The interface between the Business World and the EU Institutions

Jean Claude LAHAUT

3 February 2011

Overview

1. Challenges ahead: image and competitiveness

2. The European chemical industry and Cefic

3. The EU Institutions and the legislative process

4. Advocacy and communication

2

“Worst” EU lobbying awards 2010

1. Goldman Sachs and derivatives lobby group ISDA: for aggressive lobbying to defend their financial weapons of mass destruction

2. Hedge fund and private equity lobby groups AIMA and EVCA: for deceptive lobbying to block regulation of damaging speculation in the financial sector

3. Royal Bank of Scotland: for secretly lobbying in Brussels and for exploiting contacts by headhunting former EU Commissioner Verheugen as advisor

4. ArcelorMittal: for lobbying on CO2 cuts under the Emissions Trading Scheme

5. BusinessEurope: for aggressive lobbying to block effective climate action in the EU while claiming to support action to protect the climate

3

Image of Industry

% (more) positive

Source : Cefic PES 2010 4

The Chemical Industry…

Source : Cefic PES 2010

% respondants

5

307366

466551

665

829

982

1227

14881620

1792

1953

1990 1992 1994 1996 1998 2000 2002 2004 2006 2007 2008 2009

%

Number of “pieces of legislation”* on environment and safety issued by the European Union (1990 – 2009)

* Directives, Decisions and Regulations

Source: Federchimica

Water Pollution (5,1)

Waste (14,4)

Air Pollution (13,7)

Hazardous Substances (49,8)

Safety (17,0)

23

Examples of legislations affecting the chemical sector

REACH Regulation

Energy policy / ETS

RoHS Directive

Environmental Liability Directive

IPPC: North/South differences

Biocides

Soil legislation

Our call for better (coherent) regulation 7

This is Cefic

Contributes to 24% of the World’s chemical sales,

Represents 29,000 companies (96% SMEs),

Employs 1.2 million people,

Generates € 449 billion of revenues,

Creates a trade surplus of € 42.6 billion.

Source: Cefic Chemdata International

Key Figures

9

EU Chemical industry losing share in fast growing global market

Geographic Breakdown of World Chemical Sales

10

Cefic PRIORITIES

Importance

Urgency

REACHImplementation

Competitiveness

Innovation

Chemicals Safety

ETS

Sustainable Development:

October 2010

IED

Strategic

Operational11

12

High Level Group on the Competitiveness of the European Chemical Industry (2009)

Recommendations on :

Innovation and Research 10

Regulation 3

Human Resources 3

Energy & Feedstock 5

Climate Change Policy 5

Logistics 5

International Competitiveness & Trade 8

3913

Sustainability as a strategic choice for global challenges

9 billion people will live on earth by

2050! How can we guarantee

food and water supply for everyone?

What are possible bene-fits and contributions

of plant science?

67% of the world population will live in cities by 2025! What does future

architecture look like? Which materials

are needed to make energy consumption more efficient?

50% more primary energy

needed in 2030! What is

the ideal energy mix of the future?

How big is the stake of renewable energy?

1.2 billion cars will drive on earth by 2020! How can we reduce

emissions and fuel consumption ?

What will future cars be made off ?

Construction &Housing

Mobility & Communication

Health &Nutrition

Energy &Resources

14

Current and Future Greenhouse Gas Emisions in the World

2005: CO2 emissions (million tonnes) 2030: projected CO2 emissions without climate policies (million tonnes) 2050: greenhouse gas emissions allowed under 2 tonnes/capita scenario (million tonnes)

Source : Go for Growth, BusinessEurope, 2010

North America6,700 8,300 890

Latin America900 1,600 1,568

Africa800 1,400 3,980

Europe4,000 4,500 1,600

Russia1,500 2000 214

India1,100 3,300 3,300

AustrialNew Zeeland

Corea900 1,100 151

Japan1,200 1,200 204

15

China5,100 11,400 2800

Europe’s Innovation Challenge

R&D Expenditure (% GDP) % world patents with tertiary education

16Source : Go for Growth, BusinessEurope, 2010

31

18

19

World Business Council for Sustainable Development: Vision 2050

• Business-as-usual outlook to 2050

« The story is one of growth in populations and consumption compounded by inertia stemming from inadequate governance and policy responses.

