measurable.Example - Environmental programme, objectives and targets>TABLE>Good ideas:- outline the rationale for setting objectives and targets with reference to precautionary methods, if applicable- report on the designation of responsibility for reaching objectives and targets- indicate the costs of meeting the objectives and targets- relate to targets and objectives from previous reporting periods.Requirement:Point (e) "a summary of the data available on the performance of the organisation against its environmental objectives and targets with respect to its significant environmental impacts. The summary may include figures on pollutant emissions, waste generation, consumption of raw material, energy and water, noise as well as other aspects indicated in Annex VI. The data should allow for year-by-year comparison to assess the development of the environmental performance of the organisation".Intent: To present data on the environmental performance of the organisation and its progress in achieving its objectives and targets. Also to show how the organisation's environmental performance is changing over time.How: Report data on environmental performance against objectives and targets for the significant environmental aspects identified in accordance with Annex VI. Performance can be shown in a number of ways, such as graphs, charts and tables. Absolute figures on performance might be combined with performance indicators and thus relate performance to product output, to annual turnover and so forth. When reporting data, care needs to be taken that the correct units of measurement are used. Where data are aggregated from a number of sources in the EMS, the organisation will also need to ensure that the method of aggregation is accurate and can be checked and replicated by the verifier. Data should be reported in a consistent format to allow for comparison on a year-by-year basis.Objectives and targets may not all be achieved within the intended time-frame, particularly if the organisation sets itself challenging goals. If objectives and targets are not met, it is good practice to include a note in the environmental statement explaining the reason why.Example - Emission of CO2 in relation to targets and legal provisions>PIC FILE= "L_2001247EN.000801.TIF">Good ideas:- use of performance indicators helps to increase clarity, transparency and comparability of the information provided by an organisation- explain what action has been taken to achieve current performance levels- show performance against objectives and targets as well as against legal requirements and national or sector environmental targets- explain the way the data has been acquired and processed- reproduce degree of fulfilment against targets and objectives from earlier environmental statements to give a full picture of the organisation's environmental performance- comment on why targets have not been achieved- comment if data are not available (no measurements carried out, no environmental permits or limiting values to fulfil, etc.).Requirement:Point (f) "other factors regarding environmental performance including performance against legal provisions with respect to their significant environmental impacts".Intent: Where the organisation reports data on its environmental performance relating to significant environmental impacts which are regulated, performance against the legal level needs to be reported. The organisation may also include other information relating to its environmental performance in the statement.How: When reporting the data referred to in point (d), the organisation can also include information on legal limits to show that compliance is being achieved. Other information that the organisation may provide includes details of investments to improve environmental performance, support to local environmental groups and actions to promote dialogue with interested parties. Organisations may wish to consider reporting on existing safety plans.Good ideas:- product information- procurement policies- important decisions and investments- precautionary actions/environmental protection activities/preventive measures- complaints, public or community concerns- research and development- incidents and breaches- budget.Requirement:Point (g) "the name and accreditation number of the environmental verifier and the date of validation".Intent: To provide information on who has verified the environmental statement and when.How: This may be done using a formalised statement that explains what the verifier has done to validate the statement.3. CRITERIA FOR ENVIRONMENTAL PERFORMANCE REPORTINGThe use of environmental performance indicators helps to increase clarity, transparency and comparability of the information provided by an organisation. The selection of these indicators is important and they must fulfil the requirements in Annex III(3)(3). The Commission will develop guidance on the selection and use of environmental performance indicators in due course.4. INFORMATION TO SPECIFIC TARGET GROUPSOrganisations might wish to publish information specifically designed for individual interested parties. Below you will find some ideas of the concerns of different groups of interested parties. See also Annex III(3)(6).Interested parties and information needs4.1. Local communitySpecific interest can be excepted for- the environmental and health aspects of substances produced and emitted- external risks and how the organisation prevents or deals with these- information about the nature and number of complaints and the way complainants are treated and the settlement of complaints- information about non-compliance with permitted emissions and what measures have been taken to prevent recurrence.4.2. CustomersThe relations between an organisation and its suppliers and customers are often long term. Customers are an especially influential target group. They can express specific environmental demands to their suppliers (procurement policies), relating to products, processes, services or management.What specific information customers are interested in and what environmental improvements are desired can probably be best fixed in close mutual contact and cooperation.4.3. EmployeesMany organisations regard their own employees as an important user group of the environmental statement. If relevant the organisation can present the environmental report for discussion at the works council. Specific interest can be expected in the following issues:- the relationship between the environmental situation and working conditions, including accidents and incidents and the way these are dealt with,- the plans and possibilities for internal training in the environmental field,- implementing the environmental management system.4.4. Financial institutions/investorsA growing group of investors, banks and insurance companies are showing interest in the environmental strategy and performance of organisations. Specific interest is to be expected in:- the environmental strategy and performance of an organisation at corporate level,- the relationship between environmental and financial information,- the compliance behaviour of the organisation and the quality of its environmental management,- soil pollution and the presence of high risk substances like asbestos in buildings, possible environmental risks related to (new) production processes, products or services.4.5. Other social partiesConsumers and their organisations, as well as environmental NGOs are often interested in:- the environmental policies and performance of organisations, related to processes, products and services,- topical issues in the political realm or in the media, for example the recycling efforts in used products in the electronics industry, the elimination of toxic substances in the paints and glues sector, the origin of wood in the timber and furniture industry, etc. An organisation should realise that it is wise to clarify its position, efforts and results on these issues,- the development of environmental performance over time at individual locations as well as on the corporate level, especially in a clear context, so that comparisons can be made with the legal requirements, best available technologies and the performance of other, comparable organisations,- information on concrete targets and objectives for the shorter and longer term, not only with regard to emissions, but also indirect environmental impacts such as raw materials use, products and services, end-of-life products and transport,- how the precautionary principle has been adopted for making environmental decisions.(1) See p. 24 of this Official Journal.ANNEX IIGUIDANCE ON EMPLOYEE PARTICIPATION WITHIN THE FRAMEWORK OF EMAS(All references to annexes are the Annexes to Regulation (EC) No 761/2001, except where otherwise provided)1. INTRODUCTIONThe guidance on employee participation within the framework of EMAS is based on the following:Article 1(2) of Regulation (EC) No 761/2001 which states: "The objective of EMAS shall be to promote continual improvements in the environmental performance of organisations by:...(d) the active involvement of employees in the organisation and appropriate initial and advanced training that makes active participation in the tasks referred to under (a) possible. Where they so request, any employee representatives shall also be involved."Annex I to Regulation (EC) No 761/2001 which states: "The organisation shall identify training needs. It shall require that all personnel whose work may create a significant impact upon the environment, have received appropriate training.It shall establish annd maintain procedures to make its employees or members at each relevant function and level aware of:(a) the importance of conformance with the environmental policy and procedures and with the requirements of the environmental management system;(b) the significant environmental impacts, actual or potential, of their work activities and the environmental benefits of improved personal performance;(c) their roles and responsibilities in achieving conformance with the environmental policy and procedures and with the requirements of the environmental management system, including emergency preparedness and response requirements;(d) the potential consequences of departure from specified operating procedures.Personnel performing the tasks which can cause significant environmental impacts shall be competent on the basis of appropriate education, training and/or experience. (Annex I-A(4)(2).""In addition to the requirements in Annex I - Section A employees shall be involved in the process aimed at continually improving the organisations' environmental performance. Appropriate forms of participation like the suggestion-book system or project-based group works on environmental committees should be used for this purpose. Organisations shall take note of Commission guidance on best practice in this field. Where they so request, any employee representatives shall also be involved. (Annex I-B(4)."Involvement of all in the environmental work is a chance and an opportunity to work in a more effective way and is the prerequisite for success. The active involvement of employees in the process of continual improvement of the organisations' environmental performance should not be seen as a burden. This guidance tries to emphasise the opposite.This guidance shows ways and means of actively involving employees that will make the work more effective, that will put less burden on both management and employees and that will assure the good implementation of EMAS.The work with the environmental issues must be continuous. Without the active involvement and participation of everybody (management and employees) in an organisation this will not happen.To have everyone in the organisation involved in the work is also the right way to keep a management system alive and fresh. Experience has shown that management systems that do not actively involve everyone tend to become bureaucratic and do not function well.It is important to make the employees see the environmental work, not as a threat but, as an opportunity to, among other things, improve working conditions and create pride for working in an environmentally good organisation.Research, auditing of EMAS organisations and experience on the issue of change of organisation of work in general, have shown that when all employees are continuously actively involved, and in particular when their representatives are taking an active part in the work, the outcome is better.Experience has also shown that fatigue that can occur after a period of work with systems like EMAS and EN ISO 14001 can be avoided by the active involvement of employees.2. PROVISIONS2.1. GeneralThe organisation should acknowledge that active employee involvement is a driving force and a prerequisite for continuous and successful environmental improvements as well as being a key resource in the improvement of environmental performance. The organisation should acknowledge that the active involvement of the employees in an active manner is the right method to anchor the environmental management and audit system in the organisation in a successful way.The organisation should acknowledge that the term "employee participation" includes both participation of, and information to the individual employee and his representatives, according to national systems. Therefore, there should be an employee participation scheme at all levels.Means should be introduced for active employee involvement.Evidence that this happens should be available to verifiers. Such evidence could, for example, be:minutes from meetings with unions, works councils or other organisations representing the employees or other meetings within the organisationavailability of appropriate education, training and informationfacilities for employees to make suggestions (suggestion-book system)availability of environmental committeesmeetings between management and workers' representatives on environmental performancecreation of environmental teams or working groups or project-based groupsregularity of information given to employees and existing representativescontacts between verifiers and employees and their representativesactive involvement, information and participation between environmental officer/management representative and employees and their representativesThe organisation should acknowledge that commitment, responsiveness and active support from the side of the management is a prerequisite for the success of those processes. In this context the necessity of feedback from the management to the employees must be stressed.2.2. Education and trainingThe organisation should acknowledge the need for continuous staff information and training on environmental issues. Basic information and training should be given to all employees. Training of management is also an essential part in managing changes.Employees who are more directly involved in the environmental management of the organisation through for example participation in joint working groups, should be given a more extensive upgrading of their qualifications. Such upgrading should consist of, but not be limited to, EMAS, environmental policies, best practices and communication.2.3. Levels of involvementThe organisation should acknowledge that employee participation is important and necessary on all levels and in all stages from day one of the environmental management work. Therefore organisations should involve employees actively in:- the formulation of environmental policies of the organisation,- the initial environmental review and in the analysis of the state of art and in collecting and verifying information,- the establishment and implementation of an environmental management and audit system improving environmental performance,- environmental committees to gather information and to ensure the participation of environmental officer/management representatives and employees and their representatives,- joint working groups for the environmental action programme and environmental auditing,- the elaboration of the environmental statements.2.4. Employee suggestions and reward systemsThe organisation should see that there exists simple ways for employees to make suggestions improving the environment. This should, for example, be done by installing suggestion-boxes.When actions taken by employees lead to improved economic and/or environmental performance of the organisation employees should be rewarded. Both financial and other types of reward systems can be used.ANNEX IIIGUIDANCE ON THE IDENTIFICATION OF ENVIRONMENTAL ASPECTS AND ASSESSMENT OF THEIR SIGNIFICANCE(All references to annexes are the Annexes to Regulation (EC) No 761/2001, except where otherwise provided)1. OBJECTIVE OF THE GUIDANCEThe purpose of this document is to give guidance for the identification of significant environmental aspects arising from activities, products and services over which an organisation applying EMAS has management control or influence according to Annex VI. Under EMAS, significant environmental aspects are at the centre of attention of an organisation's environmental management system and of the evaluation and improvement of its environmental performance by setting objectives and targets as well as of the ongoing review process. Significant environmental aspects and impacts are also relevant within the environmental statement according to Annex III.2. RELATIONSHIP BETWEEN ENVIRONMENTAL ASPECTS, SIGNIFICANT ENVIRONMENTAL ASPECTS AND SIGNIFICANT ENVIRONMENTAL IMPACTSThe principle in EMAS is that the environmental aspects (Article 2(f) of Regulation (EC) No 761/2001) of organisations' operations result in environmental impacts (Article 2(g)). If an environmental aspect of the organisation gives rise to a significant environmental impact then that aspect must be considered significant and be incorporated into the environmental management system.3. STEP-BY-STEP PROCEDURE TO IDENTIFY SIGNIFICANT ENVIRONMENTAL ASPECTS>TABLE>>PIC FILE= "L_2001247EN.001601.TIF">4. HOW TO IDENTIFY DIRECT ENVIRONMENTAL ASPECTSDirect environmental aspects are associated with activities, products and services of the organisation itself over which it has direct management control. All organisations have to consider the direct aspects of their operations. However, for non-industrial organisations the focus will often be on indirect environmental aspects of their activities, products and services.How to box:- talk to employees- walk the site and its neighbourhood- talk to stakeholders- review documents (e.g. safety data sheets, licences)- look at legislation (e.g. substantive law, technical requirements such as mandatory monitoring of pollutants)- look at eco-label criteria- check information from chambers of commerce etc.- talk to other EMAS companies- look at material flows- look at existing performance indictors- look at all parts and infrastructure of the organisation (e.g. pipelines, power lines, rail tracks)Think box:- purchasing policy- emissions to water and air- waste- resource use- energy- local issues- land use and contamination- historical issues- transport5. INDIRECT ENVIRONMENTAL ASPECTS AND HOW TO INFLUENCE THEM [ANNEX VI (6)(3)]Annex VI (6)(3) places indirect environmental aspects on an equal footing with direct environmental aspects pursuant to Annex VI (6)(2). Indirect environmental aspects can result from the interaction of an organisation with third parties which can to a reasonable degree be influenced by the organisation seeking EMAS-registration. For non-industrial organisations, such as local authorities or financial institutions, it is essential that they also consider the environmental aspects associated with their core business. An inventory limited to the environmental aspects of an organisation's site and facilities is insufficient.How to box:- talk to (sub)contractors and suppliers (e.g. service companies, landlords)- talk to customers- look at use and disposal of products- look at activities of (sub)contractors- look at eco-label criteria- check information from chambers of commerce, etc.- talk to other EMAS companies- talk to NGOs and other stakeholders- look at information on supplied products and servicesThink box:- product issues- contracts- transport- new markets for existing products- financial products- product range- tourism- servicesDirect environmental aspects can be controlled by internal management decisions. Whereas indirect environmental aspects require an organisation to use its influence on (sub-)contractors, suppliers, customers and users of their products and services to gain environmental benefits. This will require an organisation to be creative in how it uses its influence. On the basis of Annex VI 6(3)(a) to (g) the management of indirect environmental aspects may include, but is not limited to:(a) product related issues (design, development, packaging, transportation, use and waste recovery/disposal)Organisations may wish to consider:- available results of lifecycle assessment of their products- results of the development and use of environmental performance indicators- environmental aspects of supplied products, of the processing of their products- effects of a foreseeable misuse, an inadmissible recovery or disposal of their products- customer/consumer and supplier information needs and additional customer education (e.g. on use and disposal of products)- durability and reparability of products, compatibility of existing products with new product series and replacement parts(b) capital investments, granting loans and insurance servicesOrganisations may wish to consider:- the admission policy and insurance premiums (e.g. preferential treatment for "green" companies, EMAS organisations)- investment policy (green investments)- assessment procedures (environmental risk reduction)- loaning policy (e.g. preferential treatment for "green" companies, EMAS organisations)- product range (e.g. green funds)(c) new marketsThe introduction of existing products into new markets may well give rise to new environmental