The result is degradation of the environment and social stress. »

• Vision: « In 2050, some 9 billion people live well, and within the limits of the planet »

20

12

22

Audiences

Decision makers

Interested audiences

Public opinion

Advocacy

Communication

Advertising

3 EU Institutions 27 Member States

Industry Stakeholders Media

« Society »

23

Cefic environment

EU society (500 M, >27 MS)

Trade unions

NGOs &

consu-mers’

EU & National Institutions

Political parties

Business &

Industry Value Chain

and other stakeholders

AcademiaScientific

World

Main EU institutions

Advisory Bodies Judiciary authority

European Commission

=EU general interest

European

Parliament =

EU citizens

The Council

=Member States

Economic and Social Committee

Committee of the Regions

The European Court of Justice

24

EU decision-making process

Commission

Council European Parliament

Green PaperWhite Paper

Inter-serviceConsultation

Formal Proposal

Economic and Social Committee

Committee of the Regions

for opinion

25

26

A complex decision-making

Commission

Council (Member States)

European parliament (parties, rapporteurs)

Comitology (Commission + Council + Parliament)

Commission President José Manuel Barroso

19 Commissioners7 Vice-Presidents Catherine Ashton High Representative of the Union for Foreign Affairs and Security PolicyViviane Reding Justice, Fundamental Rights and CitizenshipJoaquín Almunia Competition Siim Kallas Transport Neelie Kroes Digital Agenda Antonio Tajani Industry and EntrepreneurshipMaroš Šefčovič Inter-Institutional Relations and Administration

JanezPotočnik Environment Michel Barnier Internal Market and ServicesKarel De Gucht TradeJohn Dalli Health and Consumer PolicyMáire Geoghegan-Quinn Research, Innovation and ScienceGünther Oettinger EnergyOlli Rehn Economic and Monetary Affairs Andris Piebalgs DevelopmentAndroulla Vassiliou Education, Culture, Multilingualism and YouthAlgirdas Šemeta Taxation and Customs Union, Audit and Anti-Fraud

Maria Damanaki Maritime affairs and fisheriesKristalina Georgieva International Cooperation, Humanitarian Aid and Crisis ResponseJohannes Hahn Regional PolicyConnie Hedegaard Climate ActionŠtefan Füle Enlargement and European Neighbourhood PolicyLászló Andor Employment, Social Affairs and InclusionCecilia Malmström Home AffairsDacian Cioloş Agriculture and Rural DevelopmentJanusz Lewandowski Financial Programming and Budget

7 servicesCommunicationEuropean Anti-Fraud OfficeEurostatHistorical ArchivesJoint Research CenterPublication OfficeLegal Service

27 Cabinets36 Directorates

General

Secretariat General

27

Council of Ministers – number of votes per country

Germany, France, Italy and the United Kingdom 29

Spain and Poland 27

Romania 14

Netherlands 13

Belgium, Czech Republic, Greece, Hungary and Portugal 12

Austria, Bulgaria and Sweden 10

Denmark, Ireland, Lithuania, Slovakia and Finland 7

Estonia, Cyprus, Latvia, Luxembourg and Slovenia 4

Malta 3

Total: 345

“Qualified majority” needed for many decisions: 255 votes and a majority of member states

28

The European Parliament

736 MEPs

7 political groups+

27 non-attached members

Bureau1 president : Jerzy Buzek

14 vice-presidents5 quaestors

Administration1 Secretariat-

general10 directorates-

general

35 Interparliamentary

Delegations20 Committees

29

30

A Regulation for the « Guinness Book »

• 150 pages of legislative text

• 1.000 pages in annexes (+ thousands of pages of TGD)

• eight weeks of Internet consultation (32 non EU states responded)

• about 50 Business Impact Studies

• 2 Council Formations (Competitiveness and Environment)

• 10 EP Committees (Hughes Procedure with three committees)

• about 50 rapporteurs and shadow rapporteurs

• almost 5.000 amendments

• huge media interest and strong pressure from NGOs

31

Opportunities for Chemical Industry

Unique opportunity to get a more coherent, reliable and lasting framework at EU level