aspects. With respect to that organisations may for example look at:- the existing infrastructure, e.g. for recycling or handling of hazardous wastes, transport and handling of problematic substances, treatment of waste water, for cases of emergency- technological and educational standards- awareness of environmental issues in the new market(d) choice and composition of services (e.g. transport or the catering trade)Organisations may for example look at the environmental management of service providers, such as:- accommodation services (hotels, conference centres)- transfer or hauling services (environmentally friendly modes of transport, efficient organisation of transport, technological standards and fuel consumption of vehicles)- product range, green purchasing policy, use of reusable and compostable dishes, waste management of catering servicese) administrative and planning decisionsOrganisations may for example look at:- aspects arising from the execution of planning decisions in the future- results of experimental games or computerised modelling- experience gained from the implementation of similar projects(f) product range compositionsThis is relevant to organisations selling or distributing products supplied by third parties, they may for example:- develop a "green" procurement policy with respect to contractors and products- give preference to products sold under a product take-back scheme- look for products bearing commonly accepted eco-labels within their product range(g) the environmental performance and practices of contractors, subcontractors and suppliersOrganisations may for example:- inquire of (sub)contractors and suppliers about the environmental performance of their activities and products- analyse safety data sheets, product line analyses or relevant excerpts therefrom provided by contractors- train (sub)contractors and suppliers (e.g. provide advice to decrease environmental hazards)- incorporate "green clauses" into their contractsThink box:- customer education (e.g. on use and disposal of products, advice in order to decrease environmental hazards)- "green" procurement policy- preferential treatment for "green" companies, e.g. EMAS companies (loans, insurance)- "green" investments- products take-back schemes- "green" clauses in contracts6. HOW TO CARRY OUT THE SIGNIFICANCE ASSESSMENTIn order to decide whether they are significant all environmental aspects identified need to be examined and evaluated. Environmental aspects which have been identified as significant must be incorporated into the environmental management system and the ongoing review process. Those identified as not significant should also be reviewed to take into account changing circumstances. To assess the significance of the environmental aspects in question, the organisation defines its own individual set of criteria. According to Regulation (EC) No 761/2001, the criteria "shall be comprehensive, reproducible and capable of independent checking" (Annex VI (6)(4) and shall take account of Community legislation (Annex VI (6)(1). Annex 6(4) to (g) gives some of the criteria an organisation may consider when deciding on the significance of its environmental aspects.Basically an organisation should consider the following issues in assessing the significance of an environmental aspect:- potential to cause environmental harm- fragility of the local, regional or global environment- size, number, frequency and reversibility of the aspect or impact- existence and requirements of relevant environmental legislation- importance to the stakeholders and employees of the organisationThese issues and the criteria selected can be taken as questions to be answered with "yes" or "no", or they can be used in a more differentiated way in order to assess the significance of the organisation's environmental aspects in a first step and to create a priority list for action in a second step (e.g. by classifying in "high", "medium", "low" or "very important", less important, "not important").In undertaking the assessment the organisation shall also look at start-up and shutdown conditions and at reasonably foreseeable emergency conditions. Furthermore past, present and planned activities shall be taken into account.Useful sources of information for performing the assessment may be permits, relevant regulations (e.g. on quantified limits or monitoring of pollutants), national action plans, local agendas, monitoring records or scientific studies. Regulatory agencies, customers and suppliers, environmental groups, trade or craft associations, industrial associations, chambers of commerce and scientific institutions might also provide useful information to support the assessment.Think box:- accumulated pollutants- climate change (greenhouse gases, depletion of the ozone layer)- acidification of water and soil- eutrophication of water and nitrogen saturation of soil- bio diversity, pressures on areas of special conservation interests (e.g. cutting up habitats)- introduction and spread of alien organisms- effect of metals- photochemical oxidants and ground level ozone- effects of (hazardous) chemicals including persistent organic pollutants- inappropriate use of land and water resources- urban air pollution and noise- non-cyclic material flows, wastes and environmental residuesANNEX IVGUIDANCE TO VERIFIERS ON THE VERIFICATION OF SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) PARTICULARLY SMALL AND MICRO-BUSINESSES(All references to annexes are the Annexes to Regulation (EC) No 761/2001, except where otherwise provided1. INTRODUCTIONThere is a perceived problem that SMEs have difficulty in implementing management systems such as ISO 9001, ISO 14001 and EMAS. The systems are seen as too bureaucratic and time consuming. The problem is not in understanding the requirements of these management systems but in being able to provide the physical and financial resources to implement and maintain them. Of particular difficulty is the traditional reliance on controlled documentation as the only means of demonstrating that a management system is performing in accordance with the requirements of the management systems defined in standards and regulations. The maintenance and control of such systems is time consuming and often contrary to the working practices of small companies.Small companies are characterised by short reporting lines, multifunctional staff, on-the-job training and the ability to adapt rapidly to change. The task of the verifier is to recognise the strengths and weaknesses of such organisations and to conduct the verification in such a way as not to impose unnecessary burdens on small organisations. This guidance is designed to apply to small organisations and in some instances will only apply to micro-businesses. The verifier should use his experience to ascertain the applicability of this guidance to the organisation being verified in relation to the resources available to the organisation.2. DOCUMENTATIONThe purpose of documentation in a management system is to ensure that an organisation can consistently carry out its operations in accordance with the way it wishes to manage. Thus written procedures may be employed to ensure that any operation is performed consistently irrespective of the operator. Documentation is also used to provide evidence that particular operations or procedures have been carried out correctly e.g. data from monitoring to show legal compliance.When performing verifications at SMEs, verifiers should remember the following:- Not all procedures need to be documentedVerbal procedures and on-the-job training are often used in small organisations. The task of the verifier is to find evidence that the procedure works.Example: A site may have a procedure to segregate different types of waste. The evidence required would be twofold- does the operator understand what he is doing- waste segregation is working at a practical level- Procedures should be proportionalThe size and complexity of the operation, the nature of the associated environmental impacts and the competence of the operators should be taken into account when deciding on the adequacy of procedures. Simple flow charts, pictograms, notices and matrices may be the most effective.3. DOCUMENT CONTROLThe essence of document control is to ensure that the appropriate documents are in the possession of those who need them. In its simplest form all this requires is a list of the documents and who should have them. The verification that the system works would simply be to see if the people had the documents they should.ExampleProcedure>TABLE>To verify that this is in place the verifier would need to see for example that employee 3 had and was using revision 1 of the procedure for data collection.4. PROOFAt all times a verifier should be looking for objective evidence that a system works not excessive amounts of paperwork thus in small organisations it is often easier to check the effectiveness of procedures by the outcome.Examples- temperature control:a verifier would not have to check written procedures to see that control of temperature was effective provided that the records were complete and showed that the control was within effective limits. The verifier would also need to ensure the understanding of the employee responsible for this process. If non-conformances with the control requirements were shown by the records then the organisation should be able to demonstrate effective corrective action,- recycling:an organisation with a policy of recycling paper would need to demonstrate that the appropriate facilities were in place (recycling bins, etc.) and that employees knew how to use them. The effectiveness of a policy of using only recycled paper could be demonstrated through the labelling on the packaging of the paper used.5. REPORTSThe requirement for a public statement under EMAS should not be interpreted as a requirement to produce and have printed a glossy report. The requirement is intended to ensure that stakeholders are informed of the performance of an organisation. In the case of small organisations this major audience will usually be those in close proximity to the site and an organisation may choose to respond by the provision of photocopied information or similar. EMAS should not be seen as providing unnecessary burdens on small companies.6. AUDITS AND REVIEWIn most small businesses it will be possible to find someone within the organisation sufficiently independent to carry out the audit function. In very small organisations (micro-businesses) however this may not be possible. In order to avoid the necessity of employing an outside company to carry out the audit the verifier may wish to accept some alternatives.- audits from the local chambers of craft/trade, organisations of SMEs or other similar organisations- partnerships between two or more micro-businesses in one location sharing resources and expertise in the performing of audits- the combining of audit and management review in one exercise thus saving time and resources.


				|

		52013DC0355

			Recommendation for a COUNCIL RECOMMENDATION on Germany’s 2013 national reform programme and delivering a Council opinion on Germany’s stability programme for 2012-2017 /* COM/2013/0355 final */

Recommendation for a
COUNCIL RECOMMENDATION
on Germany’s 2013 national reform
programme
and delivering a Council opinion on Germany’s stability programme for 2012-2017
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union, and in particular Articles 121(2) and 148(4)
thereof,
Having regard to Council Regulation (EC) No
1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary
positions and the surveillance and coordination of economic policies[1], and in particular Article 5(2)
thereof,
Having regard to the recommendation of the
European Commission[2],
Having regard to the resolutions of the
European Parliament[3],
Having regard to the conclusions of the
European Council,
Having regard to the opinion of the
Employment Committee,
After consulting the Economic and Financial
Committee,
Whereas:
(1)       On 26 March 2010, the
European Council agreed to the Commission’s proposal to launch a new strategy
for growth and jobs, Europe 2020, based on enhanced coordination of economic
policies, which will focus on the key areas where action is needed to boost Europe’s potential for sustainable growth and competitiveness.
(2)       On 13 July 2010, on the
basis of the Commission's proposals, the Council adopted a recommendation on
the broad guidelines for the economic policies of the Member States and the
Union (2010 to 2014) and, on 21 October 2010, adopted a decision on guidelines
for the employment policies of the Member States[4],
which together form the ‘integrated guidelines’. Member States were invited to
take the integrated guidelines into account in their national economic and
employment policies.
(3)       On 29 June 2012, the Heads
of State or Government decided on a Compact for Growth and Jobs, providing a
coherent framework for action at national, EU and euro area levels using all
possible levers, instruments and policies. They decided on action to be taken
at the level of the Member States, in particular expressing full commitment to
achieving the objectives of the Europe 2020 Strategy and to implementing the
country-specific recommendations.
(4)       On 6 July 2012, the
Council adopted a recommendation on Germany’s national reform programme for
2012 and delivered its opinion on Germany’s updated stability programme for 2011-2016.
(5)       On 28 November 2012, the
Commission adopted the Annual Growth Survey[5],
marking the start of the 2013 European Semester of economic policy
coordination. Also on 28 November 2012, the Commission, on the basis of
Regulation (EU) No 1176/2011, adopted the second Alert Mechanism Report[6], in which it did not identify Germany as one of the Member States for which an in-depth review would be carried out.
(6)       On 14 March 2013, the
European Council endorsed the priorities for ensuring financial stability,
fiscal consolidation and action to foster growth. It underscored the need to
pursue differentiated, growth-friendly fiscal consolidation, to restore normal
lending conditions to the economy, to promote growth and competitiveness, to
tackle unemployment and the social consequences of the crisis, and to modernise
public administration.
(7)       On 17 April 2013, Germany
submitted its 2013 stability programme covering the period 2012-2017 and, on 12
April 2013, its 2013 national reform programme. In order to take account of
their interlinkages, the two programmes have been assessed at the same time.
(8)       Based on the assessment of
the 2013 stability programme pursuant to Council Regulation (EC) No 1466/97,
the Council is of the opinion that public finances in Germany have been overall sound and the medium-term budgetary objective (MTO) has been
achieved. The macroeconomic scenario underpinning the budgetary projections in
the programme is plausible. The stability programme's macroeconomic projections
are broadly in line with the Commission's 2013 spring forecast as regards the
pace and pattern of economic growth in 2013 and 2014 as well as with the
Commission's estimate of Germany's medium-term potential growth rate. The
objective of the budgetary strategy outlined in the programme is to ensure
continued achievement of the medium-term budgetary objective (MTO). The
programme confirms the previous MTO of -0.5 % of GDP. The MTO is in line with
the requirements of the Stability and Growth Pact. Germany achieved a structural
budgetary surplus and hence the MTO in 2012. According to the stability
programme, the (recalculated)[7]
structural balance will remain positive in 2013 and 2014, which is broadly in
line with the Commission’s forecast, and hence created space for automatic
stabilisers to play freely. Germany also complied with the expenditure
benchmark in 2012. According to the information provided in the stability
programme, the growth rate of government expenditure, net of discretionary
revenue measures, would exceed the expenditure benchmark in 2013, while
respecting it in 2014. The programme plans gross debt to fall to 80½ % of GDP
in 2013 and to remain on a downward path thereafter. Following the correction of
the excessive deficit in 2011, Germany is in a transition period regarding
compliance with the debt criterion and made sufficient progress towards
compliance with the debt criterion in 2012. If the programme is implemented as
planned, it is also making sufficient progress towards compliance with the debt
criterion in 2013 and the debt benchmark will be met at the end of the
transition period in 2014. Overall, the deficit and debt targets appear
realistic.
(9)       Germany has made only
limited efforts to improve the efficiency of public spending on healthcare and
long-term care. Past reform efforts in the health sector as well as this year's
reform of long-term care appear insufficient to contain expected future cost
increases. Germany appears on track with respect to the national target on
education and research expenditure but should envisage even more ambitious
follow-up targets with a view to catching up with the most innovative
economies.
(10)     Germany is not sufficiently
tapping growth-friendly revenue sources. The application of the reduced VAT
rate (of currently 7 %) to what is now quite a wide range of goods and
services could be narrowed and VAT administration reviewed in an effort to
increase efficiency, improve tax collection and fight fraud. Revenues from
recurrent property taxes are particularly low in Germany (0.5 % of GDP in
2011 vs 1.3 % in the EU-27), which may leave room for increasing revenues
from the municipal real estate tax (Grundsteuer), in particular by reassessing
the tax base.
(12)     There has been some
progress in the implementation of the constitutional balanced-budget rule
("debt brake") since last year’s recommendation, However, specific
implementing rules appear still to be required in most Länder so as to
ensure the effective application of the debt brake in the annual budgetary
procedure.
(13)     The financial sector has
undergone significant adjustment and the regulatory and supervisory framework
has been strengthened. Commission state aid decisions have continued to drive the
restructuring of Landesbanken. However, there still appear to be