Strong visibility in media and public discussion to address benefits of chemistry

Restore trust in chemical industry Foster role of trade associations Align membership on one-voice policy Enhance credibility vis-à-vis legislators Prepared to pro-actively address future issues

32

General political context

Public concern about environment-health related aspects on the rise

Focus of green and environmental NGOs shifting from production to products

Broad and increasing media interest for HSE issues (specifically in some countries like UK and F…)

National and EU legislators under pressure to address these concerns (precautionary principle)

33

For the chemical industry

In all current and future political/legislative initiatives chemical substances are targeted

Chemical substances are under attack through their use downstream (substances in articles)

From single substances to more complex preparations (« toxic cocktail »)

Long term effects in low doses on vulnerable populations

34

Advocacy lessons

Listen to concerns of actors involved and take them serious Early co-operation between issue owner and advocacy and

communication is key Technical knowledge and « sound science » are not winning

arguments per se Emotional and political aspects often more important (EP) Clearly define who does what and at what level Involve the parts of the network needed, including the

relevant sector groups and affiliated org. Stay focused on priorities and key messages Build strong alliances with other sectors and DU Build media campaign as early as possible to prepare the

ground for advocacy Speak with one voice

35

Long term approach

Early warning Processing

Anticipation

Reputation

Advocacy Decision

36

Prioritisation table – June 2010

UrgencyImportance

A B C

1

ETS comitology: list of exposed sectors including indirect emittersETS comitology: Auctioning rulesCrisis recovery REACH implementation(review of annexes, candidate list, etc.)Innovation

ETS comitology : BenchmarksSoilCLP – ATP comitologyNanomaterials

NEC directive reviewDrinking water directiveIndoor Air QualityETS for NOx and SO2Endocrine Disrupters

2

Biocides RoHSFalsified Medicines for human use

SCP comitologyGreen Public ProcurementEnergy Labelling

Health & Environment APEnergy tax directiveFP8Seveso II

3

Animal TestingREACH review (scope)

37

Roles

PCStrategy

SIGImplementation

NAB / ISBpolitical assessment

Consistent Messaging

CommunicationInformed citizens, Business, Industry, Unions, NGOs, Academics, Consumers …Media (advertising)Segmented but not personalised

AdvocacyInstitutions (rules)

Negotiation (sales)Personalised

Coordinate Advocacy/Communication

38

Advocacy = time-limited

tailor-mademessages

focussedmessages

Target

39

Programme Councils

Communication

Advocacy

Coordination (COGO)

40

Issue management(position paper)

Communication (one pager)

Advocacy (status report)

Distance to reduce

Distance to reduce

41

Timeline 2009-2010 – Energy & HSEyellow first reading, orange second or final reading, blue comitology – red box = event

ISSUES Nov Dec Jan Feb Mar April May June July Aug Sep Oct

ETS comitology Auctioning rules to CCC

Exposed sectors

Scritiny by the EP

Exposed sectors

vote EP

Auctioning rules Vote CCC

Auctioning rules to EP for scrutiny

Review codecision

COM to adopt regulation

Benchmarks vote CCC

Renewables comitology

Sustainability (regulatory) cttee start work?

NEC proposal to be launched by new COM?

Security of Gas supply

1st reading ongoing

Vote ITRE cttee

Plenary vote

ETS for NOx and SO2

Study ongoing Study results Possibly decision to draft new legislation

Energy Tax Directive

COM proposal possible

COM proposal possible

Water scarcity and droughts

proposal to be drafted by new COM

Drinking water impact assessment in preparation still ongoing

COM proposal?

Waste: sewage sludge

Second online COM consultation

Second online COM consultation

COM proposal?

IPPC Council common position

EP start 2nd reading

Vote in ENVI Informal Trialogues

Plenary vote

Soil 1st reading pending until Spanish presidency

Seveso II Stakeholder consultation

COM proposal

Crisis recovery EP temporary committee start work

42

Advocacy : one voice policy

42

National alliances

Cefic

Federations

EU Alliances

Companies