governance obstacles to market-driven consolidation in the banking sector,
which affect the overall efficiency of the financial sector.
(14)     Germany has not taken
action to remove significant disincentives faced by second earners and progress
in increasing the availability of full-time childcare facilities and all-day
schools remains limited. Germany has made some progress in raising the
educational achievement of disadvantaged people, but all Länder should
continue ambitious efforts to create a school system that provides equal
opportunities for all. Policy action to reduce the high tax wedge for low-wage
earners and improve the integration of the long-term unemployed into the labour
market has been limited so far. Germany should do more to reduce the high taxes
and social security contributions that they levy on low wages. Further efforts
are needed to improve transition from certain types of contracts, like
mini-jobs, into more sustainable forms of contracts, thus avoiding labour
market segmentation. While real wages are
still below their level in the year 2000, which contributed
to the structural reduction in the unemployment rate from 8% to 5.5%, they
have started to grow dynamically since then without adversely affecting
competitiveness. At the same time wage disparities have increased.
(15)     Germany is aiming to
minimise the overall economic costs of transforming the energy system. This has
not yet led to tangible results and major risks and potential inefficiencies
remain. Germany is making significant efforts to accelerate the expansion of energy
networks. Coordination of its national energy policy with the policies of neighbouring
countries is insufficient.
(16)     The situation in the
services sectors has not changed significantly since last year and there are
still restrictions on entering and exercising certain professions. Germany should do more to open up their services sector by removing unjustified
restrictions and barriers to entry, thereby leading to lower price levels,
making services more affordable for lower income groups. In many craft sectors,
including in the construction sector, there is still a requirement to hold a
master craftsman’s certificate (Meisterbrief) or an equivalent
qualification in order to run a business. The construction sector also faces
restrictions as regards commercial communication and authorisation procedures. Many
professional services are also subject to legal form and shareholding
requirements. Germany could assess whether the same public interest objectives
could not be reached with lighter regulation. The diversity of regulatory
regimes across Länder also suggests there is scope for further efforts
to identify the least burdensome regulatory approaches and extend them
throughout the country, thus cutting red tape for businesses. The level of
effective competition in the railway sector remains unchanged. Regarding public
procurement, the value of the contracts published by German authorities under
EU procurement legislation is significantly low. The legislative process
involving the revision of the Act against competition restrictions has not yet
been concluded. In the retail sector, planning regulations significantly
restrict new entries in the market.
(17)     In the context of the
European Semester, the Commission has carried out a comprehensive analysis of Germany’s economic policy. It has assessed the stability programme and national reform
programme. It has taken into account not only their relevance for sustainable
fiscal and socio-economic policy in Germany but also their compliance with EU
rules and guidance, given the need to reinforce the overall economic governance
of the European Union by providing EU-level input into future national
decisions. Its recommendations under the European Semester are reflected in
recommendations (1) to (4) below.
(18)     In the light of this
assessment, the Council has examined Germany’s stability programme, and its
opinion[8]
is reflected in particular in recommendation (1) below,
(19)     In the context of the
European Semester the Commission has also carried out an analysis of the
economic policy of the euro area as a whole. On this basis the Council has
issued specific recommendations addressed to the countries that are part of the
euro area Member States whose currency is the euro. As a country that has
adopted the euro as its currency Germany should also ensure the full and timely
implementation of these recommendations.
HEREBY RECOMMENDS that Germany should take action within the period 2013-2014 to:
1.           Preserve a sound fiscal position
as envisaged which ensures compliance with the medium-term objective over the
programme horizon. Pursue a growth-friendly fiscal policy through additional
efforts to enhance the cost-effectiveness of public spending on healthcare and
long-term through better integration of care delivery and a stronger focus on
prevention and rehabilitation and independent living. Improve the efficiency of
the tax system, in particular by broadening the VAT base and by reassessing the
municipal real estate tax base; use the available scope for increased and more
efficient growth-enhancing spending on education and research at all levels of
government. Complete the implementation of the debt brake in a consistent
manner across all Länder, ensuring that monitoring procedures and
correction mechanisms are timely and relevant.
2.           Sustain conditions that
enable wage growth to support domestic demand. To this purpose, reduce high
taxes and social security contributions, especially for low-wage earners and
raise the educational achievement of disadvantaged people. Maintain appropriate
activation and integration measures, especially for the long-term unemployed. Facilitate
the transition from non-standard employment such as mini-jobs into more
sustainable forms of employment. Take measures to improve incentives to work
and the employability of workers, in particular for second earners and
low-skilled, also with a view to improving their income. To this end, remove
disincentives for second earners and increase the availability of fulltime
childcare facilities and all-day schools
3.           Improve the coordination
of the energy policy with neighbouring countries and keep the overall costs of
transforming the energy system to a minimum, in particular by reviewing the
cost-effectiveness of energy policy instruments designed to achieve the
renewable energy targets and by continuing efforts to accelerate the expansion
of the national and cross-border electricity and gas networks.
4.           Take measures to further
stimulate competition in the services sectors, including certain crafts — in
the construction sector in particular — and professional services to boost
domestic sources of growth. Take urgent action to significantly increase the value
of public contracts open to procurement. Adopt and implement the announced
legislative reform to improve the enforcement of competition law regarding
competition restrictions. Remove planning restrictions which unduly restrict
new entries in the retail sector. Take further measures to eliminate the remaining
barriers to competition in the railway markets. Pursue efforts for
consolidation in the banking sector, including by improving the governance framework.

Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 209, 2.8.1997, p. 1.
[2]               COM(2013)355 final.
[3]               P7_TA(2013)0052 and P7_TA(2013)0053.
[4]               Council Decision2013/208/EU of 22 April 2013.
[5]               COM(2012) 750 final.
[6]               COM(2012) 751 final.
[7]               Cyclically adjusted balance net of one-off and
temporary measures, recalculated by the Commission services on the basis of the
information provided in the programme, using the commonly agreed methodology
[8]               Under Article 5(2) of Council Regulation (EC) No
1466/97.


title: Council Recommendation of 11 July 2017 on the 2017 National Reform Programme of Portugal and delivering a Council opinion on the 2017 Stability Programme of Portugal

text:
               9.8.2017

               EN

               Official Journal of the European Union

               C 261/92

         COUNCIL RECOMMENDATION
   of 11 July 2017
   on the 2017 National Reform Programme of Portugal and delivering a Council opinion on the 2017 Stability Programme of Portugal
   (2017/C 261/21)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
   Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (2), and in particular Article 6(1) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the resolutions of the European Parliament,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   Having regard to the opinion of the Economic and Financial Committee,
   Having regard to the opinion of the Social Protection Committee,
   Having regard to the opinion of the Economic Policy Committee,
   Whereas:

               (1)

               On 16 November 2016, the Commission adopted the Annual Growth Survey, marking the start of the 2017 European Semester for economic policy coordination. The priorities of the Annual Growth Survey were endorsed by the European Council on 9-10 March 2017. On 16 November 2016, on the basis of Regulation (EU) No 1176/2011, the Commission adopted the Alert Mechanism Report, in which it identified Portugal as one of the Member States for which an in-depth review would be carried out. On the same date, the Commission also adopted a recommendation for a Council Recommendation on the economic policy of the euro area, which was endorsed by the European Council on 9-10 March 2017. On 21 March 2017, the Council adopted the Recommendation on the economic policy of the euro area (‘Recommendation for the euro area’) (3).

               (2)

               As a Member State whose currency is the euro and in view of the close interlinkages between the economies in the economic and monetary union, Portugal should ensure the full and timely implementation of the Recommendation for the euro area, as reflected in recommendations (1) to (4) below.

               (3)

               The 2017 country report for Portugal was published on 22 February 2017. It assessed Portugal’s progress in addressing the country-specific recommendations adopted by the Council on 12 July 2016, the follow-up given to the country-specific recommendations adopted in previous years and Portugal’s progress towards its national Europe 2020 targets. It also included an in-depth review under Article 5 of Regulation (EU) No 1176/2011, the results of which were also published on 22 February 2017. The Commission’s analysis led it to conclude that Portugal is experiencing excessive macroeconomic imbalances. In particular, the large stocks of net external liabilities, private and public debt and a high share of non-performing loans constitute vulnerabilities in a context of high but decreasing unemployment and slow productivity growth. Potential growth lags behind its pre-crisis level, affected by persistent bottlenecks and rigidities in the product and labour markets, together with external imbalances. The current account balance shows some improvements, though additional effort is required for a more significant adjustment of net external liabilities. Following a significant adjustment in recent years, unit labour costs started increasing due to sluggish productivity growth and rising wages. Private debt is falling, and government debt has stabilised, in a context of remaining deleveraging needs. The stock of non-performing loans remains high and, together with low profitability and relatively thin capital buffers, they pose risks to banks’ balance sheets. Labour market conditions have improved but youth and long-term unemployment, as well as the share of temporary employees, are still high.

               (4)

               On 28 April 2017, Portugal submitted its 2017 National Reform Programme and its 2017 Stability Programme. In order to take account of their interlinkages, the two programmes have been assessed at the same time. Portugal’s 2017 National Reform Programme includes commitments both for the short and medium term. In particular, it includes measures to improve the management of public finances and the business environment and to tackle corporate debt. It commits with ambitious reforms to modernise the public administration, increase social protection, upgrade the skill level of the labour force and improve governance in state-owned enterprises. It also covers the challenges identified in the 2017 country report and the Recommendation for the euro area, including the need to relaunch investment and ensure the sustainability of public finances. If fully implemented within the indicated timelines, these measures would help address Portugal’s macroeconomic imbalances and country-specific recommendations. Based on the assessment of Portugal’s policy commitments, the Commission confirms its previous assessment that at this stage no further steps are warranted in the framework of the macroeconomic imbalances procedure. The implementation of the policy reform agenda will be followed closely by means of specific monitoring.

               (5)

               Relevant country-specific recommendations have been addressed in the programming of the European Structural and Investment Funds (ESI Funds) for the 2014-2020 period. As provided for in Article 23 of Regulation (EU) No 1303/2013 of the European Parliament and of the Council (4), where it is necessary to support the implementation of relevant Council recommendations, the Commission may request a Member State to review and propose amendments to its Partnership Agreement and relevant programmes. The Commission has provided further details on how it would make use of that provision in guidelines on the application of the measures linking effectiveness of the ESI Funds to sound economic governance.

               (6)

               Following the abrogation of the excessive deficit procedure, Portugal is currently in the preventive arm of the Stability and Growth Pact and subject to the transitional debt rule. In its 2017 Stability Programme, Portugal plans to attain a headline deficit of 1,5 % of GDP and 1,0 % of GDP in 2017 and 2018, respectively, and a further improvement to a surplus of 0,4 % of GDP in 2020. Those plans do not include the potential deficit-increasing impact of bank support measures. The medium-term budgetary objective — a structural surplus of 0,25 % of GDP — is planned to be achieved by 2021. The 2017 Stability Programme projects the general government debt-to-GDP ratio to reach 127,9 % in 2017 and 124,2 % in 2018, which would then be at 117,6 % in 2020. The macroeconomic scenario underpinning those budgetary projections is plausible for 2017 but favourable for the following years. At the same time, the measures needed to support the planned deficit targets from 2017 onwards have not been sufficiently specified.

               (7)

               On 12 July 2016, the Council recommended Portugal to achieve an annual fiscal adjustment of at least 0,6 % of GDP towards the medium-term budgetary objective in 2017. Based on the Commission 2017 spring forecast, there is a risk of a significant deviation from that recommended adjustment in 2017.

               (8)

               In 2018, in light of its fiscal situation and in particular of its debt level, Portugal is expected to further adjust towards its medium-term budgetary objective of a structural surplus of 0,25 % of GDP. According to the commonly agreed adjustment matrix under the Stability and Growth Pact, that adjustment translates into a requirement of a nominal growth rate of net primary government expenditure (5) which does not exceed 0,1 % in 2018. It would correspond to a structural adjustment of at least 0,6 % of GDP. Under unchanged policies, there is a risk of a significant deviation from that requirement in 2018. Portugal is prima facie not forecast to comply with the transitional debt rule in 2017 and 2018. Overall, the Council is of the opinion that further measures will be needed as of 2017 to comply with the provisions of the Stability and Growth Pact. However, as foreseen in Regulation (EC) No 1466/97, the assessment of the budgetary plans and outcomes should take account of the Member State’s budgetary balance in light of the cyclical conditions. As recalled in the Commission communication on the 2017 European Semester accompanying these country-specific recommendations, the assessment of the 2018 Draft Budgetary Plan and subsequent assessment of 2018 budget outcomes will need to take due account of the goal of achieving a fiscal stance that contributes to both strengthening the ongoing recovery and ensuring the sustainability of Portugal’s public finances. In that context, the Council notes that the Commission intends to carry out an overall assessment in line with Regulation (EC) No 1466/97, in particular in light of the cyclical situation of Portugal.

               (9)

               A solid budgetary consolidation relies on the timely and strict implementation of the new budget framework law, reviewing and rationalising public spending and further improving revenue collection. Portugal has started a spending review exercise, mainly based on efficiency measures that involve the health and education ministries, state-owned enterprises and (centralised) public procurement and real estate management. However, this spending review does not yet have a broad coverage since it only covers the central government and focuses on efficiency savings stemming from streamlining services. In the health sector, the Government has adopted measures aimed at promoting disease prevention and public health policies. Moreover, several steps have been taken to make the healthcare sector more efficient and sustainable, for example via centralised procurement or greater use of generics. At the same time, while the hospital reform continues, budgetary planning and implementation in hospitals remains an important issue. Late payments (arrears) continue to increase denoting weaknesses in accounting control mechanisms and managerial practices. Accurate and balanced budgeting, improved controls and effective enforcement of the commitment control law could help reduce arrears and improve efficiency and quality in this sector. High and rising ageing costs still pose a risk to fiscal sustainability. In the medium term, higher fiscal risks are expected to be related largely to the costs of financing pensions. Long-term fiscal risks in the country are assessed as low, largely thanks to pension reforms and assuming a no-policy-change scenario and that there is a further reduction in the reliance of the pension system on budgetary transfers. The restructuring of state-owned enterprises to make them fiscally sustainable has not still been fully addressed. State-owned enterprises supervised by the Ministry of Finance’s monitoring unit (UTAM) had a total indebtedness of EUR 32 billion in the second quarter of 2016. A framework with established targets to guarantee the financial sustainability of state-owned enterprises could help to decrease their dependence on state budget transfers and tackle the large debt stock.

               (10)

               The Portuguese labour market continued to recover in 2016, with a steady improvement in labour market indicators and in particular a decrease in the unemployment rate. A significant share of new jobs created are on open-ended contracts. However, the stock of temporary contracts remains stable at high levels. High labour market segmentation adversely affects workers’ career prospects and incomes, in particular among the young. In January 2017, Portugal redesigned its employment support programme to promote hiring on open-ended contracts. However, its expected impact on reducing segmentation appears limited, as relatively few people are expected to be covered by that programme. Although recent labour market reforms improved incentives for job creation, some aspects of the legal framework may still discourage firms from hiring workers on open-ended contracts. In particular, employers face uncertain firing costs in cases where individual dismissal of permanent workers is deemed unfair. This is due in part to the possibility of a worker being reinstated if the dismissal is deemed unfair, and to inefficiencies in legal proceedings.

               (11)

               With the drop in unemployment since 2014, the absolute number of the long-term unemployed is also decreasing. However, more than half of unemployed people have been jobless for a year or more, and this share is not decreasing with the recovery. High levels of long-term and youth unemployment increase the risk that jobless people will disengage from the labour market, gradually losing their skills and employability, thus also weighing negatively on potential growth. Youth unemployment, while still sizeable, is declining owing to a range of measures taken in previous years, including through outreach measures in the context of the Youth Guarantee (6). This may partly explain why the share of young people neither in employment nor in education or training (NEET) is lower than the Union average. Portugal is also taking action to streamline active labour market policies and to address the issue of the youth unemployment. This includes the introduction of employment incentives (through social security rebates) in April 2017, targeted to the hiring of young and long-term unemployed on open-ended contracts. However, to ensure effective activation of the long-term unemployed, it is crucial that public employment services cooperate effectively with social services to better identify and address the needs of this group. An important step in this direction would be to create the announced one-stop shops for employment.

               (12)

               By following the announced schedule, the Government has increased the minimum wage for the third consecutive year in 2017. The last increase, above expected inflation and average productivity increases is expected to make the minimum wage increasingly binding, as the share of employees covered already amounted to a fifth of the total in 2016. Minimum wage increases contribute to reducing high in-work poverty and may positively impact on aggregate demand. However, they may entail employment risks, in particular for the low-skilled. These risks did not materialise in the current context of recovery, but remain a challenge. The Government is monitoring the impact of minimum wage developments through quarterly reports, which are published and discussed with social partners.

               (13)

               Portugal has made significant improvements in its school education outcomes, as shown by the most recent results of the OECD Programme for International Student Assessment (PISA). However, the country remains among the OECD countries with the highest rates of grade repetition, which is proven to increase the risk of early school leaving and weighs significantly on education costs. The overall skills level of the labour force remains among the lowest in Europe and hampers the country’s innovation potential and competitiveness. Moreover, digital skills remain a barrier for upgrading the labour force skills. About 22 % of people in the Portuguese labour force have no digital skills (mostly because they do not use the internet regularly), about double the Union average. The Government has taken action to promote adult education and digital skills, namely by establishing the ‘Qualifica’ programme and a national initiative for digital skills (INCoDe2030 Initiative). To ensure they are effective, it will be crucial that they provide quality opportunities for upskilling and reskilling workers, in line with labour market needs. The Government has also taken a number of measures to support cooperation between higher education and the business sector, namely regarding their research outcomes and activities. However, the university structures would need to adapt in order to favour this cooperation.

               (14)

               Although the situation is improving, the large stock of corporate non-performing loans, together with low profitability, exposure to sovereign debt risks and weak capital buffers remains challenging to the banking sector. The deterioration in the quality of assets, in particular in the corporate sector, weighs on the banking sector’s profitability. It is one of the factors, along with low capital buffers, that impede the productive allocation of credit and investment. Although the level of non-performing loans is declining, the non-performing loan ratio remains high (19,5 % against 19,6 % at the end of 2015) and is still rising for some sectors of the economy, in particular firms active in the construction and real estate sectors of the economy. Some steps have been taken to address the large stock of non-performing loans. However, a comprehensive strategy is still needed to ensure a significant reduction of the impaired debt stock, including fostering the development of secondary markets in order to enable banks to sell parts of their distressed portfolios.

               (15)

               Credit conditions have been gradually improving on the demand and the supply side but access to finance for SMEs still needs to be improved. The percentage of Portuguese SMEs which did not manage to obtain the full amount of loans requested rose from 34 % to 42 %, against a falling Union average that reached 30 % in 2016. Innovative and competitive firms with strong growth potential would benefit from better access to capital. This would reduce their dependence on debt financing and improve their access to finance, thereby helping firms to scale up and internationalise. The difference in the cost of capital between investments financed by debt and the ones financed through equity in 2016 was the fifth highest in the Union and well above the Union average. Although the changes to the tax regime have reduced incentives to debt financing, it is too early to see any impact on the relatively high debt bias in corporate taxation. In July 2016, the authorities launched the Capitalizar programme designed mainly to encourage private investment. The programme establishes new credit lines for SMEs, creates specialised funds that would participate in private investments and introduces changes to the tax regime to support investment. In parallel, the Government has put in place another programme (Programa Semente) to provide finance to start-ups and small enterprises in their early stages (seed capital). The programme will help them to raise equity finance by offering tax reliefs, up to a maximum of 3 years, to individual investors who purchase new shares in such companies. Both programmes are expected to improve the financing of companies in Portugal, provided that they are swiftly and fully implemented.

               (16)

               In January 2017, as part of a package of measures to tackle barriers in services markets, the Commission provided guidance to all Member States on national reform needs for regulating professional services with high growth and jobs potential. The reform recommendations address a broad range of requirements based on a comparative analysis following the spirit and the work carried out in the mutual evaluation exercise with Member States in the last 3 years. Portugal has participated actively in this exercise. Portugal explains in its national action plan that, as major reforms and review of the regulated professions have been carried out since 2011, it does not expect major modifications in the coming years. The guidance offered by the Commission complements the 2017 European Semester evaluations by specifically addressing the requirements applicable to those professions. There are significant regulatory and administrative barriers in accessing service provision in several sectors. Some reforms targeting construction and the most restrictive business services, including regulated professions, were agreed during the financial assistance programme, but have been either halted or reversed. The by-laws regulating certain professions are less ambitious than the framework law in terms of opening up those professions to competition. They also raise concerns as regards the direct or indirect effect of restricting competition in the market for professional services.

               (17)

               Low levels of efficiency and transparency persist in the Portuguese public administration. Competition in public procurement remains limited. Despite progress, there are still shortcomings as regards the transparency and reliability of public procurement data and procedures. Transparency in concession contracts and public-private partnerships is still hindered by contracting authorities lacking the expertise needed to manage complex contracts. The use of direct awards in public procurement remains high. A revision of the Public Procurement Code has recently been put in place and its implementation will be monitored closely by the Commission. Administrative burden and the lack of homogeneous implementing practices across the country are delaying the reform of procedures. Despite some progress, there have been delays in simplifying local and central administrative procedures with little coordination between the various layers of the public administration. The Portuguese authorities have approved a new simplification programme, called Simplex+. This contains a fairly ambitious package of measures for citizens and businesses. These measures are promising and an early implementation of the Simplex+ package needs to be ensured so that the programme can start having an effective impact. Most of the measures included in the package relevant to businesses are now starting to be implemented. The performance of the Portuguese justice system is still below the Union average. In Portugal, efficiency indicators for civil, commercial and tax litigation cases remain poor. This has a negative impact on business dynamics and attracting foreign direct investment. The efficiency of the tax and administrative courts remains challenging in terms of resolution rate, and proceedings are still too long. It still takes up to 40 months to conclude insolvency court proceedings, raising doubts about the efficiency of Sireve frameworks

               (18)

               Portugal is making progress with increasing transparency and combating corruption in public administration, but there is no overarching strategy. Anti-corruption appears to have become a real priority for the national prosecution services and more efficient processes for case and resource management have been put in place. Yet, it remains to be seen whether these will be reflected by improvements in final conviction rates for high-level corruption and the application of penalties that provide stronger deterrents. On the preventive side, the corruption prevention plans set up in each public institution have so far been largely formalistic. They are not fully adapted to each organisation nor are they complemented by adequate monitoring.

               (19)

               In the context of the 2017 European Semester, the Commission has carried out a comprehensive analysis of Portugal’s economic policy and published it in the 2017 country report. It has also assessed the 2017 Stability Programme, the 2017 National Reform Programme and the follow-up given to the recommendations addressed to Portugal in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Portugal, but also their compliance with Union rules and guidance, given the need to strengthen the Union’s overall economic governance by providing Union-level input into future national decisions.

               (20)

               In the light of this assessment, the Council has examined the 2017 Stability Programme and its opinion (7) is reflected in particular in recommendation (1) below.

               (21)

               In the light of the Commission’s in-depth review and this assessment, the Council has examined the 2017 National Reform Programme and the 2017 Stability Programme. Its recommendations made under Article 6 of Regulation (EU) No 1176/2011 are reflected in recommendations (1) to (4) below,

         HEREBY RECOMMENDS that Portugal take action in 2017 and 2018 to:

               1.

               Ensure the durability of the correction of the excessive deficit. Pursue a substantial fiscal effort in 2018 in line with the requirements of the preventive arm of the Stability and Growth Pact, taking into account the need to strengthen the ongoing recovery and to ensure the sustainability of Portugal’s public finances. Use windfall gains to accelerate the reduction of the general government debt-to-GDP ratio. Step up efforts to broaden the expenditure review to cover a significant share of general government spending across several policies. Strengthen expenditure control, cost effectiveness and adequate budgeting, in particular in the health sector with a focus on the reduction of arrears in hospitals and ensure the sustainability of the pension system. To increase the financial sustainability of state-owned enterprises set sector-specific efficiency targets in time for the 2018 budget, improving state-owned enterprises’ overall net income and decreasing the burden on the state budget.

               2.

               Promote hiring on open-ended contracts, including by reviewing the legal framework. Ensure the effective activation of the long-term unemployed. Together with social partners, ensure that minimum wage developments do not harm employment of the low-skilled.

               3.

               Step up efforts to clean up the balance sheets of credit institutions by implementing a comprehensive strategy addressing non-performing loans, including by enhancing the secondary market for bad assets. Improve the access to capital, in particular for start-ups and small and medium-sized enterprises.

               4.

               Implement a roadmap to further reduce the administrative burden and tackle regulatory barriers in construction and business services by the end of 2017. Increase the efficiency of insolvency and tax proceedings.

      Done at Brussels, 11 July 2017.

            For the Council

            The President

         T. TÕNISTE

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  OJ L 306, 23.11.2011, p. 25.

      (3)  OJ C 92, 24.3.2017, p. 1.

      (4)  Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L 347, 20.12.2013, p. 320).

      (5)  Net government expenditure comprises total government expenditure excluding interest expenditure, expenditure on Union programmes fully matched by Union funds revenue and non-discretionary changes in unemployment benefit expenditure. Nationally financed gross fixed capital formation is smoothed over a 4-year period. Discretionary revenue measures or revenue increases mandated by law are factored in. One-off measures on both the revenue and expenditure sides are netted out.

      (6)  Council Recommendation of 22 April 2013 on establishing a Youth Guarantee (OJ C 120, 26.4.2013, p. 1).

      (7)  Under Article 5(2) of Regulation (EC) No 1466/